Exhibit-10(q)
"*******" DENOTE MATERIAL THAT HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED.
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 10, 2003
Among
HASBRO RECEIVABLES FUNDING, LLC
AS THE SELLER
and
CAFCO, LLC
and
▇▇▇▇▇▇▇▇ FUNDING CORPORATION
AS THE INVESTORS
and
CITIBANK, N.A.
and
BNP PARIBAS, ACTING
THROUGH ITS NEW YORK BRANCH
AS BANKS
and
CITICORP NORTH AMERICA, INC.
AS THE PROGRAM AGENT
and
CITICORP NORTH AMERICA, INC.
and
BNP PARIBAS, ACTING
THROUGH ITS NEW YORK BRANCH
AS INVESTOR AGENTS
and
HASBRO, INC.
AS COLLECTION AGENT AND AN ORIGINATOR
and
WIZARDS OF THE COAST, INC. and
ODDZON, INC.
AS ORIGINATORS
2
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.............................................................................................1
SECTION 1.01. Certain Defined Terms......................................................................1
SECTION 1.02. Other Terms...............................................................................25
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES....................................................................25
SECTION 2.01. Purchase Facility.........................................................................25
SECTION 2.02. Making Purchases..........................................................................26
SECTION 2.03. Receivable Interest Computation...........................................................27
SECTION 2.04. Settlement Procedures.....................................................................28
SECTION 2.05. Fees......................................................................................31
SECTION 2.06. Payments and Computations, Etc............................................................32
SECTION 2.07. Dividing or Combining Receivable Interests................................................32
SECTION 2.08. Increased Costs...........................................................................32
SECTION 2.09. Additional Yield on Receivable Interests Bearing a Eurodollar Rate........................34
SECTION 2.10. Taxes.....................................................................................34
SECTION 2.11. Security Interest.........................................................................36
SECTION 2.12. Sharing of Payments.......................................................................36
SECTION 2.13. Right of Setoff...........................................................................37
ARTICLE III CONDITIONS OF PURCHASES..............................................................................37
SECTION 3.01. Conditions Precedent to Initial Purchase..................................................37
SECTION 3.02. Conditions Precedent to All Purchases and Reinvestments...................................39
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................40
SECTION 4.01. Representations and Warranties of the Seller..............................................40
SECTION 4.02. Representations and Warranties of the Collection Agent....................................42
ARTICLE V COVENANTS..............................................................................................44
SECTION 5.01. Covenants of the Seller...................................................................44
SECTION 5.02. Covenant of the Seller and the Originators................................................50
ARTICLE VI ADMINISTRATION AND COLLECTION OF POOL RECEIVABLES.....................................................51
SECTION 6.01. Designation of Collection Agent...........................................................51
SECTION 6.02. Duties of Collection Agent................................................................51
SECTION 6.03. Certain Rights of the Program Agent.......................................................53
SECTION 6.04. Rights and Remedies.......................................................................54
SECTION 6.05. Further Actions Evidencing Purchases......................................................54
SECTION 6.06. Covenants of the Collection Agent and each Originator.....................................54
SECTION 6.07. Indemnities by the Collection Agent.......................................................55
ARTICLE VII EVENTS OF TERMINATION................................................................................56
SECTION 7.01. Events of Termination.....................................................................56
i
ARTICLE VIII THE PROGRAM AGENT...................................................................................60
SECTION 8.01. Authorization and Action..................................................................60
SECTION 8.02. Program Agent's Reliance, Etc.............................................................60
SECTION 8.03. CNAI and Affiliates.......................................................................61
SECTION 8.04. Indemnification of Program Agent..........................................................61
SECTION 8.05. Delegation of Duties......................................................................61
SECTION 8.06. Action or Inaction by Program Agent.......................................................61
SECTION 8.07. Notice of Events of Termination...........................................................61
SECTION 8.08. Non-Reliance on Program Agent and Other Parties...........................................62
SECTION 8.09. Successor Program Agent...................................................................62
SECTION 8.10. Reports and Notices.......................................................................62
ARTICLE IX THE INVESTOR AGENTS...................................................................................63
SECTION 9.01. Authorization and Action..................................................................63
SECTION 9.02. Investor Agent's Reliance, Etc............................................................63
SECTION 9.03. Investor Agent and Affiliates.............................................................63
SECTION 9.04. Indemnification of Investor Agents........................................................64
SECTION 9.05. Delegation of Duties......................................................................64
SECTION 9.06. Action or Inaction by Investor Agent......................................................64
SECTION 9.07. Notice of Events of Termination...........................................................64
SECTION 9.08. Non-Reliance on Investor Agent and Other Parties..........................................65
SECTION 9.09. Successor Investor Agent..................................................................65
SECTION 9.10. Reliance on Investor Agent................................................................65
ARTICLE X INDEMNIFICATION........................................................................................66
SECTION 10.01. Indemnities by the Seller................................................................66
ARTICLE XI MISCELLANEOUS.........................................................................................68
SECTION 11.01. Amendments, Etc..........................................................................68
SECTION 11.02. Notices, Etc.............................................................................68
SECTION 11.03. Assignability............................................................................68
SECTION 11.04. Costs and Expenses.......................................................................71
SECTION 11.05. No Proceedings; Waiver of Consequential Damages..........................................71
SECTION 11.06. Confidentiality..........................................................................72
SECTION 11.07. GOVERNING LAW............................................................................72
SECTION 11.08. Execution in Counterparts................................................................73
SECTION 11.09. Survival of Termination..................................................................73
SECTION 11.10. Consent to Jurisdiction..................................................................73
SECTION 11.11. WAIVER OF JURY TRIAL.....................................................................73
SECTION 11.12 Tax Treatment.............................................................................73
ii
SCHEDULES
SCHEDULE I - Lock-Box Banks
SCHEDULE II - Credit and Collection Policy
SCHEDULE III - Fiscal Months
SCHEDULE IV - Locations of Records Concerning Pool Receivables
ANNEXES
ANNEX A-1 - Form of Monthly Report
ANNEX A-2 - Form of Weekly Report
ANNEX A-3 - Form of Daily Report
ANNEX B - Form of Lock-Box Agreement
ANNEX C - Forms of Opinions of Counsel to the Seller
ANNEX D - Assignment and Acceptance
ANNEX E - Form of Funds Transfer Letter
ANNEX F - Applicable Margin
ANNEX G - Parent Undertaking
iii
RECEIVABLES
PURCHASE AGREEMENT
Dated as of December 10, 2003
HASBRO RECEIVABLES FUNDING, LLC, a Delaware limited liability company
(the "SELLER"), CAFCO, LLC, a Delaware limited liability company, as an Investor
(as defined herein), ▇▇▇▇▇▇▇▇ FUNDING CORPORATION, a Delaware corporation, as an
Investor, CITIBANK, N.A., as a Bank (as defined herein), BNP PARIBAS, ACTING
THROUGH ITS
NEW YORK BRANCH, as a Bank and an Investor Agent (as defined
herein), CITICORP NORTH AMERICA, INC., a Delaware corporation ("CNAI"), as
program agent (the "PROGRAM AGENT") for the Investors and the Banks and as an
Investor Agent, HASBRO, INC., a Rhode Island corporation, as Collection Agent
and an Originator, and WIZARDS OF THE COAST, INC., a Washington corporation
("WOTC"), and ODDZON, INC., a Delaware corporation ("ODDZON"), as Originators,
agree as follows:
PRELIMINARY STATEMENT. The Seller has acquired, and may continue to
acquire, Receivables (as hereinafter defined) from the Originators (as
hereinafter defined), by purchase (in the case of Receivables acquired from
Originators other than the Parent) or either by purchase or by contribution to
the capital of the Seller (in the case of Receivables acquired from the Parent),
as determined from time to time by the Seller and the Parent. The Seller is
prepared to sell undivided fractional ownership interests (referred to herein as
"RECEIVABLE INTERESTS") in the Receivables. The Investors may, in their
respective sole discretion, purchase such Receivable Interests, and the Banks
are prepared to purchase such Receivable Interests, in each case on the terms
set forth herein. Accordingly, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADJUSTED EURODOLLAR RATE" means, for any Fixed Period, an interest
rate per annum equal to the rate per annum obtained by dividing (i) the
Eurodollar Rate for such Fixed Period by (ii) a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage for such Fixed Period.
"ADVERSE CLAIM" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement.
"AFFECTED PERSON" has the meaning specified in Section 2.08(a).
"AFFILIATE" means, as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by or is under common control
with such Person or is a director or officer of such Person.
"AFFILIATED OBLIGOR" means any Obligor that is an Affiliate of another
Obligor.
"AGENT" means any of the Program Agent or any Investor Agent and
"Agents" means, collectively, the Program Agent and the Investor Agents.
"ALTERNATE BASE RATE" means (a) for each Bank or Investor in the Group
which includes CAFCO, a fluctuating interest rate per annum as shall be in
effect from time to time, which rate shall be at all times equal to the higher
of:
(i) the rate of interest announced publicly by Citibank in
New York,
New York, from time to time as Citibank's base rate; and
(ii) the Federal Funds Rate; and
(b) for each Bank or Investor in the Group which includes ▇▇▇▇▇▇▇▇,
on any date, a fluctuating rate of interest per annum equal to the higher of
(i) the base commercial lending rate per annum announced from
time to time by BNP Paribas at its principal office in
New York in
effect on such day; and
(ii) the Federal Funds Rate.
The Alternate Base Rate for BNP Paribas is not necessarily intended to represent
the lowest rate of interest charged by BNP Paribas for extensions of credit.
"APPLICABLE MARGIN" means, at any time, the percentage determined
pursuant to Annex F based on the Parent's Debt Rating at such time.
"ASSET PURCHASE AGREEMENT" means (a) in the case of any Bank other
than Citibank and BNP Paribas, the asset purchase agreement entered into by such
Bank concurrently with the Assignment and Acceptance pursuant to which it became
party to this Agreement and (b) in the case of Citibank and BNP Paribas, the
secondary market agreement, asset purchase agreement or other similar liquidity
agreement entered into by such Bank for the benefit of its respective Investor,
to the extent relating to the sale or transfer of interests in Receivable
Interests, in each case as amended or modified from time to time and expiring on
the Commitment Termination Date in effect from time to time.
"ASSIGNEE RATE" for any Fixed Period for any Receivable Interest means
an interest rate per annum equal to the Eurodollar Rate for such Fixed Period
PLUS the Applicable Margin; PROVIDED, HOWEVER, that in case of:
(i) any Fixed Period on or prior to the first day of which an
Investor or Bank shall have notified the Program Agent and each
Investor Agent that the
2
introduction of or any change in or in the interpretation of any law
or regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such Investor
or Bank to fund such Receivable Interest at the Assignee Rate set
forth above (and such Investor or Bank shall not have subsequently
notified the Program Agent and each Investor Agent that such
circumstances no longer exist),
(ii) any Fixed Period of one to (and including) 29 days (it
being understood and agreed that this clause (ii) shall not be
applicable to a Fixed Period for which Yield is to be computed by
reference to the Eurodollar Rate that is intended to have a one-month
duration but due solely to LIBOR interest period convention the
duration thereof will be less than 30 days),
(iii) any Fixed Period as to which the Program Agent and each
Investor Agent does not receive notice, by no later than 12:00 noon
(
New York City time) on the second Business Day preceding the first
day of such Fixed Period, that the related Receivable Interest will
not be funded by CAFCO and ▇▇▇▇▇▇▇▇ through the issuance of Promissory
Notes or commercial paper, as the case may be, or
(iv) any Fixed Period for a Receivable Interest the Capital of
which allocated to the Investors or the Banks is less than $500,000,
the "ASSIGNEE RATE" for such Fixed Period shall be an interest rate per annum
equal to one percent per annum above the Alternate Base Rate in effect from time
to time during such Fixed Period.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
agreement entered into by a Bank, an Eligible Assignee, such Bank's Investor
Agent and the Program Agent, pursuant to which such Eligible Assignee may become
a party to this Agreement, in substantially the form of Annex D hereto.
"BANK COMMITMENT" of any Bank means, (a) with respect to Citibank,
$125,000,000 or such amount as reduced or increased by any transfer under any
Assignment and Acceptance entered into among Citibank, another Bank, the
Investor Agent for Citibank and the Program Agent, (b) with respect to BNP
Paribas, $125,000,000 or such amount as reduced or increased by any transfer
under any Assignment and Acceptance entered into among BNP Paribas, another
Bank, the Investor Agent for BNP Paribas and the Program Agent or (c) with
respect to a Bank (other than Citibank or BNP Paribas) that has entered into an
Assignment and Acceptance, the amount set forth therein as such Bank's Bank
Commitment, in each case as such amount may be reduced or increased by an
Assignment and Acceptance entered into among such Bank, an Eligible Assignee,
the Investor Agent for such Bank and the Program Agent, and as may be further
reduced (or terminated) pursuant to the next sentence. Any reduction (or
termination) of the Purchase Limit pursuant to the terms of this Agreement shall
reduce ratably (or terminate) each Bank's Bank Commitment; PROVIDED that if the
Investors and Banks in any Group (the "DEPARTING GROUP") shall determine not to
extend the Commitment Termination Date or shall approve an extension of the
Commitment Termination Date based on a reduced Investor Purchase Limit for their
Group, then, if the Investors and the Banks in the other Groups shall
3
nonetheless determine to extend the Commitment Termination Date, effective from
such Commitment Termination Date, the Bank Commitment of each Bank in the
Departing Group shall be reduced (ratably, or as otherwise mutually agreed by
such Banks) or terminated.
"BANKS" means Citibank, BNP Paribas and each Eligible Assignee that
shall become a party to this Agreement pursuant to Section 11.03.
"BNP PARIBAS" means BNP Paribas, a bank organized under the laws of
France, acting through its
New York branch.
"BUSINESS DAY" means any day on which (i) banks are not authorized or
required to close in
New York City or Rhode Island, and (ii) if this definition
of "Business Day" is utilized in connection with the Eurodollar Rate, dealings
are carried out in the London interbank market.
"CAFCO" means CAFCO, LLC and any successor or assign of CAFCO that is
a receivables investment company which in the ordinary course of its business
issues commercial paper or other securities to fund its acquisition and
maintenance of receivables.
"CAPITAL" of any Receivable Interest means the original amount paid to
the Seller for such Receivable Interest at the time of its purchase by an
Investor or a Bank pursuant to this Agreement, or such amount divided or
combined in accordance with Section 2.07, in each case reduced from time to time
by Collections distributed on account of such Capital pursuant to Section
2.04(e); PROVIDED that if such Capital shall have been reduced by any
distribution and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, such Capital shall be increased by
the amount of such rescinded or returned distribution, as though it had not been
made.
"CITIBANK" means Citibank, N.A., a national banking association.
"CNAI" has the meaning specified in the introductory paragraph hereof.
"COLLECTION AGENT" means at any time the Person then authorized
pursuant to Section 6.01 to administer and collect Pool Receivables.
"COLLECTION AGENT FEE" has the meaning specified in Section 2.05(a).
"COLLECTIONS" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable, and any Collection of such Receivable deemed to have been received
pursuant to Section 2.04.
"COMMITMENT TERMINATION DATE" means the earliest of (a) December 8,
2004, UNLESS, prior to such date (or the date so extended pursuant to this
clause), upon the Seller's request, made not more than 45 days prior to the then
Commitment Termination Date, each Investor and, with respect to each such
Investor, one or more of its Related Banks which, immediately after giving
effect to such extension would have Bank Commitments in an aggregate amount
equal to such Investor's Investor Facility Amount to be in effect immediately
4
after giving effect to such extension, shall in their sole discretion consent,
which consent shall be given within 30 days of such request and not more than 30
days prior to the then Commitment Termination Date, to the extension of the
Commitment Termination Date to the date occurring not more than 364 days after
the then Commitment Termination Date; PROVIDED, however, that any failure of any
Investor or Bank to respond to the Seller's request for such extension shall be
deemed a denial of such request by such Bank, (b) the Facility Termination Date
(PROVIDED that if the Facility Termination Date shall occur solely under clause
(d) of such defined term, the Commitment Termination Date shall occur only with
respect to the Investor and Banks for which such Facility Termination Date
occurred under clause (d)), (c) the date determined pursuant to Section 7.01,
and (d) the date the Purchase Limit reduces to zero pursuant to Section 2.01(b).
"CONCENTRATION LIMIT" for any Obligor means (i) at any time that such
Obligor's Debt Rating is at least AA- by S&P and Aa3 by ▇▇▇▇▇'▇, 23%, (ii) at
any time that such Obligor's Debt Rating is at least BBB- by S&P and Baa3 by
▇▇▇▇▇'▇, and clause (i) is not applicable, 11.5%, and (iii) at all other times,
5.75% ("NORMAL CONCENTRATION LIMIT"), or such other higher percentage or dollar
amount ("SPECIAL CONCENTRATION LIMIT") for such Obligor designated by the
Program Agent and each Investor Agent in a writing delivered to the Seller;
PROVIDED that in the case of an Obligor with any Affiliated Obligor, the
Concentration Limit shall be calculated as if such Obligor and such Affiliated
Obligor are one Obligor; PROVIDED FURTHER, that the Program Agent or any
Investor Agent may for bona fide credit reasons reduce or cancel any Special
Concentration Limit for any Obligor upon three Business Days' notice to the
Seller (with a copy of each of the other Agents). The foregoing notwithstanding,
but subject to the two PROVISOS in the previous sentence, the Special
Concentration Limit for ************** shall be the lower of (a) *********** of
the Outstanding Balance of all Pool Receivables and (b) **************, and the
Special Concentration Limit for *************** shall be the lower of (a)
*********** of the Outstanding Balance of all Pool Receivables and (b)
**************, PROVIDED, that if the Debt Rating for **************shall be
below AA- by S&P or below Aa3 by ▇▇▇▇▇'▇, or the Debt Rating for **************
shall be below A- by S&P or below A3 by ▇▇▇▇▇'▇, then the Concentration Limit
for **************or **************, as the case may be, shall be the applicable
Concentration Limit determined pursuant to clauses (ii) and (iii) of the first
sentence of this definition.
"CONTRACT" means an agreement between any Originator and an Obligor or
an invoice between any Originator and an Obligor pursuant to or under which such
Obligor shall be obligated to pay for merchandise from time to time.
"CP FIXED PERIOD DATE" means, for any Receivable Interest, the date of
purchase of such Receivable Interest and thereafter the last day of each Fiscal
Month or any other day as shall have been agreed to in writing by the Program
Agent, the Investor Agents and the Seller prior to the first day of the
preceding Fixed Period for such Receivable Interest or, if there is no preceding
Fixed Period, prior to the first day of such Fixed Period.
"CREDIT AND COLLECTION POLICY" means those receivables credit and
collection policies and practices of the Seller and the Originators in effect on
the date of this Agreement and described in Schedule II hereto, as modified in
compliance with this Agreement.
5
"DAILY REPORT" means a report in substantially the form of Annex A-3
hereto and containing such additional information as any Agent may reasonably
request from time to time, furnished by the Collection Agent pursuant to Section
6.02(g)(iii) or 6.02(g)(iv).
"DEBT" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services, (iv)
obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, and (v) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv)
above.
"DEBT RATING" for any Person, means the rating by S&P, ▇▇▇▇▇'▇ or
Fitch of such Person's long-term public senior unsecured non-credit enhanced
debt.
"DEFAULT RATIO" means the ratio (expressed as a percentage) computed
as of the last day of each Fiscal Month by dividing (i) the aggregate
Outstanding Balance of all Originator Receivables that were Defaulted
Receivables on such day or that would have been Defaulted Receivables on such
day had they not been written off the books of the applicable Originator or the
Seller during such Fiscal Month by (ii) the aggregate Outstanding Balance of all
Originator Receivables on such day.
"DEFAULTED RECEIVABLE" means an Originator Receivable:
(i) as to which any payment, or part thereof, remains unpaid
for 91 or more days from the original due date for such payment;
(ii) as to which the Obligor thereof has taken any action, or
suffered any event to occur, of the type described in Section 7.01(g);
or
(iii) which, consistent with the Credit and Collection Policy,
would be written off the applicable Originator's or the Seller's books
as uncollectible.
"DEFERRED PURCHASE PRICE" has the meaning specified in the Originator
Purchase Agreement.
"DELINQUENCY RATIO" means the ratio (expressed as a percentage)
computed as of the last day of each Fiscal Month by dividing (i) the aggregate
Outstanding Balance of all Originator Receivables that were Delinquent
Receivables on such day by (ii) the aggregate Outstanding Balance of all
Originator Receivables on such day.
"DELINQUENT RECEIVABLE" means an Originator Receivable that is not a
Defaulted Receivable and:
(i) as to which any payment, or part thereof, remains unpaid
for 61 or more days, but less than 91 days, from the original due date
for such payment; or
6
(ii) which, consistent with the Credit and Collection Policy,
would be classified as delinquent by the applicable Originator or the
Seller.
"DEPARTING GROUP" has the meaning specified within the definition of
"Bank Commitment" in this Section 1.01.
"DILUTED RECEIVABLE" means that portion (and only that portion) of any
Originator Receivable which is either (a) reduced or canceled as a result of (i)
any defective, rejected or returned merchandise or services or any failure by an
Originator to deliver any merchandise or provide any services or otherwise to
perform under the underlying Contract, (ii) any change in the terms of or
cancellation of, a Contract or any cash discount, discount for quick payment or
other adjustment by an Originator which reduces the amount payable by the
Obligor on the related Originator Receivable (except any such change or
cancellation resulting from or relating to the financial inability to pay or
insolvency of the Obligor of such Originator Receivable), (iii) any set-off by
an Obligor in respect of any claim by such Obligor as to amounts owed by it on
the related Originator Receivable (whether such claim arises out of the same or
a related transaction or an unrelated transaction) or (iv) any allowance given
in connection with the applicable Originator's sales incentives and product
return programs which are accounted for as "credits" to the relevant Outstanding
Balance or (b) subject to any specific dispute, offset, counterclaim or defense
whatsoever (except the discharge in bankruptcy of the Obligor thereof); PROVIDED
that Diluted Receivables are calculated assuming that all charge backs are
resolved in the Obligor's favor.
"DILUTION HORIZON FACTOR" means, as of any date, a ratio computed by
dividing (i) the aggregate original Outstanding Balance of all Originator
Receivables created by the Originators during the number of Fiscal Months
determined pursuant to the definition of Liquidation Period by (ii) the
Outstanding Balance of Originator Receivables (other than Defaulted
Receivables), less Collections on hand but not yet applied to reduce the
Outstanding Balance of Originator Receivables, in each case as at the last day
of the most recently ended Fiscal Month.
"DILUTION PERCENTAGE" means, as of any date, the product of (a) the
sum of (i) the product of (x) two, multiplied by (y) the average of the Dilution
Ratios for each of the twelve most recently ended Fiscal Months, plus (ii) the
Dilution Volatility Ratio as at the last day of the most recently ended Fiscal
Month, multiplied by (b) the Dilution Horizon Factor as of such date.
"DILUTION RATIO" means, as of any date, the ratio (expressed as a
percentage) computed for the most recently ended Fiscal Month by dividing (i)
the aggregate amount of Diluted Receivables during such Fiscal Month by (ii) the
aggregate Outstanding Balance (in each case, at the time of creation) of all
Originator Receivables created during the sixth Fiscal Month immediately
preceding such Fiscal Month.
"DILUTION RESERVE" means, for any Receivable Interest on any date, an
amount equal to the greater of:
(a) DP X (C + YFR)
where:
7
DP = the Dilution Percentage on such date.
C = the Capital of such Receivable Interest on such
date.
YFR = the Yield and Fee Reserve for such Receivable
Interest on such date.
or (b) PD X 2.0
where:
PD = the Projected Dilution for the most recent Fiscal
Month.
"DILUTION VOLATILITY RATIO" means, as of any date, a ratio (expressed
as a percentage) equal to the product of (a) the highest of the average of the
Dilution Ratios for the most recently ended Fiscal Month and the two immediately
preceding Fiscal Months calculated for each of the twelve most recently ended
Fiscal Months minus the average of the Dilution Ratios for each of the twelve
most recently ended Fiscal Months, and (b) a ratio calculated by dividing the
highest of the average of the Dilution Ratios for the most recently ended Fiscal
Month and the two immediately preceding Fiscal Months calculated for each of the
twelve most recently ended Fiscal Months by the average of the Dilution Ratios
for each of the twelve most recently ended Fiscal Months.
"E-MAIL SELLER REPORT" has the meaning specified in Section 6.02(g).
"ELIGIBLE ASSIGNEE" means (a) with respect to the Group which includes
CAFCO, (i) CNAI or any of its Affiliates, (ii) any Person managed or sponsored
by Citibank, CNAI or any of their Affiliates or (iii) any financial or other
institution acceptable to the Investor Agent for such Group and approved by the
Seller (which approval by the Seller shall not be unreasonably withheld or
delayed and shall not be required if an Event of Termination or an Incipient
Event of Termination has occurred and is continuing) and (b) with respect to the
Group which includes ▇▇▇▇▇▇▇▇, (i) BNP Paribas or any of its Affiliates, (ii)
any Person managed or sponsored by BNP Paribas or any of its Affiliates or (iii)
any financial or other institution acceptable to the Investor Agent for such
Group and approved by the Seller (which approval by the Seller shall not be
unreasonably withheld or delayed and shall not be required if an Event of
Termination or an Incipient Event of Termination has occurred and is
continuing).
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(i) the Obligor of which is not an Affiliate of any
Originator or the Seller and is either (a) a resident of the United
States or Canada or (b) ******** or ********, PROVIDED, that no
Receivables of ******** or ******** which otherwise meet the
requirements of this definition shall be Eligible Receivables until
such time as the Program Agent has received an opinion of ********
counsel or other evidence satisfactory to it confirming that the
Program Agent (on behalf of the Investors and the Banks) has acquired
a valid and perfected first priority ownership or security interest in
and other enforceable rights with respect to such Receivables, which
interest and rights are substantially as protected and
8
favorable as the Program Agent's rights under the UCC with respect to
Receivables of United States Obligors;
(ii) which is not a Defaulted Receivable and the Obligor of
which is not the Obligor of any Defaulted Receivables which in the
aggregate constitute 10% or more of the aggregate Outstanding Balance
of all Receivables of such Obligor;
(iii) which, according to the Contract related thereto, is
required to be paid in full within ************ of the original
billing date therefor;
(iv) which is an obligation 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;
(v) which is an "account" within the meaning of Article 9 of
the UCC of the applicable jurisdictions governing the perfection of
the interest created by a Receivable Interest;
(vi) which is denominated and payable only in United States
dollars in the United States;
(vii) which arises under a Contract which, together with such
Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the Obligor of such Receivable and is
not subject to any Adverse Claim or any dispute, offset, counterclaim
or defense whatsoever (except (A) the potential discharge in
bankruptcy of such Obligor and (B) allowances given in connection with
the applicable Originator's sales incentives and product return
programs which are accounted for as "credits" to the relevant
Outstanding Balance);
(viii) which, together with the Contract related thereto, does
not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to usury, consumer protection, truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy) and with respect to which
none of the Seller, any Originator, the Collection Agent or the
Obligor is in violation of any such law, rule or regulation in any
material respect;
(ix) which arises under a Contract which (A) does not require
the Obligor thereunder to consent to the transfer, sale or assignment
of the rights and duties of the Seller or the applicable Originator
thereunder and (B) does not contain a confidentiality provision that
purports to restrict the ability of any Agent, the Investors or the
Banks to exercise their rights under this Agreement, including,
without limitation, their right to review the Contract;
9
(x) which was generated in the ordinary course of the
applicable Originator's business;
(xi) which has not been extended, rewritten or otherwise
modified from the original terms thereof (except as permitted by
Section 6.02(c)) due to the Obligor's financial inability to pay;
(xii) the transfer, sale or assignment of which does not
contravene any applicable law, rule or regulation;
(xiii) which satisfies in all material respects all applicable
requirements of the Credit and Collection Policy;
(xiv) as to which, at or prior to the later of the date of this
Agreement and the date such Receivable is created, an Investor Agent
has not notified the Seller that such Receivable (or the Obligor of
such Receivable) is, based on bona fide credit reasons, no longer
acceptable for purchase hereunder by the Investor or any Bank for
which such Investor Agent is acting as Investor Agent;
(xv) which arises under a Contract which is not an executory
contract;
(xvi) as to which the relevant Originator has satisfied and
fully performed all obligations required to be fulfilled by it (other
than customary warranty obligations and errors not of a material
nature arising in the ordinary course of business), and no further
action is required to be performed by any Person with respect thereto
other than payment thereon by the applicable Obligor; and
(xvii) which does not arise from the sale of consigned goods,
unless the Investor Agents shall have otherwise consented thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means any Person which is treated as a single
employer with the Parent under Section 414 of the Internal Revenue Code of 1986,
as amended.
"ERISA REPORTABLE EVENT" means a reportable event with respect to a
Guaranteed Pension Plan within the meaning of Section 4043 of ERISA and the
regulations promulgated thereunder.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR RATE" means, for any Fixed Period for each Bank or
Investor in any Group, an interest rate per annum equal to the rate per annum at
which deposits in U.S. dollars are offered by the principal office of Citibank
(if the Investor Agent for such Group is CNAI) or BNP Paribas (if the Investor
Agent for such Group is BNP Paribas) in each case in ▇▇▇▇▇▇,
▇▇
▇▇▇▇▇▇▇ to prime banks in the London interbank market at 11:00 A.M. (London
Time) two Business Days before the first day of such Fixed Period in an amount
substantially equal to the Capital associated with such Fixed Period on such
first day and for a period equal to such Fixed Period.
"EURODOLLAR RATE RESERVE PERCENTAGE" of any Investor or Bank for any
Fixed Period in respect of which Yield is computed by reference to the
Eurodollar Rate means the reserve percentage (expressed as a decimal and rounded
upward to the nearest 1/100th of 1%) applicable two Business Days before the
first day of such Fixed Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) (or if more
than one such percentage shall be applicable, the daily average of such
percentages for those days in such Fixed Period during which any such percentage
shall be so applicable) for determining the maximum reserve requirement
(including, without limitation, any basic emergency, supplemental, marginal and
other reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements) for such Investor or Bank with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurocurrency Liabilities is
determined) having a term equal to such Fixed Period.
"EVENT OF TERMINATION" has the meaning specified in Section 7.01.
"FACILITY TERMINATION DATE" means the earliest of (a) December 6, 2006
or (b) the date determined pursuant to Section 7.01 or (c) the date the Purchase
Limit reduces to zero pursuant to Section 2.01(b) or (d) the date the Asset
Purchase Agreement of any Bank expires without being renewed (it being
understood and agreed that the initial expiration date of the Asset Purchase
Agreement of each Bank shall be the Commitment Termination Date and concurrently
with any subsequent extension by such Bank of the Commitment Termination Date,
the Asset Purchase Agreement of such Bank will be extended for an identical time
period) (PROVIDED that, under this clause (d), the Facility Termination Date
shall occur solely with respect to the Investors and Banks in such Bank's
Group).
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of
New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Program Agent from three Federal funds brokers of
recognized standing selected by it.
"FEE AGREEMENTS" has the meaning specified in Section 2.05(b).
"FEES" has the meaning specified in Section 2.05(b).
"FISCAL MONTH" means a fiscal month of the Originators as set forth on
Schedule III hereto, as such schedule shall be updated from time to time in
accordance with the terms hereof.
11
"FITCH" means Fitch, Inc.
"FIXED PERIOD" means, with respect to any Receivable Interest:
(a) in the case of any Fixed Period in respect of which Yield
is computed by reference to the Investor Rate, each successive period
commencing on each CP Fixed Period Date for such Receivable Interest
and ending on the next succeeding CP Fixed Period Date for such
Receivable Interest; and
(b) in the case of any Fixed Period in respect of which Yield
is computed by reference to the Assignee Rate, each successive period
of from one to and including 29 days, or a period of one month, as the
Seller shall select and the Investor Agent for the relevant Investor
or Bank may approve on notice by the Seller received by such Investor
Agent (including notice by telephone, confirmed in writing) not later
than 11:00 A.M. (New York City time) on (A) the day which occurs two
Business Days before the first day of such Fixed Period (in the case
of Fixed Periods in respect of which Yield in computed by reference to
the Eurodollar Rate) or (B) the first day of such Fixed Period (in the
case of Fixed Periods in respect of which Yield is computed by
reference to the Alternate Base Rate), each such Fixed Period for such
Receivable Interest to commence on the last day of the immediately
preceding Fixed Period for such Receivable Interest (or, if there is
no such Fixed Period, on the date of purchase of such Receivable
Interest), EXCEPT that if such Investor Agent shall not have received
such notice, or such Investor Agent and the Seller shall not have so
mutually agreed, before 11:00 A.M. (New York City time) on such day,
such Fixed Period shall be one day;
PROVIDED, HOWEVER, that:
(i) any Fixed Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day (PROVIDED, HOWEVER, if Yield in
respect of such Fixed Period is computed by reference to the
Eurodollar Rate, and such Fixed Period would otherwise end on a day
which is not a Business Day, and there is no subsequent Business Day
in the same calendar month as such day, such Fixed Period shall end on
the next preceding Business Day);
(ii) in the case of any Fixed Period of one day, (A) if such
Fixed Period is the initial Fixed Period for a Receivable Interest,
such Fixed Period shall be the day of the purchase of such Receivable
Interest; (B) any subsequently occurring Fixed Period which is one day
shall, if the immediately preceding Fixed Period is more than one day,
be the last day of such immediately preceding Fixed Period and, if the
immediately preceding Fixed Period is one day, be the day next
following such immediately preceding Fixed Period; and (C) if such
Fixed Period occurs on a day immediately preceding a day which is not
a Business Day, such Fixed Period shall be extended to the next
succeeding Business Day; and
12
(iii) in the case of any Fixed Period for any Receivable
Interest which commences before the Termination Date for such
Receivable Interest and would otherwise end on a date occurring after
such Termination Date, such Fixed Period shall end on such Termination
Date and the duration of each Fixed Period which commences on or after
the Termination Date for such Receivable Interest shall be of such
duration (including, without limitation, one day) as shall be selected
by the Program Agent with the consent of the Investor Agents (or, if
such Termination Date occurs solely as a result of the occurrence of a
Facility Termination Date under clause (d) of the defined term
Facility Termination Date for less than all the Groups, as shall be
selected by the Investor Agent for the Investor and Banks for which
such Facility Termination Date under clause (d) is applicable) or, in
the absence of any such selection, each period of thirty days from the
last day of the immediately preceding Fixed Period.
"FUNDS TRANSFER LETTER" means a letter in substantially the form of
Annex E hereto executed and delivered by the Seller to the Program Agent and the
Investor Agents, as the same may be amended or restated in accordance with the
terms thereof.
"GROUP" means (a) with respect to CAFCO, its Investor Agent, its
Related Banks and CAFCO, and (b) with respect to ▇▇▇▇▇▇▇▇, its Investor Agent,
its Related Banks and ▇▇▇▇▇▇▇▇.
"GUARANTEED PENSION PLAN" means any employee pension benefit plan
within the meaning of Section 3(2) of ERISA maintained or contributed to by the
Parent or any ERISA Affiliate, the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
**********************************************************************
****************************************************
"INCIPIENT BANKRUPTCY EVENT OF TERMINATION" means an event under
Section 7.01(g) that but for notice or lapse of time or both would constitute an
Event of Termination.
"INCIPIENT EVENT OF TERMINATION" means an event that but for notice or
lapse of time or both would constitute an Event of Termination.
"INDEMNIFIED PARTY" has the meaning specified in Section 10.01.
"INVESTOR" means CAFCO, ▇▇▇▇▇▇▇▇ and all other owners by assignment or
otherwise of a Receivable Interest originally purchased by CAFCO or ▇▇▇▇▇▇▇▇
and, to the extent of the undivided interests so purchased, shall include any
participants.
"INVESTOR AGENT" means (a) with respect to CAFCO and its Related
Banks, CNAI or any successor investor agent designated by such parties, and (b)
with respect to ▇▇▇▇▇▇▇▇ and its Related Banks, BNP Paribas or any successor
investor agent designated by such parties.
"INVESTOR AGENT'S ACCOUNT" means (a) with respect to CAFCO and its
Related Banks, the special account (account number ********) of their Investor
Agent maintained at the office of Citibank at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, or such other account as such
13
Investor Agent shall designate in writing to the Seller, the Collection Agent
and the Program Agent, and (b) with respect to ▇▇▇▇▇▇▇▇ and its Related Banks,
the special account (account number ******** of their Investor Agent maintained
at the office of BNP Paribas in New York, New York, or such other account as
such Investor Agent shall designate in writing to the Seller, the Collection
Agent and the Program Agent.
"INVESTOR PURCHASE LIMIT" means (a) with respect to the Group
consisting of CAFCO and its Related Banks, $125,000,000, and (b) with respect to
the Group consisting of ▇▇▇▇▇▇▇▇ and its Related Banks, $125,000,000. Any
reduction (or termination) of the Purchase Limit pursuant to the terms of this
Agreement shall reduce ratably (or terminate) each Group's Investor Purchase
Limit; PROVIDED, that if any Departing Group shall determine not to extend the
Commitment Termination Date or shall approve an extension of the Commitment
Termination Date based on a reduced Investor Purchase Limit for their Group,
then, if the Investors and Banks in the other Groups shall nonetheless determine
to extend the Commitment Termination Date, effective from such Commitment
Termination Date, the Investor Purchase Limit of the Departing Group shall be so
reduced or terminated.
"INVESTOR RATE" means for any Fixed Period for any Receivable
Interest:
(a) with respect to CAFCO, the per annum rate equivalent to
the weighted average of the per annum rates paid or payable by such
Investor from time to time as interest on or otherwise (by means of
interest rate ▇▇▇▇▇▇ or otherwise) in respect of those Promissory
Notes issued by such Investor that are allocated, in whole or in part,
by such Investor's Investor Agent (on behalf of such Investor) to fund
the purchase or maintenance of such Receivable Interest during such
Fixed Period as determined by such Investor Agent (on behalf of such
Investor) and reported to the Seller, the Program Agent and, if the
Collection Agent is not the Seller, the Collection Agent, which rates
shall reflect and give effect to the commissions of placement agents
and dealers in respect of such Promissory Notes, to the extent such
commissions are allocated, in whole or in part, to such Promissory
Notes by such Investor Agent (on behalf of such Investor); PROVIDED,
HOWEVER, that (a) if any component of such rate is a discount rate, in
calculating the "INVESTOR RATE" for such Fixed Period such Investor
Agent shall for such component use the rate resulting from converting
such discount rate to an interest bearing equivalent rate per annum;
(b) the Investor Rate with respect to Receivable Interests funded by
CAFCO's Participants shall be the same rate as in effect from time to
time on Receivable Interests or portions thereof that are not funded
by one of its Participants; and (c) if all of the Receivable Interests
maintained by CAFCO are funded by its Participants, then the Investor
Rate shall be CAFCO's pool funding rate in effect from time to time
for its largest size pool of transactions which settles monthly.
(b) with respect to ▇▇▇▇▇▇▇▇, an interest rate per annum
equal to the sum of (i) the rate or, if more than one rate, the
weighted average of the rates, determined by converting to an
interest-bearing equivalent rate per annum the discount rate (or
rates) at which commercial paper notes of ▇▇▇▇▇▇▇▇ on each day during
such Fixed Period have been sold by any placement agent or commercial
14
paper dealer selected by ▇▇▇▇▇▇▇▇, plus (ii) to the extent not
reflected in the rate described in clause (i) above, applicable
commissions and charges charged by such placement agent or commercial
paper dealer with respect to such commercial paper notes, expressed as
a percentage of such face amount and converted to an interest-bearing
equivalent rate per annum, plus (iii) certain documentation and
transaction costs directly associated with the issuance of such
commercial paper notes, as are customarily charged by ▇▇▇▇▇▇▇▇ to its
customers in similar transactions, plus (iv) costs of other related
borrowings by ▇▇▇▇▇▇▇▇, including borrowings to fund small or odd
dollar amounts that are not easily accommodated in the commercial
paper market, expressed as a percentage of the face amount of such
commercial paper notes and converted to an interest-bearing equivalent
rate per annum; PROVIDED, HOWEVER that if any component of such rate
is a discount rate, in calculating the "Investor Rate", ▇▇▇▇▇▇▇▇ shall
for such component use the rate resulting from converting such
discount rate to an interest bearing equivalent rate per annum.
**********************************************************************
****************************************************
"LIQUIDATION DAY" means, for any Receivable Interest, (i) each day
during a Fixed Period for such Receivable Interest on which the conditions set
forth in Section 3.02 are not satisfied and (ii) each day which occurs on or
after the Termination Date for such Receivable Interest.
"LIQUIDATION FEE" means, for (i) any Fixed Period for which Yield is
computed by reference to the Investor Rate and a reduction of Capital is made
for any reason on any day with less than two Business Days' prior notice or (ii)
any Fixed Period for which Yield is computed by reference to the Eurodollar Rate
and a reduction of Capital is made for any reason on any day other than the last
day of such Fixed Period, the amount, if any, by which (A) the additional Yield
(calculated without taking into account any Liquidation Fee or any shortened
duration of such Fixed Period pursuant to clause (iii) of the definition
thereof) which would have accrued from the date of such repayment to the last
day of such Fixed Period (or, in the case of clause (i) above, the maturity of
the underlying commercial paper tranches) on the reductions of Capital of the
Receivable Interest relating to such Fixed Period had such reductions remained
as Capital, exceeds (B) the income, if any, received by the Investors or the
Banks which hold such Receivable Interest from the investment of the proceeds of
such reductions of Capital.
"LIQUIDATION PERIOD" means, at any time, the number of Fiscal Months
(rounded to the next highest whole Fiscal Month) arrived at by dividing (a) the
sum of the then Maximum Available Capital plus Yield and Fee Reserve in respect
of such Maximum Available Capital by (b) Net Collections for the most recent
Fiscal Month.
"LOCK-BOX ACCOUNT" means a post office box administered by a Lock-Box
Bank or an account maintained at a Lock-Box Bank, in each case for the purpose
of receiving Collections.
"LOCK-BOX AGREEMENT" means an agreement, in substantially the form of
Annex B.
15
"LOCK-BOX BANK" means any of the banks holding one or more Lock-Box
Accounts.
"LOSS HORIZON FACTOR" means, as of any date, a ratio computed by
dividing (i) the aggregate Outstanding Balance (in each case, at the time of
creation) of all Originator Receivables created by the Originators during the
four most recently ended Fiscal Months by (ii) the Outstanding Balance of
Originator Receivables (other than Defaulted Receivables), less Collections on
hand but not yet applied to reduce the Outstanding Balance of Originator
Receivables, in each case as at the last day of the most recently ended Fiscal
Month.
"LOSS PERCENTAGE" means, as of any date, the greatest of (a) the
product of (i) two multiplied by (ii) the Loss Horizon Factor as of the last day
of the most recently ended Fiscal Month multiplied by (iii) the highest of the
Loss Ratios for the twelve most recently ended Fiscal Months, (b) four times the
Normal Concentration Limit referred to in clause (iii) of the definition of
Concentration Limit and (c) 10%.
"LOSS RATIO" means, as of any date, the average of the ratios (each
expressed as a percentage) for each of the three most recently ended Fiscal
Months computed for each such month by dividing (a) the sum of the aggregate
Outstanding Balance of Originator Receivables which were 91-120 days past due
(or otherwise would have been classified during such Fiscal Month as Defaulted
Receivables in accordance with clauses (ii) or (iii) of the definition of
"Defaulted Receivables") as at the last day of such Fiscal Month plus (without
duplication) write-offs during such Fiscal Month of Originator Receivables not
yet 91 days past due, by (b) the aggregate Outstanding Balance (in each case, at
the time of creation) of Originator Receivables created during the fourth
preceding Fiscal Month.
"LOSS RESERVE" means, for any Receivable Interest on any date, an
amount equal to:
LP X (C+ YFR)
where:
LP = the Loss Percentage on such date.
C = the Capital of such Receivable Interest on such
date.
YFR = the Yield and Fee Reserve for such Receivable
Interest on such date.
"LOSS-TO-LIQUIDATION RATIO" means the ratio (expressed as a
percentage) computed as of the last day of each Fiscal Month by dividing (i) the
aggregate Outstanding Balance of all Originator Receivables written off by the
Originators or the Seller, or which should have been written off by the
Originators or the Seller in accordance with the Credit and Collection Policy,
during the most recently ended 12 Fiscal Months by (ii) the aggregate amount of
Collections of Originator Receivables actually received during such period.
16
"MAXIMUM AVAILABLE CAPITAL" means, at any time, the maximum amount of
Capital (not in excess of the Purchase Limit) which would be available at the
time of computation without violating the provisions of Section 7.01(i).
"MAXIMUM RECEIVABLE INTEREST" means (i) at any time when only Monthly
Reports are required to be furnished hereunder, 95%, (ii) at any time when
Weekly Reports are required to be furnished hereunder during the period referred
to in clause (a) of the definition of Weekly Reporting Period, 95% and at all
other times when Weekly Reports are required to be furnished hereunder, 98.75%,
and (iii) at any time when Daily Reports are required to be furnished hereunder
during the period referred to in clause (a) of the definition of Weekly
Reporting Period, 99% and at all other times when Daily Reports are required to
be furnished hereunder, 99.75%.
**********************************************************************
****************************************************
"MONTHLY REPORT" means a report in substantially the form of Annex A-1
hereto and containing such additional information as any Agent may reasonably
request from time to time, furnished by the Collection Agent pursuant to Section
6.02(g)(i).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" means any multiemployer plan within the meaning
of Section 3(37) of ERISA maintained or contributed to by the Parent or any
ERISA Affiliate.
"NET COLLECTIONS" means, for any Fiscal Month, an amount equal to
MC X (ER-EOC)
-------
ER
where:
MC = Collections received during such Fiscal Month.
EOC = the amount determined pursuant to clause (i) of
the definition of Net Receivables Pool Balance
(without giving effect to excess concentrations of
********or ********), when Net Receivables Pool
Balance is calculated as of the last day of such
Fiscal Month.
ER = the Outstanding Balance of Eligible Receivables in
the Receivables Pool at the end of such Fiscal
Month.
"NET RECEIVABLES POOL BALANCE" means at any time the Outstanding
Balance of Eligible Receivables then in the Receivables Pool reduced by the sum
of (without duplication) (i) the aggregate amount by which the Outstanding
Balance of Eligible Receivables of each Obligor then in the Receivables Pool
exceeds the product of (A) the Concentration Limit for such Obligor multiplied
by (B) the aggregate outstanding Capital of all Receivable Interests (PROVIDED,
that if such Concentration Limit is calculated as a dollar amount, then such
dollar
17
amount shall be used in lieu of the product of clauses (A) and (B)), (ii)
the aggregate amount of Collections on hand at such time but not yet applied to
reduce the Outstanding Balance of a Pool Receivable, (iii) to the extent credit
memos have not already been excluded from the Receivables Pool, the aggregate
Outstanding Balance of all Eligible Receivables in respect of which any credit
memo issued by an Originator or the Seller is outstanding at such time to the
extent not yet applied to reduce the Outstanding Balance of a Pool Receivable,
(iv) the amount, if any, by which (A) the aggregate Outstanding Balance of all
Eligible Receivables then in the Receivables Pool having original due dates more
than 120 days after the original billing date therefor exceeds (B) 35% of the
aggregate Outstanding Balance of all Receivables then in the Receivables Pool,
(v) the amount by which the aggregate Outstanding Balance of Receivables for
which the Obligor is a U.S. or state government or a U.S. or state governmental
subdivision or agency exceeds 2% of the aggregate Outstanding Balance of all
Receivables then in the Receivables Pool, (vi) the amount by which the aggregate
Outstanding Balance of Receivables for which the Obligor is a Canadian resident,
******** or ******** exceeds 5% of the aggregate Outstanding Balance of all
Receivables then in the Receivables Pool, (vii) the amount by which the
aggregate Outstanding Balance of Receivables for which the Obligor is a Quebec
resident exceeds ********, and (viii) from and after the date on which the
proviso in clause (i) of the definition of "Eligible Receivable" is satisfied,
the amount by which the aggregate Outstanding Balance of Receivables for which
the Obligor is ******** exceeds 1% of the aggregate Outstanding Balance of all
Receivables then in the Receivables Pool.
"OBLIGOR" means a Person obligated to make payments to any Originator
pursuant to a Contract.
"ORIGINATOR" means each of Wizards of the Coast, Inc., a Washington
corporation, OddzOn, Inc., a Delaware corporation and the Parent.
"ORIGINATOR PURCHASE AGREEMENT" means the Purchase and Contribution
Agreement dated as of the date of this Agreement between the Originators, as
sellers, and the Seller, as purchaser, as the same may be amended, modified or
restated from time to time.
"ORIGINATOR RECEIVABLE" means the indebtedness of any Obligor
resulting from the provision or sale of merchandise by any Originator under a
Contract (whether constituting an account, instrument, chattel paper or general
intangible), and includes the right to payment of any interest or finance
charges and other obligations of such Obligor with respect thereto, but shall
not include receivables bearing general ledger account codes ********
(non-trade), ******** (direct to retail), ********or ******** (intercompany) or
Wizards of the Coast Company Code ************* (retail stores dba Wizards and
Gamekeeper).
"OTHER COMPANIES" means the Originators and all of their Subsidiaries
except the Seller.
"OTHER TAXES" has the meaning specified in Section 2.10(b).
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof. Sales or use tax and any other taxes
which may be billed in connection with a Receivable are not included in the
Outstanding Balance.
18
"PARENT" means Hasbro, Inc., a Rhode Island corporation.
"PARENT UNDERTAKING" means the Undertaking Agreement made in favor of
the Seller and relating to obligations of the Originators other than the Parent
substantially in the form of Annex G hereto, as the same may be amended,
modified or restated from time to time.
"PARTICIPANT" shall have the meaning assigned to such term in Section
11.03(h).
"PBGC" means the Pension Benefit Guaranty Corporation created by
Section 4002 of ERISA and any successor entity or entities having similar
responsibilities.
"PERCENTAGE" of any Bank means, (a) with respect to Citibank, the
percentage set forth on the signature page to this Agreement, or such amount as
reduced or increased by any Assignment and Acceptance entered into with an
Eligible Assignee, (b) with respect to BNP Paribas, the percentage set forth on
the signature page to this Agreement, or such amount as reduced by any
Assignment and Acceptance entered into with an Eligible Assignee, or (c) with
respect to a Bank that has entered into an Assignment and Acceptance, the amount
set forth therein as such Bank's Percentage, or such amount as reduced or
increased by an Assignment and Acceptance entered into between such Bank and an
Eligible Assignee.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"POOL NON-COMPLIANCE DATE" means any day on which the sum of the
Receivable Interests as shown in the most recent Monthly Report, Weekly Report
(if required by Section 6.02(g)(ii)) or Daily Report (if required by Section
6.02(g)(iii)) is greater than the Maximum Receivable Interest.
"POOL RECEIVABLE" means a Receivable in the Receivables Pool.
"PROGRAM AGENT" has the meaning specified in the introductory
paragraph hereof.
"PROGRAM AGENT ACCOUNT" means the bank account (account number
********) under the control of the Program Agent maintained at the Program Agent
Account Bank, or such other account as the Program Agent shall designate in
writing to the Seller, the Collection Agent and the Investor Agents from time to
time, PROVIDED that such account shall be subject to a Program Agent Account
Control Agreement.
"PROGRAM AGENT ACCOUNT BANK" means Bank of America, N.A., or such
other bank, satisfactory to each of the Agents, as the Program Agent shall
designate in writing to each of the Seller, the Collection Agent and the
Investor Agents from time to time.
"PROGRAM AGENT ACCOUNT CONTROL AGREEMENT" means an agreement among the
Seller, the Collection Agent, the Program Agent and the Program Agent Account
Bank, in form and substance satisfactory to each of the Agents.
19
"PROJECTED DILUTION" means, for any Fiscal Month (the "RELEVANT FISCAL
MONTH") an amount equal to the aggregate amount of Diluted Receivables which
occurred during the period of "X" Fiscal Months beginning 11 Fiscal Months prior
to the relevant Fiscal Month, where "X" is the highest Liquidation Period during
the 12-month period ending with the relevant Fiscal Month.
"PROMISSORY NOTES" means, collectively, (i) promissory notes issued by
CAFCO and (ii) participations sold by CAFCO pursuant to Section 10.03(h);
PROVIDED that the term "Promissory Notes" shall not include the interests sold
by CAFCO to a Bank or its designee under an Asset Purchase Agreement.
"PURCHASE LIMIT" means $250,000,000, as such amount may be reduced
pursuant to the immediately succeeding sentence or Section 2.01(b). In the event
that the Facility Termination Date shall occur solely under clause (d) of such
defined term, then on such Facility Termination Date the Purchase Limit shall be
reduced by the aggregate Bank Commitments of the Banks in the Group for which
such Facility Termination Date has occurred (as such Bank Commitments were in
effect immediately prior to such Facility Termination Date). References to the
unused portion of the Purchase Limit shall mean, at any time, the Purchase
Limit, as then reduced pursuant to Section 2.01(b), minus the then outstanding
Capital of Receivable Interests under this Agreement.
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****
"RECEIVABLE" means any Originator Receivable which has been acquired
by the Seller by purchase or by capital contribution pursuant to the Originator
Purchase Agreement.
"RECEIVABLE INTEREST" means, at any time, an undivided percentage
ownership interest in (i) all then outstanding Pool Receivables arising prior to
the time of the most recent computation or recomputation of such undivided
percentage interest pursuant to Section 2.03, (ii) all Related Security with
respect to such Pool Receivables, and (iii) all Collections with respect to, and
other proceeds of, such Pool Receivables. Such undivided percentage interest
shall be computed as
C + YFR + LR+DR
---------------
NRPB
where:
C = the Capital of such Receivable Interest at the
time of computation.
YFR = the Yield and Fee Reserve of such Receivable
Interest at the time of computation.
LR = the Loss Reserve of such Receivable Interest at
the time of computation.
20
DR = the Dilution Reserve of such Receivable Interest
at the time of computation.
NRPB = the Net Receivables Pool Balance at the time of
computation.
Each Receivable Interest shall be determined from time to time pursuant to the
provisions of Section 2.03; PROVIDED, HOWEVER, that solely for the purpose of
determining the sum of the Receivable Interests in the second sentence of
Section 2.04(d), the first sentence of Section 4.02(g) and Section 7.01, Capital
shall be reduced by the aggregate amount of funds (if any) then held in the
Program Agent Account for distribution on account of Capital (which funds have
not yet been applied to reduce Capital), and the Reserves shall be computed on
such reduced Capital.
"RECEIVABLES POOL" means at any time the aggregation of each then
outstanding Receivable.
"REGISTER" has the meaning specified in Section 11.03(c).
"RELATED BANK" means (a) with respect to CAFCO, Citibank, each Bank
which has entered into an Assignment and Acceptance with Citibank, and each
assignee (directly or indirectly) of any such Bank, which assignee has entered
into an Assignment and Acceptance, and (b) with respect to ▇▇▇▇▇▇▇▇, BNP
Paribas, each Bank which has entered into an Assignment and Acceptance with BNP
Paribas, and each assignee (directly or indirectly) of any such Bank, which
assignee has entered into an Assignment and Acceptance.
"RELATED SECURITY" means with respect to any Receivable
(i) all of the Seller's interest in any merchandise
(including returned merchandise) relating to any sale giving rise to
such Receivable;
(ii) all security interests or liens and property subject
thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract relating to such
Receivable or otherwise, together with all financing statements filed
against an Obligor describing any collateral securing such Receivable;
(iii) all guaranties, insurance and other agreements or
arrangements of whatever character (but excluding the ********and any
letter of credit supporting payment under the ********) from time to
time supporting or securing payment of such Receivable whether
pursuant to the Contract relating to such Receivable or otherwise; and
(iv) the Contract and all other books, records and other
information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and
rights) relating to such Receivable and the related Obligor.
21
"RESERVES" means, with respect to any Receivable Interest as of any
day, the sum of the Yield and Fee Reserve, the Loss Reserve and the Dilution
Reserve for such Receivable Interest as of such day.
"S&P" means Standard and Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"SELLER REPORT" means a Monthly Report, a Weekly Report or a Daily
Report.
"SETTLEMENT DATE" for any Receivable Interest means the last day of
each Fixed Period for such Receivable Interest ; PROVIDED, HOWEVER, that if
Yield with respect to such Receivable Interest is computed with reference to the
Investor Rate and no Liquidation Day exists on the last day of a Fixed Period
for such Receivable Interest, the Settlement Date for such Receivable Interest
for such Fixed Period shall be the second Business Day after the due date of the
Monthly Report for such Fixed Period.
"▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇ Funding Corporation and any successor or
assign of ▇▇▇▇▇▇▇▇ that is a receivables investment company which in the
ordinary course of its business issues commercial paper or other securities to
fund its acquisition and maintenance of receivables.
"SUBSIDIARY" means any corporation or other entity of which securities
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by the Seller or an Originator, as the case may be, or one or
more Subsidiaries, or by the Seller or an Originator, as the case may be, and
one or more Subsidiaries.
"TANGIBLE NET WORTH" means at any time the excess of (i) the sum of
(a) the product of (x) 100% minus the Discount (as such term is defined in the
Originator Purchase Agreement) multiplied by (y) the Outstanding Balance of all
Receivables other than Defaulted Receivables plus (b) cash and cash equivalents
of the Seller, minus (ii) the sum of (a) Capital plus (b) the Deferred Purchase
Price.
**********************************************************************
****************************************************
"TAXES" has the meaning specified in Section 2.10(a).
"TERMINATION DATE" for any Receivable Interest means (i) in the case
of a Receivable Interest owned by an Investor, the earlier of (a) the Business
Day which the Seller or the Investor Agent for such Investor so designates by
notice to the other (with a copy to the Program Agent and the other Investor
Agents) at least one Business Day in advance for such Receivable Interest and
(b) the Facility Termination Date and (ii) in the case of a Receivable Interest
owned by a Bank, the earlier of (a) the Business Day which the Seller so
designates by notice to the Program Agent and the Investor Agents at least one
Business Day in advance for such Receivable Interest and (b) the Commitment
Termination Date.
22
"TRANSACTION DOCUMENT" means any of this Agreement, the Originator
Purchase Agreement, the Parent Undertaking, the Lock-Box Agreements, the Program
Agent Account Control Agreement, the Fee Agreements and all other agreements and
documents delivered and/or related hereto or thereto.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
**********************************************************************
*************************************************
"WEEK" means each calendar week beginning on Saturday and ending on
(and including) the close of business on the following Friday.
"WEEKLY REPORT" means a report in substantially the form of Annex A-2
hereto and containing such additional information as any Agent may reasonably
request from time to time, furnished by the Collection Agent pursuant to Section
6.02(g)(ii).
"WEEKLY REPORTING PERIOD" means (a) the period beginning on December 1
of each year and ending on the last day of February of the next year and (b) any
period during which the Parent's Debt Rating is less than BB by S&P or less than
Ba3 by Moody's (but no Event of Termination pursuant to Section 7.01(n) then
exists).
"WEEKLY SETTLEMENT DATE" means the second Business Day of each Week
occurring during any Weekly Reporting Period.
"WEIGHTED AVERAGE DELINQUENCY" means, as of any date, an amount
calculated by multiplying (a) the number of days equivalent to the mid-point in
each of columns two through seven in part VII (Historical Data) of the part of
the Monthly Report under "Portfolio Performance Tests and Compliance" (except
that for the column entitled "Current", the mid-point number of days shall be
zero and for the column entitled "121 + dpd", the mid-point shall be 130) times
(b) the aggregate Outstanding Balance of all Receivables in each such column and
dividing the result by (c) the aggregate Outstanding Balance of all Receivables
in all columns, in each case as calculated by the Collection Agent in the then
most recent Monthly Report; PROVIDED, that if the Program Agent should disagree
with any such calculation, the Program Agent may calculate such Weighted Average
Delinquency.
"WEIGHTED AVERAGE MATURITY" means, for any Fiscal Month, an amount
calculated by multiplying (a) the average maturity shown in each column in part
V (Payment Term Detail) of the part of the Monthly Report for which "Portfolio
Aging" is Part I times (b) the aggregate Outstanding Balance of all Receivables
in each such column and dividing the result by (c) the total Outstanding Balance
of all Receivables in all payment term categories, in each case as calculated by
the Collection Agent in the most recent Monthly Report; PROVIDED, that if the
Program Agent should disagree with any such calculation, the Program Agent may
calculate such Weighted Average Maturity.
"YIELD" means for each Receivable Interest for each Fixed Period:
23
(i) for each day during each Fixed Period to the extent an
Investor will be funding its portion of such Receivable Interest
through the issuance of Promissory Notes, commercial paper or other
promissory notes, as the case may be, and no Event of Termination has
occurred and is continuing,
IR x C X ED + LF
---
360
(ii) for each day during such Fixed Period to the extent (x)
an Investor will not be funding its portion of such Receivable
Interest through the issuance of Promissory Notes, commercial paper or
other promissory notes, as the case may be, or (y) a Bank will be
funding its portion of such Receivable Interest, or (z) an Event of
Termination has occurred and is continuing,
AR x C x ED + LF
---
360
where:
AR = the Assignee Rate for such portion of such
Receivable Interest for such Fixed Period;
C = the Capital of such portion of such Receivable
Interest during such Fixed Period;
IR = the Investor Rate for such portion of such
Receivable Interest for such Fixed Period;
ED = the actual number of days elapsed during such
portion of such Fixed Period;
LF = the Liquidation Fee, if any, for such portion of
such Receivable Interest for such Fixed Period;
PROVIDED that no provision of this Agreement shall require the payment or permit
the collection of Yield in excess of the maximum permitted by applicable law;
and PROVIDED FURTHER that Yield for any Receivable Interest shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
"YIELD AND FEE RESERVE" means, on any date, an amount equal to
(C X YFRP) + AUYF
where:
C = the Capital of such Receivable Interest at the
close of business of the Collection Agent on such
date.
24
YFRP = the Yield and Fee Reserve Percentage on such date.
AUYF = accrued and unpaid Yield, Collection Agent Fee and
Fees on such date, in each case for such Receivable
Interest.
"YIELD AND FEE RESERVE PERCENTAGE" means, on any date, a percentage
equal to
[(AER X 1.5) + AM+ CAF] X [WAD + WAM]
-------------------------------------
360
where:
AER = the one-month Adjusted Eurodollar Rate in effect
on such date.
AM = the Applicable Margin used in the calculation of
the Assignee Rate in effect on such date.
CAF = the percentage per annum used in the calculation
of the Collection Agent Fee in effect on such date.
WAD = the maximum Weighted Average Delinquency for the
immediately preceding 12 Fiscal Months.
WAM = the Weighted Average Maturity for the most recent
Fiscal Month.
SECTION 1.02. OTHER TERMS . All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles. All terms used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9.
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. PURCHASE FACILITY . (a) On the terms and conditions
hereinafter set forth, each of CAFCO and ▇▇▇▇▇▇▇▇ may, in its sole discretion,
ratably in accordance with the Investor Purchase Limit of its Group, and, if and
to the extent CAFCO or ▇▇▇▇▇▇▇▇ does not make a purchase, the Related Banks for
such Investor shall, ratably in accordance with their respective Bank
Commitments, purchase Receivable Interests from the Seller from time to time
during the period from the date hereof to the Facility Termination Date (in the
case of the Investors) and to the Commitment Termination Date (in the case of
the Banks). Under no circumstances shall the Investors make any such purchase,
or the Banks be obligated to make any such purchase, if after giving effect to
such purchase, the aggregate outstanding Capital of Receivable Interests would
exceed the Purchase Limit.
25
(b) The Seller may at any time, upon at least five Business Days'
notice to the Program Agent and the Investor Agents, terminate the facility
provided for in this Agreement in whole or, from time to time, reduce in part
the unused portion of the Purchase Limit; PROVIDED that each partial reduction
shall be in the amount of at least $1,000,000 or an integral multiple thereof.
(c) Until the Program Agent (or any Investor Agent with respect to
its Investor) gives the Seller the notice provided in Section 3.02(c)(iii), the
Program Agent, on behalf of the Investors which own Receivable Interests, may
have the Collections attributable to such Receivable Interests automatically
reinvested pursuant to Section 2.04 in additional undivided percentage interests
in the Pool Receivables by making an appropriate readjustment of such Receivable
Interests. The Program Agent, on behalf of the Banks which own Receivable
Interests, shall have the Collections attributable to such Receivable Interests
automatically reinvested pursuant to Section 2.04 in additional undivided
percentage interests in the Pool Receivables by making an appropriate
readjustment of such Receivable Interests.
SECTION 2.02. MAKING PURCHASES . (a) Each purchase by any of the
Investors or the Banks shall be made on notice given no later than 3:00 P.M.
(New York City time) at least two Business Days' in advance from the Seller to
the Program Agent and each Investor Agent, PROVIDED that no more than one
purchase shall be made in any Week. Each such notice of a purchase shall specify
(i) the amount requested to be paid to the Seller (such amount, which shall not
be less than $3,000,000, being referred to herein as the initial "Capital" of
the Receivable Interest then being purchased), (ii) the allocation of such
amount among each of the Groups (which shall be proportional to the Investor
Purchase Limit of each Group) and (iii) the date of such purchase (which shall
be a Business Day). Each Investor shall promptly notify the Program Agent
whether such Investor has determined to make the requested purchase on the terms
specified by the Seller. The Program Agent shall promptly thereafter notify the
Seller whether the Investors have determined to make the requested purchase and,
if so, whether all of the terms specified by the Seller are acceptable to the
Investors.
If any Investor has determined not to make the entire amount of a
proposed purchase requested to be made by it, the Investor Agent for such
Investor shall promptly send notice of the proposed purchase to all of the
Related Banks for such Investor concurrently by telecopier, telex or cable
specifying the date of such purchase, the aggregate amount of Capital of the
Receivable Interest being purchased by such Related Banks (which amount shall be
equal to the portion of the initial Capital requested to be funded by such
Investor, which such Investor determined not to fund), each such Related Bank's
portion thereof (determined ratably in accordance with its respective Bank
Commitment), whether the Yield for the Fixed Period for such Receivable Interest
is calculated based on the Eurodollar Rate (which may be selected only if such
notice is given at least two Business Days prior to the purchase date) or the
Alternate Base Rate, and the duration of the Fixed Period for such Receivable
Interest (which shall be one day if the Seller has not selected another period).
(b) On the date of each such purchase of a Receivable Interest, the
applicable Investors and/or Banks, as the case may be, shall, upon satisfaction
of the applicable conditions set forth in this Article II and Article III, make
available to the Seller in same day funds, at the account set forth in the Funds
Transfer Letter, an aggregate amount equal to the initial Capital of
26
such Receivable Interest; PROVIDED, HOWEVER, if such purchase is being made by
the applicable Banks following the designation by the Investor Agent for an
Investor of a Termination Date for a Receivable Interest owned by such Investor
pursuant to clause (i)(a) of the definition of Termination Date and any Capital
of such Receivable Interest is outstanding on such date of purchase, the Seller
hereby directs the applicable Banks to pay the proceeds of such purchase (to the
extent of the outstanding Capital and accrued Yield on such Receivable Interest
of such Investor) to the relevant Investor Agent's Account, for application to
the reduction of the outstanding Capital and accrued Yield on such Receivable
Interest of such Investor.
(c) Effective on the date of each purchase pursuant to this Section
2.02 and each reinvestment pursuant to Section 2.04, the Seller hereby sells and
assigns to the Program Agent, for the benefit of the parties making such
purchase, an undivided percentage ownership interest, to the extent of the
Receivable Interest then being purchased, in each Pool Receivable then existing
and in the Related Security and Collections with respect thereto.
(d) Notwithstanding the foregoing, (i) neither CAFCO nor ▇▇▇▇▇▇▇▇
shall make purchases under this Section 2.02 at any time in an amount which
would exceed the Investor Purchase Limit of such Investor's Group and (ii) a
Bank shall not be obligated to make purchases under this Section 2.02 at any
time in an amount which would exceed such Bank's Bank Commitment less the sum of
(A) the aggregate outstanding and unpaid amount of any purchases made by such
Bank under such Bank's Asset Purchase Agreement plus (B) such Bank's ratable
share of the aggregate outstanding portion of Capital held by the Investor in
such Bank's Group (whether or not any portion thereof has been assigned under an
Asset Purchase Agreement), after giving effect to reductions of the Capital held
by the Investor in such Bank's Group to be made on the date of such purchase
(whether from the distribution of Collections or from the proceeds of purchases
by such Bank). Each Bank's obligation shall be several, such that the failure of
any Bank to make available to the Seller any funds in connection with any
purchase shall not relieve any other Bank of its obligation, if any, hereunder
to make funds available on the date of such purchase, but no Bank shall be
responsible for the failure of any other Bank to make funds available in
connection with any purchase.
SECTION 2.03. RECEIVABLE INTEREST COMPUTATION . Each Receivable
Interest shall be initially computed on its date of purchase. Thereafter until
the Termination Date for such Receivable Interest, such Receivable Interest
shall be automatically recomputed (or deemed to be recomputed) on each day other
than a Liquidation Day. Any Receivable Interest, as computed (or deemed
recomputed) as of the day immediately preceding the Termination Date for such
Receivable Interest, shall thereafter remain constant; PROVIDED, HOWEVER, that
from and after the date on which the Termination Date shall have occurred for
all Receivable Interests and until each Receivable Interest becomes zero in
accordance with the next sentence, each Receivable Interest shall be calculated
as the percentage equivalent of a fraction the numerator of which is the
percentage representing such Receivable Interest immediately prior to such date
and the denominator of which is the sum of the percentages representing all
Receivable Interests which were outstanding immediately prior to such date. Each
Receivable Interest shall become zero when Capital thereof and Yield thereon
shall have been paid in full, and all Fees and other amounts owed by the Seller
hereunder to the Investors, the Banks, the Investor Agents or the Program Agent
are paid and the Collection Agent shall have received the accrued Collection
Agent Fee thereon.
27
SECTION 2.04. SETTLEMENT PROCEDURES . (a) Collection of the Pool
Receivables shall be administered by a Collection Agent, in accordance with the
terms of Article VI of this Agreement. The Seller shall provide to the
Collection Agent (if other than the Seller) on a timely basis all information
needed for such administration, including notice of the occurrence of any
Liquidation Day, a Pool Non-Compliance Date and current computations of each
Receivable Interest.
(b) So long as the Parent's Debt Ratings are equal to or higher than
BB by S&P and equal to or higher than Ba3 by ▇▇▇▇▇'▇, the Collection Agent
shall, on each day on which Collections of Pool Receivables are received by it:
(i) with respect to each Receivable Interest, set aside and
hold in trust (and, at the request of the Program Agent following an
Event of Termination, segregate) for the Investors or the Banks that
hold such Receivable Interest and for the Investor Agents, out of the
percentage of such Collections represented by such Receivable
Interest, an amount equal to the Yield, Fees and Collection Agent Fee
accrued through such day for such Receivable Interest and not
previously set aside;
(ii) with respect to each Receivable Interest, if such day is
not a Liquidation Day for such Receivable Interest, reinvest with the
Seller on behalf of the Investors or the Banks that hold such
Receivable Interest the percentage of such Collections represented by
such Receivable Interest, to the extent representing a return of
Capital, by recomputation of such Receivable Interest pursuant to
Section 2.03;
(iii) if such day is a Liquidation Day for any one or more
Receivable Interests, set aside and hold in trust (and, at the request
of the Program Agent following an Event of Termination, segregate) for
the Investors and/or the Banks that hold such Receivable Interests and
for the Investor Agents (x) if such day is a Liquidation Day for less
then all of the Receivable Interests, the percentage of such
Collections represented by such Receivable Interests and (y) if such
day is a Liquidation Day for all of the Receivable Interests, all of
the remaining Collections (but not in excess of the aggregate Capital
of such Receivable Interests and any other amounts payable by the
Seller hereunder); PROVIDED that if amounts are set aside and held in
trust on any Liquidation Day occurring prior to the Termination Date,
and thereafter prior to the Settlement Date for such Fixed Period the
conditions set forth in Section 3.02 are satisfied or waived by the
Program Agent and the Investor Agents, such previously set aside
amounts shall, to the extent representing a return of Capital, be
reinvested in accordance with the preceding subsection (ii) on the day
of such subsequent satisfaction or waiver of conditions; PROVIDED,
FURTHER, if such day is a Liquidation Day for one or more Receivable
Interests solely by reason of the designation by the Investor Agent
for an Investor of a Termination Date for a Receivable Interest
pursuant to clause (i)(a) of the definition of Termination Date (and
no other event or condition qualifying as a Liquidation Day has
occurred), then the Collection Agent shall periodically notify such
Investor Agent of the amounts set aside and
28
held in trust pursuant to this clause (iii) on account of such
Receivable Interests (which notice shall be given at such times as the
Collection Agent and such Investor Agent may agree, but no less
frequently than weekly), the Banks in such Investor Agent's Group
shall make periodic purchases of the Receivable Interests from the
Seller having initial Capital equal to the amounts so set aside and
held in trust, the Seller hereby directs such Banks to pay the
proceeds of such purchases to the applicable Investor Agent's Account,
for application to the reduction of the outstanding Capital on such
Receivable Interests of such Investor, and the amounts so set aside
and held in trust shall be paid by the Collection Agent to the Seller
on account of the purchase price of the Receivable Interests so
purchased by such Banks; and
(iv) release to the Seller for its own account any Collections
in excess of the amounts that are required to be set aside pursuant to
subsection (i) above.
(c) At any time when the Parent's Debt Rating is downgraded to less
than BB by S&P or less than Ba3 by ▇▇▇▇▇'▇, the Program Agent shall direct each
Lock-Box Bank to remit all Collections deposited in the Lock-Box Accounts to the
Program Agent Account at least once each Business Day, and thereafter the
Collection Agent shall not be permitted to withdraw any funds from the Program
Agent Account on any day unless (i) the Collection Agent shall have provided the
Agents with each Seller Report then due, (ii) the most recent Seller Report
shall show that no Pool Non-Compliance Date exists or shall show that after
taking into account the withdrawal of a portion (but not all) of the funds in
the Program Agent Account, no Pool Non-Compliance Date will exist (in which
case, only such portion of funds may be withdrawn) and (iii) no other Event of
Termination shall exist. If the Collection Agent is permitted to withdraw funds
from the Program Agent Account pursuant to the preceding sentence, such funds
shall be applied as provided in Section 2.04(b). If the Collection Agent is not
permitted to withdraw all of the funds from the Program Agent Account pursuant
to the first sentence of this Section 2.04(c), then on any subsequent Business
Day on which funds are on deposit in the Program Agent Account, the Collection
Agent may, following delivery of a Seller Report to each Agent, withdraw from
the Program Agent Account all or a portion of the funds in the Program Agent
Account and apply such funds as provided in Section 2.04(b); PROVIDED, that such
Seller Report shall state that, after taking account of the proposed withdrawal,
a Pool Non-Compliance Date does not exist, such Seller Report shall set forth
the calculation supporting such statement and no other Event of Termination
shall exist. On any Business Day which is a Settlement Date or a Weekly
Settlement Date, the Program Agent shall, and on any Business Day on which an
Event of Termination exists, the Program Agent may, direct the Program Agent
Account Bank to remit all funds then in the Program Agent Account to the
Investor Agent's Account of each Investor Agent (ratably according to the
aggregate Capital of Receivable Interests held by the Investors and Banks in
such Investor Agent's Group).
(d) The Collection Agent shall deposit into the Investor Agent's
Account of each Investor Agent, on the Settlement Date for each Receivable
Interest, Collections held for such Investor Agent and/or the Investors or the
Banks in its Group that relate to such Receivable Interest pursuant to Section
2.04(b). In addition, on the day of delivery of any Monthly Report or Weekly
Report which sets forth a Pool Non-Compliance Date as of the close of business
on the last Business Day of the preceding Fiscal Month or Week, and on each
Business Day
29
thereafter until a Pool Non-Compliance Date no longer exists, the Collection
Agent shall deposit into the Investor Agent's Account of each Investor Agent
(ratably according to the aggregate Capital of Receivable Interests held by the
Investors and Banks in such Investor Agent's Group) Collections set aside
pursuant to clause (iii) of Section 2.04(b); PROVIDED that the aggregate amount
deposited pursuant to this sentence with respect to any Monthly Report or Weekly
Report shall not exceed an amount such that, after giving effect to the
application of such amount to the reduction of Capital, the sum of the
Receivable Interests is equal to the Maximum Receivable Interest.
(e) Upon receipt of funds deposited into the Investor Agent's
Account, the relevant Investor Agent shall distribute them as follows:
(i) if such distribution occurs on a day that is not a
Liquidation Day (and does not consist of funds remitted directly from
the Program Agent Account pursuant to the last sentence of Section
2.04(c)), first to the Collection Agent in payment in full of all
accrued Collection Agent Fee payable by the Investors and Banks in its
Group and then to the Investors or the Banks in its Group that hold
the relevant Receivable Interest and to such Investor Agent in payment
in full of all accrued Yield and Fees.
(ii) if such distribution consists of (x) funds remitted
directly from the Program Agent Account pursuant to the last sentence
of Section 2.04(c) or (y) funds deposited pursuant to the second
sentence of Section 2.04(d), and, in either case, no Event of
Termination then exists, to the Investors or the Banks in its Group
that hold the Receivable Interests in reduction of the Capital of such
Receivable Interests.
(iii) if such distribution occurs on a Liquidation Day, first
to the Collection Agent in payment in full of all accrued Collection
Agent Fee payable by the Investors and Banks in its Group, second to
the Investors or the Banks in its Group that hold the relevant
Receivable Interest and to such Investor Agent in payment in full of
all accrued Yield and Fees, third to such Investors and/or Banks in
reduction to zero of all Capital and fourth to such Investors, Banks
or such Investor Agent in payment of any other amounts owed by the
Seller hereunder.
After the Capital, Yield, Fees and Collection Agent Fee with respect
to a Receivable Interest, and any other amounts payable by the Seller to the
Investors, the Banks, the Investor Agents or the Program Agent hereunder have
been paid in full, all additional Collections with respect to such Receivable
Interest shall be paid to the Seller for its own account.
(f) For the purposes of this Section 2.04:
(i) if on any day any Pool Receivable becomes (in whole or in
part) a Diluted Receivable, the Seller shall be deemed to have
received on such day a Collection of such Pool Receivable in the
amount of such Diluted Receivable
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which shall be payable by the Seller on the earlier of (x) the first
day thereafter on which a Seller Report is due and (y) the occurrence
of an Event of Termination;
(ii) if on any day any of the representations or warranties
contained in Section 4.01(h) is no longer true with respect to any
Pool Receivable, the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in full;
(iii) except as provided in subsection (i) or (ii) of this
Section 2.04(f), or as otherwise required by applicable law or the
relevant Contract, all Collections received from an Obligor of any
Receivables shall be applied to the Receivables of such Obligor in the
order of the age of such Receivables, starting with the oldest such
Receivable, unless such Obligor designates its payment for application
to specific Receivables; and
(iv) if and to the extent the Program Agent or any of the
Investor Agents, the Investors or the Banks shall be required for any
reason to pay over to an Obligor any amount received on its behalf
hereunder, such amount shall be deemed not to have been so received
but rather to have been retained by the Seller and, accordingly, the
Program Agent or such Investor Agent, the Investors or the Banks, as
the case may be, shall have a claim against the Seller for such
amount, payable when and to the extent that any distribution from or
on behalf of such Obligor is made in respect thereof.
(g) On the fifth Business Day after the end of each calendar month in
respect of which Yield is computed by reference to the Investor Rate, each
Investor Agent shall furnish the Seller with an invoice setting forth the amount
of the accrued and unpaid Yield and Fees for such Fixed Period with respect to
the Receivable Interests held by the Investors and the Banks in such Investor
Agent's Group.
SECTION 2.05. FEES . (a) Each Investor and Bank shall pay to the
Collection Agent a fee (the "COLLECTION AGENT FEE") of 2.7% per annum on the
average daily unpaid Capital of each Receivable Interest owned by such Investor
or Bank, from the date of purchase of such Receivable Interest until the later
of the Termination Date for such Receivable Interest or the date on which such
Capital is reduced to zero, payable on the Settlement Date for such Receivable
Interest. Upon three Business Days' notice to the Program Agent and each
Investor Agent, the Collection Agent (if not the Originator, the Seller or its
designee or an Affiliate of the Seller) may elect to be paid, as such fee,
another percentage per annum on the average daily Capital of such Receivable
Interest, but in no event in excess for all Receivable Interests relating to the
Receivables Pool of 110% of the reasonable costs and expenses of the Collection
Agent in administering and collecting the Receivables in the Receivables Pool.
The Collection Agent Fee shall be payable only from Collections pursuant to, and
subject to the priority of payment set forth in, Section 2.04. So long as the
Parent is acting as the Collection Agent hereunder, amounts paid as the
Collection Agent Fee pursuant to this Section 2.05(a) shall reduce, on a
dollar-for-dollar basis, the obligation of the Seller to pay the "Collection
Agent Fee" pursuant to Section 6.03 of the Originator Purchase Agreement,
PROVIDED that such obligation of the Seller shall in no event be reduced below
zero.
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(b) The Seller shall pay to the Program Agent and the Investor Agents
certain fees (collectively, the "FEES") in the amounts and on the dates set
forth in separate fee agreements of even date (i) among the Seller, the Program
Agent and the Investor Agent for the Group which includes CAFCO and (ii) between
the Seller and the Investor Agent for the Group which includes ▇▇▇▇▇▇▇▇, as the
same may be amended or restated from time to time (the "FEE AGREEMENTS").
SECTION 2.06. PAYMENTS AND COMPUTATIONS, ETC . (a) All amounts to be
paid or deposited by the Seller or the Collection Agent hereunder shall be paid
or deposited no later than 11:00 A.M. (New York City time) on the day when due
in same day funds to the applicable Investor Agent's Account.
(b) Each of the Seller and the Collection Agent shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by it when
due hereunder, at an interest rate per annum equal to 2% per annum above the
Alternate Base Rate, payable on demand.
(c) All computations of interest under subsection (b) above and all
computations of Yield, fees, and other amounts hereunder shall be made on the
basis of a year of 360 days for the actual number of days (including the first
but excluding the last day) elapsed. Whenever any payment or deposit to be made
hereunder shall be due on a day other than a Business Day, such payment or
deposit shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of such payment or deposit.
SECTION 2.07. DIVIDING OR COMBINING RECEIVABLE INTERESTS . Either the
Seller or any Investor Agent may, upon notice to the other party (with a copy of
such notice to the Program Agent) received at least three Business Days prior to
the last day of any Fixed Period in the case of the Seller giving notice, or up
to the last day of such Fixed Period in the case of an Investor Agent giving
notice, either (i) divide any portion of a Receivable Interest held by one or
more Investors and/or Banks in its Group into two or more Receivable Interests
of such Investors and/or Banks having aggregate Capital equal to the Capital of
such divided portion of such Receivable Interest, or (ii) combine any two or
more portions of Receivable Interests held by one or more Investors and/or Banks
in its Group originating on such last day or having Fixed Periods ending on such
last day into a single Receivable Interest having Capital equal to the aggregate
Capital of such Receivable Interests, PROVIDED, HOWEVER, that no Receivable
Interest owned by an Investor may be combined with a Receivable Interest owned
by any Bank.
SECTION 2.08. INCREASED COSTS . (a) If CNAI, any Investor, any
Investor Agent, any Bank, any entity (including any bank or other financial
institution providing liquidity and/or credit support to any Investor in
connection with such Investor's commercial paper program) which purchases or
enters into a commitment to purchase Receivable Interests or interests therein,
or any of their respective Affiliates (each an "AFFECTED PERSON") determines
that (i) due to any change in any law or regulation or any guideline or request
from any central bank or other governmental authority (whether or not having the
force of law), in each case made or issued after the date of this Agreement, the
amount of the capital required or expected to be maintained by such Affected
Person is or would be affected and such Affected Person determines that the
amount of such capital is increased by or based upon the existence of any
commitment to make purchases of or otherwise maintain the investment in Pool
Receivables or interests therein related
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to this Agreement or to the funding thereof and other commitments of the same
type or (ii) compliance with any U.S. or international generally accepted
accounting principles applicable to such Affected Person (whether issued by the
Financial Accounting Standards Board, the International Accounting Standards
Board or any other accounting or governmental board or authority, whether
foreign or domestic) would require the consolidation of some or all of the
assets and liabilities of CAFCO and/or ▇▇▇▇▇▇▇▇, including the assets and
liabilities which are the subject of this Agreement and the other Transaction
Documents, with those of such Affected Person, then, upon demand by such
Affected Person (with a copy to the Program Agent and the Investor Agent for
such Affected Person's Group), the Seller shall immediately pay to the Investor
Agent for such Affected Person's Group for the account of such Affected Person
(as a third-party beneficiary), from time to time as specified by such Affected
Person, additional amounts sufficient to compensate such Affected Person in the
light of such circumstances, in the case of clause (i), to the extent that such
Affected Person reasonably determines such increase in capital to be allocable
to the existence of any of such commitments, and in the case of clause (ii), to
the extent of any increased cost or reduced return resulting from the
consolidation of the assets and liabilities which are the subject of this
Agreement and the other Transaction Documents, as reasonably determined by such
Affected Person. A certificate as to such amounts submitted to the Seller and
the Program Agent and the Investor Agent for such Affected Person's Group by
such Affected Person shall be conclusive and binding for all purposes, absent
manifest error.
(b) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
referred to in Section 2.09) in or in the interpretation of any law or
regulation or (ii) compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Affected Person of agreeing to
purchase or purchasing or maintaining the ownership of Receivable Interests in
respect of which Yield is computed by reference to the Eurodollar Rate, then,
upon demand by such Affected Person (with a copy to the Program Agent and the
Investor Agent for such Affected Person), the Seller shall immediately pay to
such Investor Agent, for the account of such Affected Person (as a third-party
beneficiary), from time to time as specified by such Affected Person, additional
amounts sufficient to compensate such Affected Person for such increased costs.
A certificate as to such amounts submitted to the Seller and the Program Agent
and the Investor Agent for such Affected Person's Group by such Affected Person
shall be conclusive and binding for all purposes, absent manifest error.
(c) In determining amounts payable under Section 2.08(a) or (b), the
applicable Affected Person may use any reasonable averaging and allocation
method as long as such method is consistent with such Affected Person's
treatment of customers similar to the Seller that are parties to facilities
similar to the facility contemplated by this Agreement containing provisions
substantially similar to Sections 2.08(a) and (b), PROVIDED, that in no event
shall the Seller be liable for more than its PRO RATA share.
(d) Failure or delay on the part of any Affected Person to demand
compensation pursuant to this Section 2.08 shall not constitute a waiver of such
Affected Person's right to demand such compensation; provided that the Seller
shall not be required to compensate an Affected Person pursuant to this Section
2.08 for any increased costs incurred more than 90 days prior to the date that
such Affected Person notifies the Seller of the applicable
33
law, regulation, guideline or request giving rise to such increased costs and of
such Affected Person's intention to claim compensation therefor; and PROVIDED
FURTHER that, if the applicable law, regulation, guideline or request giving
rise to such increased costs is retroactive, then the 90-day period referred to
above shall be extended to include the period of retroactive effect thereof.
(e) If the Seller shall become obligated to pay amounts under this
Section 2.08 on account of increased costs attributable to any Affected Person,
the Seller shall have the right to require such Affected Person to sell and
assign, and upon request by the Seller to such effect, such Affected Person
shall sell and assign, all of its interests, rights and obligations under this
Agreement to an Eligible Assignee (but no Eligible Assignee shall have any
obligation to make any such purchase) or assignee identified by the Seller and
approved by the Program Agent and the relevant Investor Agent, which approval
shall not be unreasonably withheld; PROVIDED, HOWEVER, that (i) such assignment
shall not conflict with any statute, law, rule, regulation, order or decree of
any governmental authority, (ii) the assigning Affected Person shall have
received from such Eligible Assignee or such assignee full payment in
immediately available funds of all amounts payable to it in respect of Capital
accrued Yield and Fees and other amounts owing to it under or in connection with
this Agreement, (iii) the assigning Affected Person shall have been released of
any and all liabilities and obligations under this Agreement, (iv) such
assignment shall be without recourse to the assigning Affected Person and shall
be at the sole expense of the Seller and (v) the assigning Affected Person shall
continue to have the benefit of all indemnities and other agreements under this
Agreement which survive the termination of this Agreement.
SECTION 2.09. ADDITIONAL YIELD ON RECEIVABLE INTERESTS BEARING A
EURODOLLAR RATE . The Seller shall pay to any Investor or Bank, so long as such
Investor or Bank shall be required under regulations of the Board of Governors
of the Federal Reserve System to maintain reserves with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities, additional Yield
on the unpaid Capital of each Receivable Interest of such Investor or Bank
during each Fixed Period relating to any portion of the Capital of such Investor
or Bank in respect of which Yield is computed by reference to the Eurodollar
Rate, for such Fixed Period, at a rate per annum equal at all times during such
Fixed Period to the remainder obtained by subtracting (i) the Eurodollar Rate
for such Fixed Period from (ii) the rate obtained by dividing such Eurodollar
Rate referred to in clause (i) above by that percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage of such Investor or Bank for such Fixed
Period, payable on each date on which Yield is payable on such Receivable
Interest. Such additional Yield shall be determined by such Investor or Bank and
notice thereof given to the Seller through the Investor Agent for such Investor
or Bank (with a copy to the Program Agent) within 30 days after any Yield
payment is made with respect to which such additional Yield is requested. A
certificate as to such additional Yield submitted to the Seller and the Program
Agent by such Investor or Bank shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.10. TAXES . (a) Any and all payments and deposits required
to be made hereunder or under any other Transaction Document by the Collection
Agent or the Seller shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING net income
taxes that are imposed by the United States and franchise taxes and net
34
income taxes that are imposed on an Affected Person by the state or foreign
jurisdiction under the laws of which such Affected Person is organized or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If the Seller or the Collection Agent shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Affected
Person, (i) the Seller shall make an additional payment to such Affected Person,
in an amount sufficient so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.10), such
Affected Person receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Seller or the Collection Agent, as the
case may be, shall make such deductions and (iii) the Seller or the Collection
Agent, as the case may be, shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) In addition, the Seller agrees to pay any present or future stamp
or other documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any other
Transaction Document or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Transaction Document
(hereinafter referred to as "OTHER TAXES").
(c) The Seller will indemnify each Affected Person for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.10) paid by such Affected Person and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto whether or not
such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within thirty days from the date the Affected
Person makes written demand therefor (and a copy of such demand shall be
delivered to the Program Agent and the Investor Agent for such Affected Person's
Group). A certificate as to the amount of such indemnification submitted to the
Seller, the Program Agent and the Investor Agent for such Affected Person's
Group by such Affected Person, setting forth, in reasonable detail, the basis
for and the calculation thereof, shall be conclusive and binding for all
purposes absent manifest error.
(d) Each Affected Person which is organized outside the United States
and which is entitled to an exemption from, or reduction of, withholding tax
under the laws of the United States as in effect on the date hereof (or, in the
case of any Person which becomes an Affected Person after the date hereof, on
the date on which it so becomes an Affected Person with respect to any payments
under this Agreement) shall, on or prior to the date hereof (or, in the case of
any Person who becomes an Affected Person after the date hereof, on or prior to
the date on which it so becomes an Affected Person), deliver to the Seller such
certificates, documents or other evidence, as required by the Internal Revenue
Code of 1986, as amended or Treasury Regulations issued pursuant thereto,
including Internal Revenue Service Form W-8BEN or Form W-8ECI and any other
certificate or statement of exemption required by Treasury Regulation Section
1.1441 or any subsequent version thereof, properly completed and duly executed
by such Affected Person as will permit such payments to be made without
withholding or at a reduced rate. Each such Affected Person shall from time to
time thereafter, upon written request from the Seller, deliver to the Seller any
new certificates, documents or other evidence as described in the preceding
sentence as will permit payments under this
35
Agreement to be made without withholding or at a reduced rate (but only so long
as such Affected Person is legally able to do so).
(e) The Seller shall not be required to pay any amounts to any
Affected Person in respect of Taxes and Other Taxes pursuant to paragraphs (a),
(b) and (c) above if the obligation to pay such amounts is attributable to the
failure by such Affected Person to comply with the provisions of paragraph (d)
above; PROVIDED, HOWEVER, that should an Affected Person become subject to Taxes
because of its failure to deliver a form required hereunder, the Seller shall,
at such Affected Person's cost and expense, take such steps as such Affected
Person shall reasonably request to assist such Affected Person to recover such
Taxes.
SECTION 2.11. SECURITY INTEREST . As collateral security for the
performance by the Seller of all the terms, covenants and agreements on the part
of the Seller (whether as Seller or otherwise) to be performed under this
Agreement or any document delivered in connection with this Agreement in
accordance with the terms thereof, including the punctual payment when due to
the Investors, the Banks, the Investor Agents and the Program Agent hereunder of
all obligations of the Seller hereunder or thereunder, whether for
indemnification payments, fees, expenses or otherwise, the Seller hereby assigns
to the Program Agent for its benefit and the ratable benefit of the Investors,
the Banks and the Investor Agents, and hereby grants to the Program Agent for
its benefit and the ratable benefit of the Investors, the Banks and the Investor
Agents, a security interest in, all of the Seller's right, title and interest in
and to: (A) the Originator Purchase Agreement and the Parent Undertaking,
including, without limitation, (i) all rights of the Seller to receive moneys
due or to become due under or pursuant to such agreements, (ii) all security
interests and property subject thereto from time to time purporting to secure
payment of monies due or to become due under or pursuant to such agreements,
(iii) all rights of the Seller to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to such agreements, (iv) claims of the Seller
for damages arising out of or for breach of or default under such agreements,
and (v) the right of the Seller to compel performance and otherwise exercise all
remedies thereunder, (B) all Receivables, whether now owned and existing or
hereafter acquired or arising, the Related Security with respect thereto and the
Collections and all other assets, including, without limitation, accounts,
chattel paper, instruments and general intangibles (as those terms are defined
in the UCC), including undivided interests in any of the foregoing, (C) the
Lock-Box Accounts, the related lock-boxes and the Program Agent Account and (D)
to the extent not included in the foregoing, all proceeds of any and all of the
foregoing.
SECTION 2.12. SHARING OF PAYMENTS . If any Investor or any Bank (for
purposes of this Section only, referred to as a "RECIPIENT") shall obtain
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) on account of the Capital of, or Yield on, any Receivable
Interest or portion thereof owned by it in excess of its ratable share of
payments made on account of the Capital of, or Yield on, all of the Receivable
Interests owned by the Investors and the Banks (other than as a result of a
payment of Liquidation Fee or different methods for calculating Yield or
payments made to less than all of the Groups as a result of the occurrence of a
Facility Termination Date under clause (d) of the defined term Facility
Termination Date for less than all of the Groups), such Recipient shall
forthwith purchase from the Investors or the Banks which received less than
their ratable share participations in the Receivable Interests owned by such
Persons as shall be necessary to cause such Recipient to share the excess
payment ratably with each such other Person; PROVIDED,
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HOWEVER, that if all or any portion of such excess payment is thereafter
recovered from such Recipient, such purchase from each such other Person shall
be rescinded and each such other Person shall repay to the Recipient the
purchase price paid by such Recipient for such participation to the extent of
such recovery, together with an amount equal to such other Person's ratable
share (according to the proportion of (a) the amount of such other Person's
required payment to (b) the total amount so recovered from the Recipient) of any
interest or other amount paid or payable by the Recipient in respect of the
total amount so recovered.
SECTION 2.13. RIGHT OF SETOFF . Without in any way limiting the
provisions of Section 2.12, each Agent and each Investor and each Bank is hereby
authorized (in addition to any other rights it may have) at any time after the
occurrence and during the continuance of an Event of Termination or an Incipient
Event of Termination to set-off, appropriate and apply (without presentment,
demand, protest or other notice which are hereby expressly waived) any deposits
and any other indebtedness held or owing by such Agent or such Investor or such
Bank to, or for the account of, the Seller, the Collection Agent or any
Originator against any amount owing by the Seller, the Collection Agent or such
Originator, respectively, to such Person or to such Agent on behalf of such
Person (even if contingent or unmatured).
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL PURCHASE . The initial
purchase of a Receivable Interest under this Agreement is subject to the
conditions precedent that the Program Agent and each Investor Agent shall have
received on or before the date of such purchase the following, each (unless
otherwise indicated) dated such date, in form and substance satisfactory to the
Program Agent and each Investor Agent:
(a) Certified copies of the resolutions (or similar authorization, if
not a corporation) of the Board of Directors (or similar governing body or
Persons, if not a corporation) of the Seller, the Parent and the other
Originators approving this Agreement, the Originator Purchase Agreement and any
other Transaction Documents to which it is a party and certified copies of all
documents evidencing other necessary corporate or limited liability company, as
the case may be, action and governmental approvals, if any, with respect to this
Agreement, the Originator Purchase Agreement and any such Transaction Documents.
(b) A certificate of the Secretary or Assistant Secretary of the
Seller, the Parent and the other Originators certifying the names and true
signatures of the officers of the Seller, the Parent and the other Originators
authorized to sign this Agreement, the Originator Purchase Agreement and the
other Transaction Documents to be delivered by it hereunder and thereunder.
(c) Evidence of the filing of proper financing statements on or
before the date of such initial purchase under the UCC of all jurisdictions that
the Program Agent may deem necessary or desirable in order to perfect the
ownership and security interests contemplated by this Agreement and the
Originator Purchase Agreement.
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(d) Evidence of the filing of proper financing statements, if any,
necessary to release all security interests and other rights of any Person in
(i) the Receivables, Contracts or Related Security previously granted by the
Seller or any Originator and (ii) the collateral security referred to in Section
2.11 previously granted by the Seller.
(e) Completed requests for information, dated on or before the date
of such initial purchase, listing all effective financing statements filed in
the jurisdictions referred to in subsection (c) above and in any other
jurisdictions reasonably requested by the Program Agent that name the Seller or
any Originator as debtor, together with copies of such financing statements
(none of which shall cover any Receivables, Contracts, Related Security or the
collateral security referred to in Section 2.11).
(f) Executed copies of Lock-Box Agreements with each Lock-Box Bank.
(g) Opinions of (i) Mayer, Brown, ▇▇▇▇ & Maw LLP, counsel for the
Seller, the Parent and the other Originators, (ii) Tarrant Sibley, Senior
Counsel, Corporate and Securities of the Parent, and (iii) ▇▇▇▇ ▇▇▇▇, Division
General Counsel of WOTC, substantially in the form of Annex C-1, C-2 and C-3
hereto, respectively, and as to such other matters as the Program Agent or any
Investor Agent may reasonably request.
(h) The Fee Agreements.
(i) The Funds Transfer Letter.
(j) An executed copy of the Originator Purchase Agreement.
(k) An executed copy of the Parent Undertaking.
(l) An executed copy of the Program Agent Account Control Agreement.
(m) A copy of the limited liability company agreement or the by-laws
of the Seller, the Parent and the other Originators, certified by the Secretary
or Assistant Secretary of the Seller, the Parent or such other Originators, as
the case may be.
(n) A copy of the certificate of formation or articles of
incorporation of each of the Seller, the Parent and the other Originators
certified as of a recent date by its Secretary or by the Secretary of State or
other appropriate official of the state of its organization, and a certificate
as to the good standing of each of the Seller, the Parent and the other
Originators from such Secretary of State or other official, dated as of a recent
date.
(o) The opening pro forma balance sheet of the Seller referred to in
Section 4.01(e).
(p) Evidence satisfactory to the Program Agent and each Investor
Agent of the payment of (i) the up-front structuring fee referred to in the Fee
Agreements and (ii) all out-of-pocket expenses then incurred by the Program
Agent and the Investor Agents, including, without limitation, audit and legal
fees.
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SECTION 3.02. CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS.
Each purchase (including the initial purchase) and each reinvestment shall be
subject to the further conditions precedent that (a) in the case of each
purchase, the Collection Agent shall have delivered to each Agent, in form and
substance satisfactory to each Agent (i) at least one Business Day prior to such
purchase, the latest completed Monthly Report which was then required to be
delivered hereunder and (ii) by no later than 3:00 P.M. (New York City time) on
the date prior to such purchase, a completed Daily Report, in each case
containing information covering the most recently ended reporting period for
which information is required pursuant to Section 6.02(g)(i), (ii) or (iv), as
the case may be, and demonstrating that after giving effect to such purchase no
Event of Termination or Incipient Event of Termination under Section 7.01(i)
would occur, (b) in the case of each reinvestment, the Collection Agent shall
have delivered to the Program Agent and each Investor Agent on or prior to the
date of such reinvestment, in form and substance satisfactory to the Program
Agent, a completed Monthly Report or, if required by Section 6.02(g)(ii), a
completed Weekly Report, in each case containing information covering the most
recently ended reporting period for which information is required pursuant to
Section 6.02(g)(i) or (ii), as the case may be, (c) on the date of such purchase
or reinvestment the following statements shall be true, except that the
statement in clause (iii) below is required to be true only if such purchase or
reinvestment is by an Investor (and acceptance of the proceeds of such purchase
or reinvestment shall be deemed a representation and warranty by the Seller and
the Collection Agent (each as to itself) that each such statement is then true):
(i) The representations and warranties contained in Sections
4.01 and 4.02 are correct on and as of the date of such purchase or
reinvestment as though made on and as of such date,
(ii) No event has occurred and is continuing, or would result
from such purchase or reinvestment, that constitutes an Event of
Termination or an Incipient Event of Termination, (it being agreed
that an Incipient Event of Termination shall exist during any period
when the terms of the final PROVISO in Section 7.01(a) [force majeure]
are applicable),
(iii) The Program Agent shall not have given the Seller at
least one Business Day's notice that the Investors have terminated the
reinvestment of Collections in Receivable Interests or, in the case of
any reinvestment by a particular Investor, the Investor Agent for such
Investor shall not have given the Seller notice that such Investor has
terminated the reinvestment of Collections in Receivable Interests
(unless such notice has been revoked by such Investor Agent), and
(iv) Each Originator shall have sold or contributed to the
Seller, pursuant to the Originator Purchase Agreement, all Originator
Receivables originated by it and arising on or prior to such date, and
(d) The Program Agent and the Investor Agents shall have received such other
approvals, opinions or documents as the Program Agent or any Investor Agent may
reasonably request as a result of changes in factual circumstances affecting the
perfection, priority or enforcement of
39
Receivables or interests therein, or changes in law, in each case occurring
after the date of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE SELLER . The
Seller hereby represents and warrants as follows:
(a) The Seller is a limited liability company duly formed, validly
existing and in good standing under the laws of Delaware, and is duly qualified
to do business, and is in good standing, in every jurisdiction where the nature
of its business requires it to be so qualified.
(b) The execution, delivery and performance by the Seller of the
Transaction Documents to which it is a party and the other documents to be
delivered by it hereunder, including the Seller's use of the proceeds of
purchases and reinvestments, (i) are within the Seller's limited liability
company powers, (ii) have been duly authorized by all necessary limited
liability company action, (iii) do not contravene (1) the Seller's certificate
of formation or limited liability company agreement, (2) any law, rule or
regulation applicable to the Seller, (3) any contractual restriction binding on
or affecting the Seller or its property or (4) any order, writ, judgment, award,
injunction or decree binding on or affecting the Seller or its property, and
(iv) do not result in or require the creation of any lien, security interest or
other charge or encumbrance upon or with respect to any of its properties
(except for the interest created pursuant to this Agreement). Each of the
Transaction Documents to which the Seller is a party has been duly executed and
delivered by the Seller.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Seller of the Transaction
Documents to which it is a party or any other document to be delivered
thereunder, except for the filing of UCC financing statements which are referred
to therein.
(d) Each of the Transaction Documents to which it is a party
constitutes the legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms.
(e) The opening pro forma balance sheet of the Seller as at December
10, 2003, utilizing outstanding Receivables as at November 30, 2003 and giving
effect to the initial purchase to be made under this Agreement, a copy of which
has been furnished to the Program Agent and each Investor Agent, fairly presents
the financial condition of the Seller as at such date, in accordance with
generally accepted accounting principles, and since December10, 2003 there has
been no material adverse change in the business, operations, property or
financial or other condition of the Seller.
(f) There is no pending or, to the Seller's knowledge, threatened
action, investigation or proceeding affecting the Seller before any court,
governmental agency or
40
arbitrator which may materially adversely affect the financial condition or
operations of the Seller or the ability of the Seller to perform its obligations
under any Transaction Document, or which purports to affect the legality,
validity or enforceability of any Transaction Document.
(g) No proceeds of any purchase or reinvestment will be used to
acquire any equity security of a class which is registered pursuant to Section
12 of the Securities Exchange Act of 1934.
(h) Immediately prior to the purchase by the applicable Investors
and/or Banks, as the case may be, the Seller is the legal and beneficial owner
of the Pool Receivables and Related Security which are the subject of such
purchase free and clear of any Adverse Claim; upon each purchase or
reinvestment, the applicable Investors or the Banks, as the case may be,
(except, in the case of Receivables of *****************, the sale arrangements
in Section 2.02(e) of the Originator Purchase Agreement) shall acquire a valid
and perfected first priority undivided percentage ownership interest to the
extent of the pertinent Receivable Interest in each Pool Receivable then
existing or thereafter arising and in the Related Security and Collections with
respect thereto. No effective financing statement or other instrument similar in
effect covering any Contract or any Pool Receivable or the Related Security or
Collections with respect thereto is on file in any recording office, except
those filed in favor of the Program Agent relating to this Agreement and those
filed by the Seller pursuant to the Originator Purchase Agreement. Each
Receivable characterized in any Seller Report or other written statement made by
or on behalf of the Seller as an Eligible Receivable or as included in the Net
Receivables Pool Balance is, as of the date of such Seller Report or other
statement, an Eligible Receivable or properly included in the Net Receivables
Pool Balance.
(i) Each Seller Report (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied by
the Seller or an Affiliate), written information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by or
on behalf of the Seller to the Program Agent, the Investor Agents, the Investors
or the Banks in connection with this Agreement is or will be accurate in all
material respects as of its date or (except (a) as otherwise disclosed to the
Program Agent, the Investor Agents, the Investors or the Banks, as the case may
be, at such time or (b) with respect to written information, exhibits, financial
statements, documents, books, records or reports furnished prior to the date of
this Agreement, if such inaccuracy has been corrected before the date of this
Agreement) as of the date so furnished, and no such document contains or will
contain any untrue statement of a material fact.
(j) The principal place of business and chief executive office of the
Seller and the office where the Seller keeps its records concerning the Pool
Receivables are located at the address or addresses referred to in Section
5.01(b).
(k) The names and addresses of all the Lock-Box Banks, together with
the post office boxes and account numbers of the Lock-Box Accounts of the Seller
at such Lock-Box Banks, are as specified in Schedule I hereto, as such Schedule
I may be updated from time to time pursuant to Section 5.01(g). The Lock-Box
Accounts are the only accounts into which Collections of Receivables are
deposited or remitted. The Seller has delivered to the Program Agent a fully
executed Lock-Box Agreement with respect to each Lock-Box Account.
41
(l) (i) Each Receivable is, according to the related Contract,
required to be paid in full within 365 days of the original billing date
therefor, (ii) neither the Parent nor any of its Subsidiaries issues commercial
paper or other short-term indebtedness (having maturities not exceeding nine
months) in reliance on the "current transaction" exemption contained in Section
3(a)(3) of the Securities Act of 1933, as amended, and (iii) each Receivable is
an obligation representing part or all of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5) of the Investment
Company Act of 1940, as amended.
(m) The Seller is not known by and does not use any tradename or
doing-business-as name.
(n) The Seller was formed on December 3, 2003, and the Seller did not
engage in any business activities prior to the date of this Agreement. The
Seller has no Subsidiaries.
(o) (i) The fair value of the property of the Seller is greater than
the total amount of liabilities, including contingent liabilities, of the
Seller, (ii) the present fair salable value of the assets of the Seller is not
less than the amount that will be required to pay all probable liabilities of
the Seller on its debts as they become absolute and matured, (iii) the Seller
does not intend to, and does not believe that it will, incur debts or
liabilities beyond the Seller's abilities to pay such debts and liabilities as
they mature and (iv) the Seller is not engaged in a business or a transaction,
and is not about to engage in a business or a transaction, for which the
Seller's property would constitute unreasonably small capital.
(p) With respect to each Pool Receivable, the Seller (i) shall have
received such Pool Receivable as a contribution to the capital of the Seller by
the Parent or (ii) shall have purchased such Pool Receivable from the
Originators in exchange for payment (made by the Seller to such Originator in
accordance with the provisions of the Originator Purchase Agreement) of cash,
Deferred Purchase Price, or a combination thereof in an amount which constitutes
fair consideration and reasonably equivalent value. Each such sale referred to
in clause (ii) of the preceding sentence shall not have been made for or on
account of an antecedent debt owed by any Originator to the Seller and no such
sale is or may be voidable or subject to avoidance under any section of the
Federal Bankruptcy Code.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE COLLECTION AGENT.
The Collection Agent hereby represents and warrants as follows:
(a) The Collection Agent is a corporation duly incorporated, validly
existing and in good standing under the laws of Rhode Island, and is duly
qualified to do business, and is in good standing, in every jurisdiction where
the nature of its business requires it to be so qualified, unless the failure to
so qualify would not have a material adverse effect on (i) the interests of the
Investors and the Banks hereunder, (ii) the collectibility of the Receivables
Pool, or (iii) the ability of the Collection Agent to perform its obligations
hereunder.
(b) The execution, delivery and performance by the Collection Agent
of this Agreement and any other documents to be delivered by it hereunder (i)
are within the Collection Agent's corporate powers, (ii) have been duly
authorized by all necessary corporate action,
42
(iii) do not contravene (1) the Collection Agent's charter or by-laws, (2) any
law, rule or regulation applicable to the Collection Agent, (3) any contractual
restriction binding on or affecting the Collection Agent or its property or (4)
any order, writ, judgment, award, injunction or decree binding on or affecting
the Collection Agent or its property (except, in the cases of clauses (2), (3)
and (4), where any such contravention could not, in the aggregate, reasonably be
expected to have any material adverse effect on the ability of the Collection
Agent to perform its obligations under this Agreement), and (iv) do not result
in or require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of its properties. This Agreement has
been duly executed and delivered by the Collection Agent.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Collection Agent of this
Agreement or any other document to be delivered by it hereunder.
(d) This Agreement constitutes the legal, valid and binding
obligation of the Collection Agent enforceable against the Collection Agent in
accordance with its terms.
(e) The balance sheets of the Collection Agent and its Subsidiaries
as at September 28, 2003, and the related statements of earnings and cash flows
of the Collection Agent and its Subsidiaries for the nine-month period then
ended, copies of which have been furnished to the Program Agent and each
Investor Agent, fairly present the financial condition of the Collection Agent
and its Subsidiaries as at such date and the results of the operations of the
Collection Agent and its Subsidiaries for the period ended on such date, all in
accordance with generally accepted accounting principles consistently applied,
and since September 28, 2003 there has been no material adverse change in the
business, operations, property or financial or other condition of the Collection
Agent (it being understood that reduction by one sub-notch (e.g., from BB+ to
BB) in any of the Debt Ratings of the Collection Agent in effect on the date of
this Agreement does not, in and of itself, constitute a material adverse
change).
(f) There is no pending or, to the Collection Agent's knowledge,
threatened action, investigation or proceeding affecting the Collection Agent or
any of its Subsidiaries before any court, governmental agency or arbitrator
which would reasonably be expected to be adversely determined and, if adversely
determined, either in any case or in the aggregate, could reasonably be expected
to materially adversely affect the financial condition or operations of the
Collection Agent or any Originator or the ability of the Collection Agent to
perform its obligations under this Agreement, or which purports to affect the
legality, validity or enforceability of this Agreement.
(g) On the date of each purchase and reinvestment (and after giving
effect thereto) the sum of the Receivable Interests is not greater than the
Maximum Receivable Interest on such date. Each Receivable characterized in any
Seller Report as an Eligible Receivable or as included in the Net Receivables
Pool Balance is, as of the date of such Seller Report, an Eligible Receivable or
properly included in the Net Receivables Pool Balance.
43
ARTICLE V
COVENANTS
SECTION 5.01. COVENANTS OF THE SELLER. Until the latest of the
Facility Termination Date or the date on which no Capital of or any Yield on any
Receivable Interest shall be outstanding or the date all other amounts owed by
the Seller hereunder to the Investors, the Banks, the Investor Agents or the
Program Agent are paid in full:
(a) COMPLIANCE WITH LAWS, ETC. The Seller will comply in all material
respects with all applicable laws, rules, regulations and orders and preserve
and maintain its corporate existence, rights, franchises, qualifications, and
privileges except to the extent that the failure so to comply with such laws,
rules and regulations or the failure so to preserve and maintain such rights,
franchises, qualifications, and privileges would not materially adversely affect
the collectibility of the Receivables Pool or the ability of the Seller to
perform its obligations under the Transaction Documents.
(b) OFFICES, RECORDS, NAME AND ORGANIZATION. The Seller will keep its
principal place of business and chief executive office and the office where it
keeps its records concerning the Pool Receivables at the address of the Seller
set forth under its name on the signature pages to this Agreement or at one of
the locations set forth in Schedule IV, upon 30 days' prior written notice to
the Program Agent and each Investor Agent, at any other locations within the
United States. The Seller will not change its name or its state of organization,
unless (i) the Seller shall have provided the Program Agent and each Investor
Agent with at least 30 days' prior written notice thereof and (ii) no later than
the effective date of such change, all actions reasonably requested by the
Program Agent to protect and perfect the interest in the Pool Receivables have
been taken and completed. The Seller also will maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool Receivables and related Contracts in
the event of the destruction of the originals thereof), and keep and maintain
all documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables (including, without
limitation, records adequate to permit the daily identification of each Pool
Receivable and all Collections of and adjustments to each existing Pool
Receivable).
(c) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT AND
COLLECTION POLICY. The Seller will, at its expense, timely and fully perform and
comply in all material respects with all provisions, covenants and other
promises required to be observed by it under the Contracts related to the Pool
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy in regard to each Pool Receivable and the related
Contract.
(d) SALES, LIENS, ETC. Except (i) for the ownership and security
interests created hereunder in favor of the Program Agent and (ii) pursuant to
the terms of the *******************, the Seller will not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, the Seller's undivided interest
in any Pool Receivable, Related Security or Collections, or upon or with respect
to any account to which any Collections of any Pool Receivable are sent, or
assign any right to receive income in respect thereof, it being agreed that the
security interest hereunder
44
in any Receivables of ***************** which are being sold pursuant to Section
2.02(e) of the Originator Purchase Agreement will be considered to be released
upon such sale; PROVIDED, an amount equal to the lesser of (a) the Interim
Purchase Amount (as that term is defined in the **************) and (b) the
amount of Capital needed to be paid in order for there not to be a violation of
Section 7.01(i) is remitted to the Collection Agent concurrently with such sale,
which amount shall be distributed by the Collection Agent to the Investor Agent
on the next Settlement Date, the Program Agent hereby agreeing at the Seller's
expense to do all things and execute all documents reasonably requested by the
Seller to release such security interest.
(e) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as provided in
Section 6.02(c), the Seller will not (and will not permit the Collection Agent
or any Originator to) extend, amend or otherwise modify the terms of any Pool
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto.
(f) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. The Seller
will not make any change in the character of its business or in the Credit and
Collection Policy that would, in either case, materially adversely affect the
collectibility of the Receivables Pool or the ability of the Seller to perform
its obligations under this Agreement.
(g) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. The Seller will not
add or terminate any bank, post office box or bank account as a Lock-Box Bank or
Lock-Box Account from those listed in Schedule I to this Agreement, or make any
change in its instructions to Obligors regarding payments to be made to the
Seller or payments to be made to any Lock-Box Bank, unless the Program Agent
shall have received ten days' prior written notice of such addition, termination
or change (including an updated Schedule I) and a fully executed Lock-Box
Agreement with each new Lock-Box Bank or with respect to each new Lock-Box
Account.
(h) DEPOSITS TO LOCK-BOX ACCOUNTS. The Seller will (or will cause the
Collection Agent or the Originators to) instruct all Obligors to remit all their
payments in respect of Receivables to Lock-Box Accounts. If the Seller shall
receive any Collections directly, it shall immediately (and in any event within
two Business Days) deposit the same to a Lock-Box Account. The Seller will not
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to any Lock-Box Account cash or cash proceeds other than Collections of
Receivables.
(i) MARKING OF RECORDS. At its expense, the Seller will ▇▇▇▇ its
master data processing records evidencing Pool Receivables with a legend
evidencing that Receivable Interests related to such Pool Receivables have been
sold in accordance with this Agreement.
(j) FURTHER ASSURANCES. (i) The Seller agrees from time to time, at
its expense, promptly to execute and deliver all further instruments and
documents, and to take all further actions, that may be necessary or desirable,
or that the Program Agent or any Investor Agent may reasonably request, to
perfect, protect or more fully evidence the Receivable Interests purchased under
this Agreement, or to enable the Investors, the Banks, the Investor Agents or
the Program Agent to exercise and enforce their respective rights and remedies
under this Agreement.
45
(ii) The Seller authorizes the Program Agent to file financing
or continuation statements, and amendments thereto and assignments thereof,
relating to the Pool Receivables and the Related Security and the Collections
with respect thereto.
(k) REPORTING REQUIREMENTS. The Seller will provide to the Program
Agent and the Investor Agents (in multiple copies, if requested by the Program
Agent or any Investor Agent) the following:
(i) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal year
of the Parent, balance sheets of the Parent and its Subsidiaries as of
the end of such quarter and consolidated and consolidating statements
of earnings and consolidated statement of cash flows of the Parent and
its Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, certified by the
chief financial officer of the Parent;
(ii) as soon as available and in any event within 100 days
after the end of each fiscal year of the Parent, a copy of the annual
report for such year for the Parent and its Subsidiaries, containing
financial statements for such year audited by KPMG LLP or other
independent public accountants of recognized standing;
(iii) as soon as available and in any event within 60 days
after the end of each of the first three quarters and within 100 days
after the end of the fourth fiscal quarter of each fiscal year of the
Seller, a balance sheet of the Seller as of the end of such quarter
and a statement of earnings and statement of cash flows of the Seller
for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, certified by the chief financial
officer of the Seller;
(iv) as soon as possible and in any event within (x) two
Business Days after the Seller obtains knowledge of the occurrence of
each Event of Termination or Incipient Event of Termination, a
statement of the chief financial officer of the Seller setting forth
details of such Event of Termination or Incipient Event of Termination
and (y) ten Business Days after the Seller obtains knowledge of the
occurrence of each Event of Termination or Incipient Event of
Termination, a statement of the chief financial officer of the Seller
setting forth the action that the Seller has taken and proposes to
take with respect thereto;
(v) promptly after the sending or filing thereof, copies of
all reports that the Parent sends to any of its security holders, and
copies of all reports and registration statements that the Parent or
any of its Subsidiaries files with the SEC or any national securities
exchange;
(vi) promptly after the filing or receiving thereof, copies of
all reports and notices that the Seller or any ERISA Affiliate files
under ERISA with the Internal Revenue Service or the PBGC or the U.S.
Department of Labor or that the Seller or any ERISA Affiliate receives
from any of the foregoing or from any
46
Multiemployer Plan (within the meaning of Section 4001(a)(3) of ERISA)
to which the Seller or any ERISA Affiliate is or was, within the
preceding five years, a contributing employer, in each case in respect
of the assessment of withdrawal liability or an event or condition
which could, in the aggregate, result in the imposition of liability
on the Seller and/or any such ERISA Affiliate in excess of
$15,000,000;
(vii) at least 30 days prior to any change in the name or
jurisdiction of organization of the Parent, any other Originator or
the Seller, a notice setting forth the new name or jurisdiction of
organization and the effective date thereof;
(viii) promptly after the Seller obtains knowledge thereof,
notice of any "Event of Termination" or "Facility Termination Date"
under the Originator Purchase Agreement;
(ix) so long as any Capital shall be outstanding, as soon as
possible and in any event no later than the day of occurrence thereof,
notice that any Originator has stopped selling or contributing to the
Seller, pursuant to the Originator Purchase Agreement, all newly
arising Originator Receivables;
(x) at the time of the delivery of the financial statements
provided for in clauses (i) and (ii) of this paragraph, a certificate
of the chief financial officer or the treasurer of the Seller to the
effect that, to the best of such officer's knowledge, no Event of
Termination has occurred and is continuing or, if any Event of
Termination has occurred and is continuing, specifying the nature and
extent thereof;
(xi) promptly after receipt thereof, copies of all notices
received by the Seller from any Originator under the Originator
Purchase Agreement;
(xii) at least 60 days prior to the end of each fiscal year of
the Originators, a new Schedule III, setting forth the Fiscal Months
for the upcoming fiscal year; and
(xiii) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of the Seller, the
Parent or any other Originator as the Program Agent or any Investor
Agent may from time to time request if reasonably related to the
transactions contemplated by the Transaction Documents.
Reports and financial statements required to be delivered pursuant to
clauses (i), (ii) and (v) of this Section 5.01(k) shall be deemed to have been
delivered on the date on which the Parent posts such reports, or reports
containing such financial statements, on the Parent's website on the Internet at
▇▇▇.▇▇▇▇▇▇.▇▇▇ or when such reports, or reports containing such financial
statements, are posted on the SEC's website at ▇▇▇.▇▇▇.▇▇▇; PROVIDED that the
Parent shall deliver paper copies of the reports and financial statements
referred to in clauses (i) and (ii) of this Section 5.01(k) to the Program Agent
or any Investor Agent or Bank who requests the
47
Parent to deliver such paper copies until written notice to cease delivering
paper copies is given by the Program Agent or such Investor Agent or Bank, as
applicable.
(l) SEPARATENESS. (i) The Seller shall at all times maintain at least
one independent manager who (x) is not currently and has not been during the
five years preceding the date of this Agreement an officer, director or employee
of an Affiliate of the Seller or any Other Company, (y) is not a current or
former officer or employee of the Seller and (z) is not a stockholder or member
of any Other Company or any of their respective Affiliates.
(ii) The Seller shall not direct or participate in the
management of any of the Other Companies' operations or of any other
Person's operations.
(iii) The Seller shall conduct its business from an office
separate from that of the Other Companies and any other Person (but
which may be located in the same facility as one or more of the Other
Companies). The Seller shall have stationery and other business forms
and a mailing address and a telephone number separate from that of the
Other Companies and any other Person.
(iv) The Seller shall at all times be adequately capitalized
in light of its contemplated business.
(v) The Seller shall at all times provide for its own
operating expenses and liabilities from its own funds.
(vi) The Seller shall maintain its assets and transactions
separately from those of the Other Companies and any other Person and
reflect such assets and transactions in financial statements separate
and distinct from those of the Other Companies and any other Person
and evidence such assets and transactions by appropriate entries in
books and records separate and distinct from those of the Other
Companies and any other Person. The Seller shall hold itself out to
the public under the Seller's own name as a legal entity separate and
distinct from the Other Companies. The Seller shall not hold itself
out as having agreed to pay, or as being liable, primarily or
secondarily, for, any obligations of the Other Companies or any other
Person.
(vii) The Seller shall not maintain any joint account with any
Other Company or any other Person or become liable as a guarantor or
otherwise with respect to any Debt or contractual obligation of any
Other Company or any other Person.
(viii) The Seller shall not make any payment or distribution of
assets with respect to any obligation of any Other Company or any
other Person or grant an Adverse Claim on any of its assets to secure
any obligation of any Other Company or any other Person.
(ix) The Seller shall not make loans, advances or otherwise
extend credit to any of the Other Companies.
48
(x) The Seller shall hold regular duly noticed meetings of
its Board of Managers and make and retain minutes of such meetings.
(xi) The Seller shall have bills of sale (or similar
instruments of assignment) and, if appropriate, UCC-1 financing
statements, with respect to all assets purchased from any of the Other
Companies.
(xii) The Seller shall not engage in any transaction with any
of the Other Companies, except as permitted by this Agreement and as
contemplated by the Originator Purchase Agreement.
(xiii) The Seller shall comply with (and cause to be true and
correct) each of the facts and assumptions contained in Part I
(Assumptions of Facts) of the opinion of Mayer, Brown, ▇▇▇▇ & Maw LLP
delivered pursuant to Section 3.01(g) and designated as Annex C to
this Agreement.
(m) ORIGINATOR PURCHASE AGREEMENT. The Seller will not amend, waive
or modify any provision of the Originator Purchase Agreement or waive the
occurrence of any "Event of Termination" under the Originator Purchase
Agreement, without in each case the prior written consent of the Program Agent
and each Investor Agent; PROVIDED, HOWEVER, that the Seller may amend the
percentage set forth in the definition of "Discount" in the Originator Purchase
Agreement in accordance with the provisions of the Originator Purchase Agreement
without the consent of the Program Agent and each Investor Agent, PROVIDED,
FURTHER, that the Seller shall promptly notify the Program Agent and each
Investor Agent of any such amendment. The Seller will perform all of its
obligations under the Originator Purchase Agreement in all material respects and
will enforce the Originator Purchase Agreement in accordance with its terms in
all material respects.
(n) NATURE OF BUSINESS. The Seller will not engage in any business
other than as set forth in Section 7 of its limited liability company agreement.
The Seller will not create or form any Subsidiary.
(o) MERGERS, ETC. The Seller will not merge with or into or
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions), all or
substantially all of its assets (whether now owned or hereafter acquired) to, or
acquire all or substantially all of the assets or capital stock or other
ownership interest of, or enter into any joint venture or partnership agreement
with, any Person, other than as contemplated by this Agreement and the
Originator Purchase Agreement.
(p) DISTRIBUTIONS, ETC. The Seller will not declare or make any
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any membership interests of the Seller,
or return any capital to its members as such, or purchase, retire, defease,
redeem or otherwise acquire for value or make any payment in respect of any
membership interests of the Seller or any warrants, rights or options to acquire
any such membership interests, now or hereafter outstanding; PROVIDED, HOWEVER,
that the Seller declare and pay cash distributions on its membership interests
to its members so long as (i) no Event of Termination shall then exist or would
occur as a result thereof, (ii) such distributions
49
are in compliance with all applicable law including the limited liability
company law of the state of Delaware, and (iii) such distributions have been
approved by all necessary and appropriate limited liability company action of
the Seller.
(q) DEBT. The Seller will not incur any Debt, other than ordinary
operating expenses and any Debt incurred pursuant to this Agreement and the
Deferred Purchase Price.
(r) LIMITED LIABILITY COMPANY AGREEMENT. The Seller will not amend or
delete Sections 7, 8, 9(b), 9(j), 18(c), 19, 22, 28 or 32 of its limited
liability company agreement, without the prior written consent of the Agents.
(s) TANGIBLE NET WORTH. The Seller will maintain Tangible Net Worth
at all times equal to at least *****************of the Outstanding Balance of
the Receivables at such time.
SECTION 5.02. COVENANT OF THE SELLER AND THE ORIGINATORS. Until the
latest of the Facility Termination Date or the date on which no Capital of or
Yield on any Receivable Interest shall be outstanding or the date all other
amounts owed by the Seller hereunder to the Investors, the Banks, the Investor
Agents or the Program Agent are paid in full, each of the Seller and each
Originator will, at their respective expense, from time to time during regular
business hours as requested upon reasonable notice by the Program Agent or any
Investor Agent, permit the Program Agent, any Investor Agent or their respective
agents or representatives (including independent public accountants, which may
be the Seller's or the Parent's independent public accountants), (i) no more
than once each fiscal year of the Seller (unless an Event of Termination has
occurred and is continuing or a deficiency was discovered during the previous
audit, in which case such limitation shall not apply), to conduct periodic
audits of the Receivables, the Related Security and the related books and
records and collections systems of the Seller or such Originator, as the case
may be, (ii) to examine and make copies of and abstracts from all books, records
and documents (including, without limitation, computer tapes and disks) in the
possession or under the control of the Seller or such Originator, as the case
may be, relating to Pool Receivables and the Related Security, including,
without limitation, the Contracts, and (iii) to visit the offices and properties
of the Seller or such Originator, as the case may be, for the purpose of
examining such materials described in clause (ii) above, and to discuss matters
relating to Pool Receivables and the Related Security or the Seller's or such
Originator's performance under the Transaction Documents or under the Contracts
with any of the officers or employees of the Seller or such Originator, as the
case may be, having knowledge of such matters. In conjunction with the periodic
annual audit referred to in clause (i) of the previous sentence of this Section
5.02, upon the Program Agent's request no more than once per year, the Seller
will, at its expense, appoint independent public accountants (which may, with
the consent of the Program Agent, be the Seller's regular independent public
accountants), or utilize the Program Agent's representatives or auditors, to
prepare and deliver to the Program Agent and each Investor Agent a written
report with respect to the Receivables and the Credit and Collection Policy
(including, in each case, the systems, procedures and records relating thereto)
on a scope and in a form reasonably requested by the Program Agent and the
Investor Agents.
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ARTICLE VI
ADMINISTRATION AND COLLECTION
OF POOL RECEIVABLES
SECTION 6.01. DESIGNATION OF COLLECTION AGENT. The servicing,
administration and collection of the Pool Receivables shall be conducted by the
Collection Agent so designated hereunder from time to time. Until the Program
Agent gives notice to the Seller of the designation of a new Collection Agent
(which notice may only be given following the occurrence and during the
continuance of an Event of Termination), the Parent is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Collection Agent
pursuant to the terms hereof. The Program Agent at any time after the occurrence
and during the continuance of an Event of Termination may designate as
Collection Agent any Person (including itself) to succeed the Parent or any
successor Collection Agent, if such Person shall consent and agree to the terms
hereof. The Collection Agent may, with the prior consent of the Program Agent
and each Investor Agent, subcontract with any other Person for the servicing,
administration or collection of the Pool Receivables. Any such subcontract shall
not affect the Collection Agent's liability for performance of its duties and
obligations pursuant to the terms hereof, and upon designation of a successor
Collection Agent, any such subcontract with an Affiliate of any Originator shall
automatically terminate and any such subcontract with a Person which is not an
Affiliate of any Originator shall be subject to termination by the Collection
Agent on no more than 30 days' notice. The Program Agent and each Investor Agent
hereby consent to the existing subcontracting arrangements with
*****************. The Agents' consent to the subcontracting arrangement with
*****************is subject to the following conditions, each of which the
Collection Agent hereby represents is satisfied: such subcontracting arrangement
(i) does not permit *****************to receive cash collections on any such
Receivables and (ii) does not permit *****************to update any Originator's
accounts receivable systems reflecting collection activities.
SECTION 6.02. DUTIES OF COLLECTION AGENT. (a) The Collection Agent
shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Pool Receivable from time to time, all in accordance
with applicable laws, rules and regulations, with reasonable care and diligence,
and in accordance with the Credit and Collection Policy. The Seller, the Program
Agent, the Investor Agents, the Banks and the Investors hereby appoint the
Collection Agent, from time to time designated pursuant to Section 6.01, as
agent for themselves, the Investors and the Banks to enforce their respective
rights and interests in the Pool Receivables, the Related Security and the
Collections with respect thereto. In performing its duties as Collection Agent,
the Collection Agent shall exercise the same care and apply the same policies as
it would exercise and apply if it owned such Receivables and shall act in the
best interests of the Seller, the Investors, the Banks, the Investor Agents and
the Program Agent.
(b) The Collection Agent shall administer the Collections in
accordance with the procedures described in Section 2.04.
(c) If no Event of Termination or Incipient Bankruptcy Event of
Termination shall have occurred and be continuing, the Parent, while it is the
Collection Agent, may, in accordance with the Credit and Collection Policy and
its sales practices, extend the maturity or
51
adjust the Outstanding Balance of any Receivable as the Parent deems appropriate
to maximize Collections thereof, or otherwise amend or modify other terms of any
Receivable, provided that the classification of any such Receivable as a
Delinquent Receivable or Defaulted Receivable shall not be affected by any such
extension.
(d) The Collection Agent shall hold in trust for the Seller and each
Investor and Bank, in accordance with their respective interests, all documents,
instruments and records (including, without limitation, computer tapes or disks)
which evidence or relate to Pool Receivables. The Collection Agent shall ▇▇▇▇
the Seller's master data processing records evidencing the Pool Receivables with
a legend, acceptable to the Program Agent, evidencing that Receivable Interests
therein have been sold.
(e) The Collection Agent shall, as soon as practicable following
receipt, turn over to the Person entitled thereto any cash collections or other
cash proceeds received with respect to Receivables not constituting Pool
Receivables.
(f) The Collection Agent shall, from time to time at the request of
the Program Agent or any Investor Agent, furnish to the Program Agent and the
Investor Agents (promptly after any such request) a calculation of the amounts
set aside for the Investors, the Banks and the Investor Agents pursuant to
Section 2.04.
(g) (i) On or prior to the 17th day of each calendar month
(except in the month of January, in which event, the 27th day), the Collection
Agent shall prepare and forward to each Agent a Monthly Report relating to the
Receivable Interests outstanding on the last day of the immediately preceding
Fiscal Month.
(ii) During the Weekly Reporting Period, unless an Event of
Termination shall have occurred and be continuing (in which case, clause (iii)
below shall be applicable), the Collection Agent shall, on or prior to the close
of business on the second Business Day of each Week, prepare and forward to each
Agent a Weekly Report which shall contain information related to the Receivables
current as of the close of business on the last Business Day of the preceding
Week.
(iii) If an Event of Termination shall have occurred and be
continuing, the Collection Agent shall, by no later than 3:00 P.M. (New York
City time) on each Business Day, prepare and forward to each Agent a Daily
Report which shall contain information relating to the Receivables current as of
the close of business on the immediately prior Business Day.
(iv) By no later than 3:00 P.M. (New York City time) on the
Business Day prior to each requested purchase of a Receivable Interest
hereunder, the Collection Agent shall prepare and forward to each Agent a Daily
Report which shall contain information relating to the Receivables current as of
the close of business on the immediately preceding Business Day.
The Collection Agent shall transmit Seller Reports to the Program
Agent and each Investor Agent concurrently (x) by facsimile or electronic mail
with signatures scanned and (y) by electronic mail (each, an "E-MAIL SELLER
REPORT"). Each E-Mail Seller Report shall be (A) formatted as the Program Agent
may designate from time to time and shall be digitally
52
signed and (B) sent to the Program Agent and each Investor Agent at an
electronic mail address designated by each of them.
SECTION 6.03. CERTAIN RIGHTS OF THE PROGRAM AGENT. (a) The Program
Agent is authorized at any time following the occurrence and during the
continuance of an Event of Termination or an Incipient Bankruptcy Event of
Termination to date, and to deliver to the Lock-Box Banks and the Program Agent
Account Bank, the notices of effectiveness attached to the Lock-Box Agreements
and the Program Agent Account Control Agreement. The Seller hereby transfers to
the Program Agent the exclusive ownership and control of the Lock-Box Accounts
to which the Obligors of Pool Receivables shall make payments. The Program Agent
may at any time following the occurrence and during the continuance of an Event
of Termination or an Incipient Bankruptcy Event of Termination notify the
Obligors of Pool Receivables, at the Seller's expense, of the ownership of
Receivable Interests under this Agreement.
(b) At any time following the designation of a Collection Agent other
than the Parent pursuant to Section 6.01 or following the occurrence and during
the continuance of an Event of Termination or an Incipient Bankruptcy Event of
Termination:
(i) The Program Agent may direct the Obligors of Pool
Receivables that all payments thereunder be made directly to the
Program Agent or its designee.
(ii) At the Program Agent's request and at the Seller's
expense, the Seller shall notify each Obligor of Pool Receivables of
the ownership of Receivable Interests under this Agreement and direct
that payments be made directly to the Program Agent or its designee.
(iii) At the Program Agent's request and at the Seller's
expense, the Seller and the Collection Agent shall (A) assemble all of
the documents, instruments and other records (including, without
limitation, computer tapes and disks) that evidence or relate to the
Pool Receivables and the related Contracts and Related Security, or
that are otherwise necessary or desirable to collect the Pool
Receivables, and shall make the same available to the Program Agent at
a place selected by the Program Agent or its designee, and (B)
segregate all cash, checks and other instruments received by it from
time to time constituting Collections of Pool Receivables in a manner
acceptable to the Program Agent and, promptly upon receipt, remit all
such cash, checks and instruments, duly indorsed or with duly executed
instruments of transfer, to the Program Agent or its designee.
(iv) The Seller authorizes the Program Agent to take any and
all steps in the Seller's name and on behalf of the Seller that are
necessary or desirable, in the determination of the Program Agent, to
collect amounts due under the Pool Receivables, including, without
limitation, endorsing the Seller's name on checks and other
instruments representing Collections of Pool Receivables and enforcing
the Pool Receivables and the Related Security and related Contracts.
53
SECTION 6.04. RIGHTS AND REMEDIES. (a) If the Collection Agent fails
to perform any of its obligations under this Agreement, the Program Agent may
(but shall not be required to) itself perform, or cause performance of, such
obligation; and the Program Agent's reasonable costs and expenses incurred in
connection therewith shall be payable by the Collection Agent.
(b) The Seller and the Originators shall perform their respective
obligations under the Contracts related to the Pool Receivables to the same
extent as if Receivable Interests had not been sold and the exercise by the
Program Agent on behalf of the Investors, the Banks and the Investor Agents of
their rights under this Agreement shall not release the Collection Agent or the
Seller from any of their duties or obligations with respect to any Pool
Receivables or related Contracts. Neither the Program Agent, the Investors, the
Investor Agents nor the Banks shall have any obligation or liability with
respect to any Pool Receivables or related Contracts, nor shall any of them be
obligated to perform the obligations of the Seller thereunder.
(c) In the event of any conflict between the provisions of Article VI
of this Agreement and Article VI of the Originator Purchase Agreement, the
provisions of Article VI of this Agreement shall control.
SECTION 6.05. FURTHER ACTIONS EVIDENCING PURCHASES. Each Originator
agrees from time to time, at its expense, to promptly execute and deliver all
further instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Program Agent or any Investor Agent may
reasonably request, to perfect, protect or more fully evidence the Receivable
Interests purchased hereunder, or to enable the Investors, the Banks, the
Investor Agents or the Program Agent to exercise and enforce their respective
rights and remedies hereunder. Without limiting the foregoing, each Originator
will (i) upon the request of the Program Agent or any Investor Agent, execute
and file such financing or continuation statements, or amendments thereto, and
such other instruments and documents, that may be reasonably necessary or
desirable, or that the Program Agent or any Investor Agent may reasonably
request, to perfect, protect or evidence such Receivable Interests; and (ii)
▇▇▇▇ its master data processing records evidencing the Pool Receivables with a
legend, acceptable to the Program Agent, evidencing that Receivable Interests
have been sold. Each Originator hereby authorizes the Seller to file financing
statements with respect to the Originator Purchase Agreement as permitted by the
UCC.
SECTION 6.06. COVENANTS OF THE COLLECTION AGENT AND EACH ORIGINATOR.
(a) AUDITS. The Collection Agent (not in addition to the requirements of Section
5.02 unless the Collection Agent is not the Parent or an Affiliate of the
Parent) will, from time to time upon reasonable notice and during regular
business hours as requested by the Program Agent or any Investor Agent, permit
the Program Agent, such Investor Agent or their agents or representatives
(including independent public accountants, which may be the Collection Agent's
independent public accountants), (i) no more than once each fiscal year of the
Collection Agent (unless an Event of Termination has occurred and is continuing
or a deficiency was discovered during the previous audit in which case such
limitation shall not apply) to conduct periodic audits of the Receivables, the
Related Security and the related books and records and collections systems of
the Collection Agent, (ii) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes and
disks) in the possession or
54
under the control of the Collection Agent relating to Pool Receivables and the
Related Security, including, without limitation, the Contracts, and (iii) to
visit the offices and properties of the Collection Agent for the purpose of
examining such materials described in clause (ii) above, and to discuss matters
relating to Pool Receivables and the Related Security or the Collection Agent's
performance hereunder with any of the officers or employees of the Collection
Agent having knowledge of such matters.
(b) *****************. The Collection Agent agrees that at no time
will the Outstanding Balance of Receivables subject to the subcontracting
arrangements with *****************referred to in Section 6.01 exceed
*****************in the aggregate.
(c) CHANGE IN CREDIT AND COLLECTION POLICY. Neither the Collection
Agent nor any Originator will make any change in the Credit and Collection
Policy that would materially adversely affect the collectibility of any Pool
Receivable or the ability of the Parent (if it is acting as Collection Agent) to
perform its obligations under this Agreement. In the event that the Collection
Agent or any Originator makes any material change to the Credit and Collection
Policy, it shall, contemporaneously with such change, provide the Program Agent
and each Investor Agent with an updated Credit and Collection Policy and a
summary of all material changes.
SECTION 6.07. INDEMNITIES BY THE COLLECTION AGENT. Without limiting
any other rights that the Program Agent, any Investor Agent, any Investor, any
Bank or any of their respective Affiliates (including the members of any
Investor) or any of their respective officers, directors, employees or advisors
(each, a "SPECIAL INDEMNIFIED PARTY") may have hereunder or under applicable
law, and in consideration of its appointment as Collection Agent, the Collection
Agent hereby agrees to indemnify each Special Indemnified Party from and against
any and all claims, losses and liabilities (including reasonable attorneys'
fees) (all of the foregoing being collectively referred to as "SPECIAL
INDEMNIFIED AMOUNTS") arising out of or resulting from any of the following
(excluding, however, (a) Special Indemnified Amounts to the extent having
resulted from (i) gross negligence or willful misconduct on the part of such
Special Indemnified Party or (ii) breach on the part of such Special Indemnified
Party of the terms of any Transaction Document, (b) recourse for Receivables
which are not collected, not paid or uncollectible on account of the insolvency,
bankruptcy or financial inability to pay of the applicable Obligor or (c) any
income or franchise taxes or any other tax or fee measured by income incurred by
such Special Indemnified Party arising out of or as a result of this Agreement
or the ownership of Receivable Interests or in respect of any Receivable or any
Contract):
(i) any representation made or deemed made by the Collection
Agent pursuant to Section 4.02(g) hereof which shall have been
incorrect in any respect when made or any other representation or
warranty or statement made or deemed made by the Collection Agent
under or in connection with this Agreement which shall have been
incorrect in any material respect when made (without giving effect to
the parenthetical expression in Section 4.02(b));
(ii) the failure by the Collection Agent to comply with any
applicable law, rule or regulation with respect to the servicing of
any Pool Receivable or Contract;
55
(iii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool, the Contracts and the Related Security and Collections in
respect thereof, whether at the time of any purchase or reinvestment
or at any subsequent time;
(iv) any failure of the Collection Agent to perform its duties
or obligations in accordance with the provisions of this Agreement;
(v) the commingling of Collections of Pool Receivables at any
time by the Collection Agent with other funds;
(vi) any action or omission by the Collection Agent reducing
or impairing the rights of the Program Agent, the Investor Agents, the
Investors or the Banks with respect to any Pool Receivable or the
value of any Pool Receivable unless permitted by the terms of this
Agreement; or
(vii) any claim brought by any Person other than a Special
Indemnified Party arising from any activity by the Collection Agent or
its subcontractors in servicing, administering or collecting any
Receivable.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. EVENTS OF TERMINATION. If any of the following events
("EVENTS OF TERMINATION") shall occur and be continuing:
(a) The Collection Agent (i) shall fail to perform or observe any
term, covenant or agreement under this Agreement (other than as referred to in
clause (ii), (iii), (iv) or (v) of this subsection (a)) and such failure shall
remain unremedied for three Business Days or (ii) shall fail to make when due
any payment or deposit to be made by it under this Agreement and such failure,
in the case of payments on account of Yield or Fees only, shall remain
unremedied for three Business Days or (iii) shall fail to deliver any Monthly
Report when required and such failure shall remain unremedied for two Business
Days, or (iv) shall fail to deliver any Weekly Report when required and such
failure shall remain unremedied for one Business Day (provided that the grace
period in this clause (iv) may not be utilized more than once in any four-week
period), or (v) shall fail to deliver any Daily Report when required and such
failure shall remain unremedied for one Business Day (provided that the grace
period in this clause (v) may not be utilized more than once in any four-week
period, PROVIDED, that failure or delay in delivering the relevant Seller
Reports pursuant to clauses (iii), (iv) or (v) above shall be excused for not
more than three Business Days beyond the time period allowed thereunder, if such
failure or delay is caused by force majeure or other circumstances beyond the
Collection Agent's reasonable control, including war, riot, flood, earthquake or
other natural disaster, breakdown of public or private or common carrier
communications or transmission facilities; or
56
(b) The Seller shall fail to make any payment required under Section
2.04(e) and such failure shall remain unremedied for three Business Days;
(c) Any representation or warranty made or deemed made by the Seller,
any Originator, the Parent or the Collection Agent (or any of their respective
officers) under or in connection with this Agreement or any other Transaction
Document or any information or report delivered by the Seller, any Originator,
the Parent or the Collection Agent pursuant to this Agreement or any other
Transaction Document shall prove to have been incorrect or untrue in any
material respect when made or deemed made or delivered, unless the breach of
such representation or warranty is capable of being cured and is in fact cured
(without any adverse impact on the Agents, the Investors or the Banks or the
collectibility of the Pool Receivables) within ten days of the first date on
which the Seller receives written notice or obtains actual knowledge of such
breach; or
(d) (i) The Seller shall fail to perform or observe any of its
covenants contained in the second sentence of Section 5.01(b) or in ▇▇▇▇▇▇▇
▇.▇▇(▇), (▇), (▇), (▇), (▇), (▇), (▇), (▇), (▇), (▇), (▇), (q) or (r) of this
Agreement, or (ii) the Seller shall fail to perform or observe any of its
covenants contained in Section 5.01(j)(i) or 5.02 and such failure under this
clause (ii) shall continue unremedied for 10 days, or (iii) any Originator shall
fail to perform or observe any of its covenants contained in Section 5.02 or
6.05 and such failure under this clause (iii) shall continue unremedied for 10
days, or (iv) the Seller or any Originator shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement on its part to be
performed or observed and any such failure under this clause (iv) shall remain
unremedied for 20 days after written notice thereof shall have been given to the
Seller by the Program Agent or any Investor Agent; or
(e) The Seller or any Originator shall fail to pay any principal of
or premium or interest on any of its Debt (which in the case of any Originator,
is outstanding in a principal amount of at least $25,000,000 in the aggregate)
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt (PROVIDED, THAT for the purposes of this
Section 7.01(e), the term "Debt" shall exclude any Debt owing to a Subsidiary of
any Originator, PROVIDED, HOWEVER, that any affirmative action taken against any
such Originator with respect to such Debt shall nullify the foregoing
exclusion); or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), redeemed, purchased or defeased, or an offer to
repay, redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the stated maturity thereof; or
(f) Any purchase or reinvestment pursuant to this Agreement shall for
any reason (other than pursuant to the terms hereof) cease to create, or any
Receivable Interest shall for any reason cease to be a valid and perfected first
priority undivided percentage ownership interest to the extent of the pertinent
Receivable Interest in each applicable Pool Receivable and
57
the Related Security and Collections with respect thereto; or the security
interest created pursuant to Section 2.11 shall for any reason cease to be a
valid and perfected first priority security interest in the collateral security
referred to in that section; or
(g) The Seller, the Collection Agent or any Originator shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
the Seller, the Collection Agent or any Originator seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 45 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its property)
shall occur; or the Seller, or any Originator shall take any limited liability
company or corporate or other action to authorize any of the actions set forth
above in this subsection (g); or
(h) As of the last day of any Fiscal Month, either (i) the average of
the Default Ratios for such Fiscal Month and the two immediately preceding
Fiscal Months shall exceed ********or (ii) the average of the Delinquency Ratios
for such Fiscal Month and the two immediately preceding Fiscal Months shall
exceed ********or (iii) the Loss-to-Liquidation Ratio for such Fiscal Month
shall exceed ********or (iv) the average of the Dilution Ratios for such Fiscal
Month and the two immediately preceding Fiscal Months shall exceed ********; or
(i) The sum of the Receivable Interests shall be greater than the
Maximum Receivable Interest for five consecutive Business Days; or
(j) There shall have occurred any event which may materially
adversely affect the collectibility of the Receivables Pool or the ability of
the Seller, any Originator or the Collection Agent to collect Pool Receivables
or otherwise perform its obligations under this Agreement and such event, if
capable of being cured, continues for a period of three Business Days; or
(k) An "Event of Termination" or "Facility Termination Date" shall
occur under the Originator Purchase Agreement, or any Transaction Document shall
cease to be in full force and effect, or the Seller or any Originator shall
state in writing that any Transaction Document or provision thereof shall cease
to be valid and binding on it; or
(l) All of the outstanding membership interests of the Seller shall
cease to be owned, directly or indirectly, by the Parent, or all of the
outstanding capital stock of any Originator (other than the Parent) ceases to be
owned, directly or indirectly, by the Parent; or
(m) One or more judgments for the payment of money in an aggregate
amount in excess of $25,000,000 (except to the extent covered by insurance as to
which the insurer has
58
acknowledged such coverage in writing) shall be rendered against (i) any
Originator or any of its Subsidiaries or any combination thereof or (ii) the
Collection Agent or any of its Subsidiaries or a combination thereof, and the
same shall remain undischarged for more than 30 days (whether or not
consecutive) during which execution shall not be effectively stayed, or any
action shall be taken by a judgment creditor to attach or levy upon any assets
of any Originator or the Collection Agent or any of their respective
Subsidiaries to enforce any such judgment; or
(n) The Parent's Debt Rating is below BB- by S&P or below B1 by
▇▇▇▇▇'▇, or is withdrawn or suspended by S&P or ▇▇▇▇▇'▇; or
(o) The Parent or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an aggregate
amount exceeding $15,000,000, or the Parent or any ERISA Affiliate is assessed
withdrawal liability pursuant to Title IV of ERISA by a Multiemployer Plan
requiring aggregate annual payments exceeding $5,000,000, or any of the
following occurs with respect to a Guaranteed Pension Plan: (i) an ERISA
Reportable Event, or a failure to make a required installment or other payment
(within the meaning of Section 302(f)(1) of ERISA), PROVIDED that such event (A)
would be expected to result in liability of the Parent or any of its
Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount
exceeding $15,000,000 and (B) would constitute grounds for the termination of
such Guaranteed Pension Plan by the PBGC, for the appointment by the appropriate
United States District Court of a trustee to administer such Guaranteed Pension
Plan or for the imposition of a lien in favor of such Guaranteed Pension Plan;
or (ii) the appointment by a United States District Court of a trustee to
administer such Guaranteed Pension Plan; or (iii) the institution by the PBGC of
proceedings to terminate such Guaranteed Pension Plan;
then, and in any such event, any or all of the following actions may be taken by
notice to the Seller: (x) the Program Agent may in its discretion, and shall, at
the direction of any Investor Agent, declare the Facility Termination Date to
have occurred (in which case the Facility Termination Date shall be deemed to
have occurred), (y) the Program Agent may in its discretion, and shall, at the
direction of any Investor Agent, declare the Commitment Termination Date to have
occurred (in which case the Commitment Termination Date shall be deemed to have
occurred), and (z) without limiting any right under this Agreement to replace
the Collection Agent, the Program Agent may in its discretion, and shall, at the
direction of any Investor Agent, designate another Person to succeed the Parent
as the Collection Agent; PROVIDED, that, automatically upon the occurrence of
any event (without any requirement for the passage of time or the giving of
notice) described in paragraph (g) of this Section 7.01, the Facility
Termination Date and the Commitment Termination Date shall occur, the Parent (if
it is then serving as the Collection Agent) shall cease to be the Collection
Agent, and the Program Agent or its designee shall become the Collection Agent.
Upon any such declaration or designation or upon such automatic termination, the
Investors, the Investor Agents, the Banks and the Program Agent shall have, in
addition to the rights and remedies which they may have under this Agreement,
all other rights and remedies provided after default under the UCC and under
other applicable law, which rights and remedies shall be cumulative.
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ARTICLE VIII
THE PROGRAM AGENT
SECTION 8.01. AUTHORIZATION AND ACTION. Each Investor and each Bank
hereby appoints and authorizes the Program Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the other
Transaction Documents as are delegated to the Program Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto. In
the event that the Program Agent (in its capacity as such) receives any
Collections, it agrees to apply the same in the same manner as is required of
the Collection Agent. The Program Agent shall not have any duties other than
those expressly set forth in the Transaction Documents, and no implied
obligations or liabilities shall be read into any Transaction Document, or
otherwise exist, against the Program Agent. The Program Agent does not assume,
nor shall it be deemed to have assumed, any obligation to, or relationship of
trust or agency with, the Seller, the Parent or any other Originator.
Notwithstanding any provision of this Agreement or any other Transaction
Document, in no event shall the Program Agent ever be required to take any
action which exposes the Program Agent to personal liability or which is
contrary to any provision of any Transaction Document or applicable law.
SECTION 8.02. PROGRAM AGENT'S RELIANCE, ETC. Neither the Program Agent
nor any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them as Program Agent under or in
connection with this Agreement (including, without limitation, the Program
Agent's servicing, administering or collecting Pool Receivables as Collection
Agent) or any other Transaction Document, except for its or their own gross
negligence or willful misconduct or breach of the terms of any Transaction
Document. Without limiting the generality of the foregoing, the Program Agent:
(a) may consult with legal counsel (including counsel for any Investor Agent,
the Seller, the Parent, any other Originator and the Collection Agent),
independent certified public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (b)
makes no warranty or representation to any Investor Agent, Investor or Bank
(whether written or oral) and shall not be responsible to any Investor Agent,
Investor or Bank for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement or any other
Transaction Document; (c) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
this Agreement or any other Transaction Document on the part of the Seller, the
Parent, any other Originator or the Collection Agent or to inspect the property
(including the books and records) of the Seller, the Parent, any other
Originator or the Collection Agent; (d) shall not be responsible to any Investor
Agent, Investor or Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Transaction Document or any other instrument or document furnished pursuant
hereto or thereto; and (e) shall incur no liability under or in respect of this
Agreement or any other Transaction Document by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or writing (which
may be by telecopier or telex) believed by it to be genuine and signed or sent
by the proper party or parties.
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SECTION 8.03. CNAI AND AFFILIATES. The obligation of Citibank to
purchase Receivable Interests under this Agreement may be satisfied by CNAI or
any of its Affiliates. With respect to any Receivable Interest or interest
therein owned by it, CNAI shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as though it were not the
Program Agent. CNAI and any of its Affiliates may generally engage in any kind
of business with the Seller, the Parent, any other Originator, the Collection
Agent or any Obligor, any of their respective Affiliates and any Person who may
do business with or own securities of the Seller, the Parent, any other
Originator, the Collection Agent or any Obligor or any of their respective
Affiliates, all as if CNAI were not the Program Agent and without any duty to
account therefor to the Investor Agents, the Investors or the Banks.
SECTION 8.04. INDEMNIFICATION OF PROGRAM AGENT. Each Bank agrees to
indemnify the Program Agent (to the extent not reimbursed by the Seller, the
Parent or any other Originator), ratably according to the respective Percentage
of such Bank, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Program Agent in any way relating to or arising out of this
Agreement or any other Transaction Document or any action taken or omitted by
the Program Agent under this Agreement or any other Transaction Document,
PROVIDED that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Program Agent's gross negligence or
willful misconduct.
SECTION 8.05. DELEGATION OF DUTIES. The Program Agent may execute any
of its duties through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The Program
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 8.06. ACTION OR INACTION BY PROGRAM AGENT. The Program Agent
shall in all cases be fully justified in failing or refusing to take action
under any Transaction Document unless it shall first receive such advice or
concurrence of the Investor Agents and assurance of its indemnification by the
Banks, as it deems appropriate. The Program Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Transaction Document in accordance with a request or at the direction of
the Investor Agents and such request or direction and any action taken or
failure to act pursuant thereto shall be binding upon all Investors, Banks, the
Program Agent and the Investor Agents.
SECTION 8.07. NOTICE OF EVENTS OF TERMINATION. The Program Agent shall
not be deemed to have knowledge or notice of the occurrence of any Incipient
Event of Termination, or of any Event of Termination unless the Program Agent
has received notice from any Investor Agent, Investor, Bank, the Collection
Agent, any Originator or the Seller stating that an Incipient Event of
Termination or an Event of Termination has occurred hereunder and describing
such Incipient Event of Termination or Event of Termination. If the Program
Agent receives such a notice, it shall promptly give notice thereof to each
Investor Agent whereupon each Investor Agent shall promptly give notice thereof
to its respective Investors and Related Banks. The Program Agent shall take such
action concerning an Incipient Event of Termination or an Event of Termination
as may be directed by the Investor Agents (subject to the other provisions of
this
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Article VIII), but until the Program Agent receives such directions, the Program
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, as the Program Agent deems advisable and in the best
interests of the Investors and Banks.
SECTION 8.08. NON-RELIANCE ON PROGRAM AGENT AND OTHER PARTIES. Each
Investor Agent, Investor and Bank expressly acknowledges that neither the
Program Agent, any of its Affiliates nor any of their respective directors,
officers, agents or employees has made any representations or warranties to it
and that no act by the Program Agent hereafter taken, including any review of
the affairs of the Seller, the Parent or any other Originator, shall be deemed
to constitute any representation or warranty by the Program Agent. Each Investor
and Bank represents and warrants to the Program Agent that, independently and
without reliance upon the Program Agent, any of its Affiliates, any Investor
Agent (except to the extent otherwise agreed in writing between such Investor
and its Investor Agent) or any other Investor or Bank and based on such
documents and information as it has deemed appropriate, it has made and will
continue to make its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of the Seller, the Parent and the other Originators, and the
Receivable Interests and its own decision to enter into this Agreement and to
take, or omit, action under this Agreement or any other Transaction Document.
Except for items expressly required to be delivered under this Agreement or any
other Transaction Document by the Program Agent to any Investor Agent, Investor
or Bank, the Program Agent shall not have any duty or responsibility to provide
any Investor Agent, Investor or Bank with any information concerning the Seller,
the Parent or any other Originator or any of their Affiliates that comes into
the possession of the Program Agent or any of its directors, officers, agents,
employees, attorneys-in-fact or Affiliates.
SECTION 8.09. SUCCESSOR PROGRAM AGENT. The Program Agent may, upon at
least thirty (30) days' notice to the Seller and each Investor Agent, resign as
Program Agent. Such resignation shall not become effective until a successor
agent is appointed by the Investor Agents (with the approval of the Seller,
which approval shall not be unreasonably withheld and shall not be required if
an Incipient Event of Termination or an Event of Termination has occurred and is
continuing) and has accepted such appointment. Upon such acceptance of its
appointment as Program Agent hereunder by a successor Program Agent, such
successor Program Agent shall succeed to and become vested with all the rights
and duties of the retiring Program Agent, and the retiring Program Agent shall
be discharged from its duties and obligations under the Transaction Documents.
After any retiring Program Agent's resignation hereunder, the provisions of this
Article VIII and Section 6.07 and Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Program Agent.
SECTION 8.10. REPORTS AND NOTICES. The Program Agent hereby agrees to
provide each Investor Agent with copies of all material notices, reports and
other documents provided to the Program Agent by the Seller or the Collection
Agent hereunder (other than any notices received by the Program Agent referred
to in any of the definitions of Assignee Rate, Investor Rate or Fixed Period)
which are not otherwise required to be provided by the Seller or the Collection
Agent directly to the Investor Agents in accordance with the terms hereof.
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ARTICLE IX
THE INVESTOR AGENTS
SECTION 9.01. AUTHORIZATION AND ACTION. Each Investor and each Bank
which belongs to the same Group hereby appoints and authorizes the Investor
Agent for such Group to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Transaction Documents as are
delegated to such Investor Agent by the terms hereof and thereof, together with
such powers as are reasonably incidental thereto. No Investor Agent shall have
any duties other than those expressly set forth in the Transaction Documents,
and no implied obligations or liabilities shall be read into any Transaction
Document, or otherwise exist, against any Investor Agent. No Investor Agent
assumes, nor shall it be deemed to have assumed, any obligation to, or
relationship of trust or agency with, the Seller, the Parent or any other
Originator. Notwithstanding any provision of this Agreement or any other
Transaction Document, in no event shall any Investor Agent ever be required to
take any action which exposes such Investor Agent to personal liability or which
is contrary to any provision of any Transaction Document or applicable law.
SECTION 9.02. INVESTOR AGENT'S RELIANCE, ETC. No Investor Agent nor
any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them as an Investor Agent under or
in connection with this Agreement or the other Transaction Documents (i) with
the consent or at the request or direction of the Investors and Banks in its
Group or (ii) in the absence of its or their own gross negligence or willful
misconduct or breach of the terms of any Transaction Document. Without limiting
the generality of the foregoing, an Investor Agent: (a) may consult with legal
counsel (including counsel for the Program Agent, the Seller, the Parent or any
other Originator), independent certified public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (b) makes no warranty or representation to any Investor
or Bank (whether written or oral) and shall not be responsible to any Investor
or Bank for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement or any other Transaction
Document; (c) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or any other Transaction Document on the part of the Seller, the
Parent, any other Originator or any other Person or to inspect the property
(including the books and records) of the Seller, the Parent, any other
Originator or the Collection Agent; (d) shall not be responsible to any Investor
or any Bank for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Transaction
Documents or any other instrument or document furnished pursuant hereto; and (e)
shall incur no liability under or in respect of this Agreement or any other
Transaction Document by acting upon any notice (including notice by telephone),
consent, certificate or other instrument or writing (which may be by telecopier
or telex) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 9.03. INVESTOR AGENT AND AFFILIATES. With respect to any
Receivable Interest or interests therein owned by it, each Investor Agent shall
have the same rights and powers under this Agreement as any Bank and may
exercise the same as though it were not an Investor Agent. Each Investor Agent
and any of its Affiliates may generally engage in any kind
63
of business with the Seller, the Parent, any other Originator, the Collection
Agent or any Obligors, any of their respective Affiliates and any Person who may
do business with or own securities of the Seller, the Parent, any other
Originator, the Collection Agent or any Obligor or any of their respective
Affiliates, all as if such Investor Agent were not an Investor Agent and without
any duty to account therefor to any Investors or Banks.
SECTION 9.04. INDEMNIFICATION OF INVESTOR AGENTS. Each Bank in any
Group agrees to indemnify the Investor Agent for such Group (to the extent not
reimbursed by the Seller, the Parent or any other Originator), ratably according
to the proportion of the Percentage of such Bank to the aggregate Percentages of
all Banks in such Group, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against such Investor Agent in any way relating to or arising
out of this Agreement or any other Transaction Document or any action taken or
omitted by such Investor Agent under this Agreement or any other Transaction
Document, PROVIDED that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Investor Agent's gross
negligence or willful misconduct.
SECTION 9.05. DELEGATION OF DUTIES. Each Investor Agent may execute
any of its duties through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. No Investor
Agent shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 9.06. ACTION OR INACTION BY INVESTOR AGENT. Each Investor
Agent shall in all cases be fully justified in failing or refusing to take
action under any Transaction Document unless it shall first receive such advice
or concurrence of the Investors and Banks in its Group and assurance of its
indemnification by the Banks in its Group, as it deems appropriate. Each
Investor Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Transaction Document in
accordance with a request or at the direction of the Investors and Banks in its
Group, and such request or direction and any action taken or failure to act
pursuant thereto shall be binding upon all Investors and Banks in its Group.
SECTION 9.07. NOTICE OF EVENTS OF TERMINATION. No Investor Agent shall
be deemed to have knowledge or notice of the occurrence of any Incipient Event
of Termination or of any Event of Termination unless such Investor Agent has
received notice from the Program Agent, any other Investor Agent, any Investor
or Bank, the Collection Agent, any Originator or the Seller stating that an
Incipient Event of Termination or Event of Termination has occurred hereunder
and describing such Incipient Event of Termination or Event of Termination. If
an Investor Agent receives such a notice, it shall promptly give notice thereof
to the Investors and Banks in its Group and to the Program Agent (but only if
such notice received by such Investor Agent was not sent by the Program Agent).
The Investor Agent shall take such action concerning an Incipient Event of
Termination or an Event of Termination as may be directed by the Investors and
Banks in its Group (subject to the other provisions of this Article IX), but
until such Investor Agent receives such directions, such Investor Agent may (but
shall not be
64
obligated to) take such action, or refrain from taking such action, as such
Investor Agent deems advisable and in the best interests of the Investors and
Banks in its Group.
SECTION 9.08. NON-RELIANCE ON INVESTOR AGENT AND OTHER PARTIES. Except
to the extent otherwise agreed to in writing between an Investor and its
Investor Agent, each Investor and Bank in the same Group expressly acknowledges
that neither the Investor Agent for its Group, any of its Affiliates nor any of
such Investor Agent's or Affiliate's directors, officers, agents or employees
has made any representations or warranties to it and that no act by such
Investor Agent hereafter taken, including any review of the affairs of the
Seller, the Parent or any other Originator, shall be deemed to constitute any
representation or warranty by such Investor Agent. Except to the extent
otherwise agreed to in writing between an Investor and its Investor Agent, each
Investor and Bank in the same Group represents and warrants to the Investor
Agent for such Group that, independently and without reliance upon such Investor
Agent, any of its Affiliates, any other Investor Agent, the Program Agent or any
other Investor or Bank and based on such documents and information as it has
deemed appropriate, it has made and will continue to make its own appraisal of
and investigation into the business, operations, property, prospects, financial
and other conditions and creditworthiness of the Seller, the Parent, any other
Originator and the Receivable Interests and its own decision to enter into this
Agreement and to take, or omit, action under this Agreement or any other
Transaction Document. Except for items expressly required to be delivered under
this Agreement or any other Transaction Document by an Investor Agent to any
Investor or Bank in its Group, no Investor Agent shall have any duty or
responsibility to provide any Investor or Bank in its Group with any information
concerning the Seller, the Parent, any other Originator or any of their
Affiliates that comes into the possession of such Investor Agent or any of its
directors, officers, agents, employees, attorneys-in-fact or Affiliates.
SECTION 9.09. SUCCESSOR INVESTOR AGENT. Any Investor Agent may, upon
at least thirty (30) days' notice to the Program Agent, the Seller and the
Investors and Banks in its Group, resign as Investor Agent for its Group. Such
resignation shall not become effective until a successor investor agent is
appointed by the Investors and Banks in such Group and has accepted such
appointment. Upon such acceptance of its appointment as Investor Agent for such
Group hereunder by a successor Investor Agent, such successor Investor Agent
shall succeed to and become vested with all the rights and duties of the
retiring Investor Agent, and the retiring Investor Agent shall be discharged
from its duties and obligations under the Transaction Documents. After any
retiring Investor Agent's resignation hereunder, the provisions of this Article
IX and Section 6.07 and Article X shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Investor Agent.
SECTION 9.10. RELIANCE ON INVESTOR AGENT. Unless otherwise advised in
writing by an Investor Agent or by any Investor or Bank in such Investor Agent's
Group, each party to this Agreement may assume that (i) such Investor Agent is
acting for the benefit and on behalf of each of the Investors and Banks in its
Group, as well as for the benefit of each assignee or other transferee from any
such Person, and (ii) each action taken by such Investor Agent has been duly
authorized and approved by all necessary action on the part of the Investors and
Banks in its Group.
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ARTICLE X
INDEMNIFICATION
SECTION 10.01. INDEMNITIES BY THE SELLER. Without limiting any other
rights that the Program Agent, the Investor Agents, the Investors, the Banks or
any of their respective Affiliates (including the members of any Investor) or
any of their respective officers, directors, employees or advisors (each, an
"INDEMNIFIED PARTY") may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and against any and all
claims, losses and liabilities (including reasonable attorneys' fees) (all of
the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") arising
out of or resulting from this Agreement or the other Transaction Documents or
the use of proceeds of the purchases or reinvestments or the ownership of
Receivable Interests or in respect of any Receivable or any Contract, excluding,
however, (a) Indemnified Amounts to the extent having resulted from (i) gross
negligence or willful misconduct on the part of such Indemnified Party or (ii)
breach on the part of such Indemnified Party of the terms of any Transaction
Document, (b) recourse (except as otherwise specifically provided in this
Agreement) for Receivables which are not collected, not paid or uncollectible on
account of the insolvency, bankruptcy or financial inability to pay of the
applicable Obligor or (c) any income or franchise taxes or any other tax or fee
measured by income incurred by such Indemnified Party arising out of or as a
result of this Agreement or the ownership of Receivable Interests or in respect
of any Receivable or any Contract. Without limiting or being limited by the
foregoing, the Seller shall pay on demand to each Indemnified Party any and all
amounts necessary to indemnify such Indemnified Party from and against any and
all Indemnified Amounts relating to or resulting from any of the following:
(i) the characterization in any Seller Report or other
written statement made by or on behalf of the Seller of any Receivable
as an Eligible Receivable or as included in the Net Receivables Pool
Balance which, as of the date of such Seller Report or other
statement, is not an Eligible Receivable or should not be included in
the Net Receivables Pool Balance;
(ii) any representation or warranty or statement made or
deemed made by the Seller (or any of its officers) under or in
connection with this Agreement or any of the other Transaction
Documents which shall have been incorrect in any material respect when
made;
(iii) the failure by the Seller to comply with any applicable
law, rule or regulation with respect to any Pool Receivable or the
related Contract; or the failure of any Pool Receivable or the related
Contract to conform to any such applicable law, rule or regulation;
(iv) the failure to vest in the Investors or the Banks, as the
case may be, (a) a perfected undivided percentage ownership interest,
to the extent of each Receivable Interest, in the Receivables in, or
purporting to be in, the Receivables Pool and the Related Security and
Collections in respect thereof, or (b) a perfected security interest
as provided in Section 2.11, in each case free and clear of any
Adverse Claim;
66
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool and the Related Security and Collections in respect thereof,
whether at the time of any purchase or reinvestment or at any
subsequent time;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable in, or purporting to be in, the Receivables Pool
(including, without limitation, a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation
of such Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the merchandise or
services related to such Receivable or the furnishing or failure to
furnish such merchandise or services or relating to collection
activities with respect to such Receivable (if such collection
activities were performed by the Seller or any of its Affiliates
acting as Collection Agent);
(vii) any failure of the Seller to perform its duties or
obligations in accordance with the provisions hereof or to perform its
duties or obligations under the Contracts;
(viii) any products liability or other claim arising out of or
in connection with merchandise, insurance or services which are the
subject of any Contract;
(ix) the commingling of Collections of Pool Receivables at any
time with other funds;
(x) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of purchases or reinvestments or
the ownership of Receivable Interests or in respect of any Receivable
or Related Security or Contract (excluding any collection costs
incurred by the Agent, the Investors or the Banks in collecting any
Receivables not paid due to the insolvency, bankruptcy or financial
inability to pay of the applicable Obligor);
(xi) any failure of the Seller to comply with its covenants
contained in this Agreement or any other Transaction Document;
(xii) any claim brought by any Person other than an Indemnified
Party arising from any activity by the Seller or any subcontractors of
the Seller in servicing, administering or collecting any Receivable;
or
(xiii) the sale or transfer by the Seller hereunder of any
Receivable (or interest therein) in violation of applicable law.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or consent to any departure by the Seller, the
Parent (as Collection Agent or otherwise) or any other Originator therefrom
shall be effective unless in a writing signed by each Investor Agent and the
Program Agent (and, in the case of any amendment, also signed by the Seller, the
Parent and the other Originators party hereto); PROVIDED, HOWEVER, that the
signatures of the Seller, the Parent and the other Originators party hereto
shall not be required for the effectiveness of any amendment which modifies the
provisions of Sections 4.02(e), 4.02(g), 6.06(a) or 6.07 at any time when the
Collection Agent is not an Originator, the Parent or an Affiliate of such
Originator or the Parent or a successor Collection Agent is designated by the
Agent pursuant to Section 6.01, and then such amendment, waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; PROVIDED, HOWEVER, that no amendment, waiver or consent shall,
unless in writing and signed by the Collection Agent in addition to the Program
Agent and each Investor Agent, affect the rights or duties of the Collection
Agent under this Agreement. No failure on the part of the Investors, the Banks,
the Investor Agents or the Program Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
SECTION 11.02. NOTICES, ETC. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and faxed or delivered, to each party hereto,
at its address set forth under its name on the signature pages hereof or at such
other address as shall be designated by such party in a written notice to the
other parties hereto. Notices and communications by facsimile shall be effective
when sent (and shall be followed by hard copy sent by regular mail), and notices
and communications sent by other means shall be effective when received.
SECTION 11.03. ASSIGNABILITY. (a) This Agreement and the Investors'
rights and obligations herein (including ownership of each Receivable Interest)
shall be assignable by the Investors and their successors and assigns
(including, without limitation, pursuant to an Asset Purchase Agreement) with
the Seller's consent, which shall not be unreasonably withheld or delayed,
PROVIDED, that the Seller's consent shall not be required (i) if the assignment
shall be to an Eligible Assignee, unless, as a direct result thereof, the Seller
would incur obligations to make payments pursuant to Section 2.08 or 2.10 which
are in excess of any such obligations then payable by the Seller to the
assigning party, or (ii) if there shall have occurred and be continuing an Event
of Termination or an Incipient Bankruptcy Event of Termination. Each assignor of
a Receivable Interest or any interest therein shall notify the Program Agent,
its Investor Agent and the Seller of any such assignment. Each assignor of a
Receivable Interest or any interest therein may, in connection with any such
assignment, disclose to the assignee or potential assignee any information
relating to the Seller, the Parent or any other Originator, including the
Receivables, furnished to such assignor by or on behalf of the Seller, the
Parent, any other Originator or by the Program Agent; provided that, prior to
any such disclosure, the assignee or potential assignee agrees to preserve the
confidentiality of any such information which is confidential in accordance with
the provisions of Section 11.06 hereof.
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(b) Each Bank may assign to any Eligible Assignee or to any other
Bank all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Bank Commitment and any
Receivable Interests or interests therein owned by it); PROVIDED, HOWEVER, that
(i) each such assignment shall be of a constant, and not a
varying, percentage of all rights and obligations under this
Agreement,
(ii) the amount being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance
Agreement with respect to such assignment) shall in no event be less
than the lesser of (x) $10,000,000 and (y) all of the assigning Bank's
Bank Commitment,
(iii) the parties to each such assignment shall execute and
deliver to the Program Agent (with a copy to the assignor's Investor
Agent), for its acceptance and recording in the Register, an
Assignment and Acceptance Agreement, together with a processing and
recordation fee of $2,500, and
(iv) concurrently with such assignment, such assignor Bank
shall assign to such assignee Bank or other Eligible Assignee an equal
percentage of its rights and obligations under its Asset Purchase
Agreement (or, if such assignor Bank is Citibank, it shall arrange for
such assignee Bank or other Eligible Assignee to become a party to its
Asset Purchase Agreement for a maximum Capital amount equal to the
assignee's Bank Commitment).
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance Agreement, (x) the
assignee thereunder shall be a party to this Agreement and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance Agreement, have the rights and obligations of a Bank
hereunder and (y) the assigning Bank shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance Agreement, relinquish such rights and be released from such
obligations under this Agreement (and, in the case of an Assignment and
Acceptance Agreement covering all or the remaining portion of an assigning
Bank's rights and obligations under this Agreement, such Bank shall cease to be
a party hereto).
(c) The Program Agent shall maintain at its address referred to in
Section 11.02 of this Agreement a copy of each Assignment and Acceptance
Agreement delivered to and accepted by it and a register for the recordation of
the names and addresses of the Banks and the Bank Commitment of, and aggregate
outstanding Capital of Receivable Interests or interests therein owned by, each
Bank from time to time (the "REGISTER"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Seller,
the Originators, the Program Agent, the Investor Agents, the Investors and the
Banks may treat each person whose name is recorded in the Register as a Bank
under this Agreement for all purposes of this Agreement. The Register shall be
available for inspection by the Seller or any Bank at any reasonable time and
from time to time upon reasonable prior notice. Upon its receipt of an
Assignment and Acceptance Agreement executed by an assigning Bank and an
Eligible
69
Assignee, the Program Agent shall, if such Assignment and Acceptance Agreement
has been completed, (i) accept such Assignment and Acceptance Agreement, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Seller.
(d) In addition to assignments pursuant to Section 11.03(b), each
Bank or any of its Affiliates may assign any of its rights (including, without
limitation, rights to payment of Capital and Yield) under this Agreement to any
Federal Reserve Bank without notice to or consent of the Seller or the Program
Agent.
(e) Each Bank may sell participations, to one or more banks or other
entities which are Eligible Assignees, in or to all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of its Bank Commitment and the Receivable Interests or interests therein
owned by it); PROVIDED, HOWEVER, that
(i) such Bank's obligations under this Agreement (including,
without limitation, its Bank Commitment to the Seller hereunder) shall
remain unchanged,
(ii) such Bank shall remain solely responsible to the other
parties to this Agreement for the performance of such obligations, and
(iii) concurrently with such participation, the selling Bank
shall sell to such bank or other entity a participation in an equal
percentage of its rights and obligations under its Asset Purchase
Agreement.
The Agent, the other Banks and the Seller shall have the right to continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement.
(f) This Agreement and the rights and obligations of the Program
Agent herein shall be assignable by the Program Agent and its successors and
assigns.
(g) The Seller may not assign its rights or obligations hereunder or
any interest herein without the prior written consent of the Program Agent and
each Investor Agent.
(h) CAFCO may, without the consent of the Seller, sell participations
to one or more banks or other entities (each, a "PARTICIPANT") in all or a
portion of its rights and obligations hereunder (including the outstanding
Receivable Interests); PROVIDED that following the sale of a participation under
this Agreement (i) the obligations of CAFCO shall remain unchanged, (ii) CAFCO
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Seller, the Agent, and the Banks shall
continue to deal solely and directly with CAFCO in connection with CAFCO's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which CAFCO sells such a participation shall provide that the
Participant shall not have any right to direct the enforcement of this Agreement
or the other Transaction Documents or to approve any amendment, modification or
waiver of any provision of this Agreement or the other Transaction Documents;
PROVIDED that such agreement or instrument may provide that CAFCO will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that (i) reduces the amount of Capital or Yield that is payable on
account of any Receivable Interest or delays any
70
scheduled date for payment thereof or (ii) reduces any fees payable by the
Seller to the Program Agent or CAFCO's Investor Agent (to the extent relating to
payments to the Participant) or delays any scheduled date for payment of such
fees. The Seller acknowledges and agrees that CAFCO's source of funds may derive
in part from its Participants. Accordingly, references in Sections 2.08, 2.09,
2.10, 6.07, 9.01 and 11.04 and the other terms and provisions of this Agreement
and the other Transaction Documents to determinations, reserve and capital
adequacy requirements, expenses, increased costs, reduced receipts and the like
as they pertain to CAFCO shall be deemed also to include those of its
Participants; PROVIDED that the Seller shall not be required to pay higher
costs, expenses and indemnification amounts pursuant to this sentence than would
be required to be paid by the Seller in the absence of the sale of any
participation by CAFCO to a Participant as contemplated by this Section
11.03(h). CAFCO or the Agent may, in connection with any such participation,
disclose to Participants and potential Participants any information relating to
the Seller, the Parent or the other Originators, including the Receivables,
furnished to CAFCO or the Agent by or on behalf of the Seller; PROVIDED that,
prior to any such disclosure, such Participant or potential Participant agrees
to preserve the confidentiality of any such information which is confidential in
accordance with the provisions of Section 11.06 hereof. Any interest sold by
CAFCO to a Bank or its designee under its Asset Purchase Agreement shall not be
considered a participation for the purpose of this Section 11.03(h) (and the
Bank or its designee shall not be considered a Participant as a result thereof).
SECTION 11.04. COSTS AND EXPENSES. In addition to the rights of
indemnification granted under Section 10.01 hereof, the Seller agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery and administration (including periodic auditing and the other
activities contemplated in Section 5.02) of this Agreement, any Asset Purchase
Agreement and the other documents and agreements to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Program Agent, each Investor Agent, each Investor, each Bank and
their respective Affiliates with respect thereto and with respect to advising
the Program Agent, each Investor Agent, each Investor, each Bank and their
respective Affiliates as to their rights and remedies under this Agreement, and
all costs and expenses, if any (including reasonable counsel fees and expenses),
of the Program Agent, the Investor Agents, the Investors, the Banks and their
respective Affiliates, in connection with the enforcement of this Agreement and
the other documents and agreements to be delivered hereunder.
SECTION 11.05. NO PROCEEDINGS; WAIVER OF CONSEQUENTIAL DAMAGES. (a)
Each of the Seller, the Program Agent, each Investor Agent, the Collection
Agent, each Originator, each Investor, each Bank, each assignee of a Receivable
Interest or any interest therein and each entity which enters into a commitment
to purchase Receivable Interests or interests therein hereby agrees that it will
not institute against, or join any other Person in instituting against, any
Investor any proceeding of the type referred to in Section 7.01(g) so long as
any commercial paper or other senior indebtedness issued by such Investor shall
be outstanding or there shall not have elapsed one year plus one day since the
last day on which any such commercial paper or other senior indebtedness shall
have been outstanding.
(b) Without in any way limiting the benefit to the Indemnified
Parties under any indemnity provisions of this Agreement in their favor with
respect to claims of third parties, each of the Originators, the Collection
Agent and the Seller agree on the one hand and each
71
Indemnified Party agrees on the other hand that no such party shall have any
liability to them or any of their security holders or creditors in connection
with this Agreement, the other Transaction Documents or the transactions
contemplated thereby on any theory of liability for any special, indirect,
consequential or punitive damages (including, without limitation, any loss of
profits, business or anticipated savings).
SECTION 11.06. CONFIDENTIALITY. (a) Each of the Seller, each
Originator and the Collection Agent each agrees to maintain the confidentiality
of this Agreement in communications with third parties and otherwise; provided
that this Agreement (but not the Fee Agreements) may be disclosed (i) to third
parties to the extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to the Program
Agent, (ii) to the legal counsel and auditors of the Seller, the Parent and the
Collection Agent if they agree to hold it confidential and (iii) to the extent
required by or deemed appropriate under, the Seller's, the Parent's or the
Collection Agent's reporting requirements, applicable law or regulation or by
any court, regulatory body or agency having jurisdiction over such party; and
PROVIDED, FURTHER, that such party shall have no obligation of confidentiality
in respect of any information which may be generally available to the public or
becomes available to the public through no fault of such party.
(b) Each Investor, each Bank, each Investor Agent and the Program
Agent agrees to maintain the confidentiality of all information with respect to
the Seller, each Originator or the Receivables Pool (including the Seller
Reports) furnished or delivered to it pursuant to this Agreement and the other
Transaction Documents; PROVIDED, that such information may be disclosed (i) to
such party's legal counsel and auditors and to such party's assignees and
participants and potential assignees and participants and any actual or
potential subordinated investor in any Investor and their respective counsel if
they agree to hold it confidential, (ii) to the rating agencies and the
providers of liquidity for each Investor, (iii) to credit enhancers and dealers
and investors in respect of promissory notes of each Investor in accordance with
the customary practices of said Investor for disclosure to credit enhancers,
dealers or investors, as the case may be, it being understood that any such
disclosure to dealers or investors will not identify the Seller, any Originator
or any of their Affiliates by name, and (iv) to the extent required by
applicable law or regulation or by any court, regulatory body or agency having
jurisdiction over such party; and PROVIDED, FURTHER, that such party shall have
no obligation of confidentiality in respect of any information which may be
generally available to the public or becomes available to the public through no
fault of such party.
(c) Notwithstanding any other provision herein, each party hereto
(and each employee, representative or other agent of each party hereto) may
disclose to any and all Persons, without limitation of any kind, the U.S. tax
treatment and U.S. tax structure of the transaction contemplated by this
Agreement and the other Transaction Documents and all materials of any kind
(including opinions or other tax analyses) that are provided to such party
relating to such U.S. tax treatment and U.S. tax structure, other than any
information for which nondisclosure is reasonably necessary in order to comply
with applicable securities laws.
SECTION 11.07. GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE
GOVERNED BY, AND CONSTRUED IN
72
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT
OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF
ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT THAT, PURSUANT TO THE UCC OF THE
STATE OF NEW YORK, THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION
OF THE INTERESTS OF THE INVESTORS AND THE BANKS IN THE RECEIVABLES, THE
ORIGINATOR PURCHASE AGREEMENT AND OTHER ITEMS OF COLLATERAL SECURITY REFERRED TO
IN SECTION 2.11 ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
SECTION 11.08. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement.
SECTION 11.09. SURVIVAL OF TERMINATION. The provisions of Sections
2.08, 2.09, 6.07, 10.01, 11.04, 11.05, 11.06 and 11.07 shall survive any
termination of this Agreement.
SECTION 11.10. CONSENT TO JURISDICTION. (a) Each party hereto hereby
irrevocably submits to the non-exclusive jurisdiction of any New York State or
Federal court sitting in New York City in any action or proceeding arising out
of or relating to this Agreement, and each party hereto hereby irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court. The parties hereto hereby irrevocably waive, to the fullest
extent they may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The parties hereto agree 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.
(b) Each of the Seller, the Parent, the Collection Agent and the
other Originators consents to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to it at its
address specified in Section 11.02. Nothing in this Section 11.10 shall affect
the right of the Investors, any Bank or any Agent to serve legal process in any
other manner permitted by law.
SECTION 11.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED OR DELIVERED PURSUANT HERETO.
SECTION 11.12. TAX TREATMENT. It is the intent of the Seller, each
Investor and Bank, and all other parties to this Agreement that, for federal,
state and local income and franchise tax (in the nature of income tax) purposes
only, each Receivable Interest will be treated as indebtedness secured by the
Seller's assets. The Seller, by entering into this Agreement, and
73
each Investor and Bank, and all other parties to this Agreement, by purchasing a
Receivable Interest, agree to treat the Receivable Interests for federal, state
and local income and franchise tax (in the nature of income tax) purposes as
indebtedness. The provisions of this Agreement and all related Transaction
Documents shall be construed to further these intentions of the parties.
74
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SELLER: HASBRO RECEIVABLES FUNDING, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Sr. Vice President and Treasurer
Room 502
200 Narragansett Park Drive
Pawtucket, Rhode Island 02862
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
INVESTORS: CAFCO, LLC
By: Citicorp North America,
Inc., as Attorney-in-Fact
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Global Securitized Markets
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ FUNDING CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title: Treasurer
c/o JH Management
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
PROGRAM AGENT: CITICORP NORTH AMERICA, INC.,
as Program Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Global Securitized Markets
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
BANKS: CITIBANK, N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Vice President
Percentage: 50%
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
BNP PARIBAS, NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President
Percentage: 50%
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
COLLECTION AGENT
AND ORIGINATOR: HASBRO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Sr. Vice President and Treasurer
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
ORIGINATORS: WIZARDS OF THE COAST, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Sr. Vice President and Treasurer
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
ODDZON, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Sr. Vice President and Treasurer
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
INVESTOR AGENTS: CITICORP NORTH AMERICA, INC.,
as an Investor Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Global Securitized Markets
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
BNP PARIBAS, NEW YORK BRANCH,
as an Investor Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇