EXHIBIT 10.12a
FOURTH AMENDED AND RESTATED
TRADE RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of May 28, 1999
THE GEON COMPANY, a Delaware corporation (the "Seller"), CORPORATE
RECEIVABLES CORPORATION ("CRC"), a California corporation, ▇▇▇▇▇▇, ▇.▇., a New
York limited partnership ("▇▇▇▇▇▇", and together with CRC, the "Investors"; each
of ▇▇▇▇▇▇ and CRC being individually an "Investor"), and CITICORP NORTH AMERICA,
INC., a Delaware corporation ("CNAI"), as agent for the Owners (as defined in
Section 1.01 hereof) (the "Agent"), agree as follows:
PRELIMINARY STATEMENTS.
(1) Certain terms which are capitalized and used throughout this
Agreement (in addition to those defined above) are defined in Article I of this
Agreement.
(2) The Seller, the Investors and the Agent are each party to that
certain Trade Receivables Purchase and Sale Agreement dated as of April 1, 1993,
as amended and restated on May 10, 1993, as further amended and restated on
August 16, 1994 and as further amended and restated on July 31, 1997 (as
amended, collectively, the "Original Agreement") whereby the Seller has from
time to time sold to the Investors, and the Investors have from time to time
purchased from the Seller, "Eligible Assets" (as defined in the Original
Agreement), namely undivided fractional ownership interests in all the
outstanding "Pool Receivables" as defined therein and all "Related Security" and
"Collections" and other proceeds thereof and with respect thereto.
(3) The Seller desires to add to the "Pool Receivables" as defined
in the Original Agreement additional accounts receivable arising from sales from
time to time of goods or services by certain of its subsidiaries and acquired by
the Seller from time to time.
(4) The parties hereto have agreed to amend and restate the Original
Agreement, on the terms and conditions hereinafter set forth, to provide for,
among other things, the sale of Eligible Asset interests in the additional
accounts receivable referred to in Preliminary Statement (3) above as part of
the Receivables Pool.
(5) CNAI has been requested and is willing to continue to act as
Agent.
NOW THEREFORE, the parties hereby agree that, effective as of the
Restatement Effective Date the Original Agreement is hereby amended and restated
in its
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entirety to read 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):
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim of any Person.
"Affiliate" when used with respect to a Person means any other
Person controlling, controlled by or under common control with such
Person.
"Affiliated Obligor" means any Obligor which is an Affiliate of
another Obligor.
"Agent's Account" means the special account (account number
4060-5071) of the Agent maintained at the office of Citibank at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Alternate Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be 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) the sum (adjusted to the nearest 1/4 of 1% or, if there is
no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1%
per annum, plus (ii) the rate obtained by dividing (A) 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 (adjusted to the basis of a year of 365/366 days) 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
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for such rates received by Citibank from three New York certificate
of deposit dealers of recognized standing selected by the Agent, by
(B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for Citibank with respect to liabilities consisting of
or including (among other liabilities) three-month U.S. dollar
non-personal time deposits in the United States, plus (iii) the
average during such three-week period of the annual assessment rates
estimated by Citibank for determining the then current annual
assessment payable by Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring U.S. dollar deposits of
Citibank in the United States; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Applicable Margin" means, as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on
such date and the Usage on such date as set forth below:
Public Debt Rating
S&P/▇▇▇▇▇'▇ Usage Applicable Margin
------------------ ----- -----------------
▇▇▇▇▇ ▇
▇-/▇▇ or above < 33% 0.325%
> 33% 0.425%
--------------------------------------------------------------
▇▇▇▇▇ ▇
▇▇▇▇/▇▇▇▇ < 33% 0.350%
> 33% 0.400%
--------------------------------------------------------------
▇▇▇▇▇ ▇
BBB/Baa2 < 33% 0.375%
> 33% 0.500%
--------------------------------------------------------------
▇▇▇▇▇ ▇
▇▇▇-/▇▇▇▇ < 33% 0.475%
> 33% 0.600%
--------------------------------------------------------------
▇▇▇▇▇ ▇
▇▇▇/▇▇▇ < 33% 0.675%
> 33% 0.800%
--------------------------------------------------------------
▇▇▇▇▇ ▇
BB/Ba2 < 33% 1.000%
> 33% 1.125%
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"Assignee" means Citibank, CNAI or each Investor or any of their
respective Affiliates or any other Person acceptable to the Agent as the
assignee of an Eligible Asset pursuant to Section 9.01.
"Assignee Rate" for any Fixed Period for any Eligible Asset means an
interest rate per annum equal to the Eurodollar Rate for such Fixed Period
plus the Applicable Margin in effect from time to time, provided, however,
that in the case of
(i) any Fixed Period on or prior to the first day of which the
Owner shall have notified the Agent that, after reasonable efforts
by such Owner (consistent with its internal policy and legal and
regulatory restrictions) to designate a lending office that would
allow such Owner to fund an Eligible Asset at the Assignee Rate set
forth above and which would not, in the judgment of such Owner, be
otherwise disadvantageous to such Owner, the introduction of or any
change occurring on or after the effective date of this Agreement 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 the Owner to fund such Eligible Asset at the Assignee
Rate set forth above (and the Owner shall not have subsequently
notified the Agent that such circumstances no longer exist),
(ii) any Fixed Period of 1 to (and including) 29 days,
(iii) any Fixed 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 Fixed Period,
that the related Eligible Asset will not be funded by issuance of
commercial paper, or
(iv) any Fixed Period for an Eligible Asset the Capital of
which allocated to the Owner is less than $500,000,
the "Assignee Rate" for such Fixed Period for such Eligible Asset shall be
an interest rate per annum equal to the Alternate Base Rate in effect on
the first day of such Fixed Period; provided further, however, that the
Agent and the Seller may agree in writing from time to time upon a
different "Assignee Rate."
"Assignment" means an assignment, in substantially the form of
Exhibit A hereto, by which an Eligible Asset may be assigned pursuant to
Section 9.01.
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"Average Maturity" means, on any day, that period (expressed in
days) equal to the average maturity of the Pool Receivables as shall be
calculated by the Collection Agent as set forth in the most recent Seller
Report in accordance with the provisions thereof; provided, however, that,
if the Agent shall disagree with any such calculation, the Agent may
recalculate the Average Maturity for such day.
"Borrowed Debt" shall have the meaning set forth in the Credit
Agreement in effect on the date hereof.
"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 Eligible Asset means the original amount paid to
the Seller for such Eligible Asset at the time of its acquisition by an
Investor pursuant to Sections 2.01 and 2.02, or such amount divided or
combined by any dividing or combining of such Eligible Asset pursuant to
Section 2.09, in each case reduced from time to time by Collections
received and distributed on account of such Capital pursuant to Section
2.06; provided, however, that such Capital of such Eligible Asset shall
not be reduced by any distribution of any portion of Collections if at any
time such distribution is rescinded or must otherwise be returned for any
reason.
"Cash Interest Expense" means, for any period, interest expense on
all Debt of the Seller and its Subsidiaries, net of interest income, in
accordance with GAAP and including, without limitation, to the extent not
otherwise included in accordance with GAAP, (a) interest expense in
respect of Debt resulting from "Advances" under the Credit Agreement, (b)
the interest component of obligations under leases that have or should
have been or should be, in accordance with GAAP, recorded as capital
leases, (c) commissions, discounts and other fees and charges payable in
connection with letters of credit issued for the account of the Seller or
any of its Subsidiaries, (d) the net payment, if any, payable by the
Seller or any of its Subsidiaries in connection with Hedge Agreements and
(e) fees paid pursuant to Section 2.04(a) of the Credit Agreement, but
excluding, in each case, (w) any amounts accrued or payable in connection
with this Agreement or the Parallel Purchase Commitment, (x) amortization
of original issue discount, (y) the interest portion of any deferred
payment obligation and (z) other interest not payable in cash.
"Certificate" means a certificate of assignment by the Seller to the
Agent in the form of Exhibit B hereto, evidencing each Eligible Asset.
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"▇▇▇▇▇▇" shall have the meaning set forth in the recital of parties
"Citibank" means Citibank, N.A., a national banking association.
"Collection Agent" means at any time the Person (including the
Agent) then authorized pursuant to Article VI to service, administer and
collect Pool Receivables.
"Collection Agent Fee" has the meaning assigned to that term in
Section 2.10.
"Collection Agent Fee Reserve" for any Eligible Asset at any time
means the unpaid Collection Agent Fee relating to such Eligible Asset
accrued to such time.
"Collections" means, with respect to any Pool Receivable, all cash
collections and other cash proceeds of such Pool Receivable, including,
without limitation, all cash proceeds of Related Security with respect to
such Pool Receivable, and any Collection of such Pool Receivable deemed to
have been received pursuant to Section 2.07.
"Concentration Limit" for any Obligor means at any time 3 1/3%, or
such other percentage ("Special Concentration Limit") for any Obligor
designated by the Agent in a writing delivered to the Seller; provided,
that (i) 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 (ii) the Agent may cancel any Special
Concentration Limit upon three Business Days' notice to the Seller (iii) a
Special Concentration Limit of 5% is established for each of ▇▇ ▇▇▇▇▇▇▇▇
and Ashland Chemical Company.
"Confidential Information" shall have the meaning set forth in the
Credit Agreement in effect on the date hereof.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Contract" means an agreement between the Seller or a Selling
Subsidiary and an Obligor, in substantially the form of one of the forms
of written contract set forth in Schedule III hereto or otherwise approved
by the Agent, or in the case of an open account agreement, as evidenced by
one of the forms of invoices set forth in Schedule III hereto or otherwise
approved by the Agent, pursuant to or under which such Obligor shall be
obligated to pay for merchandise, insurance or services from time to time.
"CP Fixed Period Date" means, for any Eligible Asset, the date of
Purchase of such Eligible Asset and thereafter the second Business day of
each calendar month or
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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 Fixed Period for such
Eligible Asset, or, if there is no preceding Fixed Period, prior to the
first day of such Fixed Period.
"CRC" shall have the meaning set forth in the recital of parties.
"Credit Agreement" means the Credit Agreement, dated as of August
16, 1994, among the Seller, the Banks party thereto and Citibank, as
Agent, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with its terms.
"Credit and Collection Policy" means those credit and collection
policies and practices in effect on the date hereof relating to Contracts
and Receivables described in Schedule II hereto, as modified in compliance
with Section 5.03(c).
"Debt" shall have the meaning set forth in the Credit Agreement in
effect on the date hereof; any capitalized terms used in the definition of
Debt set forth in the Credit Agreement shall have the meanings given to
such terms in the Credit Agreement as of such date and are hereby
incorporated herein by reference.
"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 date or would have been Defaulted Receivables on such
date had they not been written off the books of the Seller during such
month by (ii) the aggregate Outstanding Balance of all Pool Receivables on
such date.
"Defaulted Receivable" means a Receivable:
(i) as to which any payment, or part thereof, remains unpaid
for 91 days or more from the original due date for such payment,
(ii) as to which the Obligor thereof has taken any action, or
suffered any event to occur, of the type described in Section
7.01(g),
(iii) which is subject to any dispute, offset, counterclaim or
defense whatsoever (except the discharge in bankruptcy of the
Obligor thereof) or
(iv) which, consistent with the Credit and Collection Policy,
would be written off the Seller's books as uncollectible.
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"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 at the end of such month by (ii) the aggregate Outstanding
Balance of all Pool Receivables on such date.
"Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and:
(i) as to which any payment, or part thereof, remains unpaid
for 61 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 Seller.
"Designated Obligor" means, at any time, all Obligors; provided,
however, that any Obligor shall cease to be a Designated Obligor upon
three Business Days' notice by the Agent to the Seller or pursuant to
Section 10.03.
"Determination Date" has the meaning assigned to that term in
Section 10.03.
"Dilution Horizon" means, as of any date, a ratio computed by
dividing (i) the aggregate Outstanding Balance of all Pool Receivables
acquired by the Seller during the most recently ended prior calendar month
or during such other period as the Agent shall, in its sole discretion,
determine by (ii) the Outstanding Balance of Pool Receivables as at the
last day of the most recently ended calendar month.
"Dilution Percentage" means, as of any date, the sum of (a) 1.5
times the product of (i) the average of the Dilution Ratios for each of
the twelve most recently ended calendar months and (ii) the Dilution
Horizon as at the last day of the most recently ended calendar month plus
(b) Dilution Volatility as of such date; provided, however, that the
"Dilution Percentage" shall be modified if, prior to such modification,
(i) the Agent shall have (a) requested the approval of ▇▇▇▇▇'▇ and S&P or
both and (b) set forth, in a written notice delivered to the Seller, the
proposed modification, together with written evidence of the approval of
▇▇▇▇▇'▇ or S&P or both for such modification, and (ii) the Seller shall
have delivered to the Agent its written consent to the proposed
modification. Notwithstanding anything to the contrary contained in this
definition of "Dilution Percentage," so long as the Seller's long-term
senior debt securities, if rated, are rated at least BBB- by S&P and Baa3
by ▇▇▇▇▇'▇, or, if not rated, such securities are deemed to merit a BBB
rating in the sole discretion of the Agent, the "Dilution Percentage"
shall be zero.
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"Dilution Ratio" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the
aggregate amount of credits, rebates, discounts, disputes, chargebacks,
returned inventory or equipment credits, allowances and other reductions
of the Receivables Pool the effect of which in each case is to reduce the
Outstanding Balance of any Pool Receivable (other than any dilution factor
resulting solely from any write-off of any Pool Receivable by the
Collection Agent and not from any of the other factors specified above)
provided to Obligors during such calendar month in respect of the
principal balance of any Pool Receivable by (ii) the aggregate Outstanding
Balance of all Pool Receivables acquired by the Seller during the most
recently ended prior calendar month or during such other period as the
Agent shall, in its sole discretion, determine.
"Dilution Reserve" means, for any Eligible Asset at any date, an
amount equal to
DP x C
where:
DP = the Dilution Percentage of such Eligible Asset at the close
of business of the Collection Agent on such date.
C = the Capital of such Eligible Asset at the close of business of
the Collection Agent on such date.
"Dilution Volatility" 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 twelve 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.
"EBITDA" means, for any period, net income (or net loss) plus the
sum of (a) interest expense, (b) income tax expense, (c) depreciation
expense and (d) amortization expense, in each case determined in
accordance with GAAP for such period.
"Eligible Asset" means, at any time, an undivided percentage
ownership interest at such time 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
2.04, (ii) all Related Security with respect to such Pool Receivables
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and (iii) all Collections with respect to, and other proceeds of, such
Pool Receivables. Such undivided percentage interest for such Eligible
Asset shall be computed as
C + LR + DR + YR + CAFR
-----------------------
NRPB
where:
C = the Capital of such Eligible Asset at the time of such
computation.
LR = the Loss Reserve of such Eligible Asset at the time of such
computation.
DR = the Dilution Reserve of such Eligible Asset at the time of
such computation.
YR = the Yield Reserve of such Eligible Asset at the time of such
computation.
CAFR = the Collection Agent Fee Reserve of such Eligible Asset at
the time of such computation.
NRPB = the Net Receivables Pool Balance at the time of such
computation.
Each Eligible Asset shall be determined from time to time pursuant to the
provisions of Section 2.04.
"Eligible Receivable" means, at any time and with respect to any
Eligible Asset and subject to the provisions of Section 7.02, 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 hereunder is a Designated Obligor;
(iii) the Obligor of which at the time of the initial creation
of an
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interest therein hereunder is not the Obligor of any Defaulted
Receivables in the aggregate amount of 5% or more of the aggregate
Outstanding Balance of all Pool Receivables of such Obligor;
(iv) which at the time of the initial creation of an interest
therein hereunder is not a Defaulted Receivable or a Delinquent
Receivable;
(v) which, according to the Contract related thereto, is
required to be paid in full within 30 days (or, in the case of
Receivables having an Outstanding Balance not exceeding 25% of the
Outstanding Balance of all Pool Receivables, 90 days) of the
original billing date therefor;
(vi) which is an account receivable representing all or part
of the sales price of merchandise, insurance and services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as
amended;
(vii) a purchase of which 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;
(viii) which is an "account" within the meaning of Section
9-106 of the UCC of the State of Ohio and the jurisdiction of the
chief executive office of each Selling Subsidiary;
(ix) which is denominated and payable only in United States
dollars in the United States;
(x) which arises under a Contract which has been duly
authorized and 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 enforceable against
such Obligor in accordance with its terms and is not subject to any
dispute, offset, counterclaim or defense whatsoever (except the
discharge in bankruptcy of such Obligor);
(xi) 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 truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party
to the Contract related thereto is in violation of any such law,
rule or regulation in any material respect;
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(xii) which (A) satisfies all applicable requirements of the
Credit and Collection Policy and (B) complies with such other
criteria and requirements (other than those relating to the
collectibility of such Receivable) as the Agent may from time to
time specify to the Seller upon 30 days notice; and
(xiii) as to which, at or prior to the time of the initial
creation of an interest therein through a Purchase, the Agent has
not notified the Seller that the Agent has determined, in its sole
discretion, that such Receivable (or class of Receivables) is not
acceptable for purchase by the Investor hereunder.
"ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time and the regulations promulgated and
rulings issued thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Rate" means, for any Fixed Period, an interest 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 Fixed Period in an amount substantially equal to the
Capital associated with such Fixed Period on such first day and for a
period equal to such Fixed Period.
"Eurodollar Rate Reserve Percentage" of any Owner for any Fixed
Period in respect of which Yield is computed by reference to the
Eurodollar Rate means the reserve percentage applicable during such Fixed
Period (or, if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such Fixed Period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Owner with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or with
respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurocurrency Liabilities is
determined) having a term equal to such Fixed Period.
"Event of Investment Ineligibility" has the meaning assigned to that
term in Section 7.01.
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"Event of Receivables Ineligibility" has the meaning assigned to
that term in Section 7.02.
"Excluded Obligors" has the meaning assigned to that term in Section
10.03.
"Excluded Receivables" has the meaning assigned to that term in
Section 10.03.
"Facility" means the willingness of the Investor to consider, in its
sole discretion pursuant to Article II, the purchase from the Seller of
undivided percentage interests in Pool Receivables by making Purchases of
Eligible Assets from time to time.
"Facility Termination Date" means the earlier of December 19, 2002
or the date of termination of the Facility pursuant to Section 2.03 or
Section 7.01.
"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 that is a Business Day, the
average of the quotations for such day for such transactions received by
the Agent from three federal funds brokers of recognized standing selected
by it.
"Fixed Period" means with respect to any Eligible Asset:
(a) in the case of any Fixed Period in respect of which Yield
is computed by reference to the Investor Rate each successive period
commencing on each CP Fixed Period Date for such Eligible Asset and
ending on the next succeeding CP Fixed Period Date for such Eligible
Asset;
(b) in the case of any Fixed Period in respect of which Yield
is computed by reference to the Assignee Rate, each successive
period of from one to and including 29 days, or a period of one,
two, three or six months as the Seller shall select and the Agent
shall 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 such last day, each such Fixed
Period for any Eligible Asset to commence on the last day of the
immediately preceding Fixed Period for such Eligible Asset (or, if
there is no such Fixed Period, on the date of Purchase of such
Eligible Asset), 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 last day, such
period
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shall be one day;
provided, however, that:
(i) any such Fixed Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day (provided, however, if Yield in
respect of such Fixed Period is computed by reference to the
Eurodollar Rate, and such Fixed Period would otherwise end on a day
which is not a Business Day, and there is no subsequent Business Day
in the same calendar month as such day, such Fixed Period shall end
on the next preceding Business Day);
(ii) in the case of Fixed Periods of one day for any Eligible
Asset, (A) if such Fixed Period is such Eligible Asset's initial
Fixed Period, such Fixed Period shall be the day of the related
Purchase; (B) any subsequently occurring Fixed Period which is one
day shall, if the immediately preceding Fixed Period is more than
one day, be the last day of such immediately preceding Fixed Period,
and, if the immediately preceding Fixed Period is one day, be the
day next following such immediately preceding Fixed Period; and (C)
which occurs on a day immediately preceding a day which is not a
Business Day shall be extended to the next succeeding Business Day;
and
(iii) in the case of any Fixed Period for any Eligible Asset
which commences before the Termination Date for such Eligible Asset
and would otherwise end on a date occurring after such Termination
Date, such Fixed Period shall end on such Termination Date and the
duration of each Fixed Period which commences on or after the
Termination Date for such Eligible Asset shall be of such duration
as shall be selected by the Agent.
"GAAP" has the meaning specified in Section 1.04.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Interest Coverage Ratio" means, with respect to any fiscal quarter,
the ratio of EBITDA for the Seller and its Subsidiaries to Cash Interest
Expense, in each case in the aggregate for the period of four consecutive
fiscal quarters ended at the end of such fiscal quarter.
"Investor" means Corporate Receivables Corporation, a California
corporation,
15
▇▇▇▇▇▇, ▇.▇., a New York limited partnership, and any of their respective
successors or assigns that is a receivables investment company which in
the ordinary course of its business issues commercial paper or other
securities to fund its acquisition and maintenance of receivables.
"Investor Rate" for any Fixed Period for any Eligible Asset means,
to the extent an Owner funds such Eligible Asset for such Fixed Period by
issuing commercial paper, the per annum rate equivalent to the weighted
average of the per annum rates paid or payable by such Owner from time to
time as interest on or otherwise (by means of interest rate ▇▇▇▇▇▇ or
otherwise) in respect of those promissory notes issued by such Owner that
are allocated, in whole or in part, by CNAI (on behalf of the Owner) to
fund the Purchase or maintenance of such Eligible Asset during such Fixed
Period, as determined by CNAI (on behalf of the Owner) 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 CNAI (on behalf of the Owner); provided, however, if
the rate (or rates) as agreed between any such agent or dealer and the
Agent with regard to any Fixed Period for any Eligible Asset is a discount
rate (or rates), the "Investor Rate" for such Fixed Period shall be the
rate (or if more than one rate, the weighted average of the rates)
resulting from converting such discount rate (or rates) to an
interest-bearing equivalent rate per annum.
"Liquidation Day" for any Eligible Asset means either (i) each day
during any Settlement Period for such Eligible Asset on which the
conditions set forth in Section 3.02 are not satisfied (or such failure of
conditions is not waived by the Agent), or (ii) each day which occurs on
or after the Termination Date for such Eligible Asset.
"Liquidation Fee" means, for any Fixed 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 Fixed Period pursuant to clause (iv) of the
definition thereof) which would have accrued during such Fixed Period on
the reductions of Capital of the Eligible Asset relating to such Fixed
Period had such reductions remained as Capital, exceeds (ii) the income,
if any, received by the Owner's investing the proceeds of such reductions
of Capital.
16
"Liquidation Yield" means, for any Eligible Asset at any date, an
amount equal to the product of (i) the Capital of such Eligible Asset as
at such date and (ii) the product of (a) the Assignee Rate for such
Eligible Asset for a Fixed Period deemed to commence at such time for a
period of 30 days and (b) a fraction having as its numerator the number of
days in the period equal to the Average Maturity (as in effect at such
date) and 360 as its denominator.
"Loan Documents" shall have the meaning set forth in the Credit
Agreement.
"Lock-Box Account" means an account maintained at a Lock-Box Bank
for the purpose of receiving Collections.
"Lock-Box Agreement" means an agreement, in substantially the form
of Exhibit D hereto, from the Seller or any Selling Subsidiary to any
Lock-Box Bank with such modifications as may be acceptable to the Agent.
"Lock-Box Bank" means any of the banks holding one or more Lock-Box
Accounts.
"Loss Percentage" means, for any Eligible Asset at any date, the
greatest of (i) three times the highest Default Ratio as of the last day
of the 12 months ended immediately preceding such date, (ii) three times
the Concentration Limit and (iii) 10%.
"Loss Reserve" means, for any Eligible Asset at any date, an amount
equal to
LP x C + YR)
where:
LP = the Loss Percentage for such Eligible Asset at the close of business
of the Collection Agent on such date.
C = the Capital of such Eligible Asset at the close of business of the
Collection Agent on such date.
YR = the Yield Reserve for such Eligible Asset at the close of business
of the Collection Agent on such date.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
17
"Net Receivables Pool Balance" means, at any time, the Outstanding
Balance of the Eligible Receivables in the Receivables Pool at such time
reduced by the sum of (i) the aggregate Outstanding Balance of the
Defaulted Receivables in the Receivables Pool at such time and (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 Outstanding Balance of the Eligible Receivables then
in the Receivables Pool.
"Obligor" means a Person obligated to make payments pursuant to a
Contract.
"Original Agreement" shall have the meaning set forth in the
Preliminary Statements.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Owner" means, for each Eligible Asset, upon its Purchase, the
Investor which made such Purchase and all other owners by assignment or
otherwise of an Eligible Asset and, to the extent of the undivided
interests so purchased, shall include any participants.
"Parallel Purchase Commitment" means the Third Amended and Restated
Parallel Purchase Commitment dated as of the date hereof among the Seller,
the financial institutions party thereto and CNAI, as Agent, as the same
may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with its terms.
"Person" means an individual, partnership, corporation (including a
business trust), 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.
"Public Debt Rating" means for purposes of determining the
Applicable Margin, as of any date, the rating most recently announced by
S&P and Moody's, as the case may be, for any class of long-term senior
unsecured debt issued by the Seller. For purposes of the foregoing, (a) if
only one of S&P and Moody's shall have in effect a Public Debt Rating, the
Applicable Margin shall be determined by reference to the available
rating; (b) if neither S&P nor Moody's shall have in effect a Public Debt
Rating, the Public Debt Rating for determining the Applicable Margin will
be deemed to be below BB by S&P and below Ba2 by Moody's; (c) if the
ratings established by
18
S&P and Moody's shall fall within different levels, if (i) the
differential is one level, the Applicable Margin shall be based upon the
higher rating and (ii) the differential is two levels or more, the
Applicable Margin shall be based upon one level higher than the lower
rating; (d) if any rating established by S&P or Moody's shall be changed,
such change shall be effective as of the date on which such change is
first announced publicly by the rating agency making such change; and (e)
if S&P or Moody's shall change the basis on which ratings are established,
each reference to the Public Debt Rating announced by S&P or Moody's, as
the case may be, shall refer to the then equivalent rating by S&P or
Moody's, as the case may be.
"Purchase" means a purchase by the Investor of an Eligible Asset
from the Seller pursuant to Article II.
"Purchase Limit" means $85,000,000, as such amount may be reduced
pursuant to Section 2.03.
"Receivable" means the indebtedness of any Obligor under a Contract
arising from a sale by the Seller or any Selling Subsidiary, and includes
the right to payment of any interest or finance charges and other
obligations of such Obligor with respect thereto.
"Receivables Pool" means at any time the aggregation of each then
outstanding Receivable in respect of which the Obligor is a Designated
Obligor or, as to any Receivable in existence on such date, was a
Designated Obligor on the date of any Purchase or reinvestment pursuant to
Section 2.05, and which is not excluded from the Receivables Pool pursuant
to Section 10.03.
"Reinvestment Termination Date" for any Eligible Asset means that
Business Day which the Seller designates, or, if the conditions precedent
in Section 3.02 and, for each Eligible Asset owned by ▇▇▇▇▇▇, Section 3.03
and, for each Eligible Asset owned by CRC, Section 3.04, are not
satisfied, such Business Day which the Agent designates, as the
Reinvestment Termination Date for such Eligible Asset by notice to the
Agent (if the Seller so designates) or to the Seller (if the Agent so
designates) at least one Business Day prior to such Business Day.
"Related Security" means with respect to any Receivable:
(i) all of the interest of the Seller and the Selling
Subsidiaries in the merchandise (including returned merchandise), if
any, relating to the sale which gave rise to such Receivable;
19
(ii) all other 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; and
(iii) all guarantees, 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.
"Responsible Officer" means the chief financial officer, controller
or chief accounting officer of the Seller.
"Restatement Effective Date" shall have the meaning set forth in
Section 11.04.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ companies.
"Seller Report" means a report, in substantially the form of Exhibit
C hereto, furnished by the Collection Agent to the Agent for each Owner
pursuant to Section 2.07.
"Selling Subsidiary" means Plast-O-Meric, Inc., a Wisconsin
corporation, and each other wholly-owned Subsidiary of the Seller that
shall from time to time become a party to a Selling Subsidiary Letter
pursuant to Section 5.01(1).
"Selling Subsidiary Letter" means the Selling Subsidiary Letter
dated the date hereof and duly executed by Plast-O-Meric, Inc. and the
Seller together with each other Selling Subsidiary Letter in substantially
the form of Exhibit E hereto, delivered to the Agent by each other Selling
Subsidiary and the Seller pursuant to Section 5.01(l) as the same may,
from time to time, be amended, supplemented or otherwise modified in
accordance with its terms.
"Settlement Period" for any Eligible Asset means each period
commencing on the first day of each Fixed Period for such Eligible Asset
and ending on the last day of such Fixed Period, and, on and after the
Termination Date for such Eligible Asset, such period (including, without
limitation, a daily period) as shall be selected from time to time by the
Agent or, in the absence of any such selection, each period of thirty days
from the last day of the immediately preceding Settlement Period.
"Subsidiary" of any Person means any corporation, partnership, joint
venture,
20
trust or estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a majority
of the Board of Directors of such corporation (irrespective of whether at
the time capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership or joint
venture or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Termination Date" for any Eligible Asset means the earlier of (i)
the Reinvestment Termination Date for such Eligible Asset and (ii) the
Facility Termination Date.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
"Usage" means, as of any date of determination, the ratio (expressed
as a percentage) computed by dividing the aggregate principal amount of
the Outstanding Balance of the Receivables Pool by the Purchase Limit,
calculated in each case as of the close of business of the Collection
Agent on such date.
"Yield" means:
(i) for each Eligible Asset for any Fixed Period to the extent
an Investor will be funding such Eligible Asset on the first day of
such Fixed Period through the issuance of commercial paper,
IR x C x ED + LF
---
360
(ii) for each Eligible Asset for any Fixed Period to the
extent the Owner will not be funding such Eligible Asset on the
first day of such Fixed Period through the issuance of commercial
paper,
AR x C x ED + LF
---
360
where:
AR = the Assignee Rate for such Eligible Asset for such Fixed Period.
21
C = the Capital of such Eligible Asset during such Fixed Period.
IR = the Investor Rate for such Eligible Asset for such Fixed Period.
ED = the actual number of days elapsed during such Fixed Period.
LF = the Liquidation Fee, if any, for such Eligible Asset for such Fixed
Period.
provided, however, that no provision of this Agreement or the
Certificate 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 Eligible Asset shall not be considered paid
by any distribution if at any time such distribution is rescinded or
must otherwise be returned for any reason.
"Yield Reserve" for any Eligible Asset at any time means the sum of
(i) the Liquidation Yield at such time for such Eligible Asset, and (ii)
the accrued and unpaid Yield for such Eligible Asset.
SECTION 1.02. Other Terms. All terms used in Article 9 of the UCC in
the State of New York, and not specifically defined herein, are used herein as
defined in such Article 9.
SECTION 1.03. Computation of Time Periods. Unless otherwise stated
in this Agreement, in the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding."
SECTION 1.04. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e) ("GAAP").
22
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Facility. On the terms and conditions hereinafter set
forth, each Investor may, in its sole discretion, make Purchases from time to
time during the period from the date hereof to the Facility Termination Date.
Under no circumstances shall any Investor make any Purchase if, after giving
effect to such Purchase, the aggregate outstanding Capital of Eligible Assets,
together with the aggregate outstanding "Capital" of "Eligible Assets" under the
Parallel Purchase Commitment would exceed the Purchase Limit. The Owner of each
Eligible Asset shall, with the proceeds of Collections attributable to such
Eligible Asset, reinvest, pursuant to Section 2.05, in additional undivided
percentage interests in the Pool Receivables by making an appropriate
readjustment of such Eligible Asset. Nothing in this Agreement shall be deemed
to be or construed as a commitment by any Investor (or CNAI or Citibank) to
purchase any Eligible Asset at any time.
SECTION 2.02. Making Purchases. (a) Each Purchase shall be made on
at least one Business Days' notice from the Seller to the Agent or on such other
notice period as the Seller and the Agent shall agree. Each such notice of a
proposed Purchase shall specify the desired amount (which shall not be less than
$1,000,000), date and duration of the initial Fixed Period for the Eligible
Asset to be purchased. The Agent shall promptly notify the Seller whether such
terms are acceptable to any Investor.
(b) On the date of each Purchase, each Investor making a Purchase
shall, upon satisfaction of the applicable conditions set forth in Article III,
make available to the Agent the amount of its Purchase by deposit of such amount
in same day funds to the Agent's Account, and, after receipt by the Agent of
such funds, the Agent will cause such funds to be made immediately available to
the Seller at Citibank's office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇. The
Agent shall notify the Seller and if the Seller is not the Collection Agent, the
Collection Agent, of the Investor Rate or Assignee Rate, as applicable, for each
Fixed Period for each Eligible Asset on the last day of such Fixed Period in the
case of the Investor Rate and on the first day of such Fixed Period in the case
of the Assignee Rate.
SECTION 2.03. Termination of Facility or Reduction of the Purchase
Limit. (a) Optional. The Seller may, upon at least five Business Days' notice to
the Agent, terminate the Facility in whole or reduce in part the unused portion
of the Purchase Limit; provided, however, that for purposes of this Section
2.03(a), the unused portion of the Purchase Limit shall be computed as the
excess of (A) the Purchase Limit immediately prior to giving effect to such
termination or reduction over (B) the sum of (i) the aggregate Capital of
Eligible Assets outstanding at the time of such computation and (ii) the
aggregate "Capital" of "Eligible Assets" outstanding under the Parallel Purchase
Commitment at such time; provided further that each partial reduction shall be
in an amount equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(b) Mandatory. On each day on which the Seller shall, pursuant to
Section
23
2.03(a) of the Parallel Purchase Commitment, reduce in part the unused portion
of the Commitment (as defined in the Parallel Purchase Commitment), the Purchase
Limit shall automatically reduce by an equal amount. The Purchase Limit shall
automatically terminate in whole on any day on which the Seller shall terminate
in whole the Commitment pursuant to Section 2.03(a) of the Parallel Purchase
Commitment.
SECTION 2.04. Eligible Asset. (a) Each Eligible Asset shall be
initially computed as of the opening of business of the Collection Agent on the
date of Purchase of such Eligible Asset. Thereafter until the Termination Date
for such Eligible Asset, such Eligible Asset shall be automatically recomputed
as of the close of business of the Collection Agent on each day (other than a
Liquidation Day). Such Eligible Asset shall remain constant from the time as of
which any such computation or recomputation is made until the time as of which
the next such recomputation, if any, shall be made. Any Eligible Asset, as
computed as of the day immediately preceding the Termination Date for such
Eligible Asset, shall remain constant at all times on and after such Termination
Date. Such Eligible Asset shall become zero at such time as the Owner of such
Eligible Asset shall have received the accrued Yield for such Eligible Asset and
shall have recovered the Capital of such Eligible Asset, and the Collection
Agent shall have received the accrued Collection Agent Fee for such Eligible
Asset.
(b) If any Eligible Asset would otherwise be reduced on any day on
account of Receivables arising as or becoming Pool Receivables, the Owner of
such Eligible Asset may prevent such reduction by giving notice to the
Collection Agent, before the close of business of the Collection Agent on such
day, that such Eligible Asset's interest in such Receivables is to be limited so
as to prevent such reduction. If such notice is given for any day for any
Eligible Asset, the Receivables Pool for such Eligible Asset, and the Net
Receivables Pool Balance for such Eligible Asset, will include, with respect to
Receivables arising as or becoming Pool Receivables on such day, only such
number of such Receivables or such portion of such Receivables as shall cause
such Eligible Asset to remain constant, such Receivables or portion thereof
being included in the Receivables Pool for such Eligible Asset in the order of
the Seller's account numbers for such Receivables up to an aggregate amount so
as to cause such Eligible Asset to remain constant, and the remainder of such
Receivables or portion thereof shall be treated as Receivables arising on the
next succeeding Business Day.
SECTION 2.05. Non-Liquidation Settlement Procedures. On each day
(other than a Liquidation Day) during each Settlement Period for each Eligible
Asset, the Collection Agent shall: (i) out of Collections of Pool Receivables
attributable to such Eligible Asset received on such day, set aside (and
segregate if instructed by the Agent to do so under Section 6.02(a)) and hold in
trust for the Owner of such Eligible Asset an aggregate amount equal to the sum
of (A) the Yield and Collection Agent Fee accrued through such day for such
Eligible Asset and not so previously set aside and (B) if the Agent shall have
declared the Pool
24
Receivables originally owed to any Selling Subsidiary as not being Eligible
Receivables pursuant to Section 7.02, that amount, if any, which would be
required to reduce Capital of such Eligible Asset so that, together with similar
reductions of Capital of all other Eligible Assets and of "Capital" of "Eligible
Assets" under the Parallel Purchase Commitment, the aggregate undivided
percentage interest for all Eligible Assets and the "Eligible Assets" under the
Parallel Purchase Commitment would not, after giving effect to the Collections
of Pool Receivables and the addition of new Pool Receivables on such day and the
resulting recomputation of all Eligible Assets pursuant to Section 2.04 and of
all "Eligible Assets" under, and pursuant to Section 2.04 of, the Parallel
Purchase Commitment as of the end of such day, exceed 100%, and (ii) reinvest
the remainder of such Collections, for the benefit of such Owner, by
recomputation of such Eligible Asset pursuant to Section 2.04 as of the end of
such day and the payment of such remainder to the Seller; provided, however,
that, to the extent that the Agent or any Owner shall be required for any reason
to pay over any amount of Collections which shall have been previously
reinvested for the account of such Owner pursuant hereto, such amount shall be
deemed not to have been so applied but rather to have been retained by the
Seller and paid over for the account of such Owner and, notwithstanding any
provision hereof to the contrary, such Owner shall have a claim for such amount.
On the second Business Day following the last day of each Settlement Period for
such Eligible Asset in the case of any Eligible Asset for which Yield shall be
determined for such Settlement Period with reference to the Investor Rate, and
on the last day of each Settlement Period for each other Eligible Asset, the
Collection Agent shall deposit to the Agent's Account for the account of the
Owner of such Eligible Asset the amounts set aside as described in clause (i) of
the first sentence of this Section 2.05. Upon receipt of such funds by the
Agent, the Agent shall distribute them to the Owner of such Eligible Asset in
payment of the accrued Yield for such Eligible Asset and in reduction of the
Capital thereof as described in clause (i)(B) of the first sentence of this
Section 2.05 and to the Collection Agent in payment of the accrued Collection
Agent Fee payable with respect to such Eligible Asset. If there shall be
insufficient funds on deposit for the Agent to distribute funds in payment in
full of the aforementioned amounts, the Agent shall distribute funds, first, in
payment of the accrued Yield for such Eligible Asset, second, in reduction of
the Capital thereof described in clause (i)(B) of the first sentence of this
Section 2.05, and third, in payment of the accrued Collection Agent Fee payable
with respect to such Eligible Asset.
SECTION 2.06. Liquidation Settlement Procedures. On each Liquidation
Day during each Settlement Period for each Eligible Asset, the Collection Agent
shall set aside (and segregate if instructed by the Agent to do so under Section
6.02(a)) and hold in trust for the Owner of such Eligible Asset the Collections
of Pool Receivables attributable to such Eligible Asset received on such day. On
the second Business Day following the last day of each Settlement Period for
such Eligible Asset in the case of any Eligible Asset for which Yield shall be
determined for such Settlement Period with reference to the Investor Rate, and
on the last day of each Settlement Period for each other Eligible Asset, the
Collection Agent shall deposit to the Agent's Account for the account of the
Owner of such Eligible Asset the
25
amounts set aside pursuant to the preceding sentence but not to exceed the sum
of (i) the accrued Yield for such Eligible Asset, (ii) the Capital of such
Eligible Asset, (iii) the accrued Collection Agent Fee payable with respect to
such Eligible Asset and (iv) the aggregate amount of other amounts owed
hereunder by the Seller to the Owner of such Eligible Asset. Any amounts set
aside pursuant to the first sentence of this Section 2.06 and not required to be
deposited to the Agent's Account pursuant to the preceding sentence shall be
paid to the Seller by the Collection Agent; provided, however, that, if amounts
are set aside during such Settlement Period pursuant to the first sentence of
this Section 2.06 on any Liquidation Day and thereafter during such Settlement
Period the conditions set forth in Section 3.02 are satisfied or are waived by
the Agent, such previously set aside amounts shall, to the extent representing a
return of Capital, be applied pursuant to clause (ii) of the first sentence of
Section 2.05 on the day of such subsequent satisfaction or waiver of conditions.
Upon receipt of funds deposited to the Agent's Account pursuant to the preceding
sentence or Section 7.07 of the Credit Agreement, the Agent shall distribute
them (i) to the Owner of such Eligible Asset (a) in payment of the accrued Yield
for such Eligible Asset, (b) in reduction (to zero) of the Capital of such
Eligible Asset and (c) in payment of any other amounts owed by the Seller
hereunder to such Owner and (ii) to the Collection Agent in payment of the
accrued Collection Agent Fee payable with respect to such Eligible Asset. If
there shall be insufficient funds on deposit for the Agent to distribute funds
in payment in full of the aforementioned amounts, the Agent shall distribute
funds, first, in payment of the accrued Yield for such Eligible Asset, second,
in reduction of Capital of such Eligible Asset, third, in payment of other
amounts payable to such Owner, and fourth, in payment of the accrued Collection
Agent Fee payable with respect to such Eligible Asset.
SECTION 2.07. General Settlement Procedures. If on any day the
Outstanding Balance of a Pool Receivable is either (a) reduced as a result of
any defective, rejected or returned merchandise, insurance or services, any cash
discount, or any adjustment by the Seller or any Selling Subsidiary, or (b)
reduced or cancelled as a result of a setoff in respect of any claim by the
Obligor thereof against the Seller or any Selling Subsidiary (whether such claim
arises out of the same or a related transaction or an unrelated transaction),
the Seller shall be deemed to have received on such day a Collection of such
Receivable in the amount of such reduction or cancellation. If on any day any of
the representations or warranties in Section 4.01(h) is no longer true with
respect to a Pool Receivable (including, without limitation, each Pool
Receivable, if any, that is declared by the Agent not to be an Eligible
Receivable pursuant to Section 7.02), the Seller shall be deemed to have
received on such day a Collection in full of such Pool Receivable. Except as
stated in the preceding sentences of this Section 2.07 or as otherwise required
by law or the underlying Contract, all Collections received from an Obligor of
any Receivable shall be applied to Receivables then outstanding of such Obligor
in the order of the age of such Receivables, starting with the oldest such
Receivable, except if payment is designated by such Obligor for application to
specific Receivables. Prior to the tenth Business Day of each month, the
Collection Agent shall
26
prepare and forward to the Agent for each Owner of an Eligible Asset (i) a
Seller Report, relating to each Eligible Asset, as of the close of business of
the Collection Agent on the last day of the immediately preceding month, and
(ii) at the request of the Agent, a listing by Obligor of all Pool Receivables,
together with an analysis as to the aging of such Receivables. On or prior to
the day the Collection Agent is required to make a deposit with respect to a
Settlement Period pursuant to Section 2.05 or 2.06, the Seller will advise the
Agent of each Liquidation Day occurring during such Settlement Period and of the
allocation of the amount of such deposit to each outstanding Eligible Asset;
provided, however, that, if the Seller is not the Collection Agent, the Seller
shall also advise the Collection Agent of the occurrence of each such
Liquidation Day occurring during such Settlement Period on or prior to such day.
SECTION 2.08. Payments and Computations, Etc. All amounts to be paid
or deposited by the Seller hereunder shall be paid or deposited in accordance
with the terms hereof no later than 11:00 A.M. (New York City time) on the day
when due in lawful money of the United States of America in same day funds to
the Agent's Account. The Seller shall, to the extent permitted by law, pay to
the Agent interest on all amounts not paid or deposited when due hereunder at 2%
per annum above the Alternate Base Rate, payable on demand, provided, however,
that such interest rate shall not at any time exceed the maximum rate permitted
by applicable law. Such interest shall be retained by the Agent except to the
extent that such failure to make a timely payment or deposit has continued
beyond the date for distribution by the Agent of such overdue amount to an Owner
of an Eligible Asset, in which case such interest accruing after such date shall
be for the account of, and distributed by the Agent to the Owners ratably in
accordance with their respective interests in such overdue amount. All
computations of interest and all computations of Yield, Liquidation Yield and
fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first but excluding the last day) elapsed.
SECTION 2.09. Dividing or Combining of Eligible Assets. The Seller
may, on notice received by the Agent not later than 11:00 A.M. (New York City
time) three Business Days before the last day of any Fixed Period for any then
existing Eligible Asset (an "Existing Eligible Asset"), divide such Existing
Eligible Asset on such last day into two or more new Eligible Assets, each such
new Eligible Asset having Capital as designated in such notice and all such new
Eligible Assets collectively having aggregate Capital equal to the Capital of
such Existing Eligible Asset. The Seller may, on notice received by the Agent
not later than 11:00 A.M. (New York City time) three Business Days before the
last day of any Fixed Periods ending on the same day for two or more Existing
Eligible Assets owned by the same Owner or the date of any proposed Purchase (if
the last day of such Fixed Period is the date of such proposed Purchase), either
(i) combine such Existing Eligible Assets or (ii) combine such Existing Eligible
Asset or Eligible Assets, if owned by an Investor, and such proposed Eligible
Asset to be purchased, on such last day into one new Eligible Asset, such new
Eligible Asset having Capital equal to the aggregate Capital of such Existing
Eligible Assets, or such Existing Eligible Asset or Eligible Assets and such
proposed Eligible Asset, as the case may be. On
27
and after any division or combination of Eligible Assets as described above,
each of the new Eligible Assets resulting from such division, or the new
Eligible Asset resulting from such combination, as the case may be, shall be a
separate Eligible Asset having Capital as set forth above, and shall take the
place of such Existing Eligible Asset or Eligible Assets or proposed Eligible
Asset, as the case may be, in each case under and for all purposes of this
Agreement, and the Agent shall annotate the Certificate accordingly.
SECTION 2.10. Fees and Payments. (a) The Seller shall pay certain
fees to the Agent as more fully set forth in a letter agreement of even date
herewith.
(b) Each Owner shall pay to the Collection Agent a collection fee
(the "Collection Agent Fee") of 1/4 of 1% per annum on the average daily amount
of Capital of each Eligible Asset owned by such Owner, from the date thereof
until the later of the Facility Termination Date or the date on which such
Capital is reduced to zero, payable on the last day of each Settlement Period
for such Eligible Asset; provided, however, that, upon three Business Days'
notice to the Agent, the Collection Agent may (if not the Seller) elect to be
paid, as such fee, another percentage per annum on the average daily amount of
Capital of each such Eligible Asset, but in no event in excess of 110% of the
costs and expenses referred to in Section 6.02(b); and provided further that
such fee shall be payable only from Collections pursuant to, and subject to the
priority of payment set forth in, Sections 2.05 and 2.06.
SECTION 2.11. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation occurring on or after the effective date of this Agreement or (ii)
the compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) issued on or
after the effective date of this Agreement, there shall be any increase in the
amount of capital required or expected to be maintained by CNAI, an Owner, any
entity which enters into a commitment to purchase Eligible Assets or interests
therein, or any of their respective Affiliates (each an "Affected Person") or
any corporation controlling such Affected Person, as a result of 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
relating to this Agreement, then, within five Business Days after receipt of a
written 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 setting forth in reasonable
detail the calculations used in determining, and the basis of the requirements
for, such amounts, submitted to the Seller and the Agent by such Affected
Person, shall be conclusive and binding for all purposes, absent evidence of
error.
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Notwithstanding anything to the contrary contained in this subsection (a), an
Owner shall only be entitled to receive reimbursement for such additional
amounts pursuant to this subsection (a) to the extent (i) incurred within 60
days prior to, and at any time after, the date on which such Owner gives to the
Seller a notice that an event has occurred as a result of which such additional
amounts will arise or a notice that the Seller is obligated to pay such
additional amounts, whichever first occurs and (ii) such Owner shall not have
been reimbursed for such additional amounts under a separate Section of this
Agreement.
(b) If, due to either (i) the introduction of or any change
occurring on or after the effective date of this Agreement (other than any
change by way of imposition or increase of reserve requirements referred to in
Section 2.12) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) issued on or
after the effective date of this Agreement, there shall be any increase in the
cost to an Owner of agreeing to purchase or purchasing, or maintaining the
ownership of Eligible Assets in respect of which Yield is computed by reference
to the Eurodollar Rate, then, within five Business Days after receipt of a
written demand by such Owner (with a copy to the Agent), the Seller shall pay to
the Agent, for the account of such Owner (as a third-party beneficiary), from
time to time as specified, additional amounts sufficient to compensate such
Owner for such increased costs. A certificate as to the amount of such increased
cost setting forth in reasonable detail the calculations used for determining,
and the basis of the requirements for, such increased costs, submitted to the
Seller and the Agent by such Owner shall be conclusive and binding for all
purposes, absent evidence of error. Notwithstanding anything to the contrary
contained in this subsection (b), an Owner shall only be entitled to receive
reimbursement for such increased costs to the extent (i) incurred within 60 days
prior to, and at any time after, the date on which such Owner gives to the
Seller a notice that an event has occurred as a result of which such increased
costs will arise or a notice that the Seller is obligated to pay increased
costs, whichever first occurs and (ii) such Owner shall not have been reimbursed
for such increased cost under a separate Section of this Agreement.
SECTION 2.12. Additional Yield on Eligible Assets Bearing a
Eurodollar Rate. The Seller shall pay to an Owner, so long as such Owner 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 Eligible Asset of such Owner during each Fixed Period in respect of which
Yield is computed by reference to the Eurodollar Rate, for such Fixed Period, at
a rate per annum equal at all times during such Fixed Period to the remainder
obtained by subtracting (i) the Eurodollar Rate for such Fixed Period from (ii)
the rate obtained by dividing such Eurodollar Rate referred to in clause (i)
above by that percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage of such Owner for such Fixed Period, payable on each date on which
Yield is payable on such Eligible Asset. A certificate as to such additional
Yield
29
submitted to the Seller and the Agent by such Owner shall be conclusive and
binding for all purposes, absent evidence of error.
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND OF PURCHASES
SECTION 3.01. Conditions Precedent to the Original Agreement. The
effectiveness of the Original Agreement, and the initial Purchase under the
Original Agreement after the date of effectiveness of the Original Agreement
were subject to these conditions precedent, which were satisfied: (i) the
Original Agreement was executed by the Seller, each Investor and the Agent and
(ii) the Agent did receive on or before the date of effectiveness of the
Original Agreement the following:
(a) The Certificate under the Original Agreement;
(b) A copy of the resolutions adopted by the Board of Directors of
the Seller approving the Original Agreement, the Certificate delivered in
connection therewith, and the other documents delivered by it thereunder,
and the transactions contemplated thereby, certified by its Secretary or
Assistant Secretary;
(c) A certificate of the Secretary or Assistant Secretary of the
Seller certifying the names and true signatures of the officers authorized
on its behalf to sign the Original Agreement, the Certificate thereunder
and the other documents to be delivered by it thereunder (on which
certificate the Agent and each Owner shall be entitled to conclusively
rely until such time as the Agent shall have received from the Seller a
revised certificate meeting the requirements of this subsection (c));
(d) Acknowledgment copies of proper Financing Statements (Form
UCC-1), dated a date reasonably near to the date of the initial Purchase
under the Original Agreement, naming the Seller as the assignor of
Receivables and CNAI, as Agent, as assignee, as shall be necessary or, in
the opinion of the Agent, desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the ownership interests in
all Receivables in which an interest could have been assigned thereunder.
(e) Certified copies of Requests for Information or Copies (Form
UCC-11) (or a similar search report certified by a party acceptable to the
Agent), dated a date reasonably near to the date of the initial Purchase
under the Original Agreement, listing all effective financing statements
(including those referred to above in subsection (d)) which name the
Seller (under its then present name and any previous name) as debtor and
which were filed in the jurisdictions in which filings were made pursuant
to subsection
30
(d) above, together with copies of any such financing statements (none of
which (other than the financing statements filed pursuant to clause (d)
above after giving effect thereto), shall cover any Receivables, Contracts
or Related Security);
(f) Acknowledgment copies of proper Financing Statements (Form
UCC-3), if any, necessary to release all security interests and other
rights of any Person other than the Agent in the Receivables, Contracts or
Related Security previously granted by the Seller;
(g) Executed copies of Lock-Box Agreements duly executed by the
Seller;
(h) An executed copy of the Original Parallel Purchase Commitment
(as defined in the Parallel Purchase Commitment) duly executed by the
Seller, CNAI and each Bank (as defined therein) thereunder;
(i) A favorable opinion of (i) in-house counsel to the Seller,
substantially in the form of Exhibit E-1 to the Original Agreement and
(ii) ▇▇▇▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇, special counsel to the Seller,
substantially in the form of Exhibit E-2 to the Original Agreement, and as
to such other matters as the Agent may reasonably request; and
(j) A favorable opinion of counsel for the Agent, as the Agent may
reasonably request.
(k) Letters and certificates, in form and substance satisfactory to
the Agent, attesting to the solvency of the Seller after giving effect to
the Original Agreement and the transactions contemplated thereby, from the
Seller's treasurer or chief accounting officer.
SECTION 3.02. Conditions Precedent to Amendment and Restatement and
to the Initial Purchase After the Restatement Effective Date. The effectiveness
of this Agreement to amend and restate the Original Agreement, and the initial
Purchase hereunder after the Restatement Effective Date, are subject to the
conditions precedent that (i) this Agreement shall have been executed by the
Seller, each Investor and the Agent and (ii) the Agent shall have received on or
before the Restatement Effective Date the following, each of which (unless
otherwise indicated) shall be dated such date, in form and substance
satisfactory to the Agent:
(a) The Certificate;
(b) The Selling Subsidiary Letter duly executed by the Selling
Subsidiary and the Seller;
(c) Certified copies of the charter and by-laws, as amended, of the
Selling Subsidiary;
31
(d) A copy of the resolutions adopted by the Board of Directors of
(i) the Seller approving this Agreement and the other documents to be
delivered by it thereunder and all the transactions contemplated hereby
and thereby and (ii) the Selling Subsidiary authorizing the Selling
Subsidiary Letter and the transactions contemplated hereby and thereby, in
each case certified by its Secretary or Assistant Secretary;
(e) A certificate of the Secretary or Assistant Secretary of (i)
Seller certifying the names and true signatures of the officers authorized
on its behalf to sign this Agreement, the Certificate and the other
documents to be delivered by it hereunder and thereunder, and (ii) the
Selling Subsidiary certifying the names and true signatures of the
officers authorized on its behalf to sign the Selling Subsidiary Letter
and the other documents to be delivered by it hereunder and thereunder (on
which certificates the Agent and each Owner shall be entitled to
conclusively rely until such time as the Agent shall have received from
the Seller or the Selling Subsidiary as the case may be, a revised
certificate meeting the requirements of this subsection (e));
(f) Executed copies of (i) proper Financing Statements (Form UCC-1),
to be filed immediately, naming the Selling Subsidiary as the assignor of
Receivables originally owed to such Selling Subsidiary, the Seller as
secured party and the Agent as assignee of the secured party, as shall be
necessary or, in the opinion of the Agent, desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the interests
in all Receivables created by the Selling Subsidiary Letter, (ii) proper
continuations and amendments (Form UCC-3) to the Financing Statements that
were filed pursuant to Section 3.01(d) of the Original Agreement, adding
to the property covered thereby the Pool Receivables originally owed to
the Selling Subsidiary and continuing the effectiveness of such original
Financing Statements; and (iii) proper Financing Statements (Form UCC-1),
to be filed immediately with the Clerk of Lorain County, Ohio, naming the
Seller as the assignor of Receivables and CNAI, as Agent, as secured
party;
(g) Certified copies of Requests for Information or Copies (Form
UCC-11) (or a similar search report certified by a party acceptable to the
Agent), dated a date reasonably near to the Restatement Effective Date,
listing all effective financing statements which name the Selling
Subsidiary (under its then present name, any trade names and any previous
name) as debtor and which were filed in the jurisdictions in which filings
were made pursuant to subsection (f) above, together with copies of any
such financing statements (none of which (other than the financing
statements filed pursuant to clause (f) above after giving effect
thereto), shall cover any Receivables, Contracts or Related Security);
(h) Acknowledgment copies of proper Financing Statements (Form
UCC-3),
32
if any, necessary to release all security interests and other rights of
any Person other than the Agent in the Receivables, Contracts or Related
Security previously granted by the Selling Subsidiary;
(i) Executed copies of Lock-Box Agreements duly executed by the
Seller or the Selling Subsidiary;
(j) An executed copy of the Parallel Purchase Commitment duly
executed by the Seller, CNAI and each Bank (as defined therein)
thereunder;
(k) An executed copy of the fee letter agreement dated the date
hereof between the Seller and the Agent;
(l) Favorable opinions of (i) senior corporate counsel to the
Seller, substantially in the form of Exhibit F-1 hereto, (ii) senior
corporate counsel to the Selling Subsidiary, substantially in the form of
Exhibit F-2 hereto, and (iii) Wisconsin counsel to the Selling Subsidiary,
substantially in the form of Exhibit F-3 hereto, and, in the case of the
opinions referred to in clauses (i), (ii) and (iii) above, as to such
other matters as the Agent may reasonably request; and
(m) A favorable opinion of counsel for the Agent, as the Agent may
reasonably request.
SECTION 3.03. Conditions Precedent to All Purchases and
Reinvestments. Each Purchase (including the initial Purchase after the
Restatement Effective Date) hereunder and the right of the Collection Agent to
reinvest in Pool Receivables those Collections attributable to an Eligible Asset
pursuant to Section 2.05 or 2.06 shall be subject to the further conditions
precedent that:
(a) With respect to any such Purchase, on or prior to the date of
such Purchase, the Collection Agent shall have delivered to the Agent, in
form and substance satisfactory to the Agent, a completed Seller Report,
dated within 35 days prior to the date of such Purchase, together with a
listing by Obligor of all Pool Receivables and such additional information
as may be reasonably requested by the Agent;
(b) On the date of such Purchase or reinvestment the following
statements shall be true (and the Seller by accepting proceeds of such
Purchase or by receiving the proceeds of such reinvestment shall be deemed
to have certified on the date of such purchase or reinvestment that):
(i) The representations and warranties contained in Section
4.01
33
hereof and contained in each Loan Document are correct on and as of
such date as though made on and as of such date before and after
giving effect to such Purchase or reinvestment and to the
application of proceeds therefrom other than representations or
warranties that, by their terms, refer to a date other than the date
of such Purchase,
(ii) No event has occurred and is continuing, or would result
from such Purchase or reinvestment or from the application of
proceeds therefrom, which constitutes an Event of Investment
Ineligibility or would constitute an Event of Investment
Ineligibility but for the requirement that notice be given or time
elapse or both,
(iii) The Agent shall not have delivered to the Seller a
notice that no Investor shall not make any further Purchases
hereunder and/or that the Collection Agent shall not reinvest in any
Pool Receivables on behalf of the Owner of an Eligible Asset, and
(iv) On such date, the fee agreement noted in Section 2.10 of
this Agreement shall be effective; and
(c) The Agent shall have received such other approvals, opinions or
documents as the Agent may reasonably request.
SECTION 3.04. Conditions Precedent to Purchases and Reinvestments by
▇▇▇▇▇▇. Each Purchase (including the initial Purchase after the Restatement
Effective Date) hereunder by ▇▇▇▇▇▇ and the right of the Collection Agent,
pursuant to Section 2.05 or 2.06, to reinvest in Pool Receivables those
Collections attributable to an Eligible Asset owned by ▇▇▇▇▇▇ shall be subject
to the further condition precedent that on such date, all of the Seller's
long-term public senior debt securities, if rated, are rated at least BBB- by
S&P and Baa3 by ▇▇▇▇▇'▇ or, if not rated, such securities are deemed to merit a
BBB rating in the sole discretion of the Agent.
SECTION 3.05. Conditions Precedent to Purchases and Reinvestments by
CRC. Each Purchase (including the initial Purchase after the Restatement
Effective Date) hereunder by CRC and the right of the Collection Agent, pursuant
to Section 2.05 or 2.06, to reinvest in Pool Receivables those Collections
attributable to an Eligible Asset owned by CRC shall be subject to the further
condition precedent that on such date, all of the Seller's long-term public
senior debt securities, if rated, are rated at least BB- (but lower than BBB-)
by S&P and Ba3 (but lower than Baa3) by ▇▇▇▇▇'▇ or, if not rated, such
securities are deemed to merit at least a BB (but lower than a BBB) rating in
the sole discretion of the Agent.
34
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller. The
Seller represents and warrants as follows:
(a) Each of the Seller and each Selling Subsidiary is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation 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, except where the failure to so qualify
would not have a material adverse effect on the Seller or such Selling
Subsidiary. The Seller owns all of the issued and outstanding shares
eligible to vote of the capital stock of each Selling Subsidiary.
(b) The execution, delivery and performance by the Seller of this
Agreement, each Selling Subsidiary Letter and all other instruments and
documents to be delivered hereunder, the transactions contemplated hereby
and thereby, and the Seller's use of the proceeds of Purchases, and the
execution, delivery and performance by each Selling Subsidiary of the
Selling Subsidiary Letter to which it is a party and all other instruments
and documents to be delivered by such entity hereunder and thereunder, and
the transactions contemplated hereby and thereby, are within such entity's
corporate or other powers, have been duly authorized by all necessary
corporate or other action, do not contravene (i) such entity's charter or
by-laws or other constituent documents, as applicable, or (ii) law or any
contractual restriction binding on or affecting such entity and 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 such entity's
material properties, other than as a result of the transactions
contemplated by this Agreement and each Selling Subsidiary Letter; and no
transaction contemplated hereby requires compliance with any bulk sales
act or similar law.
(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
this Agreement, each Selling Subsidiary Letter to which it is a party or
any other document or instrument to be delivered by it hereunder, or for
the due execution, delivery and performance by each Selling Subsidiary of
the Selling Subsidiary Letter to which it is a party or any other document
or instrument to be delivered by it hereunder except for the filing of the
UCC Financing Statements referred to in Article III or paragraph 4 of each
Selling Subsidiary
35
Letter, all of which, at the time required in Article III or paragraph 4
of each Selling Subsidiary Letter, as the case may be, shall have been
duly made and shall be in full force and effect.
(d) This Agreement is, and the Certificate and each Selling
Subsidiary Letter when delivered hereunder will be, the legal, valid and
binding obligation of the Seller enforceable against the Seller in
accordance with its terms, and each Selling Subsidiary Letter when
delivered hereunder by each Selling Subsidiary party thereto will be the
legal, valid and binding obligation of such Selling Subsidiary enforceable
against such Selling Subsidiary in accordance with its terms, in each
case, except to the extent that the enforceability thereof is limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or at
law).
(e) (i) The Consolidated balance sheet of the Seller and its
Subsidiaries as at December 31, 1998, and the related Consolidated
statement of income and cash flows of the Seller and its Subsidiaries for
the fiscal year then ended, accompanied by an opinion of Ernst & Young,
independent public accountants, copies of which have been furnished to the
Agent, fairly present, the Consolidated financial condition of the Seller
and its Subsidiaries as at such dates and the Consolidated results of the
operations of the Seller and its Subsidiaries for the periods ended on
such dates, all in accordance with generally accepted accounting
principles applied on a consistent basis, and (ii) since December 31,
1998, there has been no material adverse change in any such condition or
operations.
(f) There is no pending or overtly threatened action, suit,
investigation, litigation or proceeding against or affecting the Seller or
any of its Subsidiaries, or the property of the Seller or of any of its
Subsidiaries, in any court, or before any arbitrator of any kind, or
before or by any governmental body, which, taking into account its
probability of success, may materially adversely affect the financial
condition of the Seller or the Seller and its Consolidated Subsidiaries
taken as a whole or materially adversely affect the ability of the Seller
to perform its obligations under this Agreement or any Selling Subsidiary
Letter or of any Selling Subsidiary to perform its obligations under the
Selling Subsidiary Letter to which it is a party; neither the Seller nor
any of its Subsidiaries is in default with respect to any order of any
court, arbitrator or governmental body except for defaults with respect to
orders of governmental agencies which defaults are not material to the
business or operations of the Seller or the Seller and its Subsidiaries
taken as a whole.
(g) No proceeds of any Purchase or reinvestment will be used by the
Seller to acquire any equity security (other than the Common Stock of the
Seller to the extent permitted under the Credit Agreement) of a class that
is registered pursuant to Section 12 of the Securities Exchange Act of
1934.
36
(h) Each Pool Receivable is (i) together with the Contract related
thereto owned by the Seller free and clear of any Adverse Claim except as
provided for herein and (ii) an Eligible Receivable; upon each Purchase or
reinvestment, the Owner making such Purchase or reinvestment will acquire
a valid and perfected first priority undivided percentage ownership
interest to the extent of the pertinent Eligible Asset in each Pool
Receivable then existing or thereafter arising and in the Related Security
and Collections with respect thereto free and clear of any Adverse Claim
except as provided hereunder; and no effective financing statement (other
than the financing statements filed pursuant to the Original Agreement) 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 such as may be filed in favor of
CNAI, as Agent, in accordance with this Agreement.
(i) Each Seller Report (if prepared by the Seller or any Selling
Subsidiary, or to the extent that information contained therein is
supplied by the Seller or any Selling Subsidiary), information, exhibit,
financial statement, document, book, record or report furnished at any
time by the Seller or any Selling Subsidiary to the Agent or any Owner in
connection with this Agreement or any Selling Subsidiary Letter is
accurate in all material respects as of its date or (except as otherwise
disclosed to the Agent or such Owner, as the case may be, at such time) as
of the date so furnished, and no such document contains any material
misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained therein not materially
misleading.
(j) The chief executive office of the Seller is located at the
address of the Seller set forth under its name on the signature pages
hereof and the chief executive office of each Selling Subsidiary and the
chief place of business and the offices where each of the Seller and each
Selling Subsidiary keeps all its books, records and documents evidencing
Pool Receivables or the related Contracts are located at the address
specified in Schedule IV hereto as such Schedule IV may be amended from
time to time (or at such other locations, notified to the Agent in
accordance with Section 5.01(f), in jurisdictions where all action
required by Section 6.05 has been taken and completed).
(k) The names and addresses of all the Lock-Box Banks, together with
the account numbers of the Lock-Box Accounts of the Seller and each
Selling Subsidiary at such Lock-Box Banks, are specified in Schedule I
hereto as such Schedule I may be amended from time to time (or at such
other Lock-Box Banks and/or with such other Lock-Box Accounts as have been
notified to the Agent in accordance with Section 5.03(d)).
(l) Neither the Seller nor any Affiliate of the Seller has any
direct or indirect
37
ownership or other financial interest in the Investor, the Agent or any
"Original Bank" (as such term is defined in the Parallel Purchase
Commitment).
(m) Each purchase of an Eligible Asset hereunder, and each
reinvestment of Collections in Pool Receivables made hereunder, 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) With respect to each Pool Receivable originally owed to any
Selling Subsidiary, the Seller has acquired such Pool Receivable pursuant
to a Selling Subsidiary Letter and paid or will pay to such Selling
Subsidiary in cash (by book entry or otherwise), no later than 30 days
after the end of the calendar quarter during which such Pool Receivable
was transferred to the Seller pursuant to such Selling Subsidiary Letter,
an amount equal to at least the fair market value of such Pool Receivable
which could reasonably be expected to result from arms-length negotiations
between unaffiliated parties. Each such transfer was not made for or on
account of an antecedent debt owed by such Selling Subsidiary to the
Seller and no such transfer was made by the Selling Subsidiary (i) with
the intent to hinder, delay or defraud its creditors, (ii) for less than
reasonably equivalent value, (iii) while the Selling Subsidiary was, or
which rendered the Selling Subsidiary, insolvent, (iv) as a result of
which the Selling Subsidiary was left with unreasonably small capital, or
(v) as a result of which the Selling Subsidiary incurred debts beyond its
ability to pay such debts as they matured.
ARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller. Until the later
of the Facility Termination Date and the date upon which no Capital for any
Eligible Asset shall be existing, the Seller will, unless the Agent shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each Selling
Subsidiary to comply, in all material respects with all applicable laws,
rules, regulations and orders with respect to it, its business and
properties and all Pool Receivables and related Contracts, Related
Security and Collections with respect thereto.
(b) Preservation of Corporate Existence. Preserve and maintain, and
cause
38
each Selling Subsidiary to preserve and maintain, its corporate (or, in
the case of any Selling Subsidiary, if applicable, other) existence,
rights, franchises and privileges in the jurisdiction of its formation,
and qualify and remain qualified in good standing as a foreign
organization in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification
would materially adversely affect the interests of the Owners or the Agent
hereunder or in the Pool Receivables and the Related Security, or the
ability of the Seller or the Collection Agent to perform their respective
obligations hereunder or the ability of the Seller to perform its
obligations under the Contracts or any Selling Subsidiary Letter or the
ability of any Selling Subsidiary to perform its obligations under the
Selling Subsidiary Letter to which it is a party.
(c) Audits. At any time and from time to time during regular
business hours and upon reasonable prior notice, permit, and cause each
Selling Subsidiary to permit, the Agent, or its agents or representatives,
(i) to examine and make copies of and abstracts from all books, records
and documents (including, without limitation, computer tapes and disks) in
the possession or under the control of the Seller or such Selling
Subsidiary relating to Pool Receivables and the Related Security,
including, without limitation, the related Contracts, and (ii) to visit
the offices and properties of the Seller or such Selling Subsidiary for
the purpose of examining such materials described in clause (i) above, and
to discuss matters relating to Pool Receivables and the Related Security
or the Seller's or such Selling Subsidiary's performance hereunder or
under the Contracts with any of the officers or employees of the Seller or
such Selling Subsidiary having knowledge of such matters.
(d) Keeping of Records and Books of Account. Maintain and implement,
or cause each Selling Subsidiary to maintain and implement, administrative
and operating procedures (including, without limitation, an ability to
recreate records evidencing Pool Receivables 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
new Pool Receivable and all Collections of and adjustments to each
existing Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts. At
its expense, timely and fully (i) perform and comply, and cause each
Selling Subsidiary to 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, (ii) as
beneficiary of any Related Security, enforce, and cause each Selling
Subsidiary to enforce, such Related Security as reasonably requested by
the Agent.
39
(f) Location of Records. Keep, and cause each Selling Subsidiary to
keep, its chief place of business and chief executive office, and the
offices where it keeps its records concerning the Pool Receivables and all
Contracts related thereto (and all original documents relating thereto),
at the address(es) of the Seller or such Selling Subsidiary referred to in
Section 4.01(j) or, upon 30 days' prior written notice to the Agent, at
such other locations in a jurisdiction where all action required by
Section 6.05 shall have been taken and completed.
(g) Credit and Collection Policies. Comply, and cause each Selling
Subsidiary to comply, in all material respects with the Credit and
Collection Policy in regard to each Pool Receivable and the related
Contract.
(h) Collections. Instruct, and cause each Selling Subsidiary to
instruct, substantially all Obligors to remit all Collections directly to
a Lock-Box Account and cause all Collections received by the Seller or
such Selling Subsidiary to be deposited directly to a Lock-Box Account.
(i) Deposits to Lock-Box Accounts. Upon the request of the Agent,
the Seller shall instruct, and shall cause each Selling Subsidiary to
instruct, each Person that is not an Obligor to stop making deposits to
Lock-Box Accounts.
(j) Purchase of Receivables from Selling Subsidiaries. With respect
to each Pool Receivable originally owed to any Selling Subsidiary, no
later than 30 days after the end of the calendar quarter during which such
Pool Receivable was transferred to the Seller pursuant to a Selling
Subsidiary Letter, pay to such Selling Subsidiary in cash (by book entries
or otherwise) an amount at least equal to the fair market value of such
Pool Receivable which could reasonably be expected to result from
arms-length negotiations between unaffiliated parties.
(k) Ownership of Selling Subsidiaries. Except as contemplated by
Section 5.03(f), continue to be the legal and beneficial owner of all the
issued and outstanding shares of the capital stock or other equity
ownership interests of each of the Selling Subsidiaries.
(l) Additional Selling Subsidiaries. If the Seller elects to include
Receivables purchased from any Subsidiary in the Receivables Pool, if the
Agent consents in writing to such election, cause such Subsidiary to
become a Selling Subsidiary by executing, together with the Seller, a
Selling Subsidiary Letter, together with the documents of the kinds
referred to in subsections (c), (d), (e), (f), (g), (h), (i) and (l) of
Section 3.02, in each case related to such Subsidiary and such Selling
Subsidiary Letter, and then
40
delivering such Selling Subsidiary Letter and documents to the Agent prior
to any such sale of Receivables to be included in the Receivables Pool and
to take all actions required by paragraph 4 of the Selling Subsidiary
Letter in order to perfect and protect the assignment and security
interest granted thereunder or to enable the Agent to exercise and enforce
its rights and remedies under such Selling Subsidiary Letter.
SECTION 5.02. Reporting Requirements of the Seller. Until the later
of the Facility Termination Date and the date upon which no Capital for any
Eligible Asset shall be existing, the Seller will, unless the Agent shall
otherwise consent in writing, furnish to the Agent:
(a) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the Seller,
a Consolidated balance sheet of the Seller and its Subsidiaries as of the
end of such quarter and Consolidated statements of income and cash flow of
the Seller and its Subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, setting
forth in each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all in reasonable
detail, duly certified (subject to year-end audit adjustments) by a
Responsible Officer of the Seller as having been prepared in accordance
with GAAP, it being agreed that delivery of the Seller's Quarterly Report
on Form 10-Q will satisfy this requirement, together with (i) a
certificate of said officer stating that, to his knowledge after
reasonable investigation, no Event of Investment Ineligibility has
occurred and is continuing or, if an Event of Investment Ineligibility has
occurred and is continuing, a statement as to the nature thereof and the
action that the Seller has taken and proposes to take with respect thereto
and (ii) a certificate of said officer stating the Interest Coverage Ratio
as of the end of such quarter;
(b) as soon as available and in any event within 120 days after the
end of each fiscal year of the Seller, a copy of the annual report for
such year for the Seller and its Subsidiaries, containing a Consolidated
balance sheet of the Seller and its Subsidiaries as of the end of such
fiscal year and Consolidated statements of income and cash flows of the
Seller and its Subsidiaries for such fiscal year, in each case accompanied
by an opinion without qualification of independent public accountants of
recognized standing acceptable to the Agent, it being agreed that delivery
of the Seller's Annual Report on Form 10-K will satisfy this requirement,
together with (i) a certificate of such accounting firm to the Agent
stating that in the course of the regular audit of the business of the
Seller and its Subsidiaries, which audit was conducted by such accounting
firm in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge that an Event of Investment
Ineligibility has occurred insofar as such Event of Investment
Ineligibility relates to accounting matters and is continuing, or if an
Event of Investment Ineligibility has occurred and is continuing, a
statement as to the nature thereof, (ii) a certificate of a Responsible
Officer of the Seller stating the Interest
41
Coverage Ratio as of the end of such fiscal year and (iii) a certificate
of a Responsible Officer of the Seller stating that, to his knowledge
after reasonable investigation, no Event of Investment Ineligibility has
occurred and is continuing or, if a Event of Investment Ineligibility has
occurred and is continuing, a statement as to the nature thereof and the
action that the Seller has taken and proposes to take with respect
thereto;
(c) promptly after the sending or filing thereof, copies of all
reports which the Seller sends to any of its securityholders, and copies
of all reports and registration statements which the Seller or any of its
Subsidiaries files with the Securities and Exchange Commission or any
national securities exchange;
(d) promptly after the filing or receiving thereof, copies of all
reports and notices relating to the Seller and its significant domestic
subsidiaries with respect to any Reportable Event defined in Article IV of
ERISA which the Seller or any such subsidiary files under ERISA with the
Internal Revenue Service or the Pension Benefit Guaranty Corporation or
the U.S. Department of Labor or which the Seller or any subsidiary
receives from such corporation;
(e) as soon as possible and in any event within five days after the
occurrence of each Event of Investment Ineligibility or each event which,
with the giving of notice or lapse of time or both, would constitute an
Event of Investment Ineligibility, the statement of the chief accounting
officer, treasurer or assistant treasurer of the Seller setting forth
details of such Event of Investment Ineligibility or event and the action
which the Seller proposes to take with respect thereto; and
(f) promptly, from time to time, such other information, documents,
records or reports respecting the Receivables or the conditions or
operations, financial or otherwise, of the Seller, or any Subsidiary, as
the Agent may from time to time request in order to protect any Owner's or
the Agent's interests under or contemplated by this Agreement.
SECTION 5.03. Negative Covenants of the Seller. Until the later of
the Facility Termination Date and the date upon which no Capital for any
Eligible Asset shall be existing, the Seller will not, without the written
consent of the Agent:
(a) Sales, Liens, Etc. Except as otherwise provided herein, or
pursuant to the Parallel Purchase Commitment, sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with
respect to or create or suffer to exist any Adverse Claim, or permit any
Selling Subsidiary to do any of the same, upon or with respect to, the
Seller's undivided interest in any Pool Receivable or Related Security or
Collections in respect thereof, or upon or with respect to any related
Contract, or upon or with respect to any lock-box account to which any
Collections of any Pool Receivable
42
are sent, or assign any right to receive income in respect thereof.
(b) Extension or Amendment of Receivables. Except as otherwise
permitted in Section 6.02(a), extend, amend or otherwise modify, or permit
any Selling Subsidiary to extend, amend or otherwise modify, the terms of
any Pool Receivable, or amend, modify or waive, or permit any Selling
Subsidiary to amend, modify or waive, any term or condition of any
Contract related thereto.
(c) Change in Business or Credit and Collection Policy. Make, or
permit any Selling Subsidiary to make, any change in the character of its
business or in the Credit and Collection Policy, which change would, in
either case, materially impair the collectibility of any Pool Receivable.
(d) Change in Payment Instructions to Obligors. Add or terminate, or
permit any Selling Subsidiary to add or terminate, any bank as a Lock-Box
Bank from those listed in Schedule I hereto or make any change in its
instructions to Obligors regarding payments to be made to the Seller or
any Selling Subsidiary or payments to be made to any Lock-Box Bank, unless
the Agent shall have received notice of such addition, termination or
change and executed copies of Lock-Box Agreements with each new Lock-Box
Bank.
(e) Change in Corporate Name, Etc. Make, or permit any Selling
Subsidiary to make, any change to its name or structure, or use any
tradenames, fictitious names, assumed names or "doing business as" names
(other than, in the case of Plast-O-Meric, Inc., Adchem and Wilflex,
Inc.), unless, in the case of such name change or use and prior to the
effective date thereof, the Seller or such Selling Subsidiary delivers to
the Agent such financing statements or amendments to financing statements
(Form UCC-1 and UCC-3) executed by the Seller or such Selling Subsidiary,
as applicable, which the Agent may request to reflect such name change or
use, together with such other documents and instruments that the Agent may
reasonably request in connection therewith.
(f) Mergers, Etc. Merge 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, any Person, or permit any of its
Subsidiaries to do so, except that (i) any Subsidiary of the Seller (other
than a Selling Subsidiary) may merge or consolidate with or into, or
dispose of assets to, any other Subsidiary of the Seller, (ii) any Selling
Subsidiary may merge with any other Person so long as the Selling
Subsidiary is the surviving entity, and (iii) any Subsidiary of the Seller
may merge into or dispose of assets to the Seller and the Seller may merge
with any other Person so long as the Seller is the surviving
43
corporation, provided, in each case, that no "Default" as defined in the
Credit Agreement, and no Event of Investment Ineligibility or event which
would, with notice or the lapse of time or both, constitute an Event of
Investment Ineligibility shall have occurred and be continuing at the time
of such proposed transaction or would result therefrom.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent. The servicing,
administering and collection of the Pool Receivables shall be conducted by such
Person (the "Collection Agent") so designated from time to time in accordance
with this Section 6.01. Until the Agent gives three Business Days' notice to the
Seller of a designation of a new Collection Agent, the Seller is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Collection Agent pursuant to the terms hereof. The Agent may at any time
designate as Collection Agent any Person (including itself) to succeed the
Seller or any successor Collection Agent if the Agent shall determine in its
reasonable discretion that such action is necessary to protect the interest of
any Owner in the Receivables, on the condition in each case that any such Person
so designated shall agree to perform the duties and obligations of the
Collection Agent pursuant to the terms hereof. The Collection Agent may, with
the prior consent of the Agent, subcontract with any other Person for servicing,
administering or collecting the Pool Receivables, provided that the Collection
Agent shall remain liable for the performance of the duties and obligations of
the Collection Agent pursuant to the terms hereof.
SECTION 6.02. Duties of Collection Agent. (a) The Collection Agent
shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Pool Receivable from time to time, all in accordance
with applicable laws, rules and regulations, with reasonable care and diligence,
and in accordance with the Credit and Collection Policy, including, without
limitation, the billing of Pool Receivables as soon as possible under the
Contracts related thereto, the preparation and mailing of collection letters to
any Obligor whose payment is past due, the investigation and resolution of
customer inquiries and complaints, and the employment of one or more agents.
Each of the Seller, each Owner and the Agent hereby appoints as its agent the
Collection Agent, from time to time designated pursuant to Section 6.01, to
enforce its respective rights and interests in and under the Pool Receivables,
the Related Security and the Contracts. The Collection Agent shall set aside and
hold in trust for the account of the Seller and each Owner their respective
allocable shares of the Collections of Pool Receivables in accordance with
Sections 2.05 and 2.06 but shall not be required (unless otherwise requested by
the Agent) to segregate the funds constituting such portion of such Collections
prior to the remittance thereof in accordance with said Sections. If instructed
by the Agent, the Collection Agent shall segregate and deposit with a bank
(which may be Citibank) designated by the Agent such allocable share of
Collections of Pool
44
Receivables, set aside for each Owner, on the first Business Day following
receipt by the Collection Agent of such Collections. Provided no Event of
Investment Ineligibility shall have occurred and be continuing, the Seller,
while it is Collection Agent, may, in accordance with the Credit and Collection
Policy, extend the maturity or adjust the Outstanding Balance of any Defaulted
Receivable as the Seller may determine to be appropriate to maximize Collections
thereof. The Seller shall, and shall cause each Selling Subsidiary to, deliver
to the Collection Agent, and the Collection Agent shall hold in trust for the
Seller and each Owner 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.
(b) The Collection Agent shall as soon as practicable following
receipt turn over to the Seller (i) that portion of Collections of Pool
Receivables representing its undivided interest therein, less, in the event the
Seller is not the Collection Agent, all reasonable and appropriate out-of-pocket
costs and expenses of such Collection Agent of servicing, collecting and
administering the Pool Receivables to the extent not covered by the Collection
Agent Fee received by it and (ii) the Collections of any Receivable which is not
a Pool Receivable. The Collection Agent, if other than the Seller, shall as soon
as practicable upon demand deliver to the Seller all documents, instruments and
records in its possession which evidence or relate to Receivables of the Seller
other than Pool Receivables, and copies of documents, instruments and records in
its possession which evidence or relate to Pool Receivables. The Collection
Agent's authorization under this Agreement shall terminate, after the Facility
Termination Date, upon receipt by each Owner of an Eligible Asset of an amount
equal to the Capital plus accrued Yield for such Eligible Asset plus all other
amounts owed to the Agent, each Owner and the Seller and (unless otherwise
agreed by the Agent and the Collection Agent) the Collection Agent under this
Agreement.
SECTION 6.03. Rights of the Agent. (a) The Agent may notify, at any
time upon three Business Days' notice to the Seller if the Agent shall determine
in its sole discretion that such action is necessary to protect the interest of
any Owner in the Receivables, or at any time after the designation of a
Collection Agent other than the Seller and at the Seller's expense, the Obligors
of Pool Receivables, or any of them, of the ownership of Eligible Assets by the
Owners.
(b) At any time following the designation of a Collection Agent
other than the Seller pursuant to Section 6.01:
(i) The Agent may direct the Obligors of Pool Receivables, or any of
them, that payment of all amounts payable under any Pool Receivable be
made directly to the Agent or its designee.
(ii) The Seller shall, at the Agent's request and at the Seller's
expense, give
45
notice, or cause each Selling Subsidiary to give notice, of such ownership
to each said Obligor and direct that payments be made directly to the
Agent or its designee.
(iii) The Seller shall, and shall cause each Selling Subsidiary to,
at the Agent's request, (A) assemble all of the documents, instruments and
other records (including, without limitation, computer tapes and disks)
which evidence the Pool Receivables, and the related Contracts and Related
Security, or which are otherwise necessary or desirable to collect such
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
shall, promptly upon receipt, remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to the Agent
or its designee.
(iv) Each of the Seller and each Investor hereby authorizes the
Agent to take any and all steps in the Seller's or any Selling
Subsidiary's name and on behalf of the Seller or any Selling Subsidiary
and the Owners necessary or desirable, in the determination of the Agent,
to collect all amounts due under any and all Pool Receivables, including,
without limitation, endorsing the Seller's or any Selling Subsidiary's
name on checks and other instruments representing Collections and
enforcing such Pool Receivables and the related Contracts.
SECTION 6.04. Responsibilities of the Seller. Anything herein to the
contrary notwithstanding:
(a) The Seller shall, and shall cause each Selling Subsidiary to,
perform all of its obligations under the Contracts related to the Pool
Receivables to the same extent as if Eligible Assets had not been sold
hereunder and the exercise by the Agent of its rights hereunder shall not
relieve the Seller or any Selling Subsidiary from such obligations or its
obligations with respect to Pool Receivables; and
(b) Neither the Agent nor the Owners shall have any obligation or
liability with respect to any Pool Receivables or related Contracts, nor
shall any of them be obligated to perform any of the obligations of the
Seller thereunder or any of the obligations of any Selling Subsidiary
thereunder.
SECTION 6.05. Further Action Evidencing Purchases. The Seller agrees
that from time to time, at its expense, it will, and will cause each Selling
Subsidiary to, promptly execute and deliver all further instruments and
documents, and take all further action that the Agent may reasonably request in
order to perfect, protect or more fully evidence the Eligible Assets purchased
by the Owners hereunder, or to enable any of them or the Agent to exercise
46
and enforce any of their respective rights and remedies hereunder or under each
Selling Subsidiary Letter. Without limiting the generality of the foregoing, the
Seller will, and will cause each Selling Subsidiary to, upon the request of the
Agent: (i) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate in accordance with law; (ii) if the
Agent shall determine in its sole discretion that such action is necessary to
protect its interest in the Receivables, ▇▇▇▇ conspicuously each invoice
evidencing each Pool Receivable and the related Contract with a legend,
acceptable to the Agent, evidencing that such Eligible Assets have been sold in
accordance with this Agreement; and (iii) ▇▇▇▇ its master data processing
records evidencing such Pool Receivables and related Contracts with such legend.
The Seller hereby authorizes the Agent to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Pool Receivables and the Related Security now
existing or hereafter arising without the signature of the Seller where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering all or any of the Contracts, or Pool Receivables
and the Related Security and Collections with respect thereto shall be
sufficient as a financing statement where permitted by law. If the Seller fails
to perform any of its agreements or obligations under this Agreement, the Agent
may (but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by the Seller as provided in Section 10.01.
ARTICLE VII
EVENTS OF INVESTMENT INELIGIBILITY
AND RECEIVABLES INELIGIBILITY
SECTION 7.01. Events of Investment Ineligibility. If any of the
following events (except for any such event as it applies to any Selling
Subsidiary (as to which Section 7.02 shall govern)) ("Events of Investment
Ineligibility") shall occur and be continuing:
(a) (i) The Collection Agent (if other than the Agent or Citibank)
(i) shall fail to perform or observe any term, covenant or agreement
hereunder (other than as referred to in clause (ii) of this Section
7.01(a)) and such failure shall remain unremedied for three Business Days
or (ii) the Seller or the Collection Agent (if other than the Agent or
Citibank) shall fail to make any payment or deposit to be made by it
hereunder or under the letter agreement described in Section 2.10(a) when
due; or
(b) The Seller shall fail to perform or observe any term, covenant
or agreement contained in Section 5.03(e) or Section 6.03(a); or
47
(c) Any representation or warranty made or deemed to be made by the
Seller (or any of its officers) under or in connection with this
Agreement, the Loan Documents or any Seller Report or other information or
report delivered pursuant hereto shall prove to have been false or
incorrect in any material respect when made; or
(d) The Seller 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
seven Business Days after written notice thereof shall have been given by
the Agent to the Seller; or
(e) The Seller shall fail to pay any Debt in excess of $10,000,000
or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any
other default under any agreement or instrument relating to any such Debt,
or any other event, shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the
effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed, purchased or defeased,
or an offer to prepay, redeem, purchase or defease such Debt shall be
required to be made, in each case prior to the stated maturity thereof; or
(f) Any Purchase or any reinvestment pursuant to Section 2.05 shall
for any reason, except to the extent permitted by the terms hereof, cease
to create, or any Eligible Asset shall for any reason cease to be, a valid
and perfected first priority undivided percentage ownership interest to
the extent of the pertinent Eligible Asset in each applicable Pool
Receivable and the Related Security and Collections with respect thereto;
or
(g) (i) The Seller 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
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, or other
similar official for it or for any substantial part of its property and,
if instituted against the Seller, either such proceeding shall not be
stayed or dismissed for 30 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for
relief against it or the appointment of a receiver, trustee,
48
custodian or other similar official for it or for any substantial part of
its property) shall occur; or (ii) the Seller shall take any corporate
action to authorize any of the actions set forth in clause (i) above in
this subsection (g); or
(h) The Default Ratio as at the last day of any calendar month shall
exceed 6% or the Delinquency Ratio as at the last day of any calendar
month shall exceed 4% and a repurchase, if required pursuant to Section
10.03, is not made when due; or
(i) There shall have been any material adverse change in the
financial condition or operations of the Seller since December 31, 1998,
or there shall have occurred any event which materially adversely affects
the collectibility of the Pool Receivables, or there shall have occurred
any other event which materially adversely affects the ability of the
Seller to collect Pool Receivables or the ability of the Seller to perform
hereunder; or
(j) Any "Event of Default" shall have occurred and be continuing
under the Credit Agreement; or
(k) The aggregate undivided percentage interest for all Eligible
Assets and the "Eligible Assets" under the Parallel Purchase Commitment
shall exceed 100% for five consecutive days; or
(l) The Seller shall have failed to deliver to the Agent its written
consent to a proposed modification to the definition of Dilution
Percentage in accordance with the terms of such definition set forth in
Section 1.01 within 5 days after receipt by the Seller of written notice
from the Agent setting forth such proposed modification, together with
written evidence of the approval of S&P or ▇▇▇▇▇'▇ or both for such
modification;
then, and in any such event, the Agent may, by notice to the Seller, declare the
Facility Termination Date to have occurred, whereupon the Facility Termination
Date shall forthwith occur, without demand, protest or further notice of any
kind, all without any further actions on its part, which are hereby expressly
waived by the Seller; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Seller under the Federal
Bankruptcy Code or the occurrence of any event described above in subsection
(g), the Facility Termination Date shall automatically occur, without demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Seller. Upon any such termination of the Facility, the Agent and the Owners
shall have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of the
applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing or the general applicability of
Article IX hereof, any Owner may elect to assign pursuant to Article IX hereof
any Eligible Asset owned by such Owner to
49
an Assignee following the occurrence of any Event of Investment Ineligibility.
SECTION 7.02. Events of Receivables Ineligibility. If any of the
following events ("Events of Receivables Ineligibility") shall occur and be
continuing:
(a) Any representation or warranty made or deemed to be made by the
Seller (or any of its officers) under or in connection with this Agreement
or any Selling Subsidiary Letter, with respect to any Selling Subsidiary
shall prove to have been false or incorrect in any material respect when
made; or
(b) The Seller shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or any Selling
Subsidiary Letter on its part to be performed or observed with respect to
any Selling Subsidiary, or any Selling Subsidiary shall fail to perform or
observe any term, covenant or agreement contained in any Selling
Subsidiary Letter on its part to be performed or observed, and any such
failure shall remain unremedied for seven Business Days after written
notice thereof shall have been given by the Agent to the Seller; or
(c) Any Selling Subsidiary shall fail to pay any Debt in excess of
$10,000,000 or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other default under any agreement or instrument relating to
any such Debt, or any other event, shall occur and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt
shall be declared to be due and payable or required to be prepaid (other
than by a regularly scheduled required prepayment), redeemed, purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated maturity
thereof; or
(d) Any sale of any Receivables by any Selling Subsidiary pursuant
to paragraph 1 of any Selling Subsidiary Letter shall for any reason cease
to create a valid and perfected first priority 100% ownership interest in
such Receivables in favor of the Seller; or
(e) (i) Any Selling Subsidiary 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 any Selling
Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
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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, or other similar official for it or for any substantial
part of its property and, if instituted against any Selling Subsidiary,
either such proceeding shall not be stayed or dismissed for 30 days or any
of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against it 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 (ii) any Selling
Subsidiary shall take any corporate action to authorize any of the actions
set forth in clause (i) above in this subsection (e); or
(f) There shall have occurred any event which materially adversely
affects the ability of the Seller to perform under any Selling Subsidiary
Letter with respect to any Selling Subsidiary or the ability of any
Selling Subsidiary to perform its obligations under any Selling Subsidiary
Letter to which it is a party;
then, and in any such event, the Agent may, by notice to the Seller, declare all
Pool Receivables originally owed to such Selling Subsidiary as not being
Eligible Receivables, whereupon all such Pool Receivables then existing and
thereafter arising shall forthwith become and be Pool Receivables that are not
Eligible Receivables.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. Each Owner hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and each Selling Subsidiary Letter as
are delegated to the Agent by the terms hereof and thereof, 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 or any Selling Subsidiary Letter (including, without limitation,
the Agent's servicing, administering or collecting Pool Receivables as
Collection Agent pursuant to Section 6.01), except for its or their own gross
negligence or willful misconduct. Without limiting the foregoing, the Agent:
(i) may consult with legal counsel (including counsel for the
Seller), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel,
accountants or experts;
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(ii) makes no warranty or representation to any Owner and shall not
be responsible to any Owner for any statements, warranties or
representations made in or in connection with this Agreement or any
Selling Subsidiary Letter;
(iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of
this Agreement or any Selling Subsidiary Letter on the part of the Seller
or any Selling Subsidiary or to inspect the property (including the books
and records) of the Seller or any Selling Subsidiary;
(iv) shall not be responsible to any Owner for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of
this Agreement, the Certificate or any Selling Subsidiary Letter or any
other instrument or document furnished pursuant hereto; and
(v) shall incur no liability under or in respect of this Agreement
or any Selling Subsidiary Letter by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or writing
(which may be by facsimile) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 8.03. CNAI and Affiliates. With respect to any Eligible
Asset owned by CNAI, CNAI shall have the same rights and powers under this
Agreement as would any Owner and may exercise the same as though it were not the
Agent. CNAI and its Affiliates may generally engage in any kind of business with
the Seller, any Selling Subsidiary or any Obligor, any of their respective
Affiliates and any Person who may do business with or own securities of the
Seller, any Selling Subsidiary 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 Owners.
SECTION 8.04. Investors' Purchase Decision. Each Investor
acknowledges that it has, independently and without reliance upon the Agent, any
of its Affiliates or any other Owner and based on such documents and information
as it has deemed appropriate, made its own evaluation and decision to enter into
this Agreement and, if it so determines, to purchase an undivided ownership
interest in Pool Receivables hereunder.
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ARTICLE IX
ASSIGNMENT
SECTION 9.01. Assignment. (a) Each Investor may assign to any other
Assignee, and any such Assignee may assign to any other Assignee, any Eligible
Asset. Upon any such assignment, (i) the Assignee shall become the Owner of such
Eligible Asset for all purposes of this Agreement and (ii) the Owner assignor
thereof shall relinquish its rights with respect to such Eligible Asset for all
purposes of this Agreement. Such assignments shall be upon such terms and
conditions as the assignor and the Assignee of such Eligible Asset may mutually
agree, the parties thereto shall deliver to the Agent an Assignment, duly
executed by such parties, and such assignor shall promptly execute and deliver
all further instruments and documents, and take all further action, that the
Assignee may reasonably request in order to perfect, protect or more fully
evidence the Assignee's right, title and interest in and to such Eligible Asset,
and to enable the Assignee to exercise or enforce any rights hereunder or under
the Certificate. The Agent shall provide notice to the Seller of any assignment
of an Eligible Asset hereunder.
(b) By executing and delivering an Assignment, the Owner assignor
thereunder and the Assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such
Assignment, such assigning Owner makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any Selling Subsidiary Letter or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the Certificate, each Selling Subsidiary Letter or any
other instrument or document furnished pursuant hereto; (ii) such assigning
Owner makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Seller or any Selling Subsidiary or
the performance or observance by the Seller or any Selling Subsidiary of any of
its obligations under, or the perfection or priority of any ownership or
security interest created or purported to be created under or in connection
with, this Agreement, the Certificate, each Selling Subsidiary Letter or any
other instrument or document furnished pursuant hereto; (iii) such Assignee
confirms that it has received a copy of this Agreement together with copies of
the financial statements referred to in Section 4.01, each Selling Subsidiary
Letter and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and to
purchase such Eligible Asset; (iv) such Assignee will, independently and without
reliance upon the Agent, any of its Affiliates, such assigning Owner or any
other Owner and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement or each Selling Subsidiary Letter; (v)
such Assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and each Selling
Subsidiary Letter as are delegated to the Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto; (vi) such
Assignee appoints as its agent the Collection Agent from time to time designated
pursuant to Section 6.01 to enforce its respective rights and interests in and
under the Pool Receivables, the Related Security and the related Contracts; and
53
(vii) such Assignee agrees that it will not institute against any Investor any
proceeding of the type referred to in Section 7.01(g) so long as any commercial
paper issued by such Investor shall be outstanding or there shall not have
elapsed one year plus one day since the last day on which any such commercial
paper shall have been outstanding.
(c) The Seller may not assign its rights or obligations hereunder or
any interest herein without the prior written consent of the Agent.
SECTION 9.02. Annotation of Certificate. The Agent shall annotate
the Certificate to reflect any assignments made pursuant to Section 9.01 or
otherwise.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller. Without limiting any other
rights which the Agent, any Owner 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
damages, losses, claims, liabilities and related costs and expenses, including
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or incurred
by any of them arising out of or as a result of this Agreement or the use of
proceeds of Purchases or the ownership of Eligible Assets 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 or (b) recourse (except as otherwise specifically provided in
this Agreement) for uncollectible Receivables. 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 for Indemnified
Amounts relating to or resulting from:
(i) the creation of an undivided percentage ownership interest in
any Receivable which is not at the date of the creation of such interest
an Eligible Receivable or which thereafter ceases to be an Eligible
Receivable (whether pursuant to Section 7.02 or otherwise);
(ii) reliance on any representation or warranty made by the Seller
(or any of its officers) under or in connection with this Agreement, any
Selling Subsidiary Letter, any Seller Report or any other information or
report delivered by the Seller or any Selling Subsidiary pursuant hereto,
which shall have been false or incorrect in any material respect when made
or deemed made;
54
(iii) the failure by the Seller or any Selling Subsidiary to comply
with any applicable law, rule or regulation with respect to any Pool `
Receivable or the related Contract, or the nonconformity of any Pool
Receivable or the related Contract with any such applicable law, rule or
regulation;
(iv) the failure to vest in the Owner of an Eligible Asset an
undivided percentage ownership interest, to the extent of such Eligible
Asset, in the Receivables in, or purporting to be in, the Receivables Pool
and the Related Security and Collections in respect thereof, free and
clear of any Adverse Claim;
(v) the failure to file, 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;
(vii) any failure of the Seller, as Collection Agent or otherwise,
or any Selling Subsidiary to perform its duties or obligations hereunder
or under the Selling Subsidiary Letter or to perform its duties or
obligations under the Contracts;
(viii) any products liability claim arising out of or in connection
with merchandise, insurance or services which are the subject of any
Contract; or
(ix) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Purchases or the ownership of Eligible
Assets or in respect of any Receivable or any Contract; or
(x) the commingling of Collections of Pool Receivables at any time
with other funds provided, that without in any way limiting the scope of
the foregoing indemnity, such indemnity is not intended to restrict the
Seller from servicing Receivables as the Collection Agent pursuant to
Article VI of this Agreement.
SECTION 10.02. Additional Indemnities. Section 8.04(b) of the Credit
55
Agreement is incorporated in this Agreement by reference, with the same force
and effect as if the same was set out in this Agreement in full; provided that
references to the "Borrower" and any "Lender" therein shall mean the Seller and
any Owner, respectively, and, without limitation, all references in such
incorporated provision to "Indemnified Party" and "Loan Documents" shall mean
and refer to Indemnified Party and Loan Documents under this Agreement,
respectively; likewise, to the extent any word or phrase is defined in this
Agreement, any such word or phrase appearing in the provision so incorporated by
reference from the Credit Agreement shall have the meaning given to it in this
Agreement; and provided further words or phrases used in such incorporated
provision and not otherwise defined in this Agreement shall be also incorporated
herein by reference; and provided further, that notwithstanding the foregoing,
such incorporated provision shall exclude recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables. The
incorporation by reference into this Agreement from the Credit Agreement is for
convenience only and this Agreement and the Credit Agreement shall at all times
be, and be deemed to be and treated as, separate and distinct facilities.
Incorporations by reference in this Agreement from the Credit Agreement shall
not be affected or impaired by any subsequent expiration or termination of the
Credit Agreement, nor by any amendment thereof or waiver thereunder unless the
Agent, as Agent for the Owners, shall have consented to such amendment or waiver
in writing.
SECTION 10.03. Limited Recourse. On the first day (the
"Determination Date") on which (a) the Default Ratio or the Delinquency Ratio
exceeds the percentage therefor set forth in Section 7.01(h) and (b) such
percentage would not be exceeded if such ratio were calculated by excluding from
the numerator and denominator thereof all the Pool Receivables of either (i) the
Obligor with the largest, (ii) the Obligors with the two largest or (iii) the
Obligors with the three largest Outstanding Balances of Pool Receivables that on
the Determination Date are either Defaulted Receivables or Delinquent
Receivables, as the case may be (the amount of such Outstanding Balances of the
minimum number of such Obligors required so that such percentage would not be
exceeded being called the "Excluded Receivables", and the one, two or three
Obligors owing such Excluded Receivables being the "Excluded Obligors"), then
the Seller shall repurchase a portion of Eligible Assets ratably from each Owner
by paying to the Agent for the benefit of the Owners on the first Business Day
after the Determination Date:
(i) an amount of Capital equal to the product obtained by
multiplying all Capital outstanding as of the Determination Date by a
fraction the numerator of which shall be the Outstanding Balances of the
Excluded Receivables and the denominator of which shall be the Outstanding
Balances of all Pool Receivables, in each case as of the Determination
Date, plus
(ii) all Yield accrued thereon through the date of such repurchase
plus
56
(iii) the amount, if any, by which (A) the additional Yield which
would have accrued on the portion of the Eligible Assets so repurchased
during the Fixed Period (computed without regard to clause (iv) of the
definition of "Fixed Period") during which such repurchase occurs if such
portion of such Eligible Assets had remained outstanding in its entirety
exceeds (B) the income, if any, received by the Owner by investing the
proceeds of such repurchase attributable to the portion of the Eligible
Assets so repurchased.
On and after the date on which such payment is made in full, each Excluded
Obligor shall automatically and immediately cease to be a Designated Obligor,
and the Receivables of such Obligor shall automatically and immediately be
excluded from the Receivables Pool. Upon receipt of funds paid to the Agent
pursuant to this Section 10.03, the Agent shall distribute such funds to the
Owners ratably (i) in payment of the accrued Yield for such portion of each
Eligible Asset repurchased, (ii) in reduction of the Capital of such portion of
each Eligible Asset repurchased and (iii) in payment of any other amounts owed
by the Seller hereunder to such Owner.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Seller
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent, as Agent for the Owners, and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 11.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing and
mailed, faxed or delivered, as to each party hereto, to 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
notices and communications sent by other means shall be effective when received,
in each case addressed as aforesaid.
SECTION 11.03. No Waiver; Remedies. No failure on the part of the
Agent, Citibank or an Owner to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein
57
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 11.04. Restatement Effective Date; Restatement of the
Original Agreement; Binding Effect. This Agreement shall become effective when
the conditions precedent set forth in Section 3.02 are satisfied or waived (the
date on which all such conditions precedent are satisfied or waived being the
"Restatement Effective Date"). On the Restatement Effective Date, the Original
Agreement and the Certificate issued thereunder shall each automatically and
without further action be amended and restated to read in its entirety as set
forth in this Agreement. Thereafter each reference in the Original Agreement to
"this Agreement", "hereunder", "hereof", "herein" or words of like import, and
each reference to the Original Agreement in any Certificate or other document
delivered and to be delivered in connection with the Original Agreement shall
mean and be a reference to the Original Agreement as amended and restated
pursuant to this Agreement and each reference to the Certificate in the Original
Agreement and in any document delivered and to be delivered in connection with
the Original Agreement shall mean and be a reference to the Certificate issued
under this Agreement. Except as so amended and restated, the Original Agreement
shall remain in full force and effect and is hereby ratified and confirmed. The
execution, delivery and effectiveness of this Agreement shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Owner or the Agent under the Original Agreement, nor constitute a waiver of
any provision of the Original Agreement. The Original Agreement as so amended
and restated shall be binding upon and inure to the benefit of the Seller, the
Agent, the Owners and their respective successors and assigns. This Agreement
shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until such
time, after the Facility Termination Date, as no Capital of any Eligible Asset
shall be outstanding; provided, however, that rights and remedies with respect
to any breach of any representation and warranty made by the Seller pursuant to
Article IV, the indemnification provisions of Article X and the provisions of
Sections 11.06, 11.07 and 11.08 shall be continuing and shall survive any
termination of this Agreement for a period of three years.
SECTION 11.05. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE INTERESTS OF THE OWNERS IN THE
RECEIVABLES, OR REMEDIES HEREUNDER, IN RESPECT THEREOF ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 11.06. Costs, Expenses and Taxes. (a) In addition to the
rights of indemnification granted to the Indemnified Parties under Article X
hereof, the Seller agrees to pay on demand all costs and expenses in connection
with the preparation, execution, delivery, administration, modification and
amendment (including periodic auditing) of this Agreement, the Certificate, each
Selling Subsidiary Letter and the other documents to be delivered
58
hereunder, including, without limitation, the reasonable fees and expenses of
counsel for the Agent, each Investor, Citibank, CNAI and their respective
Affiliates with respect thereto and with respect to advising the Agent, each
Investor, Citibank, CNAI and their respective Affiliates as to their respective
rights and remedies under this Agreement and each Selling Subsidiary Letter. The
Seller further agrees to pay on demand all costs and expenses, if any (including
reasonable counsel fees and expenses), of the Agent, CNAI, the Owners and their
respective Affiliates, in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the
Certificate, any Selling Subsidiary Letter and the other documents to be
delivered hereunder, including, without limitation, reasonable fees and expenses
of counsel for the Agent, CNAI, the Owners and their respective Affiliates in
connection with the enforcement of rights under this Section 11.06(a). A
certificate as to the amount of such costs and expenses setting forth the basis
thereof in reasonable detail and submitted to the Seller shall be conclusive and
binding for all purposes, absent manifest error.
(b) In addition, the Seller shall pay any and all commissions of
placement agents and commercial paper dealers in respect of commercial paper
notes of each Investor issued to fund the Purchase or maintenance of any
Eligible Asset and any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing and
recording of this Agreement, each Selling Subsidiary Letter or the other
documents to be delivered hereunder, and agrees to indemnify the Agent, each
Investor, Citibank, CNAI and their respective Affiliates against any liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees.
(c) In addition, the Seller shall pay on demand all other costs,
expenses and taxes (excluding income taxes) incurred by each Investor or any
general or limited partner of each Investor ("Other Costs"), including, without
limitation, the cost of auditing each Investor's books by certified public
accountants, the cost of rating each Investor's commercial paper by independent
financial rating agencies, the taxes (excluding income taxes) resulting from
each Investor's operations, and the reasonable fees and out-of-pocket expenses
of counsel for each Investor or any counsel for any general or limited partner
of each Investor with respect to (i) advising such Investor or such general or
limited partner as to its rights and remedies under this Agreement and each
Selling Subsidiary Letter, (ii) the enforcement of this Agreement, each Selling
Subsidiary Letter and the other documents to be delivered hereunder, or (iii)
advising such Investor or such general or limited partner as to matters relating
to such Investor's operations; provided, however that, if any Investor enters
into agreements for the purchase of interests in receivables from one or more
other Persons ("Other Sellers"), the Seller and such Other Sellers shall each be
liable for such Other Costs ratably in accordance with the usage under the
respective facilities of such Investor to purchase receivables or interests
therein from the Seller and each Other Seller; 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. A certificate as
to the amount of such costs and expenses
59
setting forth the basis thereof in reasonable detail and submitted to the Seller
shall be conclusive and binding for all purposes, absent manifest error.
SECTION 11.07. No Proceedings. Each of the Seller, the Agent, each
Owner, each assignee of an Eligible Asset or any interest therein and each
entity which enters into a commitment to purchase Eligible Assets or interests
therein hereby agrees that it will not institute against any Investor any
proceeding of the type referred to in clause (i) of Section 7.01(g) so long as
any commercial paper issued by such Investor shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any such
commercial paper shall have been outstanding.
SECTION 11.08. Confidentiality. (a) Except to the extent otherwise
required by applicable law, rule, regulation or judicial process, the Seller
agrees to maintain the confidentiality of this Agreement and each Selling
Subsidiary Letter (and all drafts thereof) in communications with third parties
and otherwise; provided, however, that the Agreement and any Selling Subsidiary
Letter may be disclosed to third parties to the extent such disclosure is (i)
required in connection with a sale of securities of the Seller, (ii) made solely
to persons who are legal counsel for the purchaser or underwriter of such
securities, (iii) limited in scope to the provisions of Articles V, VII, X and,
to the extent defined terms are used in Articles V, VII and X, such terms
defined in Article I of this Agreement and (iv) made pursuant to a written
agreement of confidentiality in form and substance reasonably satisfactory to
the Agent; provided further, however, that the Agreement and any Selling
Subsidiary Letter may be disclosed to the Seller's legal counsel pursuant to an
agreement of the type referred to in clause (iv), above; and provided further,
however, that the Seller shall have no obligation of confidentiality in respect
of any information which may be generally available to the public or becomes
available to the public through no fault of the Seller.
(b) Each Owner understands that this Agreement and each Selling
Subsidiary Letter is a confidential document and no Owner will disclose it to
any other Person without the Agent's prior written consent other than (i) to
such Owner's Affiliates and their and their Affiliates' officers, directors,
employees, agents, rating agencies, counsel, auditors and advisors and then only
on a confidential basis, (ii) to actual or prospective Assignees and
participants, and then only if such Assignee has agreed in writing to maintain
such information on a confidential basis, (iii) as required by any law, rule or
regulation or judicial process or (iv) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking.
(c) Neither the Agent nor any Owner shall disclose any Confidential
Information to any Person without the consent of the Seller, other than (i) to
the Agent's or such Owner's Affiliates and their and their Affiliates' officers,
directors, employees, agents, rating agencies, counsel, auditors and advisors
and then only on a confidential basis, (ii) to
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actual or prospective Assignees and participants, and then only if such Assignee
has agreed in writing to maintain such Confidential Information on a
confidential basis, (iii) as required by any law, rule or regulation or judicial
process and (iv) as requested or required by any state, federal or foreign
authority or examiner regulating banks or banking.
SECTION 11.09. Execution in Counterparts; Severability. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telefax shall be effective as delivery of a manually executed
counterpart of this Agreement. In case any provision in or obligation under this
Agreement should be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 11.10. Grant of a Security Interest. (a) The Seller hereby
assigns and pledges to the Agent for the benefit of itself, the Owners and each
other Indemnified Party from time to time, and hereby grants to the Agent for
the benefit of itself, the Owners and each other Indemnified Party from time to
time, a security interest in and to all of the Seller's right, title and
interest in and to all of the Pool Receivables, the Related Security with
respect thereto and the Collections and all proceeds of any and all of the
foregoing Collateral (including, without limitation, proceeds which constitute
property of the types described above in this clause (a)) (collectively the
"Collateral").
(b) The assignment, pledge and security interest granted under this
Section 11.10 secures the payment of all obligations of the Seller now or
hereafter existing from time to time under this Agreement, any other instruments
and documents furnished by the Seller pursuant hereto and otherwise in
connection with this Agreement, whether for Collections received or deemed to
have been received or otherwise payable by the Seller, either individually or as
Collection Agent, repurchases of interests in Pool Receivables, interest,
capital, yield, fees (including but not limited to any Collection Agent Fees),
costs, expenses, taxes, indemnification or otherwise (all such obligations being
the "Obligations").
(c) The Seller agrees that from time to time, at the expense of the
Seller, the Seller will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that the Agent may reasonably request, in order to perfect and protect the
assignment and security interest granted or purported to be granted hereby or to
enable the Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing, the
Seller will execute and file such financing or continuation statements, or
amendments thereto, and such
61
other instruments or notices, as may be necessary or reasonably desirable, or as
the Agent may reasonably request, in order to perfect and preserve the
assignment and security interest granted or purported to be granted hereby. The
Seller hereby authorizes the Agent to file one or more financing or continuation
statements, and amendments thereto, relating to all or any part of the
Collateral without the signature of the Seller where permitted by law, and the
Agent shall notify the Seller of each such filing. A photocopy or other
reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
(d) The Seller hereby irrevocably appoints the Agent as the Seller's
attorney-in-fact, with full authority in the place and stead of the Seller and
in the name of the Seller or otherwise, from time to time in the Agent's
discretion following the occurrence and during the continuance of an Event of
Investment Ineligibility, to take any action and to execute any instrument which
the Agent may deem necessary or advisable to accomplish the purposes of the
assignment, grant and security interest granted hereunder, including, without
limitation:
(i) to ask, demand, collect, ▇▇▇ for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under
or in connection with the Collateral,
(ii) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, if any, in connection therewith,
and
(iii) to file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Agent with respect to any of the Collateral.
(e) If the Seller fails to perform any agreement contained herein,
the Agent may itself perform, or cause performance of, such agreement, and the
expenses of the Agent incurred in connection therewith shall be payable by the
Seller under Section 11.06.
(f) The powers conferred on the Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which it accords its own property.
62
(g) If any Event of Investment Ineligibility shall have occurred and
be continuing:
(i) The Agent may exercise any and all rights and remedies of the
Seller in respect of the Collateral.
(ii) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the UCC in effect in the State of New York (whether or not such UCC
applies to the affected Collateral).
(iii) All payments received by the Seller in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall
(upon request by the Agent) be segregated from other funds of the Seller
and shall be forthwith paid over to the Agent in the same form as so
received (with any necessary indorsement).
(iv) All payments made in respect of the Collateral, and all cash
proceeds in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral, received by the Agent may, in the
discretion of the Agent, be held by the Agent as collateral for, and/or
then or at any time thereafter applied (after payment of any amounts
payable to the Agent pursuant to Section 11.06) in whole or in part by the
Agent for the Owners or the applicable Indemnified Parties against, all or
any part of the Obligations in such order as the Agent shall elect. Any
surplus of such payments or cash proceeds held by the Agent and remaining
after payment in full of all the Obligations shall be paid over to the
Seller or to whomsoever may be lawfully entitled to receive such surplus.
(h) Anything herein to the contrary notwithstanding, (i) the Seller
shall remain liable under each Contract to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (ii) the exercise by the Agent of any of the rights hereunder shall
not release the Seller from any of its duties or obligations under any Contract
and (iii) neither the Agent nor any Investor nor any other Indemnified Party
shall have any obligation or liability under any Contract by reason of this
Section 11.10, nor shall the Agent or any Investor or any other Indemnified
Party be obligated to perform any of the obligations or duties of the Seller
thereunder.
63
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.
THE GEON COMPANY
By:
-------------------------------------
Title:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
(Lorain County)
Attention: Treasurer
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
CORPORATE RECEIVABLES CORPORATION
By: Citicorp North America, Inc.
as Attorney-in-Fact
By:
-------------------------------------
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: CRC
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇.▇.
By: Citicorp North America, Inc.
as Attorney-in-Fact
By:
-------------------------------------
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
CITICORP NORTH AMERICA, INC.,
as Agent
By:
-------------------------------------
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Global Securitization
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
ASSIGNMENT
Dated as of __________________ , 19___
Reference is made to the Fourth Amended and Restated Trade
Receivables Purchase and Sale Agreement dated as of May 28, 1999 (the
"Agreement") among The Geon Company (the "Seller"), Corporate Receivables
Corporation, ▇▇▇▇▇▇, ▇.▇. and Citicorp North America, Inc., as Agent. Terms
defined in the Agreement are used herein as therein defined.
__________________ (the "Assignor") and _______________ (the
"Assignee") agree as follows:
1. In consideration of the payment of $________, being the existing
[aggregate] Capital of the Eligible Asset[s] referred to below, and of $_______,
being the [aggregate] unpaid accrued Yield for such Eligible Asset[s], receipt
of which payment is hereby acknowledged, the Assignor hereby assigns to the
Agent for the account of the Assignee, and the Assignee hereby purchases from
the Assignor, all of the Assignor's right, title and interest in and to the
Eligible Asset[s] purchased by the undersigned in [a] Purchase[s] on ________,
19___; __________, 19___,[etc.]] under the Agreement.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the Eligible Asset[s] being assigned by it hereunder and
that such Eligible Asset[s] are free and clear of any Adverse Claim; (ii) makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Agreement, the Certificate, each Selling Subsidiary
Letter or any other instrument or document furnished pursuant thereto; and (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Seller or any Selling Subsidiary or the
performance or observance by the Seller or any Selling Subsidiary of any of its
obligations under the Agreement, the Certificate, each Selling Subsidiary Letter
or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Agreement together with copies of the financial statements referred to in
Section 4.01 thereof, each Selling Subsidiary Letter and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and purchase such Eligible Asset[s]; (ii)
agrees that it will, independently and without reliance upon the Agent, any of
its Affiliates, the Assignor or any other Owner and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Agreement and any
Selling Subsidiary Letter; (iii)
2
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Agreement and each Selling Subsidiary Letter
as are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; (v) appoints as its agent the Collection
Agent from time to time designated pursuant to Section 6.01 to enforce its
respective rights and interests in and under the Pool Receivables, the Related
Security and the related Contracts; and (vi) agrees that it will not institute
against any Investor any proceeding of the type referred to in Section 7.01(g)
so long as any commercial paper issued by such Investor shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any such commercial paper shall have been outstanding.
4. Following the execution of this Assignment by the Assignor and
the Assignee, it will be delivered to the Agent. The effective date of this
Assignment shall be the date above specified (the "Effective Date").
5. As of the Effective Date, (i) the Assignee shall be and become
the Owner of the Eligible Asset[s] referred to herein for all purposes of the
Agreement and (ii) the Assignor shall relinquish its rights with respect to such
Eligible Asset[s] for all purposes of the Agreement.
6. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
to be duly executed and delivered by their respective duly authorized officers
or agents as of the date first written above.
[NAME OF ASSIGNOR]
By
--------------------------------------
Title:
----------------------------------
[NAME OF ASSIGNEE]
By
--------------------------------------
Title:
----------------------------------
EXHIBIT B
CERTIFICATE OF ASSIGNMENT
Dated as of __________, 1999
Reference is made to the Fourth Amended and Restated Trade
Receivables Purchase and Sale Agreement dated as of May 28, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Agreement") among The
Geon Company (the "Seller"), Corporate Receivables Corporation, ▇▇▇▇▇▇, ▇.▇. and
Citicorp North America, Inc., as Agent. Terms defined in the Agreement are used
herein as therein defined.
The Seller hereby sells and assigns to the Agent for the account of
the Owner thereof each Eligible Asset purchased under the Agreement.
Each Purchase of an Eligible Asset made by each Investor from the
Seller, each assignment of such Eligible Asset by its Owner to an Assignee and
each reduction in Capital in respect of each Eligible Asset evidenced hereby
shall be endorsed by the Agent on the grid attached hereto which is part of this
Certificate of Assignment. Such endorsement shall evidence the ownership of such
Eligible Asset initially by each Investor and upon any assignment, if any,
thereof by the Assignee thereof and the amount of Capital from time to time.
This Certificate of Assignment is made without recourse except as
otherwise provided in the Agreement.
This Certificate of Assignment shall be governed by, and construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Certificate of
Assignment to be duly executed and delivered by its duly authorized officer as
of the date first above written.
THE GEON COMPANY
By
--------------------------------------
Title:
----------------------------------
GRID(1)
Number of Capital Owner
Eligible (Giving Effect (Giving Effect
Asset Transaction(2) to Transaction) to Transaction)
--------- -------------- --------------- ---------------
--------
(1) Eligible Assets will be numbered sequentially based upon date of Purchase.
(2) Transactions are Purchases, Reductions in Capital, Assignments, Divisions of
Eligible Assets and Combinations of Eligible Assets.
EXHIBIT C
SELLER REPORT
EXHIBIT D
FORM OF LOCK-BOX AGREEMENT
[DATE]
[Name and Address of Lock-Box Bank]
[Name of the Company]
Ladies and Gentlemen:
[The Geon Company] [Name of Selling Subsidiary] (the "Company")
hereby notifies you that the Company has transferred exclusive ownership and
control of its depository [lock-box] account number [_______________] maintained
with you (the "Lock-Box Account") to Citicorp North America, Inc., ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Agent").
The Company hereby irrevocably instructs you to make all payments to
be made by you out of or in connection with the Lock-Box Account pursuant only
to such written instructions as an officer of the Agent shall give you from time
to time.
The Company also hereby notifies you that the Agent shall be
irrevocably entitled to exercise any and all rights in respect of or in
connection with the Lock-Box Account.
By its signature below, the Agent hereby instructs you initially to
make all payments to be made by you out of or in connection with the Lock-Box
Account pursuant to such written instructions as an officer of the Company shall
give you from time to time.
Upon your receipt of further instructions from the Agent, you shall
make all payments to be made by you out of or in connection with the Lock-Box
Account directly to the account or accounts specified in those instructions.
Those accounts may include, but need not be limited to: Citibank, N.A., account
no. [ _________ ] in the name of the Agent, at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of U.S. Securitization, for the account of the Agent.
Notwithstanding anything to the contrary in any other agreement
relating to the Lock-Box Account, the Lock-Box Account is and will be maintained
solely for the benefit of the Agent, and will be entitled "Citicorp North
America, Inc., as Agent, re: [Name of
2
Company]." You will maintain a record of all checks and other remittance items
received in the Lock-Box Account. In addition to providing the Agent and the
Company with the reports and other documents provided in the past, you will
furnish to the Agent and the Company for the Lock-Box Account (i) a monthly
statement and (ii) such other information as the Agent may request from time to
time, to be transmitted to the Agent at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ and to the Company at [Address]. Given the Agent's interest in the
Lock-Box Account, all transfers from the Lock-Box Account shall be made by you
irrespective of, and without deduction for, any counterclaim, defense,
recoupment or set-off with respect to the Company or any of its affiliates and
shall be final, and you shall not seek to recover from the Agent for any reason
any such payment once made.
Notwithstanding the foregoing, all service charges and fees with
respect to the Lock-Box Account shall be payable by the Company.
Please agree to the terms of, and acknowledge receipt of, this
notice by signing in the space provided below on a counterpart hereof. This
letter may be executed in any number of counterparts and by difference parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement. Delivery of an executed counterpart of a signature page to
this letter by telefax shall be effective as delivery of a manually executed
counterpart of this letter. Your signing will also be a confirmation to the
Agent that the description of the Lock-Box Account above is correct and that you
have no notice of any other person or entity having any interest in, or pledge
or assignment of, the Lock-Box Account. Please send two signed copies of this
letter to the Agent at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention:____________________________________________________. A third copy is
enclosed for your records.
Very truly yours,
THE GEON COMPANY
By:
-------------------------------------
Title:
----------------------------------
CITICORP NORTH AMERICA, INC.
By:
-------------------------------------
Title:
----------------------------------
Agreed and acknowledged:
[NAME OF LOCK-BOX BANK]
By:
-------------------------
Title:
SCHEDULE I
LOCK-BOX BANKS
1) The Geon Company:
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇▇ ▇▇▇▇▇-▇ The Geon Company
▇.▇. ▇▇▇ ▇▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Trust and Savings Bank, Chicago
Lock-Box 71151 The Geon Company
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
2) Plast-O-Meric, Inc.:
SCHEDULE II
DESCRIPTION OF
CREDIT AND COLLECTION POLICY
SCHEDULE III
FORM OF CONTRACTS
SCHEDULE IV
LIST OF OFFICES OF SELLER AND SELLING SUBSIDIARIES WHERE RECORDS
RELATING TO THE RECEIVABLES ARE KEPT
The Geon Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇
(Lorain County)
Plast-O-Meric, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
S&S DRAFT
DATED 6/2/99
U.S. $85,000,000
FOURTH AMENDED AND RESTATED
TRADE RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of May 28, 1999
Among
THE GEON COMPANY
as Seller,
▇▇▇▇▇▇, ▇.▇.
and
CORPORATE RECEIVABLES CORPORATION
as Investors
and
CITICORP NORTH AMERICA, INC.
as Agent
TABLE OF CONTENTS
SECTION PAGE
PRELIMINARY STATEMENTS...................................................................................... 1
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Defined Terms........................................................................ 2
SECTION 1.02. Other Terms.................................................................................. 21
SECTION 1.03. Computation of Time Periods.................................................................. 21
SECTION 1.04. Accounting Terms............................................................................. 21
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Facility..................................................................................... 21
SECTION 2.02. Making Purchases............................................................................. 22
SECTION 2.03. Termination of Facility or Reduction of the Purchase Limit................................... 22
SECTION 2.04. Eligible Asset............................................................................... 22
SECTION 2.05. Non-Liquidation Settlement Procedures........................................................ 23
SECTION 2.06. Liquidation Settlement Procedures............................................................ 24
SECTION 2.07. General Settlement Procedures................................................................ 25
SECTION 2.08. Payments and Computations, Etc............................................................... 26
SECTION 2.09. Dividing or Combining of Eligible Assets..................................................... 26
SECTION 2.10. Fees and Payments............................................................................ 26
SECTION 2.11. Increased Costs.............................................................................. 27
SECTION 2.12. Additional Yield on Eligible Assets Bearing a Eurodollar Rate................................ 28
ARTICLE III CONDITIONS OF EFFECTIVENESS AND OF PURCHASES
SECTION 3.01. Conditions Precedent to the Original Agreement............................................... 28
SECTION 3.02. Conditions Precedent to Amendment and Restatement and to the Initial Purchase
After the Restatement Effective Date......................................................... 30
SECTION 3.03. Conditions Precedent to All Purchases and Reinvestments...................................... 32
SECTION 3.04. Conditions Precedent to Purchases and Reinvestments by ▇▇▇▇▇▇............................... 33
SECTION 3.05. Conditions Precedent to Purchases and Reinvestments by CRC................................... 33
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller................................................. 33
ARTICLE V GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller.......................................................... 37
SECTION 5.02. Reporting Requirements of the Seller......................................................... 39
SECTION 5.03. Negative Covenants of the Seller............................................................. 41
ARTICLE VI ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent.............................................................. 43
SECTION 6.02. Duties of Collection Agent................................................................... 43
SECTION 6.03. Rights of the Agent.......................................................................... 44
SECTION 6.04. Responsibilities of the Seller............................................................... 45
SECTION 6.05. Further Action Evidencing Purchases.......................................................... 45
ARTICLE VII EVENTS OF INVESTMENT INELIGIBILITY AND RECEIVABLES INELIGIBILITY
SECTION 7.01. Events of Investment Ineligibility........................................................... 46
SECTION 7.02. Events of Receivables Ineligibility.......................................................... 48
ARTICLE VIII THE AGENT
SECTION 8.01. Authorization and Action..................................................................... 50
SECTION 8.02. Agent's Reliance, Etc........................................................................ 50
SECTION 8.03. CNAI and Affiliates.......................................................................... 51
SECTION 8.04. Investors' Purchase Decision................................................................. 51
ARTICLE IX ASSIGNMENT
SECTION 9.01. Assignment................................................................................... 51
SECTION 9.02. Annotation of Certificate.................................................................... 53
ARTICLE X INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller................................................................... 53
SECTION 10.02. Additional Indemnities...................................................................... 54
SECTION 10.03. Limited Recourse............................................................................ 55
ARTICLE XI MISCELLANEOUS
SECTION 11.01. Amendments, Etc............................................................................. 56
SECTION 11.02. Notices, Etc................................................................................ 56
SECTION 11.03. No Waiver; Remedies......................................................................... 56
SECTION 11.04. Restatement Effective Date; Restatement of the Original Agreement; Binding Effect........... 56
SECTION 11.05. Governing Law............................................................................... 57
SECTION 11.06. Costs, Expenses and Taxes................................................................... 57
SECTION 11.07. No Proceedings.............................................................................. 58
SECTION 11.08. Confidentiality............................................................................. 59
SECTION 11.09. Execution in Counterparts; Severability..................................................... 60
SECTION 11.10. Grant of a Security Interest................................................................ 60
3
4
SCHEDULES
SCHEDULE I List of Lock-Box Banks
SCHEDULE II Description of Credit and Collection Policy
SCHEDULE III Form of Contracts
SCHEDULE IV List of Offices of Seller and Selling Subsidiary where Records
Relating to the Receivables are Kept
EXHIBITS
EXHIBIT A Form of Assignment
EXHIBIT B Form of Certificate
EXHIBIT C Seller Report
EXHIBIT D Form of Letter to Lock-Box Account Banks
EXHIBIT E Form of Selling Subsidiary Letter
EXHIBIT F-1 Form of Opinion of Counsel to the Seller
EXHIBIT F-2 Form Of Opinion of Counsel to the Selling Subsidiary
EXHIBIT F-3 Form of Opinion of Wisconsin Counsel to the Selling Subsidiary