EXHIBIT 10.20
RECEIVABLES PURCHASE AGREEMENT
dated as of January 29, 1999
among
KEEBLER FUNDING CORPORATION
KEEBLER FOODS COMPANY
LIBERTY STREET FUNDING CORP.
and
THE BANK OF NOVA SCOTIA
TABLE OF CONTENTS
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility................................ 1
Section 1.2. Making Purchases................................. 2
Section 1.3. Purchased Interest Computation................... 4
Section 1.4. Settlement Procedures............................ 4
Section 1.5. Fees............................................. 10
Section 1.6. Payments and Computations, Etc................... 10
Section 1.7. Dividing or Combining Portions of the Capital
of the Purchased Interest........................ 10
Section 1.8. Increased Costs.................................. 11
Section 1.9. Requirements of Law.............................. 12
Section 1.10. Inability to Determine Eurodollar Rate........... 13
Section 1.11. Mitigation....................................... 14
ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
Section 2.1. Repesentations and Warranties; Covenants......... 14
Section 2.2. Termination Events............................... 14
ARTICLE III.
INDEMNIFICATION
Section 3.1. Indemnities by the Seller........................ 15
Section 3.2. Indemnities by the Servicer...................... 17
Section 3.3. Defense of Claims................................ 18
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer...................... 20
Section 4.2. Duties of the Servicer........................... 21
Section 4.3. Establishment and Use of Certain Accounts........ 22
Section 4.4. Enforcement Rights............................... 23
Section 4.5. Responsibilities of the Seller................... 24
Section 4.6. Servicing Fee.................................... 25
ARTICLE V.
MISCELLANEOUS
Section 5.1. Amendments, Etc.................................. 25
Section 5.2. Notices, Etc..................................... 26
Section 5.3. Assignability.................................... 26
Section 5.4. Costs, Expenses and Taxes........................ 27
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Section 5.5. No Proceedings; Limitation On Payments............ 28
Section 5.6. Confidentiality................................... 28
Section 5.7. GOVERNING LAW AND JURISDICTION.................... 29
Section 5.8. Execution in Counterparts......................... 29
Section 5.9. Survival of Termination........................... 30
Section 5.10. WAIVER OF JURY TRIAL.............................. 30
Section 5.11. Entire Agreement.................................. 30
Section 5.12. Headings.......................................... 30
Section 5.13. Issuer's Liabilities.............................. 30
Section 5.14. Tax Treatment..................................... 31
EXHIBIT I Definitions
EXHIBIT II Conditions of Purchases
EXHIBIT III Representations and Warranties
EXHIBIT IV Covenants
EXHIBIT V Termination Events
SCHEDULE I Credit and Collection Policy
SCHEDULE II Lock-box Banks and Lock-box Accounts
SCHEDULE III Trade Names
ANNEX A Form of Monthly Report
ANNEX B Form of Purchase Notice
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This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement") is entered into as of January 29,
1999, Among KEEBLER FUNDING CORPORATION, a Delaware corporation, as seller (the
"SELLER"),KEEBLER FOODS COMPANY, a Delaware corporation ("KEEBLER"), as initial
servicer (in such capacity, together with its successors and permitted assigns
in such capacity, the "SERVICER"), LIBERTY STREET FUNDING CORP., a Delaware
corporation (together with its successors and permitted assigns, the "ISSUER"),
and THE BANK OF NOVA SCOTIA, a Canadian chartered bank acting through its New
York Agency ("BNS"), as administrator (in such capacity, together with its
successors and assigns in such capacity, the "ADMINISTRATOR").
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in EXHIBIT I. References in the Exhibits
hereto to the "Agreement" refer to this Agreement, as amended, supplemented or
otherwise modified from time to time.
The Seller desires to sell, transfer and assign an undivided variable
percentage interest in a pool of receivables, and the Issuer desires to acquire
such undivided variable percentage interest, as such percentage interest shall
be adjusted from time to time based upon, in part, reinvestments made by the
Issuer.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 PURCHASE FACILITY. (a) On the terms and conditions hereinafter
set forth, the Issuer hereby agrees subject to the next sentence to purchase,
and make reinvestments in, undivided percentage ownership interests up to the
Purchase Limit with regard to the Purchased Interest from the Seller from time
to time from the date hereof to the Facility Termination Date. Under no
circumstances shall the Issuer make any such purchase or reinvestment if, after
giving effect to such purchase or reinvestment, the aggregate outstanding
Capital of the Purchased Interest would exceed the Purchase Limit.
(b) The Seller may, upon at least 15 days' written notice to the
Administrator, terminate in whole or reduce in part the unused portion of the
Purchase Limit; PROVIDED, that each partial reduction shall be in the amount of
at least $5,000,000, or an integral multiple of $1,000,000 in excess thereof,
and that, unless terminated in whole, the Purchase Limit shall in no event be
reduced below $50,000,000.
Section 1.2 MAKING PURCHASES. (a) Each purchase (but not reinvestment) of
undivided percentage ownership interests with regard to the Purchased Interest
hereunder shall be made upon the Seller's irrevocable written notice in the form
of Annex B delivered to the Administrator in accordance with SECTION 5.2 (which
notice must be received by the Administrator before 11:00 a.m., New York City
time): (i) at least three Business Days before the requested purchase date, in
the case of a purchase to be funded at the Alternate Rate and based upon the
Eurodollar Rate, (ii) at least two Business Days before the requested purchase
date, in the case of a purchase to be funded at the Alternate Rate and based
upon the Base Rate, and (iii) at least one Business Day before the requested
purchase date, in the case of a purchase to be funded at the CP Rate, which
notice shall specify: (A) the amount requested to be paid to the Seller (such
amount, which shall not be less than $1,000,000, being the Capital relating to
the undivided percentage ownership interest then being purchased), (B) the date
of such purchase (which shall be a Business Day), and (C) the desired funding
basis for such purchase (which shall be based upon the Eurodollar Rate, the Base
Rate or the CP Rate). If the Seller has requested that the purchase be funded at
the CP Rate, the Administrator shall promptly thereafter notify the Seller
whether the Issuer has exercised its discretion not to fund such purchase with
the issuance of Notes because such purchase with the issuance of Notes would be
economically inadvisable to the Issuer or the Issuer is unable to or prohibited
from issuing Notes, the Administrator, the Seller or any other similarly
situated Person, or otherwise not permitted, in which case the Seller shall be
deemed to have requested that the purchase be funded at the Alternate Rate and
be based upon the Base Rate.
(b) On the date of each purchase (but not reinvestment) of undivided
percentage ownership interests with regard to the Purchased Interest hereunder,
the Issuer shall, upon satisfaction of the applicable conditions set forth in
EXHIBIT II, make available to the Seller in same day funds, at First National
Bank of Chicago, account number ▇▇▇▇▇▇▇, ABA ▇▇▇▇▇▇▇▇▇, an amount equal to the
Capital (as specified by the Seller pursuant to Section 1.2(a) above) relating
to the undivided percentage ownership interest then being purchased.
(c) Effective on the date of each purchase pursuant to this Section and
each reinvestment pursuant to SECTION 1.4, the Seller hereby sells and assigns
to the Issuer an undivided percentage ownership interest in: (i) each Pool
Receivable then existing, (ii) all Related Security with respect to such Pool
Receivables, and (iii) all Collections with respect to, and other proceeds of,
such Pool Receivables and Related Security.
(d) To secure all of the Seller's obligations (monetary or otherwise) under
this Agreement and the other Transaction Documents
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to which it is a party, whether now or hereafter existing or arising, due or to
become due, direct or indirect, absolute or contingent, the Seller hereby grants
to the Issuer a security interest in all of the Seller's right, title and
interest (including any undivided interest of the Seller) in, to and under all
of the following, whether now or hereafter owned, existing or arising: (i) all
Pool Receivables, (ii) all Related Security with respect to such Pool
Receivables, (iii) all Collections with respect to such Pool Receivables, (iv)
the Lock-Box Accounts and the Collection Account, and all amounts on deposit
therein, and all certificates and instruments, if any, from time to time
evidencing such Lock-Box Accounts and the Collection Account, and amounts on
deposit therein, (v) all rights (but none of the obligations) of the Seller
under the Purchase and Sale Agreement, and (vi) all proceeds of, and all amounts
received or receivable under any or all of, the foregoing (collectively, the
"Pool Assets"). The Issuer shall have, with respect to the Pool Assets, and in
addition to all the other rights and remedies available to the Issuer, all the
rights and remedies of a secured party under any applicable UCC.
Section 1.3. PURCHASED INTEREST COMPUTATION. The Purchased Interest shall
be initially computed on the date of the initial purchase hereunder. Thereafter,
until the Facility Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. The Purchased Interest as computed (or deemed
recomputed) as of the day before the Facility Termination Date shall thereafter
remain constant. The Purchased Interest shall become zero when the Capital
thereof and Discount thereon shall have been paid in full, all the amounts owed
by the Seller and the Servicer hereunder to the Issuer, the Administrator and
any other Indemnified Party or Affected Person are paid in full, and the
Servicer shall have received the accrued Servicing Fee thereon.
Section 1.4. SETTLEMENT PROCEDURES. (a) The collection of the Pool
Receivables shall be administered by the Servicer in accordance with this
Agreement. The Seller shall provide to the Servicer on a timely basis all
information needed for such administration, including notice of the occurrence
of any Termination Day and current computations of the Purchased Interest.
(b) The Servicer shall, on each Business Day on which Collections of Pool
Receivables are received by the Seller or Servicer or are deposited into the
Lock-Box Accounts, transfer such Collections therefrom and deposit such
Collections into the Collection Account. With respect to such Collections on
such day and with respect to any Collection transferred to the Collection
Account on such day pursuant to the last paragraph of Section 1.4(e), the
Servicer shall:
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(i) set aside and hold in the Collection Account for the benefit of
the Issuer, out of the percentage of such Collections represented by the
Purchased Interest, FIRST an amount equal to the Discount accrued through
such day for each Portion of Capital and not previously transferred,
SECOND, an amount equal to the fees set forth in the Fee Letter accrued
through such day for the Purchased Interest and not previously transferred,
and THIRD, to the extent funds are available therefor, an amount equal to
the Issuer's Share of the Servicing Fee accrued through such day and not
previously transferred; and
(ii) subject to SECTION 1.4 (f), if such day is not a Termination Day,
remit to the Seller, on behalf of the Issuer, the remainder of the
percentage of such Collections, represented by the Purchased Interest, to
the extent representing a return on the Capital; such Collections shall be
automatically reinvested in Pool Receivables, and in the Related Security
and Collections and other proceeds with respect thereto, and the Purchased
Interest shall be automatically recomputed pursuant to SECTION 1.3; IT
BEING UNDERSTOOD, that prior to remitting to the Seller the remainder of
such Collections by way of reinvestment in Pool Receivables, the Servicer
shall have calculated the Purchased Interest on such day, and if such
Purchased Interest shall exceed 100% on such day, such Collections shall
not be remitted to the Seller but shall be set aside and held in the
Collection Account for the benefit of the Issuer in accordance with
PARAGRAPH (iii) below;
(iii) if such day is a Termination Day (or if such day is a day on
which the Purchased Interest exceeds 100%), (A) set aside and hold in the
Collection Account for the benefit of the Issuer the entire remainder of
the percentage of the Collections represented by the Purchased Interest (or
such amount set forth in PARAGRAPH (ii) above); PROVIDED that so long as
the Facility Termination Date has not occurred if any amounts are so set
aside on any Termination Day and thereafter, the conditions set forth in
SECTION 2 of EXHIBIT II are satisfied or are waived by the Administrator,
such previously set aside amounts shall, to the extent representing a
return on the Capital, be reinvested in accordance with the preceding
PARAGRAPH (ii) on the day of such subsequent satisfaction or waiver of
conditions, and (B) set aside and hold in the Collection Account for the
benefit of the Issuer the entire remainder of the Collections in the
Collection Account represented by the Seller's Share of the Collections, if
any; PROVIDED that so long as the Facility Termination Date has not
occurred if any amounts are so set aside on any Termination Day and
thereafter, the conditions set forth in SECTION 2 of EXHIBIT II are
satisfied or are waived by the
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Administrator, such previously set aside amounts shall be distributed to
the Seller on the day of such subsequent satisfaction or waiver of
conditions; and
(iv) during the times when amounts are required to be reinvested in
accordance with the foregoing PARAGRAPH (ii) or the proviso to PARAGRAPH
(iii), release to the Seller (subject to SECTION 1.4(f)) for its own
account any Collections in excess of (x) such amounts, (y) the amounts that
are required to be set aside in the Collection Account pursuant to
PARAGRAPH (i) above and (z) in the event the Seller is not the Servicer,
all reasonable and appropriate out-of-pocket costs and expenses (including
the Servicing Fee to the extent such Servicing Fee has not already been
paid) of such Servicer of servicing, collecting and administering the Pool
Receivables.
(c) The Servicer shall deposit into the Administration Account (or such
other account designated by the Administrator), on each Settlement Date:
(i) Collections held on deposit in the Collection Account for the
benefit of the Issuer pursuant to SECTION 1.4(b)(i) in respect of accrued
Discount and accrued and unpaid Fees;
(ii) Collections held on deposit in the Collection Account for the
benefit of the Issuer pursuant to SECTION 1.4(f); and
(iii) the lesser of (x) the amount of Collections then held on deposit
in the Collection Account for the benefit of the Issuer pursuant to SECTION
1.4(b)(iii) and (y) the aggregate amount of Capital on such date.
The Servicer shall deposit to its own account from Collections held on deposit
in the Collection Account pursuant to SECTION 1.4(b)(i) in respect of the
accrued Servicing Fee, an amount equal to such accrued Servicing Fee.
(d) Upon receipt of funds deposited into the Administration Account
pursuant to CLAUSE (c), the Administrator shall cause such funds to be
distributed as follows:
(i) if such distribution occurs on a day that is not a Termination Day
and the Purchased Interest does not exceed 100%, FIRST to the Issuer in
payment in full of all accrued Discount with respect to each Portion of
Capital and accrued and unpaid Fees, and SECOND, if the Servicer has set
aside amounts in respect of the Servicing Fee pursuant to CLAUSE (b)(i) and
has not retained such amounts pursuant to CLAUSE (c), to the Servicer
(payable in arrears on each Settlement
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Date) in payment in full of the Issuer's Share of accrued Servicing Fees so
set aside, and
(ii) if such distribution occurs on a Termination Day or on a day when
the Purchased Interest exceeds 100%, FIRST to the Issuer in payment in full
of all accrued Discount with respect to each Portion of Capital and accrued
and unpaid Fees, SECOND to the Issuer in payment in full of Capital (or, if
such day is not a Termination Day, the amount necessary to reduce the
Purchased Interest to 100%), THIRD, if Keebler or an Affiliate thereof is
not the Servicer, to the Servicer in payment in full of all accrued
Servicing Fees, FOURTH, if the Capital and accrued Discount with respect to
each Portion of Capital have been reduced to zero, and all accrued
Servicing Fees payable to the Servicer (if other than Keebler or an
Affiliate thereof) have been paid in full, to the Issuer, the Administrator
and any other Indemnified Party or Affected Person in payment in full of
any other amounts owed thereto by the Seller under this Agreement and,
FIFTH, unless such amount has been retained by the Servicer pursuant to
CLAUSE (c), to the Servicer (if the Servicer is Keebler or an Affiliate
thereof) in payment in full of the Issuer's Share of all accrued Servicing
Fees.
After the Capital, Discount, and Fees with respect to the Purchased Interest,
Servicing Fees, and any other amounts payable by the Seller and the Servicer to
the Issuer, the Administrator or any other Indemnified Party or Affected Person
hereunder, have been paid in full, all additional Collections with respect to
the Purchased Interest shall be paid to the Seller for its own account.
(e) For the purposes of this SECTION 1.4:
(i) if on any day the Outstanding Balance of any Pool Receivable is
reduced or adjusted as a result of any defective, rejected, returned,
repossessed or foreclosed goods or services, or any revision, cancellation,
allowance, discount or other adjustment made by any Originator, Hollow
Tree, the Servicer, the Seller or any Affiliate of the Seller, or any
setoff or dispute between any Originator, Hollow Tree, the Seller or any
Affiliate of the Seller and an Obligor, the Seller shall be deemed to have
received on such day a Collection of such Pool Receivable in the amount of
such reduction or adjustment;
(ii) if on any day any of the representations or warranties in Section
1(g) or (m) of EXHIBIT III is not 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 (Collections deemed to have been received
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pursuant to CLAUSE (i) and (ii) of this paragraph (e) are hereinafter
sometimes referred to as "Deemed Collections");
(iii) except as otherwise required by applicable law or the relevant
Contract, all Collections received from an Obligor of any Receivable 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 in writing its payment for application to specific
Receivables; and
(iv) if and to the extent the Administrator or the Issuer shall be
required for any reason to pay over to an Obligor (or any trustee,
receiver, custodian or similar official pursuant to an Event of Bankruptcy)
any amount received by it hereunder, such amount shall be deemed not to
have been so received by the Administrator or the Issuer but rather to have
been retained by the Seller and, accordingly, the Administrator or the
Issuer, 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.
On or before the last day of each Reporting Period that contains one or more
days on which Seller is deemed to have received a Collection pursuant to this
SECTION 1.4(e), Seller shall transfer an amount equal to the aggregate amount of
such Deemed Collections to the Collection Account and the Servicer shall
distribute such transferred amount in the manner set forth in SECTION 1.4(c), as
if such transferred amount actually had been received by Seller or Servicer on
the date of such transfer from the Obligors of such Pool Receivables and as if
such transferred amount actually had been deposited into a Lockbox Account on
the date of such transfer.
(f) If at any time the Seller shall wish to cause the reduction of Capital
of the Purchased Interest (but not to commence the liquidation, or reduction to
zero, of the entire Capital of the Purchased Interest), the Seller may do so as
follows:
(i) the Seller shall give the Administrator and the Servicer at least
two Business Days' prior written notice thereof (including the amount of
such proposed reduction and the proposed date on which such reduction will
commence);
(ii) on the proposed date of commencement of such reduction and on
each day thereafter, the Servicer shall cause Collections not to be
reinvested until the amount thereof not so reinvested shall equal the
desired amount of reduction; and
(iii) the Servicer shall hold such Collections in the Collection
Account for the benefit of the Issuer, for payment
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to the Administrator on the next Settlement Date immediately following the
current Settlement Period, and the Capital of the Purchased Interest shall
be deemed reduced in the amount to be paid to the Administrator only when
in fact finally so paid;
provided, that:
(A) the amount of any such reduction shall be not less than $5,000,000
and shall be an integral multiple of $1,000,000, and the entire Capital of
the Purchased Interest after giving effect to such reduction shall be not
less than $50,000,000 and shall be in an integral multiple of $1,000,000;
and
(B) the Seller shall choose a reduction amount, and the date of
commencement thereof, so that to the extent practicable such reduction
shall commence and conclude in the same Settlement Period.
Section 1.5. FEES. The Seller shall pay to the Administrator certain fees
in the amounts and on the dates set forth in a letter, dated the date hereof,
among the Servicer, the Seller and the Administrator (as such letter agreement
may be amended, supplemented or otherwise modified from time to time, the "Fee
Letter").
Section 1.6. PAYMENTS AND COMPUTATIONS, ETC. (a) All amounts to be paid or
deposited by the Seller or the Servicer hereunder shall be made without
reduction for offset or counterclaim and shall be paid or deposited no later
than noon (New York City time) on the day when due in same day funds to the
Administration Account. All amounts received after noon (New York City time)
will be deemed to have been received on the next Business Day.
(b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate
equal to 1.0% per annum above the Base Rate, payable on demand.
(c) All computations of interest under CLAUSE (b) and all computations of
Discount, fees and other amounts hereunder shall be made on the basis of a year
of 360 (or 365 or 366, as applicable, with respect to Discount or other amounts
calculated by reference to the Base Rate) days for the actual number of days
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
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
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Section 1.7. DIVIDING OR COMBINING PORTIONS OF THE CAPITAL OF THE PURCHASED
INTEREST. The Seller may, on the last day of any Settlement Period, pursuant to
written notice delivered to the Administrator in accordance with SECTION 5.2:
(a) at least three Business Days before such last day in the case of a Portion
of Capital to be funded based upon the Eurodollar Rate and (b) at least two
Business Days before such last day in all other cases, either: (i) divide the
Capital of the Purchased Interest into two or more portions (each a "PORTION OF
CAPITAL"), which Portions of Capital may accrue Discount by reference to
different rates, equal, in aggregate, to the Capital of the Purchased Interest;
PROVIDED, that after giving effect to such division the amount of each such
Portion of Capital shall be not less than $5,000,000 and shall be an integral
multiple of $1,000,000, or (ii) combine any two or more Portions of Capital
outstanding on such last day and having Settlement Periods ending on such last
day into a single Portion of Capital equal to the aggregate of the Capital of
the Purchased Interest.
Section 1.8. INCREASED COSTS. (a) If the Administrator, the Issuer, any
Purchaser, any other Program Support Provider or any of their respective
Affiliates (each an "Affected Person") reasonably determines that the existence
of or compliance with: (i) any law or regulation or any change therein or in the
interpretation or application thereof, in each case adopted, issued or occurring
after the date hereof, or (ii) any request, guideline or directive from any
central bank or other Governmental Authority (whether or not having the force of
law) issued or occurring after the date of this Agreement, affects or would
affect the amount of capital required or expected to be maintained by such
Affected Person, 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 to maintain the investment in) Pool Receivables
related to this Agreement or any related liquidity facility, credit enhancement
facility and other commitments of the same type, then, upon written demand by
such Affected Person (with a copy to the Administrator), the Seller shall
promptly pay to the Administrator, for the account of such Affected Person, from
time to time as specified by such Affected Person, additional amounts sufficient
to compensate such Affected Person. A certificate describing in reasonable
detail, such amounts and the basis for such Affected Person's demand for such
amounts submitted to the Seller and the Administrator 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 in or in the
interpretation of any law or regulation occurring after the date hereof or (ii)
compliance with any guideline or request occurring after the date hereof 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
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Person of agreeing to purchase or purchasing, or maintaining the ownership of,
the Purchased Interest in respect of which Discount is computed by reference to
the Eurodollar Rate, then, upon written demand by such Affected Person, the
Seller shall promptly pay to such Affected Person, from time to time as
specified by such Affected Person, additional amounts sufficient to compensate
such Affected Person for such increased costs. A certificate describing in
reasonable detail, such amounts and the basis for such Affected Person's demand
for such amounts submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.
(c) In determining the additional amounts necessary to compensate an
Affected Person pursuant to clause (a) or (b) above, such Affected Person may
use any method of averaging and attribution that it (in its sole and absolute
discretion) shall deem applicable.
Section 1.9. REQUIREMENTS OF LAW. If any Affected Person reasonably
determines that the existence of or compliance with: (a) any law or regulation
or any change therein or in the interpretation or application thereof, in each
case adopted, issued or occurring after the date hereof, or (b) any request,
guideline or directive from any central bank or other Governmental Authority
(whether or not having the force of law) issued or occurring after the date of
this Agreement:
(i) does or shall subject such Affected Person to any tax of any kind
whatsoever with respect to this Agreement, any increase in the Purchased
Interest or in the amount of Capital relating thereto, or does or shall
change the basis of taxation of payments to such Affected Person on account
of Collections, Discount or any other amounts payable hereunder (excluding
taxes imposed on the overall pre-tax net income of such Affected Person,
franchise taxes imposed on such Affected Person and any withholding taxes
imposed as a result of amounts paid or payable to such Affected Person
pursuant to this Agreement),
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, or deposits or other liabilities in or for the account of, purchases,
advances or loans by, or other credit extended by, or any other acquisition
of funds by, any office of such Affected Person that are not otherwise
included in the determination of the Eurodollar Rate or the Base Rate
hereunder, or
(iii) does or shall impose on such Affected Person any other
condition,
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and the result of any of the foregoing is: (A) to increase the cost to such
Affected Person of acting as Administrator, or of agreeing to purchase or
purchasing or maintaining the ownership of undivided percentage ownership
interests with regard to the Purchased Interest (or interests therein) or any
Portion of Capital, or (B) to reduce any amount receivable hereunder (whether
directly or indirectly), then, in any such case, upon written demand by such
Affected Person, the Seller shall promptly pay to such Affected Person
additional amounts necessary to compensate such Affected Person for such
additional cost or reduced amount receivable. All such amounts shall be payable
as incurred. A certificate from such Affected Person to the Seller describing in
reasonable detail the amount and basis for the amount of such additional costs
or reduced amount receivable shall be conclusive and binding for all purposes,
absent manifest error.
Section 1.10. INABILITY TO DETERMINE EURODOLLAR RATE. If the Administrator
shall have determined before the first day of any Settlement Period (which
determination shall be conclusive and binding upon the parties hereto), by
reason of circumstances affecting the interbank Eurodollar market, either that:
(a) dollar deposits in the relevant amounts and for the relevant Settlement
Period are not available, (b) adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Settlement Period or (c) the
Eurodollar Rate determined pursuant hereto does not accurately reflect the cost
to the Issuer (as conclusively determined by the Administrator) of maintaining
any Portion of Capital during such Settlement Period, the Administrator shall
promptly give telephonic notice of such determination, confirmed in writing, to
the Seller before the first day of such Settlement Period. Upon delivery of such
notice: (i) no Portion of Capital shall be funded thereafter at the Alternate
Rate determined by reference to the Eurodollar Rate unless and until the
Administrator shall have given notice to the Seller that the circumstances
giving rise to such determination no longer exist, and (ii) with respect to any
outstanding Portions of Capital then funded at the Alternate Rate determined by
reference to the Eurodollar Rate, such Alternate Rate shall, on the immediately
succeeding Settlement Date, automatically be converted to the Alternate Rate
determined by reference to the Base Rate at the respective last days of the
then-current Settlement Periods relating to such Portions of Capital.
Section 1.11. MITIGATION. Each Affected Person agrees that if it makes any
demand for payment under SECTION 1.8 or 1.9, it will use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
sole discretion) to mitigate the effect upon such Affected Person of the capital
requirements, increased costs, tax or other matter described in SECTION 1.8 or
1.9, as applicable.
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ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1. REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the Seller
and the Servicer hereby makes the representations and warranties, and hereby
agrees to perform and observe the covenants, applicable to it set forth in
EXHIBITS III and IV, respectively.
Section 2.2. TERMINATION EVENTS. If any of the Termination Events set forth
in EXHIBIT V shall occur, the Administrator may, by notice to the Seller,
declare the Facility Termination Date to have occurred (in which case the
Facility Termination Date shall be deemed to have occurred); 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 (f) of EXHIBIT
V, the Facility Termination Date shall occur. Upon any such declaration,
occurrence or deemed occurrence of the Facility Termination Date, the Issuer and
the Administrator shall have, in addition to the rights and remedies that they
may have under this Agreement, all other rights and remedies provided after
default under the New York UCC and under other applicable law, which rights and
remedies shall be cumulative.
ARTICLE III.
INDEMNIFICATION
Section 3.1. INDEMNITIES BY THE SELLER. Without limiting any other rights
that the Administrator, the Issuer, any Program Support Provider or any of their
respective Affiliates, employees, officers, directors, agents, counsel,
successors, transferees or assigns (each, an "Indemnified Party" and
collectively, the "Parties") may have hereunder or under applicable law, the
Seller hereby agrees to indemnify each Indemnified Party from and against any
and all claims, damages, expenses, costs, losses and liabilities (including
Attorney Costs) (all of the foregoing being collectively referred to as
"Indemnified Amounts") arising out of or resulting from this Agreement (whether
directly or indirectly), the use of proceeds of purchases or reinvestments, the
ownership of the Purchased Interest, or any interest therein, or in respect of
any Receivable, Related Security or Contract, excluding, however: (a)
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Indemnified Party or its officers, directors,
agents (including any successor Servicer appointed by the Administrator pursuant
to SECTION 4.1(a)) or counsel, (b) recourse (except as otherwise specifically
provided in this Agreement) for uncollectible Receivables, or (c) any overall
net income taxes or franchise taxes imposed on such
12
Indemnified Party and any withholding taxes imposed as a result of amounts paid
or payable to such Indemnified Party pursuant to this Agreement. Subject to the
exclusions set forth in the preceding sentence, but without otherwise 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 failure of any Receivable included in the calculation of the
Net Receivables Pool Balance as an Eligible Receivable to be an Eligible
Receivable, the failure of any information contained in an Monthly Report
to be true and correct, or the failure of any other information provided to
the Issuer or the Administrator with respect to Receivables or this
Agreement to be true and correct,
(ii) the failure of any representation, warranty or statement made or
deemed made by the Seller (or any of its officers) under or in connection
with this Agreement to have been true and correct as of the date made or
deemed made in all respects,
(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 Issuer a valid and enforceable: (A)
perfected undivided percentage ownership interest, to the extent of the
Purchased Interest, in the Receivables in, or purporting to be in, the
Receivables Pool and the other Pool Assets, or (B) first priority perfected
security interest in the Pool Assets, in each case, free and clear of any
Adverse Claim,
(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 other
Pool Assets, 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 an Obligor to the payment of any Receivable
in, or purporting to be in, the Receivables Pool (including 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
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accordance with its terms), or any other claim resulting from the sale of
the goods or services related to such Receivable or the furnishing or
failure to furnish such goods 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 Servicer or
by any agent or independent contractor retained by the Seller or any of its
Affiliates),
(vii) any failure of the Seller (or any of its Affiliates acting as
the Servicer) to perform its duties or obligations in accordance with the
provisions hereof or under the Contracts,
(viii) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract,
(ix) the commingling of Collections at any time with other funds,
(x) the use of proceeds of purchases or reinvestments, or
(xi) any reduction in Capital as a result of the distribution of
Collections pursuant to SECTION 1.4(d), if all or a portion of such
distributions shall thereafter be rescinded or otherwise must be returned
for any reason.
Section 3.2. INDEMNITIES BY THE SERVICER. Without limiting any other rights
that the Administrator, the Issuer or any other Indemnified Party may have
hereunder or under applicable law, the Servicer hereby agrees to indemnify each
Indemnified Party from and against any and all Indemnified Amounts arising out
of or resulting from (whether directly or indirectly): (a) the failure of any
information contained in a Monthly Report to be true and correct, or the failure
of any other information provided to the Issuer or the Administrator by, or on
behalf of, the Servicer to be true and correct, (b) the failure of any
representation, warranty or statement made or deemed made by the Servicer (or
any of its officers) under or in connection with this Agreement to have been
true and correct in all respects as of the date made or deemed made, (c) the
failure by the Servicer to comply with any applicable law, rule or regulation
with respect to any Pool Receivable or the related Contract, (d) any dispute,
claim, offset or defense of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool resulting from or related to the
collection activities with respect to such Receivable, or (e) any failure of the
Servicer to perform its duties or obligations in accordance with the provisions
hereof.
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Section 3.3. DEFENSE OF CLAIMS. (a) Promptly after the receipt by an
Indemnified Party or Parties of a notice of the commencement of any action,
suit, proceeding, investigation or claim against such Indemnified Party or
Parties as to which it proposes to demand indemnification from the Seller or
Servicer (either or both such parties, as applicable, the "INDEMNIFYING PARTY"
or "PARTIES") pursuant to SECTION 3.1 or 3.2, as applicable, such Indemnified
Party or Parties shall notify the Indemnifying Party or Parties in writing of
the commencement thereof; but the failure so to notify the Indemnifying Party or
Parties will not relieve such Indemnifying Party or Parties from any liability
which such Indemnifying Party or Parties may have to such Indemnified Party or
Parties pursuant to SECTION 3.1 or 3.2 unless to the extent that such failure
results in a material impairment of the Indemnifying Party or Parties ability to
defend such action, suit, proceeding, investigation or claim in accordance with
the terms of this SECTION 3.3. After such notice, if (i) an Indemnifying Party
or Parties shall acknowledge (without prejudice to any exclusion of Indemnified
Amounts as a result of an Indemnified Party's gross negligence or willful
misconduct pursuant to SECTION 3.1 or 3.2) in writing to such Indemnified Party
or Parties that such Indemnifying Party or Parties shall be obligated to
indemnify such Indemnified Party or Parties for any Indemnified Amounts
described in SECTION 3.1 or 3.2, as applicable, with respect to such action,
suit, proceeding, investigation or claim, (ii) the defendants in, or targets of,
any such action, suit, proceeding, investigation or claim include both the
Indemnifying Party or Parties and any such Indemnified Party or Parties, and
(iii) no Termination Event of Unmatured Termination Event shall have occurred
and be continuing, the Indemnifying Party or Parties, to the extent that it or
they shall wish, jointly with such Indemnified Party or Parties, shall be
entitled to participate therein in defense of such action, suit, proceeding or
investigation, and the Indemnifying Party or Parties and such Indemnified Party
or Parties shall cooperate in the defense thereof and shall retain counsel
reasonably satisfactory to the Indemnifying Party or Parties and such
Indemnified Party or Parties to undertake the joint defense of such Indemnifying
Party or Parties and such Indemnified Party or Parties at such Indemnifying
Party's or Parties' cost, risk and expense. If (i) in the reasonable opinion of
such Indemnified Party or Parties, the engagement of such counsel would present
a conflict of interest that would prevent such counsel from effectively
undertaking such joint defense, (ii) such Indemnified Party or Parties
reasonably conclude that there may be legal defenses available to it or them
that are different from or in addition to those available to such Indemnifying
Party or Parties, (iii) such Indemnifying Party or Parties fail to employ
counsel reasonably satisfactory to such Indemnified Party or Parties in a timely
manner, or (iv) if a Termination Event or Unmatured Termination Event shall have
occurred and be continuing, then such Indemnified Party or Parties may employ
separate counsel to represent or defend it or them in
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any such action, suit, proceeding or investigation and such Indemnifying Party
or Parties shall pay all fees, expenses and disbursements of such counsel;
PROVIDED, HOWEVER, that in no event shall such Indemnifying Party or Parties be
liable for the fees, expenses and disbursements of more than one counsel
representing all Indemnified Parties that are parties to the same action, suit,
proceeding, investigation or claim.
(b) No Indemnifying Party shall (i) without the prior written consent of
the relevant Indemnified Party or Parties (which consent shall not be
unreasonably withheld or delayed) settle or compromise or consent to the entry
of any judgment with respect to any pending action, suit, proceeding,
investigation or claim in respect to which indemnification or contribution may
be sought hereunder (whether or not the relevant Indemnified Party or Parties
are actual or potential parties to such claim) unless such settlement,
compromise or consent includes an unconditional release of each relevant
Indemnified Party from all liability arising out of such action, suit,
proceeding, investigation or claim or (ii) be liable for any settlement of any
such action affected without its written consent (which consent shall not be
unreasonably withheld or delayed), but if settled with its written consent or if
there be a final judgment of the plaintiff in any action, the Indemnifying
Parties agree to indemnify and hold harmless any Indemnified Party from and
against any indemnified amounts (subject to the terms of SECTION 3.1 and 3.2)
relating thereto.
In the event of any dispute between any Indemnified Party or Parties, on
the one hand, and any Indemnifying Party, on the other hand, as to whether such
Indemnifying Party or Indemnified party is acting reasonably in objecting to any
proposed settlement, compromise or consent, such dispute shall be resolved
through binding arbitration in Chicago, Illinois in accordance with the
commercial arbitration rules of the American Arbitration Association. There
shall be a single arbitrator to be selected by mutual agreement of such
Indemnified Party or Parties and such Indemnifying Party or Parties (or if such
parties cannot agree on an arbitrator, by an arbitrator selected by a federal or
state court located in the City of Chicago). Any such arbitration must be
commenced not later than 30 days after the date such dispute arose.
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. APPOINTMENT OF THE SERVICER. (a) The servicing, administering
and collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as the
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Servicer in accordance with this Section. Until the Administrator gives notice
to Keebler (in accordance with this Section) of the designation of a new
Servicer, Keebler is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms hereof. Upon the
occurrence and during the continuation of a Termination Event, the Administrator
may designate as Servicer any Person (including itself) to succeed Keebler or
any successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer
pursuant to the terms hereof.
(b) Upon the designation of a successor Servicer as set forth in CLAUSE
(a), Keebler agrees that it will terminate its activities as Servicer hereunder
in a manner that the Administrator reasonably determines will facilitate the
transition of the performance of such activities to the new Servicer, and
Keebler shall cooperate with and assist such new Servicer. Such cooperation
shall include access to and transfer of related records and, to the extent
legally permissible, use by the new Servicer of all licenses, hardware or
software necessary or desirable to collect the Pool Receivables and the Related
Security.
(c) Keebler acknowledges that, in making their decision to execute and
deliver this Agreement, the Administrator and the Issuer have relied on
Keebler's agreement to act as Servicer hereunder. Accordingly, Keebler agrees
that it will not voluntarily resign as Servicer.
(d) The Servicer may with the prior written consent of the Administrator,
delegate its duties and obligations hereunder to any subservicer (each a
"Sub-Servicer"); PROVIDED, that, in each such delegation: (i) such Sub-Servicer
shall agree in writing to perform the duties and obligations of the Servicer
pursuant to the terms hereof, (ii) the Servicer shall remain primarily liable
for the performance of the duties and obligations so delegated, (iii) the
Seller, the Administrator and the Issuer shall have the right to look solely to
the Servicer for performance, and (iv) the terms of any agreement with any
Sub-Servicer shall provide that the Administrator may terminate such agreement
upon the termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer (and the Servicer shall provide
appropriate notice to each such Sub-Servicer).
Section 4.2. DUTIES OF THE SERVICER. (a) The Servicer shall take or cause
to be taken all such action as may be necessary or advisable to administer and
collect each Pool Receivable from time to time, all in accordance with this
Agreement and all applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy. The
Servicer shall set aside, for the accounts of the Seller and the
17
Issuer, the amount of the Collections to which each is entitled in accordance
with ARTICLE I. The Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity of any Pool Receivable (but not beyond 30 days) and
extend the maturity or adjust the Outstanding Balance of any Defaulted
Receivable as the Servicer may determine to be appropriate to maximize
Collections thereof; PROVIDED, HOWEVER, that: (i) such extension or adjustment
shall not alter the status of such Pool Receivable as a Delinquent Receivable or
a Defaulted Receivable or limit the rights of the Issuer or the Administrator
under this Agreement and (ii) if a Termination Event has occurred and Keebler or
an Affiliate thereof is serving as the Servicer, Keebler or such Affiliate may
make such extension or adjustment only upon the prior written approval of the
Administrator. The Seller shall deliver to the Servicer and the Servicer shall
hold for the benefit of the Seller and the Administrator (individually and for
the benefit of the Issuer), in accordance with their respective interests, all
records and documents (including computer tapes or disks) with respect to each
Pool Receivable. Notwithstanding anything to the contrary contained herein, the
Administrator may direct the Servicer (whether the Servicer is Keebler or any
other Person) to commence or settle any legal action to enforce collection of
any Pool Receivable which is a Defaulted Receivable or to foreclose upon or
repossess any Related Security.
(b) The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less, if Keebler or an Affiliate thereof is not
the Servicer, all reasonable and appropriate out-of-pocket costs and expenses of
such Servicer of servicing, collecting and administering such collections. The
Servicer, if other than Keebler or an Affiliate thereof, shall, as soon as
practicable upon demand, deliver to the Seller all records in its possession
that evidence or relate to any indebtedness that is not a Pool Receivable, and
copies of records in its possession that evidence or relate to any indebtedness
that is a Pool Receivable.
(c) The Servicer's obligations hereunder shall terminate on the later of:
(i) the Facility Termination Date and (ii) the date on which all amounts
required to be paid to the Issuer, the Administrator and any other Indemnified
Party or Affected Person hereunder shall have been paid in full.
After such termination, if Keebler or an Affiliate thereof was not the
Servicer on the date of such termination, the Servicer shall promptly deliver to
the Seller all books, records and related materials that the Seller previously
provided to the Servicer, or that have been obtained by the Servicer, in
connection with this Agreement.
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Section 4.3. ESTABLISHMENT AND USE OF CERTAIN ACCOUNTS. (a) Prior to the
initial purchase hereunder, the Seller shall enter into Lock-Box Agreements
establishing the Lock-Box Accounts listed on SCHEDULE II with all of the
Lock-Box Banks, and deliver original counterparts thereof to the Administrator.
(b) The Servicer agrees to establish the Collection Account on or
before the date of the first purchase hereunder. The Collection Account shall be
used to accept the transfer of Collections of Pool Receivables from the Lock-Box
Accounts pursuant to SECTION 1.4(b) and for such other purposes described in the
Transaction Documents.
(c) Any amounts in the Collection Account may be invested by the
Collection Account Bank at the Servicer's direction, in Permitted Investments,
so long as Issuer's interest in such Permitted Investments is perfected and such
Permitted Investments are subject to no Adverse Claims other than those of the
Issuer provided hereunder.
(d) Upon the occurrence and during the continuation of a Termination
Event, the Administrator may at any time thereafter give notice to each Lock-Box
Bank and the Collection Account Bank that the Administrator is exercising its
rights under the Lock-Box Agreements and the Collection Account Agreement, as
applicable, to do any or all of the following: (i) to have the exclusive
ownership and control of the Lock-Box Accounts and the Collection Account
transferred to the Administrator and to exercise exclusive dominion and control
over the funds deposited therein, (ii) to have the proceeds that are sent to the
respective Lock-Box Accounts redirected pursuant to the Administrator's
instructions, and (iii) to take any or all other actions permitted under the
applicable Lock-Box Agreement and the Collection Account Agreement. The Seller
hereby agrees that if the Administrator at any time takes any action set forth
in the preceding sentence, the Administrator shall have exclusive control of the
proceeds (including Collections) of all Pool Receivables and the Seller hereby
further agrees to take any other action that the Administrator may reasonably
request to transfer such control. Any proceeds of Pool Receivables received by
the Seller or the Servicer thereafter shall be sent immediately to the
Administrator.
Section 4.4. ENFORCEMENT RIGHTS. (a) At any time following the occurrence
and during the continuation of a Termination Event:
(i) the Administrator may direct the Obligors that payment of all
amounts payable under any Pool Receivable is to be made directly to the
Administrator or its designee,
(ii) the Administrator may give notice of the Issuer's interest in
Pool Receivables to each Obligor, which notice
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shall direct that payments be made directly to the Administrator or its
designee, and
(iii) the Administrator may request the Servicer to, and upon such
request the Servicer shall: (A) assemble all of the records necessary or
desirable to collect the Pool Receivables and the Related Security, and to
the extent legally permissible transfer or license to a successor Servicer
the use of all software necessary or desirable to collect the Pool
Receivables and the Related Security, and make the same available to the
Administrator or its designee at a place selected by the Administrator, and
(B) segregate all cash, checks and other instruments received by it from
time to time constituting Collections in a manner acceptable to the
Administrator and, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer,
to the Administrator or its designee.
(b) The Seller hereby authorizes the Administrator, and irrevocably
appoints the Administrator as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of the Seller, which
appointment is coupled with an interest, to take any and all steps in the name
of the Seller and on behalf of the Seller necessary or desirable, in the
determination of the Administrator, after the occurrence and during the
continuation of a Termination Event, to collect any and all amounts or portions
thereof due under any and all Pool Assets, including endorsing the name of the
Seller on checks and other instruments representing Collections and enforcing
such Pool Assets. Notwithstanding anything to the contrary contained in this
subsection, none of the powers conferred upon such attorney-in-fact pursuant to
the preceding sentence shall subject such attorney-in-fact to any liability if
any action taken by it shall prove to be inadequate or invalid, nor shall they
confer any obligations upon such attorney-in-fact in any manner whatsoever.
Section 4.5. RESPONSIBILITIES OF THE SELLER. (a) Anything herein to the
contrary notwithstanding, the Seller shall pay when due any taxes, including any
sales taxes payable in connection with the Pool Receivables and their creation
and satisfaction. The Administrator and the Issuer shall not have any obligation
or liability with respect to any Pool Asset, nor shall either of them be
obligated to perform any of the obligations of the Seller, Servicer, Hollow Tree
or any Originator thereunder.
(b) Keebler hereby irrevocably agrees that if at any time it shall cease to
be the Servicer hereunder, it shall act (if the then-current Servicer so
requests) as the data-processing agent of the Servicer and, in such capacity,
Keebler shall conduct the data-processing functions of the administration of the
Receivables and the Collections thereon in substantially the same way that
Keebler
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conducted such data-processing functions while it acted as the Servicer.
Section 4.6. SERVICING FEE. (a) Subject to CLAUSE (b), the Servicer shall
be paid a fee equal to 1.0% PER ANNUM (the "Servicing Fee Rate") of the daily
average aggregate Outstanding Balance of the Pool Receivables. The Issuer's
Share of such fee shall be paid through the distributions contemplated by
SECTION 1.4(d), and the Seller's Share of such fee shall be paid by the Seller.
(b) If the Servicer ceases to be Keebler or an Affiliate thereof, the
servicing fee shall be the greater of: (i) the amount calculated pursuant to
CLAUSE (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 100% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.
ARTICLE V.
MISCELLANEOUS
Section 5.1. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Transaction Document, or consent to any departure by
the Seller or the Servicer therefrom, shall be effective unless in a writing
signed by the Administrator, and, in the case of any amendment, by the other
parties thereto; 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 such material amendment shall be effective until both
Moody's and Standard & Poor's have notified the Administrator in writing that
such action will not result in a reduction or withdrawal of the rating of any
Notes. No failure on the part of the Issuer or the Administrator 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. The Administrator shall provide each Rating Agency with a copy of each
amendment to or waiver or consent under this Agreement promptly following the
effective date thereof.
Section 5.2. NOTICES, ETC. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier or by certified mail, postage-prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth under
its name on the signature pages hereof or at such
21
other address or facsimile number as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall be effective, (i) if personally delivered or sent by express mail or
courier or if sent by certified mail, when received, and (ii) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means.
Section 5.3. ASSIGNABILITY. (a) This Agreement and the Issuer's rights and
obligations herein (including ownership of the Purchased Interest or an interest
therein) shall be assignable, in whole or in part, by the Issuer and its
successors and assigns with the prior written consent of the Seller; PROVIDED,
HOWEVER, that such consent shall not be unreasonably withheld; and PROVIDED
FURTHER, that no such consent shall be required if the assignment is made to
BNS, any Affiliate of BNS, any Purchaser or other Program Support Provider or
any Person that is: (i) in the business of issuing Notes and (ii) associated
with or administered by BNS or any Affiliate of BNS.
(b) The Issuer may at any time grant to one or more banks or other
institutions (each a "Purchaser") party to the Liquidity Agreement, or to any
other Program Support Provider, participating interests in the Purchased
Interest. In the event of any such grant by the Issuer of a participating
interest to a Purchaser or other Program Support Provider, the Issuer shall
remain responsible for the performance of its obligations hereunder and except
as otherwise provided herein, Seller and Servicer shall continue to deal with
Issuer as if Issuer had not granted such participating interest. The Seller
agrees that each Purchaser or other Program Support Provider shall be entitled
to the benefits of SECTIONS 1.8 and 1.9.
(c) This Agreement and the rights and obligations of the Administrator
hereunder shall be assignable, in whole or in part, by the Administrator and its
successors and assigns; PROVIDED, that unless: (i) such assignment is to an
Affiliate of BNS, (ii) it becomes unlawful for BNS to serve as the Administrator
or (iii) a Termination Event exists, the Seller has consented to such
assignment, which consent shall not be unreasonably withheld.
(d) Except as provided in SECTION 4.1(d), none of the Seller, Keebler or
the Servicer may assign its rights or delegate its obligations hereunder or any
interest herein without the prior written consent of the Administrator.
(e) Without limiting any other rights that may be available under
applicable law, the rights of the Issuer may be enforced through it or by its
agents.
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Section 5.4. COSTS, EXPENSES AND TAXES. (a) In addition to the rights of
indemnification granted under SECTION 3.1, the Seller agrees to pay on demand
all reasonable costs and expenses in connection with the preparation, execution,
delivery and administration (including periodic internal audits by the
Administrator of Pool Receivables) of this Agreement, the other Transaction
Documents and the other documents and agreements to be delivered hereunder (and
all reasonable costs and expenses in connection with any amendment, waiver or
modification of any thereof), including: (i) Attorney Costs for the
Administrator, the Issuer and their respective Affiliates and agents with
respect thereto and with respect to advising the Administrator, the Issuer and
their respective Affiliates and agents as to their rights and remedies under
this Agreement and the other Transaction Documents, and (ii) all reasonable
costs and expenses (including Attorney Costs), if any, of the Administrator, the
Issuer and their respective Affiliates and agents in connection with the
enforcement of this Agreement and the other Transaction Documents.
(b) In addition, the Seller shall pay on demand any and all stamp and other
taxes and fees payable in connection with the execution, delivery, filing and
recording of this Agreement or the other documents or agreements to be delivered
hereunder, and agrees to save each Indemnified Party harmless from and against
any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
Section 5.5. NO PROCEEDINGS; LIMITATION ON PAYMENTS. Each of the Seller,
Keebler, the Servicer, the Administrator, each assignee of the Purchased
Interest or any interest therein, hereby covenants and agrees that it will not
institute against, or join any other Person in instituting against, the Issuer
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and one day after the latest maturing Note issued by the
Issuer is paid in full. The provision of this SECTION 5.5 shall survive any
termination of this Agreement.
Section 5.6. CONFIDENTIALITY. Unless otherwise required by applicable law,
each of the Seller and Servicer agrees to maintain the confidentiality of this
Agreement and the other Transaction Documents (and all drafts hereof and
thereof) in communications with third parties and otherwise; PROVIDED that this
Agreement may be disclosed to: (a) third parties to the extent such disclosure
is made pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Administrator, (b) the Seller's legal counsel and
auditors if they agree to hold it confidential and (c) in filings made under
securities laws. Unless otherwise required by applicable law, each of the
Administrator and the Issuer agrees to maintain the confidentiality of all
information regarding Keebler and its Subsidiaries; PROVIDED that
23
such information may be disclosed to: (i) third parties to the extent such
disclosure is made pursuant to a written agreement of confidentiality in form
and substance reasonably satisfactory to Keebler, (ii) legal counsel and
auditors of the Issuer or the Administrator if they agree to hold it
confidential, (iii) the rating agencies rating the Notes to the extent such
information relates to the Receivables Pool or the transactions contemplated by
this Agreement, or if not so related, upon obtaining the prior consent of
Keebler (such consent not to be unreasonably withheld), (iv) any Program Support
Provider or potential Program Support Provider to the extent such information
relates to the Receivables Pool or the transactions contemplated by this
Agreement, or if not so related, upon obtaining the prior written consent of
Keebler (such consent not to be unreasonably withheld), (v) any placement agent
placing the Notes, and (vi) any regulatory authorities having jurisdiction over
BNS, the Issuer any Program Support Provider or any Purchaser.
Section 5.7. GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY NEW YORK LAW.
Section 5.8. 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 5.9. SURVIVAL OF TERMINATION. The provisions of SECTIONS 1.8, 1.9,
3.1, 3.2, 5.4, 5.5, 5.6, 5.7, 5.8, 5.10 and 5.13 shall survive any termination
of this Agreement.
24
Section 5.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 5.11. ENTIRE AGREEMENT. This Agreement and the other Transaction
Documents embody the entire agreement and understanding between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof.
Section 5.12. HEADINGS. The captions and headings of this Agreement and any
Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.
Section 5.13. ISSUER'S LIABILITIES. The obligations of the Issuer under the
Transaction Documents are solely the corporate obligations of the Issuer. No
recourse shall be had for any obligation or claim arising out of or based upon
any Transaction Document against any stockholder, employee, officer, director or
incorporator of the Issuer; PROVIDED, HOWEVER, that this Section shall not
relieve any such Person of any liability it might otherwise have for its own
gross negligence or willful misconduct.
Section 5.14. TAX TREATMENT. The Seller has structured this Agreement and
the Purchased Interest to facilitate a secured, credit-enhanced financing on
favorable terms with the intention that the Purchased Interest will constitute
indebtedness of the Seller for federal income and state and local tax purposes.
The Seller and Issuer by acceptance of the Purchased Interest, agree to
recognize and report the Purchased Interest as indebtedness of the Seller for
purposes of federal, state and local income or franchise taxes and any other tax
imposed on or measured by income, and to report all receipts and payments
relating thereto in a manner that is consistent with such characterization.
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IN WITNESS WHEREOF, the parties have caused this agreement to be exectued
by their respective officers thereunto duly authorized, as of the date first
above written.
KEEBLER FUNDING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Vice President
Address:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone:
Facsimile:
KEEBLER FOODS COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Vice President
Address:
One Hollow Tree Lane
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ FUNDING CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
Address:
Liberty Street Funding Corp.
c/o Global Securitization
Services, LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE BANK OF NOVA SCOTIA,
as Administrator
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Product Manager
Address:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-2