RECEIVABLES TRANSFER AGREEMENT
by and among
PARK AVENUE RECEIVABLES CORPORATION,
as an Initial Purchaser
and
REDWOOD RECEIVABLES CORPORATION
as an Initial Purchaser
and
LIBERTY STREET FUNDING CORP.
as an Initial Purchaser
and
CARCORP, INC.,
as Transferor,
and
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.,
as Guarantor and
as Collection Agent
and
THE SEVERAL FINANCIAL INSTITUTIONS
PARTY HERETO
FROM TIME TO TIME,
as Liquidity Banks
and
THE SEVERAL AGENT BANKS
PARTY HERETO
FROM TIME TO TIME,
as Funding Agents
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of December 27, 1999
TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................................1
SECTION 1.1 Certain Defined Terms................................1
SECTION 1.2 Other Terms..........................................1
SECTION 1.3 Computation of Time Periods..........................1
ARTICLE II PURCHASES AND SETTLEMENTS..................................2
SECTION 2.1 Facility.............................................2
SECTION 2.2 Transfers; Certificates; Eligible Receivables........2
SECTION 2.3 Selection of Tranche Periods and Tranche Rates.......5
SECTION 2.4 PARCO Discount, Yield, Fees and Other Costs
and Expenses.........................................7
SECTION 2.5 Non-Liquidation Settlement and Reinvestment
Procedures...........................................8
SECTION 2.6 Liquidation Settlement Procedures...................10
SECTION 2.7 Fees................................................13
SECTION 2.8 Protection of Ownership Interest of the Initial
Purchasers and the PARCO APA Banks..................13
SECTION 2.9 Deemed Collections, Application of Payments.........14
SECTION 2.10 Payments and Computations, Etc......................15
SECTION 2.11 Reports.............................................16
SECTION 2.12 Collection Accounts.................................16
SECTION 2.13 Right of Setoff.....................................17
SECTION 2.14 Sharing of Payments, Etc............................17
SECTION 2.15 Broken Funding......................................17
SECTION 2.16 Conversion and Continuation of Outstanding,
Tranches Funded by the PARCO APA Banks..............19
SECTION 2.17 Illegality..........................................19
SECTION 2.18 Inability to Determine PARCO Eurodollar Rate........20
SECTION 2.19 Exchange of Canadian Dollars into U.S. Dollars......21
SECTION 2.20 Procedure for Decreasing the Facility Limit.........22
ARTICLE III REPRESENTATIONS AND WARRANTIES............................22
SECTION 3.1 Representations and Warranties of the Transferor....22
SECTION 3.2 Reaffirmation of Representations and Warranties
by the Transferor...................................26
SECTION 3.3 Representations and Warranties of the Collection
Agent...............................................26
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ARTICLE IV CONDITIONS PRECEDENT......................................27
SECTION 4.1 Conditions to Effectiveness.........................27
SECTION 4.2 Conditions to Each Transfer.........................30
ARTICLE V COVENANTS.................................................32
SECTION 5.1 Affirmative Covenants of Transferor.................32
SECTION 5.2 Negative Covenants of the Transferor................37
SECTION 5.3 Covenants of the Collection Agent and the
Guarantor...........................................40
SECTION 5.4 Negative Covenants of the Collection Agent
and the Guarantor...................................41
ARTICLE VI ADMINISTRATION AND COLLECTIONS............................42
SECTION 6.1 Appointment of Collection Agent.....................42
SECTION 6.2 Duties of Collection Agent..........................42
SECTION 6.3 Rights After Designation of New Collection
Agent...............................................44
SECTION 6.4 Collection Agent Default............................44
SECTION 6.5 Responsibilities of the Transferor and each
Seller..............................................46
SECTION 6.6 Collection Agent Indemnification of
Indemnified Parties.................................46
SECTION 6.7 Maintenance of Property; Insurance..................46
SECTION 6.8 Grant of License....................................47
ARTICLE VII INDEMNIFICATION; EXPENSES; RELATED MATTERS................47
SECTION 7.1 Indemnities by the Transferor.......................47
SECTION 7.2 Indemnity for Reserves and Expenses.................50
SECTION 7.3 Indemnity for Taxes.................................51
SECTION 7.4 Other Costs, Expenses and Related Matters...........53
ARTICLE VIII TERMINATION EVENTS........................................54
SECTION 8.1 Termination Events..................................54
SECTION 8.2 Remedies Upon the Occurrence of a
Termination Event...................................57
ARTICLE IX THE ADMINISTRATIVE AGENT..................................57
SECTION 9.1 Appointment.........................................57
SECTION 9.2 Delegation of Duties................................58
SECTION 9.3 Exculpatory Provisions..............................58
SECTION 9.4 Reliance by Administrative Agent....................59
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SECTION 9.5 Action Upon Events of Termination and
Collection Agent Defaults, Reports and Notices......59
SECTION 9.6 Non-Reliance on Administrative Agent................59
SECTION 9.7 Indemnification.....................................60
SECTION 9.8 Successor Administrative Agent......................60
ARTICLE X MISCELLANEOUS.............................................61
SECTION 10.1 Term of Agreement...................................61
SECTION 10.2 Waivers; Amendments.................................61
SECTION 10.3 Notices.............................................61
SECTION 10.4 Governing Law, Submission to Jurisdiction,
Integration.........................................64
SECTION 10.5 Severability; Counterparts..........................65
SECTION 10.6 Successors and Assigns..............................65
SECTION 10.7 Confidentiality.....................................65
SECTION 10.8 No Bankruptcy Petition Against the Initial
Purchasers..........................................66
SECTION 10.9 Limited Recourse....................................66
SECTION 10.10 Characterization of the Transactions Contemplated
by the Agreement....................................67
SECTION 10.11 Waiver of Setoff....................................68
SECTION 10.12 Chase Conflict Waiver...............................68
SECTION 10.13 GE Capital Conflict Waiver..........................68
SECTION 10.14 The Bank of Nova Scotia Conflict Waiver.............69
SECTION 10.15 Liability of Funding Agents.........................69
SECTION 10.16 Tax Treatment.......................................70
SECTION 10.17 Canadian Taxes......................................70
SECTION 10.18 Funding Agent Consents..............................70
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EXHIBITS AND ANNEX
EXHIBIT A Credit and Collection Policy*
EXHIBIT B List of Lock-Box Banks and Accounts
EXHIBIT C Form of Lock-Box Agreement
EXHIBIT D Form of Settlement Report*
EXHIBIT E Form of Weekly Report*
EXHIBIT F Form of Daily Report*
EXHIBIT G Form of Transfer Certificate
EXHIBIT H List of Transferor's Actions and Suits
EXHIBIT I List of Collection Agent's Actions and Suits*
EXHIBIT J Location of Records
EXHIBIT K List of Subsidiaries, Divisions and Tradenames
EXHIBIT L Form of Secretary's Certificate
EXHIBIT M Agreed Upon Procedures*
EXHIBIT N Form of Guaranty
EXHIBIT O Form of Required Currency Hedge Assignment
Annex X Schedule of Definitions
Schedule I List of Initial Purchasers, Liquidity Banks, Funding
Agents, Facility Limit, Purchase Limits and Commitments
Schedule II List of Equipment and Software
Schedule III List of C&A Fiscal Periods for the Year 2000
Schedule 3.1(q) Material Adverse Effect
*Omitted. The Company will furnish upon the Commission's request.
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RECEIVABLES TRANSFER AGREEMENT
RECEIVABLES TRANSFER AGREEMENT (as amended, supplemented or otherwise
modified and in effect from time to time, this "Agreement"), dated as of
December 27, 1999, by and among CARCORP, INC., a Delaware corporation, as
transferor (in such capacity, the "Transferor"), ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.,
a Delaware corporation ("C&A"), as guarantor (in such capacity, the "Guarantor")
and as collection agent (in such capacity, the "Collection Agent"), PARK AVENUE
RECEIVABLES CORPORATION, a Delaware corporation ("PARCO"), REDWOOD RECEIVABLES
CORPORATION, a Delaware corporation ("Redwood") and LIBERTY STREET FUNDING
CORP., a Delaware corporation ("Liberty") (collectively, the "Initial
Purchasers"; each individually, an "Initial Purchaser"), the several financial
institutions set forth opposite the name of PARCO on Schedule I (collectively,
the "Liquidity Banks") and the agent bank set forth opposite the name of each
Initial Purchaser on Schedule I and its permitted successor and assign (in such
capacity, the "Funding Agent" with respect to such Initial Purchaser) and THE
CHASE MANHATTAN BANK, a New York state banking corporation, as administrative
agent for the benefit of the Initial Purchasers, PARCO APA Banks and Funding
Agents (in such capacity, the "Administrative Agent").
PRELIMINARY STATEMENTS
WHEREAS, the Transferor may desire to sell, convey, transfer and
assign, from time to time, undivided percentage interests in certain rights to
receive and related assets, and PARCO may desire to, and Redwood, Liberty and,
if requested by PARCO, the PARCO APA Banks, shall, accept such sale, conveyance,
transfer and assignment of such undivided percentage interests, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. Capitalized terms used herein shall
have the meanings assigned to such terms in, or incorporated by reference into,
Annex X attached hereto, which Annex X is incorporated by reference herein.
SECTION 1.2 Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP, consistently applied. All
terms used in Article 9 of the Relevant UCC, and not specifically defined
herein, are used herein as defined in such Article 9.
SECTION 1.3 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", the words
"to" and "until" each means "to but excluding", and the word "within" means
"from and excluding a specified date and to and including a later specified
date".
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ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1 Facility. Upon the terms and subject to the conditions set
forth herein and in the other Transaction Documents prior to the Termination
Date, (x) the Transferor may, at its option, sell, convey, transfer and assign
to the Administrative Agent, on behalf of PARCO (prior to an occurrence of a
PARCO Wind-Down Event), Redwood (prior to a Redwood Termination Date), Liberty
(prior to a Liberty Termination Event) and the PARCO APA Banks (following an
occurrence of a PARCO Wind-Down Event), and (y) the Administrative Agent, on
behalf of PARCO, may, acting at the direction of PARCO (prior to an occurrence
of a PARCO Wind-Down Event), and the Administrative Agent, on behalf of the
PARCO APA Banks (following an occurrence of a PARCO Wind-Down Event but subject
to Section 2.2 of the PARCO Asset Purchase Agreement), Redwood (prior to an
occurrence of a Redwood Termination Date or Termination Date) and Liberty (prior
to an occurrence of a Liberty Termination Event or Termination Date) shall
accept such sale, conveyance, transfer and assignment from the Transferor of,
without recourse except as provided herein, undivided percentage ownership
interests in the Receivables, together with Related Security, the Required
Currency Hedge, Collections and Proceeds with respect thereto, from time to
time. Pursuant to Section 9.1 of this Agreement, the Administrative Agent shall
act as agent on behalf of the Initial Purchasers, the PARCO APA Banks and the
Funding Agents, as applicable, with respect to such undivided percentage
ownership interest, including but not limited to acting as a secured party
hereunder on behalf of the Initial Purchasers, the PARCO APA Banks and the
Funding Agents. By accepting any sale, conveyance, transfer and assignment
hereunder, none of the Administrative Agent, nor the Initial Purchasers, nor the
PARCO APA Banks nor any Funding Agent assumes or shall have any obligations or
liability under any of the Contracts, all of which shall remain the obligations
and liabilities of the Sellers.
SECTION 2.2 Transfers; Certificates; Eligible Receivables.
(a) Incremental Transfers. Prior to the Termination Date, upon the
terms and subject to the conditions set forth herein and in the other
Transaction Documents, (x) the Transferor may, at its option from time to time
on a Weekly Report Date, convey, sell, transfer and assign to the Administrative
Agent, on behalf of PARCO (prior to an occurrence of a PARCO Wind-Down Event),
Redwood (prior to a Redwood Termination Date), Liberty (prior to a Liberty
Termination Event) and to the PARCO APA Banks (following an occurrence of a
PARCO Wind-Down Event) and (y) the Administrative Agent, on behalf of PARCO,
may, at the direction of PARCO from time to time (prior to an occurrence of a
PARCO Wind-Down Event), and the Administrative Agent, on behalf of Redwood
(prior to an occurrence of a Redwood Termination Date), Liberty (prior to an
occurrence of a Liberty Termination Event) and the PARCO APA Banks (following an
occurrence of a PARCO Wind-Down Event but subject to Section 2.2 of the PARCO
Asset Purchase Agreement), shall accept such sale, conveyance, transfer and
assignment from the Transferor, without recourse except as provided herein, of
undivided percentage ownership interests in the Receivables, together with
Related Security, the Required Currency Hedge, Collections and Proceeds with
respect thereto (each, an "Incremental Transfer"); provided that after giving
effect to each Incremental Transfer, (i) the Aggregate Net Investment shall not
exceed the Facility Limit, (ii) in the case of PARCO and the PARCO APA
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Banks, the aggregate outstanding PARCO Net Investment hereunder shall not exceed
the PARCO Purchase Limit, (iii) in the case of Redwood, the aggregate
outstanding Redwood Net Investment hereunder shall not exceed the Redwood
Purchase Limit, and, (iv) in the case of Liberty, the aggregate outstanding
Liberty Net Investment hereunder shall not exceed the Liberty Purchase Limit,
provided further, that the conditions set forth in Section 4.2 shall have been
satisfied before giving effect to any such Incremental Transfer.
The Transferor shall, by notice to the Administrative Agent given by
telecopy, offer to sell, convey, transfer and assign to PARCO (prior to an
occurrence of a PARCO Wind-Down Event), Redwood (prior to an occurrence of a
Redwood Termination Date) or Liberty (prior to an occurrence of a Liberty
Termination Event) or to the PARCO APA Banks (following an occurrence of a PARCO
Wind-Down Event) undivided percentage ownership interests in the Receivables and
Related Security, the Required Currency Hedge, Collections and Proceeds with
respect thereto not later than 11:00 a.m. (New York time) (i) with respect to
Redwood and Liberty, two (2) Business Days prior to the proposed date of any
Incremental Transfer and (ii) with respect to PARCO and the PARCO APA Banks (A)
prior to a PARCO Wind-Down Event, if the Transferor requests a PARCO CP
Tranche(s), two (2) Business Days prior to the proposed date of any Incremental
Transfer, (B) after the occurrence of a PARCO Wind-Down Event, if the Transferor
requests a PARCO BR Tranche(s) from the PARCO APA Banks, on the Business Day
prior to the proposed date of any Incremental Transfer, and (C) after the
occurrence of a PARCO Wind-Down Event, if the Transferor requests that any
portion of the Aggregate Net Investment related to such Incremental Transfer is
to be allocated by the PARCO APA Banks to a PARCO Eurodollar Tranche, three (3)
Business Days prior to the proposed date of any Incremental Transfer. Promptly
upon receipt by the Administrative Agent of any such notice, the Administrative
Agent shall deliver a copy thereof to the applicable Funding Agents (but in no
event later than 1:00 p.m. New York time on the same day). Upon receipt of funds
from the related Initial Purchaser or PARCO APA Bank, as applicable, the Funding
Agents will make such funds available to the Transferor by 4:00 p.m. (New York
time) on the proposed date of any Incremental Transfer. Each such notice shall
specify (w) the amount of the proposed increase to the Aggregate Net Investment;
(x) the desired Transfer Price (which shall be at least $3,000,000 or integral
multiples of $100,000 in excess thereof) or, to the extent that the then
available unused portion of the Facility Limit or, is less than such amount,
such applicable lesser amount equal to such available portion of the Facility
Limit, and (y) the desired date of such Incremental Transfer. The Funding Agent
will promptly notify the applicable Initial Purchasers and/or the applicable
PARCO APA Banks, as applicable, of the applicable Funding Agent's receipt of any
request for an Incremental Transfer to be made to such Person. At its option,
each Initial Purchaser shall accept or reject any such offer by notice given to
the Transferor, the Administrative Agent and the applicable Funding Agent by
telephone and telecopy.
Each Incremental Transfer and each subsequent Incremental Transfer may
be made to PARCO and shall be made to Redwood, Liberty and the PARCO APA Banks
(following a PARCO Wind-Down Event), ratably, as applicable, in accordance with
the applicable Purchase Limit.
Each notice of proposed Transfer shall be irrevocable and binding on
the Transferor, and the Transferor shall indemnify the Administrative Agent, the
Initial Purchasers and the PARCO APA Banks against any loss or expense
reasonably incurred by the
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Administrative Agent, Initial Purchasers, the Liberty APA Banks and the PARCO
APA Banks, either directly or indirectly, as a result of any failure by the
Transferor to complete such Incremental Transfer, including, without limitation,
any loss (including loss of anticipated profits) or expense incurred by the
Administrative Agent, Initial Purchasers, the Liberty APA Banks and the PARCO
APA Banks, either directly or indirectly, by reason of the liquidation or
reemployment of funds acquired by the Initial Purchasers, the Liberty APA Banks
or the PARCO APA Banks (including, without limitation, funds obtained by issuing
Commercial Paper or promissory notes, obtaining deposits as loans from third
parties and reemployment of funds) for the Initial Purchasers, the Liberty APA
Banks or the PARCO APA Banks, as applicable, to fund such Incremental Transfer.
On the date of the initial Incremental Transfer, the Administrative
Agent shall deliver written confirmation of the following to the Transferor: (i)
as provided by the Funding Agents, the cash portion of the Transfer Price, and
(ii) as provided by the PARCO Funding Agent to the Administrative Agent, the
Tranche Period(s) and the Tranche Rate(s) relating to the portion of such
Transfer allocated to PARCO or the PARCO APA Banks. On the date of the initial
Incremental Transfer, the Transferor shall deliver to the Administrative Agent,
(and the Administrative Agent shall deliver to each applicable Funding Agent)
the Transfer Certificate in the form of Exhibit G hereto (the "Transfer
Certificate"). The Administrative Agent shall indicate the amount of the initial
Incremental Transfer allocated to each applicable Initial Purchaser or PARCO APA
Bank, together with the date thereof on the grid attached to the Transfer
Certificate or record in a similar manner on its administrative system. On the
date of each subsequent Incremental Transfer, the Administrative Agent, shall
send written confirmation to the Transferor of the following: (i) as provided by
the Funding Agents, the cash portion of the Transfer Price, and (ii) as provided
by the PARCO Funding Agent to the Administrative Agent, the Tranche Period(s)
and the Tranche Rate(s) relating to the portion of such Transfer allocated to
PARCO or the PARCO APA Banks applicable to such Incremental Transfer. As
provided by each Funding Agent to the Administrative Agent, the Administrative
Agent shall record on the grid attached to the Transfer Certificate or record in
a similar manner on its administrative system the amount of the Incremental
Transfer together with the date thereof as well as any decrease in the Aggregate
Net Investment, PARCO Net Investment, Liberty Net Investment and Redwood Net
Investment (each as reported by each respective Funding Agent). The Transfer
Certificate shall evidence the Incremental Transfers; provided, however, that
the failure of the Administrative Agent to so evidence any Incremental Transfer
shall not affect the validity of any Incremental Transfer. Following each
Incremental Transfer, the Administrative Agent shall deposit to the Transferor's
account at the location indicated in Section 9.3 hereof, in immediately
available funds by 4:00 p.m. on the date of the Incremental Transfer, an amount
equal to the cash portion of the Transfer Price for such Incremental Transfer
made to the Initial Purchasers or the PARCO APA Banks, as applicable.
(b) Reinvestment Transfers. On each Business Day occurring after the
initial Incremental Transfer hereunder and prior to the Termination Date, the
Transferor hereby agrees to sell, convey, transfer and assign to the
Administrative Agent, on behalf of PARCO (prior to an occurrence of a PARCO
Wind-Down Event), Redwood (prior to a Redwood Termination Date), Liberty (prior
to a Liberty Termination Event) and the PARCO APA Banks (following an occurrence
of a PARCO Wind-Down Event), and the Administrative Agent, on behalf of and
acting at the direction of PARCO (prior to an occurrence of a PARCO Wind-Down
Event) may
4
agree to purchase and, the Administrative Agent, on behalf of the PARCO APA
Banks (following an occurrence of a PARCO Wind-Down Event but subject to Section
2.2 of the PARCO Asset Purchase Agreement), Redwood (prior to a Redwood
Termination Date) and Liberty (prior to a Liberty Termination Event) shall
purchase from the Transferor undivided percentage ownership interests in each
and every Receivable, together with Related Security, the Required Currency
Hedge, Collections and Proceeds with respect thereto, to the extent that
Collections are available for such Transfer in accordance with Section 2.5
hereof. The Transferor agrees to maintain, at all times prior to the Termination
Date, a Net Receivables Balance in an amount at least sufficient to maintain the
Percentage Factor at an amount not greater than the Maximum Percentage Factor.
(c) All Transfers. Each Transfer shall constitute a purchase by the
Administrative Agent, on behalf of the applicable Initial Purchasers and PARCO
APA Banks of undivided percentage ownership interests in each and every
Receivable, together with Related Security, the Required Currency Hedge,
Collections and Proceeds with respect thereto, then existing, as well as in each
and every Receivable, together with Related Security, the Required Currency
Hedge, Collections and Proceeds with respect thereto, which arises at any time
after the date of such Transfer. The Initial Purchasers' (and, following an
occurrence of a PARCO Wind-Down Event but subject to Section 2.2 of the PARCO
Asset Purchase Agreement, the PARCO APA Banks') aggregate undivided percentage
ownership interest in the Receivables, together with the Related Security, the
Required Currency Hedge, Collections and Proceeds with respect thereto, shall
equal the Percentage Factor in effect from time to time.
(d) Percentage Factor. The Percentage Factor shall be initially
computed as of the opening of business of the Collection Agent on the date of
the initial Incremental Transfer hereunder. Thereafter, until the Termination
Date, the Percentage Factor shall be automatically recomputed as of the close of
business of the Collection Agent on each day (other than a day after the
Termination Date). The Percentage Factor 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. At all times on and
after the Termination Date until the date on which the Aggregate Net Investment
has been reduced to zero and all accrued PARCO Discount, Yield, Servicing Fees
and all other Aggregate Unpaids have been paid in full, the Percentage Factor
shall be 100%. Following any assignment of any portion of the Transferred
Interest to a PARCO APA Bank pursuant to the PARCO Asset Purchase Agreement, the
PARCO Funding Agent shall, on each Business Day, calculate PARCO's and each
applicable PARCO APA Bank's pro rata interest in the Percentage Factor, based on
the PARCO Purchase Limit and the PARCO APA Bank Commitment, and regularly report
thereon to PARCO and the PARCO APA Banks (with copies thereof to the Transferor
and Administrative Agent).
SECTION 2.3 Selection of Tranche Periods and Tranche Rates.
(a) Transferred Interest Held by PARCO or the PARCO APA Banks Prior to
the Termination Date. At all times hereafter, but prior to the Termination Date,
the Transferor may, subject to PARCO's approval and the limitations described
below, request Tranche Periods and allocate a portion of the PARCO Net
Investment to each selected Tranche Period, so that the aggregate amounts
allocated to outstanding Tranche Periods at all times shall equal the PARCO Net
Investment held by PARCO. The Transferor shall give the Administrative Agent
irrevocable
5
notice by telephone of the new requested Tranche Period(s) not later than 11:00
a.m. (New York time) (i) prior to the occurrence of a PARCO Wind-Down Event, if
the Transferor requests a PARCO CP Tranche(s), two (2) Business Days prior to
the expiration of any then existing Tranche Period(s), (ii) after the occurrence
of a PARCO Wind-Down Event, if the Transferor requests a PARCO BR Tranche(s), on
the day of the expiration of any then existing Tranche Period(s), and (iii)
after the occurrence of a PARCO Wind-Down Event, if the Transferor requests that
any portion of the PARCO Net Investment related to such Incremental Transfer is
to be allocated to a PARCO Eurodollar Tranche(s), three (3) Business Days prior
to the expiration of any then existing Tranche Period; provided, however, that
PARCO may select, in its sole discretion, any such new Tranche Period if (i) the
Transferor fails to provide such notice on a timely basis or (ii) the PARCO
Funding Agent, on behalf of PARCO, determines, in its sole discretion, that the
Tranche Period requested by the Transferor is unavailable or for any reason
commercially undesirable. Promptly upon receipt by the Administrative Agent of
any such notice, the Administrative Agent shall deliver a copy thereof to the
PARCO Funding Agent (but in no event later than 1:00 p.m. New York time on the
same day). PARCO confirms that it is its intention to allocate all or
substantially all of the portion of the Aggregate Net Investment held by it to
one or more PARCO CP Tranche Periods; provided that PARCO may determine, from
time to time, in its sole discretion, that funding such portion of the Aggregate
Net Investment by means of one or more PARCO CP Tranche Periods is not possible
or is not desirable for any reason.
(b) Transferred Interest Held by PARCO Following the Termination Date.
At all times on and after the Termination Date, with respect to any portion of
the Transferred Interest which shall not have been transferred to the PARCO APA
Banks, PARCO or the PARCO Funding Agent, as applicable, shall select all Tranche
Periods and Tranche Rates applicable thereto.
(c) Transferred Interest Held by the PARCO APA Banks Prior to the
Termination Date. At all times with respect to any portion of the Transferred
Interest transferred to the PARCO APA Banks (or any of them) pursuant to the
PARCO Asset Purchase Agreement, but prior to the Termination Date, the initial
Tranche Period applicable to such portion of the PARCO Net Investment allocable
thereto shall be a period of not greater than three (3) days, and such Tranche
shall be a PARCO BR Tranche. Thereafter (but prior to the Termination Date or
the occurrence and continuation of a Potential Termination Event), with respect
to such portion, and with respect to any other portion of the Transferred
Interest held by the PARCO APA Banks (or any of them), the Tranche Period
applicable thereto shall be, at the Transferor's option, either a PARCO BR
Tranche or a PARCO Eurodollar Tranche. The Transferor shall give the
Administrative Agent irrevocable notice by telephone of the new requested
Tranche Period no later than 11:00 a.m. (New York Time) (i) if the Transferor
requests a PARCO BR Tranche, on the day of the expiration of any then existing
Tranche Period and (ii) if the Transferor requests a PARCO Eurodollar Tranche,
three (3) Business Days prior to the expiration of any then existing Tranche
Period. Promptly upon receipt by the Administrative Agent of any such notice,
the Administrative Agent shall deliver a copy thereof to the PARCO Funding Agent
(but in no event later than 1:00 p.m. New York time on the same day). Any
Tranche Period maintained by the PARCO APA Banks which is outstanding on the
Termination Date shall end on the Termination Date.
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(d) After the Termination Date, Transferred Interest Held by the PARCO
APA Banks. At all times on and after the Termination Date, with respect to any
portion of the Transferred Interest which shall have been owned by, or
transferred to, the PARCO APA Banks (or any of them), the PARCO Funding Agent
shall select all Tranche Periods and Tranche Rates applicable thereto.
SECTION 2.4 PARCO Discount, Yield, Fees and Other Costs and Expenses.
(a) Notwithstanding the limitation on recourse under Section 2.1
hereof, the Transferor shall pay, as and when due in accordance with this
Agreement and the other Transaction Documents, all fees hereunder, PARCO
Discount, Yield, Servicing Fees and other Aggregate Unpaids. The Transferor
shall pay in the manner set forth in Sections 2.5, 2.6 and 2.10 to the
Administrative Agent, on behalf of the PARCO Funding Agent, PARCO and/or the
PARCO APA Banks, as applicable, an amount equal to the accrued and unpaid PARCO
Discount for such Tranche Period together with, in the event any portion of the
Transferred Interest is held by PARCO, an amount equal to the discount accrued
on PARCO's Commercial Paper to the extent such Commercial Paper was issued in
order to fund the Transferred Interest in an amount in excess of the cash
portion of the Transfer Price of an Incremental Transfer; provided that (i) in
the event of any repayment or prepayment of a BR Tranche or a PARCO Eurodollar
Tranche, accrued PARCO Discount on the principal amount repaid or prepaid shall
be payable on the date of such repayment or prepayment and (ii) in the event of
any conversion of a PARCO BR Tranche to a PARCO Eurodollar Tranche or any
conversion of a PARCO Eurodollar Tranche to a PARCO BR Tranche, accrued interest
on such PARCO BR Tranche or PARCO Eurodollar Tranche shall be payable on the
effective date of such conversion. PARCO Discount shall accrue with respect to
each Tranche on each day including the first day but not the last day of the
Tranche Period related thereto. The Transferor shall pay in the manner set forth
in Sections 2.5, 2.6 and 2.10 to the Administrative Agent, on behalf of the
Redwood Funding Agent and Redwood, the Redwood Yield and, on behalf of the
Liberty Funding Agent and Liberty, the Liberty Yield and, each of the Redwood
Yield and the Liberty Yield shall accrue with respect to each calendar month on
each day including the first day and the last day of the calendar month related
thereto.
(b) Each Initial Purchaser shall be entitled to receive a fee with
respect to each Settlement Period (or portion thereof) during such period (the
"Utilization Fee") which shall accrue on each day during such Settlement Period
in an amount equal to the product of (i) the Utilization Fee Rate, times (ii)
the applicable Net Investment on such day. The Utilization Fee shall be payable
in accordance with Sections 2.5, 2.6 and 2.10 on each Settlement Date.
(c) Prior to the Termination Date, Redwood, Liberty, PARCO (prior to
an occurrence of a PARCO Wind-Down Event) and the PARCO APA Banks (following an
occurrence of a PARCO Wind-Down Event) shall be entitled to receive a fee with
respect to each Settlement Period (or portion thereof) (the "Unused Fee") which
shall accrue on each day during such Settlement Period in an amount equal to the
product of (i) the Unused Fee Rate, times, (ii) the excess of the Commitment
with respect to Redwood, Liberty and the PARCO APA Banks over the Redwood Net
Investment, Liberty Net Investment, PARCO Net Investment (prior to an occurrence
of a PARCO Wind-Down Event) and PARCO APA Bank Commitment
7
(following a PARCO Wind-Down Event), as applicable, on such day. The Unused Fee
shall be payable in accordance with Sections 2.5, 2.6 and 2.10 on each
Settlement Date.
Nothing in this Agreement or the other Transaction Documents shall
limit in any way the obligations of the Transferor to pay the amounts set forth
in this Section 2.4.
SECTION 2.5 Non-Liquidation Settlement and Reinvestment Procedures.
(a) On each day after the date of any Incremental Transfer but
prior to the Termination Date, and provided that no Potential Termination Event
shall have occurred and be continuing, the Collection Agent shall:
(i) set aside and hold in trust for the Administrative Agent on
behalf of the Initial Purchasers and the PARCO APA Banks, as applicable (or
deposit into the Collection Accounts if so required pursuant to Section
2.12 hereof), an amount equal to the Percentage Factor of Collections
received by the Transferor, the Sellers or the Collection Agent or
deposited into a Lock-Box Account or the Collection Accounts on or prior to
such day and not previously accounted for or applied (the "Paid Percentage
Factor");
(ii) set aside from the Paid Percentage Factor and deposit in the
Collection Accounts for the Initial Purchasers and the PARCO APA Banks, as
applicable, allocable to each in accordance with their respective Pro Rata
Shares, an amount equal to all PARCO Discount, Yield, Indemnified Amounts,
Additional Amounts, the Utilization Fee, the Unused Fee and the Servicing
Fee accrued through such day and not so previously set aside or paid;
(iii) set aside from the Paid Percentage Factor an amount sufficient
to purchase, or payable with respect to the purchase price of, the Required
Currency Hedge (if applicable);
(iv) set aside from the Paid Percentage Factor and purchase from the
Transferor, subject to Sections 2.5(d) and 2.5(e), additional undivided
percentage interests in each Receivable pursuant to Section 2.2(b) hereof;
and
(v) set aside and hold in trust for the Initial Purchasers and the
PARCO APA Banks, as applicable, and subject to Sections 2.5(d) and 2.5(e),
release on each Business Day to the Transferor free of such trust, upon the
prior approval of the Administrative Agent, an amount equal to the Paid
Percentage Factor of Collections remaining after application of Collections
as provided in clauses (i), (ii), (iii) and (iv) of this Section 2.5(a);
provided, however, on any date on which a Daily Report is required to be
delivered to the Administrative Agent pursuant to Section 2.11(iii), the
Administrative Agent shall only release such funds (if any) to the Transferor
pursuant to clause (v) above upon the Administrative Agent's receipt of the
Daily Report; otherwise, such monies will be so released to the Transferor upon
the Administrative Agent's receipt of the Weekly Report delivered immediately
following any such date and upon the prior approval of the Administrative Agent.
8
(b) From amounts set aside as described in Section 2.5(a)(ii) and,
with respect to clause (vi) below, Section 2.5(a)(iii):
(i) On the last day of each Tranche Period or on each Settlement
Date in the event the PARCO Funding Agent selects pooled funding, the
Collection Agent shall transfer to the Administrative Agent, for the
benefit of the PARCO Funding Agent, on behalf of PARCO and/or the PARCO APA
Banks, as applicable, from the amounts allocable to PARCO and/or the PARCO
APA Banks, in the manner set forth in Section 2.10 an amount equal to the
accrued and unpaid PARCO Discount for such Tranche Period or previous
calendar month, if applicable;
(ii) On each Settlement Date, from the amounts allocable to each of
Redwood and Liberty, the Collection Agent shall transfer to the
Administrative Agent, (A) for the benefit of the Redwood Funding Agent,
Redwood and the Redwood Secured Parties, an amount equal to the accrued and
unpaid Redwood Yield as of the end of the immediately preceding calendar
month, and (B) for the benefit of Liberty and the Liberty Funding Agent an
amount equal to the accrued and unpaid Liberty Yield as of the end of the
immediately preceding calendar month;
(iii) On each Settlement Date, from the amounts set aside as
described in Section 2.5(a)(ii) after application pursuant to Section
2.5(b)(i) and (ii), the Collection Agent shall transfer to the
Administrative Agent, for the benefit of the Funding Agents, the Initial
Purchasers and the PARCO APA Banks, as applicable, in the manner set forth
in Section 2.10 an amount equal to the accrued and unpaid Utilization Fee
and Unused Fee for the related Settlement Period;
(iv) On each Settlement Date, from the amounts set aside as
described in Section 2.5(a)(ii) after application pursuant to Section
2.5(b)(i), (ii), and (iii), deposit into its own account an amount equal to
the accrued and unpaid Servicing Fee;
(v) On each Settlement Date, from the amounts set aside as
described in Section 2.5(a)(ii) after application pursuant to Section
2.5(b)(i), (ii), (iii), and (iv), the Collection Agent shall transfer to
the Administrative Agent, for the benefit of the Funding Agents, the
Initial Purchasers, the Redwood Liquidity Lenders, the Liberty APA Banks
and the PARCO APA Banks, as applicable, in the manner set forth in Section
2.10, an amount equal to (A) all Indemnified Amounts and/or Additional
Amounts incurred and payable, and (B) any other amounts required to be paid
under this Agreement not previously paid as of the end of the immediately
preceding Settlement Period; and
(vi) On each Settlement Date, from the amounts set aside as
described in Section 2.5(a)(iii), the Collection Agent shall purchase, or
make payments due with respect to the purchase price of, the Required
Currency Hedge (if applicable);
provided, that such amounts set forth in Sections 2.5(b)(i), (ii), (iii),
(iv) and (v) will be based on an invoice (based on information which shall be
given by each Funding Agent by 10:00
9
a.m. New York time on the second (2nd) Business Day of each month) provided by
the Administrative Agent to the Collection Agent on the second (2nd) Business
Day of each month.
Each Funding Agent, upon its receipt of such amounts in the Funding
Account, shall distribute such amounts to the Initial Purchasers and/or the
Liberty APA Banks and/or the PARCO APA Banks and/or the Redwood Liquidity
Lenders entitled thereto as set forth above; provided that if the Funding Agent
shall have insufficient funds to pay all of the above amounts in full on any
such date, the Funding Agent shall notify the Transferor and the Transferor
shall immediately pay to the Funding Agent, from funds previously paid to the
Transferor, an amount equal to such insufficiency.
(c) Subject to subsection 2.5(d) below, the Collection Agent shall
remit to the Transferor, on each Business Day prior to the Termination Date, and
provided that no Potential Termination Event shall have occurred and be
continuing, upon the Administrative Agent's receipt of the most recent Weekly
Report (or Daily Report if required pursuant to Section 2.11) and with the
Administrative Agent's prior approval, such portion of Collections not allocated
to (i) the Initial Purchasers, the Liberty APA Banks and the PARCO APA Banks,
(ii) the Collection Agent as payment of the Servicing Fee or (iii) the provider
of the Required Currency Hedge. So long as all of the above amounts are paid in
full on the day due, such Collections remitted to the Transferor are available
to pay any Transferor Subordinated Obligation then due and owing and for other
ordinary business purposes of the Transferor.
(d) Prior to a Termination Date or Potential Termination Date but
after a Redwood Termination Date, a portion of all funds to be applied pursuant
to Sections 2.5(a)(iv), 2.5(a)(v) and 2.5(c) shall be released to Redwood until
the Redwood Net Investment is reduced to zero based on the quotient, as
determined at the time of the Redwood Termination Date, of the Redwood Net
Investment divided by the Aggregate Net Investment. Prior to a Termination Date
or Potential Termination Date but after a Liberty Termination Event, a portion
of all funds to be applied pursuant to Section 2.5(a)(iv), 2.5(a)(v) and 2.5(c)
shall be released to Liberty until the Liberty Net Investment is reduced to zero
based on the quotient, as determined at the time of the Liberty Termination
Event, of the Liberty Net Investment divided by the Aggregate Net Investment.
SECTION 2.6 Liquidation Settlement Procedures.
(a) If at any time on or prior to the Termination Date, the
Percentage Factor is greater than the Maximum Percentage Factor, then the
Transferor shall immediately transfer to the Administrative Agent, for the
benefit of the Funding Agents, Initial Purchasers and/or the PARCO APA Banks, as
applicable, in the manner set forth in Section 2.10 from previously received
Collections that have been released to or set aside for the Transferor pursuant
to Section 2.5, an amount that will result in a Percentage Factor less than or
equal to the Maximum Percentage Factor. Such amount shall be applied to the
reduction of the Aggregate Net Investment in a manner to be determined by the
Funding Agents.
(b) On the Termination Date and on each day thereafter, and on each
day on which a Potential Termination Event has occurred and is continuing, the
Collection Agent shall in the following priority:
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(i) set aside and hold in trust for the Administrative Agent on
behalf of the Initial Purchasers and/or the PARCO APA Banks, as applicable
(or deposit into the Collection Account if so required pursuant to Section
2.12 hereof), the Percentage Factor of all Collections received by the
Transferor, the Sellers or the Collection Agent or deposited into a
Lock-Box Account or the Collection Accounts on such day;
(ii) set aside and hold in trust for the Transferor such portion of
Collections deposited in the Collection Accounts not allocated to the
Administrative Agent on behalf of the Initial Purchasers and/or the PARCO
APA Banks, as applicable, or the Collection Agent; and
(iii) transfer to the Administrative Agent, for the benefit of the
Funding Agents, the Initial Purchasers or the PARCO APA Banks, as
applicable, in the manner set forth in Section 2.10 any amounts set aside
for the Initial Purchasers and/or the PARCO APA Banks pursuant to Section
2.5 above.
(c) (i) On the last day of each Tranche Period and on each
Settlement Date to occur on or after the Termination Date or during the
continuation of a Potential Termination Event, the Collection Agent shall
transfer to the Administrative Agent, for the benefit of the Funding Agents, the
Initial Purchasers and the PARCO APA Banks, as applicable, in the manner set
forth in Section 2.10 the amounts so set aside for the Initial Purchasers and
the PARCO APA Banks pursuant to Section 2.6(b)(i) but not to exceed (together
with amounts pursuant to Section 2.6(b)(iii) above) transferred to the
Administrative Agent the sum of (i):
(A) for the account of the PARCO Funding Agent for the benefit
of PARCO and the PARCO APA Banks the accrued PARCO Discount for such Tranche
Period or previous calendar month, as applicable,
(B) for the account of the Redwood Funding Agent for the
benefit of Redwood, the accrued and unpaid Redwood Yield for the previous
calendar month,
(C) for the account of the Liberty Funding Agent for the
benefit of Liberty, the accrued and unpaid Liberty Yield for the previous
calendar month,
(D) the portion of the Aggregate Net Investment allocated to
such Tranche Period or such previous calendar month, as applicable, and
(E) all other Aggregate Unpaids.
(ii) On such day, the Collection Agent shall deposit to its account,
from the amounts set aside for the Initial Purchasers and the PARCO APA
Banks pursuant to the preceding sentence which remain after payment in full
of the aforementioned amounts, the accrued Servicing Fee for such Tranche
Period.
(iii) If there shall be insufficient funds on deposit for the
Collection Agent to distribute funds in payment in full of the
aforementioned amounts, the Collection Agent shall distribute funds:
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(A) first, (1) in payment of the accrued PARCO Discount for the
account of the PARCO Funding Agent for the benefit of PARCO and/or the PARCO APA
Banks, as applicable, (2) in payment of the accrued Redwood Yield for the
account of the Redwood Funding Agent for the benefit of Redwood, and (3) in
payment of the accrued Liberty Yield for the account of the Liberty Funding
Agent for the benefit of Liberty; provided that the payments in items (1), (2)
and (3) shall be payable ratably based on the Net Investment of each such Person
at such time,
(B) second, if the Transferor or C&A or any Affiliate thereof
is not then the Collection Agent, to the Collection Agent's account, in payment
of the Servicing Fee payable to the Collection Agent,
(C) third, in reduction of the Aggregate Net Investment
allocated to any Tranche Period or any Settlement Period, as applicable, ending
on such date,
(D) fourth, in payment of all fees (including, but not limited
to, the Utilization Fee and the Unused Fee) payable by the Transferor hereunder,
(E) fifth in payment of the Aggregate Net Investment until the
Aggregate Net Investment has been reduced to zero,
(F) sixth, in payment of all other Aggregate Unpaids
(including, but not limited to, all Transferor Subordinated Obligations owed by
the Transferor to the Funding Agents, the Initial Purchasers, the PARCO APA
Banks and the Administrative Agent pursuant to Sections 7.1, 7.2, 7.3 and 7.4),
(G) seventh, to the Eligible Counterparties, any breakage and
termination costs due and owing, and
(H) eighth, if C&A is the Collection Agent, to its account as
Collection Agent, in payment of the accrued and unpaid Servicing Fee payable to
such Person as Collection Agent; provided, that payment of the Servicing Fee
pursuant to this eighth clause shall be considered a Transferor Subordinated
Obligation.
The Administrative Agent, upon its receipt of such amounts in the Administrative
Agent's account, shall distribute such amounts to the Initial Purchasers, the
PARCO APA Banks and the Funding Agents entitled thereto as set forth above;
provided that if the Administrative Agent shall have insufficient funds to pay
all of the above amounts in full on any such date, the Administrative Agent
shall pay such amounts in the order of priority set forth above and, with
respect to any such category above for which the Administrative Agent shall have
insufficient funds to pay all amounts owing on such date, on a pro rata basis
based upon the portion that each such Person's Net Investment constitutes of the
Aggregate Net Investment at such time among all such Persons entitled to payment
thereof.
(d) Following the date on which the Aggregate Net Investment has
been reduced to zero and all accrued PARCO Discount, Yield, Servicing Fees and
all other Aggregate Unpaids have been paid in full,
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(i) the Collection Agent shall recompute the Percentage Factor,
(ii) the Administrative Agent, on behalf of the Initial Purchasers,
the PARCO APA Banks and the Redwood Secured Parties shall be considered to
have reconveyed to the Transferor all of the Initial Purchasers' and the
PARCO APA Banks' right, title and interest in, to and under the Receivables
and Related Security, the Required Currency Hedge, Collections and Proceeds
with respect thereto,
(iii) the Collection Agent shall pay to the Transferor any remaining
Collections set aside and held by the Collection Agent pursuant to Section
2.6(b)(i), and
(iv) the Administrative Agent, on behalf of the Initial Purchasers,
the PARCO APA Banks and the Redwood Secured Parties, shall execute and
deliver to the Transferor, at the Transferor's expense, such documents or
instruments as are necessary to terminate the Initial Purchasers' and the
PARCO APA Banks' interest in the Receivables and Related Security, the
Required Currency Hedge, Collections and Proceeds with respect thereto.
Any such documents shall be prepared by or on behalf of the Transferor. On the
last day of each Tranche Period, the Collection Agent shall remit to the
Transferor such portion of Collections set aside for the Transferor pursuant to
this Section 2.6.
SECTION 2.7 Fees. Notwithstanding any limitation on recourse contained
in this Agreement, the Transferor shall pay the following non-refundable fees:
(a) On each Settlement Date from the Collection Accounts, to the
Administrative Agent, for the benefit of the Funding Agents, the Initial
Purchasers and the PARCO APA Banks, as applicable, in the manner set forth in
Sections 2.5, 2.6 and 2.10, the Utilization Fee and the Unused Fee.
(b) On the date of execution hereof, to Chase Securities Inc.
solely for its own account, the Structuring Fee.
(c) On the date of execution hereof, to Redwood, Liberty and the
PARCO APA Banks, 0.50% of the applicable Commitment of Redwood, Liberty and the
PARCO APA Banks.
SECTION 2.8 Protection of Ownership Interest of the Initial Purchasers
and the PARCO APA Banks.
(a) The Transferor, C&A and each other Seller each agree that it
will, from time to time, at its sole expense, promptly execute and deliver all
instruments and documents and take all actions as may be necessary or as the
Administrative Agent may reasonably request in order to perfect or protect the
Transferred Interest or to enable the Administrative Agent, on behalf of the
Initial Purchasers, the PARCO APA Banks, the Funding Agents or the Redwood
Secured Parties to exercise or enforce any of its rights hereunder. Without
limiting the foregoing, the Transferor and each Seller will, upon the request of
the Administrative Agent, on behalf of the Initial Purchasers or any of the
PARCO APA Banks, in order to accurately reflect this
13
purchase and sale transaction, (x) execute and file such financing or
continuation statements or amendments thereto or assignments thereof (as
permitted pursuant to Section 9.6 hereof) as may be requested by the
Administrative Agent for the benefit of the Initial Purchasers and the PARCO APA
Banks and (y) ▇▇▇▇ its respective master data processing records with a legend
describing the conveyance to the Transferor (in the case of each Seller) and the
Administrative Agent for the benefit of the Initial Purchasers , the PARCO APA
Banks and the Funding Agents, of the Transferred Interest as reasonably
requested by the Administrative Agent. The Transferor, C&A and each other Seller
shall, upon the reasonable request of the Administrative Agent, obtain such
additional search reports as the Administrative Agent, for the benefit of the
Initial Purchasers, the PARCO APA Banks and the Funding Agents, shall reasonably
request. To the fullest extent permitted by applicable law, the Administrative
Agent shall be permitted to sign and file continuation statements and amendments
thereto and assignments thereof without the Transferor's, C&A's or any other
Seller's signature. Carbon, photographic or other reproduction of this Agreement
or any financing statement shall be sufficient as a financing statement. Neither
the Transferor, C&A nor any other Seller shall change its respective name,
identity or corporate structure (within the meaning of Section 9-402(7) of the
Relevant UCC), nor relocate its respective chief executive office or any office
where Records are kept unless it shall have: (i) given the Administrative Agent
at least thirty (30) days' prior notice thereof and (ii) prepared at
Transferor's, C&A's or such other Seller's expense, as applicable, and delivered
to the Administrative Agent all financing statements, instruments and other
documents necessary to preserve and protect the Transferred Interest or
reasonably requested by the Administrative Agent in connection with such change
or relocation. Any filings under the Relevant UCC or otherwise that are
occasioned by such change in name or location shall be made at the expense of
Transferor, C&A or such other Seller, as applicable.
(b) The Collection Agent shall instruct all Obligors to cause all
Collections to be deposited directly into a Lock-Box Account. Any Lock-Box
Account maintained by a Lock-Box Bank pursuant to the related Lock-Box Agreement
shall be owned by the Transferor; provided, however, that any such Lock-Box
Account shall be under the exclusive dominion and control of the Administrative
Agent which is hereby granted to the Administrative Agent by C&A and the
Transferor. The Collection Agent shall be permitted to give instructions to the
Lock-Box Banks for so long as neither a Collection Agent Default nor any other
Termination Event has occurred hereunder. The Collection Agent shall not add any
bank as a Lock-Box Bank to those listed on Exhibit B attached hereto unless such
bank has entered into a Lock-Box Agreement. The Collection Agent shall not
terminate any bank as a Lock-Box Bank unless the Administrative Agent shall have
received fifteen (15) days' prior notice of such termination. If the Transferor,
a Seller or the Collection Agent receives any Collections, the Transferor, such
Seller or the Collection Agent, as applicable, shall immediately, but in any
event within one Business Day of receipt, remit such Collections to a Lock-Box
Account.
SECTION 2.9 Deemed Collections, Application of Payments.
(a) If on any day the Administrative Agent notifies the Transferor
or the Transferor discovers that any of the representations or warranties made
herein is untrue or incorrect with respect to a Receivable in any material
respect as of the date such representation or warranty was made and any
applicable cure period, if any, has passed, then the Transferor shall be deemed
to have received on such day a Collection of such Receivable in full, and the
14
Transferor shall, on such day, pay to the Collection Agent an amount equal to
the Outstanding Balance of such Receivable and such amount shall be allocated
and applied by the Collection Agent as a Collection allocable to the Transferred
Interest in accordance with Section 2.5 or 2.6 hereof, as applicable. The
Aggregate Net Investment shall be reduced by the amount of such payment actually
received by the Funding Agents. Simultaneously with any such payment by the
Transferor, the Administrative Agent, on behalf of the Initial Purchasers and
the PARCO APA Banks, as the case may be, shall convey all of its right, title
and interest in such Receivable and Related Security to the Transferor and shall
take all action reasonably requested by the Transferor to effectuate such
conveyance.
(b) If on any day a Receivable becomes a Diluted Receivable, the
Transferor shall be deemed to have received on such day a Collection of such
Receivable in the amount of such Dilution Adjustment, and the Transferor shall
pay to the Collection Agent an amount equal to such Dilution Adjustment. Any
such amount shall be applied by the Collection Agent as a Collection in
accordance with Section 2.5 or 2.6 hereof, as applicable. The Aggregate Net
Investment shall be reduced by the amount of such payment actually received by
the Funding Agents.
(c) Any payment by an Obligor in respect of a Receivable shall,
except as otherwise specified by such Obligor or otherwise required by contract
or law and unless otherwise instructed by the Initial Purchasers, be applied as
a Collection of any Receivable of such Obligor included in the Transferred
Interest (starting with the oldest such Receivable) to the extent of any amounts
then due and payable thereunder before being applied to any other receivable or
other indebtedness of such Obligor.
SECTION 2.10 Payments and Computations, Etc. All amounts to be paid or
deposited by the Transferor or the Collection Agent hereunder shall be paid or
deposited in accordance with the terms hereof no later than 12:00 P.M. (New York
time) on the day when due in immediately available funds to a special account
(account number) in the name of the Administrative Agent and maintained at
Chase's office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ in The City of New York. Any payments to
be made by the Transferor or the Collection Agent pursuant to Sections 2.5 and
2.6 shall be made by withdrawing funds from any or all of the Collection
Accounts, at the option of the Collection Agent or, in the event of a Potential
Termination Event or Termination Event, at the option of the Administrative
Agent. The Transferor shall, to the extent permitted by law, pay to the
Administrative Agent, for the benefit of the applicable Funding Agent, Initial
Purchaser and the PARCO APA Banks, interest on all amounts not paid or deposited
when due hereunder as follows: (a) to the PARCO Funding Agent for the benefit of
PARCO and/or the PARCO APA Banks, 2% per annum plus the Applicable Margin plus
the PARCO Base Rate on the share of such amounts allocable to PARCO and the
PARCO APA Banks; (b) to the Redwood Funding Agent for the benefit of Redwood,
the Redwood Yield on the share of such amounts allocable to Redwood; and (c) to
the Liberty Funding Agent for the benefit of Liberty, 2% plus the Liberty Base
Rate on the share of such amounts allocable to Liberty. All computations of
PARCO Discount, Yield, interest and all per annum fees hereunder shall be made
on the basis of a year of 360 days (or, in the case of PARCO Discount calculated
at the Base Rate, a year of 365 or 366 days, as applicable) for the actual
number of days (including the first but excluding the last day) elapsed. Any
computations by the Administrative Agent or a Funding Agent of amounts payable
by the Transferor hereunder shall be binding upon
15
the Transferor absent manifest error. Promptly upon receipt of any amounts due
and owing to the Initial Purchasers, the PARCO APA Banks and the Funding Agents
hereunder on any Business Day, the Administrative Agent shall, by no later than
3:00 p.m. (New York time), remit such amounts in immediately available funds to
such Persons by depositing such amounts in the applicable Funding Account, until
otherwise notified in writing by the applicable Funding Agent.
SECTION 2.11 Reports. The Collection Agent shall prepare and forward
to the Administrative Agent (i) on the Monthly Settlement Report Date of each
month, a Settlement Report as of the end of the last day of the immediately
preceding Settlement Period, (ii) on each Weekly Report Date, a Weekly Report as
of the end of the last day of the immediately preceding Weekly Settlement
Period, (iii) on each Business Day (prior to an Incremental Transfer on such
day) (A) after the Guarantor shall have permitted either (1) the Interest
Coverage Ratio during any period set forth in subsection (a) of the definition
of "Interest Coverage Ratio" to be less than the ratio set forth in such
definition for such period or (2) the Leverage Ratio during any period set forth
in subsection (a) of the definition of "Leverage Ratio" to be greater than the
ratio set forth in such definition for such period, and continuing until the
Administrative Agent shall have notified the Guarantor otherwise (at the
direction of all of the Initial Purchasers and the PARCO APA Banks) and (B) on
which Collections received by the Transferor, the Sellers or the Collection
Agent or deposited into a Lock-Box Account or the Collection Accounts on such
Business Day equal or exceed $7,500,000, a Daily Report if the Transferor wishes
to have funds released to it pursuant to Section 2.5(a)(v) prior to the delivery
of the next Weekly Report, and (iv) as soon as reasonably practicable, from time
to time, such other information as the Administrative Agent may reasonably
request. With respect to subsection 2.11(iii)(A) herein, the Collection Agent
may again provide a Weekly Report after the Guarantor has complied with the
Interest Coverage Ratio or Leverage Ratio for two (2) consecutive fiscal
quarters; unless such requirement shall have been waived by the Administrative
Agent with the prior consent of the Funding Agents.
SECTION 2.12 Collection Accounts. There shall be established on the
day of the initial Incremental Transfer hereunder and maintained, for the
benefit of the Administrative Agent, the Funding Agents, the Initial Purchasers
and the PARCO APA Banks, three segregated accounts (collectively, the
"Collection Accounts"), each bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Administrative Agent,
the Initial Purchasers, the Funding Agents and the PARCO APA Banks. The
Collection Agent shall deposit all Collections into the Collection Account
within one Business Day of (i) deposit thereof into a Lock-Box Account or (ii)
receipt thereof by the Transferor, a Seller or the Collection Agent as follows:
(i) an account in the United States to hold all Collections received in the
United States (the "U.S. Dollar Collection Account"), (ii) an account in Canada
to hold all Collections received in Canada that are paid in U.S. Dollars (the
"Canada/U.S. Dollar Collection Account") and (iii) an account in Canada to hold
all Collections received in Canada that are paid in Canadian Dollars (the
"Canada/Canadian Dollar Collection Account"). All funds which are deposited in
the United States, shall be deposited into the U.S. Dollar Collection Account;
all funds which are deposited in Canada in U.S. Dollars, shall be deposited into
the Canada/U.S. Dollar Collection Account; and all funds which are deposited in
Canada in Canadian Dollars, shall be deposited into the Canada/Canadian Dollar
Collection Account. All such deposits to the U.S. Dollar Collection Account and
the Canada/U.S. Dollar Collection Account shall be made in U.S. Dollars. All
such deposits to the Canada/Canadian Dollar Collection Account shall be made in
16
Canadian Dollars. Funds on deposit in the Collection Accounts shall be invested
by the Administrative Agent in Permitted Investments selected by the Collection
Agent that will mature so that sufficient funds will be available prior to the
last day of each successive Tranche Period or each Settlement Date, as
applicable, following such investment. On the last day of each Tranche Period or
each Settlement Date, as applicable, all interest and earnings (net of losses
and investment expenses) on funds on deposit in the Collection Accounts shall be
retained in the Collection Accounts and be available to make any payments
required to be made hereunder (including PARCO Discount and Yield) by the
Transferor. On the date on which the Aggregate Net Investment is zero and all
accrued PARCO Discount, Yield, Servicing Fees and all other Aggregate Unpaids
have been paid in full, any funds remaining on deposit in the Collection
Accounts shall be paid to the Transferor.
SECTION 2.13 Right of Setoff. The Administrative Agent and each of the
Initial Purchasers, the Liberty APA Banks and the PARCO APA Banks are hereby
authorized (in addition to any other rights they may have) at any time after the
occurrence of the Termination Date, or during the continuation of a Potential
Termination Event, to set-off, appropriate and apply (without presentment,
demand, protest or other notice which are hereby expressly waived) any deposits
and any other indebtedness held or owing by the Administrative Agent, the
Initial Purchasers, the Liberty APA Banks or such PARCO APA Bank to, or for the
account of, the Transferor against the amount of the Aggregate Unpaids owing by
the Transferor to such Person (even if contingent or unmatured).
SECTION 2.14 Sharing of Payments, Etc. If the Initial Purchasers, the
Liberty APA Banks or any PARCO APA Bank (for purposes of this Section 2.14 only,
being a "Recipient") shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff, or otherwise) on account of any
interest in the Transferred Interest owned by it in excess of its ratable share
of payments on account of any interest in the Transferred Interest obtained by
the Initial Purchasers and/or the Liberty APA Banks and/or the PARCO APA Banks
entitled thereto, such Recipient shall forthwith purchase from the Initial
Purchasers and/or the Liberty APA Banks and/or the PARCO APA Banks entitled to a
share of such amount participations in the percentage interests owned by such
Persons as shall be necessary to cause such Recipient to share the excess
payment ratably with each such other Person entitled thereto; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such Recipient, such purchase from each such other Person shall be rescinded and
each such other Person shall repay to the Recipient the purchase price paid by
such Recipient for such participation to the extent of such recovery, together
with an amount equal to such other Person's ratable share (according to the
proportion of (a) the amount of such other Person's required payment to (b) the
total amount so recovered from the Recipient) of any interest or other amount
paid or payable by the Recipient in respect of the total amount so recovered.
SECTION 2.15 Broken Funding.
(a) In the event of the payment of any principal of any PARCO
Eurodollar Tranche other than on the last day of the PARCO Eurodollar Tranche
Period applicable thereto (including as a result of the occurrence of the
Termination Date or an optional prepayment of a PARCO Eurodollar Tranche), (b)
the conversion of any PARCO Eurodollar Tranche other than on the last day of the
related PARCO Eurodollar Tranche Period, or (c) any failure to borrow,
17
convert, continue or prepay any PARCO Eurodollar Tranche on the date specified
in any notice delivered pursuant hereto, then, in any such event, the Transferor
shall compensate the applicable PARCO APA Banks for the loss, cost and expense
attributable to such event. Such loss, cost or expense to any PARCO APA Bank
shall be deemed to include an amount determined by such PARCO APA Bank to be the
excess, if any, of (i) the amount of PARCO Discount which would have accrued on
the principal amount of such PARCO Eurodollar Tranche had such event not
occurred, at the PARCO Eurodollar Rate that would have been applicable to such
PARCO Eurodollar Tranche, for the period from the date of such event to the last
day of the PARCO Eurodollar Tranche Period (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the related
PARCO Eurodollar Tranche Period), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
PARCO APA Bank would bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other banks in the
interbank eurodollar market. Within forty-five (45) days after any PARCO APA
Bank hereunder receives actual knowledge of any of the events specified in this
Section 2.15(a), a certificate of such PARCO APA Bank setting forth any amount
or amounts that such PARCO APA Bank is entitled to receive pursuant to this
Section 2.15(a) and the reason(s) therefor shall be delivered to the Transferor
by the Administrative Agent (with a copy delivered by the Administrative Agent
to the PARCO Funding Agent) and shall be conclusive absent manifest error. The
Transferor shall pay to the Administrative Agent on behalf of each such PARCO
APA Bank the amount shown as due on any such certificate within ten (10) days
after receipt thereof.
(b) The Transferor shall pay to the Administrative Agent for the
account of Redwood, upon request of Redwood, such amount or amounts as shall
compensate Redwood for any loss, cost or expense incurred by Redwood in the
ordinary course (as reasonably determined by Redwood) as a result of any
reduction by the Transferor in the Redwood Net Investment (and accompanying loss
of Redwood Yield thereon) other than on the maturity date of the Commercial
Paper (or other financing source) funding such Redwood Net Investment, which
compensation shall include an amount equal to any loss or expense incurred by
Redwood during the period from the date of such reduction to (but excluding) the
maturity date of such Commercial Paper (or other financing source) if the rate
of interest obtainable by Redwood upon the redeployment of funds in an amount
equal to such reduction is less than the interest rate applicable to such
Commercial Paper (or other financing source). The reasonable determination by
Redwood of the amount of any such loss or expense shall be set forth in a
written notice to the Transferor in reasonable detail and shall be final,
binding and conclusive on the Transferor (absent manifest error) for all
purposes.
(c) The Transferor shall pay to the Administrative Agent for the
account of Liberty, upon request of Liberty, such amount or amounts as shall
compensate Liberty for any loss, cost or expense incurred by Liberty in the
ordinary course (as reasonably determined by Liberty) as a result of any
reduction by the Transferor in the Liberty Net Investment (and accompanying loss
of Liberty Yield thereon) other than on the maturity date of the Commercial
Paper (or other financing source) funding such Liberty Net Investment, which
compensation shall include an amount equal to any loss or expense incurred by
Liberty during the period from the date of such reduction to (but excluding) the
maturity date of such Commercial Paper (or other financing source) if the rate
of interest obtainable by Liberty upon the redeployment of funds in an amount
equal to such reduction is less than the interest rate applicable to such
18
Commercial Paper (or other financing source). The reasonable determination by
Liberty of the amount of any such loss or expense shall be set forth in a
written notice to the Transferor in reasonable detail and shall be final,
binding and conclusive on the Transferor (absent manifest error) for all
purposes.
SECTION 2.16 Conversion and Continuation of Outstanding, Tranches
Funded by the PARCO APA Banks. Prior to the occurrence of the Termination Date
or a Potential Termination Event, (a) each PARCO BR Tranche hereunder may, at
the option of the Transferor, be converted to a PARCO Eurodollar Tranche and (b)
each PARCO Eurodollar Tranche may, at the option of the Transferor, be continued
as a PARCO Eurodollar Tranche or converted to a PARCO BR Tranche. If the
Termination Date has occurred or a Potential Termination Event has occurred and
is continuing, then (i) no outstanding Tranche funded by the PARCO APA Banks may
be converted to, or continued as, a PARCO Eurodollar Tranche and (ii) unless
repaid, each PARCO Eurodollar Tranche shall be converted to a PARCO BR Tranche
on the last day of the Tranche Period related thereto. For any such conversion
or continuation, the Transferor shall give the Administrative Agent irrevocable
notice (each, a "Conversion/Continuation Notice") of such request not later than
10:00 a.m. (New York time) (i) in the case of a conversion of a PARCO BR Tranche
into a PARCO Eurodollar Tranche, or a continuation of a PARCO Eurodollar Tranche
as a PARCO Eurodollar Tranche, three (3) Business Days before the date of such
conversion or continuation, as applicable, and (ii) following the Termination
Date or the occurrence and continuation of a Potential Termination Event, in the
case of a conversion of a PARCO Eurodollar Tranche into a PARCO BR Tranche or a
continuation of a PARCO BR Tranche as a PARCO BR Tranche, on the Business Day of
such conversion. Promptly upon receipt by the Administrative Agent of any such
notice, the Administrative Agent shall deliver a copy thereof to the PARCO
Funding Agent (but in no event later than the close of business on the same
day). If a Conversion/Continuation Notice has not been timely delivered with
respect to any PARCO BR Tranche or PARCO Eurodollar Tranche, such funding shall
be automatically continued as, or converted to, a PARCO BR Tranche. Each
Conversion/Continuation Notice shall specify (a) the requested date (which shall
be a Business Day) of such conversion or continuation, (b) the aggregate amount
and rate option applicable to the Tranche which is to be converted or continued
and (c) the amount and rate option(s) of Tranche(s) into which such Tranche is
to be converted or continued.
SECTION 2.17 Illegality.
(a) Notwithstanding any other provision herein, if, after the
Closing Date, the adoption of any Law or bank regulatory guideline or any
amendment or change in the interpretation of any existing or future Law or bank
regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Official Body (in the case of any bank regulatory guideline, whether or not
having the force of Law), shall make it unlawful for a PARCO APA Bank to acquire
or maintain a PARCO Eurodollar Tranche as contemplated by this Agreement, (i)
the Administrative Agent on behalf of such PARCO APA Bank shall, within
forty-five (45) days after receiving actual knowledge thereof, deliver a
certificate to the Transferor (with a copy to the PARCO Funding Agent) setting
forth the basis for such illegality, which certificate shall be conclusive
absent manifest error, (ii) the commitment of such PARCO APA Bank hereunder to
make a portion of a PARCO Eurodollar Tranche, continue any portion of a PARCO
Eurodollar Tranche as such and
19
convert a PARCO BR Tranche to a PARCO Eurodollar Tranche shall forthwith be
canceled, and such cancellation shall remain in effect so long as the
circumstance described above exists, and (iii) such PARCO APA Bank's portion of
any PARCO Eurodollar Tranche then outstanding shall be converted automatically
to a PARCO BR Tranche on the last day of the related PARCO Eurodollar Tranche
Period, or within such earlier period as required by law.
If any such conversion of a portion of a PARCO Eurodollar Tranche
occurs on a day which is not the last day of the related PARCO Eurodollar
Tranche Period, the Transferor shall, pursuant to Section 2.15, pay to the
Administrative Agent on behalf of such PARCO APA Bank such amounts, if any, as
may be required to compensate such PARCO APA Bank. If circumstances subsequently
change so that it is no longer unlawful for an affected PARCO APA Bank to
acquire or to maintain a portion of a PARCO Eurodollar Tranche as contemplated
hereunder, such PARCO APA Bank will, as soon as reasonably practicable after
such PARCO APA Bank knows of such change in circumstances, notify the
Transferor, the Administrative Agent and the PARCO Funding Agent, and upon
receipt of such notice, the obligations of such PARCO APA Bank to acquire or
maintain its acquisition of portions of PARCO Eurodollar Tranches or to convert
its portion of a PARCO BR Tranche into portions of PARCO Eurodollar Tranches
shall be reinstated.
(b) Each PARCO APA Bank agrees that, upon the occurrence of any
event giving rise to the operation of Section 2.17(a) with respect to such PARCO
APA Bank, it will, if requested by the Transferor and to the extent permitted by
law or by the relevant Official Body, endeavor in good faith to change the
office at which it books its portions of Eurodollar Tranches hereunder if such
change would make it lawful for such PARCO APA Bank to continue to acquire or to
maintain its acquisition of portions of PARCO Eurodollar Tranches hereunder;
provided, however, that such change may be made in such manner that such PARCO
APA Bank, in its sole determination, suffers no unreimbursed cost or expense or
any other disadvantage whatsoever.
SECTION 2.18 Inability to Determine PARCO Eurodollar Rate. If, prior
to the first day of any PARCO Eurodollar Tranche Period:
(1) the Administrative Agent shall have determined (which
determination in the absence of manifest error shall be conclusive and
binding upon the Transferor) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the PARCO Eurodollar Rate for such PARCO Eurodollar Tranche
Period; or
(2) the Administrative Agent shall have received notice from one or
more PARCO APA Banks that the PARCO Eurodollar Rate determined or to be
determined for such PARCO Eurodollar Tranche Period will not adequately and
fairly reflect the cost to such PARCO APA Banks (as conclusively certified
by such PARCO APA Banks) of purchasing or maintaining their affected
portions of PARCO Eurodollar Tranches during such PARCO Eurodollar Tranche
Period;
then, in either such event, the Administrative Agent shall give telecopy or
telephonic notice thereof (confirmed in writing) to the Transferor and the PARCO
APA Banks as soon as
20
practicable (but, in any event, within thirty (30) days after such determination
or notice, as applicable) thereafter. Until such notice has been withdrawn by
the Administrative Agent, no further PARCO Eurodollar Tranches shall be made.
The Administrative Agent agrees to withdraw any such notice as soon as
reasonably practicable after the Administrative Agent is notified of a change in
circumstances which makes such notice inapplicable.
SECTION 2.19 Exchange of Canadian Dollars into U.S. Dollars.
All amounts transferred from a Canada/Canadian Dollar Collection
Account to the U.S. Dollar Collection Account shall be exchanged by the
Collection Agent or the Administrative Agent into U.S. Dollars, and if by the
Administrative Agent, then only at the written direction of the Collection
Agent. Subject to the last paragraph in this Section 2.19, the Collection Agent
shall solicit offer quotations from at least two Authorized Foreign Exchange
Dealers for effecting such exchange and shall compare such offer quotations to
the Required Currency Hedge and select the execution which will require the
least amount of Canadian Dollars to purchase one (1) U.S. Dollar. The Collection
Agent shall then direct the Administrative Agent in writing to effect such
exchange with the Authorized Foreign Exchange Dealer or the Eligible
Counterparty as soon thereafter as is reasonably practicable.
The Collection Agent shall notify the Administrative Agent in writing
of the name and payment instructions of the Authorized Foreign Exchange Dealer
or Eligible Counterparty, and shall direct the Administrative Agent in writing
to execute the trade. The Administrative Agent shall withdraw the portion of the
Canadian Dollars from the appropriate Canada/Canadian Dollar Collection Account
required to be paid pursuant to such agreement or agreements and make the
payments described in the payment instructions provided pursuant to the
preceding sentence, all in accordance with the written instructions of the
Collection Agent.
The Collection Agent shall maintain written records of any quotations
received in response to any solicitations made pursuant to this Section 2.19 and
shall make the same available to the Administrative Agent promptly upon request.
If, as a result of changes in customary market practice in, or other
changes relating to, the currency exchange markets in Canada, the Collection
Agent is unable to comply with the terms thereof in respect of the purchase of
U.S. Dollars with Canadian Dollars, then the parties hereto will use all
reasonable efforts to agree on the terms of an amendment hereto and to amend the
terms hereof in order to permit such compliance with the terms hereof or to
reflect such customary market practice.
The foregoing shall be the exclusive method by which amounts may be
transferred by the Administrative Agent from a Canada/Canadian Dollar Collection
Account to the U.S. Dollar Collection Account; provided, however, as an
alternate transfer method, the Collection Agent may transfer the required amount
of U.S. Dollars, calculated in accordance with the Canadian Exchange Percentage,
to the U.S. Dollar Collection Account and upon completion of such transfer, the
Administrative Agent shall distribute from such Canada/Canadian Dollar
Collection Account the corresponding amount of Canadian Dollars to or upon the
order of the Collection Agent; and provided further that the amount of U.S.
Dollars
21
transferred is not less than the amount of U.S. Dollars that would have been
transferred using the Valuation Price.
The Administrative Agent shall, in no event whatsoever, be responsible
for any loss or damages arising out of or with respect to any currency exchange
pursuant to this Article II except to the extent provided in Article IX.
SECTION 2.20 Procedure for Decreasing the Facility Limit.
On any Settlement Date prior to a Termination Date, upon the written
request of the Transferor, the aggregate Facility Limit may be permanently
reduced (a "Decrease") by the Collection Agent; provided that the Transferor
shall have given the Collection Agent and the Administrative Agent irrevocable
written notice (effective upon receipt) of the amount of such Decrease prior to
10:00 a.m. New York time on a Business Day that is at least ten (10) days prior
to such Decrease; provided, that any such Decrease shall be in an amount equal
to $10,000,000 and integral multiples of $1,000,000 in excess thereof and
provided, further, no Decrease may cause the Facility Limit to be lower than
$100,000,000 or the Facility Limit to be less than the Aggregate Net Investment.
Upon receipt of notice required in Section 2.20 from the Transferor, the
Administrative Agent shall forward a copy of such notice to each Funding Agent
with respect to each Initial Purchaser or PARCO APA Bank, no later than 2:00
p.m. (New York time), on the day received. Following a Decrease, Schedule I
attached hereto shall be replaced with a revised Schedule I that reflects the
reduced Facility Limit, as well as the reduced Purchase Limits and Commitments,
where applicable, of the Initial Purchasers and PARCO APA Banks. Each Purchase
Limit and Commitment, if applicable, shall be reduced pro rata in accordance
with subsection 2.5(e).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to the Administrative Agent, each
Funding Agent, the Initial Purchasers and the PARCO APA Banks that:
(a) Corporate Existence and Power. The Transferor is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted. The
Transferor is duly qualified to do business in, and is in good standing in,
every other jurisdiction in which the nature of its business requires it to be
so qualified.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Transferor of this Agreement and the
other Transaction Documents to which the Transferor is a party (i) are within
the Transferor's corporate powers, (ii) have been duly authorized by all
necessary corporate action, (iii) require no action by or in respect of, or
filing with, any Official Body or official thereof (except as contemplated by
Section 2.8 hereof or as have been taken or filed), (iv) do not contravene, or
22
constitute a default under, any provision of applicable Law or of the
Certificate of Incorporation or Bylaws of the Transferor, or accelerate or
permit the acceleration of any performance required by any agreement or other
instrument binding upon the Transferor, or (v) do not result in the creation or
imposition of any Adverse Claim on the assets of the Transferor or any of its
Subsidiaries (except as contemplated by Section 2.8 hereof).
(c) Binding Effect. Each of this Agreement and the other
Transaction Documents to which the Transferor is a party constitutes, and the
Transfer Certificate, upon payment of the Transfer Price set forth therein, will
constitute the legal, valid and binding obligation of the Transferor,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of
creditors generally and general equitable principles (whether considered in a
proceeding at law or in equity).
(d) Perfection. Immediately preceding each Transfer hereunder, the
Transferor shall be the owner of all of the Receivables, free and clear of all
Adverse Claims. On or prior to each Transfer and each recomputation of the
Transferred Interest, all financing statements and other documents required to
be recorded or filed in order to perfect and protect the Transferred Interest
against all creditors of, and purchasers from, the Transferor and each Seller
will have been duly filed in each filing office necessary for such purpose, and
all filing fees and taxes, if any, payable in connection with such filings shall
have been paid in full.
(e) Accuracy of Information. All information contained in this
Agreement or the Transaction Documents or heretofore furnished by or on behalf
of the Transferor to the Administrative Agent, the Initial Purchasers, any PARCO
APA Bank or any Funding Agent for purposes of, or in connection with, this
Agreement and the other Transaction Documents is, and all such information
hereafter furnished by or on behalf of the Transferor (including, without
limitation, the Settlement Reports, the Weekly Reports, any other reports
delivered pursuant to Section 2.11 hereof and the Transferor's financial
statements) to the Administrative Agent, the Initial Purchasers, any PARCO APA
Bank or any Funding Agent will be, true and accurate in every material respect,
on the date such information is stated or certified.
(f) Tax Status. The Transferor has filed all tax returns (Federal,
State and local) required to be filed by it and has paid or made adequate
provision for the payment of all taxes, assessments and other governmental
charges (including for such purposes, the setting aside of appropriate reserves
for taxes, assessments and other governmental charges being contested in good
faith).
(g) Action, Suits. There are no actions, suits or proceedings
pending or, to the knowledge of the Transferor threatened, against or affecting
the Transferor or its respective properties, in or before any court, arbitrator
or other body. Except as set forth in Exhibit H hereof regarding any Affiliates
of the Transferor, there are no actions, suits or proceedings pending or, to the
knowledge of the Transferor threatened, against or affecting any Affiliate of
the Transferor or its respective properties, in or before any court, arbitrator
or other body which may, individually or in the aggregate, have a Material
Adverse Effect or that involve this Agreement or the transactions contemplated
hereby.
23
(h) Use of Proceeds. No proceeds of any Transfer will be used by
the Transferor to acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) Place of Business. The principal place of business and chief
executive office of the Transferor are located at the address of the Transferor
indicated in Section 9.3 hereof and always have been located in ▇▇▇▇▇ County,
Nevada, and the offices where the Transferor keeps all its Records and Related
Security, are located at the address(es) described on Exhibit J or such other
locations notified to the Administrative Agent and the Funding Agents in
accordance with Section 2.8 hereof in jurisdictions where all action required by
Section 2.8 hereof has been taken and completed.
(j) Good Title. Upon each Transfer and each recomputation of the
Transferred Interest, the Administrative Agent, on behalf of the Initial
Purchasers and the PARCO APA Banks, shall acquire (A) a valid undivided
percentage ownership interest to the extent of the Transferred Interest or (B) a
first priority perfected security interest in each Receivable that exists on the
date of such Transfer and recomputation and in the Related Security, the
Required Currency Hedge, Collections and Proceeds with respect thereto, in
either case free and clear of any Adverse Claim.
(k) Tradenames, Etc. As of the date hereof (i) the Transferor has
only the subsidiaries and divisions listed on Exhibit K hereto; and (ii) the
Transferor has, within the last five (5) years, operated only under the
tradenames identified in Exhibit K hereto or as otherwise disclosed in writing
to the Administrative Agent, and, within the last five (5) years, has not
changed its name, merged with or into or consolidated with any other corporation
or been the subject of any proceeding under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code
(Bankruptcy), except as disclosed in Exhibit K hereto or as disclosed by the
Transferor in writing to the Administrative Agent.
(l) Nature of Receivables. Each Receivable (i) represented by the
Transferor or the Collection Agent to be an Eligible Receivable (including in
any Settlement Report, Weekly Report or other report delivered pursuant to
Section 2.11 hereof) or (ii) included in the calculation of the Net Receivables
Balance in fact satisfies at such time the definition of "Eligible Receivable"
and is an "eligible asset" as defined in Rule 3a-7 under the Investment Company
Act of 1940, as amended, and is not a Defaulted Receivable.
(m) Coverage Requirement, Amount of Receivables. The Percentage
Factor on any date does not exceed the Maximum Percentage Factor. As of December
17, 1999, the Outstanding Balance of the Receivables in existence was
$218,695,000 and the Net Receivables Balance was $170,318,000.
(n) Credit and Collection Policy. Since September 30, 1999, there
have been no material changes in the Credit and Collection Policy, other than as
permitted hereunder. Since such date, no material adverse change has occurred in
the overall rate of collection of the Receivables.
(o) Collections and Servicing. Since September 30, 1999, there has
been no material adverse change in the ability of the Collection Agent (to the
extent it is C&A, the
24
Transferor or any Subsidiary or Affiliate of any of the foregoing) to service
and collect the Receivables.
(p) No Termination Event or Potential Termination Event. No event
has occurred and is continuing and no condition exists which constitutes a
Termination Event or a Potential Termination Event.
(q) Material Adverse Effect. Between the date of its formation and
the Closing Date, (i) the Transferor has not incurred any obligations,
contingent or non-contingent liabilities, liabilities for charges, long-term
leases or unusual forward or long-term commitments that, alone or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, (ii)
no contract, lease or other agreement or instrument has been entered into by the
Transferor or has become binding upon the Transferor's assets and no law or
regulation applicable to the Transferor has been adopted that has had or could
reasonably be expected to have a Material Adverse Effect and (iii) the
Transferor is not in default and no third party is in default under any material
contract, lease or other agreement or instrument to which the Transferor is a
party that alone or in the aggregate could reasonably be expected to have a
Material Adverse Effect. Between the date of the formation of the Transferor and
the Closing Date, no event has occurred that alone or together with other events
could reasonably be expected to have a Material Adverse Effect, other than as
listed on Schedule 3.1(q).
(r) Not an Investment Company. The Transferor is not, and is not
controlled by, an "investment company" or an "affiliated person" of, "promoter"
or "principal underwriter" for, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or is exempt from all provisions
of such Act.
(s) ERISA. (i) Each of the Transferor and its ERISA Affiliates is
in compliance in all material respects with ERISA and (ii) no lien exists in
favor of the Pension Benefit Guaranty Corporation on any of the Receivables. No
ERISA Event has occurred with respect to Title IV Plans of the Transferor or its
ERISA Affiliates that have an aggregate Unfunded Pension Liability equal to or
greater than $10,000,000.
(t) Lock-Box Accounts. The names and addresses of all the Lock-Box
Banks, together with the account numbers of the Lock-Box Accounts at such
Lock-Box Banks, are specified in Exhibit B hereto (or at such other Lock-Box
Banks and/or with such other Lock-Box Accounts as have been notified to the
Administrative Agent and for which Lock-Box Agreements have been executed in
accordance with Section 2.8(b) hereof and delivered to the Collection Agent and
the Administrative Agent). All Obligors have been instructed to make payment to
a Lock-Box Account, and only Collections are deposited into a Lock-Box Account.
(u) Bulk Sales. No transaction contemplated hereby or by the
Receivables Purchase Agreement or the other Transaction Documents requires
compliance with any "bulk sales" act or similar law.
(v) Transfers Under Receivables Purchase Agreement. Each Receivable
which has been transferred to the Transferor by the Sellers has been purchased
by the Transferor
25
from the Sellers pursuant to, and in accordance with, the terms of the
Receivables Purchase Agreement.
(w) Preference, Voidability. The Transferor shall have given
reasonably equivalent value to the applicable Seller in consideration for the
transfer to the Transferor of the Receivables and Related Security, the Required
Currency Hedge, Collections and Proceeds with respect thereto from the
applicable Seller, and each such transfer shall not have been made for or on
account of an antecedent debt owed by the applicable Seller to the Transferor.
(x) Year 2000. The Transferor has reviewed the areas within its
business and operations which it believes would reasonably be expected to be
materially adversely affected by, and has developed a plan to address on a
timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Transferor may be unable to recognize and perform
properly date-sensitive functions involving certain dates occurring in or after
the year 2000).
(y) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Agreement and the other Transaction Documents
and (ii) the payment and accrual of all transaction costs in connection with the
foregoing, the Transferor is and will be Solvent.
(z) Full Disclosure. No information contained in this Agreement,
any of the other Transaction Documents, the Senior Credit Facility Confidential
Information Memorandum, the Rating Agency Book or, any registration statement or
annual, quarterly, monthly or other regular report which the Transferor or any
of its Affiliates filed with the Securities and Exchange Commission since
January 1, 1999 contains any untrue statement of a material fact (taken as a
whole) nor has the Transferor or its Affiliates failed to provide to the
Administrative Agent, the Initial Purchasers, the Funding Agents or the
Liquidity Banks any material information necessary to make the information
provided by the Transferor or its Affiliates in such documents or filings (taken
as a whole) not misleading in any material respect in light of the circumstances
under and for the purposes for which such information was provided; provided,
however, that this representation or warranty shall not relate to any
projections or forward looking statements in any such documents provided by the
Transferor or its Affiliates.
SECTION 3.2 Reaffirmation of Representations and Warranties by the
Transferor. On each day that a Transfer is made hereunder, the Transferor, by
accepting the proceeds of such Transfer, whether delivered to the Transferor
pursuant to subsection 2.2(a) or Section 2.5 hereof, shall be deemed to have
certified that all representations and warranties described in Section 3.1
hereof are true and correct on and as of such day as though made on and as of
such day.
SECTION 3.3 Representations and Warranties of the Collection Agent.
The Collection Agent represents and warrants (solely as to itself) to the
Administrative Agent, the Initial Purchasers, each PARCO APA Bank and each
Funding Agent as of the date it becomes a Collection Agent hereunder that:
(a) Corporate Existence and Power. The Collection Agent is a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction
26
of incorporation and has all corporate power and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where the failure to obtain such licenses, authorizations, consents and
approvals would not have a Material Adverse Effect. The Collection Agent is duly
qualified to do business in, and is in good standing in, every other
jurisdiction in which the nature of its business requires it to be so qualified,
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect.
(b) Corporate and Governmental Authorization, Contravention. The
execution, delivery and performance by the Collection Agent of this Agreement
(i) are within the Collection Agent's corporate powers, (ii) have been duly
authorized by all necessary corporate action on the Collection Agent's part,
(iii) require no action by or in respect of, or filing with, any Official Body
or official thereof (except for the filing of UCC financing statements as
required by this Agreement or as have been taken or filed and, with respect to
filings other than UCC financing statements, filings where the failure to file
will not have a Material Adverse Effect), (iv) do not contravene, or constitute
a default under, any provision of applicable Law or of the organizational
documents of the Collection Agent or of any agreement or other material
instrument binding upon the Collection Agent, except where such contravention or
default would not have a Material Adverse Effect, or (v) result in the creation
or imposition of any Adverse Claim on the assets of the Collection Agent or any
of its Affiliates (except those created by this Agreement).
(c) Binding Effect. This Agreement constitutes the legal, valid and
binding obligations of the Collection Agent, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the rights of creditors generally and general equitable
principles (whether considered in a proceeding at law or in equity).
(d) Action, Suits. Except as set forth in Exhibit I hereto, there
are no actions, suits or proceedings pending, or to the knowledge of the
Collection Agent, threatened, against the Collection Agent, or any Affiliate of
the Collection Agent, or its respective properties, in or before any court,
arbitrator or other body, which may, individually or in the aggregate, have a
Material Adverse Effect.
(e) Year 2000. The Collection Agent has reviewed the areas within
its business and operations which it believes would reasonably be expected to be
materially adversely affected by, and has developed a plan to address on a
timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Collection Agent may be unable to recognize and perform
properly date-sensitive functions involving certain dates occurring in or after
the year 2000).
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 Conditions to Effectiveness. This Agreement shall become
effective on the first day on which the Administrative Agent and each Funding
Agent, on behalf
27
of the Initial Purchasers and the PARCO APA Banks, shall have received the
following documents, instruments and fees, all of which shall be in a form and
substance reasonably acceptable to the Administrative Agent and each Funding
Agent:
(a) A Certificate of the Secretary of the Transferor in
substantially the form of Exhibit L hereto certifying (i) the names and
signatures of the officers and employees authorized on its behalf to execute
this Agreement and any other documents to be delivered by it hereunder (on which
Certificate the Administrative Agent, the Funding Agents, the Initial Purchasers
and the PARCO APA Banks may conclusively rely until such time as the
Administrative Agent, on behalf of the Initial Purchasers, the PARCO APA Banks
and the Funding Agents, shall receive from the Transferor a revised Certificate
meeting the requirements of this clause (a)(i)), (ii) a copy of the Transferor's
Certificate of Incorporation, certified by the Secretary of State of the State
of Delaware, (iii) a copy of the Transferor's By-Laws, (iv) a copy of
resolutions of the Board of Directors of the Transferor approving this
transaction and (v) a certificate of the Secretary of State of the State of
Delaware certifying the Transferor's good standing under the laws of the State
of Delaware.
(b) A Certificate of the Secretary of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products
Co. in substantially the form of Exhibit L hereto certifying (i) the names and
signatures of the officers and employees authorized on its behalf to execute
this Agreement and any other documents to be delivered by it hereunder (on which
Certificate the Administrative Agent, the Funding Agents, the Initial Purchasers
and the PARCO APA Banks may conclusively rely until such time as the
Administrative Agent, on behalf of the Initial Purchasers, the PARCO APA Banks
and the Funding Agents, shall receive from C&A a revised Certificate meeting the
requirements of this clause (b)(i)), (ii) a copy of C&A's Certificate of
Incorporation, certified by the Secretary of State of the State of Delaware,
(iii) a copy of C&A's By-Laws, (iv) a copy of resolutions of the Board of
Directors of C&A approving this transaction and (v) a certificate of the
Secretary of State of the State of Delaware certifying C&A's good standing under
the laws of the State of Delaware.
(c) Executed copies of the Lock-box Agreements relating to each of
the Lock-Box Banks and the Lock-Box Accounts.
(d) An opinion of Stroock & Stroock & ▇▇▇▇▇, LLP, special counsel
to the Transferor and the Sellers (excluding the Canadian Sellers), addressed to
the Administrative Agent, the Initial Purchasers, the PARCO APA Banks and each
Funding Agent, in form and substance reasonably acceptable to the Administrative
Agent and each Funding Agent, regarding substantive consolidation in the event
of a bankruptcy of a Seller and such other matters as the Administrative Agent
or a Funding Agent may reasonably request.
(e) An opinion of Stroock & Stroock & ▇▇▇▇▇, LLP, special counsel
to the Transferor and the Sellers (excluding the Canadian Sellers), addressed to
the Administrative Agent, the Initial Purchasers, the PARCO APA Banks and the
Funding Agent, in form and substance reasonably acceptable to the Administrative
Agent and each Funding Agent, regarding "true sale" between each Seller and the
Transferor in the event of a bankruptcy of a Seller and such other matters as
the Administrative Agent or a Funding Agent may reasonably request.
28
(f) An opinion of special counsel to each Seller, addressed to the
Administrative Agent, the Initial Purchasers, the PARCO APA Banks and each
Funding Agent, in form and substance reasonably acceptable to the Administrative
Agent and each Funding Agent, regarding the validity, perfection and priority of
the security interest granted by each Seller to the Transferor and such other
matters as the Administrative Agent or a Funding Agent may reasonably request.
(g) An opinion of Canadian special counsel to each Canadian Seller,
addressed to the Administrative Agent, the Initial Purchasers, the PARCO APA
Banks and each Funding Agent, in form and substance reasonably acceptable to the
Administrative Agent and each Funding Agent, regarding substantive consolidation
in the event of a bankruptcy of a Canadian Seller and regarding "true sale"
between each Canadian Seller and the Transferor in the event of a bankruptcy of
a Canadian Seller.
(h) An opinion of special counsel to the Transferor, addressed to
the Administrative Agent, the Initial Purchasers, the PARCO APA Banks and each
Funding Agent, in form and substance reasonably acceptable to the Administrative
Agent and each Funding Agent, regarding the validity, perfection and priority of
the security interest granted by the Transferor to the Administrative Agent, on
behalf of the Initial Purchasers and the PARCO APA Banks and such other matters
as the Administrative Agent or a Funding Agent may reasonably request.
(i) An opinion of Stroock & Stroock & ▇▇▇▇▇, LLP, special counsel
to the Transferor and each Seller, addressed to the Administrative Agent, the
Initial Purchasers, the PARCO APA Banks and each Funding Agent, in form and
substance reasonably acceptable to the Administrative Agent and each Funding
Agent, regarding the enforceability of the Transaction Documents to which each
is a party and the validity of the creation of the security interest.
(j) An opinion of the general counsel of each Seller, the Guarantor
and the Transferor, addressed to the Administrative Agent, the Initial
Purchasers, the PARCO APA Banks and each Funding Agent, in form and substance
reasonably acceptable to the Administrative Agent and each Funding Agent,
regarding certain corporate matters.
(k) An executed copy of this Agreement and each other Transaction
Document to be executed by the Transferor, the Guarantor, the Collection Agent
and each Seller.
(l) An executed copy of the Liberty Liquidity Asset Purchase
Agreement.
(m) Confirmation from the Redwood Funding Agent that the
transaction contemplated by the Redwood Liquidity Documents has been
consummated.
(n) Evidence that the Structuring Fee has been paid to Chase
Securities Inc.
(o) (i) A Weekly Report dated as of the most recent Weekly Report
Date immediately preceding the Closing Date and (ii) a Settlement Report for the
month of November 1999.
29
(p) The executed Fee Letters and payment of all fees required to be
paid on the Closing Date, and reimbursement of the Administrative Agent, the
Funding Agents, the Initial Purchasers and the PARCO APA Banks for all costs and
expenses of the closing of the transaction (including legal fees and costs)
subject to the maximum amounts set forth in the Engagement Letter between the
Transferor and Chase Securities Inc. referred to in the Fee Letters.
(q) The following financial information of the Parent and its
Subsidiaries: (i) audited financial statements prepared in accordance with GAAP
on a consolidated and consolidating basis (consolidating statements need not be
audited by such accountants) for the period December 28, 1997 through December
26, 1998 and (ii) consolidated and consolidating unaudited financial statements
for the fiscal quarter ended September 25, 1999.
(r) Evidence of the establishment of the Collection Accounts.
(s) A letter from S&P confirming its rating of each Initial
Purchasers' Commercial Paper or that such rating will not be withdrawn or
downgraded after giving effect to this Agreement and the transactions
contemplated hereby.
(t) A letter from Moody's confirming its rating of each Initial
Purchasers' Commercial Paper or that such rating will not be withdrawn or
downgraded after giving effect to this Agreement and the transactions
contemplated hereby.
(u) A Certificate of a Responsible Officer of each Seller and a
Responsible Officer of the Transferor certifying that the representations and
warranties of each Seller set forth in Section 4.1 of the Receivables Purchase
Agreement and the Transferor set forth in Section 3.1 hereof are true and
correct in all material respects as of the Closing Date.
(v) After giving effect to the transactions contemplated hereby,
the Transferor shall have outstanding no indebtedness or preferred stock other
than (i) financing under the Facility and (ii) other indebtedness as agreed upon
by each Funding Agent and PARCO APA Banks.
(w) Each Funding Agent has performed a review of the Credit and
Collection Policy.
(x) An executed copy of the Guaranty, substantially in the form of
Exhibit N, executed and delivered by the Guarantor to the Administrative Agent.
(y) The Required Currency Hedge shall be in place for the required
Hedge Notional Amount.
SECTION 4.2 Conditions to Each Transfer. The right of the Transferor
to sell Transferred Interests pursuant to Section 2.2 and the obligation, if
any, of the Initial Purchasers and PARCO APA Banks to purchase such Transferred
Interests is subject to the conditions that on the applicable Transfer Date:
30
(a) No Termination Event or Potential Termination Event shall have
occurred and then be continuing;
(b) The Termination Date shall not have occurred or, in the case of
Liberty, no Liberty Termination Event shall have occurred, or, in the case of
Redwood, no Redwood Termination Date shall have occurred;
(c) The representations and warranties set forth in Section 3.1
hereof and Section 4.1 of the Receivables Purchase Agreement shall be true and
correct on and as of such date (except to the extent such representations and
warranties relate solely to an earlier date, and then as of such earlier date);
(d) Executed copies of proper financing statements (Form UCC-1),
dated a date reasonably near to the Closing Date, naming the Transferor as the
debtor and the Administrative Agent (for the benefit of the Initial Purchasers,
the Funding Agents and the PARCO APA Banks) as a secured party, and other
similar instruments or documents as may be necessary or, in the reasonable
opinion of the Administrative Agent, desirable under the Relevant UCC of all
appropriate jurisdictions or any comparable Law to perfect the Administrative
Agent's (for the benefit of the Initial Purchasers, the Funding Agents and the
PARCO APA Banks) security interest in all Receivables, Related Security, the
Required Currency Hedge, Collections and Proceeds with respect thereto;
(e) Executed copies of proper financing statements (Form UCC-1),
dated a date reasonably near to the Closing Date, naming each Seller as
debtor/seller, the Transferor as secured party/purchaser, and the Administrative
Agent (for the benefit of the Initial Purchasers, the Funding Agents and the
PARCO APA Banks), as assignee of the secured party/purchaser, and other similar
instruments or documents as may be necessary or, in the reasonable opinion of
the Administrative Agent, desirable under the Relevant UCC of all appropriate
jurisdictions or any comparable Law to perfect the Transferor's ownership or
security interest in all Receivables, Related Security, the Required Currency
Hedge, Collections and Proceeds with respect thereto;
(f) Executed copies of proper financing statements (Form UCC-3), if
any, necessary to terminate all security interests and other rights of any
person in Receivables previously granted by the Transferor;
(g) Executed copies of proper financing statements (Form UCC-3)
necessary to terminate all security interests and other rights of any person in
Receivables previously granted by any Seller;
(h) Certified copies of request for information or copies (Form
UCC- 11) (or a similar search report certified by parties reasonably acceptable
to the Administrative Agent), dated a date reasonably near the Closing Date,
listing all effective financing statements which name the Transferor and any
Seller (under their respective present names and any previous names) as seller
or debtor and which are filed in jurisdictions in which the filings were made
pursuant to items (d) and (e) above together with copies of such financing
statements (none of which shall cover any Receivables or Contracts unless
released in accordance with paragraph (f) or (g) above);
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(i) A Weekly Report shall have been delivered to the Administrative
Agent;
(j) The Required Currency Hedge shall be in place for the required
Hedge Notional Amount; and
(k) The Administrative Agent and each Funding Agent shall have
received such other approvals, opinions or documents as it may reasonably
request.
ARTICLE V
COVENANTS
SECTION 5.1 Affirmative Covenants of Transferor. At all times from the
date hereof to the later to occur of (i) the Termination Date and (ii) the date
on which the Aggregate Net Investment has been reduced to zero, all accrued
PARCO Discount, Yield, Servicing Fees and all other Aggregate Unpaids shall have
been paid in full, in cash, unless the Administrative Agent and each Funding
Agent shall otherwise consent in writing (which consent shall be obtained by the
Administrative Agent):
(a) Financial Reporting. The Transferor will, and will cause the
Guarantor and each of the Guarantor's Subsidiaries to, maintain, for itself and
each of its respective Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to the Administrative Agent
(and with respect to clause (vi) below, each Rating Agency):
(i) Annual Reporting. Within ninety (90) days after the close of
the Transferor's and the Guarantor's fiscal years, (x) audited financial
statements of the Parent, prepared in accordance with GAAP on a
consolidated and consolidating basis (consolidating statements need not be
audited by such accountants) for the Parent and its Subsidiaries, including
balance sheets as of the end of such period, related statements of
operations, shareholder's equity and cash flows, accompanied by an
unqualified audit report certified by independent certified public
accountants, reasonably acceptable to the Administrative Agent, prepared in
accordance with GAAP and any management letter prepared by said accountants
and by a certificate of said accountants that, in the course of the
foregoing, nothing has come to their attention to cause such accountants to
believe that any Termination Event or Potential Termination Event has
occurred, or if, in the opinion of such accountants, any Termination Event
or Potential Termination Event shall exist, stating the nature and status
thereof and (y) unaudited financial statements for the Transferor certified
by its senior financial officer.
(ii) Quarterly Reporting. Within forty-five (45) days after the
close of the first three (3) quarterly periods of each of the Transferor's
and the Guarantor's fiscal years, for (x) the Transferor and (y) for the
Parent and its Subsidiaries, in each case, consolidated and consolidating
unaudited balance sheets as at the close of each such period and
consolidated and consolidating related statements of operations,
shareholder's equity and cash flows for the period from the beginning of
such fiscal year to the end of such quarter, all certified by its senior
financial officer.
32
(iii) Compliance Certificate. Together with the financial statements
required hereunder, a compliance certificate signed by the Transferor's or
the Guarantor's, as applicable, chief financial officer stating that (x)
the attached financial statements have been prepared in accordance with
GAAP and accurately reflect the financial condition of the Transferor or
the Parent, as applicable, and (y) to the best of such Person's knowledge,
no Termination Event or Potential Termination Event exists, or if any
Termination Event or Potential Termination Event exists, stating the nature
and status thereof
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of the Transferor or the Parent
copies of all financial statements, reports and proxy statements so
furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, the Guarantor
shall notify the Administrative Agent of all registration statements and
annual, quarterly, monthly or other regular reports which the Parent or any
Affiliate files with the Securities and Exchange Commission.
(vi) Notice of Termination Events or Potential Termination Events.
Immediately, and in any event within one (1) Business Day after the
Transferor obtains knowledge of the occurrence of each Termination Event or
each Potential Termination Event, a statement of the chief financial
officer or chief accounting officer of the Transferor setting forth details
of such Termination Event or Potential Termination Event and the action
which the Transferor proposes to take with respect thereto.
(vii) Change in Credit and Collection Policy and Debt Ratings. Within
ten (10) Business Days after the date any material change in or amendment
to the Credit and Collection Policy is made, a copy of the Credit and
Collection Policy then in effect indicating such change or amendment.
Within five (5) days after the date of any change in the Transferor's or
the Guarantor's public or private debt ratings, if any, a written
certification of the Transferor's or the Guarantor's public and private
debt ratings after giving effect to any such change.
(viii) Credit and Collection Policy. Within ninety (90) days after the
close of each of the Guarantor's and the Transferor's fiscal years, a
complete copy of the Credit and Collection Policy then in effect.
(ix) ERISA. Promptly after the filing or receiving thereof, copies
of all reports and notices with respect to any Reportable Event (as defined
in Article IV of ERISA) which either (i) the Transferor, any Seller, the
Guarantor or any ERISA Affiliate of the Transferor, the Guarantor or any
Seller files under ERISA with the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor or (ii) the
Transferor, the Guarantor, any Seller or any ERISA Affiliates of the
Transferor, the Guarantor or any Seller receives from the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S. Department of
Labor. The Transferor shall give the Administrative Agent prompt written
notice of any event that could result in the
33
imposition of a Lien under Section 412 of the Internal Revenue Code or
Section 302 or 4068 of ERISA.
(x) Other Information. Such other information (including
non-financial information) as the Administrative Agent may from time to
time reasonably request with respect to any Seller, the Transferor, the
Guarantor or any Subsidiary of any of the foregoing.
(b) Conduct of Business. The Transferor will carry on and conduct
its business in substantially the same manner and in substantially the same
fields of enterprise as it is presently conducted and do all things necessary to
remain duly incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and to maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted to the extent that the failure to maintain such requisite authority
would have a Material Adverse Effect.
(c) Compliance with Laws. The Transferor will, and will cause each
Seller and each of the Transferor's and the Seller's Affiliates to, comply with
all Laws to which it or its respective properties may be subject, except where
the failure to so comply would not have a Material Adverse Effect. The Transfer
of the Receivables hereunder, the application of the proceeds thereof and
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents will not violate any provision of any statute or any rule,
regulation or order issued by the Securities and Exchange Commission.
(d) Furnishing of Information and Inspection of Records. The
Transferor will, and will cause the Guarantor and each Seller to, furnish to the
Administrative Agent from time to time such information with respect to the
Receivables as the Administrative Agent may reasonably request, including,
without limitation, listings identifying the Outstanding Balance for each
Receivable, together with an aging of Receivables. The Transferor will, and will
cause the Guarantor and each Seller to, at any time and from time to time during
regular business hours and upon reasonable notice permit the Administrative
Agent, or its agents or representatives, (i) to examine and make copies of and
abstracts from all Records and (ii) to visit the offices and properties of the
Transferor, the Guarantor or any Seller, as applicable, for the purpose of
examining such Records, and to discuss matters relating to Receivables or the
Transferor's, the Guarantor's or any Seller's performance hereunder and under
the other Transaction Documents to which such Person is a party with any of the
officers, directors, employees or independent public accountants of the
Transferor, the Guarantor or any Seller, as applicable, having knowledge of such
matters. Upon a Potential Termination Event or Termination Event, each of the
Initial Purchasers, Funding Agents, PARCO APA Banks and Administrative Agent may
have without notice, immediate access to all Records and the offices and
properties of the Transferor.
(e) Keeping of Records and Books of Account. The Transferor will,
and will cause the Guarantor and each Seller to, maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing 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 Receivables (including, without limitation, records adequate
to permit the daily identification of
34
each new Receivable and all Collections of and adjustments to each existing
Receivable). The Transferor will, and will cause the Guarantor and each Seller
to, give the Administrative Agent prompt notice of any material change in the
administrative and operating procedures of the Transferor, the Guarantor or such
Seller, as applicable, referred to in the previous sentence.
(f) Communication with Accountants. The Transferor authorizes the
Initial Purchasers, the PARCO APA Banks, the Collection Agent, the
Administrative Agent and each Funding Agent to communicate directly with its
independent certified public accountants, and authorizes and shall instruct
those accountants and advisors to disclose and make available to the Initial
Purchasers, the PARCO APA Banks, the Collection Agent, the Administrative Agent
and each Funding Agent any and all financial statements and other supporting
financial documents, schedules and information relating to the Transferor
(including copies of any issued management letters) with respect to the
business, financial condition and other affairs of the Transferor. The
Transferor agrees to render the Initial Purchasers, the PARCO APA Banks, the
Collection Agent, the Administrative Agent and each Funding Agent at such
applicable Person's own cost and expense, such clerical and other assistance as
may be reasonably requested with regard to the foregoing. If any Potential
Termination Event or Termination Event shall have occurred and be continuing,
the Transferor shall, promptly upon request therefor, assist the Administrative
Agent in delivering to the Initial Purchasers, the PARCO APA Banks and the
Funding Agents Records reflecting activity through the close of business on the
Business Day immediately preceding the date of such request.
(g) Performance and Compliance with Receivables and Contracts. The
Transferor, at its expense, will, and will cause each Seller to, timely and
fully perform and comply with all material provisions, covenants and other
promises required to be observed by the Transferor or such Seller under the
Contracts related to the Receivables.
(h) Credit and Collection Policy. The Transferor will, and will
cause each Seller to, comply in all material respects with the Credit and
Collection Policy in regard to each Receivable and the related Contract.
(i) Collections. The Transferor shall, and shall cause each Seller
to, instruct all Obligors to cause all Collections to be deposited directly to a
Lock-Box Account.
(j) Collections Received. The Transferor shall, and shall cause
each Seller to, hold in trust, and deposit immediately (but in any event no
later than one Business Day following its receipt thereof) to a Lock-Box Account
all Collections received from time to time by the Transferor or any Seller, as
the case may be.
(k) Sale Treatment. Subject to the provisions of Section 10.16, the
Transferor will not, and will not permit any Seller to, account for (including
for accounting purposes), or otherwise treat, the transactions contemplated by
the Receivables Purchase Agreement in any manner other than as a sale of
Receivables by a Seller to the Transferor. In addition, the Transferor shall,
and shall cause each Seller to, disclose (in a footnote or otherwise) in all of
its respective financial statements (including any such financial statements
consolidated with any other Persons' financial statements) the existence and
nature of the transaction contemplated hereby and by the Receivables Purchase
Agreement and the interest of the Transferor (in the case
35
of each Seller's financial statements), the Initial Purchasers and the PARCO APA
Banks in the Receivables and Related Security, the Required Currency Hedge,
Collections and Proceeds with respect thereto.
(l) Enforcement of Receivables Purchase Agreement. The Transferor
shall use its best efforts to enforce all rights held by it under the
Receivables Purchase Agreement and shall not waive any breach of any covenant
contained in Section 5.1 thereunder without the prior written consent of each
Funding Agent as obtained by the Administrative Agent.
(m) Separate Existence. The Transferor shall at all times:
(i) maintain its own deposit account or accounts, separate from
those of any Affiliate, with commercial banking institutions and ensure
that the funds of the Transferor will not be diverted to any other Person
or for other than corporate uses of the Transferor, nor will such funds be
commingled with the funds of any Seller or any Subsidiary or Affiliate of a
Seller other than as a result of commingling of payments by an Obligor
which payments shall be segregated within the time period provided in
Section 5.2(e);
(ii) to the extent that it shares the same officers or other
employees as any of its stockholders or Affiliates, the salaries of and the
expenses related to providing benefits to such officers and other employees
shall be fairly allocated among such entities, and each such entity shall
bear its fair share of the salary and benefit costs associated with all
such common officers and employees;
(iii) to the extent that it jointly contracts with any of its
stockholders or Affiliates to do business with vendors or service providers
or to share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall bear its
fair share of such costs. To the extent that the Transferor contracts or
does business with venders or service providers where the goods and
services provided are partially for the benefit of any other Person, the
costs incurred in so doing shall be fairly allocated to or among such
entities for whose benefit the goods or services are provided, and each
such entity shall bear its fair share of such costs;
(iv) enter into all material transactions between the Transferor and
any of its Affiliates, whether currently existing or hereafter entered
into, only on an arm's length basis, it being understood and agreed that
the transactions contemplated in the Transaction Documents meet the
requirements of this clause (iv);
(v) maintain office space separate from the office space of each
Seller and their Affiliates and, to the extent that the Transferor and any
of its stockholders or Affiliates have offices in the same location, there
shall be a fair and appropriate allocation of overhead costs among them,
and each such entity shall bear its fair share of such expenses;
(vi) issue separate financial statements prepared not less
frequently than quarterly and prepared in accordance with GAAP;
36
(vii) conduct its affairs strictly in accordance with its certificate
of incorporation and observe all necessary, appropriate and customary
corporate formalities, including, but not limited to, holding all regular
and special stockholders' and directors' meetings appropriate to authorize
all corporate action, keeping separate and accurate minutes of its
meetings, passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and separate books,
records and accounts, including, but not limited to, payroll and
intercompany transaction accounts;
(viii) not assume or guarantee any of the liabilities of any Seller or
any Affiliate thereof;
(ix) take, or refrain from taking, as the case may be, all other
actions that are necessary to be taken or not to be taken in order to
comply with this Section 5.1(m); and
(x) will comply with all assumptions made in the Stroock & Stroock
& ▇▇▇▇▇ "true sale" opinion dated as of December 27, 1999.
(n) Required Currency ▇▇▇▇▇▇. (i) On the Closing Date and on each
Transfer Date thereafter, the Transferor shall have the Required Currency Hedge
in place for the Required Hedge Notional Amount. The Transferor agrees that at
any time that it enters into any Required Currency Hedge, it shall have funds
available to make payment of fees or other amounts due in connection with the
purchase of such Required Currency Hedge at the time that such payments are due
and payable thereunder.
(i) The Transferor agrees that at any time that it enters into any
Required Currency Hedge, it shall execute and deliver to the Administrative
Agent, for the benefit of the Initial Purchasers, PARCO APA Banks and
Funding Agents, an assignment of all amounts payable to the Transferor
under such Required Currency Hedge substantially in the form of Exhibit O
(each, a "Required Currency Hedge Assignment").
(ii) If any time the commercial paper or short term deposit ratings
from any Rating Agency assigned to a Counterparty is such that the
Counterparty is no longer an Eligible Counterparty, the Transferor shall
(x) to the extent permitted under the Required Currency Hedge to which such
Counterparty is a party, require such Counterparty to secure its
obligations under such Required Currency Hedge or (y) replace the
Counterparty with an Eligible Counterparty within the earlier of (A) 30
days or (B) within 5 days in the event that the Counterparty's commercial
paper rating or short-term deposit rating is withdrawn or downgraded below
A-2 or P-2.
(o) Minimum Net Worth. The Transferor shall at all times have a net
worth (as defined in accordance with GAAP) of at least $40,000,000.
SECTION 5.2 Negative Covenants of the Transferor. During the term of
this Agreement, unless each Funding Agent shall otherwise consent in writing,
which consent shall be obtained by the Administrative Agent:
(a) No Sales, Liens, Etc. Except as otherwise provided herein and
in the Receivables Purchase Agreement, the Transferor will not, and will not
permit any Seller to, sell,
37
assign (by operation of law or otherwise) or otherwise dispose of, or create any
Adverse Claim upon (or file any financing statement) or with respect to (x) any
Transferor Collateral, (y) any inventory or goods, the sale of which may give
rise to a Collection, or (z) any Lock-Box Account to which any Collections of
any Receivable are sent, or assign any right to receive income in respect
thereof
(b) No Extension or Amendment of Receivables. Except as otherwise
permitted in Section 6.2 hereof, the Transferor will not, and will not permit
any Seller to, extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related thereto
except in accordance with the Credit and Collection Policy.
(c) No Change in Business or the Credit and Collection Policy. The
Transferor will not, and will not permit any Seller to, make any change in the
character of its business or in the Credit and Collection Policy, which change
would, in either case, impair the collectibility of any Receivable or otherwise
have a Material Adverse Effect.
(d) No Mergers, Etc. The Transferor will not without the prior
written consent of each Funding Agent (which consent shall be obtained by the
Administrative Agent), and except as otherwise permitted pursuant to the
Receivables Purchase Agreement, will not permit any Seller to, (i) consolidate
or merge with or into any other Person, or (ii) sell, lease or transfer all or
substantially all of its assets to any other Person, provided, that a Seller may
merge with or into another Seller or with another Person if (A)(1) such Seller
is the corporation surviving such consolidation or merger or (2) the Person into
or with whom the Seller is merged or consolidated is an Affiliate and the
surviving corporation assumes in writing all duties and liabilities of the
Seller under the Transaction Documents, and (B) immediately after and giving
effect to such consolidation or merger, no Termination Event or Potential
Termination Event shall have occurred and be continuing.
(e) Change in Payment Instructions to Obligors, Deposits to
Lock-Box Accounts. The Transferor will not, and will not permit any Seller to,
add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box
Account to or from those listed in Exhibit B hereto or make any change in its
instructions to the Obligors regarding payments to be made to any Lock-Box
Account, unless (i) such instructions are to deposit such payments to another
existing Lock-Box Account or (ii) the Administrative Agent and each Funding
Agent shall have received written notice of such addition, termination or change
at least thirty (30) days prior thereto and the Administrative Agent shall have
received a Lock-Box Agreement executed by each new Lock-Box Bank or an existing
Lock-Box Bank with respect to each new Lock-Box Account, as applicable. The
Transferor will use reasonable commercial efforts to not, and will use
reasonable commercial efforts to not permit, any Seller to deposit or otherwise
credit, or cause or permit to be so deposited or credited, to any Lock-Box
Account cash or cash proceeds other than Collections of Receivables. However, in
the event any Seller deposits or otherwise credits, or causes or permits to be
so deposited or credited, to any Lock-Box Account, cash or cash proceeds other
than Collections of Receivables, such Seller shall segregate or cause to be
segregated any such cash or cash proceeds from Collections within 5 (five) days
of deposit or credit to any Lock-Box Account.
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(f) Change of Name, Etc. The Transferor will not, and will not
permit a Seller to, change its name, identity or structure or the location of
its chief executive office or the location at which any Records or Transferor
Collateral is located, unless at least ten (10) days prior to the effective date
of any such change the Transferor or Seller, as applicable, delivers to the
Administrative and each Funding Agent and the Collection Agent (i) such
documents, instruments or agreements, executed by the Transferor or Seller, as
applicable, as are necessary to reflect such change and to continue the
perfection of the Administrative Agent's (on behalf of the Initial Purchasers
and the PARCO APA Banks) ownership interests or security interests in the
Receivables and Related Security, the Required Currency Hedge, Collections and
Proceeds with respect thereto and (ii) new or revised Lock-Box Agreements
executed by the Lock-Box Banks which reflect such change and enable the
Administrative Agent to continue to exercise its rights contained in Section 2.8
hereof.
(g) Amendment to Receivables Purchase Agreement. The Transferor
will not, and will not permit any Seller to, amend, modify, or supplement the
Receivables Purchase Agreement, except with the prior written consent of the
Administrative Agent and each Funding Agent; nor shall the Transferor take, or
permit any Seller to take, any other action under the Receivables Purchase
Agreement that shall have a material adverse effect on the Administrative Agent,
a Funding Agent, the Initial Purchasers or any PARCO APA Bank or which is
inconsistent with the terms of this Agreement.
(h) Other Debt. Except as provided for herein, the Transferor will
not create, incur, assume or suffer to exist any Indebtedness whether current or
funded, other than (i) Indebtedness of the Transferor representing fees,
expenses and indemnities arising hereunder or under the Receivables Purchase
Agreement for the Purchase Price of the Receivables under the Receivables
Purchase Agreement, and (ii) other Indebtedness incurred in the ordinary course
of its business in an amount not to exceed $9,850 at any one time outstanding.
(i) ERISA Matters.
(i) To the extent applicable, the Transferor will not, and will not
permit any Seller to, (A) engage or permit any of its respective ERISA
Affiliates to engage in any prohibited transaction (as defined in Section
4975 of the Code and Section 406 of ERISA) for which an exemption is not
available or has not previously been obtained from the U.S. Department of
Labor; (B) fail to make any payments to any Multiemployer Plan that the
Transferor, any Seller or any ERISA Affiliate of the Transferor or any
Seller is required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto; (C) terminate any Benefit
Plan so as to result in any liability; or (D) permit to exist any
occurrence of any reportable event described in Title IV of ERISA, if such
prohibited transactions, failures to make payment, terminations and
reportable events described in clauses (A), (B), (C) and (D) above would in
the aggregate have a Material Adverse Effect.
(ii) To the extent applicable, the Transferer will not, and will not
permit any Seller to exist any accumulated funding deficiency (as defined
in Section 302(a) of ERISA and Section 412(a) of the Code) or funding
deficiency with respect to any Benefit Plan other than a Multiemployer
Plan.
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(iii) To the extent applicable, the Transferor will not, and will not
permit any Seller to cause or permit any of its ERISA Affiliates to cause
or permit the occurrence of an ERISA Event with respect to Title IV Plans
of the Transferor, the Sellers or its ERISA Affiliates that have an
aggregate Unfunded Pension Liability equal to or greater than $10,000,000.
(j) Payment to Sellers. With respect to any Receivable sold by a
Seller to the Transferor, the Transferor shall, and shall cause each Seller to,
effect such sale under, and pursuant to the terms of, the Receivables Purchase
Agreement, including, without limitation, the payment by the Transferor either
in cash to or by a capital contribution from such Seller of an amount equal to
the Purchase Price for such Receivable as required by the terms of the
Receivables Purchase Agreement.
SECTION 5.3 Covenants of the Collection Agent and the Guarantor. At
all times from the date hereof to the date on which the Aggregate Unpaids shall
be equal to zero, unless the Administrative Agent and each Funding Agent shall
otherwise consent in writing (which consent shall be obtained by the
Administrative Agent):
(a) Credit and Collection Policy. The Collection Agent and the
Guarantor will comply in all material respects with the Credit and Collection
Policy in regard to each Receivable and the related Contract.
(b) Collections Received. The Collection Agent and the Guarantor
shall hold in trust, and deposit as soon as reasonably practicable (but in any
event no later than one Business Day following its receipt thereof) to a
Lock-Box Account all Collections received from time to time by the Collection
Agent or any Seller, respectively.
(c) Notice of Termination Events, Potential Termination Events or
Collection Agent Defaults. Immediately, and in any event within one (1) Business
Day after the Collection Agent or the Guarantor obtains knowledge of the
occurrence of each Termination Event, Potential Termination Event or Collection
Agent Default, the Collection Agent or the Guarantor, respectively, will furnish
to the Administrative Agent, each Funding Agent and each Rating Agency a
statement of a Responsible Officer of the Collection Agent or the Guarantor,
respectively, setting forth details of such Termination Event, Potential
Termination Event or Collection Agent Default, and the action which the
Collection Agent, the Guarantor, the Transferor or a Seller proposes to take
with respect thereto.
(d) Conduct of Business. The Collection Agent and the Guarantor
will do all things necessary to remain duly incorporated, validly existing and
in good standing as a domestic corporation in its jurisdiction of incorporation
and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted to the extent that the failure
to maintain such would have a Material Adverse Effect.
(e) Compliance with Laws. The Collection Agent and the Guarantor
will comply in all respects with all Laws with respect to the Receivables to the
extent that any non-compliance would be a Material Adverse Effect.
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(f) Further Information. The Collection Agent and the Guarantor
shall furnish or cause to be furnished to the Administrative Agent and, after a
Termination Event or a Potential Termination Event, any Funding Agent such other
information relating to the Receivables and readily available public information
regarding the financial condition of the Collection Agent or the Guarantor, as
applicable, as soon as reasonably practicable, and in such form and detail, as
the Administrative Agent may reasonably request and, after a Termination Event
or a Potential Termination Event, as any Funding Agent may reasonably request.
SECTION 5.4 Negative Covenants of the Collection Agent and the
Guarantor. At all times from the date hereof to the date on which the Aggregate
Unpaids shall be equal to zero, unless the Administrative Agent and each Funding
Agent shall otherwise consent in writing which consent shall be obtained by the
Administrative Agent:
(a) No Sales, Liens, Etc. Except as otherwise provided herein and
in the Receivables Purchase Agreement, neither the Collection Agent nor the
Guarantor will sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create any Adverse Claim upon (or file any financing statement)
or with respect to (w) any of the Receivables, Related Security, the Required
Currency Hedge, Collections or Proceeds with respect thereto, (x) any inventory
or goods, the sale of which may give rise to a Collection, (y) the Transferor
Collateral or (z) any Lock-Box Account to which any Collections of any
Receivable are sent, or assign any right to receive income in respect thereof
(b) Consolidations, Mergers and Sales of Assets. Neither the
Collection Agent nor the Guarantor shall without the prior written consent of
each Funding Agent, which consent shall be obtained by the Administrative Agent
(i) consolidate or merge with or into any other Person or (ii) sell, lease or
otherwise transfer all or substantially all of its assets to any other Person;
provided that the Collection Agent or the Guarantor, as applicable, may
consolidate or merge with another Person if (A)(1) the Collection Agent or the
Guarantor, as applicable, is the corporation surviving such consolidation or
merger or (2) the Person into or with whom the Collection Agent or the
Guarantor, as applicable, is merged or consolidated is an Affiliate and the
surviving corporation assumes in writing all duties and liabilities of the
Collection Agent or the Guarantor, as applicable, hereunder and (B) immediately
after and giving effect to such consolidation or merger, no Termination Event or
Potential Termination Event shall have occurred and be continuing.
(c) Lock-Box Accounts. Except as permitted pursuant to
Sections 2.5, 2.6, 2.12 and 5.2(e) of this Agreement or as otherwise permitted
under the Transaction Documents, neither the Collection Agent nor the Guarantor
shall make, or cause or permit any other Person to make any transfer of funds on
deposit in a Lock-Box Account.
(d) Modifications of Receivables or Contracts. The Collection Agent
shall not extend, amend, forgive, discharge, compromise, waive, cancel or
otherwise modify the terms of any Receivable or amend, modify or waive any term
or condition of any Contract related thereto; provided, that the Collection
Agent may take such actions as are expressly permitted by the terms of any
Transaction Document or the Credit and Collection Policy.
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ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1 Appointment of Collection Agent. The servicing,
administering and collection of the Receivables shall be conducted by such
Person (the "Collection Agent") so designated from time to time in accordance
with this Section 6.1. Until the Administrative Agent gives notice to C&A of the
designation of a new Collection Agent pursuant to this Section 6.1, C&A is
hereby designated as, and hereby agrees to perform the duties and obligations
of, the Collection Agent pursuant to the terms hereof. The Collection Agent may
not delegate any of its rights, duties or obligations hereunder, or designate a
substitute Collection Agent, without the prior written consent of the
Administrative Agent; provided that C&A shall be permitted to delegate its
duties hereunder to any of its Affiliates or their agents and may use sub
Collection Agents, but such delegation shall not relieve C&A of its duties and
obligations hereunder. The Administrative Agent may, and upon the direction of
the Required Participants the Administrative Agent shall, after the occurrence
of a Collection Agent Default or any other Termination Event, designate as
Collection Agent any Person (including itself) to succeed C&A or any successor
Collection Agent, 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.
SECTION 6.2 Duties of Collection Agent.
(a) The Collection Agent shall take or cause to be taken all such
action as may be reasonably necessary or advisable to collect each Receivable
from time to time, all in accordance with applicable Laws, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy. Each of
the Transferor, the Administrative Agent, the Initial Purchasers, each Funding
Agent and the PARCO APA Banks, hereby appoints as its agent the Collection
Agent, from time to time designated pursuant to Section 6.1 hereof, to enforce
its respective rights and interests in and under the Receivables and Related
Security, the Required Currency Hedge, Collections and Proceeds with respect
thereto. To the extent permitted by applicable Law, each of the Transferor, C&A
(to the extent not then acting as Collection Agent hereunder) and each other
Seller hereby grants to any Collection Agent appointed hereunder an irrevocable
power of attorney to take in the Transferor's and/or each Seller's name and on
behalf of the Transferor or a Seller any and all steps necessary or desirable,
in the reasonable determination of the Collection Agent, to collect all amounts
due under any and all Receivables, including, without limitation, endorsing the
Transferor's and/or a Seller's name on checks and other instruments representing
Collections and enforcing such Receivables and the related Contracts. The
Collection Agent shall set aside for the account of the Transferor and the
Initial Purchasers their respective allocable shares of the Collections of
Receivables in accordance with Sections 2.5 and 2.6 hereof. The Collection Agent
shall segregate and deposit to the Administrative Agent's account the Initial
Purchasers' allocable share of Collections of Receivables when required pursuant
to Article II hereof. The Collection Agent agrees that prior to making any
material change in the Credit and Collection Policy in effect on the Closing
Date, it shall give at least ten (10) Business Days' prior written notice to the
Administrative Agent and the Transferor of such changes; provided, however, that
in the case of any material change in its Credit and Collection Policy made
pursuant to any Requirement of Law as to which it is unable
42
to give ten (10) Business Days' prior written notice, then the Collection Agent
shall give written notice to the Administrative Agent and the Transferor of such
changes as soon as reasonably practicable prior to the implementation of such
changes. In the event that any such changes (except changes that are necessary
under any Requirement of Law) could reasonably be expected to materially and
adversely affect the rights of the Initial Purchasers or the PARCO APA Banks,
then such changes shall not become effective without the prior written consent
of each Funding Agent, which consent shall be obtained by the Administrative
Agent. The Transferor shall deliver to the Collection Agent and the Collection
Agent shall hold in trust for the Transferor, the Administrative Agent, the
Initial Purchasers, each Funding Agent and the PARCO APA Banks, in accordance
with their respective interests, all Records which evidence or relate to
Receivables, Related Security, the Required Currency Hedge or Collections. The
Collection Agent, if other than the Transferor or C&A or an Affiliate of the
Transferor or C&A, shall as soon as practicable upon demand, deliver to C&A all
Records in its possession which evidence or relate to indebtedness of an Obligor
which is not a Receivable. The Collection Agent shall, as soon as practicable
following receipt thereof, turn over to C&A any collections of any indebtedness
of any Person which is not on account of a Receivable. Notwithstanding anything
to the contrary contained herein, following the occurrence of a Termination
Event and during the continuation of a Potential Termination Event, the
Administrative Agent shall have the absolute and unlimited right to direct the
Collection Agent (whether the Collection Agent is C&A or any other Person) to
commence or settle any legal action to enforce collection of any Receivable or
to foreclose upon or repossess any Related Security. The Collection Agent shall
not make the Administrative Agent, a Funding Agent, an Initial Purchaser or any
of the PARCO APA Banks a party to any litigation without the prior written
consent of such Person.
(b) If the Collection Agent is not the Transferor, C&A or an
Affiliate of the Transferor or C&A, the Collection Agent, by giving three (3)
Business Days' prior written notice to the Administrative Agent, may revise the
Servicing Fee; provided that such revised Servicing Fee shall be a reasonable
fee agreed upon by the Collection Agent and the Administrative Agent on an
arms-length basis reflecting rates and terms prevailing at such time.
(c) On or before ninety (90) days after the end of each fiscal year
of the Collection Agent, beginning with the fiscal year ending December 30,
2000, the Collection Agent shall cause a firm of independent public accountants
acceptable to the Administrative Agent at the expense of the Transferor (who may
also render other services to the Collection Agent, the Transferor, C&A or any
Affiliates of any of the foregoing) to furnish a report to the Administrative
Agent performing such agreed upon procedures with respect to the Collection
Agent's servicing procedures and internal control system as may be reasonably
requested by the Administrative Agent. The scope of the review shall be as set
forth in Exhibit M hereto.
The Collection Agent shall cause such firm of nationally recognized
independent certified public accountants to furnish such report to the
Administrative Agent using generally accepted auditing standards to the effect
that they have compared the mathematical calculations of each amount set forth
in five Weekly Reports and three Settlement Statements in a sample randomly
chosen during such annual period and delivered by the Collection Agent pursuant
to Section 2.11 during the period covered by such report with the Collection
Agent's computer reports that were the source of such amounts and that on the
basis of such comparison, such
43
accountants are of the opinion that such amounts are in agreement, except for
such exceptions as they believe to be immaterial and such other exceptions as
shall be set forth in such report.
(d) Notwithstanding anything to the contrary contained in this
Article VI, the Collection Agent, if not the Transferor, C&A or any Affiliate of
the Transferor or C&A, shall have no obligation to collect, enforce or take any
other action described in this Article VI with respect to any indebtedness that
is not included in the Transferred Interest other than to deliver to the
Transferor the collections and documents with respect to any such indebtedness
as described in Section 6.2(a) hereof.
SECTION 6.3 Rights After Designation of New Collection Agent. At any
time following the designation of a new Collection Agent (other than C&A)
pursuant to Section 6.1 hereof:
(i) The Administrative Agent may, at its option, or shall, at the
direction of the Required Participants, direct that payment of all amounts
payable under any Receivable be made directly to the Administrative Agent
or its designee for the benefit of the Funding Agents, the Initial
Purchasers and the PARCO APA Banks.
(ii) The Transferor shall, at the Administrative Agent's request and
at the Transferor's expense, give notice of the Initial Purchasers', the
Transferor's and/or the PARCO APA Banks' ownership of Receivables to each
Obligor and direct that payments be made directly to the Administrative
Agent or its designee.
(iii) The Transferor shall, at the Administrative Agent's request,
(A) assemble all of the Records, and shall make the same available to the
Administrative Agent or its designee at a place selected by the
Administrative Agent or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to the Administrative
Agent and shall, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer,
to the Administrative Agent or its designee.
(iv) The Transferor and each Seller hereby authorize the
Administrative Agent to take any and all steps in the Transferor's or any
Seller's name and on behalf of the Transferor and any Seller necessary or
desirable, in the reasonable determination of the Administrative Agent, to
collect all amounts due under any and all Receivables, including, without
limitation, endorsing the Transferor's or any Seller's name on checks and
other instruments representing Collections and enforcing such Receivables
and the related Contracts.
SECTION 6.4 Collection Agent Default. The occurrence of any one or
more of the following events shall constitute a Collection Agent default (each,
a "Collection Agent Default"):
(a) (i) the Collection Agent or, to the extent that the Transferor,
C&A or any Affiliate of the Transferor or C&A is then acting as Collection
Agent, the Transferor, C&A or such Affiliate, as applicable, shall fail to
observe or perform any term, covenant or agreement
44
hereunder (other than as referred to in clause (ii) or clause (iii) of this
Section 6.4(a)) or under any of the other Transaction Documents to which such
Person is a party or by which such Person is bound, and such failure shall
remain unremedied for ten (10) days following the earlier to occur of receipt of
notice thereof by the Collection Agent from the Administrative Agent or a
Funding Agent or discovery thereof by the Collection Agent, or (ii) the
Collection Agent or, to the extent that the Transferor, C&A or any Affiliate of
the Transferor or C&A is then acting as Collection Agent, the Transferor, C&A or
such Affiliate, as applicable, shall fail to make any payment or deposit
required to be made by it hereunder when due or the Collection Agent shall fail
to observe or perform any term, covenant or agreement on the Collection Agent's
part to be performed under Section 2.8(b) hereof, or (iii) the Collection Agent
fails to deliver any Weekly Report or Settlement Report within one (1) Business
Day of the date when due; or
(b) any representation, warranty, certification or statement made
by the Collection Agent or the Transferor, C&A or any Affiliate of the
Transferor or C&A (in the event that the Transferor, C&A or such Affiliate is
then acting as the Collection Agent) in this Agreement, the Receivables Purchase
Agreement or in any of the other Transaction Documents or in any certificate or
report delivered by it pursuant to any of the foregoing shall prove to have been
incorrect in any material respect when made or deemed made; provided, however,
that (i) to the extent any breach of any such representation or warranty may be
cured within ten (10) days, the Collection Agent shall have ten (10) days
following the earlier to occur of receipt of notice thereof by the Collection
Agent from the Administrative Agent or a Funding Agent or discovery thereof by
the Collection Agent to make such representation and warranty true and correct
in all material respects, (ii) if any such representation and warranty relates
to a Receivable for which the Transferor has paid to the Collection Agent an
amount equal to the Outstanding Balance of such Receivable pursuant to Section
2.9(a) hereof or (iii) the breach of the representation or warranty of the
Collection Agent has been cured within the time period provided for herein, then
the breach of such representation or warranty shall not give rise to a
Collection Agent Default under this subsection (b); or
(c) (i) failure of the Collection Agent or any of its Affiliates to
pay when due any amounts due under any agreement under which any Indebtedness
greater than $10,000,000 is governed; or (ii) any Indebtedness of the Collection
Agent or any of its Affiliates greater than $10,000,000 shall be declared to be
due and payable or required to be prepaid (other than by a regularly scheduled
payment) by reason of a breach or default of same prior to the scheduled date of
maturity thereof; or
(d) (i) any Event of Bankruptcy shall occur with respect to the
Collection Agent or (ii) an Event of Bankruptcy shall occur with respect to an
Affiliate of the Collection Agent, which in the reasonable opinion of the
Administrative Agent is a Material Adverse Effect; or
(e) there shall have occurred any material adverse change in the
operations of the Collection Agent since the end of last fiscal year ending
prior to the date of its appointment as Collection Agent hereunder or any other
event shall have occurred which, in the commercially reasonable judgment of the
Administrative Agent, materially and adversely affects the Collection Agent's
ability to either collect the Receivables or to perform under this Agreement.
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SECTION 6.5 Responsibilities of the Transferor and each Seller.
Anything herein to the contrary notwithstanding, the Transferor shall, and/or
shall cause each Seller to, (i) perform all of each Seller's obligations under
the Contracts related to the Receivables to the same extent as if interests in
such Receivables had not been sold hereunder and under the Receivables Purchase
Agreement and the exercise by the Administrative Agent, a Funding Agent, the
Initial Purchasers and the PARCO APA Banks of their rights hereunder and under
the Receivables Purchase Agreement shall not relieve the Transferor or such
Seller from such obligations and (ii) pay when due any taxes, including without
limitation, any sales taxes payable in connection with the Receivables and their
creation and satisfaction. Neither the Administrative Agent, nor the Funding
Agents, nor the Initial Purchasers nor any of the PARCO APA Banks shall have any
obligation or liability with respect to any Receivable or related Contracts, nor
shall it be obligated to perform any of the obligations of a Seller thereunder.
SECTION 6.6 Collection Agent Indemnification of Indemnified Parties.
The Collection Agent shall indemnify and hold harmless the Indemnified Parties,
from and against any loss, liability, expense, damage or injury suffered or
sustained solely by reason of any breach by the Collection Agent of any of its
representations, warranties or covenants contained in this Agreement, including
any judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses reasonably incurred in connection with the defense of any actual
action, proceeding or claim; provided, however, that (i) the Collection Agent
shall not indemnify the Indemnified Parties if such acts or omissions were
attributable directly or indirectly to fraud, gross negligence, breach of
fiduciary duty or willful misconduct by any such Indemnified Party and (ii)
neither the Collection Agent nor any of the directors, officers, employees or
agents of the Collection Agent in its capacity as Collection Agent shall be
under any liability to the Indemnified Parties for any action taken or for
refraining from the taking of any action in good faith in its capacity as
Collection Agent pursuant to this Agreement; provided, further, however that the
immediately preceding proviso shall not protect the Collection Agent or any such
director, officer, employee or agent against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Collection Agent and any director, officer, employee or
agent of the Collection Agent may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person (other than the
Collection Agent or an Affiliate of the Collection Agent) respecting any matters
arising hereunder. Any indemnification pursuant to this Section shall be had
only from the assets of the Collection Agent and shall not be payable from
Collections, except to the extent such Collections are released to the
Collection Agent in accordance with Sections 2.5 and 2.6. The provisions of such
indemnity shall run directly to and be enforceable by such Indemnified Parties.
Without limiting the foregoing, each Seller, by transferring interests in the
Receivables to the Transferor, the Transferor, by transferring interests in the
Receivables to the Initial Purchasers and/or the PARCO APA Banks, and the
Initial Purchasers and the PARCO APA Banks, by acquiring such interest in the
Receivables, acknowledge that each Seller has transferred such Receivables and
the Transferor, the Initial Purchasers and the PARCO APA Banks, as applicable,
have assumed all risk of payment and collection with respect thereto.
SECTION 6.7 Maintenance of Property; Insurance. The Collection Agent
will (i) keep all property and assets useful and necessary in its business as
Collection Agent in good working order and condition (normal wear and tear
excepted), (ii) maintain, with financially
46
sound and reputable insurance companies, insurance on all its property and
assets necessary in its business as Collection Agent in at least such amounts
and against at least such risks (and with such risk retention) as are usually
insured against in the same general area by companies of established repute
engaged in the same or a similar business and reasonably satisfactory to the
Administrative Agent and each Funding Agent, (iii) furnish to the Transferor,
the Administrative Agent and each Funding Agent upon written request, full
information as to the insurance carried, (iv) within five days of receipt of
notice from any insurer, furnish the Transferor, the Administrative Agent with a
copy of any notice of cancellation or material change in coverage from that
existing on the Closing Date and (v) forthwith, furnish the Transferor and the
Administrative Agent with notice of any cancellation or nonrenewal of coverage
by the Collection Agent. The Collection Agent will (A) maintain disaster
recovery systems and back-up computer and other information management systems
that, in the Collection Agent's reasonable judgment, are sufficient to protect
its business as Collection Agent against material interruption or loss in the
event of damage to, or loss or destruction of, its primary computer and
information management systems and (B) furnish to the Transferor and the
Administrative Agent, upon written request, full information as to such disaster
recovery systems and back-up computer and information management systems.
SECTION 6.8 Grant of License. For the purpose of enabling the
Administrative Agent or a successor Collection Agent to perform the functions of
servicing and collecting the Receivables upon a Collection Agent Default, the
Collection Agent and each Seller hereby (i) assigns, to the extent permitted, to
the Administrative Agent for the benefit of the Funding Agents, the Initial
Purchasers and the PARCO APA Banks and shall be deemed to assign to the
Administrative Agent for the benefit of the Funding Agents, the Initial
Purchasers and the PARCO APA Banks and any successor Collection Agent all rights
owned or hereinafter acquired by any Seller or the Collection Agent (by license,
sublicense, lease, easement or otherwise) in and to any equipment together with
a copy of any software listed on Schedule II hereto, (ii) agrees to use its best
efforts to assist the Administrative Agent for the benefit of the Funding
Agents, the Initial Purchasers and the PARCO APA Banks to arrange licensing
agreements with all software vendors and other applicable persons in a manner
and to the extent reasonably appropriate to effectuate the servicing of the
Receivables, and (iii) deliver to the Administrative Agent executed copies of
any landlord waivers in a form reasonably acceptable to the Administrative
Agent, that may be necessary to grant to the Administrative Agent access to any
leased premises of the Collection Agent for which the Administrative Agent may
require access to perform the collection and administrative functions to be
performed by the Administrative Agent under the Transaction Documents.
ARTICLE VII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 7.1 Indemnities by the Transferor. Without limiting any other
rights which the Administrative Agent, the Funding Agents, the Initial
Purchasers, the Liberty APA Banks or the PARCO APA Banks may have hereunder or
under applicable Law, the Transferor hereby agrees to indemnify the
Administrative Agent, the Initial Purchasers, the Liberty APA Banks, the Redwood
Secured Parties, the PARCO APA Banks and each Funding Agent and any successors
and permitted assigns and their respective officers, directors, agents and
employees
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(collectively, "Indemnified Parties") from and against any and all damages,
losses, claims, liabilities, costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or incurred
by any of them in any action or proceeding between the Transferor and any of the
Indemnified Parties or between any of the Indemnified Parties and any third
party or otherwise arising out of or as a result of this Agreement, the other
Transaction Documents, the ownership, either directly or indirectly, by a
Funding Agent, the Initial Purchasers or any PARCO APA Bank of the Transferred
Interest or any of the other transactions contemplated hereby or thereby,
excluding, however, (i) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of an Indemnified Party or (ii)
recourse (except as otherwise specifically provided in this Agreement) for
uncollectible Receivables; provided that any Indemnified Amounts owed under this
Section 7.1 shall be payable in accordance with Sections 2.5 and 2.6 and shall
be Transferor Subordinated Obligations. Without limiting the generality of the
foregoing, the Transferor shall indemnify each Indemnified Party for Indemnified
Amounts relating to or resulting from:
(a) any representation or warranty made by the Transferor or any
officers of the Transferor under this Agreement, any of the other Transaction
Documents, any Settlement Report, any Weekly Report or any other written
information or report delivered by the Transferor pursuant hereto or thereto,
which shall have been false or incorrect in any material respect when made or
deemed made;
(b) the failure by the Transferor to comply in any material respect
with any applicable Law, with respect to any Receivable or the related Contract,
or the nonconformity in any material respect of any Receivable or the related
Contract with any such applicable Law;
(c) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of an Obligor to the payment of any Receivable (including, without
limitation, a defense based on such Receivable or the related Contract not being
the 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
merchandise or provision of services related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(d) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort arising
out of or in connection with merchandise which is the subject of any Receivable;
(e) the failure by the Transferor to comply in any material respect
with any term, provision or covenant contained in this Agreement or any of the
other Transaction Documents to which it is a party or to perform any of its
respective duties under the Contracts;
(f) the failure of the Transferor to pay when due any taxes,
including without limitation, sales, excise or personal property taxes payable
in connection with any of the Receivables;
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(g) any repayment by any Indemnified Party of any amount previously
distributed in reduction of Aggregate Net Investment which such Indemnified
Party believes in good faith is required to be made;
(h) the commingling by the Transferor of Collections of Receivables
at any time with other funds to the extent not otherwise permitted pursuant to
this Agreement and the other Transaction Documents;
(i) any investigation, litigation or proceeding related to this
Agreement, any of the other Transaction Documents, the use of proceeds of
Transfers by the Transferor, the ownership of Transferred Interests, or any
Receivable, Related Security, Required Currency Hedge or Contract;
(j) the failure of any Lock-Box Bank to remit any amounts held in
the Lock-Box Accounts pursuant to the instructions of the Collection Agent, the
Transferor, the Administrative Agent, C&A or the Funding Agent (to the extent
such Person is entitled to give such instructions in accordance with the terms
hereof and of any applicable Lock-Box Agreement) whether by reason of the
exercise of set-off rights or otherwise;
(k) any failure of the Transferor to give reasonably equivalent
value to any Seller in consideration of the purchase by the Transferor from any
Seller of any Receivable, or any attempt by any Person to void, rescind or
set-aside any such transfer under statutory provisions or common law or
equitable action, including, without limitation, any provision of the Bankruptcy
Code;
(l) any action taken by the Transferor in the enforcement or
collection of any Receivable; provided, that the Transferor shall not be liable
for Indemnified Amounts attributable to the fraud, gross negligence, breach of
fiduciary duty or willful misconduct of any Collection Agent in the enforcement
or collection of any Receivable if such Collection Agent is not the Transferor,
C&A or any Affiliate of the Transferor or C&A;
(m) any failure by the Transferor to complete an Incremental
Transfer following the receipt by the Administrative Agent of notice of a
proposed Transfer from the Transferor pursuant to Section 2.2 due to no fault of
the Administrative Agent, Initial Purchasers, the Funding Agent or the PARCO APA
Banks; or
(n) the failure of any Seller, the Collection Agent (if an
Affiliate of the Transferor) or the Transferor to be Year 2000 Compliant.
provided, however, that if the Initial Purchasers enter into agreements for the
purchase of interests in receivables from one or more Other Transferors, the
Initial Purchasers shall ratably allocate such Indemnified Amounts related to
the Initial Purchasers' program documents to the Transferor and each Other
Transferor; and provided, further, that if such Indemnified Amounts are
attributable to the Transferor and not attributable to any Other Transferor, the
Transferor shall be solely liable for such Indemnified Amounts or if such
Indemnified Amounts are attributable to Other Transferors and not attributable
to the Transferor, such Other Transferors shall be solely liable for such
Indemnified Amounts.
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SECTION 7.2 Indemnity for Reserves and Expenses.
(a) If after the date hereof, the adoption of any Law or bank
regulatory guideline or any amendment or change in the interpretation of any
existing or future Law or bank regulatory guideline by any Official Body charged
with the administration, interpretation or application thereof, or the
compliance with any directive of any Official Body (in the case of any bank
regulatory guideline, whether or not having the force of Law), other than Laws,
interpretations, guidelines or directives relating to Taxes:
(i) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System) against assets of, deposits with or for the account of, or credit
extended by, any Indemnified Party or shall impose on any Indemnified Party
or on the United States market for certificates of deposit or the London
interbank market any other condition affecting this Agreement, the other
Transaction Documents, the ownership, maintenance or financing of the
Transferred Interest, the Receivables or payments of amounts due hereunder
or its obligation to advance funds hereunder or under the other Transaction
Documents; or
(ii) imposes upon any Indemnified Party any other expense deemed by
such Indemnified Party to be material (including, without limitation,
reasonable attorneys' fees and expenses, and expenses of litigation or
preparation therefor in contesting any of the foregoing provided, C&A may
settle such litigation in C&A's sole discretion) with respect to this
Agreement, the other Transaction Documents, the ownership, maintenance or
financing of the Transferred Interest, the Receivables or payments of
amounts due hereunder or its obligation to advance funds hereunder or
otherwise in respect of this Agreement or the other Transaction Documents,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Transaction
Documents, the ownership, maintenance or financing of the Transferred Interest,
the Receivables, the obligations hereunder, the funding of any Purchases
hereunder or under the other Transaction Documents, by an amount reasonably
deemed by such Indemnified Party to be material, then, within ten (10) Business
Days after demand by such Indemnified Party through the Administrative Agent,
the Transferor or C&A shall pay to the Administrative Agent, for the benefit of
such Indemnified Party, such additional amount or amounts as will compensate
such Indemnified Party for such increased cost or reduction; provided that no
such amount shall be payable with respect to any period commencing more than two
hundred and seventy (270) days prior to the date the Administrative Agent first
notifies the Transferor or C&A of its intention to demand compensation therefor
under this subsection 7.2(a); provided further that if such change in Law giving
rise to such increased costs or reductions is retroactive, then such 270-day
period shall be extended to include the period of retroactive effect thereof. In
making demand hereunder, the applicable Indemnified Party shall submit to the
Transferor a certificate as to such increased costs incurred which shall provide
in detail the basis for such claim.
(b) If any Indemnified Party shall have determined that after the
date hereof, the adoption of any applicable Law or bank regulatory guideline
regarding capital adequacy, or
50
any change therein, or any change in the interpretation thereof by any Official
Body, or any directive regarding capital adequacy (in the case of any bank
regulatory guideline, whether or not having the force of Law) of any such
Official Body, has or would have, due to an increase in the amount of capital
required to be maintained by such Indemnified Party, the effect of reducing the
rate of return on capital of such Indemnified Party (or its Guarantor) as a
consequence of such Indemnified Party's obligations hereunder or with respect
hereto to a level below that which such Indemnified Party (or its Guarantor)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
reasonably deemed by such Indemnified Party to be material, then from time to
time, within ten (10) Business Days after demand by such Indemnified Party
through the Administrative Agent, the Transferor or C&A shall pay to the
Administrative Agent, for the benefit of such Indemnified Party, such additional
amount or amounts as will compensate such Indemnified Party (or its Guarantor)
for such reduction; provided that no such amount shall be payable with respect
to any period commencing more than two hundred and seventy (270) days prior to
the date the Administrative Agent first notifies the Transferor or C&A of its
intention to demand compensation therefor under this subsection 7.2(b); provided
further that if such change in Law, giving rise to such increased costs or
reductions is retroactive, then such 270-day period shall be extended to include
the period of retroactive effect thereof In making demand hereunder, the
applicable Indemnified Party shall submit to the Transferor a certificate as to
such increased costs incurred which shall provide in detail the basis for such
claim.
(c) Anything in this Section 7.2 to the contrary notwithstanding,
if the Initial Purchasers enter into agreements for the acquisition of interests
in receivables from one or more Other Transferors, the Initial Purchasers shall
ratably allocate the liability for any amounts under this Section 7.2 ("Section
7.2 Costs") to the Transferor and C&A and each Other Transferor; provided,
however, that if such Section 7.2 Costs are attributable to the Transferor or
C&A and not attributable to any Other Transferor, the Transferor and C&A shall
be solely liable for such Section 7.2 Costs or if such Section 7.2 Costs are
attributable to Other Transferors and not attributable to the Transferor or C&A
such Other Transferors shall be solely liable for such Section 7.2 Costs.
(d) All amounts owed by the Transferor pursuant to this Section 7.2
shall be payable in accordance with Sections 2.5 and 2.6 and shall be Transferor
Subordinated Obligations. Any amounts owed by C&A pursuant to this Section shall
be had only from the assets of C&A and shall not be payable from Collections,
except to the extent such Collections are released to C&A in accordance with
Sections 2.5 and 2.6.
SECTION 7.3 Indemnity for Taxes.
(a) All payments made by the Transferor, any Seller or the
Collection Agent to the Administrative Agent for the benefit of the Funding
Agents, the Initial Purchasers and the PARCO APA Banks under this Agreement and
any other Transaction Document shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Official Body, excluding (i) taxes imposed on the net income of the
Administrative Agent or any other Indemnified Party, however denominated, (ii)
taxes that would not have been imposed if the
51
Indemnified Party had timely complied with the requirements of Section 7.3(b)
hereof, and (iii) franchise taxes imposed on the net income of the
Administrative Agent or any other Indemnified Party, in each case imposed: (1)
by the United States or any political subdivision or taxing authority thereof or
therein; (2) by any jurisdiction under the laws of which the Administrative
Agent or such Indemnified Party or lending office is organized or in which its
lending office is located, managed or controlled or in which its principal
office is located or any political subdivision or taxing authority thereof or
therein; or (3) by reason of any connection between the jurisdiction imposing
such tax and the Administrative Agent, such Indemnified Party or such lending
office other than a connection arising solely from this Agreement or any other
Transaction Document or any transaction hereunder or thereunder (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, collectively or individually, "Taxes"). If any such Taxes are
required to be withheld from any amounts payable to the Administrative Agent or
any Indemnified Party hereunder, the amounts so payable to the Administrative
Agent or such Indemnified Party shall be increased to the extent necessary to
yield to the Administrative Agent or such Indemnified Party (after payment of
all Taxes) all amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the other Transaction Documents. The Transferor
or C&A shall indemnify the Administrative Agent or any such Indemnified Party
for the full amount of any such Taxes within thirty (30) days after the date of
written demand therefor by the Administrative Agent. All amounts owed by the
Transferor pursuant to this subsection 7.3(a) shall be payable in accordance
with Sections 2.5 and 2.6 and shall be Transferor Subordinated Obligations. Any
amounts owed by C&A or the Collection Agent pursuant to this Section shall be
had only from the assets of C&A or the Collection Agent, as applicable, and
shall not be payable from Collections, except to the extent such Collections are
released to C&A or the Collection Agent, as applicable, in accordance with
Sections 2.5 and 2.6.
(b) Each Indemnified Party that is not incorporated under the laws
of the United States of America or a State thereof or the District of Columbia
shall:
(i) deliver to the Transferor and the Administrative Agent (A) two
duly completed copies of IRS Form 1001 or Form 4224, or successor
applicable form, as the case may be, and (B) an IRS Form W-8 or W-9, or
successor applicable form, as the case may be;
(ii) deliver to the Transferor and the Administrative Agent two (2)
further copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Transferor; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Transferor or
the Administrative Agent;
unless, in any such case, an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which, regardless of the identity of the
Indemnified Party, renders all such forms inapplicable or which, regardless of
the identity of the Indemnified Party, would prevent such
52
Indemnified Party from duly completing and delivering any such form with respect
to it, and such Indemnified Party so advises the Transferor and the
Administrative Agent. Each such Indemnified Party so organized shall certify (i)
in the case of an IRS Form 1001 or IRS Form 4224 (or successor applicable form),
that it is entitled to receive payments under this Agreement and the other
Transaction Documents without deduction or withholding of any United States
federal income taxes and (ii) in the case of an IRS Form W-8 or IRS Form W-9 (or
successor applicable form), that it is entitled to an exemption from United
States backup withholding tax. Each Person that is an Initial Purchaser under
the Transaction Documents, or which otherwise becomes a party to this Agreement
as a PARCO APA Bank, shall, prior to the effectiveness of such assignment,
participation or addition, as applicable, be required to provide all of the
forms and statements required pursuant to this Section 7.3.
SECTION 7.4 Other Costs, Expenses and Related Matters.
(a) The Transferor agrees, upon receipt of a written invoice, to
pay or cause to be paid, and to save the Administrative Agent, the Initial
Purchasers, the Liberty APA Banks, the PARCO APA Banks and each Funding Agent
harmless against liability for the payment of, all reasonable out-of-pocket
expenses (including, without limitation, reasonable attorneys', accountants' and
other third parties' fees and expenses, any filing fees and expenses incurred by
officers or employees of the Administrative Agent, the Initial Purchasers, the
Liberty APA Banks, the PARCO APA Banks and/or a Funding Agent) or intangible,
documentary or recording taxes incurred by or on behalf of the Administrative
Agent, the Initial Purchasers, the Liberty APA Banks, any PARCO APA Bank and a
Funding Agent (i) in connection with the negotiation, execution, delivery and
preparation of this Agreement, the other Transaction Documents and any documents
or instruments delivered pursuant hereto and thereto and the transactions
contemplated hereby or thereby (including, without limitation, the perfection or
protection of the Transferred Interest) and (ii) from time to time upon receipt
of prior written notice thereof from the Administrative Agent, a Funding Agent,
the Initial Purchasers, the Liberty APA Banks, or the PARCO APA Banks, as
applicable (a) relating to any amendments, waivers or consents under this
Agreement, any Asset Purchase Agreement and the other Transaction Documents, (b)
arising in connection with the Administrative Agent's, the Initial Purchasers',
any Liberty APA Banks' or any PARCO APA Bank's or a Funding Agent's enforcement
or preservation of rights (including, without limitation, the perfection and
protection of the Transferred Interest under this Agreement), or (c) arising in
connection with any audit, dispute, disagreement, litigation or preparation for
litigation involving this Agreement or any of the other Transaction Documents
(all of such amounts, collectively, "Transaction Costs"). All Transaction Costs
owed by the Transferor pursuant to this subsection 7.4(a) shall be payable in
accordance with Section 2.5 and 2.6, shall be subject to the maximum amount set
forth in the engagement letter between C&A and Chase Securities Inc. and shall
be Transferor Subordinated Obligations.
(b) The Transferor shall pay the Administrative Agent, for the
account of the Initial Purchasers and the PARCO APA Banks, as applicable, on
demand any Early Collection Fee due on account of the reduction of a Tranche on
any day prior to the last day of its Tranche Period.
53
(c) The Administrative Agent will within forty-five (45) days after
receipt of notice of any event occurring after the date hereof which will
entitle an Indemnified Party to compensation pursuant to this Article VII,
notify the Transferor and C&A in writing. Any notice by the Administrative Agent
claiming compensation under this Article VII and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error, provided that such claim is made in good faith and on a
reasonable basis. In determining such amount, the Administrative Agent or any
applicable Indemnified Party may use any reasonable averaging and attributing
methods.
(d) If any Seller is required to pay any additional amount to any
PARCO APA Bank pursuant to Sections 7.2 or 7.3, then such PARCO APA Bank shall
use reasonable efforts (which shall not require such PARCO APA Bank to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory restrictions or
suffer any disadvantage or burden reasonably deemed by it to be significant) (A)
to file any certificate or document reasonably requested in writing by such
Seller or (B) to assign its rights and delegate and transfer its obligations
hereunder to another of its offices, branches or affiliates, if such filing or
assignment would reduce amounts payable pursuant to Sections 7.2 or 7.3, as the
case may be, in the future.
ARTICLE VIII
TERMINATION EVENTS
SECTION 8.1 Termination Events. The occurrence of any one or more of
the following events shall constitute a Termination Event:
(a) the Transferor, any Seller or the Collection Agent shall fail
to make any payment or deposit to be made by it hereunder or under any of the
Transaction Documents and such failure shall continue for one (1) Business Day
after the date such payment or deposit became due hereunder or thereunder; or
(b) any representation, warranty, certification or statement made
by the Transferor, the Guarantor or any Seller in this Agreement, any other
Transaction Document to which it is a party or in any other document delivered
pursuant hereto or thereto shall prove to have been incorrect in any material
respect when made or deemed made, provided, however, that if any such
representation, warranty, certification or statement relates to a Receivable for
which the Transferor has paid to the Collection Agent an amount equal to the
Outstanding Balance of such Receivable pursuant to subsection 2.9(a) hereof or
if a breach of the representation and warranty in Section 3.1, 3.2 or 3.3 has
been corrected within the time period provided for herein, and in the case of
Section 3.1(f) or Section 3.1(s)(i) within 15 days of notice thereof, then the
breach of such representation or warranty shall not give rise to a Termination
Event under this subsection (b); or
(c) Failure on the part of any Seller, the Guarantor or the
Transferor to observe or perform in any material respect any other term,
covenant or agreement in this Agreement or any other Transaction Document within
the time period provided for such performance; or
54
(d) (i) failure of the Transferor, any Seller, the Guarantor or any
Affiliate of the Transferor, the Guarantor or any Seller to pay when due any
material amounts due under any agreement to which any such Person is a party and
under which any Indebtedness greater than $10,000,000 is governed; or (ii) the
material default by the Transferor, the Guarantor, any Seller or any Affiliate
of the Transferor, the Guarantor or any Seller in the performance of any
material term, provision or condition contained in any agreement to which any
such Person is a party and under which any Indebtedness owing by the Transferor,
the Guarantor, any Seller or any Affiliate of the Transferor, the Guarantor or
any Seller greater than $10,000,000 was created or is governed, regardless of
whether such event is an "event of default" or "default" under any such
agreement, which is a Material Adverse Effect; or (iii) any Indebtedness owing
by the Transferor, the Guarantor, any Seller or any Affiliate of the Transferor,
the Guarantor or any Seller greater than $10,000,000 shall be declared to be due
and payable or required to be prepaid (other than by a regularly scheduled
payment) by reason of a breach or default of same prior to the date of maturity
thereof; or
(e) (i) any Event of Bankruptcy shall occur with respect to the
Transferor, or (ii) an Event of Bankruptcy shall occur with respect to the
Guarantor or any Seller or Affiliate of the Guarantor or any Seller which, in
the reasonable opinion of the Administrative Agent, is a Material Adverse
Effect; or
(f) the Administrative Agent, on behalf of the Funding Agents, the
Initial Purchasers and the PARCO APA Banks, shall, for any reason, fail or cease
to have a valid and perfected first priority ownership or security interest in
the Receivables and Related Security, the Required Currency Hedge, Collections
and Proceeds with respect thereto, and any other Transferor Collateral free and
clear of any Adverse Claims; or
(g) a Collection Agent Default shall have occurred; or
(h) the Purchase Termination Date shall have occurred under the
Receivables Purchase Agreement; or
(i) without obtaining the prior written consent of each Funding
Agent, which consents shall be obtained by the Administrative Agent, the
Transferor or any Seller or the Guarantor shall enter into any transaction or
merger whereby it is not the surviving entity (other than a merger permitted
pursuant to either Section 5.2(d) or Section 5.4(b) hereof); or
(j) there shall have occurred a Material Adverse Effect with
respect to the Transferor or any Seller since the Closing Date; or
(k) the institution of any litigation, arbitration proceedings or
governmental proceeding involving any Seller or the Transferor or the
Receivables which would be reasonably likely to have a Material Adverse Effect;
or
(l) (i) the Percentage Factor exceeds the Maximum Percentage Factor
unless the Transferor deposits to the Funding Accounts on the next Business Day,
for the benefit of the Initial Purchasers and/or the PARCO APA Banks, as
applicable, from previously received Collections that have been released to or
set aside for the Transferor pursuant to Section 2.5 hereof or other funds
available to the Transferor, an amount that brings the Percentage Factor to
55
less than or equal to the Maximum Percentage Factor or increases the balance of
the Receivables on the next Business Day so as to reduce the Percentage Factor
to less than or equal to 100%; or (ii) the Aggregate Net Investment exceeds the
Facility Limit; or
(m) the average Dilution Ratio for the three (3) preceding
Settlement Periods exceeds 4.00%; or
(n) the average Aged Receivables Ratio for the three (3) preceding
Settlement Periods exceeds 6.50%; or
(o) (i) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000 shall be rendered against a Seller,
the Collection Agent, the Guarantor or their Subsidiaries or any combination
thereof and the same shall remain undischarged for a period of thirty (30)
consecutive days during which execution shall not be effectively stayed or to
the extent that an insurance carrier has accepted a claim for coverage thereto;
(ii) one or more judgments for the payment of money shall be rendered against
the Transferor and shall not have been satisfied; or (iii) any action shall be
legally taken by a judgment creditor to attach or levy upon any assets of the
Transferor, a Seller, the Collection Agent, the Guarantor, or their Subsidiaries
to enforce any such judgment; or
(p) the Collection Agent shall fail to deliver to the
Administrative Agent any report required to be delivered by it under the terms
of the Transaction Documents within one (1) Business Day of (i) with respect to
any Settlement Report or Weekly Report, when such report was due or (ii) with
respect to any other report, receipt by the Collection Agent of written notice
from the Administrative Agent that such report is due; or
(q) the imposition of (i) tax liens against the Transferor, (ii)
tax liens against any Seller or the Guarantor unless such lien would not have a
Material Adverse Effect and has been released within fifteen (15) days of the
earlier of (a) the date such Seller or the Guarantor, as applicable, has
knowledge of the imposition of such tax lien or (b) the date on which such
Seller or the Guarantor, as applicable, receives notice of the imposition of
such tax lien, and (iii) ERISA liens; or
(r) there shall have occurred a Change in Control; or
(s) the Guarantor shall permit the Interest Coverage Ratio to be
less than the ratio set forth in subsection (b) of the definition of "Interest
Coverage Ratio" for such period; or
(t) the Guarantor shall permit the Leverage Ratio during any period
set forth in subsection (b) of the definition of "Leverage Ratio" to be greater
than the ratio set forth in such definition for such period; or
(u) C&A and the Sellers (in the aggregate) fail to maintain 100%
ownership of the Transferor.
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SECTION 8.2 Remedies Upon the Occurrence of a Termination Event.
(a) Upon the occurrence of any Termination Event, the
Administrative Agent may, or at the direction of the Required Purchaser Groups
shall, by notice to the Transferor and the Collection Agent, declare the
Termination Date to have occurred, provided, however, that in the case of any
event described in Section 8.1(e)(i), 8.1(f), 8.1(h), 8.1(l), or 8.1(q)(i) or
8.1(q)(iii) above, the Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event. At all times after the
declaration or automatic occurrence of the Termination Date pursuant to Section
8.2(a), (i) the PARCO Base Rate plus 2.00% plus the Applicable Margin shall be
the Tranche Rate applicable to the PARCO Net Investment for all existing and
future Tranches (ii) the Redwood Yield shall be payable with respect to the
Redwood Net Investment and (iii) the Liberty Base Rate plus 2.00% shall be
payable with respect to the Liberty Net Investment. If an event or condition
shall have occurred which constitutes a Potential Termination Event, the
Administrative Agent may, by notice to the Transferor, declare such event or
condition a Potential Termination Event.
(b) In addition, if any Termination Event or Potential Termination
Event occurs hereunder, (i) the Administrative Agent shall promptly notify the
Transferor in writing whether it has declared a Termination Event or a Potential
Termination Event and whether it will be exercising the remedies specified in
this Section 8.2, (ii) the Administrative Agent, on behalf of the Funding
Agents, the Initial Purchasers and the PARCO APA Banks, shall have all of the
rights and remedies provided to a secured creditor or a purchaser of accounts
under the Relevant UCC by applicable law in respect thereto, (iii) the Facility
Limit shall be reduced as of each calendar date thereafter to equal the
Aggregate Net Investment as of such date, (iv) each Purchase Limit shall be
reduced as of each calendar date thereafter to equal the applicable Net
Investment as of such date, (v) the Percentage Factor shall be increased to
100%, (vi) each Commitment shall be reduced as of each calendar date thereafter,
to equal its Pro Rata Share of 102% of the Aggregate Net Investment as of such
date, and (vii) no Commercial Paper with respect to the Transferor will
thereafter be issued by the Initial Purchasers.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1 Appointment. Each Initial Purchaser, PARCO APA Bank and
Funding Agent hereby irrevocably designates and appoints Chase as Administrative
Agent hereunder, and authorizes the Administrative Agent to take such action on
its behalf under the provisions of this Agreement and to exercise such powers
and perform such duties as are expressly delegated to the Administrative Agent
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto, unless as otherwise directed by the Required
Purchaser Groups. To the extent the Administrative Agent takes any such action,
the Transferor, each Seller, the Guarantor and the Collection Agent, in dealing
with the Administrative Agent, shall have the right to assume such approval has
been obtained and such direction is being followed absent actual knowledge to
the contrary. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Initial Purchaser, PARCO APA Bank or Funding Agent, and no
implied
57
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of the Administrative Agent shall be read into this Agreement or the
other Transaction Documents or shall otherwise exist against the Administrative
Agent. In performing its functions and duties hereunder, the Administrative
Agent shall act solely as the agent of the Initial Purchasers, the PARCO APA
Banks and the Funding Agents under the Transaction Documents, and the
Administrative Agent does not assume, nor shall be deemed to have assumed, any
obligation or relationship of trust or agency with or for any such Person.
SECTION 9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement by or through its subsidiaries,
affiliates, agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct (other than the
gross negligence or willful misconduct) of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 9.3 Exculpatory Provisions. (a) Notwithstanding any provision
of this Agreement or any other Transaction Document: (i) the Administrative
Agent shall not have any obligations under this Agreement or any other
Transaction Document other than those specifically set forth herein and therein,
and no implied obligations of the Administrative Agent shall be read into this
Agreement or any other Transaction Document; and (ii) in no event shall the
Administrative Agent be liable under or in connection with this Agreement or any
other Transaction Document for indirect, special, or consequential losses or
damages of any kind, including lost profits, even if advised of the possibility
thereof and regardless of the form of action by which such losses or damages
maybe claimed. Neither the Administrative Agent nor any of its respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken in good faith by it or them under or in connection with this
Agreement or any other Transaction Document, except for its or their own gross
negligence or willful misconduct. Without limiting the foregoing, the
Administrative Agent (a) may consult with legal counsel (including counsel for
the Initial Purchasers, the PARCO APA Banks and the Funding Agents), 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, (b) shall not be responsible
to the Initial Purchasers, the PARCO APA Banks, the Funding Agents, the Sellers,
the Collection Agent or the Counterparties for any statements, warranties or
representations (other than its own statements) made in or in connection with
this Agreement or the other Transaction Documents, (c) shall not be responsible
to the Initial Purchasers, the PARCO APA Banks, the Funding Agents, the Sellers,
the Collection Agent or the Counterparties for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Transaction Documents (other than the legality, validity,
enforceability or genuineness of its own execution, authorization and
performance hereof and thereof), (d) shall incur no liability under or in
respect of any of the Commercial Paper or other obligations of the Initial
Purchasers, the PARCO APA Banks and the Counterparties under this Agreement or
the other Transaction Documents and (e) shall incur no liability under or in
respect of this Agreement or the other Transaction Documents by acting in good
faith 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. Notwithstanding
anything else herein or in the other Transaction Documents, it is agreed that
where the Administrative Agent may be required under
58
this Agreement or the other Transaction Documents to give notice of any event or
condition or to take any action as a result of the occurrence of any event or
the existence of any condition, the Administrative Agent agrees to give such
notice or take such action only to the extent that it has actual knowledge of
the occurrence of such event or the existence of such condition, and shall incur
no liability for any failure to give such notice or take such action in the
absence of such knowledge. All notices, documents and reports received by the
Administrative Agent hereunder or under the other Transaction Documents shall be
promptly provided by the Administrative Agent to each Funding Agent, by
facsimile or mail as deemed appropriate by the Administrative Agent.
SECTION 9.4 Reliance by Administrative Agent. The Administrative Agent
shall in all cases be entitled to rely, and shall be fully protected in relying,
in good faith, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to each of the Initial Purchasers, the Funding Agents and
the PARCO APA Banks), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall in all cases be fully
justified in failing or refusing to take any action in good faith under this
Agreement, any other Transaction Document or any other document furnished in
connection herewith or therewith unless it shall first receive such advice or
concurrence of the Funding Agents, as it deems appropriate, or it shall first be
indemnified to its satisfaction by the Funding Agents or otherwise against any
and all liability, cost and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, in good
faith under this Agreement, the other Transaction Documents or any other
document furnished in connection herewith or therewith in accordance with a
request of the Funding Agents, and such request and any action taken or failure
to act pursuant thereto shall be binding upon the Funding Agents, the Initial
Purchasers, the PARCO APA Banks and the Counterparties.
SECTION 9.5 Action Upon Events of Termination and Collection Agent
Defaults, Reports and Notices. To the extent the Administrative Agent is
entitled to consent to or withhold its consent of any waiver or amendment of
this Agreement or other Transaction Documents in accordance with the terms
hereof or thereof or otherwise take action upon the occurrence of a Termination
Event or a Collection Agent Default, the Administrative Agent shall (i) give
prompt notice to the Funding Agents of any such waiver, amendment, Termination
Event or Collection Agent Default of which it is aware and (ii) take such action
with respect to such waiver, amendment, Termination Event or Collection Agent
Default as shall be directed by all Funding Agents (unless the direction of the
Required Purchaser Groups or Required Participants is expressly required with
respect to a specific provision).
SECTION 9.6 Non-Reliance on Administrative Agent. Each of the parties
hereto expressly acknowledges that neither the Administrative Agent, nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including, without limitation, any review
of the affairs of either the Sellers or the Collection Agent, shall be deemed to
constitute any representation or warranty by the Administrative Agent. Except as
expressly
59
provided herein, the Administrative Agent shall not have any duty or
responsibility to provide any Person other than each Funding Agent, each Initial
Purchaser or each PARCO APA Bank with any credit or other information concerning
the business, operations, property, prospects, financial and other condition or
creditworthiness of the Sellers, the Collection Agent, the Initial Purchasers,
the PARCO APA Banks, the Funding Agents or the Counterparties which may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
SECTION 9.7 Indemnification. The Funding Agents and the PARCO APA
Banks agree to indemnify the Administrative Agent and its officers, directors,
employees, representatives and agents (to the extent not reimbursed by the
Transferor or the Collection Agent under the Transaction Documents, and without
limiting the obligation of such Persons to do so in accordance with the terms of
the Transaction Documents), on a pro rata basis, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent or the affected Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Administrative Agent or such affected Person shall be
designated a party thereto) that may at any time be imposed on, incurred by or
asserted against the Administrative Agent or such affected Person as a result
of, or arising out of, or in any way related to or by reason of, any of the
transactions contemplated hereunder or under the Transaction Documents or any
other document furnished in connection herewith or therewith (but excluding any
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the gross
negligence or willful misconduct of the Administrative Agent or such affected
Person).
SECTION 9.8 Successor Administrative Agent. The Administrative Agent
may, upon five (5) days' notice to each Funding Agent (with a copy to the
Transferor and the Collection Agent), and the Administrative Agent will, at the
direction of the Required Purchaser Groups, resign as Administrative Agent;
provided, in either case, that a Funding Agent or a PARCO APA Bank agrees to
become the successor Administrative Agent hereunder in accordance with the next
sentence with the approval of the Required Purchaser Groups. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
then the Required Purchaser Groups during such period shall appoint from among
the Funding Agents or the PARCO APA Banks a successor agent, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent, effective upon its acceptance of such appointment and its
delivery of a duly executed counterpart of this Agreement and an acknowledgment
to each Funding Agent, and the former Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any other or further
act or deed on the part of such former Administrative Agent or any of the
parties to this Agreement. After the retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. Notice of the appointment of a
successor Administrative Agent shall be provided by the new Administrative Agent
to the Transferor and the Collection Agent.
60
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Term of Agreement. This Agreement shall terminate on the
date following the Termination Date upon which the Aggregate Net Investment has
been reduced to zero, and all accrued PARCO Discount, the Yield, Servicing Fees
and all other Aggregate Unpaids have been paid in full, in each case, in cash;
provided, however, that (i) the rights and remedies of the Administrative Agent,
each Funding Agent, the Initial Purchasers and the PARCO APA Banks with respect
to any representation and warranty made or deemed to be made by the Transferor
pursuant to this Agreement, (ii) the indemnification and payment provisions of
each Asset Purchase Agreement, (iii) the indemnification provisions in Section
6.6 and Article VII hereof, and (iv) the agreements set forth in Section 10.8
and 10.9 hereof, shall be continuing and shall survive any termination of this
Agreement.
SECTION 10.2 Waivers; Amendments. No failure or delay on the part of
the Administrative Agent, a Funding Agent, the Initial Purchasers or any PARCO
APA Bank in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any provision of this Agreement may be amended if, but only if, such
amendment is in writing and is signed by the parties hereto and the Required
Participants, and the Rating Agencies have provided in writing confirmation that
such amendment will not result in a reduction or withdrawal of the rating of any
Initial Purchaser's Commercial Paper; provided that the consent of the Redwood
Funding Agent shall be required for any amendment, modification or supplement
relating to (i) the addition of a Seller pursuant to Section 7.2 of the
Receivables Purchase Agreement, (ii) any reference herein, or in any other
Transaction Document, to Redwood, any Redwood Secured Parties, any Redwood
Program Document or Redwood Yield or any component thereof (including without
limitation the definition of any of the foregoing), (iii) the definitions of
"Interest Coverage Ratio," "Leverage Ratio," "Eligible Obligor," "Eligible
Receivables," "Termination Date," "Purchase Termination Date," "Required
Purchaser Groups," "Percentage Factor" and "Maximum Percentage Factor" and any
defined terms incorporated therein, (iv) the reduction or postponement of the
time for payment of any fee or other amount payable to or on behalf of Redwood
or (v) this Section 10.2; provided further, that the consent of the Liberty
Funding Agent shall be required for any amendment, modification or supplement
relating to (i) the addition of a Seller pursuant to Section 7.2 of the
Receivables Purchase Agreement, (ii) any reference herein, or in any other
Transaction Document, to Liberty, Liberty Purchase Limit, Liberty Net Investment
or Liberty Yield or any component thereof (including without limitation the
definition of any of the foregoing), (iii) the definitions of "Percentage
Factor" and "Maximum Percentage Factor" and any defined terms incorporated
therein, (iv) the reduction or postponement of the time for payment of any fee
or other amount payable to or on behalf of Liberty or (v) this Section 10.2.
SECTION 10.3 Notices. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy
61
number set forth below or at such other address or telecopy number as such party
may hereafter specify for the purposes of notice to such party. Each such notice
or other communication shall be effective (i) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section 10.3
and confirmation is received, (ii) if given by mail three (3) Business Days
following such posting, postage prepaid, U.S. certified or registered, (iii) if
given by overnight courier, one (1) Business Day after deposit thereof with a
national overnight courier service, or (iv) if given by any other means, when
received at the address specified in this Section 10.3. However, anything in
this Section 10.3 to the contrary notwithstanding, the Transferor hereby
authorizes the Administrative Agent to effect Transfers, Tranche Period and
Tranche Rate selections based on telephonic notices made by any Person which the
Administrative Agent in good faith believes to be acting on behalf of the
Transferor. The Transferor agrees to deliver promptly to the Administrative
Agent (and the Administrative Agent will promptly deliver to each Funding Agent)
a written confirmation of each telephonic notice signed by an authorized officer
of Transferor. However, the absence of such confirmation shall not affect the
validity of such notice. If the written confirmation differs in any material
respect from the action taken by the Administrative Agent, the records of the
Administrative Agent shall govern absent manifest error.
If to the Initial Purchasers:
PARK AVENUE RECEIVABLES CORPORATION
c/o Global Securitization Services, LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to the PARCO Funding Agent)
REDWOOD RECEIVABLES CORPORATION
c/o General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Conduit Administrator
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Redwood Funding Agent:
GENERAL ELECTRIC CAPITAL CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-Portfolio/▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (203) 316-7821
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ FUNDING CORP.
c/o Global Securitization Service, LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
THE BANK OF NOVA SCOTIA
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Transferor:
CARCORP, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
US Bank of Nevada
Las Vegas, Nevada
ABA # ▇▇▇▇▇▇▇▇▇
Account # 153700076455
Reference Name: Carcorp Inc.
If to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
63
If to the Administrative Agent:
THE CHASE MANHATTAN BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Structured Finance Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the PARCO Funding Agent:
THE CHASE MANHATTAN BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Structured Finance Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the PARCO APA Banks, at their respective addresses set forth in
the PARCO Asset Purchase Agreement.
SECTION 10.4 Governing Law, Submission to Jurisdiction, Integration.
(a) This Agreement shall be governed by, and construed in
accordance with the laws of the State of New York. Each of the parties hereto
hereby submits to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York state court
sitting in The City of New York for purposes of all legal proceedings arising
out of or relating to this Agreement or the transactions contemplated hereby.
Each of the parties hereto hereby irrevocably waives, to the fullest extent it
may effectively do so, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum. Nothing in this Section 10.4 shall affect the right of the
Administrative Agent, the Funding Agents, the Initial Purchasers or the PARCO
APA Banks to bring any action or proceeding against the Transferor, the
Guarantor, any Seller, the Collection Agent, or their respective properties in
the courts of other jurisdictions.
(b) Each of the parties hereto hereby waives any right to have a
jury participate in resolving any dispute, whether sounding in contract, tort or
otherwise among any of them arising out of, connected with, relating to or
incidental to the relationship between them in connection with this Agreement or
the other Transaction Documents.
(c) This Agreement and the other Transaction Documents contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject
64
matter hereof and shall constitute the entire Agreement among the parties hereto
with respect to the subject matter hereof superseding all prior oral or written
understandings.
SECTION 10.5 Severability; Counterparts. 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. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 10.6 Successors and Assigns. This Agreement shall be binding
on the parties hereto and their respective successors and assigns; provided,
however, that neither the Transferor, the Guarantor, C&A nor any other Seller
may assign any of its rights or delegate any of its duties hereunder or under
any of the other Transaction Documents to which it is a party without the prior
written consent of (i) the Administrative Agent and (ii) each Funding Agent
(which consent shall be obtained by the Administrative Agent). No provision of
this Agreement shall in any manner restrict the ability of the Initial
Purchasers or any PARCO APA Bank to assign, participate, grant security
interests in, or otherwise transfer any portion of the Transferred Interest. No
provision of the Transaction Documents shall in any manner restrict the ability
of PARCO to assign, participate, grant security interests in, or otherwise
transfer any portion of its PARCO Interest. Without limiting the foregoing,
PARCO may, in one or a series of transactions, transfer all or any portion of
its PARCO Interest, and its rights and obligations under the Transaction
Documents to a Conduit Assignee. No provision of the Transaction Documents shall
in any manner restrict the ability of Redwood to assign, participate, grant
security interests in, or otherwise transfer any portion of its interest in the
Transferred Interest. Without limiting the foregoing, Redwood may, in one or a
series of transactions, transfer all or any portion of its interest in the
Transferred Interest, and its rights and obligations under the Transaction
Documents to the Redwood Liquidity Lenders.
SECTION 10.7 Confidentiality.
(a) Each of the Transferor, the Guarantor, C&A and each other
Seller shall maintain, and shall cause each officer, employee and agent of
itself and its Affiliates to maintain, the confidentiality of the Transaction
Documents and all other confidential proprietary information with respect to the
Administrative Agent, the Initial Purchasers, the Funding Agents and the PARCO
APA Banks and each of their respective businesses obtained by them in connection
with the structuring, negotiation and execution of the transactions contemplated
herein and in the other Transaction Documents, except for information that has
become publicly available or information disclosed (i) to legal counsel,
accountants and other professional advisors to the Transferor, C&A, any other
Seller and their Affiliates, (ii) as required by law, regulation, the
requirements of the New York Stock Exchange or legal process or (iii) in
connection with any legal or regulatory proceeding to which the Transferor, the
Guarantor, C&A, any other Seller or any of their Affiliates is subject. Each of
the Transferor, the Guarantor, C&A and each other Seller hereby consents to the
disclosure of any non-public information with respect to it received by the
Administrative Agent, the Initial Purchasers, the Funding Agents or
65
any PARCO APA Bank from the Transferor, Guarantor, C&A or any other Sellers to
(i) any of the Initial Purchasers, the Administrative Agent, the Funding Agents,
any PARCO APA Bank, (ii) legal counsel, accountants and other professional
advisors to the Administrative Agent, the Initial Purchasers, the Funding
Agents, a PARCO APA Bank or their Affiliates, (iii) as required by law,
regulation or legal process, (iv) in connection with any legal or regulatory
proceeding to which the Administrative Agent, the Initial Purchasers, the
Funding Agents, a PARCO APA Bank or any of their Affiliates is subject, (v) any
nationally recognized rating agency providing a rating or proposing to provide a
rating to the Initial Purchasers' Commercial Paper, (vi) any placement agent
which proposes to offer and sell the Initial Purchasers' Commercial Paper, (vii)
any provider of the Initial Purchasers' program-wide liquidity or credit support
facilities, (viii) any potential PARCO APA Bank or (ix) any Participant or
potential Participant; provided, that the Administrative Agent, the Initial
Purchasers, the Funding Agents or any PARCO APA Bank, as the case may be, shall
advise any such recipient of information that the information they receive is
non-public information and may not be disclosed or used for any other purposes
other than that for which it is disclosed to such recipient without the prior
written consent of the Guarantor and C&A.
(b) Each of the Administrative Agent, the Initial Purchasers, the
Funding Agents and the PARCO APA Banks shall maintain, and shall cause each
officer, employee and agent of itself and its Affiliates to maintain, the
confidentiality of the Transaction Documents and all other confidential
proprietary information with respect to the Transferor, the Guarantor, C&A, any
other Seller and their Affiliates and each of their respective businesses
obtained by them in connection with the structuring, negotiation and execution
of the transactions contemplated herein and in the other Transaction Documents,
except for information that has become publicly available or information
disclosed (i) to legal counsel, accountants and other professional advisors to
the Administrative Agent, the Initial Purchasers, the Funding Agents, a PARCO
APA Bank or their Affiliates, (ii) as required by law, regulation or legal
process or (iii) in connection with any legal or regulatory proceeding to which
the Administrative Agent, the Initial Purchasers, the Funding Agents, a PARCO
APA Bank or any of their Affiliates is subject, (iv) any nationally recognized
rating agency providing a rating or proposing to provide a rating to the Initial
Purchasers' Commercial Paper, (v) any placement agent which proposes to offer
and sell the Initial Purchasers' Commercial Paper, (vi) any provider of the
Initial Purchasers' program-wide liquidity or credit support facilities, (vii)
any potential PARCO APA Bank or (viii) any Participant or potential Participant.
SECTION 10.8 No Bankruptcy Petition Against the Initial Purchasers.
Each of the Transferor, the Guarantor, C&A and each other Seller hereby
covenants and agrees that, prior to the date which is one year and one day after
the payment in full of all outstanding Commercial Paper or other indebtedness of
the Initial Purchasers, it will not institute against, or join any other Person
in instituting against, the Initial Purchasers any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any State of the United States.
SECTION 10.9 Limited Recourse. Notwithstanding anything to the
contrary contained herein, the obligations of the Initial Purchasers under this
Agreement are solely the corporate obligations of the Initial Purchasers and, in
the case of obligations of the Initial Purchasers other than Commercial Paper,
shall be payable at such time as funds are actually
66
received by, or are available to, the Initial Purchasers in excess of funds
necessary to pay in full all outstanding Commercial Paper and, to the extent
funds are not available to pay such obligations, the claims relating thereto
shall not constitute a claim against the Initial Purchasers but shall continue
to accrue. Each party hereto agrees that the payment of any claim (as defined in
Section 101 of the Bankruptcy Code) of any such party shall be subordinated to
the payment in full of all Commercial Paper.
No recourse under any obligation, covenant or agreement of the Initial
Purchasers contained in this Agreement shall be had against any incorporator,
stockholder, officer, director, member, manager, employee or agent of the
Initial Purchasers, the PARCO Administrative Agent, the Administrative Agent, or
any of their Affiliates (solely by virtue of such capacity) by the enforcement
of any assessment or by any legal or equitable proceeding, by virtue of any
statute or otherwise; it being expressly agreed and understood that this
Agreement is solely a corporate obligation of the Initial Purchasers, and that
no personal liability whatever shall attach to or be incurred by any
incorporator, stockholder, officer, director, member, manager, employee or agent
of the Initial Purchasers, the PARCO Administrative Agent, the Administrative
Agent, or any of their Affiliates (solely by virtue of such capacity) or any of
them under or by reason of any of the obligations, covenants or agreements of
the Initial Purchasers contained in this Agreement, or implied therefrom, and
that any and all personal liability for breaches by the Initial Purchasers of
any of such obligations, covenants or agreements, either at common law or at
equity, or by statute, rule or regulation, of every such incorporator,
stockholder, officer, director, member, manager, employee or agent is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement; provided that the foregoing shall not relieve any such Person
from any liability it might otherwise have as a result of fraudulent actions
taken or fraudulent omissions made by them.
SECTION 10.10 Characterization of the Transactions Contemplated by the
Agreement.
(a) It is the intention of the parties that the transactions
contemplated hereby constitute the sale of the Transferred Interest, conveying
good title thereto free and clear of any Adverse Claims to the Initial
Purchasers, the PARCO APA Banks and the Funding Agents, and that the Transferred
Interest not be part of the Transferor's estate in the event of an insolvency.
If, notwithstanding the foregoing, the transactions contemplated hereby should
be deemed a financing, the parties intend that the Transferor shall be deemed to
have granted to the Administrative Agent, on behalf of the Initial Purchasers,
the PARCO APA Banks and the Funding Agents, and the Transferor hereby grants to
the Administrative Agent, on behalf of the Initial Purchasers, the PARCO APA
Banks and the Funding Agents, to secure the Aggregate Unpaids a first priority
perfected and continuing security interest in all of the Transferor's right,
title and interest in, to and under the Receivables, together with Related
Security, the Required Currency Hedge, and Collections and Proceeds with respect
thereto, together with all monies from time to time on deposit in the Collection
Account and any Lock-Box Account, and together with all of the Transferor's
rights under the Receivables Purchase Agreement and all other Transaction
Documents and any Proceeds of any of the foregoing assets (the "Transferor
Collateral"), and that this Agreement shall constitute a security agreement
under applicable Law. The Transferor hereby assigns to the Administrative Agent,
on behalf of the Initial Purchasers, the PARCO APA Banks and the Funding Agents,
all of its rights and remedies under the
67
Receivables Purchase Agreement with respect to the Receivables and with respect
to any obligations thereunder of any Seller with respect to the Receivables. The
Transferor agrees that it shall not give any consent or waiver required or
permitted to be given under the Receivables Purchase Agreement without the prior
consent of each Funding Agent which consent shall be obtained by the
Administrative Agent.
(b) Each of the Transferor and the Collection Agent acknowledges
and consents to the grant by Redwood to the Redwood Collateral Agent pursuant to
the Redwood Collateral Agent Agreement of a security interest upon all of the
Administrative Agent's right, title and interest in, to and under the Transferor
Collateral on behalf of Redwood and acknowledges the rights of the Redwood
Collateral Agent thereunder and the covenants made by the Transferor in favor of
the Administrative Agent set forth therein, and further acknowledges and
consents that, upon the occurrence and during the continuance of a Potential
Termination Event or a Termination Event, the Administrative Agent shall enforce
the provisions of the Receivables Transfer Agreement and the Transaction
Documents to which Redwood is a party and the Redwood Collateral Agent shall be
entitled to all the rights and remedies of Redwood thereunder. In addition, each
of the Transferor and the Collection Agent hereby authorizes the Redwood
Collateral Agent to rely on the representations and warranties made by it in the
Transaction Documents to which it is a party and in any other certificates or
documents furnished by it to any party in connection therewith.
SECTION 10.11 Waiver of Setoff. Each of the Administrative Agent,
Funding Agents, the Transferor, the Guarantor, the Collection Agent, and each
Seller hereby waives any right of setoff it may have or to which it may be
entitled under this Agreement from time to time against the Initial Purchasers
or their assets.
SECTION 10.12 Chase Conflict Waiver. Chase acts as PARCO Funding Agent
and as PARCO Administrative Agent for PARCO, as issuing and paying agent for
PARCO's Commercial Paper, as provider of other backup facilities for PARCO, as
Administrative Agent hereunder, and may provide other services or facilities
from time to time (the "Chase Roles"). Without limiting the generality of
Section 4.8 of the PARCO Asset Purchase Agreement, each of the parties hereto
hereby acknowledges and consents to any and all Chase Roles, waives any
objections it may have to any actual or potential conflict of interest caused by
Chase's acting as the PARCO Funding Agent or as a PARCO APA Bank under the PARCO
Asset Purchase Agreement and acting as or maintaining any of the Chase Roles,
and agrees that in connection with any Chase Role, Chase may take, or refrain
from taking, any action which it in its discretion deems appropriate.
SECTION 10.13 GE Capital Conflict Waiver. GE Capital acts as Redwood
Funding Agent, as Redwood Collateral Agent, as Redwood Liquidity Agent and as a
Redwood Liquidity Lender and may provide other services or facilities from time
to time (the "GE Capital Roles"). Each of the parties hereto hereby acknowledges
and consents to any and all GE Capital Roles, waives any objections it may have
to any actual or potential conflict of interest caused by GE Capital's acting as
the Redwood Funding Agent or as a Redwood Collateral Agent, Redwood Liquidity
Lender or Redwood Liquidity Agent under the Redwood Liquidity Loan Agreement and
acting as or maintaining any of the GE Capital Roles, and agrees that in
connection with any
68
GE Capital Role, GE Capital may take, or refrain from taking, any action which
it in its discretion deems appropriate.
SECTION 10.14 The Bank of Nova Scotia Conflict Waiver. The Bank of
Nova Scotia acts as Liberty Funding Agent and as Liberty Administrative Agent
for Liberty, as issuing and paying agent for Liberty's Commercial Paper, as
provider of other backup facilities for Liberty hereunder, and may provide other
services or facilities from time to time ("The Bank of Nova Scotia Roles"). Each
of the parties hereto hereby acknowledges and consents to any and all The Bank
of Nova Scotia Roles, waives any objections it may have to any actual or
potential conflict of interest caused by The Bank of Nova Scotia's acting as the
Liberty Funding Agent or as a Liberty APA Bank under the Liberty Liquidity Asset
Purchase Agreement and acting as or maintaining any of The Bank of Nova Scotia
Roles, and agrees that in connection with any The Bank of Nova Scotia Role, The
Bank of Nova Scotia may take, or refrain from taking, any action which it in its
discretion deems appropriate.
SECTION 10.15 Liability of Funding Agents. Notwithstanding any
provision of this Agreement, (i) the Funding Agents shall not have any
obligations under this Agreement other than those specifically set forth herein,
and no implied obligations of the Funding Agents shall be read into this
Agreement; and (ii) in no event shall the Funding Agents be liable under or in
connection with this Agreement for indirect, special, or consequential losses or
damages of any kind, including lost profits, even if advised of the possibility
thereof and regardless of the form of action by which such losses or damages may
be claimed. Neither the Funding Agents nor any of their directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
in good faith by them under or in connection with this Agreement, except for its
or their own gross negligence or willful misconduct. Without limiting the
foregoing, a Funding Agent (a) may consult with legal counsel (including counsel
for the Initial Purchasers), 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, (b) shall not be responsible to the Administrative
Agent, the Initial Purchasers, the Transferor, the Guarantor, any Seller or the
Collection Agent for any statements, warranties or representations (other than
their own respective statements) made in or in connection with this Agreement or
the other Transaction Documents, (c) shall not be responsible to the
Administrative Agent, the Initial Purchasers, the Guarantor, the Transferor, any
Seller or the Collection Agent for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Transaction Documents, (other than the legality, validity, enforceability or
genuineness of its own execution, authorization and performance hereof and
thereof), (d) shall incur no liability under or in respect of any of the
Commercial Paper or other obligations of the Initial Purchasers under this
Agreement or the other Transaction Documents and (e) shall incur no liability
under or in respect of this Agreement or the other Transaction Documents 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. Notwithstanding
anything else herein or in the other Transaction Documents, it is agreed that
where a Funding Agent may be required under this Agreement or the other
Transaction Documents to give notice of any event or condition or to take any
action as a result of the occurrence of any event or the existence of any
condition, each Funding Agent agrees to give such notice or take such action
only to the extent that it has actual knowledge of the occurrence of such event
or the existence of
69
such condition, and shall incur no liability for any failure to give such notice
or take such action in the absence of such knowledge.
SECTION 10.16 Tax Treatment. The Transferor has entered into this
Agreement with the intention that, for Federal, State and local income, single
business and franchise tax purposes, the Incremental Transfers will qualify as
indebtedness of the Transferor secured by the Receivables, Related Security, the
Required Currency Hedge, Collections and Proceeds with respect thereto. Each of
the parties hereto agree to treat the Incremental Transfers for Federal, State
and local income, single business and franchise tax purposes as indebtedness of
the Transferor.
SECTION 10.17 Canadian Taxes. The Transferor represents and warrants
to the Administrative Agent and each Funding Agent for the benefit of the
Initial Purchasers and PARCO APA Banks that it has not assumed in any manner
whatsoever any obligation of the Sellers under the Receivables Purchase
Agreement (i) to make collections and remittances in respect of any Canadian
goods and services tax, any Canadian provincial sales tax or any other similar
Canadian tax or (ii) to file any returns in respect of such taxes with Canadian
tax authorities and that it was not contemplated by either any Seller under the
Receivables Purchase Agreement or the Transferor that such obligation was to be
assumed by the Transferor. The parties hereto agree that neither the
Administrative Agent, the Initial Purchasers nor the PARCO APA Banks are
assuming the in any manner whatsoever any obligation of the Sellers under the
Receivables Purchase Agreement to collect such taxes, make such remittances and
file such returns, and that it is not contemplated by the parties hereto that
any such obligation is hereby assumed by the Initial Purchasers, the PARCO APA
Banks, the Administrative Agent or any Funding Agent. The Transferor hereby
indemnifies the Administrative Agent and each Funding Agent for the benefit of
the Initial Purchasers and PARCO APA Banks and holds them harmless from and
against any assessments, withholding taxes, claims, or other demands for payment
of such taxes by Canadian tax authorities, as well as interest and penalties;
provided that any payments made by the Transferor pursuant to this subsection
shall be made solely from funds available to the Transferor which are not
otherwise required to be applied to the payment of any amounts pursuant to this
Agreement (other than to the Transferor), shall be non-recourse other than with
respect to such funds, and shall not constitute a claim against the Transferor
to the extent that insufficient funds exist to make such payment. It is
understood that all of the invoices in respect of the Receivables with Canadian
Obligors of the Sellers under the Receivables Purchase Agreement will bear the
GST registration number of such Seller.
SECTION 10.18 Funding Agent Consents. For instances where the
Administrative Agent has undertaken to obtain the consents of the Funding
Agents, the Administrative Agent agrees that it will seek to obtain such
consents without unreasonable delay.
70
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Receivables Transfer Agreement as of the date first written
above.
PARK AVENUE RECEIVABLES
CORPORATION, as an Initial Purchaser
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CARCORP, INC., as Transferor
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO., as
Guarantor and as Collection Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
THE CHASE MANHATTAN BANK, as
PARCO Funding Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
THE CHASE MANHATTAN BANK, as a
Liquidity Bank
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
REDWOOD RECEIVABLES CORPORATION, as
an Initial Purchaser
By:
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Secretary
GENERAL ELECTRIC CAPITAL CORPORATION,
as Redwood Funding Agent
By:
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Duly Authorized Signatory
LIBERTY STREET FUNDING CORP., as an
Initial Purchaser
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
THE BANK OF NOVA SCOTIA, as Liberty
Funding Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
EXHIBIT A
Credit and Collection Policy
A-1
EXHIBIT B
List of Lock-Box Banks and Accounts
BANK ACCOUNT NUMBER
---- --------------
Northern Trust Bank 76279
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 30176279
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Canadian Imperial Bank of Commerce 22-43318
1155 Ren-L vesque ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇) ▇▇▇▇▇▇ ▇▇▇▇▇▇
Toronto Dominion Bank ▇▇▇▇▇▇▇
Commercial ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ 0685460
Canada 0685479
0686467
7302759
7302783
7302872
▇▇▇▇▇▇▇
Wachovia Bank, N.A. 1860-084622
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1865-084610
1863-084611
1861-084612
1869-084613
1867-084614
U.S. Collection Account - Chase Manhattan Bank ▇▇▇▇▇▇▇▇▇
Canada/CAD Collection Account - Toronto Dominion Bank ▇▇▇▇▇▇
Canada/USD Collection Account - Toronto Dominion Bank ▇▇▇▇▇▇▇
B-1
EXHIBIT C
[Form Of Lock-Box Agreement]
[Date]
[Name and Address
of Lock-Box Bank]
Re: Carcorp., Inc.
Lock-Box Account No[s].
Ladies and Gentlemen:
Carcorp, Inc. (the "Transferor") hereby notifies you that in
connection with certain transactions involving its accounts receivable, it has
transferred exclusive dominion of its lock-box account no[s].
maintained with you (collectively the "Accounts") to The
Chase Manhattan Bank, as administrative agent (the "Administrative Agent") and
that Transferor will transfer exclusive control of the Accounts to the
Administrative Agent effective upon delivery to you of the Notice of
Effectiveness (as hereinafter defined). The accounts receivables are being
transferred to the Transferor pursuant to the Receivables Purchase Agreement,
among ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co. and its direct and indirect Subsidiaries
named therein, each as sellers, and the Transferor as the Purchaser and the
other sellers from time to time named therein and, transferred by the Transferor
to the Administrative Agent on behalf of the Initial Purchasers and the PARCO
APA Banks pursuant to the Receivables Transfer Agreement, among the Transferor,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co., as guarantor and as collection agent (in its
capacity as collection agent, the "Collection Agent"), Park Avenue Receivables
Corporation, Redwood Receivables Corporation, Liberty Street Funding Corp., the
PARCO APA Banks (as listed on Schedule I to the Receivables Transfer Agreement),
the Funding Agents (as listed on Schedule I to the Receivables Transfer
Agreement) and the Administrative Agent.
In furtherance of the foregoing, Transferor and the Administrative
Agent hereby instruct you, beginning on the date of your receipt of the Notice
of Effectiveness: (i) to collect the monies, checks, instruments and other items
of payment mailed to the Accounts, (ii) to deposit into the Accounts all such
monies, checks, instruments and other items of payment or all funds collected
with respect thereto (unless otherwise instructed by the Administrative Agent);
and (iii) to transfer all funds deposited and collected in the Accounts pursuant
to instructions given to you by the Administrative Agent from time to time.
You are hereby further instructed: (i) unless and until the
Administrative Agent notifies you to the contrary at any time after your receipt
of the Notice of Effectiveness, to make such transfers from the Accounts at such
times and in such manner as Collection Agent, in its capacity as Collection
Agent for the Administrative Agent, shall from time to time instruct to the
extent such instructions are not inconsistent with the instructions set forth
herein, and (ii) to permit the Collection Agent (in its capacity as Collection
Agent for the Administrative Agent) and the Administrative Agent to obtain upon
request any information relating to the Accounts, including, without limitation,
any information regarding the balance or activity of the Accounts.
C-1
Transferor also hereby notifies you that, beginning on the date of
your receipt of the Notice of Effectiveness and notwithstanding anything herein
or elsewhere to the contrary, but subject to the concurrent rights of the
Collection Agent in the preceding paragraph, the Administrative Agent, and not
Transferor or the Collection Agent, shall be irrevocably entitled to exercise
any and all rights in respect of or in connection with the Accounts, including,
without limitation, the right to specify when payments are to be made out of or
in connection with the Accounts. The Administrative Agent have a continuing
interest in all of the checks and their proceeds and all monies and earnings, if
any, thereon in the Accounts, and you shall be the Administrative Agent's agent
for the purpose of holding and collecting such property. The monies, checks,
instruments and other items of payment mailed to, and funds deposited to, the
Accounts will not be subject to deduction, set-off, banker's lien, or any other
right in favor of any person other than the Administrative Agent (except that
you may set off (i) all amounts due to you in respect of your customary fees and
expenses for the routine maintenance and operation of the Accounts, and (ii) the
face amount of any checks which have been credited to the Accounts but are
subsequently returned unpaid because of uncollected or insufficient funds).
This Agreement may not be terminated at any time by Transferor or you
without providing thirty (30) days' prior written notice to the Administrative
Agent and the Collection Agent. Neither this Agreement nor any provision hereof
may be changed, amended, modified or waived orally but only by an instrument in
writing signed by the Administrative Agent, Transferor and you.
You shall not assign or transfer your rights or obligations hereunder
(other than to the Administrative Agent) without thirty (30) days' prior written
notice to the Administrative Agent and Transferor. Subject to the preceding
sentence, this Agreement shall be binding upon each of the parties hereto and
their respective successors and assigns, and shall inure to the benefit of, and
be enforceable by, the Administrative Agent, each of the parties hereto and
their respective successors and assigns.
You hereby represent that the person signing this Agreement on your
behalf is duly authorized by you to so sign.
You agree to give the Administrative Agent, Transferor and Collection
Agent prompt notice if the Accounts become subject to any writ, garnishment,
judgment, warrant of attachment, execution or similar process.
TRANSFEROR AGREES TO INDEMNIFY AND HOLD YOU HARMLESS FROM AND AGAINST
ANY AND ALL LIABILITIES, LOSSES, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) WHICH YOU MAY SUFFER OR INCUR IN CONNECTION WITH THIS AGREEMENT
OR THE MAINTENANCE OF THE ACCOUNTS, INCLUDING BUT NOT LIMITED TO THOSE WHICH IN
WHOLE OR IN PART ARISE OUT OF YOUR NEGLIGENCE, BUT NOT INCLUDING THOSE ARISING
OUT OF YOUR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN NO EVENT SHALL YOU BE
LIABLE FOR ANY INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES.
C-2
Notwithstanding any other provision of this Agreement, you shall not
be liable for any failure, inability to perform, or delay in performance
hereunder, if such failure, inability, or delay is due to acts of God, war,
civil commotion, governmental action, fire, explosion, terrorist activities,
strikes, other industrial disturbances, equipment malfunction, outages of
computers, action, non-action or delayed action on the part of Transferor,
Collection Agent or the Administrative Agent, or any other entity or any other
causes that are beyond your reasonable control, or for any such failure, or
delay resulting from your reasonable belief that the action would violate any
guideline, rule or regulation of any governmental authority.
Any notice, demand or other communication required or permitted to be
given hereunder shall be in writing and may be personally served or sent by
facsimile or by courier service or by United States mail and shall be deemed to
have been delivered when delivered in person or by courier service or by
facsimile or three (3) Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly addressed). For the
purposes hereof, the addresses of the parties hereto shall be as set forth below
each party's name below, or, as to each party, at such other address as may be
designated by such party in a written notice to the other party and the
Administrative Agent.
Please agree to the terms of, and acknowledge receipt of, this notice
by signing in the space provided below.
C-3
The transfer of control of the Accounts, referred to in the first
paragraph of this letter, shall become effective upon delivery to you of a
notice (the "Notice of Effectiveness") in substantially the form attached hereto
as Annex "1".
Very truly yours,
CARCORP, INC.
By:
------------------------------
Title:
---------------------------
Date:
----------------------------
Bank of America Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ACKNOWLEDGED AND AGREED:
[NAME OF LOCK-BOX BANK] THE CHASE MANHATTAN BANK, as
Administrative Agent
By: By:
-------------------------------------- ------------------------------
Title: Title:
----------------------------------- ---------------------------
Date: Date:
------------------------------------ ----------------------------
[Address] ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Attention: 15th Floor
-------------------------------
Facsimile No.: ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO., as Collection Agent
By:
--------------------------------------
Title:
-----------------------------------
Date:
------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
C-4
ANNEX I
TO LOCK-BOX AGREEMENT
[FORM OF NOTICE OF EFFECTIVENESS]
DATED: , 199
----------- --
TO: [Name of Lock-Box Bank]
[Address]
ATTN:
Re: Lock-Box Account No[s].
Ladies and Gentlemen:
We hereby give you notice that the transfer of control of the
above-referenced Lock-Box Account[s], as described in our letter agreement with
you dated , 199 is effective as of the
date hereof. You are hereby instructed to comply immediately with the
instructions set forth in that letter.
Very truly yours,
CARCORP, INC.
By:
-------------------------
Title:
----------------------
ACKNOWLEDGED AND AGREED:
[NAME OF LOCK-BOX BANK]
By:
--------------------------------------
Title:
-----------------------------------
Date:
------------------------------------
[Address]
Attention:
-------------------------------
Facsimile No.:
---------------------------
C-5
EXHIBIT D
[FORM OF SETTLEMENT REPORT]
D-1
EXHIBIT E
[FORM OF WEEKLY REPORT]
E-1
EXHIBIT F
[FORM OF DAILY REPORT]
F-1
EXHIBIT G
[FORM OF TRANSFER CERTIFICATE]
TRANSFER CERTIFICATE
Reference is made to the Receivables Transfer Agreement dated as of
December __, 1999 (the "Agreement") among Carcorp, Inc., as transferor (in such
capacity, the "Transferor"), ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ Products Co., as Guarantor and
as Collection Agent (in such capacity, the "Collection Agent"), Park Avenue
Receivables Corporation, Redwood Receivables Corporation and Liberty Street
Funding Corporation ("the Initial Purchasers"), the several financial
institutions party thereto from time to time as PARCO APA Banks, the Funding
Agents, and The Chase Manhattan Bank, as administrative agent (the
"Administrative Agent"). Terms defined in the Agreement, or incorporated therein
by reference, are used herein as therein defined.
The Transferor hereby conveys, transfers and assigns to the
Administrative Agent, for the benefit of the Initial Purchasers and the PARCO
APA Banks, an undivided ownership interest in the Receivables and the Related
Security, the Required Currency Hedge, Collections and Proceeds with respect
thereto (each, an "Incremental Transfer"). Each Incremental Transfer by the
Transferor to the Initial Purchasers, and each reduction or increase in the
Aggregate Net Investment in respect of each Incremental Transfer evidenced
hereby, shall be indicated by the Administrative Agent on the grid attached
hereto which is part of this Transfer Certificate.
This Transfer Certificate is made without recourse except as otherwise
provided in the Agreement.
This Transfer Certificate 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 Transfer
Certificate to be duly executed and delivered by its duly authorized officer as
of the date first above written.
CARCORP, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
G-1
GRID
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Amount of Transfer Allocated to: Aggregate Net
-------------
Investment (Giving
------------------
Date of Incremental Amount of Effect to Incremental Person Making
-------------------- ---------- ---------------------- -------------
Transfer Incremental Transfer PARCO Liberty Redwood PARCO APA Transfer) Notation
-------- -------------------- ----- ------- ------- --------- -------- --------
Banks
-----
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G-2
EXHIBIT H
LIST OF TRANSFEROR'S ACTIONS AND SUITS
None.
H-1
EXHIBIT I
LIST OF COLLECTION AGENT'S ACTIONS AND SUITS
I-1
EXHIBIT J
LOCATION OF RECORDS AND RELATED SECURITY FOR THE TRANSFEROR
Bank of America Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
J-1
EXHIBIT K
LIST OF SUBSIDIARIES, DIVISIONS AND TRADENAMES
Principal Divisions/
place of Trade-
business State of names
Name of Company Corporate Address (state) incorporation (if any)
--------------- ----------------- ------- ------------- --------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ none
Co. ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Carcorp, Inc. Bank of America Plaza Nevada Delaware none
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ North America Michigan Delaware none
Carpet & Acoustics (MI) Head Office/Tech. Center
Inc. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ none
Carpet & Acoustics (TN) ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Inc.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Canton Plant Ohio Delaware The Akro
Accessory Mats Inc. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dura Convertible East Plant Michigan Delaware none
Systems, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amco Convertible Adrian Plant Michigan Delaware none
Fabrics, Inc. ("Amco") ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Delaware none
Plastics, Inc. ▇▇▇▇, ▇▇ ▇▇▇▇▇
K-1
Principal Divisions/
place of Trade-
business State of names
Name of Company Corporate Address (state) incorporation (if any)
--------------- ----------------- ------- ------------- --------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Farnham Plant Quebec Ontario none
Canada Inc. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Scarborough Division Ontario Ontario none
Plastics, Ltd. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
List of Former Names and Merged Companies
K-2
EXHIBIT L
Form of Secretary's Certificate
I, , the undersigned [Assistant] Secretary of
(the "Company"), a
Delaware corporation, DO HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Incorporation of the Company, certified by the Secretary of State
of the State of Delaware.
2. Attached hereto as Annex B is a true and complete copy of the
By-laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Board of Directors of the Company adopted on
December __, 1999, authorizing the execution, delivery and performance of each
of the documents mentioned therein, which resolutions have not been revoked,
modified, amended or rescinded and are still in full force and effect.
4. Attached hereto as Annex D are copies of good standing
certificates of the Company certified by the Securities of State of the States
of Delaware and .
5. On and as of the date hereof, the below-named persons are duly
qualified officers or representatives of the Company holding the respective
offices or positions below set opposite their names and are authorized to
execute on behalf of the Company all of the Transaction Documents (as defined in
the below-mentioned Receivables Transfer Agreement) to which the Company is a
party and the signatures below set opposite their names are their genuine
signatures:
Name Office Signature
---- ------ ---------
L-1
Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Receivables Transfer Agreement, dated December 27, 1999 among
Carcorp, Inc., as Transferor, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co., as Guarantor and
Collection Agent, Park Avenue Receivables Corporation, as an Initial Purchaser,
Redwood Receivables Corporation, as an Initial Purchaser, Liberty Street Funding
Corp., as an Initial Purchaser, the several financial institutions party thereto
from time to time, as PARCO APA Banks, the several agent banks party thereto
from time to time, as Funding Agents, and The Chase Manhattan Bank, as
Administrative Agent.
WITNESS my hand and seal of the Company as of this 27th day of
December 1999.
------------------------------
Name:
Title: [Assistant] Secretary]
[SEAL]
I, , the undersigned, a of the
Company, DO HEREBY CERTIFY that:
1. is the duly elected and qualified
[Assistant] Secretary of the Company and the signature above is his genuine
signature.
2. The representations and warranties of the Company contained in
each of the Transaction Documents to which the Company is a party are true and
correct as if made on the date hereof.
WITNESS my hand as of this 27th day of December 1999.
------------------------------
Name:
Title:
L-2
EXHIBIT M
AGREED UPON PROCEDURES
M-1
EXHIBIT N
[FORM OF GUARANTY]
LIMITED GUARANTY
This Limited Guaranty (as amended, supplemented or otherwise modified
and in effect from time to time, the "Guaranty") is executed as of the 27th day
of December, 1999 by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co., a corporation organized and
existing under the laws of the State of Delaware (the "Guarantor"), in favor of
The Chase Manhattan Bank, as administrative agent (in such capacity, the
"Administrative Agent"), on behalf of the Funding Agents, the Initial Purchasers
and the PARCO APA Banks (together, the Funding Agents, the Initial Purchasers
and the PARCO APA Banks are referred to herein as the "Beneficiaries").
PRELIMINARY STATEMENTS
WHEREAS, pursuant to a receivables purchase agreement, dated as of
December 27, 1999 (as amended, supplemented or otherwise modified and in effect
from time to time, the "Receivables Purchase Agreement"), between ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ Products Co. ("C&A"), C&A's wholly-owned direct and indirect Subsidiaries
listed on Schedule D attached thereto, each as a seller thereunder (each a
"Seller", and collectively, the "Sellers"), and Carcorp, Inc., a Delaware
corporation (the "Receivables Company"), as purchaser thereunder, each Seller
has agreed to sell from time to time, and Receivables Company has agreed to
purchase from time to time, the Receivables;
WHEREAS, pursuant to (i) a Receivables Transfer Agreement, dated as of
December 27, 1999 (as amended, supplemented or otherwise modified and in effect
from time to time, the "Receivables Transfer Agreement"), between C&A, as
Guarantor and as collection agent thereunder (the "Collection Agent"),
Receivables Company, as transferor thereunder, the Initial Purchasers, the PARCO
APA Banks from time to time party thereto, the Funding Agents and the
Administrative Agent, (ii) an Asset Purchase Agreement, dated as of December 27,
1999 (as amended, supplemented or otherwise modified and in effect from time to
time, the "PARCO Asset Purchase Agreement"), by and among PARCO, the PARCO APA
Banks and the PARCO Funding Agent, (iii) the Redwood Liquidity Loan Agreement
and (iv) the Liberty Liquidity Asset Purchase Agreement, Receivables Company has
agreed to sell from time to time, and the Administrative Agent, on behalf of the
Initial Purchasers and the PARCO APA Banks, has agreed to purchase from time to
time, on the terms and conditions set forth in the Receivables Transfer
Agreement and the Asset Purchase Agreements, undivided interests in the
Receivables;
WHEREAS, the Guarantor is the direct or indirect owner of 100% of the
outstanding capital stock of each of the other Sellers; and
WHEREAS, it is a condition precedent to the execution and delivery of
the Receivables Transfer Agreement that the Guarantor execute this Guaranty and
deliver it to the Administrative Agent for the benefit of the Beneficiaries.
In consideration for the execution and delivery of the Receivables
Transfer Agreement and the Asset Purchase Agreements by the Beneficiaries, as
applicable, and for other good and
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valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the Guarantor, the Guarantor agrees as follows:
1. Definitions. Unless otherwise defined in this Guaranty,
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in, or incorporated by reference into, the
Receivables Transfer Agreement. As used herein, "Facility Documents" shall mean,
collectively, the Receivables Purchase Agreement, the Receivables Transfer
Agreement and each Asset Purchase Agreement.
2. Guaranty of Obligations. The Guarantor unconditionally
guarantees the full and prompt payment when due of all of the payment
obligations and the timely performance of all of the performance obligations of
the Sellers of every kind and nature now or hereafter existing, or due or to
become due, under the Facility Documents (collectively, the "Obligations");
provided that, such Obligations shall not include amounts not collected in
respect of any Receivable as a result of the creditworthiness of an Obligor,
including, but not limited to, amounts required to be returned to an Obligor as
a voidable preference. The Guarantor shall pay all reasonable costs and expenses
including, without limitation, all court costs and reasonable attorney's fees
and expenses paid or incurred by the Administrative Agent and the Beneficiaries
in connection with (a) the collection of all or any part of the Obligations from
the Guarantor and (b) the prosecution or defense of any action by or against the
Administrative Agent, the Beneficiaries or Receivables Company in connection
with, or relating to, the Obligations, whether involving the Sellers, the
Collection Agent, the Guarantor, Receivables Company or any other party
(including, but not limited to, a trustee in a bankruptcy or a
debtor-in-possession).
3. Validity of Obligations; Irrevocability. The Guarantor agrees
that subject to the proviso set forth in Section 2 above its obligations under
this Guaranty shall be unconditional, irrespective of (i) the validity,
enforceability, discharge, disaffirmance, settlement or compromise (by any
Person, including a trustee in a bankruptcy or a debtor-in-possession) of the
Obligations or of the Facility Documents or any Contract, (ii) the absence of
any attempt to collect the Obligations from a Seller or the Collection Agent or
any other party, (iii) the waiver or consent by any Person with respect to any
provision of any instrument evidencing the Obligations, (iv) any change of the
time, manner or place of payment or performance, or any other term of any of the
Obligations, (v) any law, regulation or order of any jurisdiction affecting any
term of any of the Obligations or rights of any Person with respect thereto,
(vi) the failure by any Person to take any steps to perfect and maintain
perfected its interest in the Receivables or any security or collateral related
to the Obligations or (vii) any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. The
Guarantor agrees that the Administrative Agent and the Beneficiaries shall be
under no obligation to marshal any assets in favor or against or in payment of
any or all of the Obligations. The Guarantor further agrees that, to the extent
a payment is made by a Seller or the Collection Agent under the Facility
Documents, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to such Seller or the Collection Agent, its estate,
trustee, receiver or any other party, under any bankruptcy, insolvency or
similar state or federal law, common law or equitable cause, then to the extent
of such payment or repayment, the Obligation or part thereof which has been
paid, reduced or satisfied by such amount shall be reinstated and continued in
full force and effect as of the date such initial payment, reduction or
satisfaction occurred. The Guarantor waives all set-offs and
N-2
counterclaims and all presentments, demands for performance, notices of dishonor
and notice of acceptance of this Guaranty. The Guarantor agrees that its
obligations under this Guaranty shall be irrevocable.
4. Several Obligations. The obligations of the Guarantor hereunder
are separate and apart from the Sellers or any other Person, and are primary
obligations concerning which the Guarantor is the principal obligor. The
Guarantor agrees that this Guaranty shall not be discharged except by payment in
full of the Obligations and complete performance of the obligations of the
Guarantor hereunder. The obligations of the Guarantor hereunder shall not be
affected in any way by the release or discharge of a Seller from the performance
of any of the Obligations (other than the full and final payment of all of the
Obligations), whether occurring by reason of law or any other cause, whether
similar or dissimilar to the foregoing.
5. Subrogation Rights. If any amount shall be paid to the
Guarantor on account of subrogation rights at any time when all the Obligations
shall not have been paid in full, such amount shall be held in trust for the
benefit of the Administrative Agent, on behalf of the Beneficiaries, and shall
forthwith be paid to the Administrative Agent to be applied to the Obligations.
If (a) the Guarantor shall make payment to the Administrative Agent of or
perform all or any part of the Obligations and (b) all the Obligations shall be
paid and performed in full, the Administrative Agent will, at the Guarantor's
request, execute and deliver to the Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to the Guarantor of any interest in the Obligations
resulting from such payment or performance by the Guarantor. The Guarantor
hereby agrees that it shall have no rights of subrogation with respect to
amounts due to the Administrative Agent or the Beneficiaries until such time as
all obligations of the Sellers to the Receivables Company, the Administrative
Agent and the Beneficiaries have been paid or performed in full and the
Receivables Transfer Agreement has been terminated.
6. Rights of Set-Off. The Guarantor hereby authorizes the
Administrative Agent, on behalf of the Beneficiaries, at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (whether general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the Administrative
Agent or the Beneficiaries to or for the credit or the account of Receivables
Company against any and all of the obligations of the Guarantor now or hereafter
existing under this Guaranty. The Guarantor hereby acknowledges that rights of
the Administrative Agent, on behalf of the Beneficiaries, described in this
Section 4 are in addition to all other rights and remedies (including, without
limitation, other rights of set-off) the Administrative Agent and the
Beneficiaries may have.
7. Representations and Warranties. The Guarantor hereby represents
and warrants to the Administrative Agent, for the benefit of the Beneficiaries,
as of the date hereof, as follows:
a. Corporate Existence and Power. The Guarantor is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has all
corporate power and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted.
The Guarantor is duly qualified to do
N-3
business in, and is in good standing in, every other jurisdiction in
which the nature of its business requires it to be so qualified,
except where the failure to be so qualified or in good standing would
not have a Material Adverse Effect.
b. Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Guarantor of this
Guaranty and the other Facility Documents to which the Guarantor is a
party are within the Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any Official Body or official thereof,
and do not contravene, or constitute a default under, any provision of
applicable law, rule or regulation or of the Certificate of
Incorporation or Bylaws of the Guarantor or of any material agreement,
judgment, injunction, order, writ, decree or other instrument binding
upon the Guarantor or result in the creation or imposition of any
Adverse Claim on the assets of the Guarantor or any of its
Subsidiaries.
c. Binding Effect. Each of this Guaranty and the other
Facility Documents to which the Guarantor is a party constitutes the
legal, valid and binding obligation of the Guarantor, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors and general equitable principles (whether considered in a
proceeding at law or in equity).
d. Accuracy of Information. All information heretofore
furnished by the Guarantor to the Administrative Agent or the
Beneficiaries for purposes of or in connection with this Guaranty, the
other Facility Documents or any transaction contemplated hereby or
thereby is, and all such information hereafter furnished by the
Guarantor to the Administrative Agent or the Beneficiaries will be,
true and accurate in every material respect on the date such
information is stated or certified.
e. Tax Status. The Guarantor has filed all tax returns
(Federal, state and local) required to be filed and has paid prior to
delinquency or made adequate provision for the payment of all taxes,
assessments and other governmental charges (including for such
purposes, the setting aside of appropriate reserves for taxes,
assessments and other governmental charges being contested in good
faith).
f. Action, Suits. There are no actions, suits or proceedings
pending, or to the knowledge of the Guarantor threatened, against or
affecting the Guarantor or any Affiliate of the Guarantor or their
respective properties, in or before any court, arbitrator or other
body, which may, individually or in the aggregate, have a Material
Adverse Effect.
g. Not an Investment Company. The Guarantor is not, nor is it
controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
h. Year 2000. The Guarantor has reviewed the areas within its
business and operations which it believes would reasonably be expected
to be materially adversely affected by, and has developed a plan to
address on a timely basis, the "Year 2000
N-4
Problem" (that is, the risk that computer applications used by the
Collection Agent may be unable to recognize and perform properly
date-sensitive functions involving certain dates occurring in or after
the year 2000).
8. Governing Law. The Guaranty shall be governed by, and construed
in accordance with, the laws of the State of New York.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, this Guaranty has been duly executed by the
Guarantor as of the 27th day of December, 1999.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.,
as Guarantor
By:
-----------------------------
Name:
Title:
Acknowledged and accepted as of
The date first above written:
THE CHASE MANHATTAN BANK,
As Administrative Agent for the benefit of Beneficiaries
By:
-----------------------------
Name:
Title:
N-6
EXHIBIT O
[FORM OF REQUIRED CURRENCY HEDGE ASSIGNMENT]
WHEREAS, Carcorp, Inc. (the "Transferor"), ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products
Co., in its capacity as Guarantor and Collection Agent (the "Collection Agent"),
the Initial Purchasers, the PARCO APA Banks and The Chase Manhattan Bank, not in
its individual capacity, but solely as administrative agent (in such capacity,
the "Administrative Agent") have entered into a Receivables Transfer Agreement
(as amended, supplemented or otherwise modified from time to time, the
"Receivables Transfer Agreement") dated as of December 27, 1999, providing for,
among other things, the transfer of undivided percentage interests in certain
receivables and related assets thereunder;
WHEREAS, the Transferor and the Sellers have entered into the
Receivables Purchase Agreement dated as of December 27, 1999 to provide for the
sale of the Receivables and the Related Security;
WHEREAS, the Transferor has entered into a Required Currency Hedge
with The Chase Manhattan Bank; and
WHEREAS, pursuant to subsection 5.1(n)(ii) of the Receivables Transfer
Agreement, the Transferor has agreed to deliver this Required Currency Hedge
Assignment of the Required Currency Hedge to the Administrative Agent for the
benefit of the Initial Purchasers, the PARCO APA Banks and the Funding Agents;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, the parties hereto agree as follows:
I Definitions. Capitalized terms used in this Required Currency
Hedge Assignment shall have the respective meanings assigned to such terms in
the Annex X to the Receivables Transfer Agreement.
II Assignment. In order to secure and to provide for the payment
of amounts due pursuant to the Receivables Transfer Agreement, the Transferor
hereby assigns, conveys, transfers, delivers and sets over unto the
Administrative Agent, its successors and assigns, and grants to the
Administrative Agent in each case for the benefit of the Initial Purchasers, the
PARCO APA Banks and the Funding Agents, a security interest in, all right, title
and interest of the Transferor in and to the Required Currency Hedge including,
without limitation, all moneys due and to become due to the Transferor
thereunder or in connection therewith, whether payable as fees, expenses, costs,
indemnities, damages for the breach of such Required Currency Hedge or
otherwise, and all rights, remedies, powers, privileges and claims of the
Transferor under or with respect to such Required Currency Hedge (whether
arising pursuant to the terms of such Required Currency Hedge or otherwise
available to the Transferor at law or in equity), including, without limitation,
the right of the Transferor to enforce the obligations of the Counterparties
thereunder and to give or withhold any and all consents, requests, notices,
directions, approvals, extensions or waivers under or with respect to such
Required Currency Hedge to the same extent as the Transferor could but for the
assignment and security interest granted hereby.
O-1
III Successors and Assigns. This Required Currency Hedge
Assignment and the covenants set forth herein shall be binding upon and inure to
the benefit of the Transferor, the Administrative Agent, the Funding Agents, the
Initial Purchasers and the PARCO APA Banks, respectively, and their respective
successors and permitted assigns.
IV Governing Law. THIS ASSIGNMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
V Limitation of Liability. It is expressly understood and agreed
by the parties hereto that (a) this Required Currency Hedge Assignment is
executed and delivered by The Chase Manhattan Bank, not individually or
personally but solely as Administrative Agent, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Administrative Agent
are made and intended not as personal representations, undertakings and
agreements by The Chase Manhattan Bank, (c) nothing herein contained shall be
construed as creating any liability of the Administrative Agent, individually or
personally, to perform any covenant under the Required Currency Hedge Assignment
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties who are signatories to this Required Currency
Hedge Assignment and by any Person claiming by, through or under such parties;
provided, however, the Administrative Agent shall be liable in its individual
capacity for its own willful misconduct or negligence and (d) under no
circumstances shall the Administrative Agent be personally liable for the
payment of any indebtedness or expenses or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken under
any Required Currency Hedge Assignment; provided further, that the foregoing
clauses (a) through (d) shall survive the resignation or removal of the
Administrative Agent.
The Transferor hereby agrees to indemnify and hold harmless the
Administrative Agent, the Funding Agents, the Initial Purchasers and the PARCO
APA Banks (each, an "indemnified person") from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any acts, omissions
or alleged acts or omissions arising out of, or relating to, activities of the
Transferor pursuant to any Required Currency Hedge Assignment to which it is a
party, including but not limited to any judgment, award, settlement, reasonable
attorneys' fees and other reasonable costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim, except
to the extent such loss, liability, expense, damage or injury resulted from the
negligence, bad faith or willful misconduct of an indemnified person; provided
that any payments made by the Transferor pursuant to this subsection shall be
made solely from funds available to the Transferor which are not otherwise
required to be applied to the payment of any amounts pursuant to the Receivables
Transfer Agreement (other than to the Transferor), shall be non-recourse other
than with respect to such funds, and shall not constitute a claim against the
Transferor to the extent that insufficient funds exist to make such payment.
O-2
IN WITNESS WHEREOF, the parties hereto have caused this Required
Currency Hedge Assignment to be executed as of the date first above written by
their respective duly authorized officers.
CARCORP, INC.
By:
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, not in
its individual capacity, but solely
as Administrative Agent
By:
-------------------------------
Name:
Title:
ACKNOWLEDGED:
[NAME OF COUNTERPARTY]
By:
-------------------------------
Name:
Title:
O-3
ANNEX X
"Additional Amounts" means any amounts payable to any Affected Party
under Section 2.15 of the Receivables Transfer Agreement.
"Additional Seller Supplement" shall mean each such Additional Seller
Supplement, substantially in the form of Exhibit C to the Receivables Purchase
Agreement.
"Adjusted Carrying Cost Reserve Ratio" shall mean, as of any Monthly
Settlement Report Date and continuing until, but not including, the next Monthly
Settlement Report Date, an amount (expressed as a percentage) equal to (i) the
product of (a) 1.5 times Days Sales Outstanding as of such day and (b) the
highest Base Rate in effect as of such day plus 1.25%, divided by (ii) 365.
"Adjusted Servicing Fee Reserve Ratio" shall mean, as of any Monthly
Settlement Report Date and continuing until, but not including, the next Monthly
Settlement Report Date, an amount, expressed as a percentage, equal to (i) the
product of (A) the Servicing Fee Percentage and (B) 1.5 times Days Sales
Outstanding as of such earlier Monthly Settlement Report Date divided by (ii)
360.
"Administrative Agent" shall mean Chase, as administrative agent on
behalf of the Initial Purchasers, the PARCO APA Banks and the Funding Agents,
and its permitted successors and assigns in such capacity.
"Advance" shall have the meaning specified in subsection 3.2(a) of the
Receivables Purchase Agreement.
"Advance Limit" shall have the meaning specified in subsection 3.2(a)
of the Receivables Purchase Agreement.
"Adverse Claim" shall mean a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person (including any UCC financing statement
or any similar instrument filed against such Person's assets or properties),
other than a Permitted Encumbrance.
"Affected APA Bank" shall have the meaning specified in Section 5.5(c)
of the PARCO Asset Purchase Agreement.
"Affected Party" means each of the following persons: each Initial
Purchaser, each Funding Agent, the Administrative Agent, each PARCO APA Bank,
each Liberty APA Bank and each Affiliate of the foregoing persons.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of voting stock, by contract or otherwise.
"Aged Receivables Ratio" shall mean, as of the last day of each
Settlement Period, the percentage equivalent of a fraction, the numerator of
which shall be the sum of (a) the aggregate unpaid balance of Receivables that
were 61 to 90 days past due and (b) the aggregate amount of Receivables that
were charged off as uncollectible prior to the day that is 91 days after its
original due date during such Settlement Period, and the denominator of which
shall be the aggregate amount of all Receivables originated or acquired by the
Sellers during the fourth prior Settlement Period (including the Settlement
Period ended on such day).
"Aggregate Commitment" shall mean, at any time, the sum of the
Commitments then in effect, as set forth in Schedule I to the Receivables
Transfer Agreement.
"Aggregate Net Investment" shall mean, at any time, the sum of the
PARCO Net Investment, the Redwood Net Investment and the Liberty Net Investment.
"Aggregate Unpaids" shall mean, at any time, an amount equal to the
sum of (i) the aggregate accrued and unpaid PARCO Discount with respect to all
Tranche Periods or Settlement Periods, as applicable, at such time, (ii) the
aggregate accrued and unpaid Redwood Yield at such time, (iii) the aggregate
accrued and unpaid Liberty Yield at such time, (iv) the Aggregate Net Investment
at such time, (v) any Additional Amounts, (vi) any Indemnified Amounts and (vii)
all other amounts owed (whether due or accrued) hereunder by the Transferor or
the Guarantor to each Initial Purchaser and the PARCO APA Banks at such time.
"Applicable Margin" shall mean on any date of determination, (i) for
Eurodollar Tranche Periods, 1.50%; provided however that after the occurrence of
a Termination Event or Potential Termination Event, the Applicable Margin shall
equal 2.25% and (ii) for BR Tranche Periods 0.75%; provided, however that after
the occurrence of a Termination Event or Potential Termination Event, the
Applicable Margin shall equal 1.25%.
"Asset Purchase Agreement" shall mean the PARCO Asset Purchase
Agreement, the Liberty Liquidity Asset Purchase Agreement and the Redwood
Liquidity Loan Agreement.
"Authorized Foreign Exchange Dealer" shall mean any foreign exchange
dealer authorized by applicable law to deal and engage in foreign exchange
transactions relating to Canadian Dollars selected by the Collection Agent and
reasonably acceptable to the Administrative Agent.
"Bankruptcy Code" shall mean 11 U.S.C.(Section)101-1330.
"Base Rate" or "BR" shall mean the PARCO Base Rate or the Liberty Base
Rate, as applicable.
"Benefit Plan" shall mean any employee benefit plan as defined in
Section 3(3) of ERISA in respect of which the Transferor, a Seller or any ERISA
Affiliate of the Transferor or a Seller is, or at any time during the
immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"Business Day" shall mean (i) with respect to any matters relating to
the Eurodollar Rate, a day on which banks are open for business in The City of
New York and on
2
which dealings in Dollars are carried on in the London interbank
market and (ii) for all other purposes, any day other than a Saturday, Sunday or
other day on which banking institutions or trust companies in the State of New
York generally or The City of New York are authorized or obligated by law,
executive order or governmental decree to be closed.
"C&A" shall mean ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co., a Delaware
corporation, and its permitted successors and assigns.
"Canada/Canadian Dollar Collection Account" shall have the meaning
specified in subsection 2.12(a) of the Receivables Transfer Agreement.
"Canada/U.S. Dollar Collection Account" shall have the meaning
specified in subsection 2.12(a) of the Receivables Transfer Agreement.
"Canadian Dollar Receivables" shall mean Receivables payable in
Canadian Dollars sold to the Transferor pursuant to the Receivables Purchase
Agreement.
"Canadian Dollars" shall mean dollars in lawful currency of Canada.
"Canadian Exchange Percentage" shall mean, at any date of
determination, the rate at which Canadian Dollars may be exchanged into U.S.
Dollars (expressed as the percentage of Canadian Dollars per U.S. Dollars), as
reported in The Wall Street Journal on the immediately preceding Business Day.
In the event that such rate does not appear in The Wall Street Journal on such
immediately preceding Business Day, the Canadian Exchange Percentage shall be
determined by reference to the relevant Bloomberg currency page (or, if such
rate does not appear on any Bloomberg currency page, on the relevant page of the
Reuters Monitor Money Rates Service) as of the close of business of the
immediately preceding Business Day. In the event that such rate does not appear
on any Bloomberg page or the relevant page of the Reuters Monitor Money Rates
Service, the Canadian Exchange Percentage shall be determined by reference to
such other publicly available service for displaying exchange rates with respect
to Canadian Dollars as may be selected by the Administrative Agent, and prior to
a Termination Event or Potential Termination Event, which is not reasonably
objected to by the Transferor.
"Capitalized Lease" of a Person shall mean any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with GAAP.
"Carrying Cost Reserve Ratio" shall mean as of any Monthly Settlement
Report Date and continuing until, but not including, the next Monthly Settlement
Report Date, an amount (expressed as a percentage) equal to (i) the product of
(a) two (2) times Days Sales Outstanding as of such day and (b) the highest Base
Rate in effect as of such day plus 1.25%, divided by (ii) 365.
"Change in Control" shall have the meaning as defined in the Senior
Credit Facility.
"Charges" shall mean (i) all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including taxes owed to the PBGC at
the time due and payable); (ii)
3
all levies, assessments, charges or claims of any governmental entity or any
claims of statutory lienholders, the nonpayment of which could give rise by
operation of law to a Lien or Adverse Claim and (iii) any such taxes, levies,
assessment, charges or claims which constitute a lien or encumbrance on any
property of any Seller or the Transferor.
"Chase" shall mean The Chase Manhattan Bank, in its individual
capacity, and its successors and assigns.
"Chase Roles" shall have the meaning specified in Section 4.10 of the
PARCO Asset Purchase Agreement and Section 10.12 of the Receivables Transfer
Agreement.
"Closing Date" shall mean December 27, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Collection Accounts" shall mean the accounts, established by the
Administrative Agent, for the benefit of the Initial Purchasers and the PARCO
APA Banks, pursuant to subsection 2.12(a) of the Receivables Transfer Agreement.
"Collection Agent" shall mean, at any time, the Person then authorized
pursuant to Section 6.1 of the Receivables Transfer Agreement to service,
administer and collect Receivables and initially shall be C&A.
"Collection Agent Default" shall have the meaning specified in Section
6.4 of the Receivables Transfer Agreement.
"Collections" shall mean, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all Finance Charges, if any, and cash proceeds of Related Security
with respect to such Receivable and any Deemed Collections.
"Commercial Paper" shall mean the short-term promissory notes of the
Initial Purchasers issued by the Initial Purchasers in the United States
commercial paper market.
"Commitments" shall mean each of the PARCO APA Bank Commitments, the
Liberty Liquidity Commitment and the Redwood Liquidity Commitment.
"Concentration Factor" shall mean, on any day with respect to any
Obligor, except for a Special Obligor, a percentage equal to the following:
(i) with respect to Receivables of any Obligor with short-term or
long-term ratings of at least A-1 or A by S&P, respectively, and at least
P-1 or A2 by ▇▇▇▇▇'▇ respectively, 12.0%;
(ii) with respect to Receivables of any Obligor with short-term or
long-term ratings of at least A-2 or BBB by S&P, respectively, and at
least P-2 or Baa2 by ▇▇▇▇▇'▇, respectively, 6.0%;
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(iii) with respect to Receivables of any Obligor with short-term and
long-term ratings at or below A-3 or BBB- by S&P, respectively, and P-3 or
Baa3 by ▇▇▇▇▇'▇, respectively, 3.0%; and
(iv) with respect to Receivables of any Obligor with no short-term or
long-term ratings by S&P and ▇▇▇▇▇'▇, 3.0%.
The Concentration Factor for Obligors with split ratings shall be
determined based upon the lower of the two ratings.
"Conduit Assignee" shall mean any special purpose vehicle issuing
indebtedness in the commercial paper market that is administered by Chase.
"Contract" shall mean, with respect to a Obligor, an agreement
governing the sale of merchandise or the rendering of services by the related
Seller and pursuant to which such Obligor shall be obligated to pay for such
merchandise or services.
"Contributed Receivables" shall have the meaning specified in
subsection 3.2(b) of the Receivables Purchase Agreement.
"Conversion/Continuation Notice" shall have the meaning specified in
Section 2.16 of the Receivables Transfer Agreement.
"Counterparty" shall mean a Person who is a party to a Required
Currency Hedge with the Transferor.
"▇▇ ▇▇▇▇▇▇" shall mean any Person that holds record or beneficial
ownership of Commercial Paper.
"CP Rate" shall mean the PARCO CP Rate or the Liberty CP rate, as
applicable.
"Credit and Collection Policy" shall mean the Sellers' credit and
collection policy or policies relating to Contracts and Receivables existing on
the Closing Date and referred to in Exhibit A attached to the Receivables
Transfer Agreement, as amended, supplemented or otherwise modified and in effect
from time to time in compliance with subsection 5.2(c) of the Receivables
Transfer Agreement.
"Daily Report" shall mean a report, in substantially the form attached
to the Receivables Transfer Agreement as Exhibit F.
"Days Sales Outstanding" shall mean, as of any Monthly Settlement
Report Date and continuing until (but not including) the next Monthly Settlement
Report Date, the number of calendar days equal to the product of (i) 91 and (ii)
the amount obtained by dividing (A) the Net Receivables Balance as of the last
day of the Settlement Period immediately preceding such earlier Monthly
Settlement Report Date by (B) the aggregate principal amount of Receivables
which arose during the three (3) consecutive Settlement Periods immediately
preceding such earlier Monthly Settlement Report Date.
5
"Decrease" shall have the meaning set forth in Section 2.20 of the
Receivables Transfer Agreement.
"Deemed Collections" shall mean any Collections on any Receivable
deemed to have been received pursuant to subsection 2.9(a) of the Receivables
Transfer Agreement.
"Defaulted Receivable" shall mean a Receivable: (i) as to which any
payment, or part thereof (other than as a result of a Dilution Adjustment),
remains unpaid for ninety (90) days or more from the original due date for such
Receivable; (ii) as to which an Event of Bankruptcy has occurred and is
continuing with respect to the Obligor thereof; (iii) which has been identified
by the Transferor, C&A or the applicable Seller as uncollectible; or (iv) which,
in accordance with the Credit and Collection Policy, has been or should be
written off as uncollectible.
"Defaulting PARCO APA Bank" shall have the meaning specified in
subsection 2.2(b) of the PARCO Asset Purchase Agreement.
"Delinquent Receivable" shall mean a Receivable as to which any
payment, or part thereof, remains unpaid for more than sixty (60) days or more
from the original due date for such Receivable.
"Diluted Receivable" shall mean any Receivable which is the subject of
a reduction or cancellation as a result of any defective, rejected or returned
merchandise or services and all credits, rebates, discounts, disputes, warranty
claims, repossessed or returned goods, chargebacks, allowances, other dilutive
factors and any other billing or other adjustment (whether effected through the
granting of credits against the applicable Receivables or by the issuance of a
check or other payment in respect of (and as payment for) such reduction).
"Dilution Adjustments" shall mean, collectively, the adjustments,
cancellations and reductions described in the definition of "Diluted
Receivable."
"Dilution Horizon" shall mean the number of days from the invoicing of
a Receivable until a Dilution Adjustment with respect to such Receivable is
issued by a Seller or a Seller receives notice that a Dilution Adjustment will
have to be issued in respect of such Receivable.
"Dilution Horizon Factor" shall mean (i) for the period from the
Closing Date until the sixth Monthly Settlement Report Date, 1.83 and (ii) for
any six-month period thereafter (beginning and ending on a Monthly Settlement
Report Date) a fraction, the numerator of which is the dollar weighted average
Dilution Horizon of the Sellers (based upon the Dilution Adjustment of the
selected Receivables) for such period (which shall be calculated by the
Collection Agent, in accordance with its past procedures for such calculations),
and the denominator of which is 30; provided however, that if the Dilution
Horizon Factor for any period is less than the Dilution Horizon Factor for the
immediately preceding period, then the actual Dilution Horizon Factor for such
current period shall be recalculated to equal a fraction, the numerator of which
is equal to the average of the numerators used to calculate the Dilution Horizon
Factor for such immediately preceding period and such current period and the
denominator of which is 30.
6
"Dilution Period" shall mean as of any Monthly Settlement Report Date
and continuing until (but not including) the next Monthly Settlement Report
Date, the quotient of (i) the product of (A) the principal amount of Receivables
originated or acquired by the Sellers during the Settlement Period immediately
preceding such earlier Monthly Settlement Report Date and (B) the Dilution
Horizon Factor divided by (ii) the Net Receivables Balance as of the last day of
the Settlement Period preceding such earlier Monthly Settlement Report Date.
"Dilution Ratio" shall mean, as of the last day of each Settlement
Period, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Dilution Adjustments made during such Settlement Period and
the denominator of which is the aggregate principal amount of all Receivables
originated or acquired by the Sellers during the Settlement Period immediately
preceding the Settlement Period ended on such day.
"Dilution Reserve Ratio" shall mean, as of any Monthly Settlement
Report Date, and continuing until (but not including) the next Monthly
Settlement Report Date, an amount (expressed as a percentage) that is calculated
as follows:
DRR = [(c * d) + [(e-d) * (e/d)]] * f
Where:
DRR = Dilution Reserve Ratio;
c = 2.0;
d = the twelve-month rolling average of the Dilution Ratio that occurred
during the period of twelve consecutive Settlement Periods ending
immediately prior to such earlier Monthly Settlement Report Date;
e = the highest Dilution Ratio that occurred during the period of twelve
consecutive Settlement Periods ending prior to such earlier Monthly
Settlement Report Date; and
f = the Dilution Period.
"Dollars" or "$" shall mean the lawful currency of the United States.
"Early Collection Fee" shall mean, for any Tranche Period during which
the portion of the PARCO Net Investment that was allocated to such Tranche
Period is reduced for any reason whatsoever, the excess, if any, of (i) the
additional PARCO Discount that would have accrued during such Tranche Period if
such reductions had not occurred, minus (ii) the income, if any, received by the
recipient of such reductions from investing the proceeds of such reductions.
"EBITDA" shall have the meaning defined in the Senior Credit Facility.
"Eligible Counterparty" shall mean a Counterparty with commercial
paper or short-term deposit ratings of A-1+ or P-1, or such other rating as
shall be required in the Asset Purchase Agreement. The initial Eligible
Counterparty shall be The Chase Manhattan Bank.
7
"Eligible Obligor" shall mean as of any date of determination, each
Obligor, in respect of a Receivable, that satisfies the following eligibility
criteria:
(i) it is a resident of the United States; provided however, that
Obligors resident in Canada shall be deemed to be Eligible Obligors if (x)
the Receivables of such Obligor would otherwise be Eligible Receivables and
(y) the aggregate principal amount of such Receivables does not exceed
20.0% of the Outstanding Balance of the Eligible Receivables then held by
the Transferor; provided further, that if an Obligor is located in the
Northwest Territories, it shall not be deemed to be an Eligible Obligor
until, as evidenced by an opinion of counsel, all actions are taken that
are required to be taken to perfect the Transferor's security interest in
the Receivables of any such Obligor and such Obligor is approved by S&P;
(ii) it is not a domestic or foreign government or any agency,
department or instrumentality thereof;
(iii) it is not a Seller or an Affiliate of a Seller;
(iv) it is not the subject of an Event of Bankruptcy; and
(v) it is not an Obligor with respect to which more than 25% of
its outstanding Receivables are more than sixty (60) days past due.
"Eligible Receivable" shall mean, at any time, any Receivable:
(i) which has been (a) either originated by a Seller or acquired by a
Seller from an Affiliate, and (b) subsequently sold to the Transferor
pursuant to (and in accordance with) the Receivables Purchase
Agreement, and to which the Transferor has good title thereto, free
and clear of all Adverse Claims;
(ii) which is not a Defaulted Receivable or Delinquent Receivable;
(iii) which is an "account" or "general intangible" (and not "chattel
paper" or an "instrument") within the meaning of Article 9 of the
Relevant UCC; or, if applicable, under the provisions of similar
legislation of any province of Canada;
(iv) which is denominated and required to be settled only in U.S. Dollars
or Canadian Dollars in the United States or Canada, provided that if
the Required Currency Hedge is not in place or a Counterparty ceases
to be an Eligible Counterparty and is not replaced within thirty (30)
days (or, in the event the Counterparty's commercial paper rating or
short-term deposit rating is withdrawn or downgraded below A-2 or
P-2, five (5) days), then Canadian Dollar Receivables will not be
included as Eligible Receivables; and provided further that if the
Required Currency Hedge is for a notional amount less than the
Required Hedge Notional Amount, then the principal amount of Canadian
Dollar Receivables included as Eligible Receivables will be limited
to the actual notional amount of the Required Currency Hedge
calculated using the Valuation Price;
8
(v) which, arises under a Contract that, together with the Receivable
related thereto, is in full force and effect and constitutes the
legal, valid and binding obligation of the related Obligor,
enforceable against such Obligor in accordance with its terms,
except as may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar Laws relating to or affecting
creditors' rights generally and (b) general principles of equity,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance, regardless of whether
considered in a proceeding at equity or at law;
(vi) which (i) does not contravene any applicable law, rule or
regulation and the applicable Seller is not in violation of any
law, rule or regulation in connection with it, in each case which
would in any way render such Receivable unenforceable or would
otherwise impair in any material respect the collectibility of such
Receivable and (ii) is not subject to any investigation or
proceeding known by such Seller that would reasonably be expected
to adversely affect its payment or enforceability;
(vii) which is an account receivable representing all or part of the
sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940,
as amended, and is an "eligible asset" as defined in Rule 3a-7
under such Act;
(viii) which is not a Receivable for which the applicable Seller has
established an offsetting specific reserve; provided that a
Receivable subject only in part to the foregoing shall be an
Eligible Receivable to the extent not so subject;
(ix) which is not a Receivable with original payment terms in excess of
sixty (60) days from its original billing date, or in respect of
which the applicable Seller has (i) altered the basis of the aging
from the initial due date for payment such that the final due date
extends to a date more than sixty (60) days from its original due
date or (ii) otherwise made any modification except in the ordinary
course of business and consistent with the Credit and Collection
Policy of such Seller;
(x) as to which, all required consents, approvals and authorizations
(including, without limitation, any consent of the Obligor thereof
required for the assignment and sale thereof to the Transferor
and/or the Initial Purchasers) have been obtained;
(xi) as to which the applicable Seller is not in default in any material
respect under the terms of the Contract, if any, from which such
Receivable arose;
(xii) as to which all right, title and interest has been validly sold to
the Transferor by the applicable Seller pursuant to the Receivables
Purchase Agreement and by the Transferor to the Administrative
Agent on behalf of the Initial Purchasers or the PARCO APA Banks
pursuant to the Receivables Transfer Agreement;
9
(xiii) as to which (together with the Collections and Related Security)
the Transferor or the Administrative Agent on behalf of the Initial
Purchasers (or the PARCO APA Banks) will have legal and beneficial
ownership therein free and clear of all liens other than Permitted
Encumbrances and such Receivable (together with the Collections and
Related Security) has been the subject of either a valid transfer
from the Transferor to the Administrative Agent on behalf of the
Initial Purchasers (or the PARCO APA Banks) or, alternatively, the
grant of a first priority perfected security interest therein to
the Administrative Agent on behalf of the Initial Purchasers (or
the PARCO APA Banks) free and clear of all liens other than
Permitted Encumbrances;
(xiv) which is not subject to any dispute in whole or in part or to any
offset, counterclaim, defense, rescission, recoupment or
subordination; provided that a Receivable subject only in part to
any of the foregoing shall be an Eligible Receivable to the extent
not so subject;
(xv) as to which neither the Transferor nor the applicable Seller has
(i) taken any action that would impair the rights of the
Administrative Agent, a Funding Agent, the Initial Purchasers or
the PARCO APA Banks or (ii) failed to take any action that was
necessary to avoid impairing the rights therein of the
Administrative Agent, a Funding Agent, the Initial Purchasers or
the PARCO APA Banks;
(xvi) as to which, as of the date of purchase of such Receivable, each of
the representations and warranties made in the Receivables Purchase
Agreement by the applicable Seller with respect to such Receivable
is true and correct in all material respects;
(xvii) as to which the goods related thereto shall have been shipped or
the services related thereto shall have been performed and the
Receivable shall have been billed to the related Obligor; and
(xviii) which arose in the ordinary course of business from the sale of
goods, products or services of the Sellers or their Affiliates and
in accordance with the Credit and Collection Policy and, at such
date of determination, the Receivables Purchase Agreement has not
been terminated with respect to such Seller.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, supplemented or otherwise modified and in effect from time to
time, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code (as in effect from time to
time, the "Code")) as such Person; (ii) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with such Person; or (iii) a member of the same affiliated service group
(within the meaning of Section 414(n) of the Code) as such Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above.
10
"ERISA Event" shall mean any of the following: (i) the filing pursuant
to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (ii) the
receipt by such Person or any ERISA Affiliate from the Pension Benefit Guaranty
Corporation or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(iii) the incurrence by such Person or any of its ERISA Affiliates of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; (iv) any "reportable event" as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived), (v) the incurrence by such
Person or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan or (vi) the receipt by such Person
or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan
from such Person or any ERISA Affiliate of any notice, concerning the imposition
of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Eurodollar Rate" means the PARCO Eurodollar Rate or the Liberty
Eurodollar Rate, as applicable.
"Event of Bankruptcy" shall mean, with respect to any Person, (i) that
such Person (a) shall generally not pay its debts as such debts become due or
(b) shall admit in writing its inability to pay its debts generally or (c) shall
make a general assignment for the benefit of creditors; (ii) any proceeding
shall be instituted by or against such Person seeking to adjudicate it as
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 any substantial part of
its property and, in the case of a proceeding instituted by a party other than
such Person, such proceeding shall continue undismissed, unstayed and in effect
for a period of sixty (60) consecutive days or (iii) if such Person is a
corporation, such Person or any Subsidiary shall take any corporate action to
authorize any of the actions set forth in the preceding clauses (i) or (ii).
"Facility" shall mean the purchase by the Initial Purchasers or the
PARCO APA Banks of Transferred Interests from the Transferor pursuant to the
Receivables Transfer Agreement in exchange for the Transfer Price.
"Facility Limit" shall mean the "Facility Limit" set forth on Schedule
I of the Receivables Transfer Agreement, subject to Decreases at the option of
the Transferor pursuant to Section 2.20 of the Receivables Transfer Agreement;
provided, further, that from and after the Termination Date, the Facility Limit
shall at all times equal the Aggregate Net Investment.
"Federal Funds Rate" shall mean, for any day, an interest rate per
annum equal to (a) the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or (b) if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 11:00 A.M. (New
York time)
11
on such day on such transactions received by the Administrative Agent from three
(3) Federal funds brokers of recognized standing selected by the Administrative
Agent in its sole discretion.
"Fee Letter" shall mean each of the letter agreements, dated the
Closing Date, between the Guarantor, the Transferor and a Funding Agent, for the
benefit of the Initial Purchasers and the PARCO APA Banks with respect to the
fees to be paid by the Transferor under the Transaction Documents, as amended,
supplemented or otherwise modified and in effect from time to time.
"Finance Charges" shall mean, with respect to a Contract, any finance,
interest, late or similar charges owing by an Obligor pursuant to such Contract.
"Funding Account" means any of (a) the accounts established by the
PARCO Funding Agent, for the benefit of PARCO and the PARCO APA Banks, pursuant
to subsection 2.4(a) of the PARCO Asset Purchase Agreement, (b) the account
established by the Redwood Funding Agent, for the benefit of Redwood and the
Redwood Secured Parties, pursuant to Section 3A.01 of the Redwood Liquidity Loan
Agreement, (c) the account established by the Liberty Funding Agent, for the
benefit of Liberty and (d) any other accounts established by a Funding Agent,
for the benefit of the Initial Purchasers and/or the PARCO APA Banks and/or the
Redwood Secured Parties and/or the Liberty APA Banks.
"Funding Agent" means each of the PARCO Funding Agent, the Liberty
Funding Agent and the Redwood Funding Agent. Except where the context otherwise
requires, any reference to the "Funding Agents" shall be deemed to be a
reference to each and every Funding Agent.
"GAAP" shall mean generally accepted accounting principles, in effect
from time to time, set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such accounting profession.
"GE Capital" means General Electric Capital Corporation, a New York
corporation, and its successors and assigns.
"GE Capital Roles" shall have the meaning specified in Section 10.13
of the Receivables Transfer Agreement.
"Governmental Authority" shall mean any nation or government, any
State or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantor" shall mean C&A and its permitted successors and assigns.
"Guaranty" shall mean that certain Guaranty, in substantially the form
of Exhibit N to the Receivables Transfer Agreement, dated as of December 27,
1999, as amended, supplemented or otherwise modified and in effect from time to
time.
12
"Incremental Transfer" shall have the meaning specified in subsection
2.2(a) of the Receivables Transfer Agreement.
"Indebtedness" shall mean, with respect to any Person, such Person's
(i) obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) obligations for which
such Person is obligated pursuant to a guaranty.
"Indemnified Amounts" shall have the meaning specified in Section 7.1
of the Receivables Transfer Agreement.
"Indemnified Parties" shall have the meaning specified in Section 7.1
of the Receivables Transfer Agreement.
"Initial Purchasers" shall mean PARCO, Redwood and Liberty.
"Insurance Proceeds" shall mean any amounts paid pursuant to any
insurance policies covering any Obligor with respect to its Contract other than
proceeds of such insurance policies used to purchase replacement property in
accordance with the Credit and Collection Policy.
"Interest Coverage Ratio" shall be calculated as set forth in the
Senior Credit Facility, provided that:
(a) for purposes set forth in Section 2.11 of the Receivables Transfer
Agreement, such ratio shall be compared to the ratio set forth below opposite
the applicable time period:
Period Ending: Ratio:
------------- -----
January 1999-June 2000 1.75 to 1.0
July 2000-December 2000 2.00 to 1.0
January 2001-December 2001 2.25 to 1.0
January 2002 and thereafter 2.75 to 1.0
(b) for purposes set forth in Section 8.1 of the Receivables Transfer
Agreement and Section 9.1 of the Receivables Purchase Agreement, such ratio
shall be compared to the ratio set forth below opposite the applicable time
period:
Period Ending: Ratio:
------------- -----
January 1999-June 2000 1.60 to 1.0
July 2000-December 2000 1.75 to 1.0
January 2001 and thereafter 2.00 to 1.0
13
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"Leverage Ratio" shall be calculated as set forth in the Senior Credit
Facility, provided, that:
(a) for purposes set forth in Section 2.11 of the Receivables Transfer
Agreement, such ratio shall be compared to the ratio set forth below opposite
the applicable time period:
Period Ending: Ratio:
------------- -----
July 1999-December 1999 5.25 to 1.0
January 2000-June 2000 5.00 to 1.0
July 2000-December 2000 4.50 to 1.0
January 2001-December 2001 4.00 to 1.0
January 2002 and thereafter 3.75 to 1.0
(b) for purposes set forth in Section 8.1 of the Receivables Transfer
Agreement and Section 9.1 of the Receivables Purchase Agreement, such ratio
shall be compared to the ratio set forth below opposite the applicable time
period:
Period Ending: Ratio:
------------- -----
July 1999-December 1999 5.50 to 1.0
January 2000-June 2000 5.25 to 1.0
July 2000 and thereafter 4.75 to 1.0
"Liberty" shall mean Liberty Street Funding Corp., a Delaware
corporation, and its successors and assigns.
"Liberty Administrative Agent" shall mean The Bank of Nova Scotia, as
administrative agent on behalf of Liberty, and its permitted successors and
assigns in such capacity.
"Liberty Alternate Rate" means for any Settlement Period, an interest
rate per annum equal to (a) 1.5% above the Liberty Eurodollar Rate for such
Settlement Period; provided, however, that in the case of
(i) the Liberty Funding Agent having been notified by Liberty or
a Liberty APA Bank that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or any
central bank or other governmental authority asserting that it is
unlawful, for Liberty or such Liberty APA Bank to fund any portion of
the Liberty Net Investment (based on the Liberty Eurodollar Rate) (and
the Liberty Funding Agent shall not have been subsequently notified
that such circumstances no longer exist), or
14
(ii) the inability of any Liberty APA Bank by reason of
circumstances affecting the London interbank market generally, to
obtain U.S. dollars in such market to fund its investments for such
Settlement Period,
the "Liberty Alternate Rate" for each such Settlement Period shall be an
interest rate per annum equal to the Liberty Base Rate in effect on each day of
such Settlement Period.
"Liberty APA Banks" shall mean the Persons listed on the signature
pages to the Liberty Liquidity Asset Purchase Agreement as "Purchasers",
(including, without limitation, The Bank of Nova Scotia), and the Persons which
from time to time may become a party to the Liberty Liquidity Asset Purchase
Agreement as "Purchasers" in accordance with Section 9 thereof.
"Liberty Base Rate" means, for any day, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate shall be at all
times equal to the higher of:
(a) the rate of interest in effect for such day as publicly
announced from time to time by the Liberty Funding Agent in New York,
New York as its reference rate. Such reference rate is set by the
Liberty Funding Agent based upon various factors, including the
Liberty Funding Agent's costs and desired return, general economic
conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such
announced rate, and
(b) 0.50% per annum above the latest Federal Funds Rate.
"Liberty CP Rate" means, for any Settlement Period, the per annum rate
equivalent to the weighted average cost (as determined by the Liberty
Administrative Agent and which shall include commissions of placement agents and
dealers, incremental carrying costs incurred with respect to Commercial Paper of
Liberty maintained on dates other than those on which corresponding funds are
received by Liberty, other borrowings by Liberty (other than under any program
support agreements of Liberty) and any other costs associated with the issuance
of such Commercial Paper that are allocated, in whole or in part, by the Liberty
Administrative Agent to fund or maintain Liberty's Net Investment (and which may
be also allocated in part to the funding of other assets of Liberty)); provided,
however, that if any component of such rate is a discount rate, in calculating
the CP Rate for such portion of capital for such Settlement Period, the
Transferor shall for such component use the rate resulting from converting such
discount rate to an interest bearing equivalent rate per annum.
"Liberty Eurodollar Rate" means, for any Settlement Period, an
interest rate per annum (rounded upward to the nearest 1/16th of 1%) determined
pursuant to the following formula:
LIBERTY LIBOR RATE
---------------------------------------------------------
100% - Liberty Eurodollar Rate Reserve Percentage
where Liberty Eurodollar Rate Reserve Percentage means, for any Settlement
Period, the maximum reserve percentage (expressed as a decimal, rounded upward
to the nearest 1/100th of
15
1%) in effect on the date LIBOR for such Settlement Period is determined under
regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as Eurocurrency liabilities) having a term
comparable to such Settlement Period.
"Liberty Funding Agent" shall mean The Bank of Nova Scotia, in its
capacity as funding agent for the benefit of Liberty and the Liberty APA Banks,
and any successor and assigns thereto.
"Liberty Interest" shall mean, on any day, the portion of the
beneficial interest of Liberty in the Receivables and Related Security, the
Required Currency Hedge, Collections and Proceeds with respect thereto, which
beneficial interest shall equal the product of (i) the Percentage Factor on such
day multiplied by (ii) the quotient of (A) Liberty's Net Investment on such day
divided by (B) the Aggregate Net Investment on such day multiplied by (iii) the
Outstanding Balance of all Receivables.
"Liberty LIBOR Rate" means the rate of interest per annum determined
by the Liberty Administrative Agent to be the arithmetic mean (rounded upward to
the nearest 1/16th of 1%) of the rates at which dollar deposits in the
approximate amount of the portion of the Liberty Net Investment to be funded at
the Liberty Eurodollar Rate during such Settlement Period would be offered by
major banks in the London interbank market to the Liberty Funding Agent at its
request at or about 11:00 a.m. (London time) on the second Business Day before
the commencement of such Settlement Period.
"Liberty Liquidity Commitment" shall mean, with respect to Liberty,
the amount set forth on Schedule I attached to the Receivables Transfer
Agreement equal at all times to 102% of Liberty's Pro Rata Share of the Facility
Limit.
"Liberty Liquidity Asset Purchase Agreement" shall mean that certain
Asset Purchase Agreement, dated as of December 22, 1999, by and among the
Liberty Funding Agent, the Liberty APA Banks and Liberty, as the same may from
time to time be amended, supplemented or otherwise modified and in effect.
"Liberty Net Investment" shall mean an amount equal to the result of:
(i) the sum of cash amounts paid to the Transferor by Liberty for each
Incremental Transfer minus (ii) the aggregate amount of Collections received and
applied by the Liberty Funding Agent to reduce such Liberty Net Investment
pursuant to Section 2.5, 2.6 or 2.9 of the Receivables Transfer Agreement;
provided that the Liberty Net Investment shall be restored and reinstated in the
amount of any Collections so received and applied if, at any time, the
distribution of such Collections is rescinded or must otherwise be returned for
any reason.
"Liberty Purchase Limit" means, at any time, the amount set forth on
Schedule I attached to the Receivables Transfer Agreement; provided, however,
that at all times on and after the Termination Date, the "Liberty Purchase
Limit" means the aggregate outstanding Liberty Net Investment.
16
"Liberty Termination Event" shall mean the occurrence of either of the
following events:
(a) all commitments of the Liberty APA Banks under the Liberty
Liquidity Asset Purchase Agreement shall have terminated; or
(b) a Termination Event or Potential Termination Event shall have
occurred and be continuing.
"Liberty Yield" means with respect to any Settlement Period an amount
equal to the product of (i) the Liberty Yield Rate in effect for such Settlement
Period, (ii) the average daily Liberty Net Investment outstanding during such
Settlement Period and (iii) a fraction of the numerator of which is the actual
number of days in such Settlement Period and the denominator of which is 360.
"Liberty Yield Rate" means for any Settlement Period, the weighted
average of the following rates:
(a) to the extent that Liberty funds or maintains the Liberty Net
Investment during such Settlement Period (or portion thereof) by
issuing its Commercial Paper, the Liberty CP Rate for such
Settlement Period; and
(b) to the extent Liberty funds or maintains the Liberty Investment
during such Settlement Period (or portion thereof) other than by
issuing its Commercial Paper, a rate equal to the Liberty
Alternate Rate for such Settlement Period.
provided, however, upon the Termination Date the Liberty Yield Rate shall be the
Liberty Base Rate plus 2%.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the UCC or comparable law of any jurisdiction).
"Liquidity Banks" shall mean the PARCO APA Banks.
"Litigation" shall have the meaning specified in Section 4.1(h) of the
Receivables Purchase Agreement.
"Lock-Box Account" shall mean an account maintained by the Transferor
at a Lock-Box Bank for the purpose of receiving Collections from Receivables.
17
"Lock-Box Agreement" shall mean each agreement among the Transferor,
the Collection Agent, the Administrative Agent and the applicable Lock-Box Bank
in substantially the form of Exhibit C to the Receivables Transfer Agreement.
"Lock-Box Bank" shall mean each of the banks set forth in Exhibit B to
the Receivables Transfer Agreement, and such banks as may be added thereto or
deleted therefrom pursuant to Section 2.8 of the Receivables Transfer Agreement.
"Loss and Dilution Reserve Ratio" shall mean, on any day, the greater
of (i) the Minimum Loss Reserve and (ii) the sum of (A) the Loss Reserve Ratio
and (B) the Dilution Reserve Ratio.
"Loss Reserve Ratio" shall mean, as of any Monthly Settlement Report
Date, and continuing until (but not including) the next Monthly Settlement
Report Date, an amount (expressed as a percentage) that is calculated as
follows:
LRR = [(a * b)/c] * d * e
Where:
LRR = Loss Reserve Ratio;
a = the aggregate principal amount of (i) Receivables originated or
acquired by the Sellers during the two Settlement Periods immediately
preceding such earlier Monthly Settlement Report Date and (ii) 25% of
the Receivables originated or acquired by the Sellers in the third
Settlement Period immediately preceding such Monthly Settlement Report
Date;
b = the highest three-month rolling average of the Aged Receivables Ratio
that occurred during the period of twelve consecutive Settlement
Periods ending prior to such earlier Settlement Report Date;
c = the Net Receivables Balance as of the last day of the Settlement
Period immediately preceding such earlier Monthly Settlement Report
Date;
d = 2.0; and
e = the Payment Terms Factor.
"Manager" shall mean Global Securitization Services, LLC, a Delaware
limited liability company.
"Material Adverse Effect" shall mean any event or condition which
would have a material adverse effect on (i) the collectibility of the
Receivables, (ii) the condition (financial or otherwise), businesses or
properties of the Transferor, the Guarantor or any other Seller, (iii) the
ability of the Transferor, the Guarantor or any other Seller to perform its
respective obligations under the Transaction Documents to which it is a party
and (iv) the interests of the Administrative Agent, a Funding Agent, an Initial
Purchaser or the PARCO APA Banks under
18
the Transaction Documents; provided, however, that an event or condition
resulting in a material adverse change in the condition (financial or otherwise)
of any Seller will not be deemed to have a Material Adverse Effect unless such
event or condition, in the Administrative Agent's reasonable discretion, with
the consent of each Funding Agent which shall be obtained by the Administrative
Agent, is reasonably likely to result in a material adverse change in the
condition (financial or otherwise) of any other Seller, the Transferor or the
Guarantor.
"Maximum Percentage Factor" shall mean 100%.
"Minimum Loss Reserve" shall mean, as of any Monthly Settlement Report
Date and continuing until (but not including) the next Monthly Settlement Report
Date, an amount (expressed as a percentage) that is calculated as follows:
MLR = (a*b)+c
Where:
MLR = Minimum Loss Reserve;
a = the average of the Dilution Ratio during the period of the
twelve consecutive Settlement Periods ending prior to such
earlier Monthly Settlement Report Date;
b = the Dilution Period; and
c = 12 %.
"Monthly Settlement Report Date" shall mean the tenth Business Day
following the end of each fiscal month of C&A; which fiscal months for the year
2000 are set forth on Schedule III to the Receivables Transfer Agreement.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., and its
successors and assigns.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA with respect to which a Seller, the Transferor, the
Guarantor or any ERISA Affiliate of a Seller, the Transferor or the Guarantor is
making, is obligated to make, or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Net Investment" shall mean any of the PARCO Net Investment, the
Liberty Net Investment or the Redwood Net Investment.
"Net Receivables Balance" shall mean, at any time, the Outstanding
Balance of the Eligible Receivables at such time, as reduced by the aggregate
amount by which the Outstanding Balance of all Eligible Receivables of each
Obligor exceeds the Concentration Factor or Special Obligor Concentration
Factor, as applicable, for such Obligor.
19
"Non-Defaulting PARCO APA Bank" shall have the meaning specified in
subsection 2.2(b) of the PARCO Asset Purchase Agreement.
"Obligor" shall mean a Person obligated to make payments for the
provision of goods and services pursuant to a Contract.
"Official Body" shall mean any government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Other Transferor" shall mean any Person, other than the Transferor,
that has entered into a receivables purchase agreement, receivables transfer
agreement, loan agreement or funding agreement with PARCO.
"Outstanding Balance" shall mean, with respect to any Receivable at
any time, the then outstanding principal amount thereof, excluding any accrued
and outstanding Finance Charges related thereto.
"Paid Percentage Factor" shall have the meaning set forth in Section
2.5(a)(i) of the Receivables Transfer Agreement.
"PARCO" shall mean the Park Avenue Receivables Corporation, a Delaware
corporation, and its successors and assigns.
"PARCO Administrative Agent" shall mean The Chase Manhattan Bank, as
administrative agent on behalf of PARCO, and its permitted successors and
assigns in such capacity.
"PARCO Adjusted Liquidity Price" shall mean, in determining
the PARCO Purchase Price of any portion of the PARCO Interest on any PARCO
Purchase Date, an amount equal to:
OC + (PF * NDR )
where:
PF = the product of (i) the Percentage Factor on such PARCO
Purchase Date, times (ii) the quotient of (A) the PARCO Net
Investment divided by (B) the Aggregate Net Investment.
OC = the sum of (i) all Collections received by the Sellers,
the Collection Agent or the Transferor which are due and
owing to PARCO under the Transaction Documents and which
have not yet been remitted to PARCO plus (ii) all Deemed
Collections due and owing to PARCO pursuant to subsection
2.9(a) of the Receivables Transfer Agreement plus (iii) all
amounts due and owing to PARCO
20
in respect of Diluted Receivables pursuant to subsection
2.9(b) of the Receivables Transfer Agreement.
NDR = the aggregate Outstanding Balance of all Receivables which
are not Defaulted Receivables.
Each of the foregoing shall be determined from the most recent Weekly
Report or Daily Report delivered to PARCO.
"PARCO Asset Purchase Agreement" shall mean that certain Asset
Purchase Agreement, dated as of December 27, 1999, by and among the PARCO
Funding Agent, the PARCO APA Banks and PARCO, as the same may from time to time
be amended, supplemented or otherwise modified and in effect.
"PARCO APA Bank Commitment" shall mean, with respect to any or all
PARCO APA Banks, the amount set forth on Schedule I attached to the Receivables
Transfer Agreement equal at all times to 102% of the PARCO APA Bank's Pro Rata
Share of the Facility Limit, as the same may be reduced from time to time in
accordance with Section 2.5 or subsection 5.5(c) of the PARCO Asset Purchase
Agreement.
"PARCO APA Banks" shall mean the Persons listed on Annex I to the
PARCO Asset Purchase Agreement (including, without limitation, Chase), and the
Persons which from time to time may become a party to the PARCO Asset Purchase
Agreement in accordance with Section 5.5(c) thereof.
"PARCO Base Rate" shall mean, a rate per annum equal to the sum of (x)
the greater of (i) the prime rate of interest announced by the PARCO Funding
Agent from time to time, changing when and as said prime rate changes (such rate
not necessarily being the lowest or best rate charged by the PARCO Funding
Agent) and (ii) the sum of (A) 1.50% and (B) the rate equal 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 PARCO Funding Agent from three (3) Federal
funds brokers of recognized standing selected by it and (y) the Applicable
Margin.
"PARCO BR Tranche" shall mean a Tranche as to which PARCO Discount is
calculated at the PARCO Base Rate.
"PARCO BR Tranche Period" shall mean, with respect to a PARCO BR
Tranche after a PARCO Wind-Down Event, a period of one (1) day. If such PARCO BR
Tranche Period would end on a day which is not a Business Day, such PARCO BR
Tranche Period shall end on the next succeeding Business Day.
"PARCO Commitment Expiry Date" shall mean the earliest to occur of (i)
the date on which all amounts due and owing to PARCO and the PARCO APA Banks
under the Receivables Transfer Agreement and the other Transaction Documents
have been indefeasibly
21
paid in full, (ii) following a Termination Date (not including pursuant to
clause (iii) of the definition of Termination Date), the date on which the PARCO
Interest has been reduced to zero pursuant to Section 2.5 of the PARCO Asset
Purchase Agreement, and (iii) December 25, 2000 (as may be extended for an
additional 364 days from time to time in writing by PARCO, the PARCO Funding
Agent and the PARCO APA Banks).
"PARCO CP Rate" shall mean, with respect to any PARCO CP Tranche
Period requested by the Transferor and agreed to by PARCO or selected by the
PARCO Funding Agent, the rate equivalent to the rate (or if more than one rate,
the weighted average of the rates) at which PARCO's Commercial Paper having a
term equal to such PARCO CP Tranche Period may be sold by any placement agent or
commercial paper dealer selected by PARCO on the first day of such PARCO CP
Tranche Period, plus the amount of any placement agent or commercial paper
dealer fees and commissions incurred or to be incurred in connection with such
sale; provided, however, that if the rate (or rates) as agreed between any such
agent or dealer and PARCO is a discount rate, then the "PARCO CP Rate" shall
mean the rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) resulting from PARCO's converting such discount rate (or
rates) to an interest-bearing equivalent rate per annum, however, in the event
the Transferor does not request a PARCO CP Tranche Period or the PARCO Funding
Agent does not select a PARCO CP Tranche Period, the rate will equal a blended
rate of all outstanding Commercial Paper of PARCO, as determined by the PARCO
Funding Agent.
"PARCO CP Tranche" shall mean a Tranche as to which PARCO Discount is
calculated at the PARCO CP Rate.
"PARCO CP Tranche Period" shall mean, with respect to a PARCO CP
Tranche, a period of days not to exceed sixty (60) days commencing on a Business
Day requested by the Transferor and agreed to by PARCO or selected by the PARCO
Funding Agent pursuant to Section 2.3 of the Receivables Transfer Agreement. If
a PARCO CP Tranche Period would end on a day which is not a Business Day, such
PARCO CP Tranche Period shall end on the next succeeding Business Day.
"PARCO Discount" means, (a) with respect to any Tranche Period
pertaining to PARCO:
(TR x TNI x AD)
-------------
YD
Where:
TR = the PARCO Tranche Rate applicable to such Tranche Period;
TNI = the portion of the PARCO Net Investment allocated to such
Tranche Period;
AD = the actual number of days during such Tranche Period; and
22
YD = either (i) if the PARCO Tranche Rate is the PARCO CP Rate
or the PARCO Eurodollar Rate, 360 or (ii) if the PARCO
Tranche Rate is the PARCO Base Rate, 365 or 366, as
applicable; or
(b) with respect to any Settlement Period pertaining to PARCO:
(PF x PNI x AD)
-------------
YD
Where:
PF = the weighted average rate of PARCO's Commercial Paper
funded by pooled funding allocated to the Facility for such
Settlement Period;
PNI = the portion of the PARCO Net Investment funded by pooled
funding during such Settlement Period;
AD = the actual number of days during such Settlement Period;
and
YD = 360.
provided, however, that no provision of the Receivables Transfer
Agreement shall require the payment or permit the collection of PARCO Discount
in excess of the maximum amount permitted by applicable law; and provided,
further, that PARCO Discount shall not be considered paid by any distribution
if, at any time, such distribution is rescinded or must be returned for any
reason.
"PARCO Eurodollar Rate" shall mean, with respect to any PARCO
Eurodollar Tranche Period, the Applicable Margin plus a rate per annum equal to
the sum (rounded upwards, if necessary, to the next higher 1/100 of 1%) of (i)
the rate obtained by dividing (A) the applicable PARCO LIBOR Rate by (B) a
percentage equal to 100% minus the reserve percentage used for determining the
maximum reserve requirement as specified in Regulation D (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that is applicable to the PARCO Funding Agent during such PARCO Eurodollar
Tranche Period in respect of eurocurrency or eurodollar funding, lending or
liabilities (or, if more than one percentage shall be so applicable, the daily
average of such percentage for those days in such PARCO Eurodollar Tranche
Period during which any such percentage shall be applicable) plus (ii) the then
daily net annual assessment rate (rounded upwards, if necessary, to the nearest
1/100 of 1%) as estimated by the PARCO Funding Agent for determining the current
annual assessment payable by the PARCO Funding Agent to the Federal Deposit
Insurance Corporation in respect of eurocurrency or eurodollar funding, lending
or liabilities.
"PARCO Eurodollar Tranche" shall mean a Tranche as to which PARCO
Discount is calculated at the PARCO Eurodollar Rate.
"PARCO Eurodollar Tranche Period" shall mean, with respect to a PARCO
Eurodollar Tranche, following a PARCO Wind-Down Event but prior to a Termination
Date, a
23
period of up to three (3) months requested by the Transferor and agreed to by
the PARCO Funding Agent commencing on a Business Day requested by the Transferor
and agreed to by the PARCO Funding Agent; provided, however, that if such PARCO
Eurodollar Tranche Period would expire on a day which is not a Business Day,
such PARCO Eurodollar Tranche Period shall expire on the next succeeding
Business Day; provided, further, that if such PARCO Eurodollar Tranche Period
would expire on (a) a day which is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such PARCO Eurodollar
Tranche Period shall expire on the next preceding Business Day or (b) a Business
Day for which there is no numerically corresponding day in the applicable
subsequent calendar month, such PARCO Eurodollar Tranche Period shall expire on
the last Business Day of such month.
"PARCO Funding Agent" shall mean Chase, in its capacity as funding
agent for the benefit of PARCO and the PARCO APA Banks, and any successor and
assigns thereto.
"PARCO Funding Balance" shall mean, with respect to any PARCO APA Bank
at any time of determination thereof, an amount equal to (a) such PARCO APA
Bank's Pro Rata Share multiplied by (b) all amounts due and owing to PARCO in
respect of the PARCO Interest under the Transaction Documents as at such date.
"PARCO Insolvency Event" shall mean the occurrence of any one or more
of the following: (i) any proceeding shall have been instituted by PARCO seeking
to adjudicate it as 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 any order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property, or (ii) any proceeding of the type described
in the foregoing clause (i) shall be instituted against PARCO and shall have
remained undismissed for a period of sixty (60) consecutive days, or an order
granting relief requested in any such proceeding shall be entered.
"PARCO Interest" shall mean, on any day, the portion of the beneficial
interest of PARCO in the Receivables and Related Security, the Required Currency
Hedge, Collections and Proceeds with respect thereto, which beneficial interest
shall equal the product of (i) the Percentage Factor on such day multiplied by
(ii) the quotient of (A) PARCO's Net Investment on such day divided by (B) the
Aggregate Net Investment on such day multiplied by (iii) the Outstanding Balance
of all Receivables.
"PARCO LIBOR Rate" shall mean, with respect to any PARCO Eurodollar
Tranche Period, the rate at which deposits in dollars are offered to the PARCO
Funding Agent, in the London interbank market at approximately 11:00 A.M.
(London time) two (2) Business Days before the first day of such PARCO
Eurodollar Tranche Period in an amount approximately equal to the PARCO
Eurodollar Tranche to which the PARCO Eurodollar Rate is to apply and for a
period of time approximately equal to the applicable PARCO Eurodollar Tranche
Period.
"PARCO Net Investment" shall mean an amount equal to the result of:
(i) the sum of cash amounts paid to the Transferor by PARCO and/or the PARCO APA
Banks for each Incremental Transfer minus (ii) the aggregate amount of
Collections received and applied by the
24
PARCO Funding Agent to reduce such PARCO Net Investment pursuant to Section 2.5,
2.6 or 2.9 of the Receivables Transfer Agreement; provided that the PARCO Net
Investment shall be restored and reinstated in the amount of any Collections so
received and applied if, at any time, the distribution of such Collections is
rescinded or must otherwise be returned for any reason.
"PARCO Purchase" shall mean any assignment by PARCO to the PARCO APA
Banks of the PARCO Interest pursuant to Section 2.1 of the PARCO Asset Purchase
Agreement.
"PARCO Purchase Date" shall mean the date specified by PARCO in a
PARCO Sale Notice as being the effective date of PARCO's assignment to the PARCO
APA Banks of the PARCO Interest specified therein.
"PARCO Purchase Limit" means, at any time, the amount set forth on
Schedule I attached to the Receivables Transfer Agreement; provided, however,
that at all times on and after the Termination Date, the "PARCO Purchase Limit"
means the aggregate outstanding PARCO Net Investment, as reduced pursuant to the
terms of the PARCO Asset Purchase Agreement.
"PARCO Purchase Price" shall mean, with respect to the PARCO Asset
Purchase Agreement, at any PARCO Purchase Date, an amount equal to the lesser of
(i) the PARCO Net Investment and (ii) the PARCO Adjusted Liquidity Price, as
clauses (i) and (ii) shall be increased by the sum of (A) all accrued and unpaid
PARCO Discount on all outstanding PARCO Tranches of PARCO's Commercial Paper
issued by PARCO to fund the PARCO Net Investment from the issuance date(s)
thereof to and including the PARCO Purchase Date plus (B) the aggregate PARCO
Discount to accrue on all outstanding PARCO Tranches of Commercial Paper issued
by PARCO to fund the PARCO Net Investment from and including the PARCO Purchase
Date to and excluding the maturity date of each such PARCO Tranche.
"PARCO Purchase Price Deficit" shall have the meaning specified in
subsection 2.2(b) of the PARCO Asset Purchase Agreement.
"PARCO Sale Notice" shall mean an irrevocable written notice given by
an authorized signer or authorized officer of PARCO (or on behalf of PARCO by
Chase, in its capacity as PARCO Administrative Agent) to the PARCO Funding Agent
committing to sell, assign and transfer to the PARCO APA Banks, the PARCO
Interest, which notice shall designate (i) the applicable PARCO Purchase Date,
(ii) the PARCO Interest and the Aggregate Net Investment, (iii) the PARCO
Purchase Price (including a calculation of the PARCO Purchase Price), (iv) that
no PARCO Insolvency Event has occurred and (v) wire transfer instructions
specifying the account(s) into which the proceeds of the PARCO Purchase Price
shall be deposited.
"PARCO Tranche Rate" means (i) for any PARCO CP Tranche and any PARCO
CP Tranche Period prior to the occurrence of a PARCO Wind-Down Event, the PARCO
CP Rate, (ii) for any PARCO Eurodollar Tranche and any PARCO Eurodollar Tranche
Period following the occurrence of a PARCO Wind-Down Event but prior to a
Termination Date, the PARCO Eurodollar Rate and (iii) for any PARCO BR Tranche
and any PARCO BR Tranche Period following a Termination Date or the occurrence
of a PARCO Wind-Down Event, the PARCO Base Rate.
25
"PARCO Wind-Down Event" shall mean the occurrence of any of the
following events:
(a) on the fifth Business Day prior to the date specified in clause
(iii) of the definition of "PARCO Commitment Expiry Date" (after
giving effect to any extensions), the PARCO APA Banks' Aggregate
Commitment has not been extended for an additional 364 days;
(b) any provider of PARCO's program liquidity and/or letter of
credit facilities shall have given notice that an event of
default has occurred and is continuing under its agreement with
PARCO;
(c) PARCO has notified the Transferor that it does not wish to, or
is unable to, provide financing to the Transferor;
(d) PARCO's Commercial Paper shall not be rated at least A-1/P-1 by
S&P and ▇▇▇▇▇'▇, respectively; and
(e) a Termination Event or Potential Termination Event shall have
occurred and be continuing (not including a Termination Date
that occurs pursuant to clause (i) of the definition of
"Termination Date").
"Parent" shall mean ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation, a Delaware
corporation, as the holder of 100% of the issued and outstanding capital stock
of C&A.
"Participant" shall have the meaning specified in subsection 5.5(b) of
the PARCO Asset Purchase Agreement.
"Payment Terms Factor" shall mean (i) for the period from the Closing
Date until the third Monthly Settlement Report Date, 1.11 and (ii) for each
three-month period to occur thereafter, a fraction, the numerator of which is
the sum of (A) the weighted average payment terms (based upon the principal
amount of the Receivables and expressed as a number of days) for the Receivables
generated or acquired by the Sellers during such period and (B) 60, and the
denominator of which is 90; provided, however, that if the Payment Terms Factor
for any period is less than the Payment Terms Factor for the immediately
preceding periods, then the actual Payment Terms Factor for such current period
shall be recalculated to equal a fraction, the numerator of which is equal to
the average of the numerators used to calculate the Payment Terms Factor for
such current period and the three immediately preceding periods (without giving
effect to this proviso) and the denominator of which is 90 provided, further,
the Payment Terms Factor shall never be less than 1.0.
"Pension Plan" shall mean a Plan described in Section 3(2) of ERISA.
26
"Percentage Factor" shall mean the fraction (expressed as a
percentage) computed on any date of determination as follows:
( NI x [1+(LDRR+CCRR)] + (SFRR * OBR) )
--------- ----------
1-LDRR 1-LDRR +$100,000
----------------------------------------------------------------
NRB
Where:
NI = the Aggregate Net Investment on the date of such computation;
LDRR = the Loss and Dilution Reserve Ratio on the date of such
computation;
CCRR = the Carrying Cost Reserve Ratio on the date of such
computation;
SFRR = the Servicing Fee Reserve Ratio on the date of such
computation;
OBR = the Outstanding Balance of all Receivables on the date of such
computation; and
NRB = the Net Receivables Balance on the date of such computation.
The Percentage Factor shall be calculated by the Collection Agent on
the day of the initial Incremental Transfer hereunder. Thereafter, until the
Termination Date, the Collection Agent shall recompute the Percentage Factor at
the time of each Incremental Purchase pursuant to subsection 2.2(a) of the
Receivables Transfer Agreement and as of the close of business on each Business
Day and report such recomputations to the Administrative Agent in the Weekly
Report, Settlement Report and as otherwise requested by the Administrative
Agent. The Percentage Factor 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 shall be made, notwithstanding any additional Receivables
arising, any Incremental Transfer made pursuant to such subsection 2.2(a) or any
reinvestment Transfer made pursuant to Section 2.2(b) and 2.5 of the Receivables
Transfer Agreement during any period between computations of the Percentage
Factor. The Percentage Factor shall remain constant at 100% at all times on and
after the Termination Date until such time as the Administrative Agent, on
behalf of the Initial Purchasers and the PARCO APA Banks, shall have received
the Aggregate Unpaids, in cash, at which time the Percentage Factor shall be
recomputed in accordance with Section 2.6 of the Receivables Transfer Agreement.
"Permitted Encumbrance" means any of the following:
(i) liens, charges or other encumbrances for taxes and assessments which
are not yet due and payable or which are being contested in good faith
and for which reserves have been established, if required in
accordance with GAAP;
(ii) liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or
in respect of which the
27
Transferor and/or a Seller shall at any time in good faith be
prosecuting an appeal or proceeding for a review and with respect to
which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;
(iii) liens, charges or other encumbrances or priority claims incidental to
the conduct of business or the ownership of properties and assets
(including mechanics', carriers', repairers', warehousemen's and
statutory landlords' liens and liens to secure the performance of
leases) and deposits, pledges or liens to secure statutory
obligations, surety or appeal bonds or other liens of like general
nature incurred in the ordinary course of business and not in
connection with the borrowing of money, provided in each case, the
obligation secured is not overdue, or, if overdue, is being contested
in good faith by appropriate actions or proceedings and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;
(iv) liens, charges or encumbrances in favor of any Initial Purchaser, any
PARCO APA Bank or any Funding Agent; and
(v) lien, charges, imperfections in title or other encumbrances which, in
the aggregate do not exceed $100,000 and which, individually or in the
aggregate, do not materially interfere with the rights hereunder of an
Initial Purchaser, any PARCO APA Bank or any Funding Agent in the
Receivables.
"Permitted Investments" shall mean any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) obligations of any agency of the United States of
America; (iii) time deposits in, or bankers acceptances issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities;
provided, however, that at the time of investment or contractual commitment to
invest therein, the certificates of deposit or short-term deposits, if any, or
long-term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depositary institution or trust company shall have a
credit rating from ▇▇▇▇▇'▇ and S&P of at least P-1 and "A-1", respectively, in
the case of the certificates of deposit or short-term deposits, or a rating not
lower than one of the two highest investment categories granted by ▇▇▇▇▇'▇ and
by S&P; (iv) certificates of deposit having, at the time of investment or
contractual commitment to invest therein, a rating from ▇▇▇▇▇'▇ and S&P of at
least P-1 and "A-1", respectively; or (v) investments in money market funds
rated in the highest investment category or otherwise approved in writing by
▇▇▇▇▇'▇ and S&P; (b) demand deposits in any depositary institution or trust
company referred to in (a)(iii) above; (c) commercial paper (having original or
remaining maturities of no more than 30 days) having, at the time of investment
or contractual commitment to invest therein, a credit rating from ▇▇▇▇▇'▇ and
S&P of at least P-1 and "A-1", respectively; (d) Eurodollar time deposits having
a credit rating from ▇▇▇▇▇'▇ and S&P of at least P-1 and "A-1", respectively;
(e) repurchase agreements involving any of the Permitted Investments described
in clauses (a)(i), (a)(iv) and (d) of this definition so long as the other party
to the repurchase agreement has at the time of investment therein, a rating from
▇▇▇▇▇'▇ and
28
S&P of at least P-1 and "A-1", respectively; and (f) any other investment
permitted by each of the Funding Agents, ▇▇▇▇▇'▇ and S&P.
"Person" shall mean any corporation, limited liability company,
natural person, firm, joint venture, partnership, trust, unincorporated
organization, enterprise, government or any department or agency of any
government.
"Plan" shall mean, at any time, an "employee benefit plan," as defined
in Section 3(3) of ERISA, that a Seller, the Transferor, the Guarantor or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by a Seller, the Transferor, the
Guarantor or ERISA Affiliate.
"Potential Termination Event" shall mean an event which but for the
lapse of time or the giving of notice, or both, would unavoidably constitute a
Termination Event.
"Proceeds" shall mean "proceeds" as defined in Section 9-306(1) of the
Relevant UCC.
"Program Fee" shall have the meaning specified in the Fee Letter.
"Pro Rata Share" shall mean, on any date of determination, (i) with
respect to any PARCO APA Bank, the ratio (expressed as a percentage) of such
PARCO APA Bank's pro rata share of the PARCO Purchase Limit to the Facility
Limit at such time, (ii) with respect to Redwood, the ratio (expressed as a
percentage) of the Redwood Purchase Limit to the Facility Limit at such time,
(iii) with respect to Liberty, the ratio (expressed as a percentage) of the
Liberty Purchase Limit to the Facility Limit at such time and (iv) with respect
to PARCO, the ratio (expressed as a percentage) of the PARCO Purchase Limit to
the Facility Limit at such time.
"Purchase Discount" shall mean, on any Business Day on which
Receivables are sold by a Seller to the Transferor pursuant to the Receivables
Purchase Agreement, an amount, calculated in good faith by the Transferor, equal
to the sum of (a) the Adjusted Carrying Cost Reserve Ratio, (b) the Adjusted
Servicing Fee Reserve Ratio and (c) a ratio that reflects historical loss
experience, future loss exposure and a reasonable profit. The total of the ratio
defined in clause (c) shall not exceed 0.35%.
"Purchase Limit" means either the PARCO Purchase Limit, the Liberty
Purchase Limit or the Redwood Purchase Limit.
"Purchase Price" shall, with respect to the Receivables Purchase
Agreement, have the meaning set forth in Section 3.1 of the Receivables Purchase
Agreement.
"Purchase Termination Date" shall have the meaning specified in
Section 9.1 of the Receivables Purchase Agreement.
"Purchased Receivables" shall have the meaning specified in subsection
3.2(b) of the Receivables Purchase Agreement.
29
"Purchaser" shall have the meaning specified in subsection 5.5(c) of
the PARCO Asset Purchase Agreement.
"Purchaser Group" means any of (i) prior to a PARCO Wind-Down Event,
PARCO and after a PARCO Wind-Down Event, the PARCO APA Banks, (ii) Redwood and
(iii) Liberty.
"Rating Agency" shall mean ▇▇▇▇▇'▇, S&P and any other nationally
recognized statistical rating organization from which a rating for Commercial
Paper, requested by the Initial Purchasers, is currently in effect.
"Rating Agency Book" shall mean the rating agency book, dated November
1999 prepared in connection with the Facility.
"Receivable" shall mean all indebtedness owed to a Seller by an
Obligor under a Contract, whether constituting an account or general intangible,
arising in connection with the sale or lease of merchandise or the rendering of
services by the related Seller, and includes the right to payment of any Finance
Charges and other obligations of such Obligor with respect thereto.
Notwithstanding the foregoing, once a Receivable has been deemed
collected pursuant to Section 2.9 of the Receivables Transfer Agreement, it
shall no longer constitute a Receivable under the Receivables Transfer
Agreement.
"Receivables Purchase Agreement" shall mean the Receivables Purchase
Agreement, dated as of December 27, 1999, by and between C&A, as seller, C&A's
wholly-owned direct and indirect Subsidiaries listed on Exhibit D thereto, as
sellers, and the Transferor, as purchaser, as such agreement may be amended,
supplemented or otherwise modified and in effect from time to time.
"Receivables Transfer Agreement" shall mean the Receivables Transfer
Agreement, dated as of December 27, 1999, by and between the Transferor, C&A, as
guarantor and as collection agent, the Initial Purchasers, the PARCO APA Banks,
the Funding Agents and the Administrative Agent, as such agreement may be
amended, supplemented or otherwise modified and in effect from time to time.
"Recipient" shall have the meaning specified in Section 2.14 of the
Receivables Transfer Agreement.
"Records" shall mean all Contracts and other documents, books, records
and other information (including, without limitation, computer programs, tapes,
disks, punch cards, data processing software and related property and rights)
maintained with respect to Receivables and the related Obligors.
"Redwood" means Redwood Receivables Corporation, a Delaware
corporation, and its successors and assigns.
30
"Redwood Collateral Agent" shall mean GE Capital, in its capacity as
collateral agent for Redwood and the Redwood Secured Parties under the Redwood
Liquidity Documents.
"Redwood Collateral Agent Agreement" shall mean that certain Second
Amended and Restated Collateral Agent and Security Agreement dated as of June
29, 1995, among Redwood, the Redwood Depositary and GE Capital, in its
capacities as (a) collateral agent, (b) operating agent, (c) the liquidity agent
and (d) Redwood Letter of Credit Agent, as amended pursuant to that certain
Amendment No. 1 to Second Amended and Restated Collateral Agent and Security
Agreement dated as of February 27, 1996, as amended pursuant to that certain
Amendment No. 2 to Second Amended and Restated Collateral Agent and Security
Agreement dated as of January 4, 1997, as amended pursuant to that certain
Amendment No. 3 to Second Amended and Restated Collateral Agent and Security
Agreement dated as of January 24, 1997.
"Redwood Depositary" shall mean Bankers Trust Company, or any other
Person designated as the successor Redwood Depositary pursuant to and in
accordance with the terms of the Redwood Depositary Agreement, in its capacity
as issuing and paying agent or trustee in connection with the issuance of
commercial paper by Redwood.
"Redwood Depositary Agreement" shall mean that certain Depositary
Agreement dated March 15, 1994, by and between Redwood and the Redwood
Depositary and consented to by GE Capital, as liquidity agent for Redwood.
"Redwood Funding Account" means that certain segregated deposit
account established by Redwood and maintained with the Redwood Depositary
designated as the "Redwood Receivables Corporation - Collection Account (C&A),"
account number ABA No. ▇▇▇▇▇▇▇▇▇, or such other account established in
accordance with the requirements set forth in Section 3A.01 of the Redwood
Liquidity Loan Agreement.
"Redwood Funding Agent" means GE Capital, in its capacity as funding
agent for the benefit of Redwood and the Redwood Secured Parties, and any of
their respective successors and assigns under the Receivables Transfer Agreement
and the Transaction Documents.
"Redwood Interest" means on any day, the portion of the beneficial
interest of Redwood in the Receivables and Related Security, the Required
Currency Hedge, Collections and Proceeds with respect thereto, which beneficial
interest shall equal the product of (i) the Percentage Factor on such day
multiplied by (ii) the quotient of (A) Redwood's Net Investment on such day
divided by (B) the Aggregate Net Investment on such day multiplied by (iii) the
Outstanding Balance of all Receivables.
"Redwood Letter of Credit" shall mean that certain Irrevocable Letter
of Credit No. RRC-2 dated June 29, 1995, issued by the Redwood Letter of Credit
Providers at the request of Redwood in favor of the Redwood Collateral Agent
pursuant to the Redwood Letter of Credit Agreement.
"Redwood Letter of Credit Agent" shall mean GE Capital, in its
capacity as agent for the Redwood Letter of Credit Providers under the Redwood
Letter of Credit Agreement.
31
"Redwood Letter of Credit Agreement" shall mean that certain Second
Amended and Restated Letter of Credit Reimbursement Agreement dated as of June
29, 1995, among Redwood, the Redwood Letter of Credit Agent, the Redwood Letter
of Credit Providers and GE Capital as collateral agent, as amended pursuant to
that certain Amendment No. 1 to Second Amended and Restated Letter of Credit
Reimbursement Agreement dated as of February 27, 1996, as amended pursuant to
that certain Amendment No. 2 to Second Amended and Restated Letter of Credit
Reimbursement Agreement dated as of January 24, 1997.
"Redwood Letter of Credit Providers" shall mean, initially, GE
Capital, in its capacity as issuer of the Redwood Letter of Credit under the
Redwood Letter of Credit Agreement, and thereafter its successors and permitted
assigns in such capacity.
"Redwood Liquidity Agent" shall mean GE Capital, in its capacity as
agent for the Redwood Liquidity Lenders pursuant to the Redwood Liquidity Loan
Agreement.
"Redwood Liquidity Commitment" shall mean, with respect to Redwood,
the amount set forth on Schedule I attached to the Receivables Transfer
Agreement equal at all times to 103% of Redwood's Pro Rata Share of the Facility
Limit.
"Redwood Liquidity Documents" shall mean the Redwood Liquidity Loan
Agreement and all other documents and instruments executed in connection with
the consummation of the transaction contemplated by the Redwood Liquidity Loan
Agreement.
"Redwood Liquidity Lenders" shall mean, collectively, GE Capital and
any other provider of Redwood Liquidity Loans under the Redwood Liquidity Loan
Agreement.
"Redwood Liquidity Loan Agreement" shall mean that certain Redwood
Liquidity Loan Agreement dated as of December 27, 1999, among Redwood and GE
Capital, in its capacities as (a) the operating agent for Redwood, (b) the
Redwood Collateral Agent, (c) the initial Redwood Liquidity Lender and (d) the
Redwood Liquidity Agent, as amended, restated, supplemented or otherwise
modified from time to time.
"Redwood Liquidity Loans" shall mean any and all borrowings by Redwood
under the Redwood Liquidity Loan Agreement.
"Redwood LOC Draws" shall mean any payments made to Redwood in
connection with the Redwood Letter of Credit and allocated to the Transferor.
"Redwood Net Investment" shall mean an amount equal to the result of:
(i) the sum of cash amounts paid to the Transferor by Redwood for each
Incremental Transfer minus (ii) the aggregate amount of Collections received and
applied by the Redwood Funding Agent to reduce such Redwood Net Investment
pursuant to Section 2.5, 2.6 or 2.9 of the Receivables Transfer Agreement;
provided that the Redwood Net Investment shall be restored and reinstated in the
amount of any Collections so received and applied if, at any time, the
distribution of such Collections is rescinded or must otherwise be returned for
any reason.
"Redwood Program Documents" shall mean the Redwood Letter of Credit
Agreement, the Redwood Liquidity Loan Agreement, the Redwood Collateral Agent
Agreement,
32
the Redwood Depositary Agreement, the Commercial Paper issued by Redwood, the
Operating Agent Agreement dated as of March 15, 1994 between Redwood and GE
Capital as operating agent, each Accession Agreement entered into in
substantially the form of Exhibit A to the Redwood Collateral Agent Agreement
and the dealer agreements entered into by Redwood for the distribution of its
Commercial Paper.
"Redwood Purchase Limit" means, at any time, the amount set forth on
Schedule I attached to the Receivables Transfer Agreement; provided, however,
that at all times on and after the Redwood Termination Date, the "Redwood
Purchase Limit" means the aggregate outstanding Redwood Net Investment.
"Redwood Secured Parties" means the Redwood Collateral Agent, the CP
Holders, the Redwood Depositary, the Redwood Liquidity Agent, the Redwood
Liquidity Lenders, the Redwood Letter of Credit Agent and the Redwood Letter of
Credit Providers.
"Redwood Termination Date" means the earlier of (a) the Termination
Date and (b) the date elected by Redwood or the Redwood Funding Agent, by notice
to the Transferor and the Administrative Agent upon the occurrence of a Redwood
Termination Event, as the Redwood Termination Date.
"Redwood Termination Event" means any one or more of the following
events: (a) a Redwood LOC Draw shall have occurred; (b) the obligations of the
Redwood Liquidity Lenders to make Redwood Liquidity Loans shall have terminated
and not otherwise been replaced; (c) an event of default under the Redwood
Collateral Agent Agreement or any other Redwood Program Document shall have
occurred; or (d) the short term debt rating of a Redwood Liquidity Lender shall
have been downgraded by a Rating Agency and such Redwood Liquidity Lender shall
not have been replaced in accordance with the terms of the Redwood Liquidity
Agreement within 30 days thereafter.
"Redwood Yield" shall have the meaning specified in Schedule I to
Annex X.
"Related Security" shall mean, with respect to any Receivable, all of
a Seller's and Transferor's right, title and interest in, to and under:
(a) all other accounts, contract rights, chattel paper, instruments,
Records, general intangibles and other obligations of any
Obligor with respect to any Receivable or related Contract, now
or hereafter existing, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of
services;
(b) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment
of such Receivable, whether pursuant to the Contract related to
such Receivable or otherwise, together with all financing
statements (or other similar instruments) signed by an Obligor
describing any collateral securing such Receivable;
(c) all guarantees, indemnities, warranties, insurance (and proceeds
and premium refunds thereof) or other agreements or arrangements
of any kind
33
from time to time supporting or securing payment of such
Receivable whether pursuant to the Contract related to such
Receivable or otherwise;
(d) in the case of the Administrative Agent for the benefit of the
Initial Purchasers, the Funding Agents and the PARCO APA Banks
and additionally, in the case of the Redwood Funding Agent for
the benefit of Redwood and the Redwood Secured Parties, all
rights and remedies of the Transferor under the Transaction
Documents, together with all financing statements (or other
similar instruments) filed by the Transferor against the Seller
in connection therewith; and
(e) all Proceeds of any of the foregoing.
"Relevant UCC" shall mean, with respect to any State, the Uniform
Commercial Code as from time to time in effect in such State.
"Required Currency Hedge" shall mean one or more foreign currency
instruments including currency options, currency ▇▇▇▇▇▇ and similar items,
acceptable to the Administrative Agent, exercisable at any time, with an
Eligible Counterparty providing for the delivery by such Eligible Counterparty
of U.S. Dollars in exchange for the receipt of Canadian Dollars.
"Required Currency Hedge Assignments" shall be substantially in the
form attached as Exhibit O to the Receivables Transfer Agreement.
"Required Hedge Notional Amount" shall mean an amount denominated in
U.S. Dollars, which represents the portion of Net Receivables Balance allocable
to the Canadian Dollar Receivables, as calculated in the most recent Settlement
Report.
"Required Participants" shall mean Redwood, Liberty and PARCO APA
Banks having Pro Rata Shares in the aggregate at least equal to 51% or, if the
Commitments have been terminated, having a Net Investment at least equal to 51%
of the Aggregate Net Investment; provided that the Commitment of any Defaulting
PARCO APA Bank that has not paid all amounts due and owing by it in respect of
Purchases it was obligated to make shall not be included in the Commitments for
purposes of this definition.
"Required Purchaser Groups" means, in the aggregate Purchaser Groups
whose Purchase Limits equal or exceed 66 2/3% of the Facility Limit.
"Requirements of Law" shall mean, as to any Person, the organizational
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Official Body, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Responsible Officer" shall mean, with respect to any Person, the
Chairman, the President, the Controller, any Vice President, the Secretary, the
Treasurer, or any other officer of such Person customarily performing functions
similar to those performed by any of the above-designated officers and also,
with respect to a particular matter any other officer to whom such
34
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Section 7.2 Costs" shall have the meaning specified in subsection
7.2(c) of the Receivables Transfer Agreement.
"Seller Addition Date" shall have the meaning specified in Section 7.2
of the Receivables Purchase Agreement.
"Seller Collateral" shall have the meaning set forth in Section 2.1(d)
of the Receivables Purchase Agreement.
"Seller Note" shall have the meaning specified in Section 8.1 of the
Receivables Purchase Agreement.
"Sellers" shall mean C&A, the other wholly-owned direct and indirect
Subsidiaries of C&A listed as sellers on Exhibit D to the Receivables Purchase
Agreement and any additional Sellers that become a party to the Receivables
Purchase Agreement pursuant to the terms thereof, and each of their successors
and permitted assigns.
"Senior Credit Facility" shall mean the Credit Agreement dated as of
May 28, 1998 among ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co., ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Canada Inc.,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics, Ltd., ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation, the lenders named
therein, Bank of America NT&SA, The Chase Manhattan Bank and The Chase Manhattan
Bank of Canada (including any amendments or modifications thereto) as in effect
from time to time.
"Senior Credit Facility Confidential Information Memorandum" shall
mean the information memorandum prepared in connection with the Senior Credit
Facility dated April 1999.
"Servicing Fee" shall mean the fees payable by the Transferor to the
Collection Agent in an amount equal to the Servicing Fee Percentage multiplied
by the amount of the aggregate Outstanding Balance of the Receivables. Such fee
shall accrue from the date of the initial purchase of an interest by an Initial
Purchaser in the Receivables to the later of the Termination Date or the date on
which the Percentage Factor is reduced to zero. On or prior to the Termination
Date, and provided that no Potential Termination Event shall have occurred and
be continuing, such fee shall be payable only from Collections pursuant to, and
subject to the priority of payments set forth in, Section 2.5 of the Receivables
Transfer Agreement. After the Termination Date or during the continuation of a
Potential Termination Event, such fee shall be payable only from Collections
pursuant to, and subject to the priority of payments set forth in, Section 2.6
of the Receivables Transfer Agreement.
"Servicing Fee Percentage" shall mean 1.0% per annum.
"Servicing Fee Reserve Ratio" shall mean, as of any Monthly Settlement
Report Date and continuing until, but not including, the next Monthly Settlement
Report Date, an amount, expressed as a percentage, equal to (i) the product of
(A) the Servicing Fee Percentage
35
and (B) 2 times Days Sales Outstanding as of such earlier Monthly Settlement
Report Date divided by (ii) 360.
"Settlement Date" shall mean initially, February 7, 2000 and
thereafter, the fifth (5th) Business Day of each month.
"Settlement Period" shall mean (i) with respect to the final
Settlement Period, the period ending on the Termination Date or Purchase
Termination Date and beginning with the first day of the fiscal month in which
such Termination Date or Purchase Termination Date occurs, and (ii) with respect
to all Settlement Periods other than the final Settlement Period, the period of
days from and including the first day of a fiscal month of C&A to and including
the last day of such fiscal month.
"Settlement Report" shall mean a report, in substantially the form
attached to the Receivables Transfer Agreement as Exhibit D or in such other
form as is mutually agreed to by the Transferor and the Administrative Agent
with the consent of the Funding Agents, which consent shall be obtained by the
Administrative Agent, delivered by the Collection Agent to the Administrative
Agent pursuant to Section 2.11 of the Receivables Transfer Agreement.
"Solvent" shall mean, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its Indebtedness as they become absolute and matured; (c) such Person
does not intend to, and does not believe that it will, incur Indebtedness or
liabilities beyond such Person's ability to pay as such Indebtedness and
liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities (such as Litigation, guaranties and Unfunded
Pension Liabilities) at any time shall be computed as the amount that, in light
of all the facts and circumstances existing at the time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Special Obligor" shall mean each of those Obligors designated by the
Administrative Agent which may, individually, exceed the Concentration Factor,
but is approved by the Administrative Agent based upon its credit quality. As of
the Closing Date each of the following shall be designated as a Special Obligor
so long as each Special Obligor maintains short term ratings of at least A-1 and
P-1 by S&P and ▇▇▇▇▇'▇, respectively, and long term ratings of at least A and A2
by S&P and ▇▇▇▇▇'▇, respectively: General Motors Corp., Ford Motor Company and
DaimlerChrysler AG.
"Special Obligor Concentration Factor" shall mean, on any day (i) with
respect to General Motors Corp. (and its Affiliates with equal or greater credit
ratings by all Rating Agencies which rate the applicable Affiliates or, with an
executed support agreement between such Affiliates and General Motors Corp.
which is currently in effect), so long as General Motors Corp. remains a Special
Obligor, a percentage equal to 39%, (ii) with respect to Ford Motor Company (and
its Affiliates with equal or greater credit ratings by all Rating Agencies which
rate the applicable Affiliates or, with an executed support agreement between
such
36
Affiliates and Ford Motor Company which is currently in effect), so long as Ford
Motor Company remains a Special Obligor, a percentage equal to 25%, (iii) with
respect to DaimlerChrysler AG (and its Affiliates with equal or greater credit
ratings by all Rating Agencies which rate the applicable Affiliates or, with an
executed support agreement between such Affiliates and DaimlerChrysler AG which
is currently in effect), so long as DaimlerChrysler AG remains a Special
Obligor, a percentage equal to 25% and (iv) with respect to any other Special
Obligor, a percentage specified by the Administrative Agent (with the prior
written consent of the Required Participants) in a written notice to the
Sellers, the Transferor, the Initial Purchasers, the PARCO APA Banks and the
Rating Agencies.
"Standard & Poor's" or "S&P" shall mean Standard & Poor's, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors and assigns.
"Structuring Fee" shall have the meaning specified in the Fee Letter.
"Subsidiary" of a Person shall mean any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"Taxes" shall have the meaning specified in subsection 7.3(a) of the
Receivables Transfer Agreement.
"Termination Date" shall mean the earliest of (i) the Business Day
designated by the Transferor to the Initial Purchasers as the Termination Date
at any time following the later of (A) repayment in full of all Commercial Paper
then outstanding or (B) thirty (30) days' written notice by the Transferor to
the Initial Purchasers, (ii) the day upon which a Termination Date is declared
or automatically occurs relating to a Termination Event or Potential Termination
Event pursuant to subsection 8.2(a) of the Receivables Transfer Agreement, (iii)
two (2) Business Days prior to the occurrence of the PARCO Commitment Expiry
Date, a Redwood Termination Date and a Liberty Termination Event or (iv) the
Purchase Termination Date.
"Termination Event" shall mean an event described in Section 8.1 of
the Receivables Transfer Agreement.
"Title IV Plan" shall mean a Pension Plan (other than a Multiemployer
Plan) that is covered by Title IV of ERISA and that a Seller, the Transferor,
the Guarantor or an ERISA Affiliate maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by any of them.
"The Bank of Nova Scotia Roles" shall have the meaning specified in
Section 10.14 of the Receivables Transfer Agreement.
"Tranche" shall mean a portion of the Aggregate Net Investment
allocated to a Tranche Period pursuant to Section 2.3 of the Receivables
Transfer Agreement.
"Tranche Period" shall mean a PARCO CP Tranche Period, a PARCO BR
Tranche Period or a PARCO Eurodollar Tranche Period.
37
"Tranche Rate" shall mean the applicable PARCO Tranche Rate.
"Transaction Costs" shall have the meaning specified in subsection
7.4(a) of the Receivables Transfer Agreement.
"Transaction Documents" shall mean, collectively, the Receivables
Transfer Agreement, the Receivables Purchase Agreement, the Fee Letter, the
Guaranty, the Lock-Box Agreements and all of the other instruments, documents,
certificates and other agreements executed and delivered by a Seller, the
Collection Agent, the Guarantor or the Transferor in connection with any of the
foregoing, in each case, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Transfer" shall mean a conveyance, transfer and assignment by the
Transferor to the Initial Purchasers or the PARCO APA Banks of an undivided
percentage ownership interest in Receivables, together with Related Security,
the Required Currency Hedge, Collections and Proceeds with respect thereto,
pursuant to, and in accordance with, the Receivables Transfer Agreement
(including, without limitation, as a result of any reinvestment of Collections
in Transferred Interests pursuant to Section 2.2(b) and 2.5) of the Receivables
Transfer Agreement).
"Transfer Certificate" shall have the meaning specified in subsection
2.2(a) of the Receivables Transfer Agreement.
"Transfer Date" shall mean, with respect to each Transfer, the
Business Day on which such Transfer is made.
"Transfer Price" shall mean, with respect to any Incremental Transfer,
the sum of the amounts paid to the Transferor by each Initial Purchaser or the
PARCO APA Banks, as applicable, as described in the applicable Transfer
Certificate. The Transfer Price for any Transfer shall be equal to the product
of (i) the Net Receivables Balance of Receivables transferred in any Incremental
Transfer, times (ii) the Percentage Factor.
"Transfer Supplement" shall have the meaning specified in Section
5.5(c) of the PARCO Asset Purchase Agreement.
"Transferor" shall mean Carcorp, Inc., a Delaware corporation, and its
successors and permitted assigns.
"Transferor Collateral" shall have the meaning set forth in Section
10.10 of the Receivables Transfer Agreement.
"Transferor Subordinated Obligation" shall mean any payment obligation
or other liability designated as such in Sections 2.6(c), 7.1, 7.2(d), 7.3(a)
and 7.4(a) in the Receivables Transfer Agreement, each of which payment
obligations and other liabilities shall (i) be subordinated and subject to the
prior payment in full of all Transferor Unsubordinated Obligations then due,
(ii) be made solely from funds available to the Transferor that are not required
to be applied to Transferor Unsubordinated Obligations then due and (iii) not
constitute a general recourse claim against the Transferor, but only a claim
against the Transferor to the
38
extent of funds available to the Transferor after satisfying all Transferor
Unsubordinated Obligations then due.
"Transferor Unsubordinated Obligations" shall mean all payment
obligations and other liabilities of the Transferor under the Receivables
Transfer Agreement that are not designated as Transferor Subordinated
Obligations.
"Transferred Interest" shall mean, on any date of determination, an
undivided percentage ownership interest of the Initial Purchasers and/or the
PARCO APA Banks, as applicable, in (i) each and every then outstanding
Receivable, (ii) all Related Security with respect to each such Receivable,
(iii) the Required Currency Hedge, (iv) all Collections with respect thereto,
and (v) other Proceeds of the foregoing, which undivided ownership interest
shall be equal to the Percentage Factor at such time, and only at such time
(without regard to prior calculations). The Transferred Interest in each
Receivable, together with Related Security, the Required Currency Hedge,
Collections and Proceeds with respect thereto, shall at all times be equal to
the Transferred Interest in each other Receivable, together with Related
Security, the Required Currency Hedge, Collections and Proceeds with respect
thereto. To the extent that the Transferred Interest shall decrease as a result
of a recalculation of the Percentage Factor, the Initial Purchasers and/or the
PARCO APA Banks, as applicable, shall be considered to have reconveyed to the
Transferor an undivided percentage ownership interest in each Receivable,
together with Related Security, the Required Currency Hedge, Collections and
Proceeds with respect thereto, in an amount equal to such decrease such that, in
each case, the Transferred Interest in each Receivable shall be equal to the
Transferred Interest in each other Receivable.
"Transferred Receivables" shall have the meaning specified in
subsection 3.2(b) of the Receivables Purchase Agreement.
"UCC" shall mean, with respect to any jurisdiction, the Uniform
Commercial Code as the same may, from time to time, be enacted and in effect in
such jurisdiction.
"Unfunded Pension Liability" shall mean, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits, all determined as of
the most recent valuation date for each such Title IV Plan using the actuarial
assumptions for funding purposes in effect under such Title IV Plan (and not the
assumptions used by the Pension Benefit Guaranty Corporation in calculating such
amounts), and (b) for a period of five years following a transaction that might
reasonably be expected to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by a Seller or any ERISA
Affiliate as a result of such transaction.
"Unused Fee" shall have the meaning specified in subsection 2.4(c) of
the Receivables Transfer Agreement.
"Unused Fee Rate" shall have the meaning as defined in each Fee
Letter.
"U.S." or "United States" means the United States of America and its
territories.
39
"U.S. Dollar Collection Account" shall have the meaning specified in
subsection 2.12(a) of the Receivables Transfer Agreement.
"Utilization Fee" shall have the meaning specified in subsection
2.4(b) of the Receivables Transfer Agreement.
"Utilization Fee Rate" shall have the meaning as defined in each Fee
Letter.
"Valuation Price" shall mean as of any date of determination, the
strike price of any outstanding Required Currency Hedge that would require the
highest amount of Canadian Dollars to purchase one U.S. Dollar.
"Weekly Report" shall mean a report, in substantially the form
attached to the Receivables Transfer Agreement as Exhibit E or in such other
form as is mutually agreed to by the Transferor and the Funding Agents,
delivered by (i) the Sellers to the Purchaser and the Administrative Agent
pursuant to Section 7.1(f) of the Receivables Purchase Agreement and (ii) by the
Collection Agent to the Administrative Agent pursuant to Section 2.11 of the
Receivables Transfer Agreement.
"Weekly Report Date" shall mean the second Business Day following the
last Business Day of the preceding week.
"Weekly Settlement Period" shall mean the period of days from and
including the Sunday of any calendar week to and including the Saturday of the
same calendar week.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Year 2000 Compliant" shall mean that neither performance nor
functionality of any computer hardware or software is materially affected by
dates prior to, during or after the year 2000, and in particular that (i) no
value for any current date causes any material interruption in operation, (ii)
date-based functionality behaves consistently for dates prior to, during and
after the year 2000, (iii) in all interfaces and data storage, the century in
any date is specified either explicitly or by unambiguous algorithms or
interfacing rules and (iv) the year 2000 is recognized as a leap year.
"Yield" shall mean the Redwood Yield and the Liberty Yield.
40
Schedule I
Determination of "Redwood Yield"
REDWOOD YIELD = Sum of Daily Yields for each day in the
Settlement Period
1. Daily Yield = CP Interest Amount + Liquidity Interest
Amount + LOC Interest Amount + Margin Amount
2. Daily Yield Rate = (Daily Yield/Redwood Net Investment) x 360
3. CP Interest Amount = Carcorp CP Net Amount x Daily Weighted
Average CP Rate x Redwood Funding Factor
3a. Carcorp CP Net Amount = Redwood Net Investment - Carcorp Liquidity
Loans Outstanding + Carcorp Liquidity
Deposits - Carcorp LOC Draws Outstanding +
Carcorp LOC Deposits
3b. Weighted Average
CP Rate = Average of the rate of interest for all
tranches of CP Outstanding issued by
Redwood, weighted by CP issued by Redwood
Outstanding in each tranche
3c. Daily Weighted
Average CP Rate = Weighted Average CP Rate/360
3d. Redwood Funding
Factor = Net Proceeds Amount/Aggregate CP Net Amount
4. Liquidity Interest
Amount = Carcorp Outstanding Liquidity Loans x
(Liquidity Interest Rate/360)
5. LOC Interest Amount = Carcorp LOC Draws Outstanding x Carcorp
Daily LOC Rate
5a. Carcorp Daily LOC
Rate = (CP Interest Amount + Liquidity Interest
Amount) /Carcorp Senior Debt
6. Margin Amount = Prior to a Redwood Termination Event or a
Termination Event: Redwood Net Investment x
Daily Margin
Subsequent to a Redwood Termination Event or
a Termination Event: Redwood Net Investment
x Daily Default Margin
Definitions
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in Annex X.
"Aggregate CP Net Amount" shall mean the sum of the CP Net Amounts for
all Borrowers and Sellers.
"Borrower" shall have the meaning assigned to it in the Redwood
Liquidity Loan Agreement.
"Carcorp CP Net Amount" shall mean the CP Net Amount with respect to
the Transferor.
"Carcorp Liquidity Deposits" shall have the meaning assigned to it in
the Redwood Liquidity Loan Agreement.
"Carcorp Liquidity Loans Outstanding" shall have the meaning assigned
to it in the Redwood Liquidity Loan Agreement.
"Carcorp LOC Deposits" shall have the meaning assigned to it in the
Redwood Liquidity Loan Agreement.
"Carcorp LOC Draws Outstanding" shall have the meaning assigned to it
in the Redwood Liquidity Loan Agreement.
"Carcorp Senior Debt" shall mean the sum of Carcorp CP Net Amount and
Carcorp Liquidity Loans Outstanding.
"CP Net Amount" shall mean, with respect to any Borrower or Seller, an
amount equal to the equivalent (for that Borrower or Seller) of (a) Redwood Net
Investment, minus (b) Carcorp Liquidity Loans Outstanding, plus (c) Carcorp
Liquidity Deposits, minus (d) Carcorp LOC Draws Outstanding, plus (e) Carcorp
LOC Deposits.
"Daily Margin" shall mean a per diem percentage rate at any time
during a Settlement Period equal to (a) 0.70% divided by (b) 360.
"Daily Default Margin" shall mean per diem percentage rate at any time
during a Settlement Period equal to (a) the Daily Margin for such Settlement
Period plus (b)(i) two percent (2.0%) divided by (ii) 360.
"Liquidity Interest Rate" shall have the meaning assigned to it in the
Redwood Liquidity Loan Agreement.
"Net Proceeds Amount" shall have the meaning assigned to it in the
Redwood Liquidity Loan Agreement.
"Seller" shall have the meaning assigned to it in the Redwood
Liquidity Loan Agreement.
ii
SCHEDULE I
LIST OF
INITIAL PURCHASERS,
LIQUIDITY BANKS, FUNDING AGENTS,
FACILITY LIMIT, PURCHASE LIMITS
AND COMMITMENTS
Initial Purchaser Liquidity Bank Funding Agent Purchase Limit Commitment
----------------- -------------- ------------- -------------- --------------
Park Avenue The Chase The Chase $57,189,542.48 $58,333,333.33
Receivables Manhattan Manhattan (Chase's
Corporation Bank Bank Commitment)
Redwood N/A General Electric $57,189,542.48 $58,905,228.75
Receivables Capital (Redwood's
Corporation Corporation Commitment)
Liberty Street The Bank of $57,189,542.48 $58,333,333.33
Funding Corp. Nova Scotia (Liberty's
Commitment)
Facility Limit = $171,568,627.44
SCHEDULE II
EQUIPMENT AND SOFTWARE
SCHEDULE III
LIST OF C&A FISCAL PERIODS FOR THE YEAR 2000
-------------------------------------------- ------------------------------------------
1ST QUARTER 2ND QUARTER
-------------------------------------------- ------------------------------------------
FIRST PERIOD FOURTH PERIOD
-------------------------------------------- ------------------------------------------
MONTH SUN MON TUES WED THUR FRI SAT MONTH SUN MON TUES WED THUR FRI SAT
-------------------------------------------- ------------------------------------------
DEC 25 27 28 29 30 31 MAR 27 28 29 30 31
-------------------------------------------- ------------------------------------------
JAN 1 APR 1
-------------------------------------------- ------------------------------------------
2 3 4 5 6 7 8 2 3 4 5 6 7 8
-------------------------------------------- ------------------------------------------
9 10 11 12 13 14 15 9 10 11 12 13 14 15
-------------------------------------------- ------------------------------------------
16 17 18 19 20 21 22 16 17 18 19 20 21 22
-------------------------------------------- ------------------------------------------
23 24 25 26 27 28 29 23 24 25 26 27 28 29
-------------------------------------------- ------------------------------------------
-------------------------------------------- ------------------------------------------
SECOND PERIOD FIFTH PERIOD
-------------------------------------------- ------------------------------------------
-------------------------------------------- ------------------------------------------
MONTH SUN MON TUES WED THUR FRI SAT MONTH SUN MON TUES WED THUR FRI SAT
-------------------------------------------- ------------------------------------------
JAN 30 31 APR 30
-------------------------------------------- ------------------------------------------
FEB 1 2 3 4 5 MAY 1 2 3 4 5 6
-------------------------------------------- ------------------------------------------
6 7 8 9 10 11 12 7 8 9 10 11 12 13
-------------------------------------------- ------------------------------------------
13 14 15 16 17 18 19 14 15 16 17 18 19 20
-------------------------------------------- ------------------------------------------
20 21 22 23 24 25 26 21 22 23 24 25 26 27
-------------------------------------------- ------------------------------------------
-------------------------------------------- ------------------------------------------
THIRD PERIOD SIXTH PERIOD
-------------------------------------------- ------------------------------------------
-------------------------------------------- ------------------------------------------
MONTH SUN MON TUES WED THUR FRI SAT MONTH SUN MON TUES WED THUR FRI SAT
-------------------------------------------- ------------------------------------------
FEB 27 28 29 MAY 28 29 30 31
-------------------------------------------- ------------------------------------------
MAR 1 2 3 4 JUNE 1 2 3
-------------------------------------------- ------------------------------------------
5 6 7 8 9 10 11 4 5 6 7 8 9 10
-------------------------------------------- ------------------------------------------
12 13 14 15 16 17 18 11 12 13 14 15 16 17
-------------------------------------------- ------------------------------------------
19 20 21 22 23 24 25 18 19 20 21 22 23 24
-------------------------------------------- ------------------------------------------
-------------------------------------------- ------------------------------------------
3RD QUARTER 4TH QUARTER
-------------------------------------------- ------------------------------------------
SEVENTH PERIOD TENTH PERIOD
-------------------------------------------- ------------------------------------------
MONTH SUN MON TUES WED THUR FRI SAT MONTH SUN MON TUES WED THUR FRI SAT
-------------------------------------------- ------------------------------------------
JUNE 25 26 27 28 29 30 SEPT 24 25 26 27 28 29 30
-------------------------------------------- ------------------------------------------
JULY 1 OCT 1 2 3 4 5 6 7
-------------------------------------------- ------------------------------------------
2 3 4 5 6 7 8 8 9 10 11 12 13 14
-------------------------------------------- ------------------------------------------
9 10 11 12 13 14 15 15 16 17 18 19 20 21
-------------------------------------------- ------------------------------------------
16 17 18 19 20 21 22 22 23 24 25 26 27 28
-------------------------------------------- ------------------------------------------
23 24 25 26 27 28 29
-------------------------------------------- ------------------------------------------
-------------------------------------------- ------------------------------------------
EIGHTH PERIOD ELEVENTH PERIOD
-------------------------------------------- ------------------------------------------
MONTH SUN MON TUES WED THUR FRI SAT MONTH SUN MON TUES WED THUR FRI SAT
-------------------------------------------- ------------------------------------------
JULY 30 31 OCT 29 30 31
-------------------------------------------- ------------------------------------------
AUG 1 2 3 4 5 NOV 1 2 3 4
-------------------------------------------- ------------------------------------------
6 7 8 9 10 11 12 5 6 7 8 9 10 11
-------------------------------------------- ------------------------------------------
13 14 15 16 17 18 19 12 13 14 15 16 17 18
-------------------------------------------- ------------------------------------------
20 21 22 23 24 25 26 19 20 21 22 23 24 25
-------------------------------------------- ------------------------------------------
-------------------------------------------- ------------------------------------------
NINTH PERIOD TWELFTH PERIOD
-------------------------------------------- ------------------------------------------
MONTH SUN MON TUES WED THUR FRI SAT MONTH SUN MON TUES WED THUR FRI SAT
-------------------------------------------- ------------------------------------------
AUG 27 27 29 30 31 NOV 26 27 28 29 30
-------------------------------------------- ------------------------------------------
SEPT 1 2 DEC 1 2
-------------------------------------------- ------------------------------------------
3 4 5 6 7 8 9 3 4 5 6 7 8 9
-------------------------------------------- ------------------------------------------
10 11 12 13 14 15 16 10 11 12 13 14 15 16
-------------------------------------------- ------------------------------------------
17 18 19 20 21 22 23 17 18 19 20 21 22 23
-------------------------------------------- ------------------------------------------
24 25 26 27 28 29 30
-------------------------------------------- ------------------------------------------
SCHEDULE 3.1(Q)
MATERIAL ADVERSE EFFECT
None
--------------------------------------------------------------------
RECEIVABLES PURCHASE AGREEMENT
Among
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.
AND ITS WHOLLY-OWNED
DIRECT AND INDIRECT
SUBSIDIARIES NAMED HEREIN,
AS SELLERS
AND
CARCORP, INC.,
AS PURCHASER
AND THE OTHER SELLERS FROM TIME TO TIME
NAMED HEREIN
DATED AS OF DECEMBER 27, 1999
-------------------------------------------------------------------
ARTICLE I
DEFINITIONS..............................................................1
SECTION 1.1. DEFINITIONS................................................1
SECTION 1.2. OTHER TERMS................................................1
SECTION 1.3. COMPUTATION OF TIME PERIODS................................2
ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES........................2
SECTION 2.1. SALES......................................................2
ARTICLE III
CONSIDERATION AND PAYMENT; REPORTING; ADMINISTRATION.....................3
SECTION 3.1. PURCHASE PRICE.............................................3
SECTION 3.2. PAYMENT OF PURCHASE PRICE..................................3
SECTION 3.3. SETTLEMENT REPORT..........................................4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES...........................................4
SECTION 4.1. SELLERS' REPRESENTATIONS AND WARRANTIES....................4
SECTION 4.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES BY THE
SELLERS; NOTICE OF BREACH..................................9
ARTICLE V
COVENANTS OF THE SELLERS.................................................9
SECTION 5.1. COVENANTS OF THE SELLERS...................................9
ARTICLE VI
REPURCHASE OBLIGATION...................................................15
SECTION 6.1. MANDATORY REPURCHASE......................................15
SECTION 6.2. DILUTIONS, ETC............................................15
ARTICLE VII
CONDITIONS PRECEDENT....................................................15
SECTION 7.1. CONDITIONS PRECEDENT TO PURCHASER'S PURCHASES OF
RECEIVABLES...............................................15
SECTION 7.2. CONDITIONS PRECEDENT TO THE ADDITION OF A SELLER..........16
ARTICLE VIII
SELLER NOTE.............................................................19
SECTION 8.1. SELLER NOTE...............................................19
SECTION 8.2. SOLE AND EXCLUSIVE REMEDY/SUBORDINATION...................19
SECTION 8.3. OFFSETS, ETC..............................................19
ARTICLE IX
TERM AND TERMINATION....................................................20
SECTION 9.1. TERM......................................................20
SECTION 9.2. EFFECT OF TERMINATION.....................................20
ARTICLE X
MISCELLANEOUS PROVISIONS................................................21
SECTION 10.1. AMENDMENTS, ETC...........................................21
SECTION 10.2. GOVERNING LAW; SUBMISSION TO JURISDICTION.................21
SECTION 10.3. NOTICES...................................................21
SECTION 10.4. SEVERABILITY OF PROVISIONS................................22
SECTION 10.5. ASSIGNMENTS GENERALLY.....................................23
SECTION 10.6. FURTHER ASSURANCES........................................23
SECTION 10.7. NO WAIVER; CUMULATIVE REMEDIES............................23
SECTION 10.8. COUNTERPARTS..............................................23
SECTION 10.9. BINDING EFFECT; THIRD-PARTY BENEFICIARIES.................23
SECTION 10.10.MERGER AND INTEGRATION....................................23
SECTION 10.11 HEADINGS..................................................24
SECTION 10.12.EXHIBITS..................................................24
SECTION 10.13.ADDITION OF SELLERS.......................................24
EXHIBITS
EXHIBIT A Principal Place of Business, Chief Executive Office and
Location of Records..............................................A-1
EXHIBIT B Form of Seller Note..............................................B-1
EXHIBIT C Form of Additional Seller Supplement.............................C-1
EXHIBIT D Sellers..........................................................D-1
SCHEDULE 4.1(e) Material Adverse Effect
SCHEDULE 4.1(h) Litigation
ii
RECEIVABLES PURCHASE AGREEMENT
This RECEIVABLES PURCHASE AGREEMENT, dated as of December 27, 1999 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), among ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO., a Delaware corporation
("C&A"), as a seller, C&A's wholly-owned direct and indirect Subsidiaries listed
on Exhibit D hereto as sellers (C&A and such Subsidiaries are each referred to
herein as a "Seller", and, together with the other sellers that become parties
hereto pursuant to the terms of this Agreement, the "Sellers") and CARCORP,
INC., a Delaware corporation, as purchaser (in such capacity, the "Purchaser").
W I T N E S S E T H :
WHEREAS, the Purchaser desires to purchase from time to time certain
rights to receive and related assets existing on the Closing Date and thereafter
until the Purchase Termination Date; and
WHEREAS, the Sellers desire to sell and assign from time to time such
rights to receive and related assets to the Purchaser upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed by and among
the Purchaser and the Sellers as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All capitalized terms used herein have the
meanings specified herein or, if not so specified, the meaning specified in, or
incorporated by reference into, Annex X to the Receivables Transfer Agreement,
dated as of December 27, 1999 (as amended, supplemented or otherwise modified
and in effect from time to time, the "Receivables Transfer Agreement"), by and
among the Purchaser, as Transferor thereunder, C&A, as Guarantor and as
Collection Agent thereunder, the Initial Purchasers, the Liquidity Banks, The
Chase Manhattan Bank, as Administrative Agent thereunder, and the Funding
Agents.
SECTION 1.2. Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, consistently applied.
All terms used in Article 9 of the Relevant UCC, and not specifically defined
herein, are used herein as defined in such Article 9.
SECTION 1.3. 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 means "to but excluding," and the word "within" means
"from and excluding a specified date and to and including a later specified
date."
ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES
SECTION 2.1. Sales.
(a) Upon the terms and subject to the conditions set forth herein,
each Seller hereby sells, assigns, transfers and conveys to the Purchaser, and
the Purchaser hereby purchases from each Seller, all of such Seller's right,
title and interest, whether now owned or hereafter acquired and wherever
located, in, to and under such Seller's Receivables outstanding on the Closing
Date and thereafter owned by such Seller through any Purchase Termination Date,
together with all Related Security and Collections with respect thereto and all
Proceeds of the foregoing. Such undivided interest in the Receivables, expressed
as a Dollar amount, shall be equal to the Outstanding Balance of the Receivables
from time to time. Any sale, assignment, transfer and conveyance hereunder does
not constitute an assumption by the Purchaser of any obligations of the Sellers
or any other Person to the Obligors or to any other Person in connection with
the Receivables or under any Related Security or any other agreement or
instrument relating to the Receivables.
(b) Each Seller agrees to record and file on or prior to the Closing
Date, at its own expense, a financing statement or statements (or other similar
filings) with respect to such Seller's Receivables and the other property
described in Section 2.1(a) sold by such Seller hereunder meeting the
requirements of applicable law in such manner and in such jurisdictions as are
necessary to perfect and protect the interests of the Purchaser created hereby
under the Relevant UCC or other applicable laws against all creditors of, and
purchasers from, such Seller, and to deliver either the originals of such
financing statements (or other similar filings) or a file-stamped copy of such
financing statements (or other similar filings) or other evidence of such
filings to the Purchaser on or prior to the Closing Date.
(c) Each Seller agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents and take all
actions as may be necessary or as the Purchaser may reasonably request in order
to perfect or protect the interest of the Purchaser in the Receivables purchased
hereunder or to enable the Purchaser to exercise or enforce any of its rights
hereunder. Without limiting the foregoing, each Seller will, in order to
accurately reflect this purchase and sale transaction, execute and file such
financing or continuation statements or amendments thereto or assignments
thereof (as permitted pursuant hereto) as may be requested by the Purchaser and
▇▇▇▇ its respective master data processing records (or related subledger) with a
legend describing the purchase by the Purchaser of such Seller's Receivables and
the lien of the Administrative Agent pursuant to the Receivables Transfer
Agreement and stating "An interest in these rights to receive has been granted
to The Chase Manhattan Bank, as
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Administrative Agent, on behalf of the Initial Purchasers, the Liquidity Banks
and the Funding Agents, pursuant to a Receivables Transfer Agreement dated as of
December 27, 1999." Each Seller shall, upon request of the Purchaser, obtain
such additional search reports as the Purchaser shall reasonably request. To the
fullest extent permitted by applicable law, the Purchaser shall be permitted to
sign and file continuation statements and amendments thereto and assignments
thereof without any Seller's signature. Carbon, photographic or other
reproduction of this Agreement or any financing statement shall be sufficient as
a financing statement.
(d) It is the express intent of the Sellers and the Purchaser that
each conveyance of the Receivables by a Seller to the Purchaser pursuant to this
Agreement be construed as a sale of such Receivables by such Seller to the
Purchaser. Further, it is not the intention of the Sellers and the Purchaser
that such conveyance be deemed a grant of a security interest in the Receivables
by any Seller to the Purchaser to secure a debt or other obligation of such
Seller. However, in the event that, notwithstanding the intent of the parties,
any Seller's Receivables are construed to constitute property of the applicable
Seller, then (i) this Agreement also shall be deemed to be, and hereby is, a
security agreement within the meaning of the Relevant UCC or other applicable
laws; and (ii) any of the conveyances by a Seller provided for in this Agreement
shall be deemed to be, and such Seller hereby grants to the Purchaser, a
security interest in, to and under all of such Seller's right, title and
interest in, to and under such Seller's Receivables, together with all Related
Security and Collections with respect thereto and all Proceeds of the foregoing
(the "Seller Collateral"), to secure the rights of the Purchaser set forth in
this Agreement or as may be determined in connection therewith by applicable
law. The Sellers and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Receivables, such
security interest would be deemed to be a perfected security interest in favor
of the Purchaser under applicable law and will be maintained as such throughout
the term of this Agreement.
ARTICLE III
CONSIDERATION AND PAYMENT; REPORTING; ADMINISTRATION
SECTION 3.1. Purchase Price. The purchase price for the Receivables
and related property conveyed to the Purchaser by the Sellers under this
Agreement on any Business Day shall be a Dollar amount equal to the product of
(i) the aggregate Outstanding Balance of the Receivables sold on such Business
Day, and (ii) one minus the then applicable Purchase Discount (the "Purchase
Price").
SECTION 3.2. Payment of Purchase Price.
(a) The Purchase Price for each Receivable sold hereunder on any
Business Day shall be paid or provided for on such Business Day (i) by payment
in immediately available funds to the extent such funds are available in excess
of necessary working capital, (ii) with respect to Receivables sold by C&A to
the Purchaser hereunder, with the consent of C&A, by means of capital
contributed by C&A to the Purchaser in the form of a contribution of the
additional Receivables, (iii) at the option of the Collection Agent, on behalf
of the applicable
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Seller, (subject to the provisions of Article VIII), by means of an addition to
the principal amount of the applicable Seller Note in an aggregate amount up to
the remaining portion of the Purchase Price (each, an "Advance"); provided,
however, that the aggregate amount of all Seller Notes on any Business Day shall
not exceed 49% of (x) the aggregate Purchase Price of the Receivables purchased
hereunder existing on such Business Day minus (y) an amount equal to the
Aggregate Net Investment (the "Advance Limit") or (iv) any combination of the
foregoing. The Collection Agent may evidence such additional principal amounts
by recording the date and amount thereof on the grid attached to the applicable
Seller Note; provided, however, that the failure to make any such recordation or
any error in such grid shall not adversely affect any Seller's rights. No sales
of Receivables shall be made hereunder on and after the Purchase Termination
Date.
(b) The Receivables with respect to which the Purchase Price therefor
is paid pursuant to Section 3.2(a)(i) and (iii) are referred to herein as
"Purchased Receivables" and the Receivables with respect to which the Purchase
Price therefor is paid pursuant to Section 3.2(a)(ii) are referred to herein as
"Contributed Receivables." The Purchased Receivables and the Contributed
Receivables are collectively referred to herein as the "Transferred
Receivables."
(c) The Collection Agent shall be responsible, in its sole discretion
but in accordance with subsection 3.2(a), for allocating among the Sellers the
payment of the Purchase Price for Receivables either in the form of cash
received from the Purchaser or as an addition to the principal amount of the
applicable Seller Note. The Purchaser shall be entitled to pay all amounts in
respect of the Purchase Price of Receivables and Related Security to an account
of the Collection Agent for allocation by the Collection Agent to the Sellers,
and each of the Sellers hereby appoints the Collection Agent as its agent for
the purposes of receiving such payments and making such allocations and hereby
authorizes the Purchaser to make all payments due to such Seller directly to, or
as directed by, the Collection Agent. The Collection Agent hereby accepts and
agrees to such appointment. All payments under this Agreement shall be made not
later than 3:00 p.m. (New York City time) on the date specified therefor in
Dollars in same day funds or by check, as the Collection Agent shall elect and
to the bank account designated in writing by the Collection Agent to the
Purchaser.
SECTION 3.3. Settlement Report. On the Monthly Settlement Report Date
of each of C&A's fiscal months, C&A shall deliver to the Purchaser a monthly
report, substantially in the form of Exhibit D attached to the Receivables
Transfer Agreement, showing (i) the aggregate Purchase Price of Receivables
acquired or generated by the Sellers in the preceding month and (ii) the
aggregate Outstanding Balance of such Receivables that are Eligible Receivables.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Sellers' Representations and Warranties. Each Seller
severally represents and warrants to the Purchaser as of the Closing Date and on
each Business Day on which Receivables are sold hereunder by it with respect to
itself:
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(a) Corporate Existence and Power. Such Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is now conducted,
except where the failure to obtain such licenses, authorizations, consents and
approvals would not have a Material Adverse Effect. Such Seller is duly
qualified to do business in, and is in good standing in, every other
jurisdiction in which the nature of its business requires it to be so qualified,
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by such Seller of the Transaction Documents
to which it is a party (i) are within such Seller's corporate powers, (ii) have
been duly authorized by all necessary corporate action, (iii) require no action
by or in respect of, or filing with, any Official Body or official thereof
(except for the filing of UCC financing statements or similar filings under
applicable law as required by this Agreement or as have been taken or filed and,
with respect to filings other than UCC financing statements or similar filings
under applicable law, filings where the failure to file will not have a Material
Adverse Effect), (iv) do not contravene, or constitute a default under, any
provision of applicable Law or of the Certificate of Incorporation, Articles or
Bylaws, as applicable, of such Seller, (v) do not contravene or constitute a
default under any agreement or other instrument binding upon such Seller except
where such contravention or default would not have a Material Adverse Effect, or
(vi) result in the creation or imposition of any Adverse Claim on the assets of
such Seller, or any of its Affiliates (except those created by this Agreement).
(c) Valid Sale; Binding Effect. Each purchase of Receivables and
Related Security by the Purchaser hereunder shall constitute a valid sale and
assignment by the applicable Seller to the Purchaser, enforceable against
creditors of, and purchasers from, such Seller, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of
creditors and general equitable principles (whether considered in a proceeding
at law or in equity). Each of the Transaction Documents to which such Seller is
a party will constitute the legal, valid and binding obligation of such Seller,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of creditors
and general equitable principles (whether considered in a proceeding at law or
in equity). The security interest granted to the Purchaser by such Seller
pursuant to Section 2.1(d) will at all times be a fully perfected first priority
security interest in and to the Seller Collateral transferred by such Seller.
(d) Quality of Title. Immediately preceding the sale by it of
Receivables, Related Security, Collections with respect thereto and all Proceeds
of the foregoing pursuant to this Agreement, such Seller was the owner of all of
its Receivables, free and clear of all Adverse Claims. On or prior to the date
hereof and on or prior to each Business Day on which Receivables are sold by it
hereunder, (i) all financing statements and other documents required to be
recorded or filed in order to perfect and protect the interest of the Purchaser
in, to and under the Receivables against all creditors of and purchasers from
the applicable Seller will have been duly filed in each filing office necessary
for such purpose and all filing fees and taxes, if any,
5
payable in connection with such filings shall have been paid in full, and (ii)
Purchaser will either acquire (A) valid title to and the sole record and
beneficial ownership in, or (B) a first priority perfected security interest in,
each such Receivable purchased, assigned or otherwise acquired on such date, in
each case free and clear of any Adverse Claim or restrictions on
transferability. None of the Seller Collateral has been sold, assigned or
otherwise disposed of other than pursuant hereto and the Receivables Transfer
Agreement and there are no Adverse Claims upon or with respect to the Seller
Collateral other than pursuant hereto and the Receivables Transfer Agreement.
(e) Material Adverse Effect. Commencing on the last day of the 1998
fiscal year of C&A and ending on the Closing Date, (i) such Seller has not
incurred any obligations, contingent or non-contingent liabilities, liabilities
for Charges, long-term leases or unusual forward or long-term commitments that,
alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, other than, with respect to a Material Adverse Effect as listed
on Schedule 4.1(e), (ii) no contract, lease or other agreement or instrument has
been entered into by such Seller or has become binding upon such Seller's assets
and no law or regulation applicable to such Seller has been adopted that has had
or could reasonably be expected to have a Material Adverse Effect on such
Seller, and (iii) such Seller is not in default and to the knowledge of such
Seller, no third party is in default under any material contract, lease or other
agreement or instrument to which such Seller is a party that alone or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
Commencing on the last day of the 1998 fiscal year of C&A and ending on the
Closing Date no event has occurred that alone or together with other events
could reasonably be expected to have a Material Adverse Effect, other than, with
respect to a Material Adverse Effect with respect to such Seller as listed on
Schedule 4.1(e).
(f) Accuracy of Information. All information heretofore furnished by
such Seller to the Purchaser and the Funding Agents for purposes of or in
connection with this Agreement, any other Transaction Document, or any
transaction contemplated hereby or thereby is, and all such information
hereafter furnished by such Seller to the Purchaser, the Funding Agents, the
Initial Purchasers and the PARCO APA Banks will be, true and accurate in every
material respect, on the date such information is stated or certified.
(g) Tax Status. Such Seller has withheld or deducted and remitted all
amounts required to be withheld or deducted and remitted by the applicable
legislation, and has filed all tax returns (Federal, State, Provincial and
local) required to be filed by it and has paid or made adequate provision for
the payment of all taxes, assessments and other governmental charges (including
for such purposes, the setting aside of appropriate reserves for taxes,
assessments and other governmental charges being contested in good faith).
(h) Action, Suits. There are no actions, suits or proceedings
pending, or to the knowledge of such Seller threatened, against or affecting
such Seller or any Affiliate of such Seller or their respective properties, in
or before any court, arbitrator or other body ("Litigation"), which may,
individually or in the aggregate, have a Material Adverse Effect or that involve
this Agreement or the transactions contemplated hereby. Schedule 4.1(h) sets
forth
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all Litigation that seeks damages in excess of $5,000,000, except to the extent
an insurance carrier has accepted a claim for coverage.
(i) Place of Business. The principal place of business and chief
executive office of such Seller are located at the addresses described on
Exhibit A hereof, and the offices where such Seller keeps all of its Records and
Related Security thereof are located at the addresses described on Exhibit A
hereof, or such other locations notified to the Purchaser in accordance with
this Agreement in jurisdictions where all action required by the terms of this
Agreement has been taken and completed.
(j) Solvency. Both before and after giving effect to (i) the
transactions contemplated by the Transaction Documents and (ii) the payment and
accrual of all transaction costs in connection with the foregoing, such Seller
is not and will not be insolvent, does not, and will not, have unreasonably
small capital with which to carry on its business, is, and will be, able to pay
its debts generally as they become due and payable, and its liabilities do not,
and will not, exceed its assets.
(k) Tradenames, Etc. As of the date hereof: (i) such Seller has only
the subsidiaries and divisions listed on Exhibit K to the Receivables Transfer
Agreement; and (ii) such Seller has, within the last five (5) years, operated
only under the tradenames identified on Exhibit K to the Receivables Transfer
Agreement, and, within the last five (5) years, has not changed its name, merged
with or into or consolidated with any other corporation or been the subject of
any proceeding under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (Bankruptcy), except as
disclosed in Exhibit K to the Receivables Transfer Agreement.
(l) Nature of Receivables. Each Receivable sold by such Seller to the
Purchaser hereunder is an Eligible Receivable. Each Receivable sold by such
Seller and included in the calculation of the Net Receivables Balance in fact
satisfies at such time the definition of "Eligible Receivable" and is an
"eligible asset" as defined in Rule 3a-7 under the Investment Company Act of
1940, as amended, and is not a Defaulted Receivable.
(m) Credit and Collection Policy. Since the end of the Seller's
fiscal period ending in September 1999, there have been no material changes in
the Credit and Collection Policy other than as permitted hereunder. Since such
date, no material adverse change has occurred in the overall rate of collection
of the Receivables sold by it.
(n) Collections and Servicing. Since the end of the Seller's fiscal
period ending in September 1999, there has been no material adverse change in
the ability of such Seller to service and collect its Receivables.
(o) Binding Effect of Receivables and Contract. Each Receivable and
related Contract sold by it constitutes a legal, valid and binding obligation of
the related Obligor, enforceable against the related Obligor, subject to
applicable bankruptcy, insolvency, moratorium or similar laws affecting the
rights of creditors and general equity principles (whether considered in a
proceeding at law or in equity).
7
(p) Not an Investment Company. Such Seller is not, nor is such Seller
controlled by, an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," within the
meaning of the Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(q) ERISA. To the extent applicable, such Seller and its ERISA
Affiliates are in compliance in all material respects with ERISA and the
provisions of the Code that are applicable to ERISA, and no lien exists in favor
of the Pension Benefit Guaranty Corporation on any of the Receivables. There are
no pending or, to the knowledge of such Seller, threatened claims (other than
claims for benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against such Plan of such Seller or its ERISA Affiliates
or any Person as fiduciary or sponsor of any such Plan of such Seller or its
ERISA Affiliates. No ERISA Event has occurred with respect to Title IV Plans of
such Seller or its ERISA Affiliates that have an aggregate Unfunded Pension
Liability equal to or greater than $10,000,000.
(r) Lock-Box Accounts. The names and addresses of all the Lock-Box
Banks, together with the account numbers of the Lock-Box Accounts at such Lock-
Box Banks, are specified in Exhibit B to the Receivables Transfer Agreement (or
at such other Lock-Box Banks and/or with such other Lock-Box Accounts, as have
been notified to the Administrative Agent and for which Lock-Box Agreements have
been executed in accordance with Section 2.8(b) of the Receivables Transfer
Agreement and delivered to the Collection Agent, the Administrative Agent and
the Funding Agents). All Obligors (or their designees) have been instructed to
cause all payments to be made to a Lock-Box Account.
(s) Bulk Sales. No transaction contemplated by this Agreement or the
other Transaction Documents requires compliance with any bulk sales act or
similar law.
(t) Year 2000 Plan. Such Seller has reviewed the areas within its
business and operations which it believes would reasonably be expected to be
materially adversely by, and has developed a plan to address on a timely basis,
the "Year 2000 Problem" (that is, the risk that computer applications used by
such Seller may be unable to recognize and perform properly date-sensitive
functions involving certain dates occurring in or after the year 2000).
(u) Full Disclosure. No information contained in this Agreement, any
of the other Transaction Documents, the Senior Credit Facility Confidential
Information Memorandum, the Rating Agency Book or, since January 1, 1999, any
registration statement or annual, quarterly, monthly or other regular report
which such Seller or any of its Affiliates filed with the Securities and
Exchange Commission contains any untrue statement of a material fact (taken as a
whole) nor has such Seller or its Affiliates failed to provide to the Purchaser,
the Administrative Agent, the Initial Purchasers, the Funding Agents or the
Liquidity Banks any material information necessary to make information provided
by such Seller or its Affiliates in such documents or filings (taken as a whole)
not misleading in any material respect in light of the circumstances under, and
for the purposes for, which such information was provided; provided, however,
that this representation or warranty shall not relate to any projections or
forward looking statements in any such documents provided by such Seller or its
Affiliates.
8
SECTION 4.2. Reaffirmation of Representations and Warranties by the
Sellers; Notice of Breach. On the Closing Date and on each Business Day on which
Receivables are sold by a Seller hereunder, such Seller shall be deemed to have
certified that all representations and warranties described in Section 4.1 are
true and correct on and as of such day as though made on and as of such day. The
representations and warranties set forth in Section 4.1 shall survive (i) the
conveyance of the Receivables to the Purchaser, (ii) the termination of the
rights and obligations of the Purchaser and the Sellers under this Agreement and
(iii) the termination of the rights and obligations of the Transferor, C&A, the
Administrative Agent and the Funding Agents under the Receivables Transfer
Agreement. Upon discovery by the Purchaser or any Seller of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give written notice to the others by the end of the Business Day of such
discovery.
ARTICLE V
COVENANTS OF THE SELLERS
SECTION 5.1. Covenants of the Sellers. Each Seller hereby covenants
and agrees with the Purchaser that, for so long as this Agreement is in effect,
and until all Receivables, an interest in which has been sold to the Purchaser
pursuant hereto, shall have been paid in full or written-off as uncollectible,
and all amounts owed by such Seller pursuant to this Agreement have been paid in
full, unless the Purchaser otherwise consents in writing, such Seller covenants
and agrees as follows:
(a) Conduct of Business. Such Seller will, and will cause each of its
Subsidiaries to, (i) carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation, (ii) maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted to the extent that the
failure to maintain such authority would have a Material Adverse Effect, and
(iii) maintain its principal place of business and chief executive office and
the office at which it keeps its Records and Related Security at the locations
specified in Exhibit A, or upon 30 days' prior written notice to the Purchaser,
at such other locations in a jurisdiction where all action requested by the
Purchaser and the Administrative Agent pursuant to Section 4.1(d) shall have
been taken with respect to the Receivables and Related Security.
(b) Compliance with Laws. Such Seller will, and will cause each of
its Subsidiaries to (i) comply in all material respects with all Laws to which
it may be subject and (ii) perform each of its obligations under the Transaction
Documents, except, in each case, where the failure to so comply would not have a
Material Adverse Effect.
(c) Furnishing of Information and Inspection of Records. Such Seller
will furnish to the Purchaser from time to time such information with respect to
such Seller's Receivables as the Purchaser may reasonably request, including,
without limitation, listings identifying the Obligors and the Outstanding
Balance for each of its Receivables, together with
9
an aging of such Receivables. Such Seller will, at any time and from time to
time during regular business hours and upon reasonable notice permit the
Purchaser, or its agents or representatives, (i) to examine and make copies of
and abstracts from all Records and (ii) to visit the offices and properties of
such Seller for the purpose of examining such Records, and to discuss matters
relating to its Receivables or such Seller's performance hereunder and under the
other Transaction Documents to which such Seller is a party with any of the
officers, directors, employees or independent public accountants of such Seller
having knowledge of such matters. Upon a Potential Termination Event or
Termination Event, the Initial Purchasers, the PARCO APA Banks, Funding Agents
and Administrative Agent shall, without notice, have immediate access to all
Records and to visit the offices and properties of each Seller.
(d) Keeping of Records and Books of Account. Such Seller will
maintain a system of accounting established and administered in accordance with
GAAP, consistently applied, and will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain, or obtain, as and when required, all Records
and all documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
(i) records adequate to permit the daily identification of each Receivable and
all Collections of and adjustments to each existing Receivable and (ii) records
of all payments received, credits granted and merchandise returned with respect
thereto). Such Seller will give the Purchaser prompt notice of any material
change in the administrative and operating procedures referred to in the
previous sentence.
(e) Communication with Accountants. Such Seller authorizes the
Purchaser, the Collection Agent, the Administrative Agent and each Funding Agent
to communicate directly with its independent certified public accountants, and
authorizes and shall instruct those accountants and advisors to disclose and
make available to the Purchaser, the Collection Agent, the Administrative Agent
and each Funding Agent any and all financial statements and other supporting
financial documents, schedules and information relating to such Seller
(including copies of any issued management letters) with respect to the
business, financial condition and other affairs of such Seller. Such Seller
agrees to render the Purchaser, the Collection Agent, the Administrative Agent
and each Funding Agent at such Person's own cost and expense, such clerical and
other assistance as may be reasonably requested with regard to the foregoing. If
any Potential Termination Event or Termination Event shall have occurred and be
continuing, such Seller shall, promptly upon request therefor, assist the
Purchaser in delivering to the Administrative Agent and the Funding Agents
Records reflecting activity through the close of business on the Business Day
immediately preceding the date of such request.
(f) Performance and Compliance with Receivables and Contracts. Such
Seller at its expense will 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 Receivables.
(g) Credit and Collection Policy. Such Seller will comply in all
material respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.
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(h) Collections. Such Seller shall instruct all Obligors (or their
designees) to cause all Collections to be deposited directly to a Lock-Box
Account.
(i) Collections Received. Such Seller shall hold in trust, and
deposit immediately (but in any event no later one Business Day following its
receipt thereof) to a Lock-Box Account all Collections received from time to
time by such Seller.
(j) Sale Treatment. Such Seller agrees to treat each conveyance
hereunder for all purposes (including, without limitation, tax and financial
accounting purposes) as a sale and, to the extent any such reporting is
required, shall report the transactions contemplated by this Agreement on all
relevant books, records, tax returns, financial statements and other applicable
documents as a sale of the Receivables to the Purchaser.
(k) No Sales, Liens, Etc. Except as otherwise provided herein, such
Seller will not sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create any Adverse Claim upon (or the filing of any financing
statement) or with respect to (x) any of its Receivables, Related Security,
Required Currency Hedge, Collections or Proceeds with respect thereto, (y) any
inventory or goods, the sale of which may give rise to a Collection, or (z) any
Lock-Box Account to which any Collections of any of its Receivables are sent, or
assign any right to receive income in respect thereof.
(l) No Extension or Amendment of Receivables. Such Seller will not
extend, amend or otherwise modify the terms of any Receivable, or amend, modify
or waive any term or condition of any Contract related thereto, except as
provided in the Receivables Transfer Agreement or as contemplated by the Credit
and Collection Policy, without the prior written consent of the Purchaser and
each Funding Agent (which consent shall be obtained by the Administrative
Agent).
(m) No Change in Business or Credit and Collection Policy. Except as
provided in the Receivables Transfer Agreement, such Seller will not make any
change in the character of its business or in the Credit and Collection Policy,
which change would, in either case, impair the collectibility of any Receivable
or otherwise have a Material Adverse Effect.
(n) No Mergers, Etc. Such Seller will not, without the prior written
consent of each Funding Agent (which consent shall be obtained by the
Administrative Agent), (i) consolidate or merge with or into any other Person,
or (ii) sell, lease or transfer all or substantially all of its assets to any
other Person; provided, that a Seller may merge with or into another Seller or
with another Person if (A)(1) such Seller is the corporation surviving such
consolidation or merger or (2) the Person into or with which the Seller is
merged or consolidated is an Affiliate and the surviving corporation assumes in
writing all duties and liabilities of the Seller under the Transaction Documents
and (B) immediately after and giving effect to such consolidation or merger, no
Termination Event or Potential Termination Event shall have occurred and be
continuing under the Receivables Transfer Agreement.
(o) Change in Payment Instructions to Obligors; Deposits to Lock-Box
Accounts. Such Seller will not add or terminate, or make any change to, any
Lock-Box Account,
11
except in accordance with the Receivables Transfer Agreement. Such Seller will
use reasonable commercial efforts to not deposit or otherwise credit, or cause
or permit to be so deposited or credited, to any Lock-Box Account, cash or cash
proceeds other than Collections of Receivables and in any event shall segregate,
or cause to be segregated, any such cash or cash proceeds from Collections
within five (5) days of deposit or credit to any Lock-Box Account.
(p) Change of Name, Etc. Such Seller shall not change its name,
identity or structure or the location of its chief executive office, unless at
least ten (10) days prior to the effective date of any such change such Seller
delivers to the Purchaser and the Administrative Agent (i) such documents,
instruments or agreements, executed by the applicable Seller as are necessary to
reflect such change and to continue the perfection of the Purchaser's interest
in the Receivables, Related Security, Collections and Proceeds with respect
thereto and (ii) new or revised Lock-Box Agreements executed by the Lock-Box
Banks which reflect such change and enable the Administrative Agent, on behalf
of the Funding Agents, the Initial Purchasers and the PARCO APA Banks, to
exercise its rights under the Transaction Documents.
(q) Indemnification. Such Seller severally agrees to indemnify,
defend and hold the Purchaser harmless from and against any and all loss,
liability, damage, judgment, claim, deficiency, or expense (including interest,
penalties, reasonable attorneys' fees and amounts paid in settlement) to which
the Purchaser may become subject insofar as such loss, liability, damage,
judgment, claim, deficiency, or expense arises out of or is based upon a breach
by such Seller of its representations, warranties and covenants contained
herein, or any information certified in any schedule or certificate delivered by
such Seller hereunder or in connection with the Transaction Documents, being
untrue in any material respect at any time; provided that in no event shall this
Section 5.1(q) be construed to require a Seller to indemnify the Purchaser for
amounts related to the uncollectibility of any Receivable for credit-related
reasons pertaining to the related Obligor, including, but not limited to,
amounts that are required to be returned to the related Obligor as a voidable
preference. In addition, such Seller shall severally indemnify the
Administrative Agent, the Funding Agents, the Redwood Secured Parties, the
Initial Purchasers and each of the PARCO APA Banks from any and all losses,
claims, damages, liabilities or expenses incurred by any of them and resulting
from the failure of such Seller to be Year 2000 Compliant. Any indemnification
pursuant to this Section 5.1(q) shall be had only from the assets of the Sellers
and shall not be payable from Collections, except to the extent such Collections
are released to a Seller in accordance with the Receivables Transfer Agreement.
The obligations of the Sellers under this Section 5.1(q) shall be considered to
have been relied upon by the Purchaser, the Administrative Agent and the Funding
Agents and shall survive the execution, delivery, performance and termination of
this Agreement for a period of three (3) years following the Purchase
Termination Date, regardless of any investigation made by the Purchaser, the
Administrative Agent or the Funding Agents or on behalf of any of them.
(r) ERISA.
(i) To the extent applicable, such Seller will not (A) engage or
permit any of its ERISA Affiliates to engage in any prohibited transaction
(as defined in Section 4975 of the Code and Section 406 of ERISA) for which
an exemption is not available or has not previously been obtained from the
U.S. Department of Labor; (B) fail to make
12
any payments to any Multiemployer Plan that such Seller or any ERISA
Affiliate of such Seller is required to make under the agreement relating
to such Multiemployer Plan or any law pertaining thereto; (C) terminate any
Benefit Plan so as to result in any liability; or (D) permit to exist any
occurrence of any reportable event described in Title IV of ERISA, if such
prohibited transactions, failures to make payment, terminations and
reportable events described in clauses (A), (B), (C) and (D) above would in
the aggregate have a Material Adverse Effect.
(ii) To the extent applicable, such Seller will not permit to
exist any accumulated funding deficiency (as defined in Section 302(a) of
ERISA and Section 412(a) of the Code) or funding deficiency with respect to
any Benefit Plan other than a Multiemployer Plan.
(iii) To the extent applicable, such Seller will not cause or
permit it or any of its ERISA Affiliates to cause or permit the occurrence
of an ERISA Event with respect to Title IV Plans of such Seller or its
ERISA Affiliates that have an aggregate Unfunded Pension Liability equal to
or greater than $10,000,000.
(s) Insurance. Except to the extent failure to do so would not
reasonably be expected to cause a Material Adverse Effect, such Seller shall (i)
keep its insurable properties adequately insured at all times by financially
sound and responsible insurers and maintain such other insurance, to such extent
and against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies of the same or similar size in
the same or similar businesses, (ii) maintain in full force and effect public
liability insurance against claims for personal injury or death or property
damage occurring upon, on, about or in connection with the use of any properties
owned, occupied or controlled by it or any of its Subsidiaries, as the case may
be, in such amounts and with such deductibles as are customary with companies of
the same or similar size in the same or similar businesses and in the same
geographic area and (iii) maintain such other insurance as may be required by
Law, and will cause each of its Subsidiaries to do so.
(t) Notice of Material Event. Such Seller shall promptly inform the
Purchaser in writing of the occurrence of any event, circumstance or condition
that has had or could reasonably be expected to have a material adverse effect
with respect to such Seller, in each case setting forth the details thereof and
what action, if any, such Seller proposes to take with respect thereto.
(u) Capital Structure and Business. No Seller shall: (i) make any
changes in any of its business objectives, purposes or operations that could
have or result in a Material Adverse Effect or (ii) amend, supplement or
otherwise modify its certificate or articles of incorporation or bylaws in a
manner that could have or result in a Material Adverse Effect.
(v) Separate Existence. Such Seller shall at all times:
(i) maintain its own deposit account or accounts, separate from
those of the Purchaser, with commercial banking institutions and ensure
that the funds of such
13
Seller will not be diverted to the Purchaser or for other than corporate
uses of such Seller, nor will such funds be commingled with the funds of
the Purchaser;
(ii) to the extent that it shares the same officers or other
employees with the Purchaser, the salaries of and the expenses related to
providing benefits to such officers and other employees shall be fairly
allocated among such Seller and the Purchaser, and each such entity shall
bear its fair share of the salary and benefit costs associated with all
such common officers and employees;
(iii) to the extent that it jointly contracts with the Purchaser
to do business with vendors or service providers or to share overhead
expenses, the costs incurred in so doing shall be allocated fairly among
such Seller and the Purchaser, and each such entity shall bear its fair
share of such costs. To the extent that the Seller contracts or does
business with venders or service providers where the goods and services
provided are partially for the benefit of the Purchaser, the costs incurred
in so doing shall be fairly allocated to or among such Seller and the
Purchaser for whose benefit the goods or services are provided, and each
such entity shall bear its fair share of such costs;
(iv) enter into all material transactions between the Seller and
the Purchaser, whether currently existing or hereafter entered into, only
on an arm's length basis, it being understood and agreed that the
transactions contemplated in the Transaction Documents meet the
requirements of this clause (iv);
(v) maintain office space separate from the office space of the
Purchaser and, to the extent that the Seller and the Purchaser have offices
in the same location, there shall be a fair and appropriate allocation of
overhead costs among them, and each such entity shall bear its fair share
of such expenses;
(vi) issue separate financial statements prepared not less
frequently than quarterly and prepared in accordance with GAAP;
(vii) conduct its affairs strictly in accordance with its
certificate of incorporation and observe all necessary, appropriate and
customary corporate formalities, including, but not limited to, holding all
regular and special stockholders' and directors' meetings appropriate to
authorize all corporate action, keeping separate and accurate minutes of
its meetings, passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and separate books,
records and accounts, including, but not limited to, payroll and
intercompany transaction accounts;
(viii) not assume or guarantee any of the liabilities of the
Purchaser, and
(ix) take, or refrain from taking, as the case may be, all other
actions that are necessary to be taken or not to be taken in order to
comply with this Section 5.1(v) .
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ARTICLE VI
REPURCHASE OBLIGATION
SECTION 6.1. Mandatory Repurchase.
(a) Breach of Warranty. If, on any day, any Receivable which has been
sold by any Seller hereunder and which has been reported by such Seller as an
Eligible Receivable, shall fail to meet the conditions set forth in the
definition of Eligible Receivable on the date of such sale and in connection
with the circumstances giving rise to such breach (i) the rights and interests
of the Purchaser in such Receivable, Related Security or Collections with
respect thereto or the Proceeds thereof are in any manner materially and
adversely impaired or (ii) such Receivable is not available to the Purchaser
free and clear of any Adverse Claim, such Seller shall be deemed to have
received on such day a Collection of such Receivable in full and shall on such
day pay to the Purchaser an amount equal to the aggregate Outstanding Balance of
such Receivable.
(b) Reconveyance Under Certain Circumstances. Each Seller agrees
that, if on any date the Administrative Agent, a Funding Agent or the Transferor
notifies such Seller or such Seller discovers that any of the representations
and warranties made herein is untrue or incorrect with respect to a Receivable
in any material respect as of the date such representation or warranty was made
and such untruth or incorrectness will adversely affect the collectibility of,
or the lien upon, such Receivable, such Seller shall accept the reconveyance of
such Receivable on such date. In the event of a reconveyance under this Section
6.1(b), the applicable Seller shall pay to the Purchaser in immediately
available funds on such date of reconveyance an amount equal to the Outstanding
Balance of any such Receivable.
SECTION 6.2. Dilutions, Etc. Each Seller agrees that if on any day
the Outstanding Balance of a Receivable an interest in which has been sold by
such Seller hereunder is either (x) reduced as a result of defective, rejected
or returned goods or other dilution factor, any billing adjustment or other
adjustment, or (y) reduced or cancelled as a result of (i) a setoff or offset in
respect of any claim by any Person (whether such claim arises out of the same or
a related transaction or an unrelated transaction), or (ii) any action by any
Federal or state taxing authority or as a result of the payment by any Obligor
of any portion of a Receivable constituting a tax or governmental fee or charge
to any Person other than the Purchaser, then such Seller shall be deemed to have
received on such day a collection of such Receivable in the amount of such
reduction, cancellation or payment made by the Obligor and shall on such day pay
to the Purchaser an amount equal to such reduction or cancellation.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1. Conditions Precedent to Purchaser's Purchases of
Receivables. The obligations of the Purchaser to purchase the Receivables on the
Closing Date and on any
15
Business Day on which Receivables are sold hereunder shall be subject to the
satisfaction of the following conditions:
(a) All representations and warranties of the Sellers contained in
this Agreement shall be true and correct on the Closing Date and on the
applicable Business Day of sale, with the same effect as though such
representations and warranties had been made on such date (except to the extent
such representations and warranties relate solely to an earlier date, and then
as of such earlier date);
(b) All information concerning the Receivables provided to the
Purchaser shall be true and correct in all material respects as of the Closing
Date, in the case of any Receivables sold on the Closing Date, or the date such
Receivables sold to the Purchaser, in the case of any Receivables created and
sold by any Seller to the Purchaser after the Closing Date;
(c) Each Seller shall have substantially performed all other
obligations required to be performed by the provisions of this Agreement and the
other Transaction Documents to which it is a party;
(d) The Sellers shall have either filed or caused to be filed the
financing statement(s) (or other similar instruments) required to be filed
pursuant to Section 2.1(b);
(e) All corporate and legal proceedings, and all instruments in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents and Redwood Liquidity Documents shall be satisfactory in
form and substance to the Purchaser, and the Purchaser shall have received from
the Sellers copies of all documents (including, without limitation, records of
corporate proceedings) relevant to the transactions herein contemplated as the
Purchaser may reasonably have requested;
(f) On the Closing Date, the Sellers shall deliver to the Purchaser
and the Administrative Agent a Weekly Report for the Weekly Settlement Period
immediately preceding the Closing Date; and
(g) the Purchase Termination Date shall not have occurred.
SECTION 7.2. Conditions Precedent to the Addition of a Seller. The
obligation of the Purchaser to purchase Receivables and Related Security
hereunder from a Subsidiary of C&A requested to be an additional Seller pursuant
to Section 10.13 is subject to the conditions precedent that the Purchaser shall
have received on or before the date designated for the addition of such Seller
(the "Seller Addition Date") and in form and substance satisfactory to the
Purchaser:
(a) Additional Seller Supplement. An Additional Seller Supplement
substantially in the form of Exhibit C attached hereto (with a copy for the
Administrative Agent and each Funding Agent) duly executed and delivered by such
Seller;
(b) Secretary's Certificate. A certificate of the Secretary or an
Assistant Secretary of such Seller, dated the related Seller Addition Date, and
certifying (i) that attached
16
thereto is a true and complete copy of the by-laws of such Seller, as in effect
on the Seller Addition Date and at all times since a date prior to the date of
the resolutions described in clause (ii) below, (ii) that attached hereto is a
true and complete copy of the resolutions, in form and substance reasonably
satisfactory to the Purchaser, of the Board of Directors of such Seller or
committees thereof authorizing the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party and the
transactions contemplated hereby and thereby, and that such resolutions have not
been amended, modified, revoked or rescinded and are in full force and effect,
(iii) that the certificate of incorporation of such Seller has not been amended
since the date of the last amendment thereto shown on the certificate of good
standing (or its equivalent) furnished pursuant to subsection (e) below and (iv)
as to the incumbency and specimen signature of each officer executing the
Additional Seller Supplement and any other Transaction Documents or any other
document delivered in connection therewith on behalf of such Seller (on which
certificates the Purchaser may conclusively rely until such time as the
Purchaser shall receive from such Seller a revised certificate with respect to
such Seller meeting the requirements of this subsection (b));
(c) Officer's Certificate. A certificate of a Responsible Officer of
C&A, dated the related Seller Addition Date, and certifying such Seller is in
the same or a related line of business as the existing Sellers as of the related
Seller Addition Date;
(d) Corporate Documents. The organizational documents, including all
amendments thereto, of such Seller, certified as of a recent date by the
Secretary of State or other appropriate authority of the state of incorporation,
as the case may be;
(e) Good Standing Certificates. Certificates of compliance, of status
or of good standing, dated as of a recent date, from the Secretary of State or
other appropriate authority of such jurisdiction, with respect to such Seller in
each State where the ownership, lease or operation of property or the conduct of
business requires it to qualify as a foreign corporation, except where the
failure to so qualify would not have a Material Adverse Effect;
(f) Consents, Licenses, Approvals, Etc. A Certificate dated the
related Seller Addition Date of a Responsible Officer of such Seller either (i)
attaching copies of all consents (including, without limitation, consents under
loan agreements and indentures to which any Seller or its Affiliates are
parties), licenses and approvals required in connection with the execution,
delivery and performance by such Seller of the Additional Seller Supplement and
the validity and enforceability of the Additional Seller Supplement against such
Seller, and such consents, licenses and approvals shall be in full force and
effect or (ii) stating that no such consents, licenses and approvals are so
required;
(g) No Litigation. Confirmation that there is no pending or, to its
knowledge after due inquiry, threatened action or proceeding affecting such
Seller or any of its Subsidiaries before any Governmental Authority that could
reasonably be expected to have a Material Adverse Effect;
(h) Lockboxes. A Lockbox Account with respect to Receivables to be
sold by such Seller shall have been established in the name of the Purchaser,
each invoice issued to an
17
Obligor on and after the related Seller Addition Date shall indicate that
payments in respect of its Receivable shall be made by such Obligor to a Lockbox
Account or by wire transfer or other electronic payment to a Lockbox Account or
a Collection Account and the Collection Agent shall have delivered with respect
to each Lockbox Account a Lockbox Agreement signed by the Purchaser, the
Administrative Agent and the applicable Lockbox Bank;
(i) UCC Certificate; UCC Financing Statements. Executed copies of
such proper financing statements (or other similar instruments), filed and
recorded at such Seller's expense prior to the related Seller Addition Date,
naming such Seller as the seller and the Purchaser as the purchaser of the
Receivables and the Related Security, in proper form for filing in each
jurisdiction in which the Purchaser (or any of its assignees) deems it necessary
or desirable to perfect the Purchaser's ownership interest in all Receivables
and Related Security under the UCC or any comparable law of such jurisdiction;
(j) UCC Searches. Written search reports, listing all effective
financing statements (or other similar instruments) that name such Seller as
debtor or assignor and that are filed in the jurisdictions in which filings were
made pursuant to subsection (i) above and in any other jurisdictions that the
Purchaser (or any of its assignees) determines are necessary or appropriate,
together with copies of such financing statements (none of which, except for
those described in subsection (i) above, shall cover any Receivables or Related
Security), and tax and judgment lien searches showing no liens that are not
permitted by the Transaction Documents;
(k) List of Obligors. A microfiche, typed or printed list or other
tangible evidence reasonably acceptable to the Purchaser showing, as of a date
acceptable to the Purchaser prior to the related Seller Addition Date, the
Obligors whose Receivables are to be transferred to the Purchaser and the
balance of the Receivables with respect to each such Obligor as of such date;
(l) Back-up Servicing Arrangements. Evidence that such Seller
maintains disaster recovery systems and back-up computer and other information
management systems that, in the Purchaser's reasonable judgment, are sufficient
to protect such Seller's business against material interruption or loss or
destruction of its primary computer and information management systems;
(m) Systems. Evidence, reasonably satisfactory to the Purchaser, the
Administrative Agent and each Funding Agent, that such additional Seller's
systems, procedures and record keeping relating to the Receivables remain in all
material respects sufficient and satisfactory in order to permit the purchase
and administration of the Receivables in accordance with the terms and intent of
this Agreement; and
(n) such other approvals, opinions or documents as the Purchaser (or
any of its assignees) may reasonably request from such additional Seller.
18
ARTICLE VIII
SELLER NOTE
SECTION 8.1. Seller Note. On the Closing Date or Seller Addition Date,
as applicable, the Purchaser shall issue to each Seller a note substantially in
the form of Exhibit B (each, as amended, supplemented or otherwise modified from
time to time, a "Seller Note"). The aggregate principal amount of a Seller Note
at any time shall be equal to the difference between (a) the aggregate principal
amount on the issuance thereof and each addition to the principal amount of such
Seller Note pursuant to the terms of Section 3.2 as of such time, minus (b) the
aggregate amount of all payments made in respect of the principal of such Seller
Note as of such time. All payments made in respect of a Seller Note shall be
allocated, first, to pay accrued and unpaid interest thereon, and second, to pay
the outstanding principal amount thereof. Interest on the outstanding principal
amount of a Seller Note shall accrue at a rate per annum equal to the highest
Base Rate in effect during the applicable Settlement Period plus the percentage
agreed to from time to time by the applicable Seller, the Purchaser and the
Administrative Agent, which initially shall be 2%, from and including the
Closing Date or Seller Addition Date, as applicable, to but excluding the last
day of each Settlement Period and shall be paid (x) on each Settlement Date with
respect to the principal amount of the Seller Note outstanding from time to time
during the Settlement Period immediately preceding such Settlement Date and/or
(y) on the maturity date thereof; provided, however, that, to the maximum extent
permitted by law, accrued interest on a Seller Note which is not so paid shall
be added, at the request of such Seller, to the principal amount of such Seller
Note. Principal hereunder not paid or prepaid pursuant to the terms hereof shall
be payable on the maturity date of a Seller Note. Default in the payment of
principal or interest under a Seller Note shall not constitute a Purchase
Termination Event under this Agreement, a Collection Agent Default or a
Termination Event under the Receivables Transfer Agreement.
SECTION 8.2. Sole and Exclusive Remedy/Subordination. The Purchaser
shall be obligated to repay Advances by a Seller under a Seller Note only to the
extent of funds available to the Purchaser from Collections on the Receivables
and, to the extent that such payments are insufficient to pay all amounts owing
to a Seller under a Seller Note, such Seller shall not have any claim against
the Purchaser for such amounts and no further or additional recourse shall be
available against Purchaser. Each Seller Note shall be fully subordinated to any
rights of the Administrative Agent, on behalf of the Funding Agents, the Initial
Purchasers and the PARCO APA Banks pursuant to the Receivables Transfer
Agreement and the Asset Purchase Agreements, and shall not evidence any rights
in the Receivables or Related Security.
SECTION 8.3. Offsets, etc. The Purchaser may offset any amount due and
owing by a Seller against any amount due and owing by Purchaser to such Seller
under the terms of the applicable Seller Note.
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ARTICLE IX
TERM AND TERMINATION
SECTION 9.1. Term. This Agreement shall commence as of the first day
on which all of the conditions precedent have been satisfied and shall continue
in full force and effect until the date following the earlier of (i) the date
designated by the Purchaser or C&A as the Purchase Termination Date at any time
following ten (10) days' written notice to the other (with a copy thereof to the
Administrative Agent), (ii) the date on which the Administrative Agent, on
behalf of the Initial Purchasers and the PARCO APA Banks, declares a Termination
Event or a Potential Termination Event pursuant to the Receivables Transfer
Agreement, (iii) upon the occurrence of an Event of Bankruptcy with respect to
either the Purchaser or any Seller; provided, however, that an Event of
Bankruptcy with respect to a Seller that does not have a Material Adverse Effect
will only result in a termination of the Purchaser's obligation to purchase
Receivables from such Seller, (iv) the date on which either the Purchaser or any
Seller becomes unable for any reason to purchase or re-purchase the interest of
the Purchaser in any Receivable in accordance with the provisions of this
Agreement or defaults on its obligations hereunder, which default continues
unremedied for more than ten (10) days after written notice, (v) the day on
which the Collection Agent delivers a Weekly Report or a Daily Report that
indicates that the Guarantor shall have permitted the Interest Coverage Ratio
during any period set forth in subsection (b) the definition of "Interest
Coverage Ratio" to be less than the ratio set forth in such definition for such
period, (vi) the day on which the Collection Agent delivers a Weekly Report or a
Daily Report that indicates that the Guarantor shall have permitted the Leverage
Ratio during any period set forth in subsection (b) the definition of "Leverage
Ratio" to be greater than the ratio set forth in such definition for such
period, or (vii) the first anniversary of the Closing Date unless extended (any
such date being a "Purchase Termination Date"); provided, however, that the
termination of this Agreement pursuant to this Section 9.1 hereof shall not
discharge any Person from any obligations incurred prior to such termination,
including, without limitation, any obligations to make any payments with respect
to the interest of the Purchaser in any Receivable sold prior to such
termination.
SECTION 9.2. Effect of Termination. Following the termination of this
Agreement pursuant to Section 9.1, no Seller shall sell, and the Purchaser shall
not purchase, any interests in any Receivables. No termination, rejection or
failure to assume the executory obligations of this Agreement in any Event of
Bankruptcy with respect to any Seller or the Purchaser shall be deemed to impair
or affect the obligations pertaining to any executed sale or executed
obligations, including, without limitation, pre-termination breaches of
representations and warranties by any Seller or the Purchaser. Without limiting
the foregoing, prior to termination, the failure of any Seller to deliver
computer records of its Receivables or any reports regarding its Receivables
shall not render such transfer or obligation executory, nor shall the continued
duties of the parties pursuant to this Agreement render an executed sale
executory.
20
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendments, Etc. This Agreement and the rights and
obligations of the parties hereunder may not be amended, supplemented, waived or
otherwise modified except in an instrument in writing signed by the Purchaser
and the Sellers and consented to in writing by each Funding Agent (with the
consent of the Required Participants); provided, however, the Administrative
Agent may consent (without the consent of the Funding Agents) to any amendments,
waivers, or other modifications in order to cure any ambiguities or correct any
mistakes hereunder. Any reconveyance executed in accordance with the provisions
hereof shall not be considered an amendment or modification to this Agreement.
SECTION 10.2. Governing Law; Submission to Jurisdiction.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(b) The parties hereto hereby submit to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York state court sitting in The City of New York for purposes of all
legal proceedings arising out of or relating to this agreement or the
transactions contemplated hereby. Each party hereto hereby irrevocably waives,
to the fullest extent it may effectively do so, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum. Nothing in this Section 10.2 shall affect
the right of the Purchaser to bring any other action or proceeding against any
Seller or its property in the courts of other jurisdictions.
SECTION 10.3. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt requested,
to:
(a) in the case of the Purchaser:
CARCORP, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) in the case of C&A:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
21
Attention: Assistant Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) in the case of each other Seller: to the address set forth
opposite such Seller's name on Exhibit D or in the applicable
Additional Seller Supplement;
(d) in the case of the Redwood Funding Agent
GENERAL ELECTRIC CAPITAL CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Conduit Administrator
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(e) in the case of Liberty Funding Agent
The BANK OF NOVA SCOTIA
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(f) in each case, with a copy to:
THE CHASE MANHATTAN BANK,
as the Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Structured Finance Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
SECTION 10.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
22
SECTION 10.5. Assignments Generally. This Agreement may not be
assigned by the parties hereto, except that the Purchaser may assign its rights
hereunder pursuant to the Receivables Transfer Agreement (including all of its
right, title and interest in, to, and under the Receivables sold hereunder) to
the Administrative Agent for the benefit of the Funding Agents, the Initial
Purchasers and the PARCO APA Banks as security for the Purchaser's repayment
obligations under the Receivables Transfer Agreement. The Purchaser hereby
notifies each Seller (and each Seller hereby acknowledges) that the Purchaser,
pursuant to the Receivables Transfer Agreement, has assigned its rights (but not
its obligations) (including all of its right, title and interest in, to, and
under the Receivables sold hereunder) hereunder to the Administrative Agent for
the benefit of the Funding Agents, the Initial Purchasers and the PARCO APA
Banks. The Purchaser also hereby notifies each Seller (and each Seller hereby
acknowledges) that Redwood has assigned its rights (but not its obligations)
under the Transaction Documents to the Redwood Secured Parties. All rights of
the Purchaser hereunder may be exercised by the Administrative Agent to the
extent of its rights hereunder and under the other Transaction Documents.
SECTION 10.6. Further Assurances. The Purchaser and the Sellers agree
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the other party more
fully to effect the purposes of this Agreement and the other Transaction
Documents, including, without limitation, the execution of any financing
statements or continuation statements or equivalent documents relating to the
Receivables for filing under the provisions of the Relevant UCC or other laws of
any applicable jurisdiction.
SECTION 10.7. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Purchaser, any Seller, the
Administrative Agent or a Funding Agent, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privilege
provided by law.
SECTION 10.8. Counterparts. This Agreement may be executed in two or
more counterparts including telecopy transmission thereof (and by different
parties on separate counterparts), each of which shall be an original, but all
of which together shall constitute one and the same instrument.
SECTION 10.9. Binding Effect; Third-Party Beneficiaries. This
Agreement and the other Transaction Documents will inure to the benefit of and
be binding upon the parties hereto and their respective successors and permitted
assigns. The Administrative Agent, the Initial Purchasers, the PARCO APA Banks
and each Funding Agent are each intended by the parties hereto to be third-party
beneficiaries of this Agreement.
SECTION 10.10. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the other Transaction Documents set forth
the entire understanding of
23
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement and the other Transaction
Documents.
SECTION 10.11. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 10.12. Exhibits. The schedules and exhibits referred to herein
shall constitute a part of this Agreement and are incorporated into this
Agreement for all purposes.
SECTION 10.13. Addition of Sellers. Subject to the terms and
conditions hereof, from time to time one or more wholly-owned direct or indirect
Subsidiaries of C&A may become additional Sellers parties hereto. If any such
Subsidiary wishes to become an additional Seller, C&A shall submit a request to
such effect in writing to Purchaser, the Administrative Agent, the Funding
Agents and each Rating Agency. If C&A, the Purchaser, the Administrative Agent,
and each Funding Agent shall have agreed to any such request (such consent not
to be unreasonably withheld or delayed from the date such request is received
and such consent of each Funding Agent being obtained by the Administrative
Agent), such wholly-owned Subsidiary shall become an additional Seller party
hereto on the related Seller Addition Date upon satisfaction of the conditions
set forth in Section 7.2.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, the Purchaser and the Sellers each have caused this
Receivables Purchase Agreement to be duly executed by their respective officers
as of the day and year first above written.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.,
as a Seller
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CARPET & ACOUSTICS
(MI) INC., as a Seller
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CARPET & ACOUSTICS
(TN) INC., as a Seller
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ACCESSORY MATS INC.,
as a Seller
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
DURA CONVERTIBLE SYSTEMS, INC., as a Seller
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
AMCO CONVERTIBLE FABRICS, INC., as a Seller
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PLASTICS, INC., as a
Seller
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CANADA INC., as a Seller
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PLASTICS, LTD., as a
Seller
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
CARCORP, INC.,
as Purchaser
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Acknowledged and agreed as
of the date first above written:
THE CHASE MANHATTAN BANK,
as Administrative Agent for the benefit
of the Funding Agents, the Initial
Purchasers and the PARCO APA Banks
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A
PRINCIPAL PLACE OF BUSINESS, CHIEF EXECUTIVE OFFICE
AND LOCATION OF RECORDS AND RELATED SECURITY
Name of Company Principal Place of Business/
--------------- Chief Executive Office
----------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Carpet & Acoustics (MI)Inc. North America
Head Office/Tech. Center
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Carpet & Acoustics (TN)Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Accessory Mats Inc. Canton Plant
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dura Convertible Systems, Inc. East Plant
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amco Convertible Fabrics, Inc. Adrian Plant
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Canada Inc. Farnham Plant
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics, Ltd. Scarborough Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
A-1
LOCATION OF RECORDS AND RELATED SECURITY FOR ALL U.S. SELLERS:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and each Seller's respective principal
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ place of business and chief executive
office
LOCATION OF RECORDS AND RELATED SECURITY FOR EACH CANADIAN SELLER:
For each Canadian Seller:
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Canada Inc. Farnham Plant
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics, Ltd. Scarborough Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
A-2
EXHIBIT B
FORM OF SELLER NOTE
December 27, 1999
FOR VALUE RECEIVED, the undersigned, CARCORP, INC., a Delaware
corporation (the "Maker"), hereby promises to pay to the order of [SELLER], (the
"Payee"), on the later of (i) the first anniversary of the Closing Date or (ii)
the Purchase Termination Date, the lesser of (i) the Advance Limit or (ii) the
aggregate unpaid principal amount of all Advances to the Maker from the Payee
pursuant to the terms of the Receivables Purchase Agreement, in lawful money of
the United States of America in immediately available funds, and to pay interest
from the date thereof on the principal amount hereof from time to time
outstanding, in like funds, at said office, at the rate per annum set forth in
the Receivables Purchase Agreement and shall be payable in arrears on the last
Business Day of each of the Maker's fiscal months.
The Maker hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The non-exercise by the holder hereof of any of
its rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Seller Note and all payments and
prepayments of the principal hereof and interest hereon and the respective dates
thereof shall be endorsed by the holder hereof on the schedule attached hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, or otherwise recorded by such holder in its
internal records; provided, however, that the failure of the holder hereof to
make such a notation or any error in such a notation shall not in any manner
affect the obligation of the Maker to make payments of principal and interest in
accordance with the terms of this Seller Note and the Receivables Purchase
Agreement.
The Maker shall have the right to prepay and, subject to the
limitations set forth in the Receivables Purchase Agreement, reborrow Advances
made to it without penalty or premium.
This Seller Note is one of the Seller Notes referred to in the
Receivables Purchase Agreement, which, among other things, contains provisions
for the subordination of this Seller Note to the rights of certain parties under
the Receivables Transfer Agreement, all upon the terms and conditions therein
specified. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in, or incorporated by reference into,
the Receivables Purchase Agreement dated as of the date hereof between the Maker
and the Payee (as such agreement may from time to time be amended, supplemented
or otherwise modified and in effect, the "Receivables Purchase Agreement").
B-1
This Seller Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
CARCORP, INC.
By:
-----------------------------
Name:
Title:
B-2
Advances and Payments
Unpaid Principal Person Making
Date Advance Principal/Interest Balance of Note the Notation
---- ------- ------------------ ---------------- -------------
B-3
EXHIBIT C
[FORM OF ADDITIONAL SELLER SUPPLEMENT]
SUPPLEMENT, dated [ ], to the Receivables Purchase
Agreement, dated as of December 27, 1999 (as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the "Receivables
Purchase Agreement"), among ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products, Co. ("C&A"), as a Seller,
the other Sellers named on Exhibit D thereto or added pursuant to a prior
Additional Seller Supplement and Carcorp, Inc., as the Purchaser.
W I T N E S S E T H:
WHEREAS, the Receivables Purchase Agreement provides that any wholly-
owned direct or indirect Subsidiary of C&A, although not originally a Seller
thereunder, may become a Seller under the Receivables Purchase Agreement upon
the satisfaction of each of the conditions precedent set forth in Sections 7.2
and 10.13 of the Receivables Purchase Agreement;
WHEREAS, the undersigned was not an original Seller under the
Receivables Purchase Agreement but now desires to become a Seller thereunder.
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of the
Receivables Purchase Agreement applicable to a Seller thereunder and agrees that
it shall, on the date this Supplement is accepted by C&A, the Purchaser, the
Administrative Agent and each Funding Agent and each of the conditions precedent
set forth in Section 7.2 of the Receivables Purchase Agreement have been
satisfied, become a Seller for all purposes of the Receivables Purchase
Agreement to the same extent as if originally a party thereto.
C-1
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.
[Insert name of Seller]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[address]
Accepted as of the date
first above written:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
Accepted as of the date
first above written:
CARCORP, INC.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
Acknowledged as of the date
first above written:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:
--------------------------
Name:
------------------------
Title:
-----------------------
▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
as PARCO Funding Agent
By:
--------------------------
Name:
------------------------
Title:
-----------------------
GENERAL ELECTRIC CAPITAL CORPORATION,
as Redwood Funding Agent
By:
--------------------------
Name:
------------------------
Title:
-----------------------
THE BANK OF NOVA SCOTIA,
as Liberty Funding Agent
By:
--------------------------
Name:
------------------------
Title:
-----------------------
C-3
EXHIBIT D
SELLERS IN ADDITION TO C&A
Name State of Incorporation
---- ----------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Carpet & Delaware
Acoustics (MI) Inc.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Carpet & Tennessee
Acoustics (TN) Inc.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Accessory Mats Inc. Delaware
Dura Convertible Systems, Inc. Delaware
Amco Convertible Fabrics, Inc. Delaware
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics, Inc. Delaware
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Canada Inc. Ontario
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics, Ltd. Ontario
D-1
SCHEDULE 4.1(e)
Material Adverse Effect
4.1(e)-1
SCHEDULE 4.1(h)
Litigation
4.1(h)-1
------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
by and among
PARK AVENUE RECEIVABLES CORPORATION,
THE CHASE MANHATTAN BANK,
as Funding Agent,
and
THE SEVERAL FINANCIAL INSTITUTIONS
PARTY HERETO FROM TIME TO TIME,
as APA Banks
Dated as of December 27, 1999
(▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co. and its Subsidiaries' Receivables)
------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS...................................................... 1
SECTION 1.1. Incorporation by Reference.......................... 1
SECTION 1.2. Other Defined Terms................................. 1
ARTICLE II
PURCHASE COMMITMENT.............................................. 5
SECTION 2.1. Liquidity Purchases................................. 5
SECTION 2.2. Several Commitments of the APA Banks................ 6
SECTION 2.3. Nonrecourse Nature of Transactions.................. 7
SECTION 2.4. Payments; Indemnity................................. 7
SECTION 2.5. Reduction of Commitments............................ 8
SECTION 2.6. Issuance of Commercial Paper by PARCO............... 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES................................... 8
SECTION 3.1. PARCO Disclaimer of Representations and Warranties.. 8
SECTION 3.2. Representations and Warranties of the APA Banks..... 9
ARTICLE IV
THE FUNDING AGENT................................................ 10
SECTION 4.1. Appointment......................................... 10
SECTION 4.2. Delegation of Duties................................ 10
SECTION 4.3. Exculpatory Provisions.............................. 10
SECTION 4.4. Reliance by Funding Agent........................... 11
SECTION 4.5. Notice of Events of Default and other Events;
Voting.............................................. 11
SECTION 4.6. Non-Reliance on Funding Agent....................... 11
SECTION 4.7. Indemnification..................................... 12
SECTION 4.8. Funding Agent in its Individual Capacity............ 12
SECTION 4.9. Successor Funding Agent............................. 12
SECTION 4.10. Chase Conflict Waiver............................... 13
ARTICLE V
MISCELLANEOUS.................................................... 13
SECTION 5.1. Waivers; Amendments, etc............................ 13
SECTION 5.2. Notices............................................. 14
SECTION 5.3. Governing Law; Submission to Jurisdiction........... 14
SECTION 5.4. Severability; Counterparts; Waiver of Setoff........ 14
i
SECTION 5.5. Successors and Assigns; Participations;
Assignments......................................... 14
SECTION 5.6. Effectiveness of this Agreement..................... 16
SECTION 5.7. No Petition......................................... 16
SECTION 5.8. Waiver of Trial by Jury............................. 17
SECTION 5.9. Limited Recourse.................................... 17
SECTION 5.10. Liability of Funding Agent.......................... 17
ii
ANNEXES AND EXHIBITS
ANNEX I APA Banks
EXHIBIT A Form of Transfer Supplement
EXHIBIT B Form of Opinion of Counsel
EXHIBIT C Notice Addresses
iii
ASSET PURCHASE AGREEMENT
(▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co. and its Subsidiaries' Receivables)
THIS ASSET PURCHASE AGREEMENT, dated as of December 27, 1999 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement"), is by and among PARK AVENUE RECEIVABLES CORPORATION, a Delaware
corporation (together with its successors and assigns, "PARCO"), THE SEVERAL
FINANCIAL INSTITUTIONS PARTY HERETO FROM TIME TO TIME, and THE CHASE MANHATTAN
BANK, as Funding Agent, with respect to the transactions contemplated by herein
and in that certain Receivables Transfer Agreement (as defined herein).
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Incorporation by Reference. Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
such terms in, or incorporated by reference into, Annex X to the Receivables
Transfer Agreement.
SECTION 1.2. Other Defined Terms. As used in this Agreement, the
following terms have the following meanings:
"Affected APA Bank" shall have the meaning specified in
Section 5.5(c).
"Aggregate Commitment" shall mean $61,200,000.
"Agreement" shall have the meaning specified in the recitals hereto.
"APA Banks" shall mean the Persons listed on Annex I hereto
(including, without limitation, Chase), and the Persons which from time to time
may become a party hereto in accordance with Section 5.5(c).
"Article" shall mean a numbered article of this Agreement, unless
otherwise specified.
"Chase" shall mean The Chase Manhattan Bank, in its individual
capacity, and its successors.
"Chase Roles" shall have the meaning specified in Section 4.10.
"Commitment Expiry Date" shall mean the earliest to occur of (i) the
date on which all amounts due and owing to PARCO and the APA Banks in respect of
the Transferred Interests have been indefeasibly paid in full, (ii) following a
Termination Date, (not including
1
pursuant to clause (iii) of the definition of Termination Date), and (iii)
December 25, 2000 (as may be extended for an additional 364 days from time to
time in writing by PARCO, the Funding Agent and the APA Banks).
"Defaulting APA Bank" shall have the meaning specified in
Section 2.2(b).
"Discount" shall mean, with respect to any Commercial Paper issued by
PARCO, the interest or discount component thereof.
"Face Amount" shall mean, with respect to any Commercial Paper issued
by PARCO, the amount due at maturity thereof (including the discount component
thereof or any interest thereon, as applicable).
"Fee Letter" shall mean the Fee Letter, dated as of December 27, 1999,
between C&A and the Funding Agent, on behalf of PARCO and the APA Banks, as the
same may from time to time be amended, supplemented or otherwise modified and in
effect.
"Funding Account" shall have the meaning specified in Section 2.4.
"Funding Balance" shall mean, with respect to any APA Bank at any time
of determination thereof, an amount equal to such APA Bank's Pro Rata Share of
all amounts due and owing to PARCO in respect of Transferred Interests Payments
as at such date.
"Manager" shall mean Global Securitization Services, LLC, a Delaware
limited liability company, as manager on behalf of PARCO, and its successors and
assigns in such capacity.
"Non-Defaulting APA Bank" shall have the meaning specified in
Section 2.2(b).
"Obligor" shall mean any Person obligated to make payments in respect
of a Receivable.
"OECD Country" shall mean a country that is a member of the grouping
of countries that are full members of the Organization of Economic Cooperation
and Development.
"Originators" shall mean collectively, C&A and each other Seller that
becomes a party to the Receivables Purchase Agreement, and their respective
successors and assigns.
"PARCO" shall have the meaning specified in the recitals hereto.
"Participant" shall have the meaning specified in Section 5.5(b).
"Placement Agent" shall mean, on any day with respect to PARCO, any
Person that has agreed, with the consent of PARCO, to offer and sell PARCO's
Commercial Paper.
2
"Pro Rata Share" shall mean, on any date of determination, with
respect to any APA Bank, the ratio (expressed as a percentage) of such APA
Bank's PARCO APA Bank Commitment to the Aggregate Commitment at such time.
"Purchase" shall mean any assignment by PARCO to the APA Banks of all
of its right, title and interest in and to the Transferred Interests Payments
pursuant to Section 2.1.
"Purchase Date" shall mean the date specified by PARCO in a Sale
Notice as being the effective date of PARCO's assignment to the APA Banks of all
of its right, title and interest in and to Transferred Interests Payments
specified therein.
"Purchase Price" shall mean, at any Purchase Date with respect to
PARCO, an amount equal to the lesser of (i) the PARCO Net Investment and (ii)
the PARCO Adjusted Liquidity Price, as clauses (i) and (ii) shall be increased
by the sum of (A) all accrued and unpaid Discount on all outstanding Tranches of
PARCO's Commercial Paper issued to fund the PARCO Net Investment from the
issuance date(s) thereof to and including the Purchase Date plus (B) the
aggregate Discount to accrue on all outstanding Tranches of PARCO's Commercial
Paper issued to fund the PARCO Net Investment from and including the Purchase
Date, to and excluding the maturity date of each such Tranche.
"Purchase Price Deficit" shall have the meaning specified in
Section 2.2(b).
"Rating Confirmation" shall mean, with respect to PARCO and any
subject amendment, modification, waiver or other action to be taken pursuant to
the terms of this Agreement, either (i) a confirmation by each of the Rating
Agencies that such proposed amendment, modification, waiver or action shall not
result in a downgrade or withdrawal of each Rating Agency's then current rating
of the Commercial Paper or any other debt securities, rated at the request of
PARCO, by each such Rating Agency or (ii) the delay in the taking of such action
or the delay in the effectiveness of such proposed amendment, modification or
waiver, until thirty (30) days following the maturity date of all commercial
paper or other debt securities rated, at the request of PARCO, by a Rating
Agency, outstanding at the time the confirmation referred to in clause (i) is
requested.
"Receivables Transfer Agreement" shall mean the Receivables Transfer
Agreement, dated as of December 27, 1999, among Carcorp, Inc., as Transferor,
C&A, as Guarantor and as Collection Agent, the Initial Purchasers, the several
financial institutions party thereto from time to time as PARCO APA Banks, the
Funding Agents and Chase, as Administrative Agent.
"Required APA Banks" shall mean APA Banks having Pro Rata Shares in
the aggregate at least equal to 66 2/3%; provided that the PARCO APA Bank
Commitment of any Defaulting APA Bank that has not paid all amounts due and
owing by it in respect of purchases it was obligated to make shall not be
included in the PARCO APA Bank Commitments for purposes of this definition.
3
"Sale Notice" shall mean an irrevocable written notice given by an
authorized signer or authorized officer of PARCO (or on behalf of PARCO by
Chase, in its capacity as PARCO Administrative Agent) to the Funding Agent
committing to sell, assign and transfer to the APA Banks, all of PARCO's right,
title and interest in and to Transferred Interests Payments, which notice shall
designate (a) the applicable Purchase Date, (b) the aggregate amount of PARCO's
Transferred Interests Payments and its related PARCO Net Investment, (c) the
Purchase Price (including a calculation of the Purchase Price), (d) that no
PARCO Insolvency Event has occurred and (e) wire transfer instructions
specifying the account(s) into which the proceeds of the Purchase Price shall be
deposited.
"Section" shall mean a numbered section of this Agreement unless
otherwise specified.
"Tranche" shall mean any tranche of PARCO's Commercial Paper.
"Transaction Parties" shall have the meaning specified in Section 3.1.
"Transfer Supplement" shall have the meaning specified in
Section 5.5(c).
"Transferred Interests Payments" shall mean, on any day, all payments
of Discount and principal scheduled to be made pursuant to the terms of the
Receivables Transfer Agreement on and after such day, which term shall include
all payments scheduled to have been paid prior to (but not including) such day,
but which remain accrued and unpaid on such day.
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ARTICLE II
PURCHASE COMMITMENT
SECTION 2.1. Liquidity Purchases.
(a) Sales by PARCO. From time to time prior to the Commitment
Expiry Date, upon the occurrence of a PARCO Wind-Down Event, PARCO shall be
obligated to deliver a Sale Notice to the Funding Agent. Each Sale Notice
shall be delivered by PARCO to the Funding Agent prior to 12:30 P.M. (New
York time) on the Purchase Date and shall constitute an irrevocable offer
by PARCO to sell all of its beneficial interest in Transferred Interests
Payments at the Purchase Price. Each Sale Notice delivered by PARCO shall
be deemed to be a representation and warranty by PARCO that no PARCO
Insolvency Event shall have occurred and be continuing. Each APA Bank
hereby agrees to purchase from PARCO such APA Bank's Pro Rata Share of
PARCO's Transferred Interests Payments for a purchase price equal to such
APA Bank's Pro Rata Share of the Purchase Price on the Purchase Date (which
date, subject to Section 2.1(b) below, may be the same as the date of the
Sale Notice). Notwithstanding anything to the contrary set forth in this
Agreement, no APA Bank shall have any obligation to purchase Transferred
Interests Payments or any portion thereof from PARCO if, on such Purchase
Date, a PARCO Insolvency Event shall have occurred and be continuing. The
Funding Agent shall promptly advise each APA Bank (by telecopy or by
telephone call promptly confirmed in writing by telecopy) of the receipt
and content of any Sale Notice delivered to it by PARCO and shall promptly
advise PARCO of each APA Bank's Pro Rata Share of the Purchase Price
thereunder. The Purchase Price shall be deposited in immediately available
funds into the account(s) specified by PARCO in the related Sale Notice.
(b) Timing of Sale Notice and Purchase Date. If, at or prior to
12:30 P.M. (New York time) on any Business Day, PARCO delivers a Sale
Notice to the Funding Agent specifying that the Purchase Date shall be the
same date as the date of the Sale Notice, the Funding Agent shall, by no
later than 1:00 P.M. (New York time) on such Business Day, notify each APA
Bank of such Sale Notice. Each APA Bank shall make a purchase of
Transferred Interests Payments by advancing immediately available funds on
such date to the account of PARCO maintained at the principal office of the
Funding Agent no later than 2:00 P.M. (New York time). Notwithstanding the
fact that the Purchase Date may occur on a date which is later than the
date on which the Sale Notice is delivered to the Funding Agent, the
several obligations of each APA Bank to accept such transfer and to make
payment of the amounts required to be paid by it pursuant to Section 2.2
shall arise immediately upon receipt by the Funding Agent of the Sale
Notice. Regardless of when the Sale Notice is received, any APA Bank may
designate any one or more of its domestic or foreign branches, offices or
affiliates
5
through which it will fund its Pro Rata Share of the Purchase Price for a
Purchase, and the term "APA Bank" shall include any such branch, office or
affiliate for such purpose.
SECTION 2.2. Several Commitments of the APA Banks.
(a) Funding upon Receipt of the Sale Notice. Each APA Bank
hereby absolutely and unconditionally (except as provided in Section
2.1(a)) severally commits to PARCO and to the Funding Agent to provide the
Funding Agent, on the Purchase Date (if notice has been given in accordance
with Section 2.1(b)) at the principal office of the Funding Agent in The
City of New York for delivery to PARCO, with immediately available funds in
an amount equal to such APA Bank's Pro Rata Share of the Purchase Price,
whereupon such APA Bank shall become an assignee of PARCO under the
Transaction Documents with an undivided interest in PARCO's Transferred
Interests Payments equal to such APA Bank's Pro Rata Share of PARCO's
Transferred Interests Payments. The APA Banks' several obligations under
this Section 2.2(a) to provide the Funding Agent with funds shall terminate
on the Commitment Expiry Date. Notwithstanding anything contained in this
Section 2.2(a) or elsewhere in this Agreement to the contrary, no APA Bank
shall be obligated to provide the Funding Agent with aggregate funds in
connection with a Purchase in an amount that would exceed such APA Bank's
unused PARCO APA Bank Commitment then in effect. The failure of any APA
Bank to make its Pro Rata Share of the Purchase Price available to the
Funding Agent shall not relieve any other APA Bank of its obligations
hereunder.
(b) Defaulting APA Banks. If, by 2:00 P.M. (New York time), one
or more APA Banks (each, a "Defaulting APA Bank", and each APA Bank other
than the Defaulting APA Bank being referred to as a "Non-Defaulting APA
Bank") fails to make its Pro Rata Share of the Purchase Price available to
the Funding Agent pursuant to Section 2.1(a) (the aggregate amount not so
made available to the Funding Agent being herein called the "Purchase Price
Deficit"), then the Funding Agent shall, by no later than 2:30 P.M. (New
York time), instruct each Non-Defaulting APA Bank to pay, by no later than
3:00 P.M. (New York time), in immediately available funds, to the account
designated by the Funding Agent, an amount equal to the lesser of (x) such
Non-Defaulting APA Bank's proportionate share (based upon the relative
Commitments of the Non-Defaulting APA Banks) of the Purchase Price Deficit
and (y) its unused PARCO APA Bank Commitment. A Defaulting APA Bank shall
forthwith, upon demand, pay to the Funding Agent for the ratable benefit of
the Non-Defaulting APA Banks all amounts paid by each Non-Defaulting APA
Bank on behalf of such Defaulting APA Bank, together with interest thereon,
for each day from the date a payment was made by a Non-Defaulting APA Bank
until the date such Non-Defaulting APA Bank has been paid such amounts in
full, at a rate per annum equal to the sum of the Federal Funds Rate plus
2%. In addition, without prejudice to any other rights that PARCO may have
under applicable law, each Defaulting APA Bank shall pay to PARCO forthwith
upon demand, the difference between the Defaulting APA Bank's unpaid Pro
Rata Share of the Purchase Price and the amount paid with respect thereto
by the Non-Defaulting APA Banks,
6
together with interest thereon, for each day from the date of the Funding
Agent's request for such Defaulting APA Bank's Pro Rata Share of the
Purchase Price pursuant to Section 2.1(b) until the date the requisite
amount is paid to PARCO in full, at a rate per annum equal to the sum of
the Federal Funds Rate plus 2%.
SECTION 2.3. Nonrecourse Nature of Transactions. Each of the Funding
Agent and the APA Banks hereby agrees that all Purchases shall be without
recourse of any kind to PARCO or the Funding Agent, except as expressly provided
in Sections 4.3 and 4.7 with respect to the Funding Agent.
SECTION 2.4. Payments; Indemnity.
(a) Payments Generally. On or prior to the Closing Date, the
Funding Agent shall establish a demand deposit account with Chase for the
benefit of PARCO and the APA Banks (the "Funding Account"), into which all
payments received by the Funding Agent from the Collection Agent, C&A, any
of the other Originators or the Transferor in respect of the PARCO Interest
shall be deposited. The Funding Agent, on behalf of PARCO and the APA
Banks, shall have the sole right of withdrawal from the Funding Account.
For so long as any amounts remain due and owing to PARCO or the APA Banks
hereunder or pursuant to the Receivables Transfer Agreement, the Funding
Agent shall distribute all payments received by it in respect of the PARCO
Interest immediately after receipt thereof by (i) transferring to PARCO its
Transferred Interests Payments and (ii) immediately after giving effect to
the payment in clause (a)(i), if any, transferring the remainder of any
such payments to the APA Banks ratably in accordance with their Pro Rata
Shares (calculated without regard to that portion of the PARCO APA Bank
Commitment of a Defaulting APA Bank which such Defaulting APA Bank failed
to fund pursuant to this Agreement); provided, that any amounts transferred
to the Administrative Agent by the Transferor pursuant to the first
sentence of Section 2.6 of the Receivables Transfer Agreement and deposited
by the Administrative Agent in the Funding Account in accordance with
Section 2.10 of the Receivables Transfer Agreement shall remain in the
Funding Account until transferred to PARCO and/or the APA Banks, as
applicable, on the last day of Tranche Periods selected by the Funding
Agent in reduction of the Aggregate Net Investment. Such transfers shall be
made by the Funding Agent by withdrawing funds on deposit in the Funding
Account and remitting such funds to the accounts of PARCO and the several
APA Banks specified by each of them from time to time. Funds transferred to
the Administrative Agent by the Transferor pursuant to the first sentence
of Section 2.6 of the Receivables Transfer Agreement and deposited by the
Administrative Agent in the Funding Account in accordance with Section 2.10
of the Receivables Transfer Agreement shall be invested by the Funding
Agent in Permitted Investments that will mature so that such funds will be
available prior to the last day of each successive Tranche Period following
such investment. On the last day of each Tranche Period, all interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Funding Account shall be retained in the Funding Account and be available
to make any payments required to be made under the Transaction Documents
7
by the Transferor to PARCO and the APA Banks. On the date on which the
Aggregate Net Investment is zero and all accrued Discount and all other
Aggregate Unpaids have been paid in full, any funds remaining on deposit in
the Funding Account shall be paid to the Transferor.
(b) Requests for Indemnity under the Transaction Documents. The
Funding Agent shall, at the written request of any APA Bank, make demand of
PARCO for payment of any amounts from time to time claimed by such APA Bank
pursuant to the terms of the Receivables Transfer Agreement, and the
Funding Agent shall, upon its receipt of such amounts, distribute them to
each such APA Bank ratably in accordance with their respective Pro Rata
Shares (calculated without regard to that portion of the PARCO APA Bank
Commitment of a Defaulting APA Bank which such Defaulting APA Bank failed
to fund pursuant to this Agreement); provided that no such demand shall be
made of PARCO except to the extent that such claim arises out of, or
relates to, PARCO's beneficial interest in the Transferred Interests.
(c) Payments Conditional upon Receipt from the Administrative
Agent, PARCO, the Collection Agent, the Originators or the Transferor.
Anything in this Agreement to the contrary notwithstanding, the Funding
Agent shall have no obligation to make any payments to the APA Banks unless
and until it has received such amounts from the Administrative Agent,
PARCO, the Collection Agent, the Originators or the Transferor pursuant to
the terms of the Receivables Transfer Agreement.
SECTION 2.5. Reduction of Commitments. The PARCO APA Bank Commitment
of each APA Bank and the Aggregate Commitment shall be automatically reduced to
zero on the Commitment Expiry Date. Following a Termination Date, each PARCO APA
Bank Commitment shall be reduced as of each calendar date thereafter, to equal
its Pro Rata Share of 102% of the PARCO Net Investment.
SECTION 2.6. Issuance of Commercial Paper by PARCO. For so long as
this Agreement is in full force and effect, PARCO shall not issue Commercial
Paper with respect to the Transferred Interests on any day if, after giving
effect to such issuance and the use of proceeds thereof, the Face Amount of all
outstanding Commercial Paper issued by PARCO with respect to the Transferred
Interests on such day would exceed 102% of the sum of the Transfer Prices
related to all PARCO Interests (after giving effect to the issuance and payment
of such Commercial Paper on such day).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. PARCO Disclaimer of Representations and Warranties. By
executing and delivering any Sale Notice pursuant to Section 2.2(a), (a) PARCO
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Receivables Transfer Agreement
8
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Transaction Documents, and (b) PARCO makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Collection Agent, the Originators, the Transferor or any Obligor
(collectively, the "Transaction Parties") or the Funding Agent or the
Administrative Agent, or the performance or observance by the Transaction
Parties, the Funding Agent or the Administrative Agent of any of their
respective obligations under the Receivables Transfer Agreement or the
Transaction Documents.
SECTION 3.2. Representations and Warranties of the APA Banks. Each of
the APA Banks (a) confirms that it has received copies of the Transaction
Documents; (b) represents and warrants to the Funding Agent and PARCO that it
has, independently and without reliance upon the Funding Agent, PARCO or any
other APA Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of the Transaction Parties, and made its own decision to enter
into this Agreement; (c) represents that it will, independently and without
reliance upon the Funding Agent, PARCO or any other APA Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the Transaction Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, prospects, financial and other condition and
creditworthiness of the Transaction Parties; (d) appoints and authorizes the
Funding Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement and the Transaction Documents as are delegated to
the Funding Agent by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto; (e) represents and warrants that it is a
corporation or a banking association duly organized and validly existing under
the laws of its jurisdiction of incorporation or organization and has all
corporate power to perform its obligations hereunder; (f) represents and
warrants that 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 it of this Agreement, which has
not otherwise been obtained; (g) represents and warrants that the execution,
delivery and performance of this Agreement are within its corporate powers, have
been duly authorized by all necessary corporate action, do not contravene or
violate (i) its charter, certificate or articles of incorporation or association
or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or any of its property is bound or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not
result in the creation or imposition of any adverse claim on its assets, which
contravention or violation in any of the foregoing cases could have a material
adverse effect on its financial condition or its ability to perform its
obligations hereunder; (h) represents and warrants that this Agreement
constitutes its legal, valid and binding obligations enforceable against it in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to limiting creditors' rights generally and by equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or at
law); and (i) represents and warrants that this Agreement has been duly
authorized,
9
executed and delivered by it.
ARTICLE IV
THE FUNDING AGENT
SECTION 4.1. Appointment. PARCO and each APA Bank hereby irrevocably
designates and appoints Chase as Funding Agent on its behalf under the
Transaction Documents and under Section 2.4(a) of this Agreement, and each APA
Bank hereby irrevocably designates and appoints Chase as Funding Agent on its
behalf under this Agreement. In furtherance of the foregoing, PARCO and each
APA Bank hereby authorizes the Funding Agent to take such action on its behalf
under the provisions of this Agreement and the Transaction Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Funding Agent by the terms of the Agreement and the Transaction Documents,
together with such other powers as are reasonably incidental hereto or thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or the
Transaction Documents, the Funding Agent shall not have any duties or
responsibilities, except those expressly set forth herein or therein, or any
fiduciary relationship with any APA Bank or PARCO, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities on the part of
the Funding Agent shall be read into this Agreement or any Transaction Document
or shall otherwise exist against the Funding Agent. The provisions of this
Article IV are solely for the benefit of the Funding Agent, PARCO and the APA
Banks. In performing its functions and duties solely under this Agreement
(except with respect to Section 2.4(a) hereof), subject to the provisions of
Section 5.10 hereof, the Funding Agent shall act solely as the agent of the APA
Banks and does not assume, nor shall be deemed to have assumed, any obligation
or relationship of trust or agency with or for PARCO.
SECTION 4.2. Delegation of Duties. The Funding Agent may execute any
of its duties under this Agreement by or through its subsidiaries, affiliates,
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Funding Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 4.3. Exculpatory Provisions. Neither the Funding Agent nor
any of its directors, officers, agents or employees shall be (a) liable for any
action lawfully taken or omitted to be taken by it or them or any Person
described in Section 4.2 under or in connection with this Agreement or the
Transaction Documents (except for its, their or such Person's own gross
negligence or willful misconduct), or (b) responsible in any manner to PARCO and
the APA Banks for any recitals, statements, representations or warranties
contained in this Agreement or the Transaction Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
under or in connection with, such agreements or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Transaction
Documents, this Agreement or any other document furnished in connection
therewith or herewith, or for any failure of PARCO or an APA Bank to perform its
obligations under this Agreement or any Transaction Document or for the
satisfaction of any condition
10
specified in this Agreement or the Transaction Documents. The Funding Agent
shall not be under any obligation to any APA Bank to ascertain or to inquire as
to the observance or performance of any of the agreements or covenants contained
in, or conditions of, the Transaction Documents, or to inspect the properties,
books or records of the Transaction Parties.
SECTION 4.4. Reliance by Funding Agent. The Funding Agent shall in
all cases be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to PARCO
and the APA Banks), independent accountants and other experts selected by the
Funding Agent. The Funding Agent shall in all cases be fully justified in
failing or refusing to take any action under this Agreement, the Transaction
Documents or any other document furnished in connection herewith or therewith
unless it shall first receive such advice or concurrence of the Required
Participants, the Required APA Banks or all of the APA Banks, as applicable, as
it deems appropriate, or it shall first be indemnified to its satisfaction by
the APA Banks against any and all liability, cost and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Funding Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any Transaction Document or any other
document furnished in connection herewith or therewith in accordance with a
request of the Required Participants, the Required APA Banks or all of the APA
Banks, as applicable, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the APA Banks.
SECTION 4.5. Notice of Events of Default and other Events; Voting.
The Funding Agent shall not be deemed to have knowledge or notice of the
occurrence of any Termination Event unless the Funding Agent has received notice
from any APA Bank, an Initial Purchaser or any Transaction Party referring to
the Transaction Documents stating that a Termination Event has occurred with
respect to the Transferred Interests and describing such event. If the Funding
Agent receives such a notice, the Funding Agent shall promptly give notice
thereof to PARCO, each APA Bank and each Rating Agency. Subject to the
provisions of Section 5.1(b), to the extent the Funding Agent is entitled to
consent to or withhold its consent of any waiver or amendment of any Transaction
Document in accordance with the terms thereof, the Funding Agent shall (a) give
prompt notice to PARCO, the APA Banks and the Rating Agencies of any such waiver
or amendment of which it is aware, and (b) take such action with respect to such
waiver, amendment, or Termination Event as shall be directed by the Required
Participants; provided, however, that unless and until the Funding Agent shall
have received such directions, the Funding Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Termination Event as the Funding Agent shall deem advisable and in the best
interests of the APA Banks.
SECTION 4.6. Non-Reliance on Funding Agent. PARCO and each APA Bank
expressly acknowledges that neither the Funding Agent, nor any of its officers,
directors,
11
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Funding Agent hereafter taken,
including, without limitation, any review of the affairs of PARCO, the APA Banks
or any Transaction Party, shall be deemed to constitute any representation or
warranty by the Funding Agent. The Funding Agent shall not have any duty or
responsibility to provide PARCO or any APA Bank with any credit or other
information concerning the business, operations, property, prospects, financial
and other condition or creditworthiness of PARCO, the APA Banks or the
Transaction Parties which may come into the possession of the Funding Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
SECTION 4.7. Indemnification. The APA Banks agree to indemnify the
Funding Agent and its officers, directors, employees, representatives and agents
(to the extent not reimbursed by the Transaction Parties, and without limiting
the obligation of any Transaction Party to do so in accordance with the terms of
the Transaction Documents), ratably according to their Pro Rata Shares, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for the Funding Agent or the affected Person in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not the Funding Agent or such affected
Person shall be designated a party thereto) that may at any time be imposed on,
incurred by or asserted against the Funding Agent or such affected Person as a
result of, or arising out of, or in any way related to or by reason of, any of
the transactions contemplated hereunder or under the Transaction Documents or
the execution, delivery or performance of this Agreement, any Transaction
Document or any other document furnished in connection herewith or therewith
(but excluding any such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the gross negligence or willful misconduct of the Funding Agent or such
affected Person).
SECTION 4.8. Funding Agent in its Individual Capacity. The Funding
Agent and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with PARCO or any Transaction Party or any
Affiliate of such Persons as though the Funding Agent were not the Funding Agent
hereunder. With respect to its acquisition of Transferred Interests Payments
pursuant to this Agreement, the Funding Agent shall have the same rights and
powers under this Agreement as any APA Bank and may exercise the same as though
it were not the Funding Agent, and the terms "APA Bank" and "APA Banks" shall
include the Funding Agent in its individual capacity as an APA Bank.
SECTION 4.9. Successor Funding Agent. The Funding Agent may, upon
five (5) days' notice to PARCO, the APA Banks and the Rating Agencies, and the
Funding Agent will, upon the direction of the Required APA Banks (calculated
without regard to the Pro Rata Share of Chase or any Affiliate of Chase), resign
as Funding Agent; provided, in either case, that an APA Bank agrees to become
the successor Funding Agent hereunder in accordance with the next sentence. If
the Funding Agent shall resign as Funding Agent under this Agreement, then the
Required APA Banks during such period shall appoint from among the APA Banks a
12
successor agent, whereupon such successor agent shall succeed to the rights,
powers and duties of the Funding Agent, and the term "Funding Agent" shall mean
such successor agent, effective upon its acceptance of such appointment, and the
former Funding Agent's rights, powers and duties as Funding Agent shall be
terminated, without any other or further act or deed on the part of such former
Funding Agent or any of the parties to this Agreement. After the retiring
Funding Agent's resignation hereunder as Funding Agent, the provisions of this
Article IV shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Funding Agent under this Agreement.
SECTION 4.10. Chase Conflict Waiver. Chase acts as PARCO
Administrative Agent, as issuing and paying agent for PARCO's Commercial Paper,
as provider of other backup facilities for PARCO, as Administrative Agent, and
may provide other services or facilities from time to time (the "Chase Roles").
Without limiting the generality of Section 4.8, each APA Bank hereby
acknowledges and consents to any and all Chase Roles, waives any objections it
may have to any actual or potential conflict of interest caused by Chase's
acting as the Funding Agent or as an APA Bank hereunder and acting as or
maintaining any of the Chase Roles, and agrees that in connection with any Chase
Role, Chase may take, or refrain from taking, any action which it in its
discretion deems appropriate. The APA Banks are hereby notified that PARCO may
delegate responsibility for signing and/or sending Sale Notices to Chase as
PARCO Administrative Agent.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Waivers; Amendments, etc.
(a) No Waiver; Remedies Cumulative. No failure or delay on the
part of the Funding Agent or any APA Bank in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power, right or remedy preclude
any other further exercise thereof or the exercise of any other power,
right or remedy. The rights and remedies herein provided shall be
cumulative and nonexclusive of any rights and remedies provided by law. Any
waiver of this Agreement shall be effective only for the specific purpose
for which given.
(b) Amendments, Etc. This Agreement may be amended,
supplemented, modified or waived with the written consent of all of the
parties hereto; provided that no such amendment, supplement, modification
or waiver shall become effective without prior written notice to each of
the Rating Agencies. Notwithstanding the foregoing, without the consent of
the APA Banks, the Funding Agent and PARCO may amend this Agreement solely
to add additional Persons as APA Banks. Any such amendment, supplement,
modification or waiver shall apply to each of the APA Banks equally and
shall be binding upon PARCO, the APA Banks and the Funding Agent. In the
case of any waiver, PARCO, the APA Banks and the Funding Agent shall be
restored to their former positions and rights hereunder.
13
(c) Integration. This Agreement and the Transaction Documents
contain a final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to
the subject matter hereof, superseding all prior oral or written
understandings.
SECTION 5.2. Notices. Except as otherwise expressly provided herein,
all communications and notices provided for hereunder shall be in writing and
shall be (a) hand-delivered by messenger, (b) sent by reputable overnight or
second business day courier, or (c) sent by telecopy or similar electronic
transmission directed to the applicable address or telecopy number, as the case
may be, set forth on Exhibit C hereto (as amended from time to time) or at such
other address or telecopy number as any party may hereafter specify in writing
to the Funding Agent for the purpose of receiving notices. Each such notice or
other communication shall be effective only upon receipt thereof.
SECTION 5.3. Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York.
SECTION 5.4. Severability; Counterparts; Waiver of Setoff. 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. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Each APA Bank and the Funding Agent hereby waives any right
of setoff it may have or to which it may be entitled under this Agreement from
time to time against PARCO or its assets.
SECTION 5.5. Successors and Assigns; Participations; Assignments.
(a) Successors and Assigns. This Agreement shall be binding upon
the parties hereto and their respective successors and permitted assigns.
No APA Bank may participate, assign or sell any portion of its rights
hereunder except as required by operation of law, in connection with the
merger, consolidation or dissolution of any APA Bank or as provided in this
Section 5.5. No assignment hereunder shall become effective without a
Rating Confirmation.
(b) Participations. Any APA Bank may, with the consent of the
Funding Agent and in the ordinary course of its business and in accordance
with applicable law, at any time sell to one or more Persons (each, a
"Participant") participating interests in its rights and obligations
hereunder and under the Transaction Documents; provided, however, that each
Participant shall purchase an identical percentage in such selling APA
Bank's Commitment, unused PARCO APA Bank Commitment and Funding Balance;
provided, further, that each Participant shall, prior to
14
the effectiveness of such participation, be required to provide all of the
forms and statements required pursuant to subsection 7.3(b) of the
Receivables Transfer Agreement and shall, as of the date such Person
becomes a Participant comply with the provisions of subsection 7.3(b) and
Section 10.9 of the Receivables Transfer Agreement. Notwithstanding any
such sale by an APA Bank of participating interests to a Participant, such
APA Bank's rights and obligations under this Agreement shall remain
unchanged, such APA Bank shall remain solely responsible for the
performance thereof, and PARCO and the Funding Agent shall continue to deal
solely and directly with such APA Bank in connection with such APA Bank's
rights and obligations under this Agreement and the Transaction Documents.
Each APA Bank agrees that any agreement between such APA Bank and any such
Participant in respect of such participating interest shall not restrict
such APA Bank's right to agree to any amendment, supplement, waiver or
modification to this Agreement.
(c) Assignments to Purchasers.
(i) Any APA Bank may at any time and from time to time,
upon the prior written consent of PARCO and the Funding Agent, assign
to one or more accredited investors or other Persons ("Purchaser(s)")
all or any part of its rights and obligations under this Agreement and
the Transaction Documents pursuant to a supplement to this Agreement,
substantially in the form of Exhibit A hereto (each, a "Transfer
Supplement"), executed by the Purchaser, such selling APA Bank and, as
applicable, the Funding Agent; and provided however that (A) each
Purchaser shall purchase an identical percentage in such selling APA
Bank's Commitment, unused PARCO APA Bank Commitment and Funding
Balance, (B) any such assignment cannot be for an amount less than the
lesser of (1) $10,000,000 and (2) such selling APA Bank's Commitment
or Funding Balance (calculated at the time of such assignment), (C)
each Purchaser must be a financial institution incorporated in an OECD
Country rated at least A-1/P-1 (or the equivalent short-term rating)
by the Rating Agencies and (D) each Purchaser shall deliver to the
Funding Agent and PARCO an opinion of such Purchaser's counsel in
substantially the form of Exhibit B hereto.
(ii) Each of the APA Banks agrees that in the event that it
shall cease to have short-term debt ratings of at least A-1 by S&P and
at least P-1 by ▇▇▇▇▇'▇, or, if such APA Bank does not have short-term
debt which is rated by S&P's and ▇▇▇▇▇'▇, in the event that the parent
corporation of such APA Bank has rated short-term debt, such parent
corporation ceases to have short-term debt ratings of at least A-1 by
S&P and at least P-1 by ▇▇▇▇▇'▇ (each, an "Affected APA Bank"), such
Affected APA Bank shall be obliged, at the request of PARCO and the
Funding Agent, to assign all of its rights and obligations hereunder
to (x) one or more other APA Banks selected by PARCO and the Funding
Agent which are willing to accept such assignment, or (y) another
financial institution rated at least A-1/P-1 (or the equivalent short-
term rating) by the Rating Agencies
15
nominated by the Funding Agent and consented to by PARCO (which
consent shall not be unreasonably withheld) and the Funding Agent, and
willing to participate in this facility through the Commitment Expiry
Date in the place of such Affected APA Bank; provided that (i) the
Affected APA Bank receives payment in full, pursuant to a Transfer
Supplement and/or, as applicable, an assignment, of an amount equal to
the Affected APA Bank's Funding Balance and any other amounts due and
owing under the Transaction Documents in respect of such Affected APA
Bank's Funding Balance and (ii) such nominated financial institution,
if not an existing APA Bank, satisfies all the requirements of this
Agreement and provides the Funding Agent with an opinion of counsel in
substantially the form of Exhibit B hereto.
(iii) Upon (A) execution of a Transfer Supplement, (B)
delivery of an executed copy thereof to PARCO, the Funding Agent and
the Administrative Agent and delivery to the Funding Agent and PARCO
of an opinion of such Purchaser's counsel in substantially the form of
Exhibit B hereto, (C) payment, if applicable, by the Purchaser to such
selling APA Bank of an amount equal to the purchase price agreed
between such selling APA Bank and the Purchaser and (D) receipt by
PARCO of a Rating Confirmation, such selling APA Bank shall be
released from its obligations hereunder and under the Transaction
Documents to the extent of such assignment and the Purchaser shall,
for all purposes, be an APA Bank party to this Agreement and, if and
when applicable, an assignee of PARCO's right to receive Transferred
Interests Payments under the Transaction Documents and shall have all
the rights and obligations of an APA Bank under this Agreement to the
same extent as if it were an original party hereto or thereto, and no
further consent or action by PARCO, the APA Banks or the Funding Agent
shall be required. The amount of the assigned portion of the selling
APA Bank's Funding Balance allocable to the Purchaser shall be equal
to the Transferred Percentage (as defined in the Transfer Supplement)
of such selling APA Bank's Funding Balance which is transferred
thereunder regardless of the purchase price paid therefor. Such
Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of
the Purchaser as an APA Bank and the resulting adjustment of the
selling APA Bank's Commitment arising from the purchase by the
Purchaser of all or a portion of the selling APA Bank's rights,
obligations, and interest hereunder and under the Transaction
Documents.
SECTION 5.6. Effectiveness of this Agreement. This Agreement, and the
obligations of the Funding Agent and the APA Banks hereunder, shall become
effective when the Funding Agent has received counterparts hereof, duly executed
by the Funding Agent, PARCO and each of the APA Banks.
SECTION 5.7. No Petition. The Funding Agent, each APA Bank and PARCO
hereby covenant and agree that, prior to the date which is one year and one day
after the payment
16
in full of all outstanding Commercial Paper of PARCO, such party will not
institute against, or join any other Person in instituting against, PARCO any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of any jurisdiction. The provisions
of this Section 5.7 shall survive termination of this Agreement.
SECTION 5.8. Waiver of Trial by Jury. To the extent permitted by
applicable law, the Funding Agent, each APA Bank and PARCO irrevocably waives
all right of trial by jury in any action, proceeding or counterclaim arising out
of or in connection with this Agreement or the operative documents or any matter
arising hereunder or thereunder.
SECTION 5.9. Limited Recourse. Notwithstanding anything to the
contrary contained herein, the obligations of PARCO under this Agreement are
solely the corporate obligations of PARCO and, in the case of obligations of
PARCO other than Commercial Paper, shall be payable at such time as funds are
received by or are available to PARCO in excess of funds necessary to pay in
full all outstanding Commercial Paper and, to the extent funds are not available
to pay such obligations, the claims relating thereto shall not constitute a
claim against PARCO but shall continue to accrue. Each party hereto agrees that
the payment of any claim (as defined in Section 101 of Title 11 of the
Bankruptcy Code) of any such party shall be subordinated to the payment in full
of all Commercial Paper.
No recourse under any obligation, covenant or agreement of PARCO
contained in this Agreement shall be had against any incorporator, stockholder,
officer, director, employee or agent of PARCO, the Administrative Agent, the
PARCO Administrative Agent, the Funding Agent, the Manager or any of their
Affiliates (solely by virtue of such capacity) by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that this Agreement is
solely a corporate obligation of PARCO individually, and that no personal
liability whatever shall attach to or be incurred by any incorporator,
stockholder, officer, director, employee or agent of PARCO, the Administrative
Agent, the PARCO Administrative Agent, the Funding Agent, the Manager or any of
their Affiliates (solely by virtue of such capacity) or any of them under or by
reason of any of the obligations, covenants or agreements of PARCO contained in
this Agreement, or implied therefrom, and that any and all personal liability
for breaches by PARCO of any of such obligations, covenants or agreements,
either at common law or at equity, or by statute, rule or regulation, of every
such incorporator, stockholder, officer, director, employee or agent is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement; provided that the foregoing shall not relieve any such Person
from any liability it might otherwise have as a result of fraudulent actions
taken or omissions made by them. The provisions of this Section 5.9 shall
survive termination of this Agreement.
SECTION 5.10. Liability of Funding Agent. Notwithstanding any
provision of this Agreement: (i) the Funding Agent shall not have any
obligations under this Agreement other than those specifically set forth herein,
and no implied obligations of the Funding Agent shall be read into this
Agreement; and (ii) in no event shall the Funding Agent be liable under or in
connection with this Agreement for indirect, special, or consequential losses or
damages of
17
any kind, including lost profits, even if advised of the possibility thereof and
regardless of the form of action by which such losses or damages may be claimed.
Neither the Funding Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken in good
faith by it or them under or in connection with this Agreement, except for its
or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Funding Agent (a) may consult with legal counsel (including
counsel for the Initial Purchasers and the APA Banks), 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, (b) shall not be responsible to
PARCO for any statements, warranties or representations made in or in connection
with this Agreement or the Transaction Documents, (c) shall not be responsible
to PARCO for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the Transaction Documents, (d) shall
incur no liability under or in respect of any of the Commercial Paper or other
obligations of PARCO under this Agreement or the Transaction Documents and (e)
shall incur no liability under or in respect of this Agreement or the
Transaction Documents 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.
Notwithstanding anything else herein or in the Transaction Documents, it is
agreed that where the Funding Agent may be required under this Agreement or the
Transaction Documents to give notice of any event or condition or to take any
action as a result of the occurrence of any event or the existence of any
condition, the Funding Agent agrees to give such notice or take such action only
to the extent that it has actual knowledge of the occurrence of such event or
the existence of such condition, and shall incur no liability for any failure to
give such notice or take such action in the absence of such knowledge.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
18
IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be executed and delivered by their duty authorized officers or
signatories as of the date hereof.
PARK AVENUE RECEIVABLES CORPORATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
THE CHASE MANHATTAN BANK, as
Funding Agent
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
THE CHASE MANHATTAN BANK, as an
APA Bank
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
ANNEX 1
APA Banks
The Chase Manhattan Bank
Annex 1 - Page 1
EXHIBIT A
[FORM OF TRANSFER SUPPLEMENT]
THIS TRANSFER SUPPLEMENT is entered into as of the _____ day of ________,
19/20__, by and between ____________________ ("Seller") and _____________
("Purchaser").
PRELIMINARY STATEMENTS
A. This Transfer Supplement is being executed and delivered in accordance
with Section 5.5(c) of that certain Asset Purchase Agreement, dated as of
December 27, 1999 (as amended, supplemented or otherwise modified and in effect
from time to time, the "Agreement"), by and among Park Avenue Receivables
Corporation, a Delaware corporation, the several APA Banks party thereto from
time to time, and The Chase Manhattan Bank, a New York banking corporation,
individually and as Funding Agent. Capitalized terms used herein and not
otherwise defined herein are used with the meanings set forth in, or
incorporated by reference into, the Agreement.
B. The Seller is an APA Bank party to the Agreement, and the Purchaser
wishes to become an APA Bank thereunder.
C. The Seller is selling and assigning to the Purchaser an undivided ___%
(the "Transferred Percentage") interest in all of Seller's rights and
obligations under the Agreement and the Transaction Documents, including,
without limitation, the Seller's Commitment and (if applicable) the Seller's
Funding Balance as set forth herein.
The parties hereto hereby agree as follows:
1. The transfer effected by this Transfer Supplement shall become
effective (the "Transfer Effective Date") two (2) Business Days (or such other
date selected by the Funding Agent in its sole discretion) following the date on
which a transfer effective notice substantially in the form of Schedule II to
this Transfer Supplement ("Transfer Effective Notice") is delivered by the
Funding Agent to PARCO, the Seller and the Purchaser. From and after the
Transfer Effective Date, the Purchaser shall be an APA Bank party to the
Agreement for all purposes thereof as if the Purchaser were an original party
thereto and the Purchaser agrees to be bound by all of the terms and provisions
contained therein.
2. If there is no related PARCO Net Investment on the Transfer Effective
Date, Seller shall be deemed to have hereby transferred and assigned to the
Purchaser, without recourse, representation or warranty (except as provided in
paragraph 6 below), and the Purchaser shall be deemed to have hereby irrevocably
taken, received and assumed from the
A-1
Seller, the Transferred Percentage of the Seller's Commitment and all rights and
obligations associated therewith under the terms of the Agreement, including,
without limitation, the Transferred Percentage of the Seller's future funding
obligations under Section 2.2(a) of the Agreement.
3. If there is a related PARCO Net Investment, at or before 12:00 noon,
local time of the Seller, on the Transfer Effective Date, the Purchaser shall
pay to the Seller, in immediately available funds, an amount equal to the sum of
(i) the Transferred Percentage of an amount equal to the Seller's Funding
Balance (such amount, being hereinafter referred to as the "Purchaser's Funding
Balance"); (ii) all accrued but unpaid (whether or not then due) interest
attributable to the Purchaser's Funding Balance; and (iii) accrued but unpaid
fees and other costs and expenses payable in respect of the Purchaser's Funding
Balance for the period commencing upon each date such unpaid amounts commence
accruing, to and including the Transfer Effective Date (the "Purchaser's
Acquisition Cost"), whereupon, the Seller shall be deemed to have transferred
and assigned to the Purchaser, without recourse, representation or warranty
(except as provided in paragraph 6 below), and the Purchaser shall be deemed to
have hereby irrevocably taken, received and assumed from the Seller, the
Transferred Percentage of the Seller's Commitment and its Funding Balance and
all related rights and obligations under the Agreement and the Transaction
Documents, including, without limitation, the Transferred Percentage of the
Seller's future funding obligations under Section 2.2(a) of the Agreement.
4. Concurrently with the execution and delivery hereof, the Seller will
provide to the Purchaser copies of all documents requested by the Purchaser
which were delivered to such Seller pursuant to the Agreement.
5. Each of the parties to this Transfer Supplement agrees that at any
time and from time to time upon the written request of any other party, it will
execute and deliver such further documents and do such further acts and things
as such other party may reasonably request in order to effect the purposes of
this Transfer Supplement.
6. By executing and delivering this Transfer Supplement, the Seller and
the Purchaser confirm to and agree with each other, the Funding Agent and the
APA Banks as follows: (a) other than the representation and warranty that it has
not created any Adverse Claim upon any interest being transferred hereunder, the
Seller makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made by any other
Person in or in connection with the Agreement or the Transaction Documents or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value thereof or any other instrument or document furnished pursuant thereto or
the perfection, priority, condition, value or sufficiency of any collateral; (b)
the Seller makes no representation or warranty and assumes no responsibility
with respect to the financial condition of PARCO, the Funding Agent, the
Administrative Agent or any Transaction Party, any surety or any guarantor or
the performance or observance by PARCO, any Transaction Party, the
Administrative Agent or the Funding Agent of any of their respective obligations
under the Agreement or any Transaction Document or any other instrument or
document furnished pursuant thereto or in connection therewith; (c)
A-2
the Purchaser confirms that it has received a copy of the Agreement and the
Transaction Documents, together with such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Transfer Supplement; (d) the Purchaser will, independently and without
reliance upon the Funding Agent, PARCO or any other APA Bank, 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
or the Transaction Documents; (e) the Purchaser appoints and authorizes the
Funding Agent to take such action as agent on its behalf and to exercise such
powers under the Agreement as are delegated to the Funding Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (f) the
Purchaser was not formed for the purpose of acquiring the interest being
acquired hereunder; and (h) the Purchaser agrees that it will perform in
accordance with their terms all of the obligations which, by the terms of the
Agreement and the Transaction Documents, are required to be performed by it as
an APA Bank or as the holder of PARCO's interest thereunder.
7. Each party hereto represents and warrants to and agrees with the
Funding Agent that it is aware of and will comply with the provisions of (i) the
Agreement, including, without limitation, Sections 2.2, 5.5(c) and 5.7 thereof
and (ii) Sections 7.3(b) and 10.9 of the Receivables Transfer Agreement.
8. Schedule I hereto sets forth the revised PARCO APA Bank Commitment of
the Seller and the PARCO APA Bank Commitment of the Purchaser, as well as
administrative information with respect to the Purchaser.
9. This Transfer Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.
A-3
IN WITNESS WHEREOF, the parties hereto have caused this Transfer Supplement
to be executed by their respective duly authorized officers of the date hereof.
[SELLER]
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
[PURCHASER]
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
A-4
SCHEDULE I TO TRANSFER SUPPLEMENT
LIST OF PURCHASING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
Date: _______________, 19/20___
Transferred Percentage: _____%
Pro
PARCO APA PARCO APA Outstanding Rata
Seller Bank Bank Funding Balance Share
Commitment Commitment
[existing] [revised]
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Pro
PARCO APA Outstanding Rata
Purchaser Bank Funding Balance Share
Commitment
[initial]
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Purchaser's Addresses for Notices:
________________________
________________________
________________________
Attention:
Telephone:
Telecopy:
SI-1
SCHEDULE II TO TRANSFER SUPPLEMENT
TRANSFER EFFECTIVE NOTICE
TO: ___________________, Seller
___________________
___________________
TO: ___________________, Purchaser
___________________
___________________
The undersigned, as Funding Agent under the Asset Purchase Agreement, dated
as of December 27, 1999 (as amended, supplemented or otherwise modified and in
effect from time to time), by and among Park Avenue Receivables Corporation, a
Delaware corporation, the several APA Banks party thereto from time to time, and
The Chase Manhattan Bank, a New York banking corporation, individually and as
Funding Agent, hereby acknowledges receipt of executed counterparts of a
completed Transfer Supplement dated as of ______, 19/20__ between ___________,
as Seller, and _____________, as Purchaser. Capitalized terms defined in such
Transfer Supplement are used herein as therein defined or incorporated by
reference therein.
1. Pursuant to such Transfer Supplement, you are advised that the
Transfer Effective Date will be ___________, 19/20__.
2. The Funding Agent each hereby consents to the Transfer Supplement as
required by Section 5.5(c) of the Agreement.
--------------
[3. Pursuant to such Transfer Supplement, the Purchaser is required to pay
$_______ to the Seller at or before 12:00 noon (local time of the Seller) on the
Transfer Effective Date in immediately available funds.]
Very truly yours,
THE CHASE MANHATTAN BANK,
as Funding Agent
By:
------------------------
Authorized Signatory
SII-1
EXHIBIT B
FORM OF OPINION OF COUNSEL
Park Avenue Receivables Corporation Standard & Poor's Ratings Services, a
c/o Global Securitization Services, LLC division of The ▇▇▇▇▇▇-▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Companies, Inc.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The Chase Manhattan Bank, as ▇▇▇▇▇'▇ Investors Service, Inc.
Administrative Agent, Depositary, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Liquidity Agent, Liquidity Bank, New York, New York 10007
L/C Agent and L/C Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Transfer Supplement dated as of __________ with [Name of Bank]
Ladies and Gentlemen:
We have acted as counsel for [Name of Bank] (the "Bank") in
connection with (i) the Asset Purchase Agreement, dated as of December 27, 1999
(as amended, supplemented or otherwise modified to the date hereof, the
"Agreement"; terms defined therein and not otherwise defined in this letter
shall have the respective meanings ascribed therein), by and among Park Avenue
Receivables Corporation, a Delaware corporation, the several APA Banks party
thereto from time to time, and The Chase Manhattan Bank, a New York banking
corporation, individually and as Funding Agent, and (ii) the Transfer Supplement
(the "Transfer Supplement"), dated as of ____________, 19/20__, between [Name of
Seller] as "Seller" (as defined therein) and the Bank as "Purchaser" (as defined
therein), consented to by the Funding Agent.
1. The Bank is a ______________________ organized, validly existing
and in good standing under the laws of ___________________. The Bank has the
corporate power and authority to execute and deliver the Transfer Supplement and
to perform its obligations under the Asset Purchase Agreement.
2. No governmental approval or other action, which has not been
obtained or taken and is not in full force and effect, is required to authorize,
or is required in connection with, the execution or delivery by the Bank of the
Transfer Supplement or the performance by the Bank of its obligations thereunder
and under the Asset Purchase Agreement.
3. Neither the execution and delivery of the Transfer Supplement by
the Bank, nor the consummation of the transactions contemplated thereby and by
the Asset Purchase Agreement, will contravene, or result in a violation of, any
law applicable to the Bank.
B-1
4. The Transfer Supplement has been duly authorized, executed and
delivered by the Bank, and the Asset Purchase Agreement, as amended by the
Transfer Supplement, constitutes the legal, valid and binding obligation of the
Bank, enforceable against the Bank in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, receivership,
conservatorship or other similar laws, regulations and administrative orders of
general application relating to or affecting the enforcement of creditors'
rights in general and the rights of creditors of banks as the same may be
applied in the event of the bankruptcy, insolvency, receivership,
conservatorship or other similar event in respect of the Bank or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5. With the exception of obligations being given priority by statute
or regulation, the obligations of the Bank under the Asset Purchase Agreement,
as amended by the Transfer Supplement, will rank pari passu with all obligations
of the Bank which are not contractually subordinated to payment of such
obligations.
Very truly yours,
[NOTE THAT ADDITIONAL OPINIONS MAY BE REQUIRED FROM
FOREIGN APA BANKS]
B-2
EXHIBIT C
NOTICE ADDRESSES
If to PARCO:
Park Avenue Receivables Corporation
c/o Global Securitization Services, LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Funding Agent:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Structured Finance Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Chase as an APA Bank:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Structured Finance Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
C-1
If to C&A:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Collection Agent:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Transferor:
Carcorp, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
C-2
LIMITED GUARANTY
This Limited Guaranty (as amended, supplemented or otherwise modified
and in effect from time to time, the "Guaranty") is executed as of the 27th day
of December, 1999 by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co., a corporation organized and
existing under the laws of the State of Delaware (the "Guarantor"), in favor of
The Chase Manhattan Bank, as administrative agent (in such capacity, the
"Administrative Agent"), on behalf of the Funding Agents, the Initial Purchasers
and the PARCO APA Banks (together, the Funding Agents, the Initial Purchasers
and the PARCO APA Banks are referred to herein as the "Beneficiaries").
PRELIMINARY STATEMENTS
WHEREAS, pursuant to a receivables purchase agreement, dated as of
December 27, 1999 (as amended, supplemented or otherwise modified and in effect
from time to time, the "Receivables Purchase Agreement"), between ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ Products Co. ("C&A"), C&A's wholly-owned direct and indirect Subsidiaries
listed on Schedule D attached thereto, each as a seller thereunder (each a
"Seller", and collectively, the "Sellers"), and Carcorp, Inc., a Delaware
corporation (the "Receivables Company"), as purchaser thereunder, each Seller
has agreed to sell from time to time, and Receivables Company has agreed to
purchase from time to time, the Receivables;
WHEREAS, pursuant to (i) a Receivables Transfer Agreement, dated as of
December 27, 1999 (as amended, supplemented or otherwise modified and in effect
from time to time, the "Receivables Transfer Agreement"), between C&A, as
Guarantor and as collection agent thereunder (the "Collection Agent"),
Receivables Company, as transferor thereunder, the Initial Purchasers, the PARCO
APA Banks from time to time party thereto, the Funding Agents and the
Administrative Agent, (ii) an Asset Purchase Agreement, dated as of December 27,
1999 (as amended, supplemented or otherwise modified and in effect from time to
time, the "PARCO Asset Purchase Agreement"), by and among PARCO, the PARCO APA
Banks and the PARCO Funding Agent, (iii) the Redwood Liquidity Loan Agreement
and (iv) the Liberty Liquidity Asset Purchase Agreement, Receivables Company has
agreed to sell from time to time, and the Administrative Agent, on behalf of the
Initial Purchasers and the PARCO APA Banks, has agreed to purchase from time to
time, on the terms and conditions set forth in the Receivables Transfer
Agreement and the Asset Purchase Agreements, undivided interests in the
Receivables;
WHEREAS, the Guarantor is the direct or indirect owner of 100% of the
outstanding capital stock of each of the other Sellers; and
WHEREAS, it is a condition precedent to the execution and delivery of
the Receivables Transfer Agreement that the Guarantor execute this Guaranty and
deliver it to the Administrative Agent for the benefit of the Beneficiaries.
In consideration for the execution and delivery of the Receivables
Transfer Agreement and the Asset Purchase Agreements by the Beneficiaries, as
applicable, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the Guarantor, the Guarantor
agrees as follows:
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1. Definitions. Unless otherwise defined in this Guaranty,
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in, or incorporated by reference into, the
Receivables Transfer Agreement. As used herein, "Facility Documents" shall mean,
collectively, the Receivables Purchase Agreement, the Receivables Transfer
Agreement and each Asset Purchase Agreement.
2. Guaranty of Obligations. The Guarantor unconditionally
guarantees the full and prompt payment when due of all of the payment
obligations and the timely performance of all of the performance obligations of
the Sellers of every kind and nature now or hereafter existing, or due or to
become due, under the Facility Documents (collectively, the "Obligations");
provided that, such Obligations shall not include amounts not collected in
respect of any Receivable as a result of the creditworthiness of an Obligor,
including, but not limited to, amounts required to be returned to an Obligor as
a voidable preference. The Guarantor shall pay all reasonable costs and expenses
including, without limitation, all court costs and reasonable attorney's fees
and expenses paid or incurred by the Administrative Agent and the Beneficiaries
in connection with (a) the collection of all or any part of the Obligations from
the Guarantor and (b) the prosecution or defense of any action by or against the
Administrative Agent, the Beneficiaries or Receivables Company in connection
with, or relating to, the Obligations, whether involving the Sellers, the
Collection Agent, the Guarantor, Receivables Company or any other party
(including, but not limited to, a trustee in a bankruptcy or a
debtor-in-possession).
3. Validity of Obligations; Irrevocability. The Guarantor agrees
that subject to the proviso set forth in Section 2 above its obligations under
this Guaranty shall be unconditional, irrespective of (i) the validity,
enforceability, discharge, disaffirmance, settlement or compromise (by any
Person, including a trustee in a bankruptcy or a debtor-in-possession) of the
Obligations or of the Facility Documents or any Contract, (ii) the absence of
any attempt to collect the Obligations from a Seller or the Collection Agent or
any other party, (iii) the waiver or consent by any Person with respect to any
provision of any instrument evidencing the Obligations, (iv) any change of the
time, manner or place of payment or performance, or any other term of any of the
Obligations, (v) any law, regulation or order of any jurisdiction affecting any
term of any of the Obligations or rights of any Person with respect thereto,
(vi) the failure by any Person to take any steps to perfect and maintain
perfected its interest in the Receivables or any security or collateral related
to the Obligations or (vii) any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. The
Guarantor agrees that the Administrative Agent and the Beneficiaries shall be
under no obligation to marshal any assets in favor or against or in payment of
any or all of the Obligations. The Guarantor further agrees that, to the extent
a payment is made by a Seller or the Collection Agent under the Facility
Documents, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to such Seller or the Collection Agent, its estate,
trustee, receiver or any other party, under any bankruptcy, insolvency or
similar state or federal law, common law or equitable cause, then to the extent
of such payment or repayment, the Obligation or part thereof which has been
paid, reduced or satisfied by such amount shall be reinstated and continued in
full force and effect as of the date such initial payment, reduction or
satisfaction occurred. The Guarantor waives all set-offs and counterclaims and
all presentments, demands for performance, notices of dishonor and notice of
acceptance of this Guaranty. The Guarantor agrees that its obligations under
this Guaranty shall be irrevocable.
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4. Several Obligations. The obligations of the Guarantor hereunder
are separate and apart from the Sellers or any other Person, and are primary
obligations concerning which the Guarantor is the principal obligor. The
Guarantor agrees that this Guaranty shall not be discharged except by payment in
full of the Obligations and complete performance of the obligations of the
Guarantor hereunder. The obligations of the Guarantor hereunder shall not be
affected in any way by the release or discharge of a Seller from the performance
of any of the Obligations (other than the full and final payment of all of the
Obligations), whether occurring by reason of law or any other cause, whether
similar or dissimilar to the foregoing.
5. Subrogation Rights. If any amount shall be paid to the Guarantor
on account of subrogation rights at any time when all the Obligations shall not
have been paid in full, such amount shall be held in trust for the benefit of
the Administrative Agent, on behalf of the Beneficiaries, and shall forthwith be
paid to the Administrative Agent to be applied to the Obligations. If (a) the
Guarantor shall make payment to the Administrative Agent of or perform all or
any part of the Obligations and (b) all the Obligations shall be paid and
performed in full, the Administrative Agent will, at the Guarantor's request,
execute and deliver to the Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantor of any interest in the Obligations resulting from
such payment or performance by the Guarantor. The Guarantor hereby agrees that
it shall have no rights of subrogation with respect to amounts due to the
Administrative Agent or the Beneficiaries until such time as all obligations of
the Sellers to the Receivables Company, the Administrative Agent and the
Beneficiaries have been paid or performed in full and the Receivables Transfer
Agreement has been terminated.
6. Rights of Set-Off. The Guarantor hereby authorizes the
Administrative Agent, on behalf of the Beneficiaries, at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (whether general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the Administrative
Agent or the Beneficiaries to or for the credit or the account of Receivables
Company against any and all of the obligations of the Guarantor now or hereafter
existing under this Guaranty. The Guarantor hereby acknowledges that rights of
the Administrative Agent, on behalf of the Beneficiaries, described in this
Section 4 are in addition to all other rights and remedies (including, without
limitation, other rights of set-off) the Administrative Agent and the
Beneficiaries may have.
7. Representations and Warranties. The Guarantor hereby represents
and warrants to the Administrative Agent, for the benefit of the Beneficiaries,
as of the date hereof, as follows:
(a) Corporate Existence and Power. The Guarantor is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate power and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its
business is now conducted. The Guarantor is duly qualified to do business
in, and is in good standing in, every other jurisdiction in which the
nature of its business requires it to be so qualified, except where the
failure to be so qualified or in good standing would not have a Material
Adverse Effect.
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(b) Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Guarantor of this Guaranty
and the other Facility Documents to which the Guarantor is a party are
within the Guarantor's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or
filing with, any Official Body or official thereof, and do not contravene,
or constitute a default under, any provision of applicable law, rule or
regulation or of the Certificate of Incorporation or Bylaws of the
Guarantor or of any material agreement, judgment, injunction, order, writ,
decree or other instrument binding upon the Guarantor or result in the
creation or imposition of any Adverse Claim on the assets of the Guarantor
or any of its Subsidiaries.
(c) Binding Effect. Each of this Guaranty and the other
Facility Documents to which the Guarantor is a party constitutes the legal,
valid and binding obligation of the Guarantor, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of creditors and general equitable
principles (whether considered in a proceeding at law or in equity).
(d) Accuracy of Information. All information heretofore
furnished by the Guarantor to the Administrative Agent or the Beneficiaries
for purposes of or in connection with this Guaranty, the other Facility
Documents or any transaction contemplated hereby or thereby is, and all
such information hereafter furnished by the Guarantor to the Administrative
Agent or the Beneficiaries will be, true and accurate in every material
respect on the date such information is stated or certified.
(e) Tax Status. The Guarantor has filed all tax returns
(Federal, state and local) required to be filed and has paid prior to
delinquency or made adequate provision for the payment of all taxes,
assessments and other governmental charges (including for such purposes,
the setting aside of appropriate reserves for taxes, assessments and other
governmental charges being contested in good faith).
(f) Action, Suits. There are no actions, suits or proceedings
pending, or to the knowledge of the Guarantor threatened, against or
affecting the Guarantor or any Affiliate of the Guarantor or their
respective properties, in or before any court, arbitrator or other body,
which may, individually or in the aggregate, have a Material Adverse
Effect.
(g) Not an Investment Company. The Guarantor is not, nor is it
controlled by, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or is exempt from all provisions of such
Act.
(h) Year 2000. The Guarantor has reviewed the areas within its
business and operations which it believes would reasonably be expected to
be materially adversely affected by, and has developed a plan to address on
a timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Collection Agent may be unable to recognize and
perform properly date-sensitive functions involving certain dates occurring
in or after the year 2000).
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8. Governing Law. The Guaranty shall be governed by, and construed
in accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, this Guaranty has been duly executed by the
Guarantor as of the 27th day of December, 1999.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.,
as Guarantor
By:
---------------------------------
Name:
Title:
Acknowledged and accepted as of
The date first above written:
THE CHASE MANHATTAN BANK,
As Administrative Agent for the benefit of Beneficiaries
By:
----------------------------
Name:
Title:
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