RECEIVABLES PURCHASE AGREEMENT
Dated as of June 10, 1999
Among
WITCO FUNDING CORPORATION
as the Seller
and
▇▇▇▇▇▇ ▇.▇.
as the Investor
and
CITIBANK, N.A.
as the initial Bank
and
CITICORP NORTH AMERICA, INC.
as the Agent
and
WITCO CORPORATION
as Collection Agent and Originator
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT 1
ARTICLE I DEFINITIONS 1
SECTION 1.01. Certain Defined Terms 1
SECTION 1.02. Other Terms 20
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES 21
SECTION 2.01. Purchase Facility 21
SECTION 2.02. Making Purchases 21
SECTION 2.03. Receivable Interest Computation 22
SECTION 2.04. Settlement Procedures 22
SECTION 2.05. Fees 25
SECTION 2.06. Payments and Computations, Etc. 25
SECTION 2.07. Dividing or Combining Receivable Interests 26
SECTION 2.08. Increased Costs 26
SECTION 2.09. Additional Yield on Receivable Interests
Bearing a Eurodollar Rate 27
SECTION 2.10. Intention of the Parties. 27
ARTICLE III CONDITIONS OF PURCHASES 28
SECTION 3.01. Conditions Precedent to Initial Purchase 28
SECTION 3.02. Conditions Precedent to All Purchases and
Reinvestments. 29
ARTICLE IV REPRESENTATIONS AND WARRANTIES 30
SECTION 4.01. Representations and Warranties of the Seller 30
SECTION 4.02. Representations and Warranties of the Collection
Agent 33
ARTICLE V COVENANTS 34
SECTION 5.01. Covenants of the Seller 34
SECTION 5.02. Covenant of the Seller and the Originator 40
SECTION 5.03. Post Closing Opinion 41
ARTICLE VI ADMINISTRATION AND COLLECTION
OF POOL RECEIVABLES 41
SECTION 6.01. Designation of Collection Agent 41
SECTION 6.02. Duties of Collection Agent 41
SECTION 6.03. Certain Rights of the Agent 43
SECTION 6.04. Rights and Remedies 44
SECTION 6.05. Further Actions Evidencing Purchases 44
SECTION 6.06. Covenants of the Collection Agent and the
Originator 44
SECTION 6.07. Indemnities by the Collection Agent 45
ARTICLE VII EVENTS OF TERMINATION 46
SECTION 7.01. Events of Termination 46
ARTICLE VIII THE AGENT 49
SECTION 8.01. Authorization and Action 49
SECTION 8.02. Agent's Reliance, Etc 49
SECTION 8.03. CNAI and Affiliates 50
SECTION 8.04. Bank's Purchase Decision 50
ARTICLE IX INDEMNIFICATION 50
SECTION 9.01. Indemnities by the Seller 50
ARTICLE X MISCELLANEOUS 52
SECTION 10.01. Amendments, Etc 52
SECTION 10.02. Notices, Etc 53
SECTION 10.03. Assignability 53
SECTION 10.04. Costs, Expenses and Taxes 54
SECTION 10.05. No Proceedings 55
SECTION 10.06. Confidentiality 55
SECTION 10.07. GOVERNING LAW 56
SECTION 10.08. Execution in Counterparts 56
SECTION 10.09. Survival of Termination 56
SCHEDULES
SCHEDULE I - Lock-Box Banks
SCHEDULE II - Credit and Collection Policy
ANNEXES
ANNEX A - Form of Seller Report
ANNEX B-1 - Form of Control Agreement for Designated
Accounts
ANNEX B-2 - Form of Lock-Box Agreement for all other
Lock-Box Accounts
ANNEX C - Form of Opinion of Cravath, Swaine & ▇▇▇▇▇,
special counsel to the Seller and the
Originator
ANNEX D - Assignment and Acceptance
ANNEX E - Form of OPA Assignment
ANNEX F - Form of Funds Transfer Letter
RECEIVABLES PURCHASE AGREEMENT
Dated as of June 10, 1999
WITCO FUNDING CORPORATION, a Delaware corporation (the
"Seller"), ▇▇▇▇▇▇ ▇.▇., a New York limited partnership, CITIBANK,
N.A. a national banking association ("Citibank"), and CITICORP
NORTH AMERICA, INC., a Delaware corporation ("CNAI"), as agent
(the "Agent") for the Investors and the Banks (as defined
herein), and WITCO CORPORATION, a Delaware corporation, as
Collection Agent and Originator, agree as follows:
PRELIMINARY STATEMENT. The Seller has acquired, and
may continue to acquire Receivables from the Originator (as
hereinafter defined), either by purchase or by contribution to
the capital of the Seller, as determined from time to time by the
Seller and the Originator. The Seller is prepared to sell
undivided fractional ownership interests (referred to herein as
"Receivable Interests") in the Receivables. ▇▇▇▇▇▇ may, in its
sole discretion, purchase such Receivable Interests, and Citibank
and the other Banks from time to time, if any, 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
Settlement Period, an interest rate per annum equal to the rate
per annum obtained by dividing (i) the Eurodollar Rate for such
Settlement Period by (ii) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Settlement Period.
"Adverse Claim" means a lien, security interest or
other charge or any other encumbrance.
"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,
with respect to an individual, is a director or officer of such
Person.
"Affiliated Obligor" means any Obligor that is an
Affiliate of another Obligor.
"Agent's Account" means the special account
(account number 3885-8248) of the Agent maintained at the office
of Citibank at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Alternate Base Rate" means 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 highest of:
(a) the rate of interest announced publicly by Citibank
in New York, New York, from time to time as Citibank's base rate;
(b) 0.50% above the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money
market banks, such three-week moving average being determined
weekly on each Monday (or, if such day is not a Business Day, on
the next succeeding Business Day) for the three-week period
ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published
by the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations for
such rates received by Citibank from three New York certificate
of deposit dealers of recognized standing selected by Citibank,
in either case adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of
one percent; and
(c) the Federal Funds Rate.
"Asset Purchase Agreement" means in the case of any
Bank other than Citibank, the asset purchase agreement entered
into by such Bank concurrently with the Assignment and Acceptance
pursuant to which it became party to this Agreement.
"Assignee Rate" for any Settlement Period for any
Receivable Interest means an interest rate per annum equal to
1.00% per annum above the Eurodollar Rate for such Settlement
Period; provided, however, that in case of:
(i) any Settlement Period on or prior to the first day
of which an Investor or Bank shall have notified the Agent that
the 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 Agent that such circumstances
no longer exist),
(ii) any Settlement Period of one to (and including) 29
days,
(iii) any Settlement Period as to which the Agent does
not receive notice, by no later than 12:00 noon (New York City
time) on the third Business Day preceding the first day of such
Settlement Period, that the related Receivable Interest will not
be funded by issuance of commercial paper, or
(iv) any Settlement 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 Settlement Period shall be an
interest rate per annum equal to the Alternate Base Rate in
effect on the first day of such Settlement Period; provided
further that the Agent and the Seller may agree in writing from
time to time upon a different "Assignee Rate".
"Assignment and Acceptance" means an assignment and
acceptance agreement entered into by a Bank, an Eligible Assignee
and the Agent, pursuant to which such Eligible Assignee may
become a party to this Agreement, in substantially the form of
Annex D hereto.
"Average Maturity" means at any time that period of
days equal to the average maturity of the Pool Receivables
calculated by the Collection Agent in the then most recent Seller
Report; provided if the Agent reasonably disputes any such
calculation, the Agent may recalculate such Average Maturity.
"Bank" or "Banks" means Citibank and each Eligible
Assignee that shall become a party to this Agreement pursuant to
Section 10.03.
"Bank Commitment" of any Bank means, (a) with respect
to Citibank, $150,000,000 or such amount as reduced by any
Assignment and Acceptance entered into between Citibank and other
Banks; or (b) with respect to a Bank 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 by an Assignment and Acceptance entered into between such
Bank and an Eligible Assignee, 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.
"Business Day" means any day on which (i) banks are not
authorized or required to close in New York City, 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.
"Capital" of any Receivable Interest means the original
amount paid to the Seller for such Receivable Interest at the
time of its purchase by ▇▇▇▇▇▇ 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(d) or otherwise; 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.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ ▇.▇., and any successor or assign
of ▇▇▇▇▇▇ that is a receivables investment company managed by
CNAI or an Affiliate of CNAI which in the ordinary course of its
business issues commercial paper or other securities to fund its
acquisition and maintenance of receivables.
"Closing Date" means the date and time of the initial
purchase hereunder following the fulfillment or waiver of the
conditions precedent set forth in Section 3.01 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).
"Collection Agent Default" means any of the following
events:
(i) the Collection Agent (if the Originator or any of
its Affiliates) shall fail to perform or observe any term,
covenant or agreement under Section 6.02 and such failure shall
remain unremedied (in the reasonable judgment of the Agent) for
10 days following delivery of written notice of such failure from
the Agent; or
(ii) the Collection Agent (if the Originator or any of
its Affiliates) shall fail to make when due any payment or
deposit to be made by it under this Agreement; or
(iii) the occurrence and continuance of any Event of
Termination under Section 7.01(b), Section 7.01(c) (with respect
to any representation or warranty made by the Collection Agent),
Section 7.01(e), Section 7.01(f), Section 7.01(g), Section
7.01(j) (with respect to the Collection Agent), Section 7.01(l)
or Section 7.01(m).
"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) June 8, 2000, unless, prior to such date (or the date so
extended pursuant to this clause), upon the Seller's request,
made not more than 90 nor less than 45 days prior to the then
Commitment Termination Date, one or more Banks having 100% of the
Purchase Limit shall in their sole discretion consent, which
consent shall be given not more than 30 days prior to the then
Commitment Termination Date, to the extension of the Commitment
Termination Date to the date occurring 364 days after the then
Commitment Termination Date; provided, however, that any failure
of any 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, (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 at any time
2.5%, or such other percentage ("Special Concentration Limit")
for such Obligor designated by the 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 Agent may cancel any Special
Concentration Limit upon three Business Days' notice to the
Seller effective with respect to Eligible Receivables thereafter
transferred to the Seller by the Originator.
"Contract" means an agreement now or hereafter existing
between the Originator and an Obligor pursuant to or under which
such Obligor shall be obligated to pay for the provision or sale
of specialty chemical products or services of the Originator from
time to time.
"Control Agreement" means a Control Agreement with
respect to Designated Banks in substantially the form attached
hereto as Annex B-1.
"Credit and Collection Policy" means those receivables
credit and collection policies and practices of the Originator in
effect on the date of this Agreement and described in Schedule II
hereto, as modified in compliance with this Agreement.
"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, (v) liabilities in respect of
unfunded vested benefits under plans covered by Title IV of
ERISA, and (vi) 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 (v) above.
"Default Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each calendar month by
dividing (i) the aggregate Outstanding Balance of all Pool
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 Originator or the Seller during
such month by (ii) the aggregate Outstanding Balance of all Pool
Receivables on such day.
"Defaulted Receivable" means an Originator Receivable:
(i) as to which any payment, or part thereof,
remains unpaid for more than 90 days from the original due date
for such payment;
(ii) as to which the Obligor thereof or any other
Person obligated thereon or providing any Related Security in
respect 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 Originator's or the
Seller's books as uncollectible.
"Deferred Purchase Price" has the meaning set forth in
the Originator Purchase Agreement.
"Delinquency Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each calendar month by
dividing (i) the aggregate Outstanding Balance of all Pool
Receivables that were Delinquent Receivables on such day by (ii)
the aggregate Outstanding Balance of all Pool Receivables on such
day.
"Delinquent Receivable" means a Pool Receivable that is
not a Defaulted Receivable and:
(i) as to which any payment, or part thereof, remains
unpaid for more than 30 days and less than or equal to 90 days
from the original due date for such payment; or
(ii) which, consistent with the Credit and Collection
Policy, would be classified as delinquent by the Originator or
the Seller.
"Designated Account" or "Designated Accounts" means one
or more bank accounts established for the deposit of all
Collections at a Designated Bank and subject to an executed
Control Agreement.
"Designated Bank" means any bank or banks selected by
the Collection Agent from time to time (initially, to be Mellon
Bank) and approved by the Agent (such approval not to be
unreasonably withheld) to establish a Designated Account.
"Designated Obligor" means, at the time, each Obligor;
provided, however, that any Obligor shall cease to be a
Designated Obligor, based on the Agent's analysis of the
creditworthiness of such Obligor (as determined by the Agent in
its sole reasonable discretion), upon three Business Days' notice
by the Agent to the Seller effective with respect to Eligible
Receivables thereafter transferred by the Originator to the
Seller.
"Diluted Receivable" means that portion (and only that
portion) of any Pool Receivable which is reduced or canceled as a
result of (i) any defective, rejected or returned merchandise or
services or any failure by the Originator to deliver any
merchandise or provide any services or otherwise to perform under
the underlying Contract or invoice, (ii) any change in the terms
of or cancellation of, a Contract or invoice or any cash
discount, discount for quick payment or other adjustment by the
Originator which reduces the amount payable by the Obligor on the
related Receivable (except any such change or cancellation
resulting from or relating to the financial inability to pay or
insolvency of the Obligor of such Receivable) or (iii) any set-
off by an Obligor in respect of any claim by such Obligor as to
amounts owed by it on the related Pool Receivable; provided that
Diluted Receivables are calculated assuming that all chargebacks
are resolved in the Obligor's favor and do not include
contractual adjustments to the amount payable by an Obligor that
are eliminated from the Receivables balance sold to the Seller
through a reduction in the purchase price for the related
Receivable.
"Dilution Horizon Factor" means, as of any date, a
ratio computed by dividing (i) the aggregate original Outstanding
Balance of all Pool Receivables created by the Originator during
the three most recently ended calendar months, by (ii) the excess
of (a) the Outstanding Balance of Pool Receivables as at the last
day of the most recently ended calendar month, minus (b) the
aggregate Outstanding Balance of all Pool Receivables that became
Defaulted Receivables as at the last day of such 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 12 most
recently ended calendar months, plus (ii) the Dilution Volatility
Ratio as at the last day of the most recently ended calendar
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
calendar month by dividing (i) the aggregate amount of Pool
Receivables which became Diluted Receivables during such calendar
month by (ii) the aggregate Outstanding Balance (in each case, at
the time of creation) of all Pool Receivables created during the
calendar month immediately preceding such calendar month.
"Dilution Reserve" means for any Receivable Interest as
of any date, (x) when the Originator has maintained a rating of
all of the Originator's long term public senior debt securities
at not less than BBB by S&P and not less than Baa2 by Moody's, an
amount equal to 1.1 multiplied by the highest Dilution Ratio for
any calendar month during the immediately prior 24 months,
multiplied by the sum of (i) Capital plus (ii) the Yield/Fee
Reserve, in each case, of such Receivable Interest on such date,
and (y) when the Originator has not maintained both such ratings,
an amount equal to:
DP x (C + YFR)
where:
DP = the Dilution Percentage for such Receivable
Interest on such date.
C = the Capital of such Receivable Interest on such
date.
YFR = the Yield/Fee Reserve for such Receivable
Interest on such date.
"Dilution Volatility Ratio" means, as of any date, a
ratio (expressed as a percentage) equal to the product of (a) the
highest of the Dilution Ratios calculated for each of the 12 most
recently ended calendar months minus the average of the Dilution
Ratios for each of the twelve most recently ended calendar
months, and (b) a ratio calculated by dividing the highest of the
Dilution Ratios calculated for each of the twelve most recently
ended calendar months by the average of the Dilution Ratios for
each of the twelve most recently ended calendar months.
"E-Mail Seller Report"has the meaning specified in
Section 10.02.
"Eligible Assignee" means (i) Citibank and any other
Bank or the Investor that previously became a party to this
Agreement pursuant to Section 10.03, (ii) any of their respective
Affiliates, (iii) any Person managed by Persons included in
clauses (i) or (ii) above, or (iv) any other financial or other
institution identified by the Agent and consented to by the
Seller, such consent not to be unreasonably withheld; provided,
that if an Event of Termination is continuing at the time of the
proposed assignment, the consent of the Seller shall not be
required.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which is a United States resident, is
not an Affiliate of any of the parties hereto, and is not a
government or a governmental subdivision or agency;
(ii) the Obligor of which, at the time of the initial
creation of an interest therein under this Agreement, is a
Designated Obligor and 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 at the time of the initial creation of an
interest therein under this Agreement is not a Defaulted or
Delinquent Receivable;
(iv) which, according to the Contract related thereto, is
required to be paid in full within 60 days of the original
billing date therefor;
(v) which is an obligation representing ▇▇▇▇▇ 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;
(vi) the purchase of which from the Seller with the
proceeds of notes would constitute a "current transaction" within
the meaning of Section 3(a)(3) of the Securities Act of 1933, as
amended;
(vii) which is an "account" within the meaning of
Section 9-106 of the UCC of the applicable jurisdictions
governing the perfection of the interest created by a Receivable
Interest;
(viii) which is denominated and payable only in United
States dollars in the United States;
(ix) 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 dispute, offset,
counterclaim or defense whatsoever (except the potential
discharge in bankruptcy of such Obligor);
(x) 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, the Originator or the Obligor is in violation of any such
law, rule or regulation in any material respect;
(xi) which arises under a Contract which does not require
the Obligor thereunder to consent to the transfer, sale or
assignment of payment rights of the Seller or the Originator
thereunder;
(xii) which was generated in the ordinary course of the
Originator's business;
(xiii) which, at the time of the initial creation of an
interest therein under this Agreement, has not been extended,
rewritten or otherwise modified from the original terms thereof
except in a manner permitted under the Credit and Collection
Policy;
(xiv) which (A) satisfies all applicable requirements of
the Credit and Collection Policy and (B) complies with such other
reasonable criteria and requirements (relating to the
Receivables) as the Agent may from time to time specify to the
Seller upon 30 days' notice; and
(xv) as to which, at or prior to the time of the initial
creation of an interest therein under this Agreement, the Agent
has not notified the Seller that such Receivable (or class of
Receivables) is no longer acceptable for purchase by ▇▇▇▇▇▇ and
the Banks hereunder for bona fide credit-related reasons.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued 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 Settlement Period, 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 in London, England to prime banks in the London
interbank market at 11:00 A.M. (London Time) two Business Days
before the first day of such Settlement Period in an amount
substantially equal to the Capital associated with such
Settlement Period on such first day and for a period equal to
such Settlement Period.
"Eurodollar Rate Reserve Percentage" of any Investor or
Bank for any Settlement Period in respect of which Yield is
computed by reference to the Eurodollar Rate means the reserve
percentage applicable two Business Days before the first day of
such Settlement 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 Settlement Period during which any such percentage shall
be so applicable) for determining the maximum applicable reserve
requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) 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 Settlement Period.
"Event of Termination" has the meaning specified in
Section 7.01.
"Facility Termination Date" means the earliest of
(a) June 10, 2002 or (b) the date of termination determined
pursuant to Section 7.01 or (c) the date the Purchase Limit is
reduced to zero pursuant to Section 2.01(b).
"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 Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" has the meaning specified in Section
2.05(b).
"Fees" has the meaning specified in Section 2.05(b).
"Final Termination Date" means the latest of (i) the
Facility Termination Date, and (ii) the date on which no Capital
of or Yield on any Receivable Interest shall be outstanding, all
other amounts owed by the Seller hereunder to the Investors, the
Banks or the Agent are paid in full and all purchase obligations
of the Banks have been terminated.
"Foreign Receivable" means, at any time, a receivable
the Obligor of which is not a United States resident.
"Funds Transfer Letter" means a letter in substantially
the form of Annex F hereto executed and delivered by the Seller
to the Agent, as the same may be amended or restated in
accordance with the terms thereof.
"Incipient Event of Termination" means an event that
but for notice or lapse of time or both would constitute an Event
of Termination.
"Investor" means ▇▇▇▇▇▇ and all other owners by
assignment or otherwise of a Receivable Interest originally
purchased by ▇▇▇▇▇▇ and, to the extent of the undivided interests
so purchased, shall include any participants.
"Investor Rate" for any Settlement Period for any
Receivable Interest means the per annum rate equivalent to the
weighted average of the per annum rates paid or payable by ▇▇▇▇▇▇
from time to time as interest on or otherwise (by means of
interest rate ▇▇▇▇▇▇ or otherwise) in respect of those promissory
notes issued by ▇▇▇▇▇▇ that are allocated, in whole or in part,
by the Agent (on behalf of ▇▇▇▇▇▇) to fund the purchase or
maintenance of such Receivable Interest during such Settlement
Period as determined by the Agent (on behalf of ▇▇▇▇▇▇) and
reported to the Seller 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
the Agent (on behalf of ▇▇▇▇▇▇); provided, however, that if any
component of such rate is a discount rate, in calculating the
Investor Rate for such Settlement Period the Agent 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 Settlement 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 any Settlement Period
during which a Liquidation Day occurs, the amount, if any, by
which (i) the additional Yield (calculated without taking into
account any Liquidation Fee or any shortened duration of such
Settlement Period pursuant to clause (iii) of the definition
thereof) which would have accrued during such Settlement Period
on the reductions of Capital of the Receivable Interest relating
to such Settlement Period had such reductions remained as
Capital, exceeds (ii) the income, if any, received by the
Investors' investing the proceeds of such reductions of Capital.
"Lock-Box Bank" means (i) each Designated Bank, and
(ii) prior to December 31, 1999, any of the other banks listed on
Schedule I that are the subject of an undated Lock-Box Agreement.
"Lock-Box Account" means any Designated Account and any
other bank account at a Lock-Box Bank subject to a Lock-Box
Agreement.
"Lock-Box Agreement" means a Lock-Box Agreement with
respect to all Lock-Box Banks (other than Designated Banks) in
substantially the form attached hereto as Annex B-2.
"Loss Percentage" means for any Receivable Interest as
of any date, the greatest of (i) three times the highest Default
Ratio as of the last day of each of the twelve months ended
immediately preceding such date, (ii) four times the
Concentration Limit, and (iii) 10%.
"Loss-to-Liquidation Ratio" means the ratio (expressed
as a percentage) computed as of the last day of each calendar
month by dividing (i) the aggregate Outstanding Balance of all
Pool Receivables written off by the Originator or the Seller, or
which should have been written off by the Originator or the
Seller in accordance with the Credit and Collection Policy,
during the twelve calendar month period ending on such last day,
by (ii) the aggregate amount of Collections of Pool Receivables
actually received during such period.
"Loss Reserve" means, for any Receivable Interest on
any date, an amount equal to
LP x Capital
(1 - LP)
where:
LP = the Loss Percentage for such Receivable
Interest on such date.
Capital = the Capital of such Receivable Interest on such
date.
"Material Adverse Effect" means any condition, event or
series of events that has a material adverse effect on: (i) the
Receivable Interests or the collectibility of any material amount
of funds with respect thereto; (ii) the rights of the Agent, the
Banks or the Investors with respect to the Receivable Interests
and the rights set forth in this Agreement; (iii) the business,
consolidated financial position, consolidated results of
operation of the Collection Agent (if it is the Originator or an
Affiliate of the Originator), the Originator and its
Subsidiaries; (iv) the ability of the Seller, the Collection
Agent or the Originator to perform their respective duties and
obligations or exercise their rights and remedies under this
Agreement and the Transaction Documents; or (v) the legality,
validity or enforceability of the Transaction Documents.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Receivables Pool Balance" means at any time the
Outstanding Balance of Eligible Receivables then in the
Receivables Pool reduced by the sum of (i) the Outstanding
Balance of such Eligible Receivables that are then Defaulted
Receivables, (ii) the aggregate amount by which the Outstanding
Balance of Eligible Receivables (other than Defaulted
Receivables) of each Obligor then in the Receivables Pool exceeds
the product of (A) the Concentration Limit for such Obligor
multiplied by (B) the Capital of the Eligible Receivables then in
the Receivables Pool, (iii) the aggregate amount by which the
Outstanding Balance of Eligible Receivables (other than Defaulted
Receivables) then in the Receivables Pool which, according to the
Contracts related thereto are required to be paid in full between
31 and 45 days of the original billing date therefor, exceeds 15%
of the Outstanding Balance of the Eligible Receivables then in
the Receivables Pool, (iv) the aggregate amount by which the
Outstanding Balance of Eligible Receivables (other than Defaulted
Receivables) then in the Receivables Pool which, according to the
Contracts related thereto are required to be paid in full between
46 and 60 days of the original billing date therefor, exceeds 15%
of the Outstanding Balance of Eligible Receivables then in the
Receivables Pool, and (v) the aggregate amount of Collections on
hand at such time for payment on account of any Eligible
Receivables, the Obligor of which has not been identified.
"Obligor" means a Person obligated to make payments
pursuant to a Contract.
"OPA Assignment" means the assignment agreement,
pursuant to which the Seller is assigning to the Agent the
Originator Purchase Agreement, duly acknowledged and consented to
by the Originator, in substantially the form of Annex E hereto.
"Originator" means Witco Corporation, a Delaware
corporation.
"Originator Purchase Agreement" means the Purchase and
Contribution Agreement dated as of the date of this Agreement
between the Originator, as seller, 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, other than an Obligor which is not a United States
resident, resulting from the provision or sale of specialty
chemical merchandise or services by the Originator under a
Contract, and includes the right to payment of any interest or
finance charges and other obligations of such Obligor with
respect thereto.
"Other Companies" means the Originator and all of its
Subsidiaries except the Seller.
"Outstanding Balance" of any Receivable at any time
means the then outstanding principal balance thereof.
"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 by any Assignment and
Acceptance entered into with an Eligible Assignee, or (b) 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 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 Receivable" means a Receivable in the Receivables
Pool.
"Purchase Limit" means $150,000,000, as such amount may
be reduced pursuant to Section 2.01(b). 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.
"Receivable" means any Originator Receivable which has
been acquired by the Seller from the Originator by purchase or by
capital contribution pursuant to the Originator Purchase
Agreement.
"Receivable Interest" means, at any time, an undivided
percentage ownership interest of the Investors or the Banks 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/Fee Reserve of such Receivable
Interest at the time of computation.
LR = the Loss Reserve of such Receivable Interest at
the time of computation.
DR = the Dilution Reserve of such Receivable Interest
at the time of computation.
NRPB = the Net Receivables Pool Balance attributable to
such Receivable Interest at the time of
computation.
Each Receivable Interest shall be determined from time to time
pursuant to the provisions of Section 2.03.
"Receivables Pool" means at any time the aggregation of
each then outstanding Eligible Receivable or Originator
Receivable that was represented to be an Eligible Receivable on
the date of the initial creation of an interest in such
Receivable under this Agreement.
"Receivables Turnover Days" means at any time, the
average, for the immediately prior three months, of the
Outstanding Balance of Eligible Receivables at the end of each
such month, divided by Collections received during such month,
multiplied by 36.75 days.
"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 related to such
Receivable or otherwise, together with all financing statements
signed by an Obligor describing any collateral securing such
Receivable;
(iii) all guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting
or securing payment of such Receivable whether pursuant to the
Contract related to such Receivable or otherwise; 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.
"S&P" means Standard & Poor's Rating Services, a
division of ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Seller Report" means a report in substantially the
form of Annex A hereto and containing such additional information
as the Agent may reasonably request from time to time, furnished
by the Collection Agent to the Agent pursuant to Section 6.02(g).
"Settlement Period" means, with respect to any
Receivable Interest:
(a) in the case of any Settlement Period in respect of
which Yield is computed by reference to the Investor Rate, each
successive period commencing on each Settlement Period Date for
such Receivable Interest and ending on the next succeeding
Settlement Period Date for such Receivable Interest; and
(b) in the case of any Settlement 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 Agent may
approve on notice by the Seller received by the 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 three
Business Days before the first day of such Settlement Period (in
the case of Settlement Periods in respect of which Yield is
computed by reference to the Eurodollar Rate) or (B) the first
day of such Settlement Period (in the case of Settlement Periods
in respect of which Yield is computed by reference to the
Alternate Base Rate), each such Settlement Period for such
Receivable Interest to commence on the last day of the
immediately preceding Settlement Period for such Receivable
Interest (or, if there is no such Settlement Period, on the date
of purchase of such Receivable Interest), except that if the
Agent shall not have received such notice, or the Agent and the
Seller shall not have so mutually agreed, before 11:00 A.M. (New
York City time) on such day, such Settlement Period shall be one
day;
provided, however, that:
(i) any Settlement 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 Settlement Period is computed by
reference to the Eurodollar Rate, and such Settlement 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 Settlement Period shall end on the next preceding
Business Day);
(ii) in the case of any Settlement Period of one day, (A)
if such Settlement Period is the initial Settlement Period for a
Receivable Interest, such Settlement Period shall be the day of
the purchase of such Receivable Interest; (B) any subsequently
occurring Settlement Period which is one day, if the immediately
preceding Settlement Period is more than one day, shall be the
last day of such immediately preceding Settlement Period and, if
the immediately preceding Settlement Period is one day, shall be
the day next following such immediately preceding Settlement
Period; and (C) if such Settlement Period occurs on a day
immediately preceding a day which is not a Business Day, such
Settlement Period shall be extended to the next succeeding
Business Day; and
(iii) in the case of any Settlement 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 Settlement Period
shall end on such Termination Date and the duration of each
Settlement Period which commences on or after the Termination
Date for such Receivable Interest shall be of such duration
(including, without limitation, a period of one day) as shall be
selected by the Agent.
"Settlement Period Date" means, for any Receivable
Interest, the date of purchase of such Receivable Interest and
thereafter, the 15th day of each calendar month (or, if such day
is not a Business Day, the immediately succeeding Business Day)
or any other day as shall have been agreed to in writing by the
Agent and the Seller prior to the first day of the preceding
Settlement Period for such Receivable Interest or, if there is no
preceding Settlement Period, prior to the first day of such
Settlement Period; provided, that, the first Settlement Period
Date after the Closing Date shall be the 15th day of the calendar
month succeeding the calendar month on such Closing Date;
provided, further, that, with respect to any Settlement Period
for which Yield is computed with reference to the Assignee Rate
for purposes of the payment of Yield, the Collection Agent Fee,
and fees under the Fee Letter, the Settlement Date shall be the
last day of the Settlement Period.
"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 the Originator, as the case may be, or one or more
Subsidiaries, or by the Seller or the Originator, as the case may
be, and one or more Subsidiaries.
"Tangible Net Worth" means at any time the excess of
(i) the Outstanding Balance of all Receivables plus cash and cash
equivalents of the Seller, minus (ii) the sum of (a) the
Outstanding Balance of Receivables that have become Defaulted
Receivables, plus (b) Capital, Yield/Fee Reserve, Loss Reserve
and Dilution Reserve.
"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 Agent
so designates by notice to the other 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 Agent at least one Business
Day in advance for such Receivable Interest and (b) the
Commitment Termination Date.
"Transaction Documents" means this Agreement, the
Originator Purchase Agreement, each Lock-Box Agreement, each
Control Agreement, the OPA Assignment and all other agreements
and documents delivered hereto or thereto.
"UCC" means the Uniform Commercial Code as from time to
time in effect in the specified jurisdiction.
"Year 2000 Problem" means the risk that computer
applications used by the Collection Agent and its Subsidiaries
may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after
December 31, 1999.
"Yield" means:
(i) for each Receivable Interest for any Settlement
Period to the extent ▇▇▇▇▇▇ will be funding such Receivable
Interest through the issuance of commercial paper,
IR x C x AD + LF
360
(ii) for each Receivable Interest for any Settlement
Period to the extent (x) the Investors will not be funding such
Receivable Interest through the issuance of commercial paper or
(y) the Banks will be funding such Receivable Interest,
AR x C x AD + LF
360
where:
AR = the Assignee Rate for such Receivable Interest for
such Settlement Period;
C = the Capital of such Receivable Interest during such
Settlement Period;
IR = the Investor Rate for such Receivable Interest for
such Settlement Period;
AD = the actual number of days elapsed during such
Settlement Period;
LF = the Liquidation Fee, if any, for such Receivable
Interest for such Settlement 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/Fee Reserve" means, for any Receivable Interest
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.
YFRP = the Yield/Fee Reserve Percentage on such date.
AUYF = accrued and unpaid Yield, Collection Agent Fee, and
fees under the Fee Letter on such date.
"Yield/Fee Reserve Percentage" means, for any
Receivable Interest on any date, a percentage equal to:
[(AER x 1.5) + AS + PF + CAF] x RTDF
360
where:
AER = the one-month Adjusted Eurodollar Rate in effect on
such date.
AS = the percentage per annum contained in the
definition of "Assignee Rate" in effect on such
date.
PF = the sum of the percentages per annum used in the
calculation of the Program Fee (as defined in the
Fee Letter), in effect on such date.
CAF = the percentage per annum used in the calculation of
the Collection Agent Fee in effect on such date.
RTDF = the highest monthly Receivable Turnover Days
during the most recently ended 12 months, plus 10
days.
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, ▇▇▇▇▇▇ may, in its sole
discretion, and the Banks shall, ratably in accordance with their
respective Bank Commitments, purchase Receivable Interests from
the Seller from time to time during the period from the Closing
Date to the Facility Termination Date (in the case of ▇▇▇▇▇▇) and
to the Commitment Termination Date (in the case of the Banks).
Under no circumstances shall ▇▇▇▇▇▇ 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 would
exceed the Purchase Limit.
(b) The Seller may, upon at least five Business Days'
notice to the Agent, 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) At any time prior to the Termination Date, the
Agent, on behalf of the Investors 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. The 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
▇▇▇▇▇▇ or the Banks shall be made on at least three Business
Days' written notice from the Seller to the Agent. 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
$2,000,000, being referred to herein as the initial "Capital" of
the Receivable Interest then being purchased), (ii) the date of
such purchase (which shall be a Business Day), and (iii) if the
Assignee Rate is to apply to such Receivable interest, the
duration of the initial Settlement Period for such Receivable
Interest. The Agent shall promptly thereafter notify the Seller
(and shall use its reasonable efforts to so notify on the same
Business Day if it receives notice prior to 2:00 p.m.) whether
▇▇▇▇▇▇ has determined to make a purchase and, if so, whether all
of the terms specified by the Seller are acceptable to ▇▇▇▇▇▇.
If ▇▇▇▇▇▇ has determined not to make a proposed
purchase, the Agent shall promptly send notice (and shall use its
reasonable efforts to send such notice on the same Business Day
if it receives notice prior to 2:00 p.m.) of the proposed
purchase to all of the Banks concurrently by telecopier, telex or
cable specifying the date of such purchase, each Bank's
Percentage multiplied by the aggregate amount of Capital of
Receivable Interest being purchased, whether the Yield for the
Settlement 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
Settlement 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, ▇▇▇▇▇▇ or the Banks, as the case may be, shall, upon
satisfaction of the applicable conditions set forth in Article
III, make available to the Seller in same day funds an amount
equal to the initial Capital of such Receivable Interest, at the
account set forth in the Funds Transfer Letter.
(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 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, 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 outstanding and unpaid amount of any purchases made by such
Bank under the Asset Purchase Agreement. 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. Such 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 or the Agent are
paid and the Collection Agent shall have received the accrued
Collection Agent Fee thereon.
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 and current computations of each Receivable
Interest.
(b) The Collection Agent shall, on each day on which
Collections of Pool Receivables are received by it with respect
to any Receivable Interest:
(i) set aside on its books and records, which shall
be deemed to be held in trust (although the Collection Agent
shall not be required to segregate such amounts) for the benefit
of the Agent on behalf of the Investors or the Banks that hold
such Receivable Interest, 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) 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 (or deemed recomputation) of such Receivable
Interest pursuant to Section 2.03;
(iii) if such day is a Liquidation Day for such
Receivable Interest, set aside and hold in trust (and, at the
request of the Agent following the occurrence of an Event of
Termination, segregate) for the Investors or the Banks that hold
such Receivable Interest the entire remainder of such percentage
of Collections; provided that if amounts are set aside and held
in trust on any Liquidation Day occurring prior to the
Termination Date, and thereafter during such Settlement Period
the conditions set forth in Section 3.02 are satisfied or waived
by the Agent, 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; and
(iv) during such times as amounts are required
to be reinvested in accordance with the foregoing subsection (ii)
or the proviso to subsection (iii), release to the Seller for its
own account any Collections in excess both of such amounts and of
the amounts that are required to be set aside pursuant to
subsection (i) above.
(c) The Collection Agent shall deposit into the Agent's
Account, on the last day of each Settlement Period for a
Receivable Interest, Collections held for the Investors or the
Banks that relate to such Receivable Interest pursuant to Section
2.04(b); provided, however, that if Yield with respect to such
Receivable Interest was computed by reference to the Investor
Rate during such Settlement Period and no Liquidation Day then
exists, Collections held for the Investors pursuant to subsection
(i) of Section 2.04(b) shall be deposited to the Agent's Account
on the second Business Day after the last date of such Settlement
Period instead of such last day.
(d) Upon receipt of funds deposited into the Agent's
Account, the Agent shall distribute them as follows:
(i) if such distribution occurs on a day that is
not a Liquidation Day, first to the Investors or the Banks that
hold the relevant Receivable Interest and to the Agent in payment
in full of all accrued Yield and Fees and then to the Collection
Agent in payment in full of all accrued Collection Agent Fee.
(ii) if such distribution occurs on a Liquidation
Day, first to the Investors or the Banks that hold the relevant
Receivable Interest and to the Agent in payment in full of all
accrued Yield and Fees, second to such Investors or Banks in
reduction to zero of all Capital, third to such Investors, Banks
or the Agent in payment of any other amounts owed by the Seller
hereunder, and fourth to the Collection Agent in payment in full
of all accrued Collection Agent Fee.
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 or the 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.
(e) For the purposes of this Section 2.04:
(i) if on any day the Outstanding Balance of any
Pool Receivable is reduced or adjusted as a result of any
defective, rejected or returned merchandise or services, or any
cash discount, discount for quick payment or other adjustment
made by the Seller or the Originator, or any setoff, 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 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(e), 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 Agent, 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 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.
SECTION 2.05. Fees. (a) Each Investor and Bank shall pay
to the Collection Agent a fee (the "Collection Agent Fee") of
0.75% per annum on the average daily 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 last day of
each Settlement Period for such Receivable Interest (or, if the
proviso in Section 2.04(c) is then applicable, the second
Business Day after the last day of such Settlement Period). Upon
three Business Days' notice to the 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 a single Receivables Pool of 110% of the
reasonable costs and expenses of the Collection Agent in
administering and collecting the Receivables in such 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 Originator 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.
(b) The Seller shall pay to the Agent certain fees
(collectively, the "Fees") in the amounts and on the dates set
forth in a separate fee letter of even date between the Seller
and the Agent, as the same may be amended or restated from time
to time (the "Fee Letter").
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 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 1.00% 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 the Agent may, upon notice to the other
party received at least three Business Days prior to the last day
of any Settlement Period in the case of the Seller giving notice,
or up to the last day of such Settlement Period in the case of
the Agent giving notice, either (i) divide any Receivable
Interest into two or more Receivable Interests having aggregate
Capital equal to the Capital of such divided Receivable Interest,
or (ii) combine any two or more Receivable Interests originating
on such last day or having Settlement Periods ending on such last
day into a single Receivable Interest having Capital equal to the
aggregate of the Capital of such Receivable Interests; provided,
however, that no Receivable Interest owned by ▇▇▇▇▇▇ may be
combined with a Receivable Interest owned by any Bank.
SECTION 2.08. Increased Costs. (a) If CNAI, any Investor,
any Bank, any entity which enters into a commitment to purchase
Receivable Interests or interests therein, or any of their
respective Affiliates (each an "Affected Person") determines that
compliance with 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) affects or would affect the amount
of the 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 or interests therein
related to this Agreement or to the funding thereof and other
commitments of the same type, then, upon demand by such Affected
Person (with a copy to the Agent), the Seller shall immediately
pay to the 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 in the light of such circumstances, to the extent
that such Affected Person reasonably determines such increase in
capital to be allocable to the existence of any of such
commitments. A certificate as to such amounts submitted to the
Seller and the Agent 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 Investor or Bank
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 Investor or Bank (with a copy to the Agent), the Seller
shall immediately pay to the Agent, for the account of such
Investor or Bank (as a third-party beneficiary), from time to
time as specified by such Investor or Bank, additional amounts
sufficient to compensate such Investor or Bank for such increased
costs. A certificate as to such amounts submitted to the Seller
and the Agent by such Investor or Bank shall be conclusive and
binding for all purposes, absent manifest error.
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 Settlement Period in respect of
which Yield is computed by reference to the Eurodollar Rate, for
such Settlement Period, at a rate per annum equal at all times
during such Settlement Period to the remainder obtained by
subtracting (i) the Eurodollar Rate for such Settlement 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 Settlement 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 Agent within 30 days
after any Yield payment is made with respect to which such
additional Yield is requested. The affected Bank or Investor
shall take reasonable efforts to provide the Seller with prompt
notice of such additional yield charges and a certificate as to
such additional Yield submitted to the Seller and the Agent by
such Investor or Bank shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 2.10. Intention of the Parties. The parties
hereto have structured this Agreement with the intention that
each purchase of undivided interests in Receivables hereunder be
treated as a sale of such Receivables by the Seller to the
Investor or the Banks, as the case may be, for all purposes,
other than federal and state income tax purposes. This Agreement
is, and the parties intend this Agreement to be, a security
agreement, as such term is understood under Article 9 of the UCC.
Section 9-105 of the UCC provides that a " 'Security agreement'
means an agreement which creates or provides for a security
interest", and Section 1-201 of the UCC provides that a "security
interest" under the UCC " . . . also includes any interest of a
buyer of accounts or chattel paper which is subject to Article 9
. . ." of the UCC.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase.
The initial purchase of a Receivable Interest under this
Agreement on the Closing Date is subject to the conditions
precedent that the 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 reasonably
satisfactory to the Agent:
(a) Certified copies of the resolutions of the Board of
Directors of each of the Seller and the Originator approving this
Agreement and the Originator Purchase Agreement and certified
copies of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this
Agreement, as the case may be, and the Originator Purchase
Agreement.
(b) A certificate of the Secretary or Assistant
Secretary of the Seller and the Originator certifying the names
and true signatures of the officers of the Seller and the
Originator authorized to sign the Originator Purchase Agreement
and this Agreement and the other documents to be delivered by it
hereunder and thereunder.
(c) Acknowledgment copies of proper financing
statements, duly filed on or before the date of such initial
purchase under the UCC of all jurisdictions that the Agent may
deem necessary or desirable in order to perfect the ownership
interests contemplated by this Agreement and the Originator
Purchase Agreement.
(d) Acknowledgment copies 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 the
Originator and (ii) the collateral security referred to in
Section 2.10 previously granted by the Seller.
(e) Completed requests for information, dated on or
before the date of such initial purchase, listing the financing
statements referred to in subsection (c) above and all other
effective financing statements filed in the jurisdictions
referred to in subsection (c) above that name the Seller or the
Originator as debtor, together with copies of such other
financing statements (none of which shall cover any Receivables,
Contracts, Related Security or the collateral security referred
to in Section 2.10).
(f) Executed copies of the Control Agreement to the
initial Designated Bank and the undated executed copies of the
Lock-Box Agreements to the other Lock-Box Banks.
(g) A favorable opinion of (i) Cravath, Swaine & ▇▇▇▇▇,
as counsel for the Seller and the Originator and (ii) internal
counsel to the Seller and the Originator, substantially in the
forms of Annex C hereto and as to such other matters as the Agent
may reasonably request.
(h) The Fee Letter.
(i) The Funds Transfer Letter.
(j) An executed copy of the Originator Purchase
Agreement and an executed copy of the OPA Assignment.
(k) A copy of the by-laws of the Seller, certified by
the Secretary or Assistant Secretary of the Seller.
(l) A copy of the certificate or articles of
incorporation of the Seller, certified as of a recent date by the
Secretary of State or other appropriate official of the state of
its organization, and a certificate as to the good standing of
the Seller from such Secretary of State or other official, dated
as of a recent date.
(m) A favorable opinion of ▇▇▇▇, Scholer, Fierman, ▇▇▇▇
& Handler, LLP, counsel for the Agent, as to such matters as the
Agent may reasonably request.
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 the Agent at least one Business Day
prior to such purchase, in form and substance satisfactory to the
Agent, a completed Seller Report containing information covering
the most recently ended reporting period for which information is
required pursuant to Section 6.02(g) 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, on or prior to the date of
such reinvestment the Collection Agent shall have delivered to
the Agent as and when due in accordance with this Agreement, in
form and substance satisfactory to the Agent, a completed Seller
Report containing information covering the most recently ended
reporting period for which information is required pursuant to
Section 6.02(g), (c) on the date of such purchase or reinvestment
the following statements shall be true (and acceptance of the
proceeds of such purchase or reinvestment shall be deemed a
representation and warranty by the Seller that such statements
are then true):
(i) The representations and warranties contained in
Section 4.01 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,
(iii) The Originator shall have sold or contributed
to the Seller, pursuant to the Originator Purchase Agreement, all
Originator Receivables arising on or prior to such date,
(iv) With respect to all purchases and reinvestments
made on or after January 1, 2000, the Agent shall have received
evidence satisfactory to it that Collections are not being sent
to any bank account other than a Designated Account, and
(v) The Agent shall have received such other
approvals, opinions or documents as it may reasonably request.
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 corporation duly incorporated,
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 corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) do not
contravene (1) the Seller's charter or by-laws, (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 constitutes the
legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms.
(e) The balance sheets of the Originator and its
consolidated Subsidiaries as at December 31, 1998, and the
related statements of income and retained earnings of the
Originator and its consolidated Subsidiaries for the fiscal year
then ended, copies of which have been furnished to the Agent,
fairly present the financial condition of the Originator and its
consolidated Subsidiaries as at such date and the results of the
operations of the Originator and its consolidated Subsidiaries
for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied,
and since March 31, 1999 there has been no change in the business
(taken as a whole), consolidated financial condition or
consolidated results of operation of the Originator and its
consolidated Subsidiaries that reasonably could be expected to
result in a Material Adverse Effect.
(f) The opening pro forma balance sheet of the Seller as
at June 10, 1999, giving effect to the initial purchase to be
made under this Agreement, a copy of which has been furnished to
the Agent, fairly presents the financial condition of the Seller
as at such date, in accordance with generally accepted accounting
principles, and since June 10, 1999 there has been no material
adverse change in the business, operations or financial position
of the Seller.
(g) Except as disclosed in the Form 10-Q filed with the
Securities and Exchange Commission on May 7, 1999, there is no
action, suit or proceeding pending against or, to the knowledge
of the Seller or any of its Subsidiaries, threatened against or
affecting the Seller or any of its Subsidiaries before any court
or arbitrator, any governmental body, agency or official that
reasonably could be expected to result in a Material Adverse
Effect.
(h) Neither the Originator nor any Subsidiary is in
default with respect to any order of any court, arbitration or
governmental body except for defaults with respect to orders of
governmental agencies that reasonably could be expected to result
in a Material Adverse Effect.
(i) The Seller is the legal and beneficial owner of the
Pool Receivables and Related Security free and clear of any
Adverse Claim; upon each purchase or reinvestment, the Investors
or the Banks, as the case may be, 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 Agent
relating to this Agreement and those filed by the Seller pursuant
to the Originator Purchase Agreement.
(j) 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), 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 Agent, 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 as otherwise disclosed to the
Agent, Investors or the Banks, as the case may be, at such time)
as of the date so furnished, and no such document contains or
will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances
under which they were made, not misleading.
(k) 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).
(l) The names and addresses of all the Lock-Box Banks,
together with the 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).
(m) Each purchase of a Receivable Interest from the
Seller and each reinvestment of Collections in Pool Receivables
of the Seller will constitute (i) a "current transaction" within
the meaning of Section 3(a)(3) of the Securities Act of 1933, as
amended, and (ii) a purchase or other acquisition of notes,
drafts, acceptances, open accounts receivable or other
obligations 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.
(n) The Seller is not known by and does not use any
tradename or doing-business-as name.
(o) The Seller was incorporated on June 4, 1999, and the
Seller did not engage in any business activities prior to the
date of this Agreement. The Seller has no Subsidiaries.
(p)(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.
(q) 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 Originator or (ii) shall have
purchased such Pool Receivable from the Originator in exchange
for payment (made by the Seller to the 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 the 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:
The Collection Agent is a corporation duly
incorporated, validly existing and in good standing under the
laws of Delaware, and is duly qualified to do business, and is in
good standing, in New York and every other jurisdiction where the
nature of its business requires it to be so qualified, except to
the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
(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, (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, 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
consolidated Subsidiaries as at December 31, 1998, and the
related statements of income and retained earnings of the
Collection Agent and its consolidated Subsidiaries for the fiscal
year then ended, copies of which have been furnished to the
Agent, fairly present the financial condition of the Collection
Agent and its consolidated Subsidiaries as at such date and the
results of the operations of the Collection Agent and its
consolidated Subsidiaries for the period ended on such date, all
in accordance with generally accepted accounting principles
consistently applied, and since March 31, 1999 there has been no
change in the business (taken as a whole), consolidated financial
position or consolidated results of operation of the Collection
Agent and its consolidated Subsidiaries that has resulted in or
reasonably could be expected to result in a Material Adverse
Effect.
(f) Except as disclosed in the Form 10-Q filed with the
Securities and Exchange Commission on May 7, 1999, there is no
action, suit or proceeding pending against or, to the knowledge
of the Seller or any of its Subsidiaries, threatened against or
affecting the Seller or any of its Subsidiaries before any court
or arbitrator, any governmental body, agency or official that has
resulted in or reasonably could be expected to result in a
Material Adverse Effect.
(g) The Collection Agent and its Subsidiaries have
reviewed the areas within their business and operations that
could be adversely affected by, and have a developed a program to
address on a timely basis, the Year 2000 Problem. To the extent
it reasonably deems appropriate, the Collection Agent agrees to
make related appropriate inquiry of its material suppliers and
vendors whose performance may materially affect the Collection
Agent's performance hereunder. Based on such review and program,
the Collection Agent believes that the Year 2000 Problem is not
reasonably expected to result in a Material Adverse Effect.
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 Yield on any Receivable Interest shall be outstanding or
the date all other amounts owed by the Seller hereunder to the
Investors, the Banks or the 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 to the extent that the failure to do so
comply could reasonably be expected to result in a Material
Adverse Effect
(b) Offices, Records and Books of Account. 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, upon 30 days'
prior written notice to the Agent, at any other locations in
jurisdictions where all actions reasonably requested by the 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 with all material 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. 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, related Contract 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, other than liens for taxes not yet due and
payable.
(e) Extension or Amendment of Receivables. Except as
provided in Section 6.02(c), the Seller will not extend, amend or
otherwise modify the terms of any Pool Receivable, or amend,
modify or waive any payment provisions 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 any bank as a Lock-Box Bank to those listed
in Schedule I to this Agreement. The Seller will not add any
bank as a Designated Bank unless the Agent shall have received
notice of such addition (including an updated Schedule I) and a
fully executed copy of a Control Agreement for each new
Designated Bank. The Seller will terminate each Lock-Box Account
(other than the Designated Accounts) on or prior to December 31,
1999. Following the delivery of any Lock-Box Agreement or
Control Agreement, as applicable, the Seller will not 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,
other than instructing Obligors that are making payments to a
Lock-Box Account that is not a Designated Account to make
payments to a Designated Account.
(h) Deposits to Lock-Box Accounts. At all times on and
prior to December 31, 1999, the Seller will deposit, or cause to
be deposited, all Collections of Receivables solely into Lock-Box
Accounts. At all times subsequent to December 31, 1999, the
Seller will deposit, or cause to be deposited, all Collections of
Receivables solely into a Designated 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 and shall promptly
(and in any event within two Business Days) cause any Collections
deposited in a Lock-Box Account and not relating to Receivables
to be removed from the applicable Lock-Box Account.
(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 and related Contracts have been
sold in accordance with this Agreement.
(j) Further Assurances. 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
reasonable actions requested by the Agent, that may be reasonably
necessary or desirable, or that the 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 or the Agent to exercise and enforce their
respective rights and remedies under this Agreement. Without
limiting the foregoing, the Seller will, upon the request of the
Agent, execute and file such financing or continuation
statements, or amendments thereto, and such other instruments and
documents, that may be necessary or desirable, or that the Agent
may reasonably request, to perfect, protect or evidence such
Receivable Interests.
(ii) The Seller authorizes the Agent to file
financing or continuation statements, and amendments thereto and
assignments thereof, relating to the Pool Receivables and the
Related Security, the related Contracts and the Collections with
respect thereto without the signature of the Seller where
permitted by law. A photocopy or other reproduction of this
Agreement shall be sufficient as a financing statement where
permitted by law.
(k) Reporting Requirements. The Seller will provide to
the Agent (in multiple copies, if requested by the Agent) the
following:
(i) as soon as available and in any event within 60
days after the end of the first three quarters of each fiscal
year of the Originator, consolidated balance sheets of the
Originator and its Subsidiaries as of the end of such quarter and
consolidated statements of income and retained earnings of the
Originator 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, controller or
other chief accounting officer of the Originator;
(ii) as soon as available and in any event within
120 days after the end of each fiscal year of the Originator, a
copy of the annual report for such year for the Originator and
its Subsidiaries, containing financial statements for such year
audited by a "Big 5" accounting firm or other independent public
accountants acceptable to the Agent;
(iii) as soon as possible and in any event within
five days after the Seller obtains knowledge of the occurrence of
each Event of Termination or Incipient Event of Termination, to
the extent that such event is continuing, a statement of the
chief financial officer of the Seller setting forth details of
such Event of Termination or event and the action that the Seller
has taken and proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof,
copies of all reports that the Originator sends to any of its
security holders, and copies of all reports and registration
statements that the Originator or any of its Subsidiaries files
with the Securities and Exchange Commission or any national
securities exchange;
(v) promptly after the filing or receiving thereof,
copies of all reports and notices that the Seller or any
Affiliate files under ERISA with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation or the U.S. Department
of Labor or that the Seller or any Affiliate receives from any of
the foregoing or from any multiemployer plan (within the meaning
of Section 4001(a)(3) of ERISA) to which the Seller or any
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 Affiliate in excess of $10,000,000;
(vi) at least ten Business Days prior to any change
in the name of the Originator or the Seller, a notice setting
forth the new name and the effective date thereof;
(vii) promptly after the Seller obtains knowledge
thereof, notice of any "Event of Termination" or "Facility
Termination Date" under the Originator Purchase Agreement and, if
such event is continuing, a description of the nature thereof;
(viii) 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 the Originator has stopped
selling or contributing to the Seller, pursuant to the Originator
Purchase Agreement, all newly arising Originator Receivables that
constitute or are believed to constitute Eligible Receivables;
(ix) 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;
(x) promptly after receipt thereof, copies of all
notices received by the Seller from the Originator under the
Originator Purchase Agreement, or under any Control Agreement or
Lock-Box Agreement; and
(xi) such other information respecting the
Receivables or the condition or operations, financial or
otherwise, of the Seller as the Agent may from time to time
reasonably request.
(l) Corporate Separateness. (i) The Seller shall at
all times maintain at least one independent director 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 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.
(iii) The Seller shall conduct its business from an
office separate from that of the Other Companies (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.
(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
reflect such assets and transactions in financial statements
separate and distinct from those of the Other Companies and
evidence such assets and transactions by appropriate entries in
books and records separate and distinct from those of the Other
Companies. 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.
(vii) The Seller shall not maintain any joint
account with any Other Company or become liable as a guarantor or
otherwise with respect to any Debt or contractual obligation of
any Other Company.
(viii) The Seller shall not make any payment or
distribution of assets with respect to any obligation of any
Other Company or grant an Adverse Claim on any of its assets to
secure any obligation of any Other Company.
(ix) The Seller shall not make loans, advances or
otherwise extend credit to any of the Other Companies other than
as contemplated under the Originator Purchase Agreement.
(x) The Seller shall hold regular duly noticed
meetings of its Board of Directors 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 Sections 2 through 4 on pages 5-8 of the opinion of Cravath,
Swaine & ▇▇▇▇▇ 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 (provided that the Seller may extend the "Facility
Termination Date" thereunder) or waive the occurrence of any
"Event of Termination" under the Originator Purchase Agreement,
without in each case the prior written consent of the Agent. 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 the purchase of Receivables, Related
Security and Collections from the Originator and the transactions
contemplated by this 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 shares of any class of capital stock of the Seller, or return
any capital to its shareholders as such, or purchase, retire,
defease, redeem or otherwise acquire for value or make any
payment in respect of any shares of any class of capital stock of
the Seller or any warrants, rights or options to acquire any such
shares, now or hereafter outstanding; provided, however, that the
Seller may declare and pay cash dividends on its capital stock to
its shareholders so long as (i) no Event of Termination shall
then exist or would occur as a result thereof, (ii) such
dividends are in compliance with all applicable law including the
General Corporation Law of the State of Delaware, and (iii) such
dividends have been approved by all necessary and appropriate
corporate action of the Seller.
(q) Debt. The Seller will not incur any Debt, other
than any Debt incurred pursuant to this Agreement and the
Deferred Purchase Price.
(r) Certificate of Incorporation. The Seller will not
amend or delete Articles III, IV or XI of its certificate of
incorporation.
(s) Tangible Net Worth. The Seller will maintain
Tangible Net Worth at all times equal to at least 3% of the
Outstanding Balance of the Receivables at such time.
SECTION 5.02. Covenant of the Seller and the Originator .
Until the Final Termination Date, each of the Seller and the
Originator will, at their respective expense, from time to time
during regular business hours and following reasonable notice to
the Seller and Originator permit the Agent or its agents or
representatives (including independent public accountants, which
may be the Seller's or the Originator's independent public
accountants), (i) to conduct periodic audits of the Receivables,
the Related Security and the related books and records and
collections systems of the Seller or the Originator, as the case
may be, relating to Receivables generation and collection,
(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 the 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 the 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 the
Originator's performance under the Transaction Documents or under
the Contracts with any of the officers or employees of the Seller
or the Originator, as the case may be, having knowledge of such
matters; provided, however, prior to the occurrence and
continuance of any Event of Termination or Incipient Event of
Termination, audits, examinations and visits described in (i),
(ii) and (iii) above (together with the audit rights set forth in
Section 6.06(a) hereof and Section 5.01(g) of the Originator
Purchase Agreement) shall occur no more frequently than annually.
In addition, upon the Agent's request at least once per year, the
Seller will, at its expense, appoint independent public
accountants (which, so long as no Event of Termination is
continuing, shall be the Seller's regular independent public
accountants), or utilize the Agent's representatives or auditors,
to prepare and deliver to the 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 Agent.
SECTION 5.03. Post Closing Opinion. On or before June 25,
1999, the Seller shall arrange for its counsel, Cravath, Swaine &
▇▇▇▇▇, to deliver to the Agent a favorable opinion in form and
substance reasonably satisfactory to the Agent addressing issues
related to the representation contained in Section 4.01(m)(i) and
consistent with the discussions held between counsel to the Agent
and counsel to the Seller.
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. The Originator is hereby designated
as, and hereby agrees to perform the duties and obligations of
the Collection Agent pursuant to the terms hereof. Upon the
occurrence of a Collection Agent Default, the Agent may designate
as Collection Agent any Person (including itself) to succeed the
Originator 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 Agent (such consent not
to be unreasonably withheld), 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.
SECTION 6.02. Duties of Collection Agent . The Collection
Agent shall take or cause to be taken all such actions as may be
reasonably 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 and
the Agent hereby appoint the Collection Agent, from time to time
designated pursuant to Section 6.01, as agent for themselves and
for the Investors and the Banks to enforce their respective
rights and interests in the Pool Receivables, the Related
Security and the related Contracts. 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 a manner consistent
with the Credit and Collection Policy and in the best interests
of the Seller, the Investors and the Banks.
(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 Event of
Termination shall have occurred and be continuing, the
Originator, while it is the Collection Agent, may, in accordance
with the Credit and Collection Policy, extend the maturity or
adjust the Outstanding Balance of any Receivable as the
Originator deems appropriate, or otherwise amend or adjust the
payment terms under the related Contract in a manner consistent
with the Credit and Collection Policy, to maximize Collections
thereof, 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 cause the Originator to ▇▇▇▇, legend or otherwise designate
its master data processing records indicating that an interest in
the Pool Receivables has been transferred hereunder.
(e) The Collection Agent shall, as soon as practicable
following receipt, turn over to the Seller 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 Agent, furnish to the Agent (promptly after any
such request) a calculation of the amounts set aside for the
Investors and the Banks pursuant to Section 2.04.
(g) Prior to the 10th Business Day of each month, the
Collection Agent shall prepare and forward to the Agent a Seller
Report relating to the Receivable Interests outstanding on the
last day of the immediately preceding month.
In connection with the preparation by the Collection Agent
of the "Dilution", "Collections" and "Sales" figures contained in
Seller Report, the Agent acknowledges the Collection Agent does
not have the systems capability to exclude Foreign Receivables
from such figures and the current Seller Report includes Foreign
Receivables. So long as Foreign Receivables do not exceed 20% of
the total aggregate Receivables appearing in any Seller Report,
the inclusion of Foreign Receivables in the "Dilution",
"Collections" and "Sales" figures of any Seller Report shall
comply with the Collection Agent's reporting requirements and
shall not constitute a default or violation of the Collection
Agent's representations and warranties or covenants or in the
performance of its duties. The Collection Agent hereby covenants
and agrees to utilize its best efforts to eliminate the inclusion
of Foreign Receivables in the "Dilution", "Collections" and
"Sales" figures of each Seller Report as soon as practicable and
in no event later than December 31, 1999 (unless the Collection
Agent and the Agent agree to another mutually acceptable
reporting modification).
SECTION 6.03. Certain Rights of the Agent. The Seller
hereby transfers to the Agent the exclusive ownership and control
of the Lock-Box Accounts to which the Obligors of Pool
Receivables shall make payments.
(b) At any time following the designation of a
Collection Agent other than the Originator pursuant to Section
6.01 or following and during the continuance of an Event of
Termination or an Incipient Event of Termination:
(i) The Agent may direct the Obligors of Pool
Receivables that all payments thereunder be made directly to the
Agent or its designee.
(ii) The Agent may deliver a Lock-Box Agreement to
the Lock-Box Banks with open Lock-Box Accounts as at such date.
(iii) At the Agent's request and at the Seller's
expense, the Seller shall notify (i) each Obligor of Pool
Receivables of the ownership of Receivable Interests under this
Agreement and direct that payments be made directly to such
account (including a Designated Account) as instructed by Agent
or its designee, and (ii) all other obligors to redirect funds
and make payment with respect to amounts owing to the Originator
to accounts of the Originator other than a Designated Account.
(iv) At the 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 Agent at a place selected by the Agent or its designee,
and (B) segregate all cash, checks and other instruments received
by it from time to time constituting Collections of Pool
Receivables in a manner acceptable to the Agent and, promptly
upon receipt, remit all such cash, checks and instruments, duly
indorsed or with duly executed instruments of transfer, to the
Agent or its designee.
(v) The Seller authorizes the 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 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.
SECTION 6.04. Rights and Remedies. If the Collection
Agent fails to perform any of its obligations under this
Agreement, the Agent may (but shall not be required to) itself
perform, or cause performance of, such obligation; and the
Agent's costs and expenses incurred in connection therewith shall
be payable by the Collection Agent.
(b) The Seller and the Originator 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 Agent on behalf of the
Investors and the Banks 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 Agent, the Investors 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 this Agreement shall
control.
SECTION 6.05. Further Actions Evidencing Purchases . The
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 reasonably necessary or
desirable, or that the Agent may reasonably request, to perfect,
protect or more fully evidence the Receivable Interests purchased
hereunder, or to enable the Investors, the Banks or the Agent to
exercise and enforce their respective rights and remedies
hereunder. Without limiting the foregoing, the Originator will
upon the request of the Agent (i) 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 Agent may reasonably request, to perfect,
protect or evidence such Receivable Interests; and (ii) ▇▇▇▇,
legend or otherwise designate its master data processing records
and, following the occurrence and during the continuance of an
Event of Termination or Incipient Event of Termination Event, the
Contracts, in each case, indicating that such Pool Receivables
have been transferred hereunder.
SECTION 6.06. Covenants of the Collection Agent and the
Originator . Audits. The Collection Agent will, from time to
time during regular business hours as requested by the Agent, and
following reasonable notice to the Collection Agent, permit the
Agent, or its agents or representatives (including independent
public accountants, which may be the Collection Agent's
independent public accountants), (i) to conduct periodic audits
of the Receivables, the Related Security and the related books
and records and collections systems of the Collection Agent
relating to Receivables generation and collection, (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 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; provided however, prior
to the occurrence of and continuance of a Collection Agent
Default or Incipient Event of Termination, audits described in
(i), (ii) and (iii) above (together with the audit rights set
forth in Section 5.02 hereof and Section 5.01(g) of the
Originator Purchase Agreement) shall occur no more frequently
than annually.
(b) Change in Credit and Collection Policy. The
Originator will not make any change in the Credit and Collection
Policy that would impair the collectibility of any Pool
Receivable or the ability of the Originator (if it is acting as
Collection Agent) to perform its obligations under this
Agreement.
SECTION 6.07. Indemnities by the Collection Agent .
Without limiting any other rights that the Agent, any Investor,
any Bank or any of their respective Affiliates (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 resulting from gross negligence or willful misconduct on
the part of such Special Indemnified Party, (b) recourse for
uncollectible Receivables or (c) any income 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 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;
(ii) the failure by the Collection Agent to comply
with any applicable law, rule or regulation with respect to any
Pool Receivable or Contract; or the failure of any Pool
Receivable or Contract to conform to any such applicable law,
rule or regulation;
(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 Investors or the Banks
with respect to any Pool Receivable or the value of any Pool
Receivable;
(vii) any restriction applicable to the Agent, the
Investors or the Banks in their ability to exercise their rights
under this Agreement due to a confidentiality provision in a
Contract that purports to restrict the ability of the Investors
or the Banks to exercise their rights under this Agreement,
including, without limitation, their right to review the
Contract;
(viii) any Collection Agent Fees or other costs and
expenses payable to any replacement Collection Agent, to the
extent in excess of the Collection Agent Fees payable to the
Collection Agent hereunder; or
(ix) any claim brought by any Person other than a
Special Indemnified Party arising from any activity by the
Collection Agent or its Affiliates in servicing, administering or
collecting any Receivable; or
(x) the failure of the Collection Agent's computer
applications to resolve the Year 2000 Problem.
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 occurrence of any Collection Agent Default; or
(b) The Seller or the Originator shall fail following a
Collection Agent Default, to transfer to the Agent when
requested, any rights pursuant to this Agreement or the OPA
Assignment, which the Seller or the Originator then has as
Collection Agent, or (ii) to make any payment required under
Section 2.04; or
(c) Any representation or warranty made or deemed made
by the Seller or the Collection Agent under this Agreement or any
other Transaction Document or any written information or report
(including, without limitation, any E-Mail Seller Report)
delivered by the Seller 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, and such condition, to the extent it is
capable of being remedied, shall remain unremedied for 10 days;
or
(d) The Seller or the 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 shall remain unremedied for 10 days after written
notice thereof shall have been given to the Seller by the Agent;
or
(e) The Seller or the Originator shall fail to pay any
payment of principal, face amount, interest, premium, fees or any
similar obligation in respect of any Debt in an aggregate amount
exceeding $25,000,000 when due or within any applicable grace
period (provided, that if Section 6.01(e) of the Originator's
existing $500,000,000 credit agreement, dated as of March 31,
1997, is amended to provide that no "Event of Default" under such
credit agreement will result until such Debt is declared to be or
otherwise becomes due and payable in such aggregate amount, then
this clause (e) shall not constitute an Event of Termination
hereunder unless such Debt is declared to be or otherwise becomes
due and payable in such aggregate amount); or
(f) Any purchase or any 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 or security interest (as
understood under the UCC) to the extent of the pertinent
Receivable Interest in each applicable Pool Receivable and the
Related Security and Collections with respect thereto; or the
interest created under the OPA Assignment shall for any reason
cease to be a valid and ownership interest thereunder; or
(g) The Seller or the 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 or the 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 30 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
the Originator shall take any corporate action to authorize any
of the actions set forth above in this subsection (g); or
(h) As of the last day of any calendar month, the three
month rolling average of (w) the Dilution Ratio shall exceed
5.3%, (x) the Default Ratio shall exceed 6%, (y) the Delinquency
Ratio shall exceed 5.2%, or (z) the Loss-to-Liquidation Ratio
shall exceed 1%; or
(i) The Net Receivables Pool Balance shall on any
Business Day be less than 100% of the sum of the aggregate
outstanding Capital of all Receivable Interests or the sum of the
Receivable Interests shall on any 5 consecutive Business Day be
greater than 95%; or
(j) There shall have occurred any event or events that
results in a Material Adverse Effect; or
(k) An "Event of Termination", "Incipient Event of
Termination" or "Facility Termination Date" shall occur and be
continuing under the Originator Purchase Agreement, or any
material provision in the Originator Purchase Agreement shall
cease to be in full force and effect; or
(l) All of the outstanding capital stock of the Seller
shall cease to be owned, directly or indirectly, by the
Originator; or
(m) Any of the Originator's long term public senior
unsecured debt securities (having a rating not dependant on any
guaranty) are no longer rated at least BBB- by S&P and at least
Baa3 by ▇▇▇▇▇'▇, or the Originator has not maintained both such
ratings;
then, and in any such event, any or all of the following actions
may be taken by notice to the Seller: (x) the Investor or the
Agent may declare the Facility Termination Date to have occurred
(in which case the Facility Termination Date shall be deemed to
have occurred), (y) the Agent may declare the Commitment
Termination Date to have occurred (in which case the Commitment
Termination Date shall be deemed to have occurred), and (z) if
such Event of Termination coincides with or also constitutes a
Collection Agent Default, and without limiting any right under
this Agreement to replace the Collection Agent, the Agent may
designate another Person to succeed the Originator 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 Originator (if it is
then serving as the Collection Agent) shall cease to be the
Collection Agent, and the Agent or its designee shall become the
Collection Agent. Upon any such declaration or designation or
upon such automatic termination, the Investors, the Banks and the
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.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action . Each Investor and
each Bank hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto.
SECTION 8.02. Agent's Reliance, Etc . Neither the Agent
nor any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them
as Agent under or in connection with this Agreement (including,
without limitation, the Agent's servicing, administering or
collecting Pool Receivables as Collection Agent), except for its
or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, the Agent: (a) may
consult with legal counsel (including counsel for the Seller 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
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; (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 on
the part of the Seller or the Collection Agent or to inspect the
property (including the books and records) of the Seller or the
Collection Agent; (d) shall not be responsible to any Investor or
Bank for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (e) shall
incur no liability under or in respect of this Agreement 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 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 Agent.
CNAI and any of its Affiliates may generally engage in any kind
of business with the Seller, 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 Collection
Agent or any Obligor or any of their respective Affiliates, all
as if CNAI were not the Agent and without any duty to account
therefor to the Investors or the Banks.
SECTION 8.04. Bank's Purchase Decision . Each Bank
acknowledges that it has, independently and without reliance upon
the Agent, any of its Affiliates or any other Bank and based on
such documents and information as it has deemed appropriate, made
its own evaluation and decision to enter into this Agreement.
Each Bank also acknowledges that it will, independently and
without reliance upon the Agent, any of its Affiliates or any
other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under this Agreement.
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. Indemnities by the Seller . Without
limiting any other rights that the Agent, the Investors, the
Banks or any of their respective Affiliates (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 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 resulting from gross negligence or willful
misconduct on the part of such Indemnified Party, (b) recourse
(except as otherwise specifically provided in this Agreement) for
uncollectible Receivables or (c) any income taxes 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 creation of an undivided percentage ownership
interest in any Receivable which purports to be part of the Net
Receivables Pool Balance but which is not at the date of the
creation of such interest an Eligible Receivable;
(ii) reliance on 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 and the
other Transaction Documents which shall have been incorrect in
any material respect when made;
(iii) the failure by the Seller or the Originator 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 2.10, 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 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;
(xi) any failure of the Seller to comply with its
covenants contained in Section 5.01;
(xii) any claim brought by any Person other than an
Indemnified Party arising from any activity by the Seller or any
Affiliate of the Seller in servicing, administering or collecting
any Receivable; or
(xiii) the failure of the Seller's computer applications
to resolve the Year 2000 Problem.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc . No amendment or waiver
of any provision of this Agreement or consent to any departure by
the Seller therefrom shall be effective unless in a writing
signed by the Agent, as agent for the Investors and the Banks
(and, in the case of any amendment, also signed by the Seller),
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 Agent, affect the rights or duties of
the Collection Agent under this Agreement. No failure on the
part of the Investors, the Banks or the 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 10.02. 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.
(b) The Collection Agent may, with the consent of the
Agent (which consent may be withdrawn at any time by notice from
the Agent to the Collection Agent and the Seller) accept delivery
of Seller Reports by electronic mail (each, an "E-Mail Seller
Report"), subject to the following conditions:
(i) The Collection Agent shall have made
arrangements with VeriSign, Inc. (or another authenticating
organization acceptable to the Agent) to enable the Collection
Agent to generate digital signatures,
(ii) The Collection Agent shall be solely
responsible for safeguarding keys, access codes or other means of
generating its digital signature,
(iii) Each E-Mail Seller Report shall be formatted
in a manner designated by the Agent from time to time, shall be
digitally signed, and shall be sent to an electronic mail address
designated by the Agent, and
(iv) The Agent shall be authorized to rely on any
E-Mail Seller Report for the purposes of this Agreement to the
same extent as if the contents thereof had been otherwise
delivered to the Agent in accordance with Section 10.02(a).
SECTION 10.03. Assignability . This Agreement and the
Investors' rights and obligations herein (including ownership of
each Receivable Interest) shall be assignable by the Investors,
with the prior consent of the Seller, which consent shall not be
unreasonably withheld. Each assignor of a Receivable Interest or
any interest therein shall notify the Agent and the Seller of any
such proposed assignment. Each assignor of a Receivable Interest
or any interest therein may, in connection with a proposed
assignment or participation, disclose to the assignee or
participant any information relating to the Seller or the
Originator, including the Receivables, furnished to such assignor
by or on behalf of the Seller or by the Agent ; provided that,
prior to any such disclosure, the assignee or participant agrees
to preserve the confidentiality of any confidential information
relating to the Seller or the Originator received by it from any
of the foregoing entities.
(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). The parties to each such
assignment shall execute and deliver to the Agent an Assignment
and Acceptance. In addition, Citibank 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 Agent.
(c) This Agreement and the rights and obligations of the
Agent herein shall be assignable by the Agent and its successors
and assigns (i) prior to the occurrence of any Event of
Termination, with the prior consent of the Seller, which consent
shall not be unreasonably withheld, and (ii) following the
occurrence of any Event of Termination, without consent of any
nature.
(d) The Seller may not assign its rights or obligations
hereunder or any interest herein without the prior written
consent of the Agent.
SECTION 10.04. Costs, Expenses and Taxes. (a) In addition
to the rights of indemnification granted under Section 9.01
hereof, the Seller agrees to pay on demand all reasonable 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 Agent, CNAI, ▇▇▇▇▇▇, Citibank and their
respective Affiliates with respect thereto and with respect to
advising the Agent, CNAI, ▇▇▇▇▇▇, Citibank 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 Agent, CNAI, 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.
(b) In addition, the Seller shall pay (i) any and all
commissions of placement agents and dealers in respect of
commercial paper notes issued to fund the purchase or maintenance
of any Receivable Interest, (ii) any and all costs and expenses
of any issuing and paying agent or other Person responsible for
the administration of ▇▇▇▇▇▇'▇ commercial paper program in
connection with the preparation, completion, issuance, delivery
or payment of commercial paper notes issued to fund the purchase
or maintenance of any Receivable Interest, and (iii) 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. A certificate as
to such amounts submitted to the Seller shall be conclusive and
binding for all purposes, absent manifest error.
(c) The Seller also shall pay on demand all other costs,
expenses and taxes (excluding income taxes) incurred by ▇▇▇▇▇▇ or
any partner of ▇▇▇▇▇▇ ("Other Costs"), including the cost of
auditing ▇▇▇▇▇▇'▇ books by certified public accountants, the cost
of rating ▇▇▇▇▇▇'▇ commercial paper by independent financial
rating agencies, the taxes (excluding income taxes) resulting
from ▇▇▇▇▇▇'▇ operations, and the reasonable fees and out-of-
pocket expenses of counsel for any partner of ▇▇▇▇▇▇ with respect
to advising as to rights and remedies under this Agreement, the
enforcement of this Agreement or advising as to matters relating
to ▇▇▇▇▇▇'▇ operations; provided that the Seller and any other
Persons who from time to time sell receivables or interests
therein to ▇▇▇▇▇▇ ("Other Sellers") each shall be liable for such
Other Costs ratably in accordance with the usage under their
respective facilities; and provided further that if such Other
Costs are attributable to the Seller and not attributable to any
Other Seller, the Seller shall be solely liable for such Other
Costs.
SECTION 10.05. No Proceedings . Each of the Seller, the
Agent, the Collection Agent, 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 ▇▇▇▇▇▇ any proceeding of the type referred to
in Section 7.01(g) so long as any commercial paper or other
senior indebtedness issued by ▇▇▇▇▇▇ 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.
SECTION 10.06. Confidentiality . Unless otherwise
required by applicable law or regulation, the Seller and the
Collection Agent each agrees to maintain the confidentiality of
this Agreement 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 Agent, (b) the legal counsel and
auditors of the Seller and the Collection Agent if they agree to
hold it confidential, and (c) to rating agencies rating the
Originator's equity and debt instruments.
(b) Unless otherwise required by applicable law or
regulation (including, without limitation, state and federal
banking authorities), the Investors and the Banks each agrees to
maintain the confidentiality of this Agreement 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 Agent, (b) the legal counsel and auditors of the Seller and
the Collection Agent if they agree to hold it confidential, and
(c) to rating agencies rating the commercial paper issued by the
Investors.
SECTION 10.07. 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 THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES
THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY
OTHER JURISDICTION; PROVIDED THAT THE PROVISIONS RELATING TO THE
PERFECTION AND PRIORITY OF RECEIVABLE INTERESTS SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF CONNECTICUT AND THE UNIFORM
COMMERCIAL CODE IN EFFECT IN THE STATE OF CONNECTICUT.
SECTION 10.08. 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 10.09. Survival of Termination . This Agreement
shall become effective on the Closing Date and shall terminate on
the Final Termination Date. The provisions of Sections 2.08,
2.09, 6.07, 9.01, 10.04, 10.05 and 10.06 shall survive the Final
Termination Date.
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.
INVESTOR: ▇▇▇▇▇▇ ▇.▇.
By: Citicorp North America,
Inc., as Attorney-in-Fact
By
Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: U.S. Securitization
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
AGENT: CITICORP NORTH AMERICA, INC.,
as Agent
By
Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: U.S. Securitization
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
BANK: CITIBANK, N.A.
By:
Attorney-in-Fact
Percentage Interest: 100%
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
SELLER WITCO FUNDING CORPORATION
By:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ______________
Telephone: _____________
Fax: _________________
ORIGINATOR AND WITCO CORPORATION
COLLECTION AGENT:
By:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ______________
Telephone: _____________
Fax: _________________