| EXHIBIT D
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Form of Lock-Box Agreement (Post-Lease Facility)
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CREDIT AND SECURITY AGREEMENT
Dated as of March 31, 2000
THIS IS A CREDIT AND SECURITY AGREEMENT, among:
(1) ▇▇▇▇▇▇ TRADE FUNDING LLC, a Delaware limited liability company
(together with its successors and permitted assigns, the “Borrower”),
(2) ▇▇▇▇▇▇ WORLDWIDE, INC., a Delaware corporation (together with its
successors, “▇▇▇▇▇▇”),
(3) ▇▇▇▇▇▇ COLLECTIONS LIMITED PARTNERSHIP, a Delaware limited partnership
(together with its successors, “▇▇▇▇▇▇ Collections”), as initial servicer
hereunder (in such capacity, together with any successor servicer or
sub-servicer appointed pursuant to Section 8.1, the “Servicer”),
(4) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware corporation (together
with its successors, “Blue Ridge”), as lender (the
“Lender”), and
(5) WACHOVIA BANK, N.A., a national banking association, as administrative
agent for the Lender (in such capacity, together with any successors thereto in
such capacity, the “Administrator”).
Unless otherwise indicated, capitalized terms used in this Agreement are
defined in Appendix A.
Background
1. The Borrower is wholly-owned by ▇▇▇▇▇▇.
2. The Originators are engaged in the business of the sale of business
equipment and related supplies and services related thereto.
3. Pursuant to the Sale Agreement (Step 1), each Originator has
transferred, and hereafter will transfer to ▇▇▇▇▇▇ Receivables LLC (“▇▇▇▇▇▇
Receivables”) all of its right, title and interest in and to the Receivables
and certain related property.
4. Pursuant to the Sale Agreement (Step 2), ▇▇▇▇▇▇ Receivables has
transferred, and hereafter will transfer to ▇▇▇▇▇▇ Trade Receivables
LLC (“LTR
LLC”) all of its right, title and interest in and to the Receivables and
certain related property.
5. LTR LLC and the Borrower have entered into the Sale Agreement (Step 3)
pursuant to which LTR LLC has transferred, and hereafter will transfer, to the
Borrower all of its right, title and interest in and to the Eligible
Receivables and certain related property.
6. LTR LLC and the Borrower have entered into the Purchase and Sale
Agreement (Subordinated Interest) pursuant to which LTR LLC has transferred,
and hereafter will transfer, to the Borrower all of its right, title and
interest in and to Ineligible Receivables (as defined therein) and certain
related property.
7. The Borrower has requested the Lender, and the Lender has agreed,
subject to the terms and conditions contained in this Agreement, to make
revolving loans to the Borrower from time to time secured by the Collateral,
and, subject to the terms and conditions contained in this Agreement, the
Lender is willing to make such secured loans.
8. ▇▇▇▇▇▇ has entered into the Performance Guaranty for the benefit of the
Lender and the Administrator, pursuant to which ▇▇▇▇▇▇ has guaranteed the
performance by ▇▇▇▇▇▇ Collections of its duties and obligations as Servicer
hereunder.
9. Wachovia has been requested, and is willing, to act as the
Administrator under this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto hereby agree as follows:
ARTICLE I.
THE CREDIT
Section 1.1 The Facility.
On the terms and subject to the conditions set forth in this Agreement,
the Borrower (or the Servicer on the Borrower’s behalf) may from time to time
during the Revolving Period request Advances by delivering a Borrowing Request
to the Administrator in accordance with Section 2.1. Upon receipt of a copy of
each Borrowing Request from the Borrower or Servicer, the Administrator shall
advise the Borrower not later than 12:00 noon (New York City time) on the
Business Day following such receipt whether Blue Ridge and/or the Liquidity
Banks will fund the aggregate amount of the requested Advance by the making of
one or more Loans or Liquidity Fundings, as applicable, on the terms and
subject to the conditions hereof, provided that at no time may the aggregate
principal amount of the Loans and Liquidity Fundings at any one time
outstanding exceed the lesser of (i) the Aggregate Commitment, and (ii) the
Borrowing Base (such lesser amount, the “Allocation Limit”). Each Loan shall
be in the minimum amount of $1,000,000 or a larger integral multiple of
$500,000. Each of the Loans, and all other Obligations of the Borrower, shall
be secured by the Collateral as provided in Article IX.
Section 1.2 Funding Mechanics; Liquidity Fundings.
(a) Each Advance hereunder shall consist of Loans made by Blue Ridge
and/or the Liquidity Banks.
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(b) The Lender shall initiate a wire transfer in the principal amount of
its Loan on the applicable Borrowing Date to the Administrator in immediately
available funds not later than 2:00 p.m. (New York City time) on the applicable
Borrowing Date and, subject to its receipt of such Loan proceeds, the
Administrator shall initiate a wire transfer of such funds to the account
specified by the Borrower in its Borrowing Request not later than 3:00 p.m.
(New York City time) on such Borrowing Date.
(c) While it is the intent of Blue Ridge to fund each requested Advance
through the issuance of Commercial Paper Notes, the parties acknowledge that if
Blue Ridge is unable, or reasonably in good faith determines that it is
undesirable, to issue Commercial Paper Notes to fund all or any portion the
Loans at a CP Rate, or is unable to repay such Commercial Paper Notes upon the
maturity thereof, Blue Ridge may put all or any portion of its Loans to the
Liquidity Banks at any time pursuant to the Liquidity Agreement to finance or
refinance the necessary portion of its Loans through a Liquidity Funding to the
extent available. The Liquidity Fundings may be Alternate Base Rate Loans or
Eurodollar Loans, or a combination thereof, selected by the Borrower in
accordance with Article II. In addition, the parties acknowledge that
Commercial Paper Notes are issued at a discount and at varying discount rates;
accordingly, it may not be possible for all CP Rate Loans to be made in amounts
precisely equal to the amounts specified in a Borrowing Request. Regardless of
whether a Liquidity Funding constitutes an assignment of a Loan or the sale of
one or more participations therein, each Liquidity Bank participating in a
Liquidity Funding shall have the rights of a “Lender” hereunder with the same
force and effect as if it had directly made a Loan to the Borrower in the
amount of its Liquidity Funding.
(d) Nothing herein shall be deemed to commit the Lender to make CP Rate Loans.
Section 1.3 Interest Rates.
(a) Each CP Rate Loan shall bear interest on the outstanding principal
amount thereof from and including the first day of the CP Tranche Period
applicable thereto selected in accordance with Article II of this Agreement to
(but not including) the last day of such CP Tranche Period at the applicable CP
Rate.
(b) Each Eurodollar Loan shall bear interest on the outstanding principal
amount thereof from and including the first day of the Interest Period
applicable thereto selected in accordance with Article II of this Agreement to
(but not including) the last day of such Interest Period at a rate per annum
equal to the sum of (i) the applicable Eurodollar Rate (Reserve Adjusted) for
such Interest Period plus (ii) 2.00% per annum.
(c) Each Alternate Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from and including the date such Loan is
made to but excluding the date it is paid at a rate per annum equal to the
Alternate Base Rate for such day. Changes in the rate of interest on Alternate
Base Rate Loans will take effect simultaneously with each change in the
Alternate Base Rate.
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(d) Notwithstanding anything to the contrary contained in Sections 1.3(a),
(b) or (c), upon the occurrence of a Liquidation Event, and during the
continuance thereof, all Obligations shall bear interest, payable upon demand,
at the Default Rate.
(e) Interest at any of the aforementioned rates shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day a Loan is made but not for the day of any payment on the amount
paid if payment is received prior to 12:00 noon (New York City time) at the
place of payment. If any payment of principal of or interest on a Loan shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
Section 1.4 Payment Dates; Noteless Agreement.
(a) The Borrower promises to pay each CP Rate Loan on the last day of its
CP Tranche Period.
(b) The Borrower promises to pay each Eurodollar Loan on the last day of
its Interest Period.
(c) The Borrower promises to pay each Alternate Base Rate Loan, together
with all accrued and unpaid interest thereon, on or before the earlier to occur
of (i) the Termination Date, and (ii) refinancing of such Loan with a CP Rate
Loan or a Eurodollar Rate Loan.
(d) The Borrower promises to pay all accrued and unpaid interest on each
Loan on its applicable Interest Payment Date.
(e) The Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to the Lender
resulting from each Loan made by the Lender from time to time, including the
amounts of principal and interest payable and paid to the Lender from time to
time hereunder. Upon request of the Administrator or the Borrower, the Lender
will confirm the outstanding principal balances of its Loans and the amount of
any accrued and unpaid interest thereon. The entries maintained in the
accounts maintained pursuant to this Section shall be prima facie evidence of
the existence and amounts of the Obligations therein recorded; provided,
however, that the failure of the Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Obligations in accordance with their terms.
Section 1.5 Prepayments.
(a) The Borrower may, subject, in the case of CP Rate Loans and Eurodollar
Loans, to the funding indemnification provisions of Section 4.3 but otherwise
without premium or penalty, from time to time prepay all outstanding Loans, or,
in a minimum aggregate amount of $2,000,000 (or a larger integral multiple of
$1,000,000), any portion of the outstanding Loans
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upon two Business Days’ prior
written notice to the Administrator (each, a “Prepayment Notice”), provided
that each such prepayment of principal is accompanied by a payment of all
accrued and unpaid interest thereon;
(b) If on any Business Day, the aggregate outstanding principal amount of
the Loans exceeds the Allocation Limit, the Borrower shall prepay such Loans,
without premium or penalty, by initiating a wire transfer to the Administrator
not later than 10:00 a.m. (New York City time) on the second Business Day
thereafter in an amount sufficient to eliminate such excess, together with
accrued and unpaid interest on the amount prepaid; and
(c) Upon receipt of any wire transfer pursuant to Section 1.5(b), the
Administrator shall initiate a wire transfer to the Lender not later than 11:00
a.m. (New York City time) on the date when received.
Section 1.6 Reductions in Aggregate Commitment.
The Borrower may permanently reduce the Aggregate Commitment in whole, or
in part, in a minimum amount of $10,000,000 (or a larger integral multiple of
$1,000,000), upon at least five Business Days’ written notice to the
Administrator (each, a “Commitment Reduction Notice”), provided, however, that
(a) the amount of the Aggregate Commitment may not be reduced below the
aggregate principal amount of the outstanding Advances, and (b) the amount of
the Aggregate Commitment may not be reduced below $20,000,000 unless the
Aggregate Commitment is terminated in full. All accrued and unpaid fees shall
be payable on the effective date of any termination of the Aggregate
Commitment. Each Commitment Reduction Notice shall be irrevocable once
delivered to the Administrator.
Section 1.7 Requests for Increases in Aggregate Commitment.
The Borrower may from time to time request increases in the Aggregate
Commitment in a minimum amount of $5,000,000 (or a larger integral multiple of
$1,000,000), upon at least 30 days’ prior written notice to the Administrator,
which notice shall specify the amount of and proposed effective date for any
such requested increase (each, a “Commitment Increase Request”). If the Lender
and all of the Liquidity Banks each agrees to the requested increase by
notifying the Administrator and the Borrower in writing of their concurrence,
such increase shall be made as of the effective date specified in the
Commitment Increase Request.
Section 1.8 Extension of the Funding Termination Date.
Provided that no Liquidation Event or ▇▇▇▇▇▇ Credit Event exists and is
continuing, the Borrower may request an extension of the Funding Termination
Date by submitting a request for an extension (each, an “Extension Request”) to
the Administrator no more than 60 days prior to the Funding Termination Date
then in effect. The Extension Request must specify the new Funding Termination
Date requested by the Borrower and the date (which must be at least 30 days
after the Extension Request is delivered to the Administrator) as of which the
Administrator, the Lender and the Liquidity Banks must respond to the Extension
Request (the
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“Response Date”). The new Funding Termination Date shall be no
more than 364 days after the Funding Termination Date in effect at the time the
Extension Request is received, including the Funding Termination Date as one of
the days in the calculation of the days elapsed. Promptly upon receipt of an
Extension Request, the Administrator shall notify the Lender and each Liquidity
Bank of the contents thereof and shall request each such Person to approve the
Extension Request. The Lender and each Liquidity Bank approving the Extension
Request shall deliver its written approval to the Administrator no later than
the Response Date, whereupon the Administrator shall notify the Borrower within
one (1) Business Day thereafter as to whether the Lender approves the Extension
Request. If the Lender approves the Extension Request, the Funding Termination
Date specified in the Extension Request shall become effective on the existing
Funding Termination Date, and the Administrator shall promptly notify the
Borrower and the Lender of the new Funding Termination Date.
Section 1.9 Distribution of Certain Notices; Notification of Interest
Rates.
Promptly after receipt thereof, the Administrator will notify Blue Ridge
and the Liquidity Banks of the contents of each Settlement Report, Borrowing
Request, Extension Request, Commitment Reduction Notice, Prepayment Notice,
Commitment Increase Request or notice of default received by it from the
Borrower or the Servicer hereunder. In addition, the Administrator shall
promptly notify the Lender and the Borrower of each determination of and change
in Interest Rates.
ARTICLE II.
BORROWING AND PAYMENT MECHANICS; CERTAIN COMPUTATIONS
Section 2.1 Method of Borrowing.
The Borrower (or the Servicer on the Borrower’s behalf) shall give the
Administrator irrevocable notice in the form of Exhibit 2.1 hereto (each, a
“Borrowing Request”) not later than 12:00 noon (New York City time) at least
two Business Days before the Borrowing Date of each Advance. On each Borrowing
Date, the Lender shall make available its Loan in immediately available funds
to the Administrator by initiating a wire transfer in such amount not later
than 2:00 p.m. (New York City time). Subject to its receipt of such wire
transfers, the Administrator will initiate a wire transfer of the funds so
received from the Lender to the Borrower at the account specified in its
Borrowing Request not later than 3:00 p.m. (New York City time) on the
applicable Borrowing Date. Neither the Borrower, nor the Servicer on the
Borrower’s behalf, may deliver more than one (1) Borrowing Request in any
month.
Section 2.2 Selection of CP Tranche Periods and Interest Periods.
Prior to the occurrence of a Liquidation Event, the Borrower or the
Servicer in its Borrowing Request may request CP Tranche Periods (or, in the
case of Liquidity Fundings, Interest Periods) from time to time to apply to the
Lender’s CP Rate Loans or Eurodollar Loans,
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as applicable; provided, however,
that (i) at least one CP Tranche Period or one Interest Period shall mature on
each Settlement Date, and (ii) no CP Tranche Period or Interest Period which
began prior to the Funding Termination Date shall extend beyond the Funding
Termination Date.
While the Administrator will use reasonable efforts to accommodate the
Borrower’s or the Servicer’s requests for CP Tranche Periods or Interest
Periods prior to a Liquidation Event, the Administrator shall have the right to
subdivide any requested Loan into one or more Loans of different CP Tranche
Periods or Interest Periods, as the case may be, or, if the requested period is
not feasible, to suggest an alternative CP Tranche Period or Interest Period,
provided that not less than $1,000,000 of principal may be allocated to any CP
Tranche Period or Interest Period and no Alternate Base Rate Loan may have a
principal amount of less than $1,000,000.
The Borrower (or the Servicer on the Borrower’s behalf) may not request an
Interest Period for a Eurodollar Loan unless it shall have given the
Administrator written notice of its desire therefor not later than 12:00 noon
(New York City time) at least two (2) Business Days prior to the first day of
the desired Interest Period. Accordingly, all Liquidity Fundings shall
initially be Alternate Base Rate Loans.
Unless the Administrator shall have received written notice by 12:00 noon
(New York City time) on the second Business Day prior to the last day of a CP
Tranche Period that the Borrower intends to reduce the aggregate principal
amount of the CP Rate Loans outstanding, Blue Ridge shall be entitled to assume
that the Borrower desires to refinance the maturing CP Rate Loans on the last
day of such CP Tranche Period with new CP Rate Loans in like principal amounts
with CP Tranche Periods of approximately the same duration; provided, however,
that Blue Ridge shall not be liable for failure to effect such refinancing and
the Borrower shall remain liable for failure to pay the matured CP Rate Loans
which were not so refinanced.
Unless the Administrator shall have received written notice by 12:00 noon
(New York City time) on the second Business Day prior to the last day of an
Interest Period that the Borrower intends to reduce the aggregate principal
amount of the Eurodollar Loans outstanding, the Lender shall be entitled to
assume that the Borrower desires to refinance its maturing Eurodollar Loans on
the last day of such Interest Period with Alternate Base Rate Loans.
Section 2.3 Computation of Concentration Limits and Unpaid Balance.
The Obligor Concentration Limits and the aggregate Unpaid Balance of
Receivables of any Obligor and its Affiliated Obligors (if any) shall be
calculated as if such Obligor and its Affiliated Obligors were one Obligor.
Section 2.4 Maximum Interest Rate.
No provision of this Agreement shall require the payment or permit the
collection of interest in excess of the maximum permitted by applicable law.
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Section 2.5 Payments and Computations, Etc.
(a) Payments. All amounts to be paid to the Administrator or any other
Person or deposited by the Borrower or the Servicer hereunder (other than
amounts payable under Section 4.2) shall be paid or deposited in accordance
with the terms hereof no later than 12:00 noon (New York City time) on the day
when due in lawful money of the United States of America in same day funds to
the Lender in care of Wachovia Bank, N.A., ABA #▇▇▇▇▇▇▇▇▇, Account
#8735-098787, for credit: Blue Ridge Asset Funding Corporation, Reference:
▇▇▇▇▇▇ Trade Funding LLC, Attention: ▇▇▇▇ ▇▇▇▇▇▇, tel. (▇▇▇) ▇▇▇-▇▇▇▇ or to
such other account at the bank named therein or at such other bank as the
Administrator on behalf of the Lender may designate by written notice to the
Person making such payment (any such account, the “Administrator’s Account”).
(b) Late Payments. To the extent permitted by law, upon demand, the
Borrower or the Servicer, as applicable, shall pay to the Administrator for the
account of each Person to whom payment of any Obligation is due, interest on
all amounts not paid or deposited by 2:00 p.m. (New York City time) on the date
when due (without taking into account any applicable grace period) at the
Default Rate, provided, however, that no such interest rate shall at any time
exceed the maximum rate permitted by applicable law.
(c) Method of Computation. All computations of interest, Servicer’s Fee,
any per annum fees payable under Section 4.1 and any other per annum fees
payable by the Borrower to the Lender, the Servicer or the Administrator under
the Transaction Documents shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
elapsed.
(d) Avoidance
or Rescission of Payments. To the maximum extent permitted
by applicable law, no payment of any Obligation shall be considered to have
been paid if at any time such payment is rescinded or must be returned for any
reason.
Section 2.6 Non-Receipt of Funds by the Administrator.
Unless the Lender notifies the Administrator prior to the date and time on
which it is scheduled to fund a Loan that it does not intend to fund, the
Administrator may assume that such funding will be made and may, but shall not
be obligated to, make the amount of such Loan available to the intended
recipient in reliance upon such assumption. If the Lender has not in fact
funded its Loan proceeds to the Administrator, the recipient of such payment
shall, on demand by the Administrator, repay to the Administrator the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the
Administrator until the date the Administrator recovers such amount at a rate
per annum equal to the Federal Funds Rate for such day.
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ARTICLE III.
SETTLEMENTS
Section 3.1 Reporting.
The parties hereto will take the following actions with respect to each
Settlement Period:
(a) Settlement Report. On the fifteenth Business Day of each month (each
a “Reporting Date”), the Servicer shall deliver to the Administrator, on behalf
of the Secured Parties, a report in the form of Exhibit 3.1(a) (each, a
“Settlement Report”).
(b) Interest; Other Amounts Due. At or before 12:00 noon (New York City
time) on the Business Day before each Settlement Date, the Administrator shall
notify the Borrower and the Servicer of (i) the aggregate principal balance of
all Loans that are then outstanding, and (ii) the aggregate amount of all
principal, interest and fees that will be due and payable by the Borrower to
the Administrator for the account of the Administrator or the Lender on such
Settlement Date.
Section 3.2 Turnover of Collections.
Without limiting the Administrator’s and the Lender’s recourse to the
Borrower for payment of any and all Obligations:
(a) If any Settlement Report reveals that a mandatory prepayment is
required under Section 1.5(b), not later than the 12:00 noon (New York City
time) on the next succeeding Settlement Date, the Servicer shall turn over to
the Administrator, for distribution to the Lender, a portion of the Collections
equal to the aggregate amount of such required mandatory prepayment;
(b) If any Loans are to be voluntarily prepaid on a Settlement Date in
accordance with Section 1.5(a), on such Settlement Date, the Servicer shall
turn over to the Administrator, for distribution to the Lender, a portion of
the Collections equal to the aggregate amount of such optional prepayment; and
(c) Reinvestments of Certain Collections; Payment of Remaining
Collections.
(i) On the close of business on each day during the period from the
date of the first Advance to the Termination Date, the Servicer will, out
of all Collections received on such day from Receivables:
(A) identify and hold in trust for the Lender an amount equal to the
sum of the estimated amount (based on the rate information provided by
the Administrator pursuant to Section 3.4 of (x) interest accrued in
respect of each Loan, and (y) all other amounts
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due to the Lender or the
Administrator hereunder (amounts under clauses (x) and (y) being the
“Lender Allocations”);
(B) out of the portion of Collections not constituting Lender
Allocations identify and set aside the Servicer’s Fee accrued through
such day and not previously paid;
(C) apply the Collections not required to be identified pursuant to
clause (A) or (B) above to the purchase from LTR LLC of ownership
interests in Receivables and Related Assets (each such purchase being a
“Reinvestment”); provided that:
(I) if the aggregate principal amount of the Loans outstanding
as of such date would exceed the Allocation Limit, then the
Servicer shall not reinvest, but shall make a mandatory prepayment
pursuant to Section 1.5(b); and
(II) if any of the conditions precedent to Reinvestment in
clause (a), (b) and (d) of Section 5.2, subject to the proviso set
forth in Section 5.2, are not satisfied, then the Servicer shall
not reinvest any of such remaining Collections, but shall make a
mandatory prepayment pursuant to Section 1.5(b).
(D) pay to the Borrower (x) the remaining portion of Collections not
constituting Lender Allocations pursuant to clause (A) net of the amount
identified as the Servicer’s Fee pursuant to clause (B) and (y) the
Collections applied to Reinvestment pursuant to clause (C).
(ii) Funds Under Sale Agreement (Step 3). Upon the written request of the
Administrator, on the Lender’s behalf, given at any time when (i) based on the
most recent Settlement Report, the (aggregate principal amount of the Loans
outstanding) would exceed the Allocation Limit, or (ii) a Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, the Borrower
shall identify all funds that under the Sale Agreement (Step 3) would be
applied to repay principal of the Initial Seller Note (as defined in the Sale
Agreement (Step 3)) owing to LTR LLC. The Servicer may make withdrawals of
such funds only for the purposes of (i) at any time, making Reinvestments; and
(ii) making mandatory prepayments of the Loans hereunder pursuant to Section
1.5.
If the Collections are insufficient to make all payments required under
clauses (a), (b) and (c) and the Servicer’s Fee (all of the foregoing,
collectively, the “Required Amounts”), the Servicer shall immediately on any
such day repay any advance made by the Borrower to the Servicer in accordance
with Section 8.2(b).
(d) In addition to, but without duplication of, the foregoing, on (i) each
Settlement Date and (ii) each other date on which any principal of or interest
on any of the Loans becomes due (whether by acceleration or otherwise), the
Servicer shall turn over to the Administrator, for distribution to the Lender,
a portion of the Collections equal to the aggregate amount of all Obligations
that are due and owing on such date.
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(e) Order of Application. Upon receipt by the Administrator, on behalf of
the Secured Parties, of funds distributed pursuant to Section 3.2(d), the
Administrator shall apply them to the items specified in the subclauses below,
in the order of priority of such subclauses:
(i) to any accrued and unpaid interest on the Loans that is then due
and owing, including any previously accrued interest which was not paid
on its applicable due date;
(ii) to the accrued and unpaid Servicer’s Fee (if the Servicer is
not ▇▇▇▇▇▇ Collections or its Affiliate);
(iii) to the Facility Fee accrued during such Settlement Period,
plus any previously accrued Facility Fee not paid on a prior Settlement
Date;
(iv) to the payment of the principal of any Loans that are then due
and owing;
(v) to other accrued and unpaid amounts owing to the Secured Parties
or the Administrator hereunder; and
(vi) to the accrued and unpaid Servicer’s Fee (if Servicer is ▇▇▇▇▇▇
or its Affiliate).
(f) Non-Distribution of Servicer’s Fee. The Administrator hereby consents
(which consent may be revoked at any time after the occurrence and during the
continuance of a Liquidation Event or ▇▇▇▇▇▇ Credit Event), to the retention by
the Servicer of the amounts (if any) identified pursuant to Section 3.2(c) in
respect of the Servicer’s Fee, in which case no distribution shall be made in
respect of the Servicer’s Fee pursuant to clause (d) above.
Section 3.3 Deemed Collections.
Deemed Collections. If on any day
(i) the Unpaid Balance of any Receivable is
(A) reduced as a result of any defective, rejected or returned
merchandise or services, any cash discount, or any other adjustment
by any Loan Party, Originator or any Affiliate thereof, or as a
result of any tariff or other governmental or regulatory action, or
(B) reduced or canceled as a result of a setoff in respect of
any claim by the Obligor thereof (whether such claim arises out of
the same or a related or an unrelated transaction), or
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(C) reduced on account of the obligation of any Loan Party,
Originator or any Affiliate thereof to pay to the related Obligor
any rebate or refund, or
(D) less than the amount included in calculating the Net Pool
Balance for purposes of any Settlement Report (for any reason other
than such Receivable becoming a Defaulted Receivable), or
(ii) any of the representations or warranties of the Borrower set
forth in Section 6.1(j), (l) or (p) were not true when made with respect
to any Receivable, or any of the representations or warranties of the
Borrower set forth in Section 6.1(l) are no longer true with respect to
any Receivable, or any Receivable is repurchased by LTR LLC pursuant to
the Sale Agreement (Step 3),
then, on such day, the Borrower shall be deemed to have received a Collection
of such Receivable
(I) in the case of clause (i) above, in the amount of such
reduction or cancellation or the difference between the actual
Unpaid Balance and the amount included in calculating such Net Pool
Balance, as applicable; and
(II) in the case of clause (ii) above, in the amount of the
Unpaid Balance of such Receivable.
Collections deemed received by the Borrower under this Section 3.3 are herein
referred to as “Deemed Collections.”
Section 3.4 Estimates of Interest
For purposes of determining the amounts required to be identified by the
Servicer pursuant to Section 3.2(c), the Administrator shall notify the
Servicer (and, if ▇▇▇▇▇▇ Collections is not the Servicer, the Borrower) from
time to time of the Interest Rate applicable to each Loan and the rates at
which fees and other amounts are accruing hereunder. It is understood and
agreed that (i) the interest for any Loan may change from one Interest Period
to the next, and the Bank Rate may change from time to time during an
applicable Interest Period, (ii) certain rate information provided by the
Administrator to the Servicer shall be based upon the Administrator’s good
faith estimate, (iii) the amount of interest payable with respect to a Loan
during any Interest Period may exceed, or be less than, the amount identified
with respect thereto by Servicer, and (iv) the amount of fees or other amounts
payable by the Borrower hereunder which have accrued hereunder with respect to
any Settlement Period may exceed, or be less than, the amount identified with
respect thereto by the Servicer. Failure to identify any amount so accrued
shall not relieve the Servicer of its obligation to remit Collections to the
Administrator, for the benefit of the Secured Parties, with respect to such
accrued amount, as and to the extent provided in Section 3.2.
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ARTICLE IV.
FEES AND YIELD PROTECTION
Section 4.1 Fees.
The Borrower shall pay to the Lender certain fees from time to time in
amounts and payable on such dates as are set forth in the letter dated on or
about the date hereof (as amended from time to time, the “Fee Letter”) among
the Borrower, the Lender and the Administrator. ▇▇▇▇▇▇ shall pay to the
Administrator the structuring fee set forth in the letter dated January 3, 2000
between ▇▇▇▇▇▇ and Wachovia (the “Mandate Letter”) on or before the date this
Agreement is executed.
Section 4.2 Yield Protection.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring after the
date hereof
(A) shall subject an Affected Party to any tax, duty or other charge
with respect to its Obligations or, as applicable, its commitment under
any Liquidity Agreement, or shall change the basis of taxation of
payments to the Affected Party of any Obligations, or as applicable, its
commitment under any Liquidity Agreement (except for (1) taxes based on,
or measured by, net income, or changes in the rate of tax on or
determined by reference to the overall net income, of such Affected Party
imposed by the United States of America, by the jurisdiction in which
such Affected Party’s principal executive office is located and, if such
Affected Party’s principal executive office is not in the United States
of America, by the jurisdiction where such Affected Party’s principal
office in the United States is located, (2) franchise taxes, taxes on, or
in the nature of, doing business taxes or capital taxes), or (3)
withholding taxes required for payments made to any foreign entity which,
at the time such foreign entity issues its Liquidity Commitment or
becomes an assignee of the Lender hereunder, fails to deliver to the
Administrator and the Borrower an accurate IRS Form 1001 or 4224, as
applicable; or
(B) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Federal Reserve Board, but
excluding any reserve included in the determination of Earned Discount),
special deposit or similar requirement against assets of any Affected
Party, deposits or obligations with or for the account of any Affected
Party or with or for the account of any affiliate (or entity deemed by
the Federal Reserve Board to be an affiliate) of any Affected Party, or
credit extended by any Affected Party; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party; or
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(D) shall impose any other condition affecting any Advance made in
whole or in part by any Affected Party, or its obligations or rights, if
any, to make Loans or Liquidity Fundings; or
(E) shall change the rate for, or the manner in which the Federal
Deposit Insurance Corporation (or a successor thereto) assesses, deposit
insurance premiums or similar charges;
and the result of any of the foregoing is or would be
(x) to increase the cost to (I) an Affected Party funding or making
or maintaining any Loan, any Liquidity Funding, or any commitment of such
Affected Party with respect to any of the foregoing, or (II) the
Administrator for continuing its or the Borrower’s relationship with the
Lender, in each case, in an amount deemed to be material by such Affected
Party,
(y) to reduce any amount received by an Affected Party in connection
with any Loan, any Liquidity Funding, or any commitment of such Affected
Party with respect to any of the foregoing, or
(z) to require any Affected Party to make any payment calculated by
reference to the amount of the Loan or Liquidity Funding made or
maintained by it, by an amount deemed material by such Affected Party,
then, within thirty days after demand by such Affected Party (which demand
shall be accompanied by a certificate setting forth, in reasonable detail, the
basis of such demand and the methodology for calculating, and the calculation
of, the amounts claimed by the Affected Party), the Borrower shall pay directly
to such Affected Party such additional amount or amounts as will compensate
such Affected Party for such additional or increased cost or such reduction.
(b) Each Affected Party will promptly notify the Borrower and the
Administrator of any event of which it has knowledge (including any future
event that, in the judgment of such Affected Party, is reasonably certain to
occur) which will entitle such Affected Party to compensation pursuant to this
Section 4.2; provided, however, no failure to give or delay in giving such
notification shall adversely affect the rights of any Affected Party to such
compensation.
(c) In determining any amount provided for or referred to in this Section
4.2, an Affected Party may use any reasonable averaging and attribution methods
(consistent with its ordinary business practices) that it (in its discretion)
shall deem applicable. Any Affected Party when making a claim under this
Section 4.2 shall submit to the Borrower the certificate (referred to in
subsection (a) above) as to such increased cost or reduced return (including
calculation thereof in reasonable detail), which statement shall, in the
absence of demonstrable error, be conclusive and binding upon the Borrower.
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Section 4.3 Funding Losses.
In the event that the Lender or any Liquidity Bank shall actually incur
any loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by the Lender
to make any Loan or such Liquidity Bank to make any Liquidity Funding or
maintain any Liquidity Funding) as a result of (i) any payment of principal
with respect to the Lender’s Loan being made on any day other than the
scheduled last day of an applicable CP Tranche Period or Interest Period with
respect thereto (it being understood that the foregoing shall not apply to any
Alternate Base Rate Loans), or (ii) any Loan not being made in accordance with
a request therefor under Section 2.1, then, upon written notice from the
Administrator to the Borrower and the Servicer, the Borrower shall pay to the
Servicer and the Servicer shall pay to the Administrator for the account of the
Lender or Liquidity Bank, as applicable, the amount of such actual loss or
expense. Such written notice (which shall include the methodology for
calculating, and the calculation of, the amount of such loss or expense, in
reasonable detail) shall, in the absence of demonstrable error, be conclusive
and binding upon the Borrower and the Servicer.
ARTICLE V.
CONDITIONS OF ADVANCES
Section 5.1 Conditions Precedent to Initial Advance.
The initial Advance pursuant to this Agreement is subject to the following
conditions precedent:
(a) the Administrator, on behalf of the Secured Parties, shall have
received, on or before the date of such initial Advance, the following each
(unless otherwise indicated) dated such date and in form and substance
reasonably satisfactory to the Administrator:
(i) The Sale Agreement (Step 3), duly executed by the parties
thereto;
(ii) A certificate of the Assistant Secretary of each Loan Party
certifying the names and true signatures of the officers authorized on
its behalf to sign this Agreement and the other Transaction Documents to
be delivered by it hereunder (on which certificate the Administrator and
the Lender may conclusively rely until such time as the Administrator, on
behalf of the Secured Parties, shall receive from such Loan Party a
revised certificate meeting the requirements of this subsection (a)(ii));
(iii) The Articles or Certificate of Formation of each Loan Party,
duly certified by the Secretary of State of such Loan Party’s state of
formation, as of a recent date acceptable to Administrator, on behalf of
the Secured Parties, in each case together with a copy of the by-laws or
operating agreement, as applicable, of such Loan Party, duly certified by
the Assistant Secretary of such Loan Party;
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(iv) Copies of good standing certificates for each Loan Party,
issued by the Secretaries of State of the state of formation of such Loan
Party and the state where such Loan Party’s principal place of business
is located;
(v) Signed copies of (i) proper financing statements (Form UCC-1),
in such form as the Administrator may reasonably request, naming the (A)
applicable Originator as the debtor and seller of its Receivables and
Related Assets, the ▇▇▇▇▇▇ Receivables as the secured party and purchaser
thereof and the Administrator, for the benefit of the Secured Parties, as
assignee, (B) ▇▇▇▇▇▇ Receivables as the debtor and seller of the
Receivables and Related Assets, LTR LLC as the secured party and
purchaser thereof and the Administrator, for the benefit of the Secured
Parties as Assignee and (C) LTR LLC as the debtor and seller of the
Receivables and Related Assets, the Borrower as the secured party and
purchaser thereof and the Administrator for the benefit of the Secured
Parties as Assignee, and (ii) financing statements (Form UCC-1), in such
form as the Administrator may reasonably request, naming the Borrower as
the debtor and the Administrator, for the Secured Parties, as the secured
party, or other, similar instruments or documents, as may be necessary
or, in the opinion of the Administrator desirable under the UCC or any
comparable law of all appropriate jurisdictions to perfect the sales of
the Receivables and Related Assets under the Sale Agreements and the
Administrator’s security interest in the Collateral;
(vi) Search reports provided in writing to the Administrator, on
behalf of the Secured Parties, (i) listing all effective financing
statements that name any Originator, the Borrower, or ▇▇▇▇▇▇ Collections
as debtor and that are filed in the jurisdictions in which filings were
made pursuant to subsection (v) above and in such other jurisdictions
that the Administrator shall reasonably request, together with copies of
such financing statements (none of which (other than any of the financing
statements described in subsection (v) above) shall cover any Receivables
or Related Assets, and (ii) listing all tax liens and judgment liens (if
any) filed against any debtor referred to in clause (i) above in the
jurisdictions described therein and showing no such Liens;
(vii) Evidence that the Initial Seller Note has been duly executed
and delivered by the Borrower;
(viii) Favorable opinions of King & Spalding and Morris, James,
Hitchens & ▇▇▇▇▇▇▇▇ LLP, counsel to the Loan Parties, in substantially
the form of Exhibit 5.1(a)(viii);
(ix) A favorable opinion of King & Spalding, counsel to the Loan
Parties, as to:
(x) the existence of a “true sale” of the Receivables from the
Originators to the ▇▇▇▇▇▇ Receivables under the Sale Agreement
(Step 1);
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(y) the existence of a “true sale” of the Receivables from
▇▇▇▇▇▇ Receivables to LTR LLC under the Sale Agreement (Step 2);
and
(z) the inapplicability of the doctrine of substantive
consolidation to the Borrower in connection with any bankruptcy
proceeding involving any Originator;
(x) A pro forma Settlement Report, prepared as of the Cut-Off Date
of February 29, 2000;
(xi) A report in form and substance satisfactory to the
Administrator, on behalf of the Secured Parties, from the Initial Due
Diligence Auditor as to a pre-closing due diligence audit by the Initial
Due Diligence Auditor;
(xii) The Liquidity Agreement, in form and substance satisfactory to
the Administrator, duly executed by Blue Ridge, the Liquidity
Administrator and each Liquidity Bank;
(xiii) Lock-Box Agreements with respect to each Lock-Box Account
(except with respect to the account with US Bank);
(xiv) the Sale Agreement (Step 2) duly executed by the parties
thereto;
(xv) the Sale Agreement (Step 1) duly executed by the parties
thereto;
(xvi) the Purchase and Sale Agreement (Subordinated Interest), duly
executed by the parties thereto;
(xvii) the Limited Secured Guaranty, duly executed by the parties
thereto;
(xviii) the Security Agreement (▇▇▇▇▇▇ Trade Receivables LLC), duly
executed by the parties thereto;
(xix) the Intercreditor Agreement, duly executed by the parties thereto;
(xx) the Letter Agreement, duly executed by the parties thereto;
(xxi) the Subordination Agreement, duly executed by the parties thereto;
(xxii) the Performance Guaranty, duly executed by the parties thereto;
(xxiii) With respect to ▇▇▇▇▇▇, a consolidated balance sheet, income
statement and statement of shareholders’ equity as at December 31, 1999
and with respect to the Borrower, a balance sheet, income statement and
statement of shareholders’ equity as at
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March 30, 2000, each of the
foregoing together with a certification of the chief financial officer or
treasurer in the form attached hereto as Exhibit B; and
(xxiv) such other agreements, instruments, certificates, opinions
and other documents as the Administrator may reasonably request; and
(b) ▇▇▇▇▇▇ shall have paid (i) the Structuring Fee and (ii) all Transaction Fees.
Section 5.2 Conditions Precedent to All Advances and Reinvestments.
Each Advance (including the initial Advance) shall be subject to the
further conditions precedent that on the applicable Borrowing Date the
following statements shall be true (and the Borrower, by accepting the amount
of such Advances or by receiving the proceeds of any Loan comprising such
Advance, and each other Loan Party, upon such acceptance or receipt by the
Borrower, shall be deemed to have certified that):
(a) the representations and warranties contained in Section 6.1 are
correct in all material respects on and as of such day as though made on and as
of such day and shall be deemed to have been made on such day unless such
representation or warranty relates only to a prior date,
(b) no event has occurred and is continuing, or would result from such
Advance, that constitutes a Liquidation Event or Unmatured Liquidation Event,
(c) after giving effect to each proposed Advance, the Advances will not
exceed the Allocation Limit.
(d) the Termination Date shall not have occurred, and
(e) in the case of an Advance, the Administrator shall have timely
received an appropriate Borrowing Request in accordance with Section 2.1;
provided, however, the absence of the occurrence and continuance of an
Unmatured Liquidation Event shall not be a condition precedent to any Advance
which does not increase the aggregate principal amount of all Advances
outstanding over the aggregate outstanding principal balance of the Advances as
of the opening of business on such day.
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ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties of the Loan Parties.
Each Loan Party represents and warrants as to itself, except when
specifically provided, in which case, the specified Loan Party represents and
warrants as follows:
(a) Organization and Good Standing; Ownership. It has been duly organized
and is validly existing as a corporation in good standing under the laws of the
state of its formation, with power and authority to own its properties and to
conduct its business as such properties are presently owned and such business
is presently conducted. The Borrower had at all relevant times, and now has,
all necessary power, authority, and legal right to acquire and own the
Receivables and Related Assets. ▇▇▇▇▇▇ owns directly all the issued and
outstanding ownership interests of the Borrower.
(b) Due Qualification. It is duly qualified to do business as a foreign
corporation or company, as applicable, in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership
or lease of property or the conduct of its business requires such
qualification, licenses or approvals, except where the failure to be so
qualified or have such licenses or approvals would not have a Material Adverse
Effect.
(c) Power and Authority; Due Authorization. It (i) has all necessary
power, authority and legal right (A) to execute and deliver this Agreement and
the other Transaction Documents to which it is a party, (B) to carry out the
terms of the Transaction Documents to which it is a party, (C) in the case of
the Servicer, to service the Receivables and the Related Assets in accordance
with this Agreement and the Sale Agreement (Step 3), and (D) in the case of the
Borrower, grant the security interest in the Collateral on the terms and
conditions herein provided, and (ii) has duly authorized by all necessary
corporate action the execution, delivery and performance of this Agreement and
the other Transaction Documents and, in the case of the Borrower, the sales and
assignments described in clause (D).
(d) Valid Security Interest; Binding Obligations. (i) The Borrower
represents and warrants that this Agreement creates a valid security interest
in Collateral in favor of the Administrator, for the benefit of the Secured
Parties, enforceable against creditors of, and purchasers from, the Borrower,
and (ii) the Loan Parties each represent and warrant that this Agreement and
each other Transaction Document signed by such Loan Party constitutes, a legal,
valid and binding obligation of such Loan Party, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws from time to time in effect affecting the
enforcement of creditors’ rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
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(e) No Violation. The execution, delivery and performance by it of this
Agreement and the other Transaction Documents to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby will not
(i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default
under, its articles or certificate of incorporation or by-laws or operating
agreement, or any material indenture, loan agreement, receivables purchase
agreement, mortgage, deed of trust, or other agreement or instrument to which
it is a party or by which it or any of its properties is bound, (ii) result in
the creation or imposition of any Lien upon any its properties pursuant to the
terms of any such material indenture, loan agreement, receivables purchase
agreement, mortgage, deed of trust, or other agreement or instrument, other
than this Agreement, the Security Agreement and the other Transaction
Documents, or (iii) violate any law or any order, rule, or regulation
applicable to it of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over it or any of its properties.
(f) No Proceedings. There are no proceedings or investigations pending,
or, to its knowledge, threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality (i)
asserting the invalidity of this Agreement or any other Transaction Document,
(ii) seeking to prevent the sale and assignment of the Receivables under the
Sale Agreement (Step 3) or the grant of the security interest in the Collateral
under this Agreement or the consummation of any of the other transactions
contemplated by this Agreement or any other Transaction Document, or (iii) that
would have a Material Adverse Effect.
(g) Bulk Sales Act. The Borrower represents and warrants that no
transaction contemplated hereby requires compliance with any bulk sales act or
similar law.
(h) Government Approvals. 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 and each other Transaction Document to which it is a party, except,
in the case of the Borrower, for (i) the filing of the UCC financing statements
referred to in Article V, and (ii) the filing of any UCC continuation
statements and amendments from time to time required in relation to any UCC
financing statements filed in connection with this Agreement, as provided in
Section 8.7, all of which, at the time required in Section 8.7 shall have been
duly made and shall be in full force and effect.
(i) Financial Condition of ▇▇▇▇▇▇. ▇▇▇▇▇▇ represents and warrants that
(i) the consolidated balance sheets of it and its consolidated subsidiaries as
at December 31, 2000, and the related statements of income and shareholders’
equity of ▇▇▇▇▇▇ and its consolidated subsidiaries for the fiscal year then
ended, certified by Ernst & Young independent certified public accountants,
copies of which have been furnished to the Administrator, fairly present in all
material respects the consolidated financial condition of it and its
consolidated subsidiaries as at such date and the consolidated results of the
operations of it and its consolidated subsidiaries for the period ended on such
date, all in accordance with GAAP consistently applied, and (ii) since December
31, 1999, there has been no material adverse change in any such financial
condition, business or operations except as described in Schedule 6.1(i).
20
(j) Financial Condition of Borrower. The Borrower represents and warrants
that (i) the balance sheets of the Borrower as at March 30, 2000, certified by
the chief financial officer or treasurer of the Borrower by means of a
Certificate of Financial Officer in the form attached hereto as Exhibit B,
copies of which have been furnished to the Administrator, fairly present in all
material respects the financial condition, assets and liabilities of the
Borrower as at such date, all in accordance with GAAP consistently applied, and
(ii) since March 30, 2000 there has been no material adverse change in the
Borrower’s financial condition, business or operations.
(k) Federal Regulations. The Borrower represents and warrants that no
part of any funds obtained by it hereunder will be (x) used to acquire any
equity security of a class that is registered pursuant to Section 12 of the
Exchange Act or (y) used for “purchasing” or “carrying” any “margin stock”
within the respective meanings of each of the quoted terms under Regulation U
of the Federal Reserve Board as now and from time to time hereafter in effect
or for any purpose which violates the provisions of any Regulations of the
Federal Reserve Board. If requested by the Administrator at any time, the
Borrower will furnish to the Administrator a statement in conformity with the
requirements of FR Form U-1 referred to in Regulation U.
(l) Quality of Title. The Borrower represents and warrants that (i) each
Receivable, together with the Related Assets, is owned by the Borrower free and
clear of any Lien (other than any Lien arising solely as the result of any
action taken by the Administrator or one of the Secured Parties or any Lien
otherwise granted pursuant to the Transaction Documents); (ii) the
Administrator, on behalf of the Secured Parties has a valid and perfected first
priority security interest in the Collateral; and (iii) no financing statement
or other instrument similar in effect covering any portion of the Collateral is
on file in any recording office except such as may be filed (1) in favor of
▇▇▇▇▇▇ Receivables in connection with the Sale Agreement (Step (1)), (2) in
favor of LTR LLC in connection with the Sale Agreement (Step 2); (3) in favor
of the Borrower in connection with the Sale Agreement (Step 3), (4) in favor of
the Administrator in accordance with this Agreement or in connection with any
Lien arising solely as the result of any action taken by the Lender (or any
assignee thereof) or by the Administrator, (5) in favor of the Administrator in
accordance with the Security Agreement or (6) in favor of the Collateral Agent.
(m) Accurate Reports. No Settlement Report (if prepared by such Loan
Party, or to the extent information therein was supplied by such Loan Party) or
other information, exhibit, financial statement, document, book, record or
report furnished or to be furnished, in each case in writing, by or on behalf
of such Loan Party to the Administrator or the Lender pursuant to this
Agreement was or will be inaccurate in any material respect as of the date it
was or will be dated or (except as otherwise disclosed to the Administrator or
the Lender at such time) as of the date so furnished, or contained or (in the
case of information or other materials to be furnished in the future) will
contain any material misstatement of fact or omitted or (in the case of
information or other materials to be furnished in the future) will omit to
state a material fact or any fact necessary to make the statements contained
therein not materially misleading in light of the circumstances made or
presented.
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(n) Offices. The principal places of business and chief executive offices
of the Servicer and the Borrower are located at the respective addresses set
forth on Schedule 14.2, and the offices where the Servicer and the Borrower
keep all their books, records and documents evidencing Receivables, the related
Contracts and all purchase orders and other agreements related to such
Receivables are located at the addresses specified in Schedule 6.1(n) (or at
such other locations, notified to the Administrator, on behalf of the Secured
Parties, in accordance with Section 7.1(f), in jurisdictions where all action
required by Section 8.5 has been taken and completed).
(o) Lock-Box Accounts. The names and addresses of all the Lock-Box Banks,
together with the account numbers of the accounts of the Originators or the
Borrower at such Lock-Box Banks, are specified in Schedule 6.1(o) (or have been
notified to and approved by the Administrator, on behalf of the Secured
Parties, in accordance with Section 7.3(d)).
(p) Eligible Receivables. The Borrower represents and warrants that each
Receivable included in the Net Pool Balance in connection with any computation
or recomputation of the Borrowing Base is an Eligible Receivable on such date.
(q) Servicing Programs. No license or approval is required for the
Administrator’s use of any program used by the Servicer in the servicing of the
Receivables, other than those which have been obtained and are in full force
and effect.
(r) [Reserved].
(s) Compliance with Credit and Collection Policy. With respect to each
Receivable, it has complied in all material respects with the Credit and
Collection Policy.
(t) Payments to LTR LLC. The Borrower represents and warrants that with
respect to each Receivable transferred to the it by LTR LLC pursuant to the
Sale Agreement (Step 3), the Borrower has given reasonably equivalent value to
LTR LLC in consideration for the Receivables sold by it and the Related Assets
with respect thereto and such transfer was not made for or on account of
antecedent debt.
(u) Names. The Borrower represents and warrants that in the past five
years, the it has not used any corporate names, trade names or assumed names
other than the name in which it has executed this Agreement.
(v) Ownership of the Borrower. The Borrower represents and warrants that
Lanier owns 100% of the issued and outstanding ownership interests of the
Borrower, free and clear of any Lien, except as may arise pursuant to the
Security Agreement. Such ownership interests are validly issued, fully paid
and nonassessable, and there are no options, warrants or other rights to
acquire ownership interests of the Borrower.
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(w) Investment Company. The Borrower represents and warrants that it is
not an “investment company” within the meaning of the Investment Company Act of
1940, as amended from time to time, or any successor statute.
(x) Taxes. It has filed all material tax returns and reports required by
law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except to the extent any failure to file such
returns or reports or pay such taxes or charges could not reasonably be
expected to result in a Material Adverse Effect.
ARTICLE VII.
GENERAL COVENANTS OF THE LOAN PARTIES
Section 7.1 Affirmative Covenants of the Loan Parties.
From the date hereof until the Final Payout Date, unless the Administrator
shall otherwise consent in writing:
(a) Compliance With Laws, Etc. Each Loan Party will comply in all
material respects with all applicable laws, rules, regulations and orders,
including those with respect to the Receivables and related Contracts, except
where the failure to so comply would not individually or in the aggregate have
a Material Adverse Effect.
(b) Preservation of Corporate Existence. Each Loan Party will preserve
and maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification would have a Material Adverse Effect.
(c) Audits. Each Loan Party will (i) at any time and from time to time
upon not less than five (5) Business Days’ notice (unless a Liquidation Event
has occurred and is continuing (or the Administrator, on behalf of the Secured
Parties, believes in good faith that a Liquidation Event has occurred and is
continuing), in which case no such notice shall be required) during regular
business hours, permit the Administrator, on behalf of the Secured Parties, or
any of its agents or representatives, (A) to examine and make copies of and
abstracts from all books, records and documents (including, without limitation,
computer tapes and disks) in the possession or under the control of such Loan
Party relating to Receivables, including, without limitation, the related
Contracts and purchase orders and other agreements, and (B) to visit the
offices and properties of such Loan Party for the purpose of examining such
materials described in clause (i)(A) next above, and to discuss matters
relating to Receivables or such Loan Party’s performance hereunder with any of
the officers or employees of such Loan Party having knowledge of such matters;
(ii) permit the Administrator or any of its agents or representatives, upon not
less than five (5) Business Days’ notice from the Administrator (unless a
Liquidation Event has occurred and is continuing (or the Administrator believes
in good faith that a Liquidation Event has occurred and is continuing) in which
case no such notice shall be
23
required), to meet with the independent auditors
of such Loan Party, to review such auditors’ work papers and otherwise to
review with such auditors the books and records of such Loan Party with respect
to the Receivables and Related Assets; and (iii) without limiting the
provisions of clause (i) or (ii) next above, from time to time, at the expense
of such Loan Party, permit certified public accountants or other auditors
acceptable to the Administrator to conduct a review of such Loan Party’s books
and records with respect to the Receivables and Related Assets; provided, that,
so long as no Liquidation Event has occurred and is continuing, (x) such
reviews shall not be done more than four (4) times in any one calendar year and
(y) the Loan Parties shall only be responsible for the costs and expenses of
one such review in any one calendar year.
(d) Keeping of Records and Books of Account. The Servicer 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, 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 outstanding Unpaid
Balances by Obligor and related debit and credit details of the Receivables).
(e) Performance and Compliance with Receivables and Contracts. Each Loan
Party will, at its expense, timely and fully perform and comply with all
material provisions, covenants and other promises, if any, required to be
observed by it under the Contracts related to the Receivables and all
agreements related to such Receivables.
(f) Location of Records. Each Loan Party will keep its chief place of
business and chief executive office, and the offices where it keeps its records
concerning the Receivables, all related Contracts and all agreements related to
such Receivables (and all original documents relating thereto), at the
address(es) of the Servicer and the Borrower referred to in Section 6.1(n) or,
upon 30 days’ prior written notice to the Administrator, at such other
locations in jurisdictions where all action required by Section 8.5 shall have
been taken and completed.
(g) Credit and Collection Policies. Each Loan Party will comply in all
material respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.
(h) Sale Agreement. The Borrower will perform and comply in all material
respects with all of its covenants and agreements set forth in the Sale
Agreement (Step 3), and will enforce the performance by LTR LLC of its
obligations under the Sale Agreement (Step 3).
(i) Lock-Box Agreement. The Borrower, each Originator and the Servicer
shall enter into a Lock-Box Agreement with Wachovia with respect to each
Lock-Box Account, and shall instruct all Obligors to deposit all Collections to
the Lock-Box Accounts and each Lock-Box Bank to deposit all Collections to the
Collection Account, except as specifically provided below with respect to the
account at US Bank. The Borrower will not give any contrary or conflicting
instructions, and will, upon the request of Servicer or the Administrator,
confirm such instructions by Servicer or take such other action as may be
reasonably required to give effect to
24
such instructions. Notwithstanding the
foregoing, Collections received into any Lock-Box Account may, until the
Administrator provides notice to the contrary to the Servicer, be used in
accordance with the provisions of Section 8.2(b).
The parties acknowledge that ▇▇▇▇▇▇ has a lock-box with US Bank at its
location in Edina, Minnesota (the “US Bank Lock-Box”) into which certain
Collections of the Receivables are directed, and that US Bank has declined to
enter into a Lock-Box Agreement. In connection therewith the Loan Parties
agree as follows: (i) immediately following the date hereof, but no later than
the date of the first Advance hereunder, the Loan Parties will (A) give notice
(with copy to the Administrator) to US Bank to change the name on the US Bank
Lock-Box and its related account to “▇▇▇▇▇▇ Collections Limited Partnership, as
servicer,” and (B) cause all funds in such account that constitute Collections
to be transferred to one of the Lock-Box Accounts at Wachovia on the date of
receipt in the US Bank Lock-Box; and (ii) no later than 60 days following the
date hereof, the Loan Parties will either (A) negotiate, execute and deliver a
Lock-Box Agreement with US Bank with respect to the US Bank Lock-Box in
substantially the form of Exhibit A-1 hereof with such changes as may be
approved by the Administrator in its sole discretion, or (B) cause all Obligors
who have been delivering Collections to the US Bank Lock-Box to deliver such
Collections to either an existing Wachovia Lock-Box or a new lock-box and
lock-box account established with Wachovia (which new lock-box and account
shall be made subject to the Letter Agreement and shall thereafter be deemed to
be a “Lock-Box Account”).
(j) Lease Facility Intercreditor Agreement. Upon the closing of the Lease
Facility, the Servicer and ▇▇▇▇▇▇ will cause to be executed (i) an
Intercreditor Agreement in substantially the form set forth on Exhibit C and
(ii) a Lock-Box Agreement with Wachovia in substantially the form set forth on
Exhibit D, in each with such changes to such forms as may be approved by the
Administrator. Such additional Intercreditor Agreement and Lock-Box Agreement
shall constitute additional Transaction Documents.
(k) Application for Delaware Tax Exemption; Tax Reserve. Immediately
following the date hereof, ▇▇▇▇▇▇ shall file an application with the State of
Delaware for an exemption for ▇▇▇▇▇▇ Trade Receivables LLC from Delaware state
income tax (the “Delaware Exemption”). Upon the first to occur of (i) sixty
(60) days following the date hereof without ▇▇▇▇▇▇ having obtained the Delaware
Exemption in form and substance reasonably satisfactory to the Administrator or
(ii) receipt by Lanier of a response from the State of Delaware indicating that
the request for the Delaware Exemption has been denied (of which Lanier will
provide immediate notice to the Administrator), the Servicer shall establish
the Tax Reserve Account with Wachovia (which account shall be pledged to the
Administrator for the benefit of the Secured Parties and otherwise subject to
such restrictions as the Administrator may require), and either the Borrower or
the Servicer shall deposit thereto the Tax Reserve Amount on each Settlement
Date out of Collections after payment of sums due to the Administrator or the
Lender hereunder. The Servicer, on behalf of ▇▇▇▇▇▇ Trade Receivables LLC,
shall pay from the Tax Reserve Account all estimated and actual tax payments
due by ▇▇▇▇▇▇ Trade Receivables LLC to the State of Delaware on or before the
date that such tax payments are due, and shall provide written confirmation
thereof to the Administrator simultaneously with such payment. The Servicer or
▇▇▇▇▇▇ may request that the foregoing requirements be waived upon the
relocation of
25
▇▇▇▇▇▇ Trade Receivables LLC to a different and more favorable
tax jurisdiction, and the delivery to the Administrator of evidence of such
UCC-1 filings, certifications, and legal opinions as the Administrator may
require in its sole discretion.
(l) Post-Lease Agreement. The applicable Loan Parties, upon closing of
the Lease Facility, will cause to be executed (i) an Intercreditor Agreement
with Wachovia in a substantially similar form as provided in Exhibit C and (ii)
a Lock-Box Agreement with Wachovia in a substantially similar form as provided
in Exhibit D. Any changes to the aforementioned forms must be approved by the
Administrator.
Section 7.2 Reporting Requirements of the Loan Parties.
From the date hereof until the Final Payout Date, unless the
Administrator, on behalf of the Secured Parties, shall otherwise consent in
writing:
(a) Quarterly Financial Statements. ▇▇▇▇▇▇ will furnish to the
Administrator for the benefit of the Secured Parties, as soon as practicable,
and in any event within forty-five (45) days after the end of the first three
quarterly periods of each of its fiscal years, for itself and its Subsidiaries,
consolidated and consolidating unaudited balance sheets as at the end of each
such period and consolidated and consolidating statements of income and
consolidated and consolidating statements of changes in owners’ equity, and a
statement of cash flows for the period from the beginning of such fiscal year
to the end of such quarter, together with a Certificate of Financial Officer in
the form attached hereto as Exhibit B executed by the chief financial officer
or treasurer of ▇▇▇▇▇▇.
(b) Annual Financial Statements. ▇▇▇▇▇▇ will furnish to the Administrator
for the benefit of the Secured Parties as soon as available and in any event
within ninety (90) days after the end of each fiscal year of ▇▇▇▇▇▇, (a) an
audit report, certified (as to consolidated, but not consolidating statements)
by internationally recognized independent certified public accountants,
prepared in accordance with generally accepted accounting principles, on a
consolidated and consolidating basis for itself and its Subsidiaries, including
balance sheets as of the end of such period, related statements of income and
consolidated and consolidating statements of changes in owners’ equity, and a
statement of cash flows, which audit report shall be unqualified and shall
state that such financial statements fairly present the consolidated financial
position of ▇▇▇▇▇▇ and its Subsidiaries as at the dates indicated and results
of operations and cash flows for the periods indicated in conformity with
generally accepted accounting principles and that the examination by such
accountants in connection with such consolidated and consolidating financial
statements has been made in accordance with generally accepted auditing
standards and (b) projected balance sheets, statements of income and cash flows
for the three succeeding fiscal years, prepared in accordance with generally
accepted accounting principles, on a consolidated basis, together with the
appropriate supporting details and a statement of underlying assumptions.
(c) Quarterly Financial Statements-Borrower. The Borrower will furnish to
the Administrator for the benefit of the Secured Parties, as soon as available
and in any event within
26
45 days after the end of each of the first three
quarters of each fiscal year of the Borrower, copies of the financial
statements of the Borrower, consisting of at least a balance sheet as at the
close of such quarter and statements of earnings and changes in cash flows for
such quarter and for the period from the beginning of the fiscal year to the
close of such quarter, together with a Certificate of Financial Officer in the
form attached hereto as Exhibit B executed by the chief financial officer or
treasurer of the Borrower;
(d) Annual Financial Statements-Borrower. The Borrower will furnish to
the Administrator for the benefit of the Secured Parties, as soon as available
and in any event within 90 days after the end of each fiscal year of the
Borrower, copies of the financial statements of the Borrower, consisting of at
least a balance sheet of the Borrower for such year and statements of earnings,
cash flows and shareholders’ equity, setting forth in each case in comparative
form corresponding figures from the preceding fiscal year, together with a
Certificate of Financial Officer in the form attached hereto as Exhibit B
executed by the chief financial officer or treasurer of the Borrower;
(e) Reports to Holders and Exchanges. In addition to the reports required
by subsections (a), (b), (c) and (d) next above, promptly upon the
Administrator’s request, ▇▇▇▇▇▇ will furnish to the Administrator for the
benefit of the Secured Parties, copies of any reports specified in such request
which ▇▇▇▇▇▇ sends to any of its securityholders, and any reports or
registration statements that ▇▇▇▇▇▇ files with the Securities and Exchange
Commission or any national securities exchange other than registration
statements relating to employee benefit plans and to registrations of
securities for selling securities;
(f) ERISA. Promptly after the filing or receiving thereof, each Loan
Party will furnish to the Administrator for the benefit of the Secured Parties,
copies of all reports and notices with respect to any Reportable Event defined
in Article IV of ERISA which any Loan Party files under ERISA with the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or which such Loan Party receives from the Pension Benefit
Guaranty Corporation;
(g) Liquidation Events, Etc. As soon as possible and in any event within
three Business Days after obtaining knowledge of the occurrence of any
Liquidation Event, any Unmatured Liquidation Event, or any ▇▇▇▇▇▇ Credit Event,
each Loan Party will furnish to the Administrator for the benefit of the
Secured Parties, a written statement of the chief financial officer, treasurer
or chief accounting officer of such Loan Party setting forth details of such
event and the action that such Loan Party will take with respect thereto;
(h) Litigation. As soon as possible and in any event within ten Business
Days of any Loan Party’s knowledge thereof, such Loan Party will furnish to the
Administrator for the benefit of the Secured Parties, notice of (i) any
litigation, investigation or proceeding which may exist at any time which could
reasonably be expected to have a Material Adverse Effect and (ii) any
development in previously disclosed litigation which development could
reasonably be expected to have a Material Adverse Effect;
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(i) Audit of Receivables. As soon as available and in any event by the
end of each fiscal year of the Borrower, the Borrower will furnish to the
Administrator for the benefit of the Secured Parties, an audit report, prepared
by a Person reasonably acceptable to the Administrator (unless a ▇▇▇▇▇▇ Credit
Event has occurred, in which case such audit report shall be prepared by a
nationally recognized accounting firm or other Person acceptable to the
Administrator), as of the end of such fiscal year, substantially in the form of
the report delivered pursuant to Section 5.1(k) and covering such other matters
as the Administrator may reasonably request in order to protect the interests
of the Administrator or the Secured Parties under or as contemplated by this
Agreement;
(j) Change in Credit and Collection Policy. Prior to its effective date,
each Loan Party will furnish to the Administrator for the benefit of the
Secured Parties, notice of (i) any material change in the character of such
Loan Party’s business, and (ii) any material change in the Credit and
Collection Policy;
(k) ▇▇▇▇▇▇ Credit Event. Within one Business Day of the occurrence
thereof, each Loan Party will furnish to the Administrator for the benefit of
the Secured Parties, notice of any ▇▇▇▇▇▇ Credit Event.
(l) Deliveries to Liquidity Banks. The Borrower will deliver to each of
the Liquidity Banks and the Administrator simultaneously with the delivery of
each set of annual and quarterly financial statements referred to in paragraphs
(a), (b), (c) and (d) above, a statement of its Chief Financial Officer or
Treasurer certifying the accuracy of such financial statements and certifying
that no Liquidation Event or Unmatured Liquidation Event has occurred or if any
such Liquidation Event or Unmatured Liquidation Event has occurred, setting
forth the details thereof and the action which such Loan Party is taking or
proposes to take with respect thereto.
(m) Other. Promptly, from time to time, each Loan Party will furnish to
the Administrator for the benefit of the Secured Parties, such other
information, documents, records or reports respecting the Receivables or the
condition or operations, financial or otherwise, of such Loan Party as the
Administrator may from time to time reasonably request in order to protect the
interests of the Administrator or the Lender under or as contemplated by this
Agreement.
Section 7.3 Negative Covenants of the Loan Parties.
From the date hereof until the Final Payout Date, without the prior
written consent of the Administrator:
(a) Sales, Liens, Etc. (i) The Borrower will not, except as otherwise
provided herein and in the other Transaction Documents, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Lien upon or with respect to, any Receivable or any Related Asset, or
any interest therein, or any account to which any Collections of any Receivable
are sent, or any right to receive income or proceeds from or in respect of any
of the foregoing (except, prior to the execution of Lock-Box Agreements,
set-off rights of any bank at
28
which any such account is maintained), and (ii)
the Servicer will not assert any interest in the Receivables, except as
Servicer.
(b) Extension or Amendment of Receivables. No Loan Party will, except as
otherwise permitted in Section 8.2(c), extend, amend or otherwise modify the
terms of any Receivable, or amend, modify or waive any material term or
condition of any Contract related thereto in any way that adversely affects the
collectibility of any Receivable or the Secured Parties’ rights therein.
(c) Change in Business or Credit and Collection Policy. No Loan Party
will make or permit to be made 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 significant portion of the Receivables or otherwise
adversely affect the interests or remedies of the Lender under this Agreement
or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. No Loan Party will add or
terminate any bank as a Lock-Box Bank from those listed in Schedule 6.1(o) or,
after Lock-Box Accounts have been delivered pursuant to Section 7.1(i), make
any change in its instructions to Obligors regarding payments to be made to the
Borrower or Servicer or payments to be made to any Lock-Box Bank (except for a
change in instructions solely for the purpose of directing Obligors to make
such payments to another existing Lock-Box Bank), unless (i) the Administrator
shall have received prior written notice of such addition, termination or
change and (ii) if a ▇▇▇▇▇▇ Credit Event has occurred, the Administrator shall
have received duly executed copies of Lock-Box Agreements with each new
Lock-Box Bank.
(e) Deposits to Collection Account. No Loan Party will deposit or
otherwise credit, or cause or permit to be so deposited or credited, to the
Collection Account, any cash or cash proceeds other than Collections of
Receivables.
(f) Changes to Other Documents. The Borrower will not enter into any
amendment or modification of, or supplement to, the Sale Agreement (Step 3),
the Purchase and Sale Agreement (Subordinated Interest) or the Borrower’s
certificate of formation.
(g) Restricted Payments by the Borrower. The Borrower will not (i)
purchase or redeem any ownership interests of the Borrower, (ii) declare or pay
any dividends thereon, (iii) make any distribution to interest holders or set
aside any funds for any such purpose, or (iv) pay any principal amount of the
Initial Seller Note (as defined in the Sale Agreement (Step 3)); provided,
however, that if (A) no Liquidation Event or Unmatured Liquidation Event shall
have occurred and be continuing and (B) the Borrower’s net worth (determined in
accordance with GAAP) is not less than $1,800,000, then the Borrower may, after
making payment of all Obligations due and owing on such Settlement Date, (x)
pay all or a portion of such principal amount on the Settlement Date for any
Settlement Period or (y) make other distributions permitted by the Transaction
Documents,
29
(h) Borrower Indebtedness. The Borrower will not incur or permit to exist
any Indebtedness or liability on account of deposits or advances or for
borrowed money or for the deferred purchase price of any property or services,
except (A) indebtedness of the Borrower to LTR LLC incurred in accordance with
the Sale Agreement (Step 3), (B) current accounts payable arising under the
Transaction Documents and not overdue and (C) other current accounts payable
arising in the ordinary course of business and not overdue, in an aggregate
amount at any time outstanding not to exceed $10,699 (excluding fees payable to
professionals).
(i) Negative Pledges. No Loan Party will enter into or assume any
agreement (other than this Agreement and the other Transaction Documents)
prohibiting the creation or assumption of any Lien upon any Receivables or
Related Assets, whether now owned or hereafter acquired, except as contemplated
by the Transaction Documents, or otherwise prohibiting or restricting any
transaction contemplated hereby or by the other Transaction Documents.
(j) Change of Name. The Borrower will not change its name, any trade name
or corporate structure, or commence the use of any new trade name unless it has
given the Administrator at least 30 days prior written notice thereof and has
taken all steps necessary to continue the perfection of the Lender’s interest,
including the filing of amendments to the UCC financing statements filed
pursuant to Section 5.1(e).
(k) Liens. The Borrower will not create, incur, assume or permit to exist
any Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except as provided
in the Transaction Documents.
(l) Mergers, Consolidations and Acquisitions.
(i) ▇▇▇▇▇▇ will not enter into any merger or consolidation, or
liquidate, wind-up dissolve (or suffer any liquidation or dissolution),
or convey, lease, sell, transfer or otherwise dispose of, in one
transaction or series of transactions, all or substantially all of its
consolidated business or property (each such transaction a “Fundamental
Change”), whether now or hereafter acquired, except (i) a Subsidiary of
▇▇▇▇▇▇ other than the Borrower may be merged into or consolidated with
▇▇▇▇▇▇ or such other wholly-owned Subsidiary of ▇▇▇▇▇▇ other than the
Borrower (in which case ▇▇▇▇▇▇ or such wholly-owned Subsidiary shall be
the surviving corporation), (ii) any liquidation of any Subsidiary of
▇▇▇▇▇▇ other than the Borrower into ▇▇▇▇▇▇ or another Subsidiary of
▇▇▇▇▇▇, as applicable, and (iii) ▇▇▇▇▇▇ may merge with any other Person,
or any Subsidiary of ▇▇▇▇▇▇ other than the Borrower may consolidate or
merge with any other Person, provided, that (A) no Liquidation Event or
Unmatured Liquidation Event shall exist immediately after giving effect
to such Fundamental Change, (B) in the case of any merger of ▇▇▇▇▇▇,
▇▇▇▇▇▇ is the surviving corporation in such merger and such merger is
with a Person in a line of business substantially similar to that of
▇▇▇▇▇▇ and its Subsidiaries as of the execution date of this Agreement or
any business or activities which are similar, related or incidental
thereto or logical extensions thereof, and (C) in
30
the case of any merger
or consolidation of any Subsidiary of ▇▇▇▇▇▇, the surviving corporation
in such Fundamental Change is or becomes as a result thereof a
wholly-owned Subsidiary of ▇▇▇▇▇▇, and (D) such transaction is with a
Person in a line of business substantially similar to that of ▇▇▇▇▇▇ and
its Subsidiaries as of the execution date of this Agreement.
(ii) Borrower will not merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it,
or purchase, lease or otherwise acquire (in one transaction or a series
of transactions) all or substantially all of the assets of any other
Person (whether directly by purchase, lease or other acquisition of all
or substantially all of the assets of such Person or indirectly by
purchase or other acquisition of all or substantially all of the capital
stock of such other Person) other than the acquisition of the Receivables
and Related Assets pursuant to the Sale Agreement (Step 3) and the sale
of an interest in the Receivables and Related Assets hereunder.
(m) Use of Proceeds of Receivables. Neither the Borrower nor the Servicer
shall transfer or pay any funds, including without limitation Collections, to
any Person other than payments of the Obligations if (i) any of the following
has occurred: a Liquidation Event, Unmatured Liquidation Event or ▇▇▇▇▇▇
Credit Event or (ii) the aggregate outstanding principal amount of the Loans
exceeds the Borrowing Base, or (iii) if the aggregate principal amount of the
Loans is less than or equal to the Borrowing Base, but the Borrower has
reasonably foreseeable expenses or obligations for which it has not reserved
cash for the payment of such expenses or obligations when due, which expenses
or obligations could cause the aggregate outstanding principal amount of the
Loans to exceed the Borrowing Base.
Section 7.4 Separate Corporate Existence of the Borrower.
Each Loan Party hereby acknowledges that Lender and the Administrator are
entering into the transactions contemplated hereby in reliance upon Borrower’s
identity as a legal entity separate from the Originators and its other
Affiliates. Therefore, each Loan Party shall take all steps specifically
required by this Agreement or reasonably required by the Administrator to
continue Borrower’s identity as a separate legal entity and to make it apparent
to third Persons that the Borrower is an entity with assets and liabilities
distinct from those of its Affiliates, and is not a division of ▇▇▇▇▇▇ or any
other Person. Without limiting the foregoing, each Loan Party will take such
actions as shall be required in order that:
(i) The Borrower will be a limited purpose company whose primary
activities are restricted in its Certificate of Formation to purchasing
or otherwise acquiring from LTR LLC, owning, holding, granting security
interests, or selling interests, in the Receivables and Related Assets,
entering into agreements for the selling and servicing of the
Receivables, and conducting such other activities as it deems necessary
or appropriate to carry out its primary activities;
(ii) Not less than one member of the Borrower’s Board of Managers
(the “Independent Manager”) shall be an individual who is not, and never
has been, a direct,
31
indirect or beneficial stockholder, officer,
director, employee, affiliate, associate, material supplier or material
customer of ▇▇▇▇▇▇ or any of its Affiliates. The certificate of
incorporation of the Borrower shall provide that (a) at least one member
of the Borrower’s Board of Managers shall be an Independent Manager, (b)
the Borrower’s Board of Managers shall not approve, or take any other
action to cause the filing of, a voluntary bankruptcy petition with
respect to the Borrower unless the Independent Manager shall approve the
taking of such action in writing prior to the taking of such action and
(c) the provisions requiring an independent director and the provision
described in clauses (a) and (b) of this paragraph (ii) cannot be amended
without the prior written consent of the Independent Manager;
(iii) The Independent Manager shall not at any time serve as a
trustee in bankruptcy for the Borrower or any Affiliate thereof;
(iv) Any employee, consultant or agent of the Borrower will be
compensated from the Borrower’s funds for services provided to the
Borrower. The Borrower will not engage any agents other than its
attorneys, auditors and other professionals, and a servicer and any other
agent contemplated by the Transaction Documents for the Receivables,
which the Servicer will be fully compensated for its services by payment
of the Servicer’s Fee, and certain organizational expenses in connection
with the formation of the Borrower;
(v) The Borrower will contract with the Servicer to perform for the
Borrower all operations required on a daily basis to service the
Receivables. The Borrower will pay the Servicer the Servicer’s Fee
pursuant hereto. The Borrower will not incur any material indirect or
overhead expenses for items shared with ▇▇▇▇▇▇ Collections (or any other
Affiliate thereof) which are not reflected in the Servicer’s Fee. To the
extent, if any, that the Borrower (or any other Affiliate thereof) share
items of expenses not reflected in the Servicer’s Fee, for legal,
auditing and other professional services and directors’ fees, such
expenses will be allocated to the extent practical on the basis of actual
use or the value of services rendered, and otherwise on a basis
reasonably related to the actual use or the value of services rendered,
it being understood that ▇▇▇▇▇▇ shall pay all expenses relating to the
preparation, negotiation, execution and delivery of the Transaction
Documents, including, without limitation, legal, rating agency and other
fees;
(vi) The Borrower’s operating expenses will not be paid by any other
Loan Party or other Affiliate of the Borrower;
(vii) The Borrower will have its own stationery;
(viii) The books of account, financial reports and corporate records
of the Borrower will be maintained separately from those of ▇▇▇▇▇▇ and
each other Affiliate of the Borrower;
32
(ix) Any financial statements of any Loan Party or Affiliate thereof
which are consolidated to include the Borrower will contain detailed
notes clearly stating that (A) all of the Borrower’s assets are owned by
the Borrower, and (B) the Borrower is a separate corporate entity with
its own separate creditors that will be entitled to be satisfied out of
the Borrower’s assets prior to any value in the Borrower becoming
available to the Borrower’s equity holders; and the accounting records
and the published financial statements of the Originators will clearly
show that, for accounting purposes, the Receivables and Related Assets
have been sold by the Originators to ▇▇▇▇▇▇ Receivables and by ▇▇▇▇▇▇
Receivables to LTR LLC and by LTR LLC to the Borrower;
(x) The Borrower’s assets will be maintained in a manner that
facilitates their identification and segregation from those of the
Servicer and the other Affiliates;
(xi) Each Affiliate of the Borrower will strictly observe
organizational formalities in its dealings with the Borrower, and, except
as permitted pursuant to this Agreement with respect to Collections,
funds or other assets of the Borrower will not be commingled with those
of any of its Affiliates;
(xii) No Affiliate of the Borrower will maintain joint bank accounts
with the Borrower or other depository accounts with the Borrower to which
any such Affiliate (other than in its capacity as the Servicer hereunder
or under the Sale Agreement (Step 3)) has independent access, provided
that prior to the occurrence of a ▇▇▇▇▇▇ Credit Event, Collections may be
held by the Servicer subject to the obligations of the Servicer pursuant
to Section 3.2(c);
(xiii) No Affiliate of the Borrower shall, directly or indirectly,
name the Borrower or enter into any agreement to name the Borrower as a
direct or contingent beneficiary or loss payee on any insurance policy
covering the property of any Affiliate of the Borrower;
(xiv) Each Affiliate of the Borrower will maintain arm’s length
relationships with the Borrower, and each Affiliate of the Borrower that
renders or otherwise furnishes services or merchandise to the Borrower
will be compensated by the Borrower at market rates for such services or
merchandise;
(xv) No Affiliate of the Borrower will be, nor will it hold itself
out to be, responsible for the debts of the Borrower or the decisions or
actions in respect of the daily business and affairs of the Borrower.
▇▇▇▇▇▇ Collections and the Borrower will immediately correct any known
misrepresentation with respect to the foregoing and they will not operate
or purport to operate as an integrated single economic unit with respect
to each other or in their dealing with any other entity;
(xvi) The Borrower will keep correct and complete books and records
of account and minutes of the meetings and other proceedings of its
stockholder and board
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of directors, as applicable, and the resolutions,
agreements and other instruments of the Borrower will be continuously
maintained as official records by the Borrower; and
(xvii) The Borrower, on the one hand, and the Loan Parties, ▇▇▇▇▇▇
Receivables, LTR LLC and the Originators, on the other hand, will conduct
its business solely in its own corporate name and in such a separate
manner so as not to mislead others with whom they are dealing.
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer.
(a) ▇▇▇▇▇▇ Collections as Initial Servicer. The servicing, administering
and collection of the Receivables shall be conducted by the Person designated
as Servicer hereunder from time to time in accordance with this Section 8.1.
Until the Administrator, on behalf of the Secured Parties, gives to ▇▇▇▇▇▇
Collections a Successor Notice (as defined in Section 8.1(b)), ▇▇▇▇▇▇
Collections is hereby designated as, and hereby agrees to perform the duties
and obligations of, the Servicer pursuant to the terms hereof; provided,
however, that ▇▇▇▇▇▇ Collections shall guarantee the performance by ▇▇▇▇▇▇
Collections of its duties and obligations Servicer hereunder pursuant to the
Performance Guaranty.
(b) Successor Notice; Servicer Transfer Events. Upon ▇▇▇▇▇▇ Collections’
receipt of a notice from the Administrator of the Administrator’s designation,
on behalf of the Secured Parties, of a new Servicer (a “Successor Notice”),
▇▇▇▇▇▇ Collections agrees that it will terminate its activities as Servicer
hereunder in a manner that the Administrator believes will facilitate the
transition of the performance of such activities to the new Servicer, and the
Administrator (or its designee) shall assume each and all of ▇▇▇▇▇▇
Collections’ obligations to service and administer such Receivables, on the
terms and subject to the conditions herein set forth, and ▇▇▇▇▇▇ Collections
shall use its best efforts to assist the Administrator (or its designee) in
assuming such obligations. Without limiting the foregoing, ▇▇▇▇▇▇ Collections
agrees, at its expense, to take all actions necessary to provide the new
Servicer with access to all computer software necessary or useful in collecting
or billing Receivables, solely for use in collecting and billing Receivables.
The Administrator agrees not to give ▇▇▇▇▇▇ Collections a Successor Notice
until after the occurrence and during the continuance of any Liquidation Event
or ▇▇▇▇▇▇ Collections Credit Event (any such event being herein called a
“Servicer Transfer Event”), in which case such Successor Notice may be given at
any time in the Administrator’s discretion. If ▇▇▇▇▇▇ Collections disputes the
occurrence of a Servicer Transfer Event, ▇▇▇▇▇▇ Collections may take
appropriate action to resolve such dispute; provided that ▇▇▇▇▇▇ Collections
must terminate its activities hereunder as Servicer and allow the newly
designated Servicer to perform such activities on the date provided by the
Administrator as described above, notwithstanding the commencement or
continuation of any proceeding to resolve the aforementioned dispute, if the
Administrator, on behalf of the Secured Parties, reasonably determines, in good
faith, that such termination is necessary or advisable to protect the Secured
Parties’ interests hereunder.
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(c) Subcontracts. The Servicer may, with the prior consent of the
Administrator, subcontract with any other Person for servicing, administering
or collecting the Receivables, provided that the Servicer shall remain liable
for the performance of the duties and obligations of the Servicer pursuant to
the terms hereof and such subservicing arrangement may be terminated at the
Administrator’s request, on behalf of the Secured Parties, at any time after a
Successor Notice has been given.
Section 8.2 Duties of Servicer.
(a) Appointment; Duties in General. The Borrower, the Lender and the
Administrator hereby appoints as its agent the Servicer, as from time to time
designated pursuant to Section 8.1, to enforce its rights and interests in and
under the Receivables, the Related Security and the related Contracts. The
Servicer shall take or cause to be taken all such actions as may be necessary
or advisable to collect each Receivable from time to time, all in accordance
with applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy.
(b) Allocation of Collections. The Servicer shall identify portions of
the Collections for the account of the Borrower and/or the Administrator for
the benefit of the Secured Parties in accordance with Section 3.2(c) but shall
not be required (unless otherwise requested by the Administrator, for the
benefit of the Secured Parties, after the occurrence of a Liquidation Event or
a ▇▇▇▇▇▇ Credit Event) to segregate the funds constituting such portions of
such Collections in accordance with said Section. Amounts held by the Servicer
pursuant to this Section 8.2(b) shall be considered an advance from the
Borrower to the Servicer. Such advance shall be payable upon demand of the
Borrower or, if not otherwise repaid, shall be paid on the succeeding
Settlement Date. If instructed by the Administrator, on behalf of the Secured
Parties, after the occurrence of a Liquidation Event or ▇▇▇▇▇▇ Credit Event,
the Servicer shall segregate and deposit collections into the Collection
Account, on the second Business Day following receipt by the Servicer of such
Collections to immediately available funds. Any repayment of any such advance
shall be made by the Servicer by wire transfer in immediately available funds
to the Administrator’s Account no later than 12 noon (New York City time) on
the date such payment is due.
(c) Modification of Receivables. So long as no Liquidation Event and no
Unmatured Liquidation Event shall have occurred and be continuing, ▇▇▇▇▇▇,
while it is Servicer, may, in accordance with the Credit and Collection Policy,
(i) extend the maturity or adjust the Unpaid Balance of any Defaulted
Receivable as ▇▇▇▇▇▇ may reasonably determine to be appropriate to maximize
Collections thereof, and (ii) adjust the Unpaid Balance of any Receivable to
reflect the reductions or cancellations described in the first sentence of
Section 3.2(a).
(d) Documents and Records. Each Loan Party shall deliver to the Servicer,
and the Servicer shall hold in trust for the Borrower and the Lender in
accordance with their respective interests, all documents, instruments and
records (including, without limitation, computer tapes
35
or disks) that evidence or relate to Receivables, provided, however, if a subservicer is engaged by the
Servicer, such Loan Party may deliver to such subservicer.
(e) Certain Duties to the Borrower. The Servicer shall, as soon as
practicable following receipt, turn over to the Borrower (i) that portion of
the Collections which are not required to be turned over to the Administrator,
less the Servicer’s Fee, and, in the event that neither ▇▇▇▇▇▇ Collections nor
any other Loan Party or Affiliate thereof is the Servicer, all reasonable and
appropriate out-of-pocket costs and expenses of the Servicer of servicing,
collecting and administering the Receivables to the extent not covered by the
Servicer’s Fee received by it, and (ii) the Collections of any receivable which
is not a Receivable. The Servicer, if other than ▇▇▇▇▇▇ Collections or any
other Loan Party or Affiliate thereof, shall, as soon as practicable upon
demand, deliver to the Borrower all documents, instruments and records in its
possession that evidence or relate to Receivables of the Borrower other than
Receivables, and copies of documents, instruments and records in its possession
that evidence or relate to Receivables.
(f) Termination. The Servicer’s authorization under this Agreement shall
terminate upon the Final Payout Date.
(g) Power of Attorney. The Borrower hereby grants to the Servicer an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of the Borrower all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by the Borrower or transmitted or
received by the Lender (whether or not from the Borrower) in connection with
any Receivable.
Section 8.3 Servicer Advances.
For each Settlement Period, if the Servicer determines that any payment
(or portion thereof) which was due and payable pursuant to a Contract in the
Receivables during such Settlement Period was not received prior to the end of
such Settlement Period, the Servicer shall make an advance in an amount up to
the amount of such delinquent payment (or portion thereof); any such advance, a
“Servicer Advance”). Notwithstanding the preceding sentence, (i) the Servicer
shall not be required to make a Servicer Advance with respect to any Contract
if, and only if, the Servicer determines (such determination to be conclusive
and binding) in good faith that such Servicer Advance will not ultimately be
recoverable from future collections on, or the liquidation of, the Receivables,
and (ii) the Servicer’s obligation to make a Servicer Advance for any Contract
shall cease on the day such Contract becomes a Defaulted Contract. The
Servicer may recover any Servicer Advance that it has made in respect of any
Contract from amounts received in respect of such Contract. If the Servicer
has previously made a Servicer Advance which it later determined to be
nonrecoverable, the Servicer may, following delivery of an officer’s
certificate to the Administrator detailing the Servicer’s determination that
such Servicer Advance is nonrecoverable, recover the amount of such Servicer
Advance from Collections received in respect of any Contract. Any amount so
recovered by the Servicer shall not be a Collection for purposes of Section
3.2. The Servicer will deposit any Servicer Advances into the
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Collection Account on or prior to 12:00 noon (New York City time) on the date necessary to
make any payment required to be made under Section 3.1. All Servicer Advances
shall be made by wire transfer in immediately available funds.
Section 8.4 Servicer Defaults.
If any one of the following events (a “Servicer Default”) shall occur and
be continuing:
(a) any failure by the Servicer or ▇▇▇▇▇▇ (if ▇▇▇▇▇▇ Collections is the
Servicer) to make any payment, transfer or deposit or to give instructions or
notice to the Administrator as required by this Agreement including, without
limitation, delivery of any Settlement Report and, (i) in the case of failure
to deliver a Settlement Report such failure shall remain unremedied for three
(3) Business Days after the earliest to occur of (A) written notice thereof
shall have been given by the Administrator to the Servicer or (B) the Servicer
shall have otherwise become aware of such failure and (ii) in the case of
failure to make any payment or deposit to be made by the Servicer such failure
shall remain unremedied for two (2) Business Days after the due date thereof;
(b) any failure on the part of the Servicer or ▇▇▇▇▇▇ (if ▇▇▇▇▇▇
Collections is the Servicer) duly to observe or perform in any material respect
any other covenants or agreements of the Servicer set forth in this Agreement,
which continues unremedied for a period of 30 days after the first to occur of
(i) the date on which written notice of such failure requiring the same to be
remedied shall have been given to the Servicer by the Administrator and (ii)
the date on which the Servicer becomes aware thereof;
(c) any representation, warranty or certification made by the Servicer or
Lanier (if ▇▇▇▇▇▇ Collections is the Servicer) in this Agreement or in any
certificate delivered pursuant to this Agreement shall prove to have been
incorrect when made, which continues to be unremedied for a period of 30 days
after the first to occur of (i) the date on which written notice of such
incorrectness requiring the same to be remedied shall have been given to the
Servicer by the Administrator and (ii) the date on which the Servicer becomes
aware thereof;
(d) a ▇▇▇▇▇▇ Credit Event shall occur or any bankruptcy, insolvency or
similar event occurs with respect to the Servicer (if other than ▇▇▇▇▇▇); or
(e) any change in the control of the Servicer which takes the form of
either a merger or consolidation in which the Servicer is not the surviving
entity or a Change in Control with respect to ▇▇▇▇▇▇ (if ▇▇▇▇▇▇ Collections is
the Servicer).
Notwithstanding anything herein to the contrary, so long as any such Servicer
Default shall not have been remedied, the Administrator, by written notice to
the Servicer (a “Termination Notice”), may terminate all of the rights and
obligations of the Servicer as Servicer under this Agreement and appoint a
successor Servicer satisfactory to the Administrator (in the Administrator’s
sole discretion).
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Section 8.5 Rights of the Administrator.
(a) Notice to Obligors. At any time following the occurrence of a
Liquidation Event, the Administrator may notify the Obligors of Receivables, or
any of them, of the security interest of the Secured Parties.
(b) Notice to Lock-Box Banks. At any time following the occurrence of a
Liquidation Event, if Lock-Box Agreements have been executed, the Administrator
is hereby authorized to give notice to the Lock-Box Banks, as provided in the
Lock-Box Agreements, of the transfer to the Administrator of dominion and
control over the lock-boxes and related accounts to which the Obligors of
Receivables make payments. The Borrower and the Servicer hereby transfer to
the Administrator, effective when the Administrator shall give notice to the
Lock-Box Banks as provided in the Lock-Box Agreements, the exclusive dominion
and control over such lock-boxes and accounts, and shall take any further
action that the Administrator may reasonably request to effect such transfer.
(c) Rights on Servicer Transfer Event. At any time following the
designation of a Servicer other than ▇▇▇▇▇▇ pursuant to Section 8.1:
(i) The Administrator may direct the Obligors of Receivables, or any
of them, to pay all amounts payable under any Receivable directly to the
Administrator or its designee.
(ii) Any Loan Party shall, at the Administrator’s request and at
such Loan Party’s expense, give notice of the Administrator’s security
interest in the Receivables to each Obligor of Receivables and direct
that payments be made directly to the Administrator or its designee.
(iii) Each Loan Party shall, at the Administrator’s request, (A)
assemble all of the documents, instruments and other records (including,
without limitation, computer programs, tapes and disks) which evidence
the Receivables, and the related Contracts and Related Security, or which
are otherwise necessary or desirable to collect such Receivables, and
make the same available to the successor Servicer at a place selected by
the Administrator, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting Collections of
Receivables in a manner acceptable to the Administrator and promptly upon
receipt, remit all such cash, checks and instruments, duly endorsed or
with duly executed instruments of transfer, to the successor Servicer.
(iv) Each Loan Party and Lender hereby authorizes the Administrator,
on behalf of the Secured Parties, and grants to the Administrator an
irrevocable power of attorney (which shall terminate on the Final Payout
Date), to take any and all steps in such Loan Party’s name and on behalf
of the Loan Parties and the Lender which are necessary or desirable, in
the determination of the Administrator, to collect all amounts due under
any and all Receivables, including, without limitation, endorsing any
Loan
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Party’s name on checks and other instruments representing
Collections and enforcing such Receivables and the related Contracts.
Section 8.6 Responsibilities of the Loan Parties and Originators.
Anything herein to the contrary notwithstanding:
(a) Contracts. Each Originator shall remain responsible for performing
all of its obligations (if any) under the Contracts related to the Receivables
and under the related agreements to the same extent as if the security interest
in the Collateral had not been granted hereunder, and the exercise by the
Administrator or its designee of its rights hereunder shall not relieve any
Originator from such obligations.
(b) Limitation of Liability. The Administrator and the Lender shall not
have any obligation or liability with respect to any Receivables, Contracts
related thereto or any other related agreements, nor shall any of them be
obligated to perform any of the obligations of any Loan Party or any
Originators thereunder.
Section 8.7 Further Action Evidencing the Security Interest.
(a) Further Assurances. Each Loan Party agrees that from time to time, at
its expense, it will promptly execute and deliver all further instruments and
documents, and take all further action that the Administrator or its designee
may reasonably request in order to perfect, protect the security interest
granted, or to enable the Lender or the Administrator or its designee to
exercise or enforce any of their respective rights hereunder or under any
Transaction Document in respect thereof. Without limiting the generality of
the foregoing, each Loan Party will:
(i) upon the request of the Administrator, execute and file such
financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be
necessary or appropriate, in accordance with the terms of this Agreement;
(ii) upon the request of the Administrator after the occurrence and
during the continuance of a Liquidation Event, ▇▇▇▇ conspicuously each
Contract evidencing each Receivable with a legend, acceptable to the
Administrator, evidencing its security interest therein pursuant to this
Agreement; and
(iii) ▇▇▇▇ its master data processing records evidencing the
Collateral with a legend, acceptable to the Administrator, evidencing
that a security interest in the Collateral has been granted pursuant to
this Agreement.
(b) Additional Financing Statements; Performance by Administrator. Each
Loan Party hereby authorizes the Administrator, on behalf of the Secured
Parties, or its designee to file one or more financing or continuation
statements, and amendments thereto and assignments
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thereof, relative to all or
any of the Receivables and the Related Assets now existing or hereafter arising
in the name of any Loan Party. If any Loan Party fails to promptly execute and
deliver to the Administrator, on behalf of the Secured Parties, any financing
statement or continuation statement or amendment thereto or assignment thereof
requested by the Administrator, on behalf of the Secured Parties, each Loan
Party hereby authorizes the Administrator, on behalf of the Secured Parties, to
execute such statement on behalf of such Loan Party. If any Loan Party fails
to perform any of its agreements or obligations under this Agreement, the
Administrator or its designee may (but shall not be required to) itself
perform, or cause performance of, such agreement or obligation, and the
reasonable expenses of the Administrator or its designee incurred in connection
therewith shall be payable by the Loan Parties as provided in Section 14.5.
(c) Continuation Statements; Opinion. Without limiting the generality of
subsection (a), the Borrower will, not earlier than six (6) months and not
later than three (3) months prior to the fifth anniversary of the date of
filing of the financing statements referred to in Section 5.1(e) or any other
financing statement filed pursuant to this Agreement or in connection with any
Advance hereunder, if the Final Payout Date shall not have occurred:
(i) if necessary, execute and deliver and file or cause to be filed
an appropriate continuation statement with respect to such financing
statement; and
(ii) deliver or cause to be delivered to the Administrator an
opinion of the counsel for the Loan Parties, in form and substance
reasonably satisfactory to the Administrator, confirming and updating the
opinion delivered pursuant to Section 5.1(h) to the effect that the
security interest in the Collateral hereunder continues to be a valid and
perfected security interest, subject to no other Liens of record except
as provided herein or otherwise permitted hereunder.
Section 8.8 Application of Collections.
Any payment (excluding any Lease Payments) by an Obligor in respect of any
indebtedness owed by it to an Originator or the Borrower shall, except as
otherwise specified by such Obligor or required by the underlying Contract or
law, be applied, first, as a Collection of any Receivable or Receivables then
outstanding of such Obligor in the order of the age of such Receivables,
starting with the oldest of such Receivables and, second, to any other
indebtedness of such Obligor.
ARTICLE IX.
SECURITY INTEREST
Section 9.1 Grant of Security Interest.
To secure the due and punctual payment of the Obligations, whether now or
hereafter existing, due or to become due, direct or indirect, or absolute or
contingent, including, without
40
limitation, all Indemnified Amounts, in each
case pro rata according to the respective amounts thereof, the Borrower hereby
pledges to the Administrator, for the benefit of the Secured Parties, and
hereby grants to the Administrator, for the benefit of the Secured Parties, a
security interest in, all of the Borrower’s right, title and interest now or
hereafter existing in, to and under (a) all the Receivables and Related Assets,
(b) the Sale Agreements and the other Transaction Documents and (c) all
proceeds of any of the foregoing (collectively, the
“Collateral”).
Section 9.2 Further Assurances.
The provisions of Section 8.5 shall apply to the security interest granted
under Section 9.1.
Section 9.3 Remedies.
Upon the occurrence of a Liquidation Event, the Lender shall have, with
respect to the collateral granted pursuant to Section 9.1, and in addition to
all other rights and remedies available to the Lender or the Administrator
under this Agreement and the other Transaction Documents or other applicable
law, all the rights and remedies of a secured party upon default under the UCC.
ARTICLE X.
LIQUIDATION EVENTS
Section 10.1 Liquidation Events.
The following events shall be
“Liquidation Events” hereunder:
(a) Any Loan Party (i) shall fail to perform or observe any term, covenant
or agreement that is an obligation of such Loan Party hereunder (including
without limitation, the failure to deliver any Settlement Report) and such
failure shall remain unremedied for thirty (30) days after written notice
thereof shall have been given by the Administrator to the applicable defaulting
Loan Party and the Servicer (except for failure to deliver a Settlement Report
which failure shall be cured within three (3) Business Days), or (ii) shall
fail to make any payment or deposit to be made by such Loan Party hereunder
when due which failure shall continue for two (2) Business Days; or
(b) Any representation or warranty made or deemed to be made by any Loan
Party or any Originator (or any of its officers) under this Agreement or any
other Transaction Document or any Settlement Report or other information or
report delivered pursuant hereto shall prove to have been false or incorrect in
any material respect when made; or
(c) Any Loan Party or Originator shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement or any of the
other Transaction Documents on its part to be performed or observed and any
such failure shall remain unremedied for thirty
41
(30) days after written notice
thereof shall have been given by the Administrator to such Loan Party or
Originator; or
(d) (i) The Borrower shall (1) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness when the aggregate
unpaid principal amount is in excess of $10,000, when and as the same shall
become due and payable (after expiration of any applicable grace period) or (2)
fail to observe or perform any other term, covenant, condition or agreement
(after expiration of any applicable grace period) contained in any agreement or
instrument evidencing or governing any such Indebtedness (ii) any default under
any other agreement or instrument of the Borrower or ▇▇▇▇▇▇ or which is the
subject of a Guarantee by ▇▇▇▇▇▇ relating to the purchase of receivables in an
aggregate amount in excess of in the case of the Borrower, $10,000, or in the
case of ▇▇▇▇▇▇ $10,000,000, or any other event, shall occur and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument; or
(e) An Event of Bankruptcy shall have occurred and remain continuing with
respect to the Servicer, any Originator or any Loan Party; or
(f) The Lender or its successor shall become an “investment company”
within the meaning of the Investment Company Act of 1940; or
(g) The rolling three month average of the Dilution Ratio at any Cut-Off
Date exceeds 6.45%; or
(h) The rolling three month average of the Default Ratio at any Cut-Off
Date exceeds 5.00%; or
(i) The rolling three month average of the Delinquency Ratio at any
Cut-Off Date exceeds 5.05%; or
(j) On any Settlement Date, after giving effect to the payments made under
Article II or Article III, the aggregate outstanding principal balance of the
Advances exceeds the Allocation Limit; or
(k) There shall have occurred any event which is reasonably likely to have
a Material Adverse Effect; or
(l) The Borrower or ▇▇▇▇▇▇ experiences a Change in Control; or
(m) The Internal Revenue Service shall file notice of a lien pursuant to
Section 6323 of the Code with regard to any of the Receivables or Related
Assets, or the Pension Benefit Guaranty Corporation shall file notice of a lien
pursuant to Section 4068 of the Employee Retirement Income Security Act of 1974
with regard to any of the Receivables or Related Assets; or
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(n) Any Originator, the Borrower or the Servicer shall make any material
change in the policies as to origination of Receivables or in the Credit and
Collection Policy without prior written notice to and consent by the
Administrator; or
(o) The Secured Parties, for any reason, cease to maintain a valid,
perfected first priority interest in the Collateral; or
(p) A final judgment or judgments shall be rendered against the Borrower
or ▇▇▇▇▇▇ for the payment of money with respect to which an aggregate amount in
excess of $100 with respect to the Borrower and $10,000,000 with respect to
▇▇▇▇▇▇, is not covered by insurance and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to levy
upon assets or properties of ▇▇▇▇▇▇ or the Borrower to enforce any such
judgment; or
(q) A Reportable Event or Reportable Events, or a failure to make a
required installment or other payment (within the meaning of Section 412(n)(1)
of the Code), shall have occurred with respect to any Plan or Plans that
reasonably could be expected to result in liability of ▇▇▇▇▇▇ or any Loan Party
to the Pension Benefit Guaranty Corporation (“PBGC”) or to a Plan in an
aggregate amount exceeding $250,000 and, within 30 days after the reporting of
any such Reportable Event to the Administrator, for the benefit of the Secured
Parties, the Administrator shall have notified ▇▇▇▇▇▇ in writing that (i) the
Administrator, on behalf of the Secured Parties, has made a determination that,
on the basis of such Reportable Event or Reportable Events or the failure to
make a required payment, there are reasonable grounds (A) for the termination
of such Plan or Plans by the PBGC, (B) for the appointment by the appropriate
United States District Court of a trustee to administer such Plan or Plans or
(C) for the imposition of a lien in favor of a Plan and (ii) as a result
thereof a Liquidation Event exists hereunder; or a trustee shall be appointed
by a United States District Court to administer any such Plan or Plans; or the
PBGC shall institute proceedings to terminate any Plan or Plans.
(r) A Servicer Default shall have occurred and be continuing.
Section 10.2 Remedies.
(a) Optional Acceleration. Upon the occurrence of a Liquidation Event
(other than a Liquidation Event described in subsection (e) of Section 10.1),
the Administrator shall, at the request, or may with the consent, of the
Lender, by notice to the Borrower declare the Funding Termination Date to have
occurred and all Obligations shall become immediately due and payable.
(b) Automatic Acceleration. Upon the occurrence of a Liquidation Event
described in subsection (e) of Section 10.1, the Funding Termination Date shall
automatically occur and all Obligations shall be immediately due and payable.
(c) Additional Remedies. Upon any Funding Termination Date pursuant to
this Section 10.2, the Aggregate Commitment will terminate, no Loans or
Advances thereafter will be
43
made, and the Administrator, on behalf of the
Secured Parties, shall have, in addition to all other rights and remedies under
this Agreement or otherwise, all other rights and remedies provided under the
UCC of each applicable jurisdiction and other applicable laws, which rights
shall be cumulative.
ARTICLE XI.
THE ADMINISTRATOR
Section 11.1 Authorization and Action.
Pursuant to agreements entered into with the Administrator, the Lender has
appointed and authorized the Administrator (or its designees) to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrator by the terms hereof, together with such
powers as are reasonably incidental thereto.
Section 11.2 Administrator’s Reliance, Etc.
The Administrator and its directors, officers, agents or employees shall
not be liable for any action taken or omitted to be taken by it or them in good
faith under or in connection with the Transaction Documents (including, without
limitation, the servicing, administering or collecting Receivables as Servicer
pursuant to Section 8.1), except for its or their own breach of the terms of
the applicable terms of the Transaction Documents or its or their own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, the Administrator: (a) may consult with legal counsel (including
counsel for the Borrower), independent certified public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (b) makes no warranty or representation to the Lender
or any other holder of any interest in Receivables and shall not be responsible
to the Lender or any such other holder for any statements, warranties or
representations made by any Loan Party in or in connection with any Transaction
Document; (c) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Transaction Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (d) shall not be
responsible to the Lender or any other holder of any interest in Receivables
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Transaction Document; and (e) shall incur no
liability under or in respect of this Agreement by acting upon any notice
(including notice by telephone where permitted herein), consent, certificate or
other instrument or writing (which may be by facsimile or telex) in good faith
believed by it to be genuine and signed or sent by the proper party or parties.
Section 11.3 Wachovia and Affiliates.
Wachovia and any of its Affiliates may generally engage in any kind of
business with any Loan Party or any obligor, any of their respective Affiliates
and any Person who may do business
44
with or own securities of any Loan Party or
any Obligor or any of their respective Affiliates, all as if Wachovia was not
the Administrator, and without any duty to account therefor to the Lender or
any other holder of an interest in Receivables, but in any event subject to
Section 14.7.
ARTICLE XII.
ASSIGNMENT OF THE LENDER’ INTEREST
Section 12.1 Restrictions on Assignments.
(a) No Loan Party may assign its rights, or delegate its duties hereunder
or any interest herein without the prior written consent of the Administrator;
provided, however, that the foregoing shall not be deemed to restrict the
▇▇▇▇▇▇ Collections’ right, prior to delivery of a Successor Notice, to delegate
its duties as Servicer to other Originators, provided that ▇▇▇▇▇▇ shall remain
liable for the performance or non-performance of such duties pursuant to the
Performance Guaranty.
(b) Blue Ridge may, at any time, assign all or any portion of a Loan, or
sell participations therein, to the Liquidity Banks (or to the Administrator
for the ratable benefit of the Liquidity Banks).
(c) In addition to, and not in limitation of, assignments and
participations described in Section 12.1(b):
(i) in the event that any Liquidity Bank becomes a Downgraded Liquidity
Bank, such Downgraded Liquidity Bank shall give prompt written notice of
its Downgrading Event to the Administrator and to the Borrower, whereupon
the Administrator may identify an Eligible Liquidity Assignee and the
Downgraded Liquidity Bank shall promptly assign its rights and
obligations to the Eligible Liquidity Assignee designated by the
Administrator against payment in full of its Obligations;
(ii) the Lender may assign all or any portion of its Loans under this
Agreement to any Eligible Liquidity Assignee; and
(iii) each of the Lender may sell participations in all or any portion of
their respective rights and obligations in, to and under the Transaction
Documents and the Obligations in accordance with Sections 12.2 and 14.7.
Section 12.2 Rights of Assignee and Participants.
(a) Upon the assignment by the Lender in accordance with Section 12.1(b)
or (c), the Eligible Liquidity Assignee(s) receiving such assignment shall have
all of the rights of the Lender with respect to the Transaction Documents and
the Obligations (or such portion thereof as has been assigned).
45
(b) In no event will the sale of any participation interest in the
Lender’s or any Eligible Liquidity Assignee’s rights under the Transaction
Documents or in the Obligations relieve the seller of such participation of its
obligations, if any, hereunder or, if applicable, under the Liquidity
Agreement.
Section 12.3 Terms and Evidence of Assignment.
Any assignment to any Eligible Liquidity Assignee(s) pursuant to Section
1.8, 12.1(b) or 12.1(c) shall be upon such terms and conditions as the
assigning Lender and the Administrator, on the one hand, and the Eligible
Liquidity Assignee, on the other, may mutually agree, and shall be evidenced by
such instrument(s) or document(s) as may be satisfactory to the Lender, the
Administrator and the Eligible Liquidity Assignee(s). Any assignment made in
accordance with the terms of the Article XII shall relieve the assigning Lender
of its obligations, if any, under this Agreement (and, if applicable, the
Liquidity Agreement) to the extent assigned.
ARTICLE XIII.
INDEMNIFICATION
Section 13.1 Indemnities by the Borrower.
(a) General Indemnity. Without limiting any other rights which any such
Person may have hereunder or under applicable law, the Borrower hereby agrees
to indemnify each of Wachovia, both individually and as the Administrator, the
Lender, the Liquidity Banks, the Liquidity Administrator, each of their
respective Affiliates, and all successors, transferees, participants and
assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each an “Indemnified Party”),
forthwith on demand, from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including attorneys’ fees and
disbursements (all of the foregoing being collectively referred to as
“Indemnified Amounts”) awarded against or incurred by any of them arising out
of or relating to the Transaction Documents or the making of Advances hereunder
or in respect of any Receivable or any Contract, excluding, however, (a)
Indemnified Amounts to the extent determined by a court of competent
jurisdiction to have resulted from gross negligence or willful misconduct on
the part of such Indemnified Party or (b) recourse (except as otherwise
specifically provided in this Agreement) for Defaulted Receivables. Without
limiting the foregoing, the Borrower shall indemnify each Indemnified Party for
Indemnified Amounts arising out of or relating to:
(i) the creation of any Lien on, or transfer by ▇▇▇▇▇▇ Receivables,
LTR LLC, any Loan Party or any Originator of any interest in, the
Collateral other than in connection with the sale of Receivables and
related property by the Originators, ▇▇▇▇▇▇ Receivables or LTR LLC
pursuant to the Sale Agreements and the grant of by the Borrower of a
security interest in the Collateral to the Administrator pursuant to
Section 9.1 or pursuant to the Security Agreement;
46
(ii) any representation or warranty made by ▇▇▇▇▇▇ Receivables, LTR
LLC, any Loan Party or any Originator (or any of respective officers)
under or in connection with any Transaction Document, any Settlement
Report or any other information or report delivered by or on behalf of
▇▇▇▇▇▇ Receivables, LTR LLC, any Loan Party pursuant hereto, which shall
have been false, incorrect or misleading in any material respect when
made or deemed made or delivered, as the case may be;
(iii) the failure by ▇▇▇▇▇▇ Receivables, LTR LLC, any Loan Party to
comply with any applicable law, rule or regulation with respect to any
Receivable or the related Contract, or the nonconformity of any
Receivable or the related Contract with any such applicable law, rule or
regulation;
(iv) the failure to vest and maintain vested in Administrator, for
the benefit of the Secured Parties, a valid and perfected first priority
security interest in the Collateral, free and clear of any other Lien,
other than a Lien arising solely as a result of an act of one of the
Secured Parties or the Administrator pursuant to the Security Agreement,
now or at any time thereafter;
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Collateral;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables (including, without limitation, a
defense based on such Receivables or the related Contract not being a
legal, valid and binding obligation of such Obligor enforceable against
it in accordance with its terms), or any other claim resulting from the
sale of the merchandise or services related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vii) any matter described in clause (i) or (ii) of Section 3.4;
(viii) any failure of ▇▇▇▇▇▇ Receivables, LTR LLC, any Originator or
any Loan Party, as Servicer or otherwise, to perform its duties or
obligations in accordance with the provisions of this Agreement or the
other Transaction Documents to which it is a party;
(ix) any products liability claim arising out of or in connection
with merchandise or services that are the subject of any Receivable;
(x) any claim of breach by ▇▇▇▇▇▇ Receivables, LTR LLC, any
Originator or any Loan Party of any related Contract with respect to any
Receivable; or
(xi) any tax or governmental fee or charge (but not including taxes
upon or measured by net income), all interest and penalties thereon or
with respect thereto, and all out-of-pocket costs and expenses, including
the reasonable fees and expenses of counsel
47
in defending against the
same, which may arise by reason of the Administrator’s security interest
in the Collateral.
Notwithstanding the foregoing, (x) the foregoing indemnification is not
intended to, and shall not, constitute a guarantee of the collectibility or
payment of the Receivables; and (y) nothing in this Section 13.1(b) shall
require the Borrower to indemnify the Indemnified Parties for Receivables which
are not collected, not paid or otherwise uncollectible on account of the
insolvency, bankruptcy, credit-worthiness or financial inability to pay of the
applicable Obligor.
(b) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall
have notice of any attempt to impose or collect any tax or governmental fee or
charge for which indemnification will be sought from ▇▇▇▇▇▇ Receivables, LTR
LLC, any Originator or any Loan Party under Section 13.1(a)(xi), such
Indemnified Party shall give prompt and timely notice of such attempt to the
Borrower and the Borrower shall have the right, at its expense, to participate
in any proceedings resisting or objecting to the imposition or collection of
any such tax, governmental fee or charge. Indemnification hereunder shall be
in an amount necessary to make the Indemnified Party whole after taking into
account any tax consequences to the Indemnified Party of the payment of any of
the aforesaid taxes (including any deduction) and the receipt of the indemnity
provided hereunder or of any refund of any such tax previously indemnified
hereunder, including the effect of such tax, deduction or refund on the amount
of tax measured by net income or profits which is or was payable by the
Indemnified Party.
(c) Contribution. If for any reason the indemnification provided above in
this Section 13.1 (and subject to the exceptions set forth therein) is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Borrower shall contribute to the amount paid or
payable by such Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Party on the one hand and the Borrower on
the other hand but also the relative fault of such Indemnified Party as well as
any other relevant equitable considerations.
Section 13.2 Indemnities by Servicer.
Without limiting any other rights which any Indemnified Party may have
hereunder or under applicable law, the Servicer hereby agrees to indemnify each
of the Indemnified Parties forthwith on demand, from and against any and all
Indemnified Amounts awarded against or incurred by any of them arising out of
or relating to the Servicer’s performance of, or failure to perform, any of its
obligations under or in connection with any Transaction Document, or any
representation or warranty made by Servicer (or any of its officers) under or
in connection with any Transaction Document, any Settlement Report or any other
information or report delivered by or on behalf of Servicer, which shall have
been false, incorrect or misleading in any material respect when made or deemed
made or delivered, as the case may be, or the failure of the Servicer to comply
with any applicable law, rule or regulation with respect to any Receivable or
the related Contract. Notwithstanding the foregoing, in no event shall any
Indemnified Party be awarded any Indemnified Amounts (a) to the extent
determined by a court of competent
48
jurisdiction to have resulted from gross
negligence or willful misconduct on the part of such Indemnified Party or (b)
recourse for Defaulted Receivables.
If for any reason the indemnification provided above in this Section 13.2
(and subject to the exceptions set forth therein) is unavailable to an
Indemnified Party or is insufficient to hold an Indemnified Party harmless,
then the Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnified Party on the one hand and the Servicer on the other hand
but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 Amendments, Etc.
No amendment or waiver of any provision of this Agreement nor consent to
any departure by any Loan Party therefrom shall in any event be effective
unless the same shall be in writing and signed by (a) each Loan Party, the
Administrator and the Lender (with respect to an amendment), or (b) the
Administrator and the Lender (with respect to a waiver or consent by them) or
any Loan Party (with respect to a waiver or consent by it), as the case may be,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. The parties acknowledge
that, before entering into such an amendment or granting such a waiver or
consent, the Lender may also be required to obtain the approval of some or all
of the Liquidity Banks or to obtain confirmation from certain rating agencies
that such amendment, waiver or consent will not result in a withdrawal or
reduction of the ratings of the Commercial Paper Notes.
Section 14.2 Notices, Etc.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including facsimile communication) and
shall be personally delivered or sent by express mail or courier or by
certified mail, postage prepaid, or by facsimile, to the intended party at the
address or facsimile number of such party set forth on Schedule 14.2 or at such
other address or facsimile number as shall be designated by such party in a
written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered or sent by
express mail or courier or if sent by certified mail, when received, and (b) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means.
Section 14.3 No Waiver; Remedies.
No failure on the part of the Administrator, any Affected Party, any
Indemnified Party, the Lender or any other Secured Party to exercise, and no
delay in exercising, any right
49
hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law. Without limiting the foregoing, each of Wachovia, individually, and as
Administrator, the Collateral Agent, and each Liquidity Bank is hereby
authorized by the Borrower at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand provisional or final) at any time held and other
indebtedness at any time owing by Wachovia, the Collateral Administrator and
such Liquidity Bank to or for the credit or the account of the Borrower, now or
hereafter existing under this Agreement, to the Administrator, any Affected
Party, any Indemnified Party or the Lender, or their respective successors and
assigns.
Section 14.4 Binding Effect; Survival.
This Agreement shall be binding upon and inure to the benefit of each Loan
Party, the Administrator, the Lender and their respective successors and
assigns, and the provisions of Section 4.2 and Article XIII shall inure to the
benefit of the Affected Parties and the Indemnified Parties, respectively, and
their respective successors and assigns; provided, however, nothing in the
foregoing shall be deemed to authorize any assignment not permitted by Section
12.1. This Agreement shall create and constitute the continuing obligations of
the parties hereto in accordance with its terms, and shall remain in full force
and effect until the Final Payout Date. The rights and remedies with respect
to any breach of any representation and warranty made by the Borrower pursuant
to Article VI and the indemnification and payment provisions of Article XIII
and Sections 4.2, 14.5, 14.6, 14.7, 14.8 and 14.15 shall be continuing and
shall survive any termination of this Agreement.
Section 14.5 Costs, Expenses and Taxes.
In addition to its obligations under Article XIII, the Loan Parties
jointly and severally agree to pay on demand:
(a) all costs and expenses incurred by the Administrator, the Collateral
Administrator, any Liquidity Bank, the Lender and their respective Affiliates
(subject to the limits on Transaction Fees set forth in the Fee Letter) in
connection with
(i) the negotiation, preparation, execution and delivery of this
Agreement, the other Transaction Documents or the Liquidity Agreement,
any amendment of or consent or waiver under any of the Transaction
Documents which is requested or proposed by any Loan Party (whether or
not consummated), or the enforcement by any of the foregoing Persons of,
or any actual or claimed breach of, this Agreement or any of the other
Transaction Documents, including, without limitation, the reasonable fees
and expenses of counsel to any of such Persons incurred in connection
with any of the foregoing or in advising such Persons as to their
respective rights and remedies under any of the Transaction Documents in
connection with any of the foregoing, and
50
(ii) the administration (including periodic auditing as provided for
herein) of this Agreement and the other Transaction Documents, including,
without limitation, all reasonable out-of-pocket expenses (including
reasonable fees and expenses of independent accountants), incurred in
connection with any review of any Loan Party’s books and records either
prior to the execution and delivery hereof or pursuant to Section 7.2(i)
or 7.1(c)(iii); and
(b) all stamp and other taxes and fees payable or determined to be payable
in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents (and the Loan Parties, jointly and
severally agree to indemnify each Indemnified Party against any liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees).
Section 14.6 No Proceedings.
The Servicer hereby agrees that it will not institute against the
Borrower, or join any Person in instituting against the Borrower, each Loan
Party, the Servicer and Wachovia (individually or as Administrator) each hereby
agrees that it will not institute against Blue Ridge, or join any other Person
in instituting against Blue Ridge, any insolvency proceeding (namely, any
proceeding of the type referred to in the definition of Event of Bankruptcy) so
long as any Commercial Paper Notes issued by the Lender shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any such Commercial Paper Notes shall have been outstanding.
Section 14.7 Confidentiality of the Borrower Information.
(a) Confidential Borrower Information. Each party hereto (other than Loan
Parties) acknowledges that certain of the information provided to such party by
or on behalf of the Loan Parties in connection with this Agreement and the
transactions contemplated hereby is or may be confidential, and each such party
severally agrees that, unless ▇▇▇▇▇▇ shall otherwise agree in writing, and
except as provided in subsection (b), such party will not disclose to any other
person or entity:
(i) any information regarding, or copies of, any nonpublic financial
statements, reports, schedules and other information furnished by any
Loan Party to the Lender or the Administrator (A) prior to the date
hereof in connection with such party’s due diligence relating to the Loan
Parties and the transactions contemplated hereby, or (B) pursuant to
Section 3.1, 5.1, 6.1(i), 6.1(j), 7.1(c) or 7.2, or
(ii) any other information regarding any Loan Party which is
designated by any Loan Party to such party in writing as confidential
(the information referred to in clauses (i) and (ii) above, whether furnished
by any Loan Party or any attorney for or other representative thereof (each a
“Borrower Information Provider”), is collectively referred to as the “Borrower
Information”); provided, however, “Borrower
51
Information” shall not include any
information which is or becomes generally available to the general public or to
such party on a nonconfidential basis from a source other than any Borrower
Information Provider, or which was known to such party on a nonconfidential
basis prior to its disclosure by any Borrower Information Provider.
(b) Disclosure. Notwithstanding subsection (a), each party may disclose
any Borrower Information:
(i) to any of such party’s independent attorneys, consultants and
auditors, and to any dealer or placement agent for the Lender’s
commercial paper, who (A) in the good faith belief of such party, have a
need to know such Borrower Information, and (B) are informed by such
party of the confidential nature of the Borrower Information and the
terms of this Section 14.7 and has agreed, verbally or otherwise, to be
bound by the provisions of this Section 14.7;
(ii) to any Liquidity Bank, any actual or potential assignees of, or
participants in, any rights or obligations of the Lender, any Liquidity
Bank or the Administrator under or in connection with this Agreement who
has agreed to be bound by the provisions of this Section 14.7;
(iii) to any rating agency that maintains a rating for the Lenders’
commercial paper or is considering the issuance of such a rating, for the
purposes of reviewing the credit of the Lender in connection with such
rating;
(iv) to any other party to this Agreement (and any independent
attorneys, consultants and auditors of such party), for the purposes
contemplated hereby,
(v) as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such party,
in order to comply with any law, order, regulation, regulatory request or
ruling applicable to such party,
(vi) subject to subsection (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Borrower Information, or
(vii) in connection with the enforcement of this Agreement or any
other Transaction Document.
In addition, each of the Lender and the Administrator may disclose on a “no
name” basis to any actual or potential investor in Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of the Aggregate Commitment
and the Advances), the nature, amount and status of the Receivables, and the
current and/or historical ratios of losses to liquidations and/or outstandings
with respect to the Receivables.
52
(c) Legal Compulsion. In the event that any party hereto (other than any
Loan Party) or any of its representatives is requested or becomes legally
compelled (by interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of the Borrower
Information, such party will (or will cause its representative to):
(i) provide ▇▇▇▇▇▇ with prompt written notice so that (A) Lanier may
seek a protective order or other appropriate remedy, or (B) ▇▇▇▇▇▇ may,
if it so chooses, agree that such party (or its representatives) may
disclose such Borrower Information pursuant to such request or legal
compulsion; and
(ii) unless ▇▇▇▇▇▇ agrees that such Borrower Information may be
disclosed, make a timely objection to the request or compulsion to
provide such Borrower Information on the basis that such Borrower
Information is confidential and subject to the agreements contained in
this Section 14.7.
In the event such protective order or remedy is not obtained, or ▇▇▇▇▇▇ agrees
that such Borrower Information may be disclosed, such party will furnish only
that portion of the Borrower Information which (in such party’s good faith
judgment) is legally required to be furnished and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
afforded the Borrower Information.
(d) This
Section 14.7 shall survive termination of this Agreement.
Section 14.8 Confidentiality of Program Information.
(a) Confidential Information. Each party hereto acknowledges that
Wachovia, individually and in its capacity as Administrator, regards the
structure of the transactions contemplated by this Agreement to be proprietary,
and each such party agrees that:
(i) it will not disclose without the prior consent of Wachovia
(other than to the directors, employees, auditors, counsel or affiliates
(collectively, “representatives”) of such party, each of whom shall be
informed by such party of the confidential, nature of the Program
Information (as defined below) and of the terms of this Section 14.8),
(A) any information regarding the pricing in, or copies of, this
Agreement, any other Transaction Document or any transaction contemplated
hereby or thereby, (B) any information regarding the organization,
business or operations of Blue Ridge generally or the services performed
by Wachovia as the Administrator for Blue Ridge, or (C) any information
which is furnished by Wachovia to such party and which is designated by
Wachovia to such party in writing or otherwise as confidential or not
otherwise available to the general public (the information referred to in
clauses (A), (B) and (C) is collectively referred to as the “Program
Information”); provided, however, that such party may disclose any such
Program Information (I) to any other party to this Agreement (and any
independent attorneys, consultants and auditors of any such party) for
the purposes contemplated hereby, (II) as may be required by any
municipal, state, federal or other regulatory body having or claiming to
have jurisdiction over such party, including,
53
without limitation, the
Securities and Exchange Commission, (III) in order to comply with any
law, order, regulation, regulatory request or ruling applicable to such
party, (IV) subject to subsection (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose any
such Program Information, or (V) in financial statements as required by
GAAP;
(ii) it will use the Program Information solely for the purposes of
evaluating, administering and enforcing the transactions contemplated by
this Agreement and making any necessary business judgments with respect
thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to Wachovia, all documents or other written
material received from Wachovia in connection with (a)(i)(B) or (C) above
and all copies thereof made by such party which contain the Program
Information.
(b) Availability of Confidential Information. This Section 14.8 shall be
inoperative as to such portions of the Program Information which are or become
generally available to the public or such party on a nonconfidential basis from
a source other than Wachovia or were known to such party on a nonconfidential
basis prior to its disclosure by Wachovia.
(c) Legal Compulsion to Disclose. In the event that any party or anyone
to whom such party or its representatives transmits the Program Information is
requested or becomes legally compelled (by interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any of the Program Information, such party will:
(i) provide Wachovia with prompt written notice so that Wachovia may
seek a protective order or other appropriate remedy and/or, if it so
chooses, agree that such party may disclose such Program Information
pursuant to such request or legal compulsion; and
(ii) unless Wachovia agrees that such Program Information may be
disclosed, make a timely objection to the request or confirmation to
provide such Program Information on the basis that such Program
Information is confidential and subject to the agreements contained in
this Section 14.8.
In the event that such protective order or other remedy is not obtained, or
Wachovia agrees that such Program Information may be disclosed, such party will
furnish only that portion of the Program Information which (in such party’s
good faith judgment) is legally required to be furnished and will exercise
reasonable efforts to obtain reliable assurance that confidential treatment
will be accorded the Program Information. In the event any Loan Party is
required to file a copy of this Agreement with the SEC or any other
governmental authority, it will (A) provide Wachovia with prompt written notice
of such requirement and (B) exercise reasonable
54
efforts to obtain reliable
assurance that such governmental authority will give confidential treatment to
this Agreement.
(d) Survival. This Section 14.8 shall survive termination of this Agreement.
Section 14.9 Captions and Cross References.
The various captions (including, without limitation, the table of
contents) in this Agreement are provided solely for convenience of reference
and shall not affect the meaning or interpretation of any provision of this
Agreement. Unless otherwise indicated, references in this Agreement to any
Section, Appendix, Schedule or Exhibit are to such Section of or Appendix,
Schedule or Exhibit to this Agreement, as the case may be, and references in
any Section, subsection, or clause to any subsection, clause or subclause are
to such subsection, clause or subclause of such Section, subsection or clause.
Section 14.10 Integration.
This Agreement and the other 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
understanding among the parties hereto with respect to the subject matter
hereof, superseding all prior oral or written understandings.
Section 14.11 Governing Law.
THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW,
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF THE LENDER IN THE
RECEIVABLES OR RELATED PROPERTY IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
Section 14.12 Waiver Of Jury Trial.
EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL NOT BE
TRIED BEFORE A JURY.
55
Section 14.13 Consent To Jurisdiction; Waiver Of Immunities.
EACH LOAN PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY UNITED
STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF
ANY NEW YORK STATE COURT, AS APPROPRIATE, IN EITHER CASE SITTING IN NEW YORK
COUNTY, NEW YORK, AS APPROPRIATE IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR
FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO
EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR
IN CONNECTION WITH THIS AGREEMENT.
Section 14.14 Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be as
effective as delivery of a manually executed counterpart of a signature page to
this Agreement.
Section 14.15 No Recourse Against Other Parties.
The obligations of the Lender under this Agreement are solely the
corporate obligations of the Lender. No recourse shall be had for the payment
of any amount owing by the Lender under this Agreement or for the payment by
the Lender of any fee in respect hereof or any other obligation or claim of or
against the Lender arising out of or based upon this Agreement against any
employee, officer, director, incorporator or stockholder of the Lender. Each
of the Borrower, the Servicer and the Administrator agree that Blue Ridge shall
be liable for any claims that such party may have against Blue Ridge only to
the extent Blue Ridge has excess funds and to the extent such assets are
insufficient to satisfy the obligations of Blue Ridge hereunder, Blue Ridge
shall have no liability with respect to any amount of such obligations
remaining unpaid and such unpaid amount shall not constitute a claim against
Blue Ridge. Any and all claims
56
against Blue Ridge or the Administrator shall
be subordinate to the claims of the holders of Commercial Paper and the
Liquidity Banks.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
57
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
|
|
| ▇▇▇▇▇▇ TRADE FUNDING LLC, as
the Borrower
|
| and a Loan Party
|
| By:___________________________________
|
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
|
|
| ▇▇▇▇▇▇ WORLDWIDE, INC., as
guarantor of the
|
| servicer’s performance and a Loan Party
|
| By:___________________________________
|
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Finance and Treasurer
|
|
|
| ▇▇▇▇▇▇
COLLECTIONS LIMITED
| | PARTNERSHIP, as the initial
Servicer and a
| | Loan Party
| | BY: ▇▇▇▇▇▇ Worldwide, Inc., as its sole
| | general partner
|
| By:
___________________________________
| Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Finance and Treasurer
|
|
| BLUE RIDGE ASSET FUNDING CORPORATION,
as Lender
|
| By:___________________________________
|
Title:
|
|
| WACHOVIA BANK, N.A., as the Administrator
|
| By:___________________________________
|
Title:
APPENDIX A
DEFINITIONS
This is Appendix A to the Credit and Security Agreement dated as of March
31, 2000, among ▇▇▇▇▇▇ Trade Funding LLC, as the Borrower, ▇▇▇▇▇▇ Worldwide,
Inc., ▇▇▇▇▇▇ Collections Limited Partnership, as the Servicer, Blue Ridge Asset
Funding Corporation, as the Lender, and Wachovia Bank, N.A., as individually
and as Administrator (as amended, supplemented or otherwise modified from time
to time, this “Agreement”). Each reference in this Appendix A to any Section,
Appendix or Exhibit refers to such Section of or Appendix or Exhibit to this
Agreement.
A. Defined Terms. As used in this Agreement, unless the context requires
a different meaning, the following terms have the meanings indicated below:
Adjusted Dilution Ratio: The 12-month rolling average of the Dilution Ratio.
Administrator: As defined in the preamble.
Administrator’s Account: As defined in Section 2.5(a).
Advance: A borrowing hereunder consisting of the Loan made on the Borrowing
Date
Affected Party: Each of the Lender, each Liquidity Bank, any assignee or
participant of the Lender or any Liquidity Bank, Wachovia, any successor to
Wachovia, as Administrator, or any sub-agent of the Administrator.
Affiliate: With respect to any other Person controlling, controlled by, or
under common control with, such Person.
Affiliated Obligor: In relation to any Obligor, an Obligor that is an
Affiliate of such Obligor.
Aggregate Commitment: The aggregate of the commitments of the Liquidity Banks,
initially $50,000,000, as reduced or increased from time to time pursuant to
the terms hereof.
Allocation Limit: As defined in Section 1.1.
Alternate Base Rate: For any day, the rate per annum equal to the higher as of
such day of (i) the Base Rate, or (ii) one-half of one percent (0.50%) above
the Federal Funds Rate. For purposes of determining the Alternate Base Rate
for any day, changes in the Prime Rate or the Federal Funds Rate shall be
effective on the date of each such change. The Alternate Base Rate is not
necessarily intended to be the lowest rate of interest determined by Wachovia
in connection with extensions of credit.
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Alternate Base Rate Loan: A Loan which bears interest at the Alternate Base
Rate or the Default Rate.
Average Dealer Repayment Credit: On any day, an amount calculated as of the
immediately preceding Cut-Off Date equal to the highest three month rolling
average Dealer Repayment Credit over the 12 months ending on such Cut-Off Date.
Bank Facilities: (i) That certain 364-Day Credit Agreement dated as of October
20, 1999 by and among ▇▇▇▇▇▇, as the Company, the Subsidiary Borrowers named
therein, the Lenders named therein, ABN Amro Bank N.V., as Administrative
Agent, Suntrust Bank, Atlanta, as Syndication Agent and Wachovia, as
Documentation Agent and (ii) that certain 5-Year Credit Agreement, dated as of
October 20, 1999, by and among, ▇▇▇▇▇▇, as the Company, the Subsidiary
Borrowers named therein, the Lenders named therein, ABN Amro Bank, N.V., as
Administrative Agent, Issuing Bank and Dollar Swing Line Bank, ABN Amro Bank
N.V., Belgium Branch, as Multicurrency Swing Line Bank, Suntrust Bank, Atlanta
as Syndication Agent and Wachovia, as Documentation Agent.
Base Rate: For any day, the rate per annum equal to the higher as of such day
of (i) the Prime Rate, or (ii) one-half of one percent above the Federal Funds
Rate. For purposes of determining the Base Rate for any day, changes in the
Prime Rate or the Federal Funds Rate shall be effective on the date of each
such change. The Base Rate is not necessarily intended to be the lowest rate
of interest determined by Wachovia in connection with extensions of credit.
Blue Ridge: As defined in the preamble.
Borrower: As defined in the preamble.
Borrower Information: As defined in Section 14.7(a).
Borrower Information Provider: As defined in Section 14 .7(a).
Borrowing Base: On any date of determination, the amount determined by
reference to the following formula:
(NPB — RR) — EDC
where:
|
|
|
|
|
|
| NPB
| =
| the Net Pool Balance as of the most recent Cut-Off Date;
|
| RR
| =
| the Required Reserve as of the most recent Cut-Off Date; and
|
| EDC
| =
| Deemed Collections that have occurred since the most recent Cut-Off Date
to the extent such Deemed Collections exceed the Dilution Reserve.
Borrowing Date: A date on which an Advance is made hereunder.
A - 2
Borrowing Request: As defined in Section 2.1.
Business Day: (i) with respect to any matters relating to the Eurodollar Rate,
a day on which banks are open for business in New York, New York, and in
Atlanta, Georgia, and on which dealings in U.S. 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 New York, New York, or Atlanta, Georgia, are authorized or obligated by law,
executive order or governmental decree to be closed.
Change in Control:
(a) in relation to ▇▇▇▇▇▇, the acquisition by any person or group of
persons (within the meaning of Section 13 or 14 of the Exchange Act), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act) of issued and
outstanding shares of the capital stock of ▇▇▇▇▇▇ entitled (without
regard to the occurrence of any contingency) to vote for the election of
members of the board of directors of ▇▇▇▇▇▇ and having a then present
right to exercise 50% or more of the voting power for the election of
members of the board of directors of ▇▇▇▇▇▇ attached to all such
outstanding shares of capital stock of ▇▇▇▇▇▇, unless otherwise agreed in
writing by the Administrator; and
(b) in relation to the Borrower, the failure of LTR LLC to own
(directly or through wholly-owned Subsidiaries of ▇▇▇▇▇▇) 100% of the
issued and outstanding ownership interests (including all warrants,
options, conversion rights, and other rights to purchase or convert into
such ownership interests) of the Borrower on a fully diluted basis.
Code: The Internal Revenue Code of 1986, as the same may be amended from time
to time.
Collateral: As defined in Section 9.1.
Collateral Administrator: Such Person as may be appointed as collateral agent
from time to time by the Lender.
Collection Account: The segregated account which may hereafter be established
by the Administrator maintained with Wachovia, and titled “Wachovia Bank, N.A.,
as Administrator.”
Collections: With respect to any Receivable, all funds which either (a) are
received by the Borrower, an Originator or the Servicer from or on behalf of
the related Obligor in payment of any amounts owed (including, without
limitation, purchase prices, finance charges, interest and all other charges)
in respect of such Receivable, or applied to such amounts owed by such Obligor
(including, without limitation, insurance payments that the Borrower, an
Originator or the Servicer applies in the ordinary course of its business to
amounts owed in respect of such Receivable and net proceeds of sale or other
disposition of repossessed goods or other collateral
A - 3
or property of the Obligor
or any other party directly or indirectly liable for payment of such Receivable
and available to be applied thereon), or (b) are Deemed Collections; provided
that, prior to such time as ▇▇▇▇▇▇ Collections shall cease to be the Servicer,
late payment charges, collection fees and extension fees shall not be deemed to
be Collections. Collections shall also include (i) amounts paid on the
Obligations pursuant to the Limited Secured Guaranty and (ii) all Trade
Allocation amounts pursuant to the Intercreditor Agreement.
Commercial Paper Notes: The commercial paper promissory notes, if any, issued
by or on behalf of Blue Ridge that fund any CP Rate Loan.
Commitment Increase Request: As defined in Section 1.7.
Commitment Reduction Notice: As defined in Section 1.6.
Contract: A contract between the Borrower, ▇▇▇▇▇▇ Receivables, LTR LLC or an
Originator and any Person, or an invoice sent or to be sent by the Borrower,
▇▇▇▇▇▇ Receivables, LTR LLC or an Originator, pursuant to or under which a
Receivable shall arise or be created, or which evidences a Receivable. A
“related Contract’ or similar reference means rights to payment, collection and
enforcement, and other rights under a Contract to the extent directly related
to a Receivable, but not any other rights under such Contract.
CP Rate: With respect to any CP Tranche Period, the rate equivalent to the
rate (or if more than one rate, the weighted average of the rates) at which
Commercial Paper Notes having a term equal to such CP Tranche Period are sold
plus the amount of any placement agent or commercial paper dealer fees incurred
in connection with such sale.
CP Rate Loan: A Loan made by Blue Ridge which bears interest at a CP Rate.
CP Tranche Period: A period of up to 120 days commencing on a Business Day
determined by the Administrator in consultation with the Borrower pursuant to
Section 1.2. If such CP Tranche Period would end on a day which is not a
Business Day, such CP Tranche Period shall end on the preceding Business Day.
Credit and Collection Policy: Those credit and collection policies and
practices of the Originators relating to Contracts and Receivables as in effect
on the date of this Agreement, as modified without violating Section 7.3(c),
but subject to compliance with applicable tariffs or state regulations in
effect from time to time; provided that if a ▇▇▇▇▇▇ Credit Event has occurred,
at the request of the Administrator, ▇▇▇▇▇▇ shall provide a detailed written
summary of the Credit and Collection Policy.
Cumulative Sales: For each Settlement Period, the amount of Receivables
originated by the Originators and sold to the Borrower pursuant to the Sale
Agreement (Step 3).
Cut-Off Date: The last day of each Settlement Period.
A - 4
Days Sales Outstanding or DSO: As of any day, an amount equal to the product
of (x) 91, multiplied by (y) the amount obtained by dividing (i) the aggregate
outstanding balance of Receivables as of the most recent Cut-Off Date, by (ii)
the aggregate amount of Receivables created during the three Settlement Periods
including and immediately preceding such Cut-Off Date.
Dealer Repayment Credit: The amount calculated as of each Cut-Off Date and
reported on each Settlement Report as “Credit to Dealers,” with respect to
collections received by the Servicer in payment of maintenance services, which
amounts are payable by the Servicer to the appropriate Person who provided such
maintenance services and shall not be deemed to be part of Collections.
Deemed Collections: As defined in Section 3.3.
Default Horizon: 150 days.
Default Horizon Ratio: As of any Cut-Off Date, the ratio (expressed as a
percentage) of (i) the aggregate sales of the Originators during the Default
Horizon ending on such Cut-Off Date divided by (ii) the Net Pool Balance on
such Cut-Off Date.
Default Rate: A rate per annum equal to the sum of (i) the Alternate Base Rate
plus (ii) 2.00%, changing when and as the Alternate Base Rate changes.
Default Ratio: At any time, the ratio (expressed as a percentage) computed as
of the Cut-Off Date for the next preceding Settlement Period by dividing (x)
the aggregate Unpaid Balance of all Receivables that became Defaulted
Receivables during the Settlement Period ending on such Cut-Off Date by (y) the
Cumulative Sales generated during the Settlement Period five (5) months prior
to the Settlement Period ending on such Cut-Off Date.
Defaulted Receivable: A Receivable (a) as to which any payment, or part
thereof, remains unpaid for more than 150 days from the original invoice date
with respect thereto; or (b) as to which an Event of Bankruptcy has occurred
and remains continuing with respect to the Obligor thereof.
Delinquency Ratio: At any time, the ratio (expressed as a percentage) computed
as of the Cut-Off Date for the next preceding Settlement Period by dividing (x)
the aggregate Unpaid Balance of all Receivables that are Delinquent Receivables
on such Cut-Off Date by (y) the aggregate Unpaid Balance of Receivables on such
Cut-Off Date.
Delinquent Receivable: A Receivable (a) that is not a Defaulted Receivable and
(b) as to which any payment, or part thereof, remains unpaid for 121 days or
more from the original invoice date with respect thereto.
Dilution: The amount of any reduction or cancellation of the Unpaid Balance of
a Receivable as described in Section 3.2(a).
A - 5
Dilution Horizon Ratio: As of any date, an amount (expressed as a percentage)
calculated by dividing the sum of Cumulative Sales for the most recent
preceding Settlement Period and one-half Cumulative Sales for the Settlement
Period immediately preceding such aforereferenced Settlement Period by the
outstanding balance of all Eligible Receivables as of the most recent Cut-Off
Date.
Dilution Ratio: As of any date, an amount (expressed as a percentage) equal to
a fraction, the numerator of which is the total amount of Dilution during the
previous Settlement Period, and the denominator of which is the Cumulative
Sales generated during the Settlement Period two months prior to the previous
Settlement Period.
Dilution Reserve: An amount (expressed as a percentage) equal to the product
of (a) the sum of (i) 2.0 times the Adjusted Dilution Ratio and (ii) the
Dilution Volatility Component and (b) the Dilution Horizon Ratio.
Dilution Volatility Component: An amount (expressed as a percentage) equal to
the product of (a) the difference between (i) the highest three month rolling
average Dilution Ratio over the past 12 months and (ii) the Adjusted Dilution
Ratio and (b) a fraction, the numerator of which is the highest three month
rolling average Dilution Ratio over the past 12 months and the denominator of
which is the Adjusted Dilution Ratio.
Downgraded Liquidity Bank: A Liquidity Bank which has been the subject of a
Downgrading Event.
Downgrading Event: With respect to any Person means the lowering of the rating
with regard to the short-term securities of such Person to below (i) A-1 by
Standard & Poor’s Ratings Group, or (ii) P-1 by Moody’s.
Eligible Liquidity Assignee: a) any “bankruptcy remote” special purpose entity
which is administered by Wachovia or (or any Affiliate of the foregoing) that
is in the business of acquiring or financing receivables, securities and/or
other financial assets and which issues commercial paper notes that are rated
at least A-1 by S&P and P-1 by Moody’s, (b) any Qualifying Liquidity Bank
having a combined capital and surplus of at least $250,000,000, or (c) any
Downgraded Liquidity Bank whose Liquidity Commitment has been fully drawn by
Blue Ridge or the Administrator and funded into a collateral account.
Eligible Receivable: At any time, a Receivable:
(a) which is a Receivable representing goods that have been shipped or
services that have been performed and which arises out of the sale by an
Originator in the ordinary course of its business of the sale of office
equipment and/or the rendering of office services on the premises of certain
Obligors, which Receivable has been sold (i) to ▇▇▇▇▇▇ Receivables pursuant to
the Sale Agreement (Step 1) in a “true sale” transaction, (ii) to LTR LLC
pursuant to the Sale
A - 6
Agreement (Step 2) in a “true sale” transaction, or (iii)
to the Borrower pursuant to the Sale Agreement (Step 3);
(b) as to which the perfection of the Administrator’s security interest
therein is governed by the laws of a jurisdiction where the Uniform Commercial
Code — Secured Transactions is in force, and which constitutes an “account” or
“chattel paper” as defined in the Uniform Commercial Code as in effect in such
jurisdiction;
(c) the Obligor of which is a resident of the United States, or any of its
possession or territories and is neither an Affiliate of any Loan Party nor a
Governmental Authority.
(d) which is not a Defaulted Receivable;
(e) with regard to which the warranty of the Borrower in Section 6.1(l) is
true and correct;
(f) the sale of an undivided interest in which does not contravene or
conflict with any applicable federal, state or local law or regulation;
(g) which is denominated and payable only in U.S. Dollars in the United
States;
(h) which arises under a Contract that has been duly authorized and
executed and that, together with such Receivable, is in full force and effect
and constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms and is
not subject to any dispute, offset, counterclaim or defense whatsoever;
(i) which, together with the Contract related thereto, does not contravene
in any material respect any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which no party to the Contract related thereto is in violation of any such law,
rule or regulation in any material respect if such violation would impair the
collectibility of such Receivable;
(j) which satisfies in all material respects all applicable requirements
of the Credit and Collection Policy;
(k) which, according to the Contract related thereto, is due and payable
within 30 days from the invoice date of such Receivable or, if such Receivable;
(l) not more than 35% of the aggregate unpaid balance of all Receivables
of the Obligor of which are Defaulted Receivables; and
(m) the original term of which has not been extended and the Unpaid
Balance of which has not been adjusted more than once.
A - 7
ERISA: The U.S. Employee Retirement Income Security Act of 1974, as amended
from time to time.
ERISA Affiliate: Any trade or business (whether or not incorporated) that is a
member of a group of which ▇▇▇▇▇▇ is a member and which is treated as a single
employer under Section 414 of the Code.
Eurodollar Business Day: A day of the year as defined in clause (i) of the
definition of Business Day.
Eurodollar Loan: A Loan which bears interest at the applicable Eurodollar
Rate.
Eurodollar Rate: For any Interest Period, the rate per annum determined on the
basis of the offered rate for deposits in U.S. Dollars of amounts equal or
comparable to the principal amount of the related Liquidity Funding offered for
a term comparable to such Interest Period, which rates appear on a Bloomberg
L.P. terminal, displayed under the address “US0001M
<Index> Q <Go>” effective as of 11:00
A.M., London time, two Eurodollar Business Days prior to the first day of such
Interest Period, provided that if no such offered rates appear on such page,
the Eurodollar Rate for such Interest Period will be the arithmetic average
(rounded upwards, if necessary, to the next higher 1/100th of 1%) of rates
quoted by not less than two major banks in New York City, selected by the
Administrator, at approximately 10:00 A.M., New York City time, two Eurodollar
Business Days prior to the first day of such Interest Period, for deposits in
U.S. Dollars offered by leading European banks for a period comparable to such
Interest Period in an amount comparable to the principal amount of such
Liquidity Funding.
Eurodollar Rate (Reserve Adjusted): With respect to any Interest Period means
a rate per annum equal to the quotient obtained (rounded upwards, if necessary,
to the next higher 1/100th of 1%) by dividing (i) the applicable Eurodollar
Rate for such Interest Period by (ii) 1.00 minus the Eurodollar Reserve
Percentage.
Eurodollar Reserve Percentage: With respect to any with respect to any
Interest Period, the maximum reserve percentage, if any, applicable to a
Liquidity Bank under Regulation D during such Interest Period (or if more than
one percentage shall be applicable, the daily average of such percentages for
those days in such Interest Period during which any such percentage shall be
applicable) for determining such Liquidity Bank’s reserve requirement
(including any marginal, supplemental or emergency reserves) with respect to
liabilities or assets having a term comparable to such Interest Period
consisting or included in the computation of “Eurocurrency Liabilities”
pursuant to Regulation D. Without limiting the effect of the foregoing, the
Eurodollar Reserve Percentage shall reflect any other reserves required to be
maintained by such Liquidity Bank by reason of any Regulatory Change against
(a) any category of liabilities which includes deposits by reference to which
the “London Interbank Offered Rate” or “LIBOR” is to be determined or (b) any
category of extensions of credit or other assets which include LIBOR-based
credits or assets.
A - 8
Event of Bankruptcy: With respect to a Person if either:
(a) a case or other proceeding shall be commenced, without the application
or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or
all or substantially all of its assets, or any similar action with respect to
such Person under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person shall be
entered in an involuntary case under the federal bankruptcy laws or other
similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding under
any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent
to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for, such Person
or for any substantial part of its property, or shall make any general
assignment for the benefit of creditors, or shall be adjudicated insolvent, or
admit in writing its inability to, pay its debts generally as they become due,
or, if a corporation or similar entity, its board of directors shall vote to
implement any of the foregoing.
Excess Concentration Amount: As of any date, the sum of the amounts by which
the aggregate Unpaid Balance of Receivables of each Obligor exceeds the Obligor
Concentration Limit for such Obligor.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extension Request: As defined in Section 1.8.
Facility Fee: As defined in the Fee Letter.
Federal Funds Rate: For any day, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) 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 on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if the day for which such rate is to be determined is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (ii) if such rate is not so published for any
day, the Federal Funds Rate for such day shall be the average rate charged to
the Administrator on such day on such transactions, as reasonably determined by
the Administrator.
Federal Reserve Board: The Board of Governors of the Federal Reserve System,
or any successor thereto or to the functions thereof.
A - 9
Fee Letter: As defined in Section 4.1.
Final Payout Date: The date following the Termination Date on which the
Invested Amount shall have been reduced to zero and all other amounts payable
by the Borrower under the Transaction Documents shall have been paid in full.
Fundamental Change: As defined in Section 7.3.
Funding Termination Date: The earliest of the following:
(a) 364 days following the date hereof;
(c) the Administrator declares a Funding Termination Date in a notice to
the Borrower in accordance with Section 10.2(a); or
(d) in accordance with Section 10.2(b), the Funding Termination Date
occurs automatically.
GAAP: Generally accepted accounting principles 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, which are applicable to the circumstances as of the date of
determination.
Governmental Authority: Any Federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory body.
Guarantee: With respect to any person, any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of
such person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (e) to purchase property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (f) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided however that the
term Guarantee shall not include endorsements for collection or deposit, in
either case, in the ordinary course of business.
Indebtedness: With respect to any person means, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (g) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (h) all obligations of such person
upon which interest charges are customarily paid, (i) all obligations of such
person under conditional sale or other title retention agreements relating to
property or
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assets purchased by such person, (j) all obligations of such person
issued or assumed as the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of business), (k) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such person, whether or not the obligations
secured thereby have been assumed, but limited, if such obligations are without
recourse to such person, to the lesser of the principal amount of such
Indebtedness or the fair market value of such property, (g) all Guarantees by
such person of Indebtedness of others, (l) all capital lease obligations of
such person, (m) all obligations of such person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest
or exchange rate hedging arrangements (the amount of any such obligation to be
the amount that would be payable upon the acceleration, termination or
liquidation thereof) and (n) all obligations of such person as an account party
in respect of letters of credit and bankers’ acceptances. The Indebtedness of
any person shall include the Indebtedness of any partnership in which such
person is a general partner.
Indemnified Amounts: As defined in Section 13.1.
Indemnified Party: As defined in Section 13.1.
Independent Manager: As defined in Section 7.4(ii).
Initial Due Diligence Auditor: Such person designated by the Administrator as
the initial due diligence auditor.
Initial Seller Note: As defined in the Sale Agreement.
Intercreditor Agreement: The Intercreditor Agreement (Pre-Lease), dated as of
March 31, 2000, among Wachovia, Bank One, NA, and ▇▇▇▇▇▇.
Interest Payment Date:
(a) with respect to any CP Rate Loan, each of the following days:
the last day of its CP Tranche Period, the date on which any such Loan is
prepaid, in whole or in part, and the Termination Date;
(o) with respect to any Eurodollar Loan, each of the following days:
the last day of its Interest Period, the date on which any such Loan is
prepaid, in whole or in part, and the Termination Date;
(p) with respect to any Alternate Base Rate Loan, each of the
following days: each Settlement Date while such Loan remains
outstanding, the date on which any such Loan is prepaid, in whole or in
part, and the Termination Date; and
(q) with respect to any Loan while the Default Rate is applicable
thereto, each of the following days: upon demand or, in the absence of
any such demand, each
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Settlement Date while such Loan remains
outstanding, the date on which any such Loan is prepaid, in whole or in
part, and the Termination Date.
Interest Period: With respect to a Eurodollar Loan, a period not to exceed
three months commencing on a Business Day selected by the Borrower (or the
Servicer on the Borrower’s behalf) pursuant to this Agreement and agreed to by
the Administrator. Such Interest Period shall end on the day which corresponds
numerically to such date one, two, or three months thereafter, provided,
however, that (i) if there is no such numerically corresponding day in such
next, second or third succeeding month, such Interest Period shall end on the
last Business Day of such next, second or third succeeding month, and (ii) if
an Interest Period would otherwise end on a day which is not a Business Day,
such Interest Period shall end on the next succeeding Business Day unless said
next succeeding Business Day falls in a new calendar month, then such Interest
Period shall end on the immediately preceding Business Day.
Interest Rate: A Eurodollar Rate (Reserve Adjusted), a CP Rate, the Alternate
Base Rate or the Default Rate.
Interest Reserve: On any date of determination, 1.5 times the Alternate Base
Rate multiplied by a fraction the numerator of which is the 12-month high Days
Sales Outstanding and the denominator of which is 360.
▇▇▇▇▇▇: ▇▇▇▇▇▇ Worldwide, Inc., a Delaware corporation.
▇▇▇▇▇▇ Credit Event: The occurrence of any Default under the Bank Facilities.
Lease Facility: The proposed financing arrangement with respect to the
securitization of certain lease receivables to be entered into among ▇▇▇▇▇▇,
certain ▇▇▇▇▇▇ Affiliates, Falcon Asset Securitization Corporation, Bank One,
NA, Wachovia and Blue Ridge and various other parties.
Lease Payments: Any payments related to the lease or rental of equipment or any
related maintenance contract.
Lender: As defined in the preamble.
Letter Agreement: The Letter Agreement with respect to the Lock-Box at
Wachovia, dated as of March 31, 2000 among ▇▇▇▇▇▇, ▇▇▇▇▇▇ Financial Services,
Inc., the Borrower, ▇▇▇▇▇▇ Lease Funding LLC, the Servicer and Wachovia, as the
same may be amended, supplemented or otherwise modified.
Lien: Any security interest, lien, encumbrance, pledge, assignment, title
retention, similar claim, right or interest.
Limited Secured Guaranty: The Limited Secured Guaranty, dated as of March 31,
2000 made by LTR LLC in favor of Wachovia, as Administrator for the Secured
Parties.
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Liquidation Event: As defined in Section 10.1.
Liquidity Administrator: Wachovia, as agent for the Liquidity Banks under the
Liquidity Agreement, or any successor to Wachovia in such capacity.
Liquidity Agreement: The Liquidity Asset Purchase Agreement dated as of the
date hereof among Blue Ridge, the Administrator, and the Liquidity Banks from
time to time party thereto, as the same may be amended, restated, supplemented,
replaced or otherwise modified from time to time.
Liquidity Bank: The commercial lending institutions that are at any time
parties to the Liquidity Agreement as liquidity providers thereunder.
Liquidity Commitment: With respect to each Liquidity Bank, its commitment to
make Liquidity Fundings pursuant to the Liquidity Agreement.
Liquidity Funding: A purchase made by any Liquidity Bank pursuant to its
Liquidity Commitment of all or any portion of one of Blue Ridge’s Loans.
Liquidity Termination Date: The earlier to occur of the following:
(a) the date on which the Liquidity Banks’ commitments pursuant to
the Liquidity Agreement expire, cease to be available to Blue Ridge or
otherwise cease to be in full force and effect; or
(r) the date on which a Downgrading Event with respect to a
Liquidity Bank shall have occurred and been continuing for not less than
30 days, and either (i) the Downgraded Liquidity Bank shall not have been
replaced by a Qualifying Liquidity Bank pursuant to the Liquidity
Agreement, or (ii) the commitment of such Downgraded Liquidity Bank under
a Liquidity Agreement shall not have been funded or collateralized in
such a manner that will avoid a reduction in or withdrawal of the credit
rating applied to the Commercial Paper Notes to which such Liquidity
Agreement applies by any of the rating agencies then rating such
Commercial Paper Notes.
Loan: Any loan made by the Lender to the Borrower pursuant to this Agreement.
Each Loan shall either be a CP Rate Loan, an Alternate Base Rate Loan or a
Eurodollar Rate Loan, selected in accordance with the terms of this Agreement.
Loan Parties: Collectively, (i) the Borrower, (ii) ▇▇▇▇▇▇ Collections and (iii)
▇▇▇▇▇▇.
Lock-Box Account: Any bank account maintained for the purpose of receiving
Collections at a bank or other financial institution that has executed a
Lock-Box Agreement.
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Lock-Box Agreement: A letter agreement, in substantially the form of Exhibit
A-1, among the Servicer, the Lender, the Administrator, the Borrower and any
Lock-Box Bank. The Letter Agreement shall constitute a Lock-Box Agreement.
Lock-Box Bank: Any of the banks holding one or more lock-boxes or Lock-Box
Accounts receiving Collections from Receivables.
Loss Reserve: At any time, means (expressed as a percentage) the product of
(i) two times (ii) the greatest rolling three month average Sales Based Default
Ratio to have occurred during the most recently ended twelve consecutive month
period times (iii) the most recently calculated Default Horizon Ratio times
(iv) the Net Pool Balance.
LTR LLC: ▇▇▇▇▇▇ Trade Receivables LLC.
Mandate Letter: As defined in Section 4.1.
Material Adverse Effect: With respect to any event or circumstance, a material
adverse effect on:
(i) (A) the assets, operations, business or financial condition of
the Borrower or (B) the business, assets, operations or financial
condition of ▇▇▇▇▇▇ and its Subsidiaries, taken as a whole, which could
reasonably be expected to have a material adverse effect on the
creditworthiness of ▇▇▇▇▇▇;
(ii) the ability of the Borrower, ▇▇▇▇▇▇ or any Affiliate of ▇▇▇▇▇▇
to perform in all material respects its obligations under this Agreement
or any other Transaction Document; or
(iii) the status, existence, perfection, priority or enforceability
of the Secured Parties’ and the Administrator’s interest in the
Receivables.
Moody’s: ▇▇▇▇▇’▇ Investors Service, Inc.
Net Pool Balance: On any date, an amount equal to the aggregate Unpaid Balance
of all Eligible Receivables on such date, minus (i) the Excess Concentration
Amount, and (ii) the Average Dealer Repayment Credit.
Obligations: All unpaid principal of and accrued and unpaid interest on the
Loans, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Lender (or the
Lender), the Administrator or any Indemnified Party arising under the
Transaction Documents.
Obligor: A Person obligated to make payments with respect to a Receivable,
including any guarantor thereof.
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Obligor Concentration Limit: At any time, in relation to the aggregate Unpaid
Balance of Receivables owed by any single Obligor and its Affiliated obligors
(if any):
(a) for Obligors who have a short term unsecured debt rating currently
assigned to them by Standard & Poor’s and Moody’s, the applicable concentration
limit shall be determined according to the following table (and, if such
Obligor has a split rating, the applicable rating will be the lower of the
two):
A-1+
▇-▇
▇-▇
▇-▇
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ▇▇▇▇▇▇▇▇▇
|
| % of Eligible
|
| S&P Rating
| ▇▇▇▇▇'▇ Rating
| Receivables
|
| P-1
|
| 10
| %
|
| P-1
|
| 8
| %
|
| P-2
|
| 6
| %
|
| P-3
| 3
| %; or
(b) for Obligors who do not have a debt rating listed above, 3% of the
aggregate Unpaid Balance of Eligible Receivables at such time.
provided, however that at the Originator’s request, the Administrator may
permit (with the approval of Standard & Poor’s and Moody’s) certain obligors to
have an Obligor Concentration Limit in excess of those described in clauses (a)
and (b) above.
Originator and Originators: ▇▇▇▇▇▇, ▇▇▇▇▇▇ Professional Services, Inc. and
▇▇▇▇▇▇ Litigation Services, Inc., as the case may be.
Outstanding Balance: With respect to any Receivable, the outstanding balance
of such Receivable in U.S. Dollars.
Performance Guaranty: The Performance Guaranty of ▇▇▇▇▇▇ dated March 31, 2000
for the benefit of Blue Ridge and the Administrator.
Person: An individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, joint venture,
government or any agency or political subdivision thereof or any other entity.
Plan: Any pension plan subject to the provisions of Title IV of ERISA or
Section 412 of the Code which is maintained for employees of ▇▇▇▇▇▇ or any
ERISA Affiliate.
Prime Rate: Refers to that interest rate so denominated and set by Wachovia
from time to time as an interest rate basis for borrowings. The Prime Rate is
but one of several interest rate bases used by Wachovia. Wachovia lends at
interest rates above and below the Prime Rate.
Prepayment Notice: As defined in Section 1.5(a).
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Principal Amount: The actual net cash proceeds received by Blue Ridge upon
issuance of a Commercial Paper Note.
Program Information: As defined in Section 14.8(a)(i).
Purchase and Sale Agreement (Subordinated Interest): The Purchase and Sale
Agreement (Subordinated Interest), dated as of March 31, 2000 between LTR LLC
and the Borrower.
Qualifying Liquidity Bank: A Liquidity Bank with a rating of its short-term
securities equal to or higher than (i) A-1 by Standard & Poor’s and (ii) P-1 by
Moody’s.
Ratable Share: With respect to any Liquidity Bank, the ratio which its
Commitment bears to the sum of the Commitments of all Liquidity Banks.
Receivable: Any right to payment arising from the sale of equipment, supplies
or services by an Originator, including, without limitation, the right to
payment of any interest or finance charges and other amounts with respect
thereto, which is sold or contributed under any of the Sale Agreements,
excluding in all cases (i) any Lease Payments and (ii) any right to payment
arising from the sale by an Originator of inventory equipment or supplies
manufactured or provided by Hewlett-Packard Company. Rights to payment arising
from any one transaction, including, without limitation, rights to payment
represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the rights to payment arising from any other
transaction or evidenced by any other invoice; provided, however, any right to
payment referred to in this sentence shall be a Receivable regardless of
whether the account debtor or the Borrower treats such right to payment as a
separate payment obligation.
Regulation: Any specified Regulation of the Federal Reserve Board, as the same
may be amended or supplemented from time to time.
Regulatory Change: Any change after the date of this Agreement in United
States (federal, state or municipal) or foreign laws or regulations (including
Regulation D) or the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks (including the Liquidity
Bank) of or under any United States (federal, state or municipal) or foreign,
laws, or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
Reinvestment: As defined in Section 3.2(r).
Related Assets: (a) all rights to, but not any obligations under, all Related
Security related to any Receivables, (b) all rights and interests of the
Borrower hereunder under the Sale Agreements in relation to any Receivables,
(c) all books and records evidencing or otherwise relating to any Receivables,
(d) all Lock-Box Accounts and all cash and investments therein, to the extent
constituting or representing the items in the following clause (e) and (e) all
Collections in respect of, and other proceeds of, any Receivables or any other
Related Assets.
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Related Security: With respect to any Receivable, all of the Borrower’s (in
the case of usage in this Credit and Security Agreement) or the Originator’s
(in the case of usage in the Sale Agreements) right, title and interest in and
to: (a) all Contracts that relate to such Receivable; (b) all merchandise
(including returned merchandise), if any, relating to the sale which gave rise
to such Receivable; (c) all security deposits and other security interests or
liens and property subject thereto from time to time purporting to secure
payment of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise; (d) all UCC financing statements covering any
collateral securing payment of such Receivable (but only to the extent of the
interest of the Lender in the respective Receivable); (e) all guarantees and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to the
Contract related to such Receivable or otherwise; and (f) all insurance
policies, and all claims thereunder, related to such Receivable, in each case
to the extent directly related to rights to payment, collection and
enforcement, and other rights with respect to such Receivable.
Reportable Event: Any reportable event as defined in Section 4043(b) of ERISA
or the regulations issued thereunder with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate which is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code).
Reporting Date: As defined in Section 3.1(a).
Required Amounts: As defined in Section 3.2.
Required Reserve: On any day during a Settlement Period, an amount equal to
the product of the Required Reserve Factor and the Net Pool Balance.
Required Reserve Factor: On any day during the Settlement Period, an amount
equal to (i) the greater of (x) the Required Reserve Factor Floor and (y) the
sum of the Loss Reserve, (ii) the Dilution Reserve, (iii) the Interest Reserve,
and (iv) the Servicing Reserve.
Required Reserve Factor Floor: 14.00%.
Response Date: As defined in Section 1.8.
Revolving Period: The period from and after the date of the initial Advance
under this Agreement to but excluding the Termination Date.
S&P: Standard & Poor’s Ratings Service.
Sale Agreements: Collectively, the Sale Agreement (Step 1), the Sale Agreement
(Step 2), the Sale Agreement (Step 3) and the Purchase and Sale Agreement
(Subordinated Interest).
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Sale Agreement (Step 1): The Purchase and Sale Agreement (1) dated as of March
31, 2000 among ▇▇▇▇▇▇, ▇▇▇▇▇▇ Professional Services, Inc., ▇▇▇▇▇▇ Litigation
Services, Inc. and ▇▇▇▇▇▇ Receivables LLC, as it may be amended, supplemented
or otherwise modified.
Sale Agreement (Step 2): The Purchase and Sale Agreement (Step 2) dated as of
March 31, 2000 between ▇▇▇▇▇▇ Trade Receivables LLC and ▇▇▇▇▇▇ Receivables LLC,
as it may be amended, supplemented or otherwise modified.
Sale Agreement (Step 3): The Purchase and Sale Agreement (Step 3) dated as of
March 31, 2000 between ▇▇▇▇▇▇ Trade Receivables LLC and the Borrower, as it may
be amended, supplemented or otherwise modified in accordance with Section
7.3(f).
Sales Based Default Ratio: As of any Cut-Off Date, the ratio (expressed as a
percentage) of (i) the aggregate Unpaid Balance of all Receivables which became
Defaulted Receivables during the Settlement Period including such Cut-Off Date
divided by (ii) the aggregate sales of the Originators during the month
occurring five months prior to the month ending on such Cut-Off Date.
SEC: The Securities and Exchange Commission.
Secured Parties: The Lender, the Administrator, the Indemnified Parties and
the Affected Parties.
Security Agreement (▇▇▇▇▇▇ Trade Receivables LLC): The Security Agreement
(▇▇▇▇▇▇ Trade Receivables LLC), dated as of March 31, 2000, among LTR LLC and
Wachovia.
Servicer: As defined in the preamble.
Servicer Advance: As defined in Section 8.3.
Servicer Default: As defined in Section 8.4.
Servicer Transfer Event: As defined in Section 8. 1(b).
Servicer’s Fee: An amount equal to (x) the Servicer’s Fee Rate, times (y) the
aggregate Unpaid Balance of the Receivables at the close of business on the
first day of such Settlement Period, times (z) 1/360.
Servicer’s Fee Rate: 1.0% per annum.
Servicing Reserve: The product of the Servicing Fee Rate and a fraction, the
numerator of which is the highest Days Sales Outstanding calculated for each of
the most recent 12 monthly periods and the denominator of which is 360.
Settlement Date: Two Business Days following each Reporting Date.
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Settlement Period:
(a) the period from the date of the initial Advance to the last day of the
calendar month in which such date occurs; and
(b) thereafter, each period from the last day of the next preceding
Settlement Period to the last day of the next following calendar month;
provided, however, that the last Settlement Period shall end on the Final
Payout Date.
Settlement Report: As defined in Section 3.1(a).
Structuring Fee: The structuring fee described in the Mandate Letter.
Subordination Agreement: The Subordination Agreement, dated as of March 31,
2000, among LTR LLC, the Borrower and Wachovia, as the same may be modified,
supplemented or otherwise modified.
Subsidiary: With respect to any Person means (i) a corporation more than 50%
of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned or controlled by such
Person, directly or indirectly through Subsidiaries, and (ii) any partnership,
association, joint venture or other entity in which such Person, directly or
indirectly through Subsidiaries, has more than a 50% equity interest at the
time.
Successor Notice: As defined in Section 8.1(b).
Tax Reserve Account: The segregated account which may hereafter be established
by the Servicer maintained with Wachovia and titled “Wachovia Bank, N.A., as
Administrator, ▇▇▇▇▇▇ Trade Receivables LLC Tax Reserve Account.”
Tax Reserve Amount: On any applicable Settlement Date, the amount of income
tax reasonably estimated to be due and payable by ▇▇▇▇▇▇ Trade Receivables LLC
to the State of Delaware on the immediately succeeding date on which Delaware
state income tax estimates or payments are due (which estimate and the
calculation method used to arrive at such estimate shall be provided to the
Administrator with the related Settlement Report and shall be reasonably
acceptable to the Administrator).
Termination Date: The earliest of:
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(a) the date of termination (whether by scheduled expiration, termination
on default or otherwise) of the Liquidity Bank’s commitments under the
Liquidity Agreement (unless such commitments are renewed, extended or replaced
on or before such date);
(b) the Funding Termination Date;
(c) the date designated by the Borrower as the “Termination Date” on not
less than five (5) Business Days’ notice to the Administrator, provided that on
such date the Obligations have been paid in full;
(d) March 29, 2001; and
(e) the date on which any of the following shall occur:
(i) Failure to obtain a Liquidity Agreement in substitution for the
then existing Liquidity Agreement on or before 30 days prior to the
expiration of the commitments of the Liquidity Banks thereunder; or
(ii) A Downgrading Event with respect to a Liquidity Bank shall have
occurred and been continuing for not less than 45 days, (x) the
Downgraded Liquidity Bank shall not have been replaced by a Qualifying
Liquidity Bank pursuant to a Liquidity Agreement in form and substance
acceptable to the Lender and the Administrator, and (y) the commitment of
such Downgraded Liquidity Bank under the Liquidity Agreement shall not
have been funded or collateralized in such a manner that such Downgrading
Event will not result in a reduction or withdrawal of the credit rating
applied to the Commercial Paper Notes by any of the rating agencies then
rating the Commercial Paper Notes; or
(iii) Lender shall become an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.
Termination Notice: As defined in Section 8.4.
Trade Allocation: As defined in the Intercreditor Agreement.
Transaction Documents: This Agreement, the Lock-Box Agreements, the Sale
Agreement (Step 1), the Sale Agreement (Step 2), the Sale Agreement Step (3),
the Purchase and Sale Agreement (Subordinated Interest), the Liquidity
Agreement, the Limited Secured Guaranty, the Intercreditor Agreement, the
Letter Agreement, the Subordination Agreement, the Security Agreement (▇▇▇▇▇▇
Trade Receivables LLC), the Performance Guaranty, the Fee Letter, the Mandate
Letter and the other documents to be executed and delivered in connection with
the foregoing.
Transactions Fees: All reasonable expenses of the Administrator incurred in
connection with the consummation of this Agreement and each other Transaction
Document as set forth in the Fee
A - 20
Letter, including but not limited to (i) the
legal fees of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to the Administrator, (ii)
expenses incurred in connection with any due diligence audit and (iii)
out-of-pocket expenses of the Administrator.
UCC: The Uniform Commercial Code, as from time to time in effect in the
applicable jurisdiction or jurisdictions.
Unmatured Liquidation Event: Any event which, with the giving of notice or
lapse of time, or both, would become a Liquidation Event.
Unpaid Balance: With respect to any Receivable means at any time the unpaid
amount thereof, but excluding all late payment charges, delinquency charges and
extension or collection fees.
U.S. Dollars: Dollars in lawful money of the United States of America.
B. Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word “from” means “from and including” and the words
“to” and “until” each mean “to but excluding.”
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