RECEIVABLES PURCHASE AGREEMENT
dated as of November 29, 1999
among
IMO FUNDING COMPANY, LLC
IMO INDUSTRIES INC.
LIBERTY STREET FUNDING CORP.
and
THE BANK OF NOVA SCOTIA
TABLE OF CONTENTS
||
ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility 1
Section 1.2. Making Purchases 2
Section 1.3. Purchased Interest Computation 3
Section 1.4. Settlement Procedures 3
Section 1.5. Fees 9
Section 1.6. Payments and Computations, Etc 9
Section 1.7. Increased Costs 10
Section 1.8. Requirements of Law 11
Section 1.9. Inability to Determine Eurodollar Rate 12
ARTICLE II. REPRESENTATIONS AND WARRANTIES;
COVENANTS; TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants 13
Section 2.2. Termination Events 13
ARTICLE III. INDEMNIFICATION
Section 3.1. Indemnities by the Seller 13
Section 3.2. Indemnities by the Servicer 16
ARTICLE IV. ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer 17
Section 4.2. Duties of the Servicer 18
Section 4.3. Establishment and Use of Certain Accounts 19
Section 4.4. Enforcement Rights 20
Section 4.5. Responsibilities of the Seller 21
Section 4.6. Servicing Fee 22
ARTICLE V. MISCELLANEOUS
Section 5.1. Amendments, Etc. 22
Section 5.2. Notices, Etc 23
Section 5.3. Assignability 23
Section 5.4. Costs, Expenses and Taxes 24
Section 5.5. No Proceedings; Limitation on Payments 25
Section 5.6. Confidentiality 25
Section 5.7. GOVERNING LAW AND JURISDICTION 26
Section 5.8. Execution in Counterparts 26
Section 5.9. Survival of Termination 26
Section 5.10. WAIVER OF JURY TRIAL 26
Section 5.11. Entire Agreement 27
Section 5.12. Headings 27
Section 5.13. Issuer's Liabilities 27
EXHIBIT I Definitions
EXHIBIT II Conditions of Purchases
EXHIBIT III Representations and Warranties
EXHIBIT IV Covenants
EXHIBIT V Termination Events
SCHEDULE I Credit and Collection Policy
SCHEDULE II Lock-box Banks and Lock-box Accounts
SCHEDULE III Trade Names
ANNEX A Form of Monthly Report
ANNEX B Form of Purchase Notice
This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement") is entered into as of November 29,
1999, among IMO FUNDING COMPANY, LLC, a Delaware limited liability company, as
seller (the "Seller"), IMO INDUSTRIES INC., a Delaware corporation ("IMO"), as
initial servicer (in such capacity, together with its successors and permitted
assigns in such capacity, the "Servicer"), LIBERTY STREET FUNDING CORP., a
Delaware corporation (together with its successors and permitted assigns, the
"Issuer"), and THE BANK OF NOVA SCOTIA, a Canadian chartered bank acting through
its New York Agency ("BNS"), as administrator (in such capacity, together with
its successors and assigns in such capacity, the "Administrator").
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I. References in the Exhibits
hereto to the "Agreement" refer to this Agreement, as amended, supplemented or
otherwise modified from time to time.
The Seller desires to sell, transfer and assign an undivided variable
percentage interest in a pool of receivables, and the Issuer desires to acquire
such undivided variable percentage interest, as such percentage interest shall
be adjusted from time to time based upon, in part, reinvestments made by the
Issuer.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
I. ARTICLE
AMOUNTS AND TERMS OF THE PURCHASES
1. Section Purchase Facility. On the terms and conditions hereinafter set forth,
the Issuer hereby agrees subject to the next sentence to purchase, and make
reinvestments in, undivided percentage ownership interests up to the Purchase
Limit with regard to the Purchased Interest from the Seller from time to time
from the date hereof to the Facility Termination Date. Under no circumstances
shall the Issuer make any such purchase or reinvestment if, after giving effect
to such purchase or reinvestment, the aggregate outstanding Capital of the
Purchased Interest would exceed the Purchase Limit.
1. The Seller may, upon at least 30 days' written notice to the Administrator,
terminate in whole or reduce in part the unused portion of the Purchase Limit;
provided, that each partial reduction shall be in the amount of at least
$5,000,000, or an integral multiple of $1,000,000 in excess thereof, and that,
unless terminated in whole, the Purchase Limit shall in no event be reduced
below $15,000,000.
1. Section Making Purchases. Each purchase (but not reinvestment) of undivided
percentage ownership interests with regard to the Purchased Interest hereunder
shall be made upon the Seller's irrevocable written notice in the form of Annex
B delivered to the Administrator in accordance with Section 5.2 (which notice
must be received by the Administrator before 11:00 a.m., New York City time): at
least two Business Days before the requested purchase date, which notice shall
specify: (A) the amount requested to be paid to the Seller (such amount, which
shall not be less than $250,000, being the "Capital" relating to the undivided
percentage ownership interest then being purchased), and (B) the date of such
purchase (which shall be a Business Day).
1. On the date of each purchase (but not reinvestment) of undivided percentage
ownership interests with regard to the Purchased Interest hereunder, the Issuer
shall, upon satisfaction of the applicable conditions set forth in Exhibit II,
make available to the Seller in same day funds, at Bank of America, N.A.,
account number ▇▇▇▇▇▇▇▇▇▇, ABA ▇▇▇▇▇▇▇▇▇, an amount equal to the Capital (as
specified by the Seller pursuant to Section 1.2(a) above) relating to the
undivided percentage ownership interest then being purchased.
1. Effective on the date of each purchase pursuant to this Section and each
reinvestment pursuant to Section 1.4, the Seller hereby sells and assigns to the
Issuer an undivided percentage ownership interest in: (i) each Pool Receivable
then existing, (ii) all Related Security with respect to such Pool Receivables,
and (iii) all Collections with respect to, and other proceeds of, such Pool
Receivables and Related Security.
1. To secure all of the Seller's obligations (monetary or otherwise) under this
Agreement and the other Transaction Documents to which it is a party, whether
now or hereafter existing or arising, due or to become due, direct or indirect,
absolute or contingent, the Seller hereby grants to the Issuer a security
interest in all of the Seller's right, title and interest (including any
undivided interest of the Seller) in, to and under all of the following, whether
now or hereafter owned, existing or arising: (i) all Pool Receivables, (ii) all
Related Security with respect to such Pool Receivables, (iii) all Collections
with respect to such Pool Receivables, (iv) the Lock-Box Accounts and the
Collection Account, and all amounts on deposit therein, and all certificates and
instruments, if any, from time to time evidencing such Lock-Box Accounts and the
Collection Account, and amounts on deposit therein, (v) all rights (but none of
the obligations) of the Seller under the Purchase and Sale Agreement, and (vi)
all proceeds of, and all amounts received or receivable under any or all of, the
foregoing (collectively, the "Pool Assets"). The Issuer shall have, with respect
to the Pool Assets, and in addition to all the other rights and remedies
available to the Issuer, all the rights and remedies of a secured party under
any applicable UCC.
A. Section Purchased Interest Computation. The Purchased Interest shall be
initially computed on the date of the initial purchase hereunder. Thereafter,
until the Facility Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. The Purchased Interest as computed (or deemed
recomputed) as of the day before the Facility Termination Date shall thereafter
remain constant. The Purchased Interest shall become zero when the Capital
thereof and Discount thereon shall have been paid in full, all the amounts owed
by the Seller and the Servicer hereunder to the Issuer, the Administrator and
any other Indemnified Party or Affected Person are paid in full, and the
Servicer shall have received the accrued Servicing Fee thereon.
1. Section Settlement Procedures. The collection of the Pool Receivables shall
be administered by the Servicer in accordance with this Agreement. The Seller
shall provide to the Servicer on a timely basis all information needed for such
administration, including notice of the occurrence of any Termination Day and
current computations of the Purchased Interest.
1. The Servicer shall, on each Business Day on which Collections of Pool
Receivables are received by the Seller or Servicer or are deposited into the
Lock-Box Accounts, transfer such Collections therefrom and deposit such
Collections into the Collection Account. With respect to such Collections on
such day and with respect to any Collection transferred to the Collection
Account on such day pursuant to the last paragraph of Section 1.4(e), the
Servicer shall:
a) set aside and hold in the Collection Account for the benefit of the Issuer,
out of the percentage of such Collections represented by the Purchased Interest,
first an amount equal to the Discount accrued through such day for each Portion
of Capital and not previously transferred, second, an amount equal to the fees
set forth in the Fee Letter accrued through such day for the Purchased Interest
and not previously transferred, and third, to the extent funds are available
therefor, an amount equal to the Issuer's Share of the Servicing Fee accrued
through such day and not previously transferred; and
a) subject to Section 1.4(f), if such day is not a Termination Day, remit to the
Seller, on behalf of the Issuer, the remainder of the percentage of such
Collections, represented by the Purchased Interest, to the extent representing a
return on the Capital; such Collections shall be automatically reinvested in
Pool Receivables, and in the Related Security and Collections and other proceeds
with respect thereto, and the Purchased Interest shall be automatically
recomputed pursuant to Section 1.3; it being understood, that prior to remitting
to the Seller the remainder of such Collections by way of reinvestment in Pool
Receivables, the Servicer shall have calculated the Purchased Interest on such
day, and if such Purchased Interest shall exceed 100% on such day, such
Collections shall not be remitted to the Seller but shall be set aside and held
in the Collection Account for the benefit of the Issuer in accordance with
paragraph (iii) below;
a) if such day is a Termination Day (or if such day is a day on which the
Purchased Interest exceeds 100%), (A) set aside and hold in the Collection
Account for the benefit of the Issuer the entire remainder of the percentage of
the Collections represented by the Purchased Interest (or such amount set forth
in paragraph (ii) above); provided that so long as the Facility Termination Date
has not occurred if any amounts are so set aside on any Termination Day and
thereafter, the conditions set forth in Section 2 of Exhibit II are satisfied or
are waived by the Administrator, such previously set aside amounts shall, to the
extent representing a return on the Capital, be reinvested in accordance with
the preceding paragraph (ii) on the day of such subsequent satisfaction or
waiver of conditions, and (B) set aside and hold in the Collection Account for
the benefit of the Issuer the entire remainder of the Collections in the
Collection Account represented by the Seller's Share of the Collections, if any;
provided that so long as the Facility Termination Date has not occurred if any
amounts are so set aside on any Termination Day and thereafter, the conditions
set forth in Section 2 of Exhibit II are satisfied or are waived by the
Administrator, such previously set aside amounts shall be distributed to the
Seller on the day of such subsequent satisfaction or waiver of conditions; and
a) during the times when amounts are required to be reinvested in accordance
with the foregoing paragraph (ii) or the proviso to paragraph (iii), release to
the Seller (subject to Section 1.4(f)) for its own account any Collections in
excess of (x) such amounts, (y) the amounts that are required to be set aside in
the Collection Account pursuant to paragraph (i) above and (z) in the event the
Seller is not the Servicer, all reasonable and appropriate out-of-pocket costs
and expenses (including the Servicing Fee to the extent such Servicing Fee has
not already been paid) of such Servicer of servicing, collecting and
administering the Pool Receivables.
1. The Servicer shall deposit into the Administration Account
(or such other account designated by the Administrator), on each Settlement
Date:
a) Collections held on deposit in the Collection Account for
the benefit of the Issuer pursuant to Section 1.4(b)(i) in respect of accrued
Discount and accrued and unpaid Fees;
a) Collections held on deposit in the Collection Account for the
benefit of the Issuer pursuant to Section 1.4(f); and
a) the lesser of (x) the amount of Collections then held on deposit in the
Collection Account for the benefit of the Issuer pursuant to Section 1.4(b)(iii)
and (y) the aggregate amount of Capital on such date.
The Servicer shall deposit to its own account from Collections held on deposit
in the Collection Account pursuant to Section 1.4(b)(i) in respect of the
accrued Servicing Fee, an amount equal to such accrued Servicing Fee.
1. Upon receipt of funds deposited into the Administration Account pursuant to
clause (c), the Administrator shall cause such funds to be distributed as
follows:
a) if such distribution occurs on a day that is not a Termination Day and the
Purchased Interest does not exceed 100%, first to the Issuer in payment in full
of all accrued Discount with respect to each Portion of Capital and accrued and
unpaid Fees, and second, if the Servicer has set aside amounts in respect of the
Servicing Fee pursuant to clause (b)(i) and has not retained such amounts
pursuant to clause (c), to the Servicer (payable in arrears on each Settlement
Date) in payment in full of the Issuer's Share of accrued Servicing Fees so set
aside, and
a) if such distribution occurs on a Termination Day or on a day when the
Purchased Interest exceeds 100%, first to the Issuer in payment in full of all
accrued Discount with respect to each Portion of Capital and accrued and unpaid
Fees, second to the Issuer in payment in full of Capital (or, if such day is not
a Termination Day, the amount necessary to reduce the Purchased Interest to
100%), third, if IMO or an Affiliate thereof is not the Servicer, to the
Servicer in payment in full of the Issuer's Share of all accrued Servicing Fees,
fourth, if the Capital and accrued Discount with respect to each Portion of
Capital have been reduced to zero, and all accrued Servicing Fees payable to the
Servicer (if other than IMO or an Affiliate thereof) have been paid in full, to
the Issuer, the Administrator and any other Indemnified Party or Affected Person
in payment in full of any other amounts owed thereto by the Seller under this
Agreement and, fifth, unless such amount has been retained by the Servicer
pursuant to clause (c), to the Servicer (if the Servicer is IMO or an Affiliate
thereof) in payment in full of the Issuer's Share of all accrued Servicing Fees.
After the Capital, Discount, and Fees with respect to the Purchased Interest,
Servicing Fees, and any other amounts payable by the Seller and the Servicer to
the Issuer, the Administrator or any other Indemnified Party or Affected Person
hereunder, have been paid in full, all additional Collections with respect to
the Purchased Interest shall be paid to the Seller for its own account.
1. For the purposes of this Section 1.4:
a) if on any day the Outstanding Balance of any Pool Receivable is reduced or
adjusted as a result of any defective, rejected, returned, repossessed or
foreclosed goods or services, or any revision, cancellation, allowance, discount
or other adjustment made by any Originator, the Servicer, the Seller or any
Affiliate of the Seller, or any setoff or dispute between any Originator, the
Seller or any Affiliate of the Seller and an Obligor, the Seller shall be deemed
to have received on such day a Collection of such Pool Receivable in the amount
of such reduction or adjustment;
a) if on any day any of the representations or warranties in Section 1(g)or (m)
of Exhibit III is not true with respect to any Pool Receivable, the Seller shall
be deemed to have received on such day a Collection of such Pool Receivable in
full (Collections deemed to have been received pursuant to clause (i) and (ii)
of this paragraph (e) are hereinafter sometimes referred to as "Deemed
Collections");
a) except as otherwise required by applicable law or the relevant Contract, all
Collections received from an Obligor of any Receivable shall be applied to the
Receivables of such Obligor in the order of the age of such Receivables,
starting with the oldest such Receivable, unless such Obligor designates in
writing its payment for application to specific Receivables; and
a) if and to the extent the Administrator or the Issuer shall be required for
any reason to pay over to an Obligor (or any trustee, receiver, custodian or
similar official pursuant to an Event of Bankruptcy) any amount received by it
hereunder, such amount shall be deemed not to have been so received by the
Administrator or the Issuer but rather to have been retained by the Seller and,
accordingly, the Administrator or the Issuer, as the case may be, shall have a
claim against the Seller for such amount, payable when and to the extent that
any distribution from or on behalf of such Obligor is made in respect thereof.
On or before the last day of each Reporting Period that contains one or more
days on which Seller is deemed to have received a Collection pursuant to this
Section 1.4(e), Seller shall transfer an amount equal to the aggregate amount of
such Deemed Collections to the Collection Account and the Servicer shall
distribute such transferred amount in the manner set forth in Section 1.4(c), as
if such transferred amount actually had been received by Seller or Servicer on
the date of such transfer from the Obligors of such Pool Receivables and as if
such transferred amount actually had been deposited into a Lockbox Account on
the date of such transfer.
1. If at any time the Seller shall wish to cause the reduction of Capital of the
Purchased Interest (but not to commence the liquidation, or reduction to zero,
of the entire Capital of the Purchased Interest), the Seller may do so as
follows:
a) the Seller shall give the Administrator and the Servicer at least two
Business Days' prior written notice thereof (including the amount of such
proposed reduction and the proposed date on which such reduction will commence);
a) on the proposed date of commencement of such reduction and on each day
thereafter, the Servicer shall cause Collections not to be reinvested until the
amount thereof not so reinvested shall equal the desired amount of reduction;
and
a) the Servicer shall hold such Collections in the Collection Account for the
benefit of the Issuer, for payment to the Administrator on the next Settlement
Date immediately following the current Settlement Period, and the Capital of the
Purchased Interest shall be deemed reduced in the amount to be paid to the
Administrator only when in fact finally so paid;
provided, that:
(A) the amount of any such reduction shall be not less than
$5,000,000 and shall be an integral multiple of $1,000,000, and the entire
Capital of the Purchased Interest after giving effect to such reduction,
if not reduced to zero, shall be not less than $5,000,000 and shall be in
an integral multiple of $1,000,000; and
(B) the Seller shall choose a reduction amount, and the date of
commencement thereof, so that to the extent practicable such reduction
shall commence and conclude in the same Settlement Period.
A. Section Fees. The Seller shall pay to the Administrator certain
fees in the amounts and on the dates set forth in a letter, dated the date
hereof, among the Servicer, the Seller and the Administrator (as such letter
agreement may be amended, supplemented or otherwise modified from time to
time, the "Fee Letter").
1. Section Payments and Computations, Etc. All amounts to be paid or deposited
by the Seller or the Servicer hereunder shall be made without reduction for
offset or counterclaim and shall be paid or deposited no later than noon (New
York City time) on the day when due in same day funds to the Administration
Account. All amounts received after noon (New York City time) will be deemed to
have been received on the next Business Day.
1. The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate
equal to 1.0% per annum above the Base Rate, payable on demand.
1. All computations of interest under clause (b) and all computations of
Discount, fees and other amounts hereunder shall be made on the basis of a year
of 360 (or 365 or 366, as applicable, with respect to Discount or other amounts
calculated by reference to the Base Rate) days for the actual number of days
elapsed. Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall be made on the next
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
1. Section Increased Costs. If the Administrator, the Issuer, any Purchaser, any
other Program Support Provider or any of their respective Affiliates (each an
"Affected Person") reasonably determines that the existence of or compliance
with: (i) any law or regulation or any change therein or in the interpretation
or application thereof, in each case adopted, issued or occurring after the date
hereof, or (ii) any request, guideline or directive from any central bank or
other Governmental Authority (whether or not having the force of law) issued or
occurring after the date of this Agreement, affects or would affect the amount
of capital required or expected to be maintained by such Affected Person, and
such Affected Person determines that the amount of such capital is increased by
or based upon the existence of any commitment to make purchases of (or otherwise
to maintain the investment in) Pool Receivables related to this Agreement or any
related liquidity facility, credit enhancement facility and other commitments of
the same type, then, upon written demand by such Affected Person (with a copy to
the Administrator), the Seller shall promptly pay to the Administrator, for the
account of such Affected Person, from time to time as specified by such Affected
Person, additional amounts reasonably sufficient to compensate such Affected
Person. A certificate describing in reasonable detail, such amounts and the
basis for such Affected Person's demand for such amounts submitted to the Seller
and the Administrator by such Affected Person shall be conclusive and binding
for all purposes, absent manifest error.
1. If, due to either: (i) the introduction of or any change in or in the
interpretation of any law or regulation occurring after the date hereof or (ii)
compliance with any guideline or request occurring after the date hereof from
any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to any Affected Person of
agreeing to purchase or purchasing, or maintaining the ownership of, the
Purchased Interest in respect of which Discount is computed by reference to the
Eurodollar Rate, then, upon written demand by such Affected Person, the Seller
shall promptly pay to such Affected Person, from time to time as specified by
such Affected Person, additional amounts reasonably sufficient to compensate
such Affected Person for such increased costs. A certificate describing in
reasonable detail, such amounts and the basis for such Affected Person's demand
for such amounts submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.
(c) In determining the additional amounts necessary to compensate an
Affected Person pursuant to clause (a) or (b) above, such Affected Person may
use any reasonably method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable.
A. Section Requirements of Law. If any Affected Person reasonably determines
that the existence of or compliance with: (a) any law or regulation or any
change therein or in the interpretation or application thereof, in each case
adopted, issued or occurring after the date hereof, or (b) any request,
guideline or directive from any central bank or other Governmental Authority
(whether or not having the force of law) issued or occurring after the date of
this Agreement:
(i) does or shall subject such Affected Person to any tax of any
kind whatsoever with respect to this Agreement, any increase in the
Purchased Interest or in the amount of Capital relating thereto, or does
or shall change the basis of taxation of payments to such Affected Person
on account of Collections, Discount or any other amounts payable hereunder
(excluding taxes imposed on the overall pre-tax net income of such
Affected Person, franchise taxes imposed on such Affected Person by the
jurisdiction under the laws of which such Affected Party is organized or a
political subdivision thereof),
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
purchases, advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Affected Person that are not
otherwise included in the determination of the Eurodollar Rate or the Base
Rate hereunder, or
(iii) does or shall impose on such Affected Person any other
condition,
and the result of any of the foregoing is: (A) to increase the cost to such
Affected Person of acting as Administrator, or of agreeing to purchase or
purchasing or maintaining the ownership of undivided percentage ownership
interests with regard to the Purchased Interest (or interests therein) or any
Portion of Capital, or (B) to reduce any amount receivable hereunder (whether
directly or indirectly), then, in any such case, upon written demand by such
Affected Person, the Seller shall promptly pay to such Affected Person
additional amounts reasonably necessary to compensate such Affected Person for
such additional cost or reduced amount receivable. All such amounts shall be
payable as incurred. A certificate from such Affected Person to the Seller
describing in reasonable detail the amount and basis for the amount of such
additional costs or reduced amount receivable shall be conclusive and binding
for all purposes, absent manifest error.
A. Section Inability to Determine Eurodollar Rate. If the Administrator shall
have determined before the first day of any Settlement Period (which
determination shall be conclusive and binding upon the parties hereto), by
reason of circumstances affecting the interbank Eurodollar market, either that:
(a) dollar deposits in the relevant amounts and for the relevant Settlement
Period are not available, (b) adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Settlement Period or (c) the
Eurodollar Rate determined pursuant hereto does not accurately reflect the cost
to the Issuer (as conclusively determined by the Administrator) of maintaining
any Portion of Capital during such Settlement Period, the Administrator shall
promptly give telephonic notice of such determination, confirmed in writing, to
the Seller before the first day of such Settlement Period. Upon delivery of such
notice: (i) no Portion of Capital shall be funded thereafter at the Alternate
Rate determined by reference to the Eurodollar Rate unless and until the
Administrator shall have given notice to the Seller that the circumstances
giving rise to such determination no longer exist, and (ii) with respect to any
outstanding Portions of Capital then funded at the Alternate Rate determined by
reference to the Eurodollar Rate, such Alternate Rate shall, on the immediately
succeeding Settlement Date, automatically be converted to the Alternate Rate
determined by reference to the Base Rate at the respective last days of the
then-current Settlement Periods relating to such Portions of Capital.
I. ARTICLE
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
A. Section Representations and Warranties; Covenants. Each of the
Seller and the Servicer hereby makes the representations and warranties, and
hereby agrees to perform and observe the covenants, applicable to it set
forth in Exhibits III and IV, respectively.
A. Section Termination Events. If any of the Termination Events set forth in
Exhibit V shall occur, the Administrator may, by notice to the Seller, declare
the Facility Termination Date to have occurred (in which case the Facility
Termination Date shall be deemed to have occurred); provided, that automatically
upon the occurrence of any event (without any requirement for the passage of
time or the giving of notice) described in paragraph (f) of Exhibit V, the
Facility Termination Date shall occur. Upon any such declaration, occurrence or
deemed occurrence of the Facility Termination Date, the Issuer and the
Administrator shall have, in addition to the rights and remedies that they may
have under this Agreement, all other rights and remedies provided after default
under the New York UCC and under other applicable law, which rights and remedies
shall be cumulative.
I. ARTICLE
INDEMNIFICATION
A. Section Indemnities by the Seller. Without limiting any other rights that the
Administrator, the Issuer, any Program Support Provider or any of their
respective Affiliates, employees, officers, directors, agents, counsel,
successors, transferees or assigns (each, an "Indemnified Party" and
collectively, the "Parties") may have hereunder or under applicable law, the
Seller hereby agrees to indemnify each Indemnified Party from and against any
and all claims, damages, expenses, costs, losses and liabilities (including
Attorney Costs) (all of the foregoing being collectively referred to as
"Indemnified Amounts") arising out of or resulting from this Agreement (whether
directly or indirectly), the use of proceeds of purchases or reinvestments, the
ownership of the Purchased Interest, or any interest therein, or in respect of
any Receivable, Related Security or Contract, excluding, however: (a)
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Indemnified Party or its officers, directors,
agents (including any successor Servicer appointed by the Administrator pursuant
to Section 4.1(a)) or counsel, (b) recourse (except as otherwise specifically
provided in this Agreement) for uncollectible Receivables, or (c) any overall
net income taxes or franchise taxes imposed on such Indemnified Party by the
jurisdiction under the laws of which such Indemnified Party is organized or a
political subdivision thereof. Subject to the exclusions set forth in the
preceding sentence, but without otherwise limiting or being limited by the
foregoing, the Seller shall pay on demand to each Indemnified Party any and all
amounts necessary to indemnify such Indemnified Party from and against any and
all Indemnified Amounts relating to or resulting from any of the following:
a) the failure of any Receivable included in the calculation of the Net
Receivables Pool Balance as an Eligible Receivable to be an Eligible Receivable,
the failure of any information contained in an Monthly Report to be true and
correct, or the failure of any other information provided to the Issuer or the
Administrator with respect to Receivables or this Agreement to be true and
correct,
a) the failure of any representation, warranty or statement made or deemed made
by the Seller (or any of its officers) under or in connection with this
Agreement to have been true and correct as of the date made or deemed made in
all respects,
a) the failure by the Seller to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract, or the
failure of any Pool Receivable or the related Contract to conform to any such
applicable law, rule or regulation,
a) the failure to vest in the Issuer a valid and enforceable: (A) perfected
undivided percentage ownership interest, to the extent of the Purchased
Interest, in the Receivables in, or purporting to be in, the Receivables Pool
and the other Pool Assets, or (B) first priority perfected security interest in
the Pool Assets, in each case, free and clear of any Adverse Claim,
a) the failure to have filed, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables in, or
purporting to be in, the Receivables Pool and the other Pool Assets, whether at
the time of any purchase or reinvestment or at any subsequent time, b) any
dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor) of an Obligor to the payment of any Receivable in, or purporting to be
in, the Receivables Pool (including a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the goods or services related to such Receivable or
the furnishing or failure to furnish such goods or services or relating to
collection activities with respect to such Receivable (if such collection
activities were performed by the Seller or any of its Affiliates acting as
Servicer or by any agent or independent contractor retained by the Seller or any
of its Affiliates),
a) any failure of the Seller (or any of its Affiliates acting as
the Servicer) to perform its duties or obligations in accordance with the
provisions hereof or under the Contracts,
a) any products liability or other claim, investigation, litigation
or proceeding arising out of or in connection with merchandise, insurance or
services that are the subject of any Contract,
a) the commingling of Collections at any time with other funds,
a) the use of proceeds of purchases or reinvestments, or
a) any reduction in Capital as a result of the distribution of Collections
pursuant to Section 1.4(d), if all or a portion of such distributions shall
thereafter be rescinded or otherwise must be returned for any reason.
A. Section Indemnities by the Servicer. Without limiting any other rights that
the Administrator, the Issuer or any other Indemnified Party may have hereunder
or under applicable law, the Servicer hereby agrees to indemnify each
Indemnified Party from and against any and all Indemnified Amounts arising out
of or resulting from (whether directly or indirectly): (a) the failure of any
information contained in a Monthly Report to be true and correct, or the failure
of any other information provided to the Issuer or the Administrator by, or on
behalf of, the Servicer to be true and correct, (b) the failure of any
representation, warranty or statement made or deemed made by the Servicer (or
any of its officers) under or in connection with this Agreement to have been
true and correct in all respects as of the date made or deemed made, (c) the
failure by the Servicer to comply with any applicable law, rule or regulation
with respect to any Pool Receivable or the related Contract, (d) any dispute,
claim, offset or defense of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool resulting from or related to the
collection activities with respect to such Receivable, or (e) any failure of the
Servicer to perform its duties or obligations in accordance with the provisions
hereof.
I. ARTICLE
ADMINISTRATION AND COLLECTIONS
1. Section Appointment of the Servicer. The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as the Servicer in accordance with this Section.
Until the Administrator gives notice to IMO (in accordance with this Section) of
the designation of a new Servicer, IMO is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Servicer pursuant to the
terms hereof. Upon the occurrence and during the continuation of a Termination
Event, the Administrator may designate as Servicer any Person (including itself)
to succeed IMO or any successor Servicer, on the condition in each case that any
such Person so designated shall agree to perform the duties and obligations of
the Servicer pursuant to the terms hereof.
1. Upon the designation of a successor Servicer as set forth in clause (a), IMO
agrees that it will terminate its activities as Servicer hereunder in a manner
that the Administrator reasonably determines will facilitate the transition of
the performance of such activities to the new Servicer, and IMO shall cooperate
with and assist such new Servicer. Such cooperation shall include access to and
transfer of related records and, to the extent legally permissible, use by the
new Servicer of all licenses, hardware or software necessary or desirable to
collect the Pool Receivables and the Related Security.
1. IMO acknowledges that, in making their decisions to execute and deliver this
Agreement, the Administrator and the Issuer have relied on IMO's agreement to
act as Servicer hereunder. Accordingly, IMO agrees that it will not voluntarily
resign as Servicer.
1. The Servicer may with the prior written consent of the Administrator,
delegate its duties and obligations hereunder to any subservicer (each a
"Sub-Servicer"); provided, that, in each such delegation: (i) such Sub-Servicer
shall agree in writing to perform the duties and obligations of the Servicer
pursuant to the terms hereof, (ii) the Servicer shall remain primarily liable
for the performance of the duties and obligations so delegated, (iii) the
Seller, the Administrator and the Issuer shall have the right to look solely to
the Servicer for performance, and (iv) the terms of any agreement with any
Sub-Servicer shall provide that the Administrator may terminate such agreement
upon the termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer (and the Servicer shall provide
appropriate notice to each such Sub-Servicer).
1. Section Duties of the Servicer. The Servicer shall take or cause to be taken
all such action as may be necessary or advisable to administer and collect each
Pool Receivable from time to time, all in accordance with this Agreement and all
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy. The Servicer shall set
aside, for the accounts of the Seller and the Issuer, the amount of the
Collections to which each is entitled in accordance with Article I. The Servicer
may, in accordance with the Credit and Collection Policy, extend the maturity of
any Pool Receivable (but not beyond a total of 60 days from the invoice date)
and extend the maturity or adjust the Outstanding Balance of any Defaulted
Receivable as the Servicer may determine to be appropriate to maximize
Collections thereof; provided, however, that: (i) such extension or adjustment
shall not alter the status of such Pool Receivable as a Delinquent Receivable or
a Defaulted Receivable or limit the rights of the Issuer or the Administrator
under this Agreement and (ii) if a Termination Event has occurred and IMO or an
Affiliate thereof is serving as the Servicer, IMO or such Affiliate may make
such extension or adjustment only upon the prior written approval of the
Administrator. The Seller shall deliver to the Servicer and the Servicer shall
hold for the benefit of the Seller and the Administrator (individually and for
the benefit of the Issuer), in accordance with their respective interests, all
records and documents (including computer tapes or disks) with respect to each
Pool Receivable. Notwithstanding anything to the contrary contained herein, the
Administrator may direct the Servicer (whether the Servicer is IMO or any other
Person) to commence or settle any legal action to enforce collection of any Pool
Receivable which is a Defaulted Receivable or to foreclose upon or repossess any
Related Security.
1. The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less, if IMO or an Affiliate thereof is not the
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of
such Servicer of servicing, collecting and administering such collections. The
Servicer, if other than IMO or an Affiliate thereof, shall, as soon as
practicable upon demand, deliver to the Seller all records in its possession
that evidence or relate to any indebtedness that is not a Pool Receivable, and
copies of records in its possession that evidence or relate to any indebtedness
that is a Pool Receivable.
1. The Servicer's obligations hereunder shall terminate on the later of: (i) the
Facility Termination Date and (ii) the date on which all amounts required to be
paid to the Issuer, the Administrator and any other Indemnified Party or
Affected Person hereunder shall have been paid in full.
After such termination, if IMO or an Affiliate thereof was not the
Servicer on the date of such termination, the Servicer shall promptly deliver to
the Seller all books, records and related materials that the Seller previously
provided to the Servicer, or that have been obtained by the Servicer, in
connection with this Agreement.
A. Section Establishment and Use of Certain Accounts. (a) Prior to
the initial purchase hereunder, the Seller shall enter into Lock-Box
Agreements establishing the Lock-Box Accounts listed on Schedule II with all
of the Lock-Box Banks, and deliver original counterparts thereof to the
Administrator.
(b) The Servicer agrees to establish the Collection Account on or
before the date of the first purchase hereunder. The Collection Account shall be
used to accept the transfer of Collections of Pool Receivables from the Lock-Box
Accounts pursuant to Section 1.4(b) and for such other purposes described in the
Transaction Documents.
(c) Any amounts in the Collection Account may be invested by the
Collection Account Bank at the Servicer's direction, in Permitted Investments,
so long as Issuer's interest in such Permitted Investments is perfected and such
Permitted Investments are subject to no Adverse Claims other than those of the
Issuer provided hereunder.
(d) Upon the occurrence and during the continuation of a Termination
Event, the Administrator may at any time thereafter give notice to each Lock-Box
Bank and the Collection Account Bank that the Administrator is exercising its
rights under the Lock-Box Agreements and the Collection Account Agreement, as
applicable, to do any or all of the following: (i) to have the exclusive
ownership and control of the Lock-Box Accounts and the Collection Account
transferred to the Administrator and to exercise exclusive dominion and control
over the funds deposited therein, (ii) to have the proceeds that are sent to the
respective Lock-Box Accounts redirected pursuant to the Administrator's
instructions, and (iii) to take any or all other actions permitted under the
applicable Lock-Box Agreement and the Collection Account Agreement. The Seller
hereby agrees that if the Administrator at any time takes any action set forth
in the preceding sentence, the Administrator shall have exclusive control of the
proceeds (including Collections) of all Pool Receivables and the Seller hereby
further agrees to take any other action that the Administrator may reasonably
request to transfer such control. Any proceeds of Pool Receivables received by
the Seller or the Servicer thereafter shall be sent immediately to the
Administrator.
1. Section Enforcement Rights. At any time following the
occurrence and during the continuation of a Termination Event:
a) the Administrator may direct the Obligors that payment of all
amounts payable under any Pool Receivable is to be made directly to the
Administrator or its designee,
a) the Administrator may give notice of the Issuer's interest in Pool
Receivables to each Obligor, which notice shall direct that payments be made
directly to the Administrator or its designee, and
a) the Administrator may request the Servicer to, and upon such request the
Servicer shall: (A) assemble all of the records necessary or desirable to
collect the Pool Receivables and the Related Security, and to the extent legally
permissible transfer or license to a successor Servicer the use of all software
necessary or desirable to collect the Pool Receivables and the Related Security,
and make the same available to the Administrator or its designee at a place
selected by the Administrator, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting Collections in a
manner acceptable to the Administrator and, promptly upon receipt, remit all
such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Administrator or its designee.
1. The Seller hereby authorizes the Administrator, and irrevocably appoints the
Administrator as its attorney-in-fact with full power of substitution and with
full authority in the place and stead of the Seller, which appointment is
coupled with an interest, to take any and all steps in the name of the Seller
and on behalf of the Seller necessary or desirable, in the determination of the
Administrator, after the occurrence and during the continuation of a Termination
Event, to collect any and all amounts or portions thereof due under any and all
Pool Assets, including endorsing the name of the Seller on checks and other
instruments representing Collections and enforcing such Pool Assets.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.
1. Section Responsibilities of the Seller. Anything herein to the contrary
notwithstanding, the Seller shall pay when due any taxes, including any sales
taxes payable in connection with the Pool Receivables and their creation and
satisfaction. The Administrator and the Issuer shall not have any obligation or
liability with respect to any Pool Asset, nor shall either of them be obligated
to perform any of the obligations of the Seller, Servicer or any Originator
thereunder.
1. IMO hereby irrevocably agrees that if at any time it shall cease to be the
Servicer hereunder, it shall act (if the then-current Servicer so requests) as
the data-processing agent of the Servicer and, in such capacity, IMO shall
conduct the data-processing functions of the administration of the Receivables
and the Collections thereon in substantially the same way that IMO conducted
such data-processing functions while it acted as the Servicer.
A. Section Servicing Fee. (a) Subject to clause (b), the Servicer
shall be paid a fee equal to 1.0% per annum (the "Servicing Fee Rate") of the
daily average aggregate Outstanding Balance of the Pool Receivables. The
Issuer's Share of such fee shall be paid through the distributions
contemplated by Section 1.4(d), and the Seller's Share of such fee shall be
paid by the Seller.
(b) If the Servicer ceases to be IMO or an Affiliate thereof, the
servicing fee shall be the greater of: (i) the amount calculated pursuant to
clause (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.
I. ARTICLE
MISCELLANEOUS
A. Section Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Transaction Document, or consent to any departure by the
Seller or the Servicer therefrom, shall be effective unless in a writing signed
by the Administrator, and, in the case of any amendment, by the other parties
thereto; and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such material amendment shall be effective until both Moody's
and Standard & Poor's have notified the Administrator in writing that such
action will not result in a reduction or withdrawal of the rating of any Notes.
No failure on the part of the Issuer or the Administrator to exercise, and no
delay in exercising any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The
Administrator shall provide each Rating Agency with a copy of each amendment to
or waiver or consent under this Agreement promptly following the effective date
thereof.
A. Section Notices, Etc. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier or by certified mail, postage-prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth under
its name on the signature pages hereof or at such other address or facsimile
number as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective, (i) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (ii) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
1. Section Assignability. This Agreement and the Issuer's rights and obligations
herein (including ownership of the Purchased Interest or an interest therein)
shall be assignable, in whole or in part, by the Issuer and its successors and
assigns with the prior written consent of the Seller; provided, however, that
such consent shall not be unreasonably withheld; and provided further, that no
such consent shall be required if the assignment is made to BNS, any Affiliate
of BNS, any Purchaser or other Program Support Provider or any Person that is:
(i) in the business of issuing Notes and (ii) associated with or administered by
BNS or any Affiliate of BNS.
1. The Issuer may at any time grant to one or more banks or other institutions
(each a "Purchaser") party to the Liquidity Agreement, or to any other Program
Support Provider, participating interests in the Purchased Interest. In the
event of any such grant by the Issuer of a participating interest to a Purchaser
or other Program Support Provider, the Issuer shall remain responsible for the
performance of its obligations hereunder and except as otherwise provided
herein, Seller and Servicer shall continue to deal with Issuer as if Issuer had
not granted such participating interest. The Seller agrees that each Purchaser
or other Program Support Provider shall be entitled to the benefits of Sections
1.8 and 1.9.
1. This Agreement and the rights and obligations of the Administrator hereunder
shall be assignable, in whole or in part, by the Administrator and its
successors and assigns; provided, that unless: (i) such assignment is to an
Affiliate of BNS, (ii) it becomes unlawful for BNS to serve as the Administrator
or (iii) a Termination Event exists, the Seller has consented to such
assignment, which consent shall not be unreasonably withheld.
1. Except as provided in Section 4.1(d), none of the Seller, IMO or the Servicer
may assign its rights or delegate its obligations hereunder or any interest
herein without the prior written consent of the Administrator.
1. Without limiting any other rights that may be available under
applicable law, the rights of the Issuer may be enforced through it or by its
agents.
1. Section Costs, Expenses and Taxes. In addition to the rights of
indemnification granted under Section 3.1, the Seller agrees to pay on demand
all reasonable costs and expenses in connection with the preparation, execution,
delivery and administration (including periodic internal audits by the
Administrator of Pool Receivables) of this Agreement, the other Transaction
Documents and the other documents and agreements to be delivered hereunder (and
all reasonable costs and expenses in connection with any amendment, waiver or
modification of any thereof), including: (i) Attorney Costs for the
Administrator, the Issuer and their respective Affiliates and agents with
respect thereto and with respect to advising the Administrator, the Issuer and
their respective Affiliates and agents as to their rights and remedies under
this Agreement and the other Transaction Documents, and (ii) all reasonable
costs and expenses (including Attorney Costs), if any, of the Administrator, the
Issuer and their respective Affiliates and agents in connection with the
enforcement of this Agreement and the other Transaction Documents. Unless a
Termination Event or Unmatured Termination Event shall exist, the Seller shall
only be responsible for the cost of one periodic internal audit described above
in any twelve month period.
1. In addition, the Seller shall pay on demand any and all stamp and other taxes
and fees payable in connection with the execution, delivery, filing and
recording of this Agreement or the other documents or agreements to be delivered
hereunder, and agrees to save each Indemnified Party harmless from and against
any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
A. Section No Proceedings; Limitation on Payments. Each of the Seller, IMO, the
Servicer, the Administrator, each assignee of the Purchased Interest or any
interest therein, hereby covenants and agrees that it will not institute
against, or join any other Person in instituting against, the Issuer any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and one day after the latest maturing Note issued by the Issuer is paid
in full. The provision of this Section 5.5 shall survive any termination of this
Agreement.
A. Section Confidentiality. Unless otherwise required by applicable law, each of
the Seller and Servicer agrees to maintain the confidentiality of this Agreement
and the other Transaction Documents (and all drafts hereof and thereof) in
communications with third parties and otherwise; provided that this Agreement
may be disclosed to: (a) third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Administrator, (b) the Seller's legal counsel and
auditors if they agree to hold it confidential, (c) in filings made under
securities laws and (d) the parties to the Credit Agreement. Unless otherwise
required by applicable law, each of the Administrator and the Issuer agrees to
maintain the confidentiality of all information regarding IMO and its
Subsidiaries, this Agreement and the other Transaction Documents (and all drafts
hereof and thereof) in communications with third parties and otherwise; provided
that such information may be disclosed to: (i) third parties to the extent such
disclosure is made pursuant to a written agreement of confidentiality in form
and substance reasonably satisfactory to IMO, (ii) legal counsel and auditors of
the Issuer or the Administrator if they agree to hold it confidential, (iii) the
rating agencies rating the Notes to the extent such information relates to the
Receivables Pool or the transactions contemplated by this Agreement, or if not
so related, upon obtaining the prior consent of IMO (such consent not to be
unreasonably withheld), (iv) any Program Support Provider or potential Program
Support Provider to the extent such information relates to the Receivables Pool
or the transactions contemplated by this Agreement, or if not so related, upon
obtaining the prior written consent of IMO (such consent not to be unreasonably
withheld), (v) any placement agent placing the Notes, and (vi) any regulatory
authorities having jurisdiction over BNS, the Issuer any Program Support
Provider or any Purchaser.
1. Section GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
1. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY NEW YORK LAW.
A. Section Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which, when so executed,
shall be deemed to be an original, and all of which, when taken together,
shall constitute one and the same agreement.
A. Section Survival of Termination. The provisions of Sections 1.8,
1.9, 3.1, 3.2, 5.4, 5.5, 5.6, 5.7, 5.8, 5.10 and 5.13 shall survive any
termination of this Agreement.
A. Section WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
A. Section Entire Agreement. This Agreement and the other
Transaction Documents embody the entire agreement and understanding between
the parties hereto, and supersede all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
A. Section Headings. The captions and headings of this Agreement
and any Exhibit, Schedule or Annex hereto are for convenience of reference
only and shall not affect the interpretation hereof or thereof.
A. Section Issuer's Liabilities. The obligations of the Issuer under the
Transaction Documents are solely the corporate obligations of the Issuer. No
recourse shall be had for any obligation or claim arising out of or based upon
any Transaction Document against any stockholder, employee, officer, director or
incorporator of the Issuer; provided, however, that this Section shall not
relieve any such Person of any liability it might otherwise have for its own
gross negligence or willful misconduct.
Receivables Purchase Agreement
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.
IMO FUNDING COMPANY,
LLC,
as Seller
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IMO INDUSTRIES INC.
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LIBERTY STREET FUNDING CORP.
as Issuer
By:
Name:
Title:
Address:
Liberty Street Funding Corp.
c/o Global Securitization
Services, LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇▇▇▇
Telephone No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.:
(▇▇▇) ▇▇▇-▇▇▇▇
THE BANK OF NOVA SCOTIA,
as Administrator
By:
Name:_______________________________
Title:______________________________
Address:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits, Schedules and Annexes),
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references
in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to the
Agreement.
"Accrued Customer Rebate" means the aggregate current accrued amount
recorded on the accounting ledgers of the Originators, which amount is owed to
the Obligors as a result of discounts.
"Accrued Customer Rebate Reserve" means an amount equal to (i) prior to
January 1, 2000, zero and (ii) on and after January 1, 2000, the Accrued
Customer Rebate.
"Administration Account" means the account, account number 2158-13 of the
Administrator maintained at the office of The Bank of Nova Scotia, or such other
account as may be so designated in writing by the Administrator to the Servicer.
"Administrator" has the meaning set forth in the preamble to the
Agreement.
"Adverse Claim" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement; it being understood
that any thereof in favor of the Issuer or the Administrator (for the benefit of
the Issuer) shall not constitute an Adverse Claim.
"Affected Person" has the meaning set forth in Section 1.7 of the
Agreement.
"Affiliate" means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, with respect to the Issuer,
Affiliate shall mean the holder(s) of its capital stock. For purposes of this
definition, control of a Person shall mean the power, direct or indirect: (x) to
vote 25% or more of the securities having ordinary voting power for the election
of directors of such Person, or (y) to direct or cause the direction of the
management and policies of such Person, in either case whether by ownership of
securities, contract, proxy or otherwise.
"Agreement" has the meaning set forth in the preamble to the Agreement.
"Alternate Rate" for any Settlement Period for any Portion of Capital of
the Purchased Interest means an interest rate per annum equal to: (a) the
Applicable Margin plus the Eurodollar Rate or, in the sole discretion of the
Administrator, (b) the Base Rate plus the Applicable Margin for such Settlement
Period; provided, however, that the "Alternate Rate" for any day while a
Termination Event exists shall be an interest rate equal to the greater (i) 1.0%
per annum above the Base Rate in effect on such day or (ii) the Applicable
Margin plus the Base Rate in effect on such day.
"Applicable Margin" has the meaning set forth in the Fee Letter.
"Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel, the reasonable allocated cost of
internal legal services and all reasonable disbursements of internal counsel,
which fees, disbursements and costs shall be set forth in reasonably detailed
statements.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978
(11 ▇.▇.▇.▇▇. 101, et seq.), as amended from time to time.
"Base Rate" means, for any day, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate shall be at all times equal to
the higher of:
1. the rate of interest in effect for such day as publicly announced from time
to time by BNS in New York, New York as its "reference rate". Such "reference
rate" is set by BNS based upon various factors, including BNS's costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below
such announced rate, and
1. 0.75% per annum above the latest Federal Funds Rate.
"Benefit Plan" means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller, each Originator, IMO or
any ERISA Affiliate is, or at any time during the immediately preceding six
years was, an "employer" as defined in Section 3(5) of ERISA.
"BNS" has the meaning set forth in the preamble to the Agreement
"Business Day" means any day (other than a Saturday or Sunday) on which:
(a) banks are not authorized or required to close in New York, New York or
Chicago, Illinois and (b) if this definition of "Business Day" is utilized in
connection with the Eurodollar Rate, dealings are carried out in the London
interbank market.
"Capital" means the amount paid to the Seller in respect of the Purchased
Interest by the Issuer pursuant to the Agreement, or such amount divided or
combined in order to determine the Discount applicable to any portion of
Capital, in each case reduced from time to time by Collections distributed and
applied on account of such Capital pursuant to Section 1.4(d) of the Agreement;
provided, that if such Capital shall have been reduced by any distribution, and
thereafter all or a portion of such distribution is rescinded or must otherwise
be returned for any reason, such Capital shall be increased by the amount of
such rescinded or returned distribution as though it had not been made.
"Change in Control" means that IMO ceases to own, directly or indirectly,
100% of the capital stock of the Seller free and clear of all Adverse Claims.
"Closing Date" means November 30, 1999.
"Collections" means, with respect to any Pool Receivable: (a) all funds
that are received by any Originator, the Seller or the Servicer in payment of
any amounts owed in respect of such Receivable (including purchase price,
finance charges, interest and all other charges), or applied to amounts owed in
respect of such Receivable (including insurance payments and net proceeds of the
sale or other disposition of repossessed goods or other collateral or property
of the related Obligor or any other Person directly or indirectly liable for the
payment of such Pool Receivable and available to be applied thereon), (b) all
Deemed Collections and (c) all other proceeds of such Pool Receivable.
"Collection Account" means that certain bank account numbered ▇▇▇▇▇▇▇▇▇▇
maintained at Bank of America, N.A. which is (i) identified as the "Imo Funding
Company, LLC Collection Account," (ii) in the Seller's name, (iii) pledged, on a
first-priority basis, to the Issuer pursuant to Section 1.2(d), and (iv) is
governed by a Collection Account Agreement.
"Collection Account Agreement" means a letter agreement among the Seller,
the Agent and the Collection Account Bank, as the same may be amended,
supplemented, amended and restated, or otherwise modified from time to time in
accordance with the Agreement.
"Collection Account Bank" means the bank maintaining the Collection
Account.
"Company Note" has the meaning set forth in Section 3.2 of the Purchase
and Sale Agreement.
"Concentration Percentage" means: (a) for any Group A Obligor, 12%, (b)
for any Group B Obligor, 12%, (c) for any Group C Obligor, 6% and (d) for any
Group D Obligor, 3%; provided, however, that the Issuer may, with prior written
consent from the Administrator and the Liquidity Agent, and if the Rating Agency
Condition is satisfied, approve higher Concentration Percentages for selected
Obligors
"Contract" means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.
"CP Rate" for any Settlement Period for any Portion of Capital of the
Purchased Interest means, to the extent the Issuer funds such Portion of Capital
by issuing Notes, a rate per annum equal to the sum of (i) the rate (or if more
than one rate, the weighted average of the rates) at which Notes of the Issuer
on each day during such period have been sold by any placement agent or
commercial paper dealer selected by the Administrator on behalf of the Issuer
during such Settlement Period to fund such Portion of Capital; provided, that if
the rate (or rates) is a discount rate (or rates), then such rate shall be the
rate (or if more than one rate, the weighted average of the rates) resulting
from converting such discount rate (or rates) to an interest-bearing equivalent
rate per annum, plus (ii) the commissions and charges charged by such placement
agent or commercial paper dealer with respect to such Notes, expressed as a
percentage of such face amount and converted to an interest-bearing equivalent
rate per annum.
"Credit Agreement" means the Credit Agreement, dated as of August 29,
1997, (as amended, supplemented or otherwise modified from time to time) among
IMO, Colfax Corporation (formerly known as II Acquisition Corp.), a Delaware
corporation, BNS, as the administrative agent and the documentation agent,
NationsBanc Capital Markets, Inc., as syndication agent and certain financial
institutions from time to time parties thereto.
"Credit and Collection Policy" means, as the context may require, those
receivables credit and collection policies and practices of each Originator in
effect on the date of the Agreement and described in Schedule I to the
Agreement, as modified in compliance with the Agreement.
"Days' Sales Outstanding" means, for any Reporting Period, an amount
computed as of the last day of such Reporting Period equal to: (a) the average
of the Outstanding Balance of all Pool Receivables as of the last day of each of
the three most recent Reporting Periods ended on the last day of such Reporting
Period, divided by (b) the aggregate amount of new Receivables generated by each
Originator during the three Reporting Periods ended on or before the last day of
such Reporting Period, multiplied by (c) 90.
"Debt" means, without duplication: (a) indebtedness for borrowed money,
(b) obligations evidenced by bonds, debentures, notes or other similar
instruments, (c) obligations to pay the deferred purchase price of property or
services, (d) obligations as lessee under leases that shall have been or should
be, in accordance with generally accepted accounting principles, recorded as
capital leases, and (e) obligations under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (d).
"Deemed Collections" has the meaning set forth in Section 1.4(e)(ii) of
the Agreement.
"Default Ratio" means the ratio (expressed as a percentage and rounded to
the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each Reporting Period by dividing: (a) the sum of (i) the aggregate
Outstanding Balance (excluding credit balances) of all Pool Receivables as to
which any payment, or part thereof, remained unpaid for more than 90 to and
including 120 days from the original due date for such payment during such
Reporting Period plus (ii) the aggregate Outstanding Balance of all Pool
Receivables that remained unpaid for less than 91 days from the original due
date and were written off as uncollectible during such Reporting Period, by (b)
the aggregate credit sales made by each Originator during the Reporting Period
that is five Reporting Periods before such Reporting Period.
"Defaulted Receivable" means a Receivable:
(a) as to which any payment, or part thereof, remains unpaid for
more than 90 days from the original due date for such payment, or
(b) without duplication (i) as to which an Event of Bankruptcy shall
have occurred with respect to the Obligor thereof or any other Person
obligated thereon or owning any Related Security with respect thereto, or
(ii) which has been, or, consistent with the Credit and Collection Policy
would be, written off the Seller's books as uncollectible.
"Delinquency Ratio" means the ratio (expressed as a percentage and rounded
to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of
the last day of each Reporting Period by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that were Delinquent Receivables on such day by
(b) the Net Receivables Pool Balance on such day.
"Delinquent Receivable" means a Receivable (other than a Defaulted
Receivable) as to which any payment, or part thereof, remains unpaid for more
than 60 days from the original due date for such payment.
"Dilution Ratio" means the ratio (expressed as a percentage and rounded to
the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each Reporting Period by dividing: (a) the aggregate amount of
payments made or owed by the Seller pursuant to Section 1.4(e)(i) of the
Agreement during such calendar month (other than Accrued Customer Rebate) by (b)
the aggregate credit sales made by each Originator during the Reporting Period
that is two Reporting Periods before such Reporting Period.
"Dilution Reserve" means, on any day, an amount equal to: (a) the Capital
at the close of business of the Servicer on such date multiplied by (b) (i) the
Dilution Reserve Percentage, divided by (ii) 1 minus the Dilution Reserve
Percentage.
"Dilution Reserve Percentage" means (a) 2.5%,; provided, however, if the
Dilution Ratio is equal to or greater than 6% then (b) 5.0%.
"Discount" means:
(a) for the Portion of Capital for any Settlement Period to the
extent the Issuer will be funding such Portion of Capital during such
Settlement Period through the issuance of Notes:
CPR x C x ED/360
(b) for the Portion of Capital for any Settlement Period to the
extent the Issuer will not be funding such Portion of Capital during such
Settlement Period through the issuance of Notes:
AR x C x ED/Year + TF
where:
AR = the Alternate Rate for the Portion of Capital
for such Settlement Period,
C = the relevant Portion of Capital during such
Settlement Period,
CPR = the CP Rate for the Portion of Capital,
ED = the actual number of days during such
Settlement Period,
Year = if such Portion of Capital is funded based upon: (i)
the Eurodollar Rate, 360 days, and (ii) the Base
Rate, 365 or 366 days, as applicable, and
TF = the Termination Fee, if any, for the Portion of
Capital for such Settlement Period;
provided, however, that during the occurrence and continuance of a Termination
Event, the CP Rate shall not be available and Discount for the Portion of
Capital shall be determined for each day in a Settlement Period using a rate
equal to the Base Rate in effect on such day plus 1.0%; provided, further, that
no provision of the Agreement shall require the payment or permit the collection
of Discount in excess of the maximum permitted by applicable law; and provided
further, that Discount for the Portion of Capital shall not be considered paid
by any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.
"Eligible Receivable" means, at any time, a Pool Receivable:
(a) the Obligor of which is (i) a United States resident; provided,
however, if the Obligor of such Receivable is a resident of a jurisdiction
other than the United States, such Receivable shall satisfy the
requirements of this clause (a)(i) if the aggregate Outstanding Balance of
all Pool Receivables of such Obligor that are Eligible Receivables when
added to the aggregate Outstanding Balance of all other Eligible
Receivables of the Obligors that are not residents of the United States
shall not exceed 5% of the Net Receivables Pool Balance at such time, (ii)
not a government or a governmental subdivision, affiliate or agency;
provided, however, if the Obligor of such Receivable is a government or a
governmental subdivision, affiliate or agency, such Receivable shall
satisfy the requirements of this clause (a)(ii) if the aggregate
Outstanding Balance of all Pool Receivables of such Obligor that are
Eligible Receivables when added to the aggregate Outstanding Balance of
all other Eligible Receivables of the Obligors that are governments or
governmental subdivisions, affiliates or agencies shall not exceed 7.5% of
the Net Receivables Pool Balance at such time, (iii) not subject to any
action of the type described in paragraph (f) of Exhibit V to the
Agreement and (iv) not an Affiliate of IMO or any Affiliate of IMO,
(b) that is denominated and payable only in U.S. dollars in the
United States,
(c) that does not have a stated maturity which is more than 30 days
after the original invoice date of such Receivable,
(d) that arises under a duly authorized Contract for the sale and
delivery of goods and services in the ordinary course of each Originator's
business,
(e) that arises under a duly authorized Contract that is in full
force and effect and that is a legal, valid and binding obligation of the
related Obligor, enforceable against such Obligor in accordance with its
terms,
(f) that conforms in all material respects with all applicable
laws, rulings and regulations in effect,
(g) that is not the subject of any asserted dispute, offset, hold
back defense, Adverse Claim or other claim,
(h) that satisfies all applicable requirements of the Credit and
Collection Policy,
(i) that has not been modified, waived or restructured since its
creation, except as permitted pursuant to Section 4.2 of the Agreement,
(j) in which the Seller owns good and marketable title, free and
clear of any Adverse Claims, and that is freely assignable by the Seller
(including without any consent of the related Obligor),
(k) for which the Issuer shall have a valid and enforceable
undivided percentage ownership or security interest, to the extent of the
Purchased Interest, and a valid and enforceable first priority perfected
security interest therein and in the Related Security and Collections with
respect thereto, in each case free and clear of any Adverse Claim,
(l) that constitutes an account as defined in the UCC, and that
is not evidenced by instruments or chattel paper,
(m) that is not a Defaulted Receivable,
(n) for which none of the Originators, the Seller nor the
Servicer has established any offset arrangements with the related
Obligor,
(o) for which the sum of Delinquent Receivables and Defaulted
Receivables of the related Obligor do not exceed 25% of the Outstanding
Balance of all such Obligor's Receivables, and
(p) that represents amounts earned and payable by the Obligor that
are not subject to the performance of additional services by any
Originator.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"ERISA Affiliate" means: (a) any corporation that is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Seller, Servicer or any Originator, (b) a trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Internal Revenue Code) with the Seller, Servicer or any
Originator, or (c) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Internal Revenue Code) as the Seller, Servicer,
any Originator, any corporation described in clause (a) or any trade or business
described in clause (b).
"Eurodollar Rate" means, for any Settlement Period, an interest rate per
annum (rounded upward to the nearest 1/16th of 1%) determined pursuant to the
following formula:
LIBOR
100% - Eurodollar Rate Reserve Percentage
where "Eurodollar Rate Reserve Percentage" means, for any Settlement Period, the
maximum reserve percentage (expressed as a decimal, rounded upward to the
nearest 1/100th of 1%) in effect on the date LIBOR for such Settlement Period is
determined under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
"Eurocurrency" funding (currently referred to as "Eurocurrency liabilities")
having a term comparable to such Settlement Period.
"Event of Bankruptcy" means (a) any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors or (b) any general assignment for the benefit of creditors of a Person,
composition, marshalling of assets for creditors of a Person, or other similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each of cases (a) and (b) undertaken under U.S. Federal, state
or foreign law, including the U.S. Bankruptcy Code.
"Excess Concentration" means the sum of the amounts by which the
Outstanding Balance of Eligible Receivables of each Obligor then in the
Receivables Pool exceeds an amount equal to: (a) the Concentration Percentage,
for such Obligor, multiplied by (b) the Outstanding Balance of all Eligible
Receivables then in the Receivables Pool.
"Facility Termination Date" means the earliest to occur of: (a) November
30, 2004,(b) the date determined pursuant to Section 2.2 of the Agreement, (c)
the date the Purchase Limit reduces to zero pursuant to Section 1.1(b) of the
Agreement and (d) the date that the commitments of the Purchasers terminate
under the Liquidity Agreement.
"Federal Funds Rate" means, for any day, the per annum rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate." If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the Administrator of the rates for the last
transaction in overnight Federal funds arranged before 9:00 a.m. (New York time)
on that day by each of three leading brokers of Federal funds transactions in
New York City selected by the Administrator.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any entity succeeding to any of its principal functions.
"Fee Letter" has the meaning set forth in Section 1.5 of the Agreement.
"Fees" means the fees payable by the Seller to the Administrator pursuant
to the Fee Letter.
"GAAP" means the generally accepted United States accounting principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors and successors from time to time.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Group A Obligor" means any Obligor with a short-term rating of at least:
(a) "A-1" by Standard & Poor's, or if such Obligor does not have a short-term
rating from Standard & Poor's, a rating of "A+" or better by Standard & Poor's
on its long-term senior unsecured and uncredit-enhanced debt securities, and (b)
"P-1" by Moody's, or if such Obligor does not have a short-term rating from
▇▇▇▇▇'▇, "▇▇" or better by Moody's on its long-term senior unsecured and
uncredit-enhanced debt securities.
"Group B Obligor" means an Obligor, not a Group A Obligor with a
short-term rating of at least: (a) "A-2" by Standard & Poor's, or if such
Obligor does not have a short-term rating from Standard & Poor's, a rating of
"BBB+" to "A" by Standard & Poor's on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) "P-2" by Moody's, or if such Obligor
does not have a short-term rating from Moody's, "Baa1" to "A2" by Moody's on its
long-term senior unsecured and uncredit-enhanced debt securities.
"Group B Obligor Percentage" means, at any time, for each Group B Obligor,
the percentage equivalent of: (a) the aggregate Outstanding Balance of the
Eligible Receivables of such Group B Obligor less any Excess Concentrations of
such Obligor, divided by (b) the aggregate Outstanding Balance of all Eligible
Receivables at such time.
"Group C Obligor" means an Obligor, not a Group A Obligor or Group B
Obligor, with a short-term rating of at least: (a) "A-3" by Standard & Poor's,
or if such Obligor does not have a short-term rating from Standard & Poor's, a
rating of "BBB-" to "BBB" by Standard & Poor's on its long-term senior unsecured
and uncredit-enhanced debt securities, and (b) "P-3" by Moody's, or if such
Obligor does not have a short-term rating from Moody's, "Baa3" to "Baa2" by
Moody's on its long-term senior unsecured and uncredit-enhanced debt
securities."
"Group C Obligor Percentage" means, at any time, for each Group C Obligor,
the percentage equivalent of: (a) the aggregate Outstanding Balance of the
Eligible Receivables of such Group C Obligor less any Excess Concentrations of
such Obligor, divided by (b) the aggregate Outstanding Balance of all Eligible
Receivables at such time.
"Group D Obligor" means any Obligor that is not a Group A Obligor, Group B
Obligor or Group C Obligor.
"Group D Obligor Percentage" means, at any time, for each Group D Obligor:
(a) the aggregate Outstanding Balance of the Eligible Receivables of such Group
D Obligor less any Excess Concentrations of such Obligor, divided by (b) the
aggregate Outstanding Balance of all Eligible Receivables at such time.
"IMO" has the meaning set forth in the preamble to the Agreement.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of Seller, Servicer, any Originator or any other Subsidiary or Affiliate of
Servicer, any qualification or exception to such opinion or certification:
(i) which is of a "going concern" or similar nature; or
(ii) which relates to the limited scope of examination of matters
relevant to such financial statement (other than any standard
qualification of such nature).
"Indemnified Amounts" has the meaning set forth in Section 3.1 of the
Agreement.
"Indemnified Party" has the meaning set forth in Section 3.1 of the
Agreement.
"Independent Director" has the meaning set forth in paragraph 3(c) of
Exhibit IV to the Agreement.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code also refer to any successor
sections.
"Issuer" has the meaning set forth in the preamble to the Agreement.
"Issuer's Share" of any amount means such amount multiplied by the
Purchased Interest at the time of determination.
"LIBOR" means the rate of interest per annum determined by the
Administrator to be the arithmetic mean (rounded upward to the nearest 1/16th of
1%) of the rates of interest per annum notified to the Administrator by the
Reference Bank as the rate of interest at which dollar deposits in the
approximate amount of the Portion of Capital to be funded at the Eurodollar Rate
during such Settlement Period would be offered by major banks in the London
interbank market to such Reference Bank at its request at or about 11:00 a.m.
(London time) on the second Business Day before the commencement of such
Settlement Period.
"Liquidity Agent" means BNS in its capacity as the Liquidity Agent
pursuant to the Liquidity Agreement.
"Liquidity Agreement" means the Liquidity Asset Purchase Agreement, dated
as of November 29, 1999, among the purchasers from time to time party thereto,
the Issuer and BNS, as Administrator and Liquidity Agent, as the same may be
further amended, supplemented or otherwise modified from time to time.
"Lock-Box Account" means an account maintained at a bank or other
financial institution for the purpose of receiving Collections.
"Lock-Box Agreement" means an agreement, in substantially the form of
Annex C to the Agreement, among the Seller, the Servicer and a Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.
"Loss Reserve" means, on any date, an amount equal to (a) the Capital at
the close of business of the Servicer on such date multiplied by (b)(i) the Loss
Reserve Percentage on such date divided by (ii) 1 minus the Loss Reserve
Percentage on such date.
"Loss Reserve Percentage" means, on any date, the greater of: (a) 12.0%,
(b) 2 times the Delinquency Ratio and (c) (i) the product of (x) 2 times the
highest average of the Default Ratios for any three consecutive Reporting
Periods during the thirteen most recent Reporting Periods multiplied by (y) the
aggregate credit sales made during the five most recent Reporting Periods
divided by (ii) the Net Receivables Pool Balance on such date.
"Material Adverse Effect" means, relative to any Person with respect to
any event or circumstance, a material adverse effect on:
(a) the assets, operations, business or financial condition of
such Person and its consolidated Subsidiaries, taken as a whole,
(b) the ability of any such Person to perform its obligations
under the Agreement or any other Transaction Document to which it is a
party,
(c) the validity or enforceability of any other Transaction
Document, or the validity, enforceability or collectibility of a
material portion of the Pool Receivables, or
(d) the status, perfection, enforceability or priority of the
Issuer's or the Seller's interest in the Pool Assets.
"Monthly Report" means a report, in substantially the form of Annex A to
the Agreement, furnished to the Administrator pursuant to the Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Receivables Pool Balance" means, at any time: (a) the Outstanding
Balance of Eligible Receivables then in the Receivables Pool, minus (b) the
Excess Concentration.
"Notes" means short-term promissory notes issued, or to be issued, by the
Issuer to fund its investments in accounts receivable or other financial assets.
"Obligor" means, with respect to any Receivable, the Person obligated to
make payments pursuant to the Contract relating to such Receivable.
"Originator" has the meaning set forth in the Purchase and Sale Agreement.
"Originator Assignment Certificate" means the assignment, in substantially
the form of Exhibit E to the Purchase and Sale Agreement, evidencing Seller's
ownership of the Receivables generated by each Originator, as the same may be
amended, supplemented, amended and restated, or otherwise modified from time to
time in accordance with the Sale Agreement.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Payment Date" has the meaning set forth in Section 1.4 of the Purchase
and Sale Agreement.
"Permitted Investments" means certificates of deposit that are not
represented by instruments, have a maturity of one week or less and are issued
by the Collection Account Bank (with respect to the investment of funds in the
Collection Account) or The Bank of Nova Scotia; provided, however, that the
Administrator on behalf of Issuer) may, from time to time, upon the later of (x)
three Business Days' prior written notice to Servicer and (y) the end of the
current maturity period with respect to certificates of deposits invested prior
to the Servicers receipt of such notice, remove from the scope of "Permitted
Investments" certificates of deposit of any such bank(s) and with the prior
consent of the Servicer (which consent shall not be unreasonably withheld)
specify to be within such scope, certificates of deposit of any other bank.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"Pool Assets" has the meaning set forth in Section 1.2(d) of the
Agreement.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Portion of Capital" means any separate portion of Capital being funded or
maintained by the Issuer (or its successors or permitted assigns) by reference
to a particular interest rate basis.
"Program Support Agreement" means and includes the Liquidity Agreement and
any other agreement entered into by any Program Support Provider providing for:
(a) the issuance of one or more letters of credit for the account of the Issuer,
(b) the issuance of one or more surety bonds for which the Issuer is obligated
to reimburse the applicable Program Support Provider for any drawings
thereunder, (c) the sale by the Issuer to any Program Support Provider of the
Purchased Interest (or portions thereof) and/or (d) the making of loans and/or
other extensions of credit to the Issuer in connection with the Issuer's
Receivables-securitization program contemplated in the Agreement, together with
any letter of credit, surety bond or other instrument issued thereunder (but
excluding any discretionary advance facility provided by the Administrator).
"Program Support Provider" means and includes any Purchaser and any other
Person (other than any customer of the Issuer) now or hereafter extending credit
or having a commitment to extend credit to or for the account of, or to make
purchases from, the Issuer pursuant to any Program Support Agreement.
"Purchase and Sale Agreement" means the Purchase and Sale Agreement, dated
as of November 29, 1999 among the Seller, the Originators named therein and IMO,
as such agreement may be amended, amended and restated, supplement or otherwise
modified from time to time.
"Purchase and Sale Indemnified Amounts" has the meaning set forth in
Section 9.1 of the Purchase and Sale Agreement.
"Purchase and Sale Indemnified Party" has the meaning set forth in Section
9.1 of the Purchase and Sale Agreement.
"Purchase and Sale Termination Date" has the meaning set forth in Section
1.4 of the Purchase and Sale Agreement.
"Purchase and Sale Termination Event" has the meaning set forth in Section
8.1 of the Purchase and Sale Agreement.
"Purchase Facility" has the meaning set forth in Section 1.1 of the
Purchase and Sale Agreement.
"Purchase Limit" means $35,000,000, as such amount may be reduced pursuant
to Section 1.1(b) of the Agreement. References to the unused portion of the
Purchase Limit shall mean, at any time, the Purchase Limit minus the then
outstanding Capital.
"Purchase Price" has the meaning set forth in Section 2.1 of the Purchase
and Sale Agreement.
"Purchase Report" has the meaning set forth in Section 2.1 of the Purchase
and Sale Agreement.
"Purchased Interest" means, at any time, the undivided percentage
ownership interest in: (a) each and every Pool Receivable now existing or
hereafter arising, (b) all Related Security with respect to such Pool
Receivables and (c) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security. Such undivided percentage interest shall
be computed as:
Capital + Total Reserves
Net Receivables Pool Balance
The Purchased Interest shall be determined from time to time pursuant to Section
1.3 of the Agreement.
"Purchaser" has the meaning set forth in Section 5.3(b) of the Agreement.
"Rating Agencies" means Moody's and Standard & Poor's.
"Rating Agency Condition" means, with respect to any event or occurrence,
receipt by the Issuer of written confirmation from Standard & Poor's and Moody's
that such event or occurrence shall not cause the rating on the then outstanding
Notes to be downgraded or withdrawn.
"Receivable" means any indebtedness and other obligations owed to the
Seller as assignee of each Originator or such Originator by, or any right of the
Seller or such Originator to payment from or on behalf of, an Obligor whether
constituting an account, chattel paper, instrument or general intangible arising
in connection with the sale of goods or the rendering of services by such
Originator, and includes the obligation to pay any finance charges, fees and
other charges with respect thereto.
"Receivables Pool" means, at any time, all of the then outstanding
Receivables purchased or purported to be purchased by the Seller pursuant to the
Purchase and Sale Agreement prior to the Facility Termination Date.
"Reference Bank" means BNS.
"Related Rights" has the meaning set forth in Section 1.1 of the Purchase
and Sale Agreement.
"Related Security" means, with respect to any Receivable:
(a) all of the Seller's, and each Originator's interest in any goods
(including returned goods), and documentation of title evidencing the
shipment or storage of any goods (including returned goods), relating to
any sale giving rise to such Receivable,
(b) all instruments and chattel paper that may evidence such
Receivable,
(c) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with all UCC financing statements or similar filings relating
thereto, and
(d) all of the Seller's and each Originator's rights, interests and
claims under the Contracts and all guaranties, indemnities, insurance and
other agreements (including the related Contract) or arrangements of
whatever character from time to time supporting or securing payment of
such Receivable or otherwise relating to such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise.
"Reporting Period" means each period commencing on the first day of
Seller's fiscal month and ending on the last day of such fiscal month.
"Seller" has the meaning set forth in the preamble to the Agreement.
"Seller's Share" of any amount means the greater of: (a) $0 and (b)
such amount minus the Issuer's Share.
"Servicer" has the meaning set forth in the preamble to the Agreement.
"Servicing Fee" shall mean the fee referred to in Section 4.6 of the
Agreement.
"Servicing Fee Rate" shall mean the rate referred to in Section 4.6 of the
Agreement.
"Servicing Fee Reserve" at any time means the sum of (a) the then accrued
and unpaid Servicing Fee plus (b) the product of (i) the Outstanding Balance of
Pool Receivables at such time, times (ii) the product of (x) the Servicing Fee
Rate multiplied by (y) a fraction, the numerator of which is 1.5 times the Days'
Sales Outstanding (calculated on the last day of the most recent preceding
Reporting Period) and the denominator of which is 360.
"Settlement Date" means (a) prior to the Facility Termination Date, the
last day of each calendar month (or if such day is not a Business Day, then the
next following Business Day) and (b) on and after the Facility Termination Date,
each day selected from time to time by the Administrator (it being understood
that the Administrator may select such Settlement Date to occur as frequently as
daily), or, in the absence of any such selection, the day which would be the
Settlement Date for such Portion of Capital pursuant to clause (a) of this
definition.
"Settlement Period" means, with respect to each Portion of Capital of the
Purchased Interest: (a) with respect to any Portion of Capital funded by the
issuance of Notes, (i) initially the period commencing on (and including) the
date of the initial purchase or funding of such Portion of Capital and ending on
(and including) the last day of the current calendar month, and (ii) thereafter,
each period commencing on (and including) the first day after the last day of
the immediately preceding Settlement Period for such Portion of Capital and
ending on (and including) the last day of the current calendar month; and (b)
with respect to any Portion of Capital not funded by the issuance of Notes, (i)
initially the period commencing on (and including) the date of the initial
purchase or funding of such Portion of Capital and ending on (but excluding) the
next following Settlement Date, and (ii) thereafter, each period commencing on a
Settlement Date and ending on (but excluding) the next following Settlement
Date; provided, that
(i) any Settlement Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day; provided, however, if Discount
in respect of such Settlement Period is computed by reference to the
Eurodollar Rate, and such Settlement Period would otherwise end on a
day which is not a Business Day, and there is no subsequent Business
Day in the same calendar month as such day, such Settlement Period
shall end on the next preceding Business Day;
(ii) in the case of any Settlement Period for any Portion of
Capital of the Purchased Interest which commences before the
Facility Termination Date and would otherwise end on a date
occurring after the Facility Termination Date, such Settlement
Period shall end on such Facility Termination Date and the duration
of each Settlement Period which commences on or after the Facility
Termination Date shall be of such duration as shall be selected by
the Administrator; and
(iii) any Settlement Period in respect of which Discount is
computed by reference to the CP Rate may be terminated at the
election of, and upon notice thereof to the Seller, by the
Administrator any time, in which case the Portion of Capital
allocated to such terminated Settlement Period shall be allocated to
a new Settlement Period commencing on (and including) the date of
such termination and ending on (but excluding) the next following
Settlement Date, and shall accrue Discount at the Alternate Rate and
based on the Base Rate.
"Solvent" means, with respect to any Person at any time, a condition under
which:
(i) the fair value and present fair saleable value of such Person's
total assets is, on the date of determination, greater than such Person's
total liabilities (including contingent and unliquidated liabilities) at
such time;
(ii) the fair value and present fair saleable value of such Person's
assets is greater than the amount that will be required to pay such
Person's probable liability on its existing debts as they become absolute
and matured ("debts," for this purpose, includes all legal liabilities,
whether matured or unmatured, liquidated or unliquidated, absolute, fixed,
or contingent);
(iii) such Person is and shall continue to be able to pay all of
its liabilities as such liabilities mature; and
(iv) such Person does not have unreasonably small capital with which
to engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Person's contingent or unliquidated liabilities
at any time shall be that amount which, in light of all the facts and
circumstances then existing, represents the amount which can reasonably be
expected to become an actual or matured liability;
(B) the "fair value" of an asset shall be the amount which may be
realized within a reasonable time either through collection or sale of
such asset at its regular market value;
(C) the "regular market value" of an asset shall be the amount which
a capable and diligent business person could obtain for such asset from an
interested buyer who is willing to purchase such asset under ordinary
selling conditions; and
(D) the "present fair saleable value" of an asset means the amount
which can be obtained if such asset is sold with reasonable promptness in
an arm's-length transaction in an existing and not theoretical market.
"Standard & Poor's" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"Subsidiary" means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.
"Termination Day" means: (a) each day on which the conditions set forth
in Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day
that occurs on or after the Facility Termination Date.
"Termination Event" has the meaning specified in Exhibit V to the
Agreement.
"Termination Fee" means, for any Settlement Period during which a
Termination Day occurs, the amount, if any, by which: (a) the additional
Discount (calculated without taking into account any Termination Fee or any
shortened duration of such Settlement Period pursuant to the definition thereof)
that would have accrued during such Settlement Period on the reductions of
Capital relating to such Settlement Period had such reductions not been made,
exceeds (b) the income, if any, received by the Issuer from investing the
proceeds of such reductions of Capital, as determined by the Administrator,
which determination shall be binding and conclusive for all purposes, absent
manifest error.
"Total Reserves" means, at any time the sum of : (a) the Yield Reserve,
plus (b) Servicing Fee Reserve, plus (c) the Loss Reserve, plus (d) the Dilution
Reserve, plus (e) the Accrued Customer Rebate Reserve.
"Transaction Documents" means the Agreement, the Lock-Box Agreement(s) and
the Collection Account Agreement, the Fee Letter, the Purchase and Sale
Agreement and all other certificates, instruments, UCC financing statements,
reports, notices, agreements and documents executed or delivered under or in
connection with the Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
Agreement.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction.
"Unmatured Purchase and Sale Termination Event" means any event which,
with the giving of notice or lapse of time, or both, would become a Purchase and
Sale Termination Event.
"Unmatured Termination Event" means an event that, with the giving of
notice or lapse of time, or both, would constitute a Termination Event.
"Yield Reserve" means, at any time:
( BR x 1.5(DSO) x Capital)
360
where:
BR = the Base Rate in effect at such time, and
DSO = Days' Sales Outstanding.
Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in the State of New York, and not specifically
defined herein, are used herein as defined in such Article 9. Unless the context
otherwise requires, "or" means "and/or," and "including" (and with correlative
meaning "include" and "includes") means including without limiting the
generality of any description preceding such term.
EXHIBIT II
CONDITIONS OF PURCHASES
I. Conditions Precedent to Initial Purchase. The initial purchase
under this Agreement is subject to the following conditions precedent that
the Administrator shall have received on or before the date of such purchase,
each in form and substance (including the date thereof) satisfactory to the
Administrator:
A. A counterpart of the Agreement and the other Transaction
Documents executed by the parties thereto.
A. Certified copies of: (i) the resolutions of the Board of
Directors of each of the Seller, the Servicer and each Originator authorizing
the execution, delivery and performance by the Seller, the Servicer and such
Originator, as the case may be, of the Agreement and the other Transaction
Documents to which it is a party; (ii) all documents evidencing other
necessary organizational or corporate action and governmental approvals, if
any, with respect to the Agreement and the other Transaction Documents and
(iii) the certificate of incorporation and by-laws or the limited liability
company agreement, as applicable, of the Seller, the Servicer and such
Originator.
A. A certificate of the Secretary or Assistant Secretary of the
Seller, the Servicer and each Originator certifying the names and true
signatures of its officers who are authorized to sign the Agreement and the
other Transaction Documents. Until the Administrator receives a subsequent
incumbency certificate from the Seller, the Servicer and such Originator, as
the case may be, the Administrator shall be entitled to rely on the last such
certificate delivered to it by the Seller, the Servicer and such Originator,
as the case may be.
A. Acknowledgment copies, or time stamped receipt copies, of proper
financing statements, duly filed on or before the date of such initial
purchase under the UCC of all jurisdictions that the Administrator may deem
necessary or desirable in order to perfect the interests of the Seller and
the Issuer contemplated by the Agreement, the Purchase and Sale Agreement and
the Sale Agreement.
A. Acknowledgment copies, or time-stamped receipt copies, of proper
financing statements, if any, necessary to release all security interests and
other rights of any Person in the Receivables, Contracts or Related
Security previously granted by any Originator or the Seller.
A. Completed UCC search reports, dated on or shortly before the
date of the initial purchase hereunder, listing the financing statements
filed in all applicable jurisdictions referred to in subsection (e) above that
name, any Originator or the Seller as debtor, together with copies of
such other financing statements, and similar search reports with respect to
judgment liens, federal tax liens and liens of the Pension Benefit Guaranty
Corporation in such jurisdictions, as the Administrator may reasonably
request, showing no Adverse Claims on any Pool Assets.
A. copies of the executed (i) Lock-Box Agreement with the Lock-Box
Bank and (ii) Collection Account Agreement with the Collection Account Bank.
A. Favorable opinions, in form and substance reasonably
satisfactory to the Administrator, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel
for Seller, Servicer and each Originator.
A. Satisfactory results of a review and audit (performed by
representatives of the Administrator) of the Servicer's collection, operating
and reporting systems, the Credit and Collection Policy of each Originator,
historical receivables data and accounts, including satisfactory results of a
review of the Servicer's operating location(s) and satisfactory review and
approval of the Eligible Receivables in existence on the date of the initial
purchase under the Agreement.
A. A pro forma Monthly Report representing the performance of the
Receivables Pool for the Reporting Period before closing.
A. Evidence of payment by the Seller of all accrued and unpaid fees
(including those contemplated by the Fee Letter), costs and expenses to the
extent then due and payable on the date thereof, including any such costs,
fees and expenses arising under or referenced in Section 5.4 of the Agreement
and the Fee Letter.
A. The Fee Letter duly executed by the Seller and the Servicer.
A. Good standing certificates with respect to each of the Seller,
each Originator and the Servicer issued by the Secretary of State (or similar
official) of the state of each such Person's organization and principal place
of business.
A. Letters from each of the rating agencies then rating the Notes
confirming the rating of such Notes after giving effect to the transaction
contemplated by the Agreement.
A. The Liquidity Agreement and all other Transaction Documents duly
executed by the parties thereto.
A. A file (computer generated or otherwise) containing all
information with respect to the Receivables as the Administrator or the
Issuer may reasonably request.
A. Such other approvals, opinions or documents as the Administrator
or the Issuer may reasonably request.
I. Conditions Precedent to All Purchases and Reinvestments. Each
purchase (except as to clause (a), including the initial purchase) and each
reinvestment shall be subject to the further conditions precedent that:
A. in the case of each purchase, the Servicer shall have delivered
to the Administrator on or before such purchase, in form and substance
satisfactory to the Administrator, a completed pro forma Monthly Report to
reflect the level of Capital and related reserves after such subsequent
purchase; and
A. on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the
Seller that such statements are then true):
1. the representations and warranties contained in Exhibit III to
the Agreement are true and correct in all material respects on and as of the
date of such purchase or reinvestment as though made on and as of such date;
and
1. no event has occurred and is continuing, or would result from
such purchase or reinvestment, that constitutes a Termination Event or an
Unmatured Termination Event.
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. Representations and Warranties of the Seller. The Seller represents
and warrants as follows:
A. The Seller is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware, and is duly qualified to do business and is in good standing as a
foreign limited liability company in every jurisdiction where the nature of its
business requires it to be so qualified, except where the failure to be
so qualified would not have a Material Adverse Effect.
A. The execution, delivery and performance by the Seller of the
Agreement and the other Transaction Documents to which it is a party,
including its use of the proceeds of purchases and reinvestments: (i) are
within its organizational powers; (ii) have been duly authorized by all
necessary organizational action; (iii) do not contravene or result in a
default under or conflict with: (A) its certificate of formation, limited
liability company agreement or any other organizational document of the
Seller, (B) any law, rule or regulation applicable to it, (C) any indenture,
loan agreement, mortgage, deed of trust or other agreement or instrument to
which it is a party or by which it is bound, or (D) any order, writ,
judgment, award, injunction or decree binding on or affecting it or any of
its property; and (iv) do not result in or require the creation of any
Adverse Claim upon or with respect to any of its properties. The Agreement
and the other Transaction Documents to which it is a party have been duly
executed and delivered by the Seller.
A. No authorization, approval or other action by, and no notice to
or filing with, any Governmental Authority or other Person is required for
its due execution, delivery and performance by the Seller of the Agreement or
any other Transaction Document to which it is a party, other than the Uniform
Commercial Code filings referred to in Exhibit II to the Agreement, all of
which shall have been filed on or before the date of the first purchase
hereunder.
A. Each of the Agreement and the other Transaction Documents to
which the Seller is a party constitutes the legal, valid and binding
obligation of the Seller enforceable against the Seller 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.
B. There is no pending or, to Seller's best knowledge, threatened
action or proceeding affecting Seller or any of its properties before any
Governmental Authority or arbitrator.
A. No proceeds of any purchase or reinvestment will be used by the
Seller to acquire any equity security of a class that is registered pursuant
to Section 12 of the Securities Exchange Act of 1934.
A. The Seller is the legal and beneficial owner of the Pool
Receivables and Related Security, free and clear of any Adverse Claim. Upon
each purchase or reinvestment, the Issuer shall acquire a valid and
enforceable perfected undivided percentage ownership or security interest, to
the extent of the Purchased Interest, in each Pool Receivable then existing or
thereafter arising and in the Related Security, Collections and other
proceeds with respect thereto, free and clear of any Adverse Claim. The
Agreement creates a security interest in favor of the Issuer in the Pool
Assets, and the Issuer has a first priority perfected security interest in the
Pool Assets, free and clear of any Adverse Claims. No effective financing
statement or other instrument similar in effect covering any Pool Asset is on
file in any recording office, except those filed in favor of the Seller
pursuant to the Purchase and Sale Agreement and the Issuer relating to the
Agreement.
A. Each Monthly Report (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied
by the Seller or an Affiliate), information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by
or on behalf of the Seller to the Administrator in connection with the
Agreement or any other Transaction Document to which it is a party is or will be
complete and accurate in all material respects as of its date or as of the
date so furnished,
A. The Seller's principal place of business and chief executive
office (as such terms are used in the UCC) and the office where it keeps its
records concerning the Receivables are located at the address referred to in
Sections 1(b) and 2(b) of Exhibit IV to the Agreement.
A. The names and addresses of all the Lock-Box Banks, together with
the account numbers of the Lock-Box Accounts at such Lock-Box Banks, are
specified in Schedule II to the Agreement (or at such other Lock-Box Banks
and/or with such other Lock-Box Accounts as have been notified to the
Administrator in accordance with the Agreement) and all Lock-Box
Accounts are subject to Lock-Box Agreements.
A. The Seller is not in violation of any order of any court,
arbitrator or Governmental Authority.
B. No proceeds of any purchase or reinvestment will be used for any
purpose that violates any applicable law, rule or regulation, including
Regulations G or U of the Federal Reserve Board.
A. Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable.
A. No event has occurred and is continuing, or would result from a
purchase in respect of, or reinvestment in respect of, the Purchased Interest
or from the application of the proceeds therefrom, that constitutes a
Termination Event or an Unmatured Termination Event.
A. The Seller has complied in all material respects with the Credit
and Collection Policy of each Originator with regard to each Receivable
originated by such Originator.
A. The Seller has complied in all material respects with all of the
terms, covenants and agreements contained in the Agreement and the other
Transaction Documents that are applicable to it.
A. The Seller's complete organizational name is set forth in the
preamble to the Agreement, and it does not use and has not during the last
five years used any other organizational name, trade name, doing-business
name or fictitious name, except as set forth on Schedule III to the Agreement
and except for names first used after the date of the Agreement and set forth
in a notice delivered to the Administrator pursuant to Section 1(k)(iv) of
Exhibit IV to the Agreement.
A. The Seller is not an "investment company," or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. In addition, the Seller is not a "holding
company," a "subsidiary company" of a "holding company" or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(s) The Seller reasonably believes that all internal computer
operations that are material to its business operations will be able to
perform properly date sensitive functions for all dates before, on and after
January 1, 2000, except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
2. Representations and Warranties of IMO (including in its capacity as
the Servicer). IMO, individually and in its capacity as the Servicer,
represents and warrants as follows:
A. IMO is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, and is duly qualified
to do business and is in good standing as a foreign corporation in every
jurisdiction where the nature of its business requires it to be so qualified,
except where the failure to be so qualified would not have a Material Adverse
Effect.
A. The execution, delivery and performance by IMO of the Agreement
and the other Transaction Documents to which it is a party, including the
Servicer's use of the proceeds of purchases and reinvestments: (i) are within
its corporate powers; (ii) have been duly authorized by all necessary
corporate action; (iii) do not contravene or result in a default under or
conflict with: (A) its charter or by-laws, (B) any law, rule or regulation
applicable to it, (C) any indenture, loan agreement, mortgage, deed of trust or
other material agreement or instrument to which it is a party or by which
it is bound, or (D) any order, writ, judgment, award, injunction or decree
binding on or affecting it or any of its property; and (iv) do not result in or
require the creation of any Adverse Claim upon or with respect to any of
its properties. The Agreement and the other Transaction Documents to which
IMO is a party have been duly executed and delivered by IMO.
A. No authorization, approval or other action by, and no notice to or
filing with any Governmental Authority or other Person, is required for the
due execution, delivery and performance by IMO of the Agreement or any other
Transaction Document to which it is a party, other than the Uniform Commercial
Code filings referred to in Exhibit II to the Agreement, all of
which shall have been filed on or before the date of
the first purchase hereunder.
A. Each of the Agreement and the other Transaction Documents to
which IMO is a party constitutes the legal, valid and binding obligation of
IMO enforceable against IMO 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.
A. The balance sheets of IMO and its consolidated Subsidiaries as
at December 31, 1998, and the related statements of income and retained
earnings for the fiscal year then ended, copies of which have been furnished to
the Administrator, fairly present the financial condition of IMO and its
consolidated Subsidiaries as at such date and the results of the operations
of IMO and its Subsidiaries for the period ended on such date, all in
accordance with generally accepted accounting principles consistently
applied, and since December 31, 1998 there has been no event or
circumstances which have had a Material Adverse Effect.
A. Except as disclosed in the most recent audited financial
statements of IMO furnished to the Administrator, there is no pending or, to
its best knowledge, threatened action or proceeding affecting it or any of
its Subsidiaries before any Governmental Authority or arbitrator that could
have a Material Adverse Effect.
A. Each Monthly Report (if prepared by IMO or one of its
Affiliates, or to the extent that information contained therein is supplied
by IMO or an Affiliate), information, exhibit, financial statement, document,
book, record or report furnished or to be furnished at any time by or on
behalf of the Servicer to the Administrator in connection with the Agreement
is or will be complete and accurate in all material respects as of its date
or (except as otherwise disclosed to the Administrator at such time) as of
the date so furnished.
A. IMO is not in violation of any order of any court, arbitrator or
Governmental Authority, which could have a Material Adverse Effect.
A. The Servicer has complied in all material respects with the
Credit and Collection Policy of each Originator with regard to each
Receivable originated by such Originator.
(j) IMO reasonably believes that all internal computer operations that
are material to its business operations will be able to perform properly date
sensitive functions for all dates before, on and after January 1, 2000,
except to the extent that a failure to do so could not reasonably be expected
to have a Material Adverse Effect.
EXHIBIT IV
COVENANTS
1. Covenants of the Seller. Until the latest of the Facility
Termination Date, the date on which no Capital of or Discount in respect of
the Purchased Interest shall be outstanding or the date all other amounts
owed by the Seller under the Agreement to the Issuer, the Administrator and
any other Indemnified Party or Affected Person shall be paid in full:
A. Compliance with Laws, Etc. The Seller shall comply in all
material respects with all applicable laws, rules, regulations and orders,
and preserve and maintain its organizational existence, rights, franchises,
qualifications and privileges, except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve
and maintain such rights, franchises, qualifications and
privileges would not have a Material Adverse Effect.
A. Offices, Records and Books of Account, Etc. The Seller: (i)
shall keep its principal place of business and chief executive office (as
such terms or similar terms are used in the UCC) and the office where it
keeps its records concerning the Receivables at the address of the Seller set
forth under its name on the signature page to the Agreement or, pursuant to
clause (k)(iv) below, at any other locations in jurisdictions where all
actions reasonably requested by the Administrator to protect and perfect the
interest of the Issuer in the Receivables and related items (including the
Pool Assets) have been taken and completed and (ii) shall provide the
Administrator with at least 30 days' written notice before making any change in
the Seller's name or making any other change in the Seller's identity or
organizational structure (including a Change in Control) that could render any
UCC financing statement filed in connection with this Agreement
"seriously misleading" as such term (or similar term) is used in the UCC; each
notice to the Administrator pursuant to this sentence shall set forth the
applicable change and the effective date thereof. The Seller also will
maintain and implement (or cause the Servicer to maintain and implement)
administrative and operating procedures (including an ability to recreate
records evidencing Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain (or cause the
Servicer to keep and maintain) all documents, books, records, computer tapes
and disks and other information reasonably necessary or advisable for the
collection of all Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to
each existing Receivable).
A. Performance and Compliance with Contracts and Credit and
Collection Policy. The Seller shall (and shall cause the Servicer to) fully
comply in all material respects with the applicable Credit and Collection
Policies with regard to each Receivable and the related Contract.
A. Ownership Interest, Etc. The Seller shall (and shall cause the
Servicer to), at its expense, take all action necessary or desirable to
establish and maintain a valid and enforceable undivided percentage ownership
or security interest, to the extent of the Purchased Interest, in the Pool
Receivables, the Related Security and Collections with respect thereto, and a
first priority perfected security interest in the Pool Assets, in each case
free and clear of any Adverse Claim, in favor of the Issuer, including taking
such action to perfect, protect or more fully evidence the interest of the
Issuer as the Issuer, through the Administrator, may reasonably request.
A. Sales, Liens, Etc. The Seller shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Adverse Claim upon or with respect to, any or all of its right,
title or interest in, to or under any Pool Assets (including the Seller's
undivided interest in any Receivable, Related Security or Collections, or
upon or with respect to any account to which any Collections of any
Receivables are sent), or assign any right to receive income in respect of
any items contemplated by this paragraph.
A. Extension or Amendment of Receivables. Except as provided in the
Agreement, the Seller shall not, and shall not permit the Servicer to, extend
the maturity or adjust the Outstanding Balance or otherwise modify the terms of
any Pool Receivable, or amend, modify or waive any term or condition of
any related Contract.
A. Change in Credit and Collection Policy. The Seller shall not
make (or permit any Originator to make) any material change in the character
of its business or in the Credit and Collection Policy, or any change in the
Credit and Collection Policy that would adversely affect the collectibility
of the Receivables Pool or the enforceability of any related Contract or the
ability of the Seller or Servicer to perform its obligations under
any related Contract or under the Agreement.
A. Audits. The Seller shall (and shall cause each Originator to)
from time to time during regular business hours, as reasonably requested in
advance (unless a Termination Event or Unmatured Termination Event exists) by
the Administrator permit the Administrator, or its agents or representatives:
(i) to examine and make copies of and abstracts from all books, records and
documents (including computer tapes and disks) in the possession or under the
control of the Seller (or such Originator) relating to Receivables and the
Related Security, including the related Contracts, and (ii) to visit the
offices and properties of the Seller and each Originator for the purpose of
examining such materials described in clause (i) above, and to discuss
matters relating to Receivables and the Related Security or the Seller's,
Servicer's or such Originator's performance under the Transaction Documents
or under the Contracts with any of the officers, employees, agents or
contractors of the Seller, Servicer or such Originator having knowledge of
such matters.
A. Change in Lock-Box Banks, Lock-Box Accounts and Payment
Instructions to Obligors. The Seller shall not, and shall not permit the
Servicer or any Originator to, add or terminate any bank as a Lock-Box Bank or
any account as a Lock-Box Account from those listed in Schedule II to the
Agreement, or make any change in its instructions to Obligors regarding
payments to be made to the Seller, any Originator, the Servicer or any
Lock-Box Account (or related post office box), unless the Administrator shall
have consented thereto in writing and the Administrator shall have received
copies of all agreements and documents (including Lock-Box Agreements) that
it may request in connection therewith.
A. Deposits to Lock-Box Accounts. The Seller shall (or shall cause
the Servicer to): (i) instruct all Obligors to make payments of all
Receivables to one or more Lock-Box Accounts or to post office boxes to which
only Lock-Box Banks have access (and shall instruct the Lock-Box Banks to
cause all items and amounts relating to such Receivables received in such post
office boxes to be removed and deposited into a Lock-Box Account on a daily
basis), and (ii) deposit, or cause to be deposited, any Collections received
by it, the Servicer or any Originator into Lock-Box Accounts not
later than one Business Day after receipt thereof. Each Lock-Box Account and
the Collection Account shall at all times be subject to a Lock-Box Agreement
and a Collection Account Agreement, respectively. The Seller will not (and
will not permit the Servicer to) deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any Lock-Box Account
cash or cash proceeds other than Collections.
A. Reporting Requirements. The Seller will provide to the
Administrator (in multiple copies, if requested by the Administrator) the
following:
1. as soon as available and in any event within 120 days after the end of
each fiscal year of the Seller, a copy of the annual report for such year for
the Seller, containing unaudited financial statements for such year certified
as to accuracy by the chief financial officer or treasurer of the
Seller;
1. as soon as possible and in any event within five days after the
Seller becomes aware of the occurrence of each Termination Event or Unmatured
Termination Event, a statement of the chief financial officer of the Seller
setting forth details of such Termination Event or Unmatured Termination
Event and the action that the Seller has taken and proposes to take with
respect thereto;
1. promptly after the filing or receiving thereof, copies of all
reports and notices that the Seller or any Affiliate files under ERISA with
the Internal Revenue Service, the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or that the Seller or any Affiliate receives from
any of the foregoing or from any multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA) to which the Seller or any of its Affiliates is or
was, within the preceding five years, a contributing employer, in each
case in respect of the assessment of withdrawal liability or an event or
condition that could, in the aggregate, result in the imposition of liability
on the Seller and/or any such Affiliate;
1. at least thirty days before any change in the Seller's name or
any other change requiring the amendment of UCC financing statements, a
notice setting forth such changes and the effective date thereof;
1. promptly after the Seller obtains knowledge thereof, notice of
any: (A) material litigation, investigation or proceeding that may exist at
any time between the Seller and any Person or (B) material litigation or
proceeding relating to any Transaction Document;
1. promptly after the occurrence thereof, notice of a material
adverse change in the business, operations, property or financial or other
condition of the Seller, the Servicer or any Originator;
1. such other information respecting the Receivables or the
condition or operations, financial or otherwise, of the Seller or any of its
Affiliates as the Administrator may from time to time reasonably request; and
(viii) as soon as available and in any event within 140 days
after the end of each fiscal year of Seller, the Seller shall, at the
Seller's expense, cause a firm of independent public accountants (who may
be the independent public accountants who verify the IMO's annual
audited financial statements), reasonably acceptable to the
Administrator, to furnish a report to the Administrator, to the effect
that such firm has (i) compared the information contained in the
Monthly Reports delivered during such fiscal year then ended with the
information contained in the Seller's records and computer systems for
such period, and that, on the basis of such examination and comparison,
such firm is of the opinion that the information contained in the
Monthly Reports reconciles with the information contained in the
Seller's records and computer systems and that the servicing of the
Receivables has been conducted in compliance with the Agreement, (ii)
confirmed the Net Receivables Pool Balance as of the end of each
Settlement Period during such fiscal year, (iii) verified that the
Receivables treated by the Seller as Eligible Receivables in fact
satisfied the requirements of the definition thereof contained in
Exhibit I to the Agreement, and (iv) conducted a "negative
confirmation" of a sample of Receivables and verified that the Seller's
records and computer systems used in servicing the Receivables
contained correct information with regard to due dates and outstanding
balances, except in each case for (a) such exceptions as such firm
shall believe to be immaterial (which exceptions need not be
enumerated) and (b) such other exceptions as shall be set forth in such
statement.
A. Certain Agreements. Without the prior written consent of the
Administrator, the Seller will not (and will not permit any Originator to)
amend, modify, waive, revoke or terminate any Transaction Document to which
it is a party or any provision of Seller's certificate of incorporation or
by-laws.
A. Restricted Payments. (i) Except pursuant to clause (ii) below,
the Seller will not: (A) purchase or redeem any shares of its capital stock,
(B) declare or pay any dividend or set aside any funds for any such purpose,
(C) prepay, purchase or redeem any Debt, (D) lend or advance any funds or (E)
repay any loans or advances to, for or from any of its Affiliates (the
amounts described in clauses (A) through (E) being
referred to as "Restricted Payments").
(ii) Subject to the limitations set forth in clause (iii) below,
the Seller may make Restricted Payments so long as such Restricted
Payments are made only in one or more of the following ways: (A) the
Seller may make cash payments (including prepayments) on the Company
Notes in accordance with its terms, and (B) if no amounts are then
outstanding under the Company Notes, the Seller may declare and pay
dividends.
(iii) The Seller may make Restricted Payments only out of the
funds it receives pursuant to Sections 1.4(b)(ii) and (iv) of the
Agreement. Furthermore, the Seller shall not pay, make or declare: (A)
any dividend if, after giving effect thereto, the Seller's tangible net
worth would be less than $2,000,000, or (B) any Restricted Payment
(including any dividend) if, after giving effect thereto, any
Termination Event or Unmatured Termination Event shall have
occurred and be continuing.
A. Other Business. The Seller will not: (i) engage in any business
other than the transactions contemplated by the Transaction Documents; (ii)
create, incur or permit to exist any Debt of any kind (or cause or permit to
be issued for its account any letters of credit or bankers' acceptances)
other than pursuant to this Agreement or the Company Notes; or (iii) form any
Subsidiary or make any investments in any other Person; provided, however,
that the Seller shall be permitted to incur minimal obligations to the extent
necessary for the day-to-day operations of the Seller (such as expenses for
stationery, audits, maintenance of legal status, etc.).
A. Use of Seller's Share of Collections. The Seller shall apply the
Seller's Share of Collections to make payments in the following order of
priority: (i) the payment of its expenses (including all obligations payable
to the Issuer and the Administrator under the Agreement and under the Fee
Letter); (ii) the payment of accrued and unpaid interest on the Company
Notes; (iii) the payment of principal of the Notes and (iv) other legal and
valid organizational purposes.
A. Tangible Net Worth. The Seller will not permit its tangible net
worth, at any time, to be less than $2,000,000.
2. Covenants of the Servicer and IMO. Until the latest of the Facility
Termination Date, the date on which no Capital of or Discount in respect of
the Purchased Interest shall be outstanding or the date all other amounts
owed by the Seller under the Agreement to the Issuer, the Administrator and
any other Indemnified Party or Affected Person shall be paid in full:
A. Compliance with Laws, Etc. The Servicer and, to the extent that
it ceases to be the Servicer, IMO shall comply (and shall cause each
Originator to comply) in all material respects with all applicable laws,
rules, regulations and orders, and preserve and maintain its corporate
existence, rights, franchises, qualifications and privileges, except to the
extent that the failure so to comply with such laws, rules and regulations or
the failure so to preserve and maintain such existence, rights, franchises,
qualifications and privileges would not have a Material Adverse Effect.
A. Records and Books of Account, Etc. The Servicer and, to the
extent that it ceases to be the Servicer, IMO, also will (and will cause each
Originator to) maintain and implement administrative and operating procedures
(including an ability to recreate records evidencing Receivables and related
Contracts in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records, computer tapes and disks and
other information reasonably necessary or advisable for the collection of all
Receivables (including records adequate to permit the daily identification of
each Receivable and all Collections of and adjustments to each existing
Receivable).
A. Change in Credit and Collection Policy. The Servicer and, to the
extent that it ceases to be the Servicer, IMO, shall not make (and shall not
permit any Originator to make) any material change in the character of its
business or in the Credit and Collection Policy, or any change in the Credit
and Collection Policy that would adversely affect the collectibility of the
Receivables Pool or the enforceability of any related Contract or the ability of
the Seller or Servicer to perform its obligations under any related
Contract or under the Agreement.
A. Audits. The Servicer and, to the extent that it ceases to be the
Servicer, IMO, shall (and shall cause each Originator to) from time to time
during regular business hours, as reasonably requested in advance (unless a
Termination Event or Unmatured Termination Event exists) by the Administrator
permit the Administrator, or its agents or representatives: (i) to examine
and make copies of and abstracts from all books, records and documents
(including computer tapes and disks) in its possession or under its control
relating to Receivables and the Related Security, including the related
Contracts, and (ii) to visit its offices and properties for the purpose of
examining such materials described in clause (i) above, and to discuss
matters relating to Receivables and the Related Security or its performance
hereunder or under the Contracts with any of its officers, employees, agents
or contractors having knowledge of such matters.
A. Deposits to Lock-Box Accounts. The Servicer shall: (i) instruct
all Obligors to make payments of all Receivables to one or more Lock-Box
Accounts or to post office boxes to which only Lock-Box Banks have access (and
shall instruct the Lock-Box Banks to cause all items and amounts
relating to such Receivables received in such post office boxes to be removed
and deposited into a Lock-Box Account on a daily basis); and (ii) deposit, or
cause to be deposited, any Collections received by it into Lock-Box Accounts
not later than one Business Day after receipt thereof. Each Lock-Box Account
and the Collection Account shall at all times be subject to a Lock-Box
Agreement and a Collection Account Agreement, respectively. The Servicer will
not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds other than
Collections.
A. Reporting Requirements. IMO shall provide to the Administrator
(in multiple copies, if requested by the Administrator) the following:
1. As soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of IMO, (a)
copies of the unaudited consolidated balance sheet of IMO and its
consolidated Subsidiaries as at the end of such quarter, together with
unaudited statements of earnings, stockholders' equity and cash flows for such
quarter and the portion of the fiscal year through such quarter, prepared in
accordance with GAAP and certified by the chief financial
officer, treasurer or chief accounting officer of IMO, (b) a letter from the
chief financial officer, treasurer or chief accounting officer of IMO
certifying to the best knowledge of such officer, that neither a Termination
Event nor an Unmatured Termination Event has occurred and is continuing;
1. As soon as available and in any event within 120 days after the end of
each fiscal year of IMO, (a) a copy of the consolidated balance sheet of IMO
and its consolidated Subsidiaries as at the end of such fiscal year,
together with the related statements of earnings, stockholders' equity and
cash flows for such fiscal year, each prepared in accordance with GAAP
applied consistently throughout the periods reflected therein (such
consolidated balance sheet and such related statements to be certified
without any Impermissible Qualification by independent certified public
accountants of nationally recognized standing), and (b) a letter from the
chief financial officer, treasurer or chief accounting officer of IMO
certifying to the best knowledge of such officer, that neither a Termination
Event nor an Unmatured Termination Event has occurred and is continuing, in
each case as at the end of each such fiscal year and the date of delivery of
such letter;
1. as to the Servicer only, as soon as available and in any event
not later than 10 days after the last day of each Reporting Period a Monthly
Report as of the last day of such Reporting Period or, within 5 Business Days of
a request by the Administrator, a Monthly Report for such periods as is
specified by the Administrator (including on a semi-monthly, weekly or daily
basis);
1. promptly after the sending or filing thereof, copies of all
reports that IMO sends to any of its security holders, and copies of all
reports and registration statements that IMO or any Subsidiary files with the
Securities and Exchange Commission or any national securities exchange;
1. promptly after the filing or receiving thereof, copies of all
reports and notices that IMO or any of its Affiliate files under ERISA with
the Internal Revenue Service, the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or that such Person or any of its Affiliates
receives from any of the foregoing or from any multiemployer plan (within the
meaning of Section 4001(a)(3) of ERISA) to which such Person or any of its
Affiliate is or was, within the preceding five years, a contributing
employer, in each case in respect of the assessment of withdrawal liability
or an event or condition that could, in the aggregate, result in the
imposition of liability on IMO and/or any such Affiliate;
1. promptly after IMO obtains knowledge thereof, notice of any: (A)
litigation, investigation or proceeding that may exist at any time between
IMO or any of its Subsidiaries and any Governmental Authority that, if not
cured could be reasonably expected to have a Material Adverse Effect; (B)
litigation or proceeding affecting IMO or any of its Subsidiaries, or any of
their respective properties, businesses, assets or revenues, which could be
reasonably expected to have a Material Adverse Effect on IMO and its
Subsidiaries as a whole; or (C) litigation or proceeding relating to any
Transaction Document; and
1.
such other information respecting the Receivables or the condition or
operations, financial or otherwise, of IMO or any of its Affiliates as the
Administrator may from time to time reasonably request.
A. Credit Agreement. IMO shall provide notice to the Administrator
of a Termination Event described in paragraph (l) or (m) of Exhibit V within
5 Business Days after the occurrence of such Termination Event (regardless of
whether the circumstances or events giving rise to such Termination Events
shall have been amended, modified or waived pursuant to the Credit
Agreement).
3. Separate Existence. Each of the Seller and IMO hereby acknowledges
that the Purchasers, the Issuer and the Administrator are entering into the
transactions contemplated by this Agreement and the other Transaction
Documents in reliance upon the Seller's identity as a legal entity separate
from IMO and its Affiliates. Therefore, from and after the date hereof, each
of the Seller and IMO shall take all steps specifically required by the
Agreement or reasonably required by the Administrator to continue the
Seller's identity as a separate legal entity and to make it apparent to third
Persons that the Seller is an entity with assets and liabilities distinct from
those of IMO and any other Person, and is not a division of IMO, its
Affiliates or any other Person. Without limiting the generality of the
foregoing and in addition to and consistent with the other covenants set
forth herein, each of the Seller and IMO shall take such
actions as shall be required in order that:
(a) The Seller will be a limited purpose entity whose primary
activities are restricted in its limited liability company agreement
to: (i) purchasing or otherwise acquiring from Originators, owning,
holding and granting security interests or selling interests, in Pool
Assets, (ii) entering into agreements for the selling and servicing of
the Receivables Pool, and (iii) conducting such other activities as it
deems necessary or appropriate to carry out its primary activities;
(b) The Seller shall not engage in any business or activity, or
incur any indebtedness or liability, other than as expressly permitted
by the Transaction Documents;
(c) Not less than one member of the Seller's Board of Directors
(the "Independent Director") shall be an individual who is not a
direct, indirect or beneficial stockholder, officer, director,
employee, affiliate, associate or supplier of IMO or any of its
Affiliates. The limited liability company agreement of the Seller shall
provide that: (i) the Seller's Board of Directors shall not approve, or
take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Seller unless the Independent Director
shall approve the taking of such action in writing before the taking of
such action, and (ii) such provision cannot be amended without the
prior written consent of the Independent Director;
(d) The Independent Director shall not at any time serve as a
trustee in bankruptcy for the Seller, IMO or any Affiliate thereof;
(e) Any employee, consultant or agent of the Seller will be
compensated from the Seller's funds for services provided to the
Seller. The Seller 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 Pool,
whichservicer will be fully compensated for its services by payment of
the Servicing Fee, and a manager, which manager will be fully
compensated from the Seller's funds;
(f) The Seller will contract with the Servicer to perform for the
Seller all operations required on a daily basis to service the
Receivables Pool. The Seller will pay the Servicer the Servicing Fee
pursuant hereto. Except as provided in the following sentence the
Seller will not incur any material indirect or overhead
expenses for items shared with IMO (or any other Affiliate thereof) that
are not reflected in the Servicing Fee. To the
extent, if any, that the Seller (or any Affiliate thereof) shares items of
expenses not reflected in the Servicing Fee or the manager's fee,
such as legal, auditing and other professional services, 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 IMO shall pay all expenses relating to the preparation,
negotiation, execution and delivery of the Transaction Documents,
including legal, rating agency and other fees;
(g) Except as provided in clause (f) above, the Seller's
operating expenses will not be paid by IMO or any other Affiliate
thereof;
(h) All of the Seller's business correspondence and other
communications shall be conducted in the Seller's own name and on its
own separate stationery;
(i) The Seller's books and records will be maintained separately
from those of IMO and any other Affiliate thereof;
(j) All financial statements of IMO or any Affiliate thereof that
are consolidated to include Seller will contain detailed notes clearly
stating that: (i) a special purpose entity exists as a Subsidiary of
IMO, and (ii) Originators have sold receivables and other related
assets to such special purpose Subsidiary that, in turn, has sold
undivided interests therein to certain financial institutions and other
entities;
(k) The Seller's assets will be maintained in a manner that
facilitates their identification and segregation from those of IMO or
any Affiliate thereof;
(l) The Seller will strictly observe organizational formalities in
its dealings with IMO or any Affiliate thereof, and funds or other
assets of the Seller will not be commingled with those of IMO or any
Affiliate thereof except as permitted by the Agreement in connection
with servicing the Pool Receivables. The Seller shall not maintain
joint bank accounts or other depository accounts to which IMO or any
Affiliate thereof (other than IMO in its capacity as the Servicer) has
independent access. The Seller is not named, and has not entered into
any agreement to be named, directly or indirectly, as a direct or
contingent beneficiary or loss payee on any insurance policy with
respect to any loss relating to the property of IMO or any Subsidiary
or other Affiliate of IMO. The Seller will pay to the appropriate
Affiliate the marginal increase or, in the absence of such increase, the
market amount of its portion of the premium payable with respect to
any insurance policy that covers the Seller and such Affiliate; and
(m) The Seller will maintain arm's-length relationships with IMO
(and any Affiliate thereof). Any Person that renders or otherwise
furnishes services to the Seller will be compensated by the Seller at
market rates for such services it renders or otherwise furnishes to the
Seller. Neither the Seller nor IMO will be or will hold itself out to
be responsible for the debts of the other or the decisions or actions
respecting the daily business and affairs of the other. The Seller and
IMO 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.
(n) IMO shall not pay the salaries of Seller's employees, if any.
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
A. (i) the Seller, any Originator or the Servicer (if IMO or any of
its Affiliates) shall fail to make when due any payment or deposit to be made
by it under the Agreement and such failure shall continue unremedied for one
Business Day or (ii) the Seller, any Originator or the Servicer (if IMO or
any of its Affiliates) shall fail to perform or observe any other term,
covenant or agreement under the Agreement or any other Transaction Document
and such failure shall continue for 30 days after notice thereof from the
Issuer or the Administrator;
A. IMO (or any Affiliate thereof) shall fail to transfer to any
successor Servicer when required any rights pursuant to the Agreement that
IMO (or such Affiliate) then has as Servicer;
A. any representation or warranty made or deemed made by the
Seller, IMO, or any Originator (or any of their respective officers) under or
in connection with the Agreement or any other Transaction Document, or any
information or report delivered by the Seller, IMO, or any Originator or the
Servicer pursuant to the Agreement or any other Transaction Document, shall
prove to have been incorrect or untrue in any material respect when made or
deemed made or delivered;
A. the Seller or the Servicer shall fail to deliver the Monthly
Report pursuant to the Agreement, and such failure shall remain unremedied
for five days after notice thereof from the Issuer or the Administrator;
A. the Agreement or any purchase or reinvestment pursuant to the
Agreement shall for any reason: (i) cease to create, or the Purchased
Interest shall for any reason cease to be, a valid and enforceable perfected
undivided percentage ownership or security interest to the extent of the
Purchased Interest in the Pool Receivables, the Related Security and
Collections with respect thereto, free and clear of any Adverse Claim, or
(ii) cease to create, or the interest of the Issuer with respect to such Pool
Assets shall cease to be, a valid and enforceable first priority perfected
security interest, free and clear of any Adverse Claim,
A. the Seller, IMO, or any Originator shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the Seller,
IMO, or any Originator seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but
not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 60 days, or any of the actions sought in such
proceeding (including the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or for any substantial part of its property) shall occur; or the Seller, IMO or
any Originator shall take any organizational or corporate action, as
applicable to authorize any of the actions set forth above in this paragraph;
A. (i) the (A) Default Ratio shall exceed 3.5%, (B) the Delinquency
Ratio shall exceed 9.0% or (C) the Dilution Ratio shall exceed 8.0% or (ii)
the average for three consecutive Reporting Periods of: (A) the Default Ratio
shall exceed 2.5%, (B) the Delinquency Ratio shall exceed 8.0%(C) the
Dilution Ratio shall exceed 7.0%.
A. a Change in Control shall occur,
A. at any time (i) the sum of (A) the Capital plus (B) the Total
Reserves, exceeds (ii) the sum of (A) the Net Receivables Pool Balance at
such time plus (B) the Issuer's Share of the amount of Collections then on
deposit in the Lock-Box Accounts and the Collection Account (other than
amounts set aside therein representing Discount and Fees), and such
circumstance shall not have been cured within four Business Days,
(j) (i) IMO or any of its Subsidiaries shall fail to pay any principal of
or premium or interest on any of its Debt that is outstanding in a principal
amount of at least $2,500,000 in the aggregate when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement, mortgage,
indenture or instrument relating to such Debt (and shall have not been
waived); or (ii) any other event (other than a Termination Event described in
paragraph (l) or (m) of Exhibit V) shall occur or condition shall exist under
any agreement, mortgage, indenture or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement, mortgage, indenture or instrument (and shall have not been waived),
if, in either case: (a) the effect of such non-payment, event or
condition is to give the applicable debtholders the right (whether acted upon or
not) to accelerate the maturity of such Debt, or (b) any such Debt shall
be declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed, purchased or defeased, or an
offer to repay, redeem, purchase or defease such Debt shall be required to
be made, in each case before the stated maturity thereof;
(k) either: (i) the Internal Revenue Service shall file a notice of
lien asserting a claim pursuant to the Internal Revenue Code with regard to
any of the assets of Seller, any Originator, IMO or any ERISA Affiliate, or
(ii) the Pension Benefit Guaranty Corporation shall file a notice of lien
asserting a claim pursuant to ERISA with regard to any assets of the Seller,
any Originator, IMO or any ERISA Affiliate;
(l) IMO shall fail to perform and comply with each of the financial
covenants set forth in Section 7.2.4 of the Credit Agreement as in effect on
the date hereof, (regardless of whether such covenants may be amended,
modified or waived from time to time in accordance with the Credit
Agreement), each of which covenants and agreements, together with all related
definitions, exhibits and ancillary provisions, are hereby incorporated in
this Agreement by reference as through specifically set forth in this
paragraph (l) and shall survive the termination and/or expiration of the
Credit Agreement; or
(m) the occurrence of an event set forth in Section 8.1.5 of the Credit
Agreement as in effect on the date hereof, (regardless of whether such event
may be amended, modified or waived from time to time in accordance with the
Credit Agreement), each of which events and agreements, together with all
related definitions, exhibits and ancillary provisions, are hereby
incorporated in this Agreement by reference as through specifically set forth in
this paragraph (m) and shall survive the termination and/or expiration of
the Credit Agreement.
SCHEDULE I
CREDIT AND COLLECTION POLICY
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
Lock-Box Bank Lock-Box Accounts Lock-Box Number
Bank of America, N.A. 3751450524 502932
Bank of America, N.A. 3751450540 502944
Bank of America, N.A. ▇▇▇▇▇▇▇▇▇▇ 502924
Bank of America, N.A. 3751450553 502959
502910
502919
SCHEDULE III
TRADE NAMES
None
ANNEX A
to Receivables Purchase Agreement
FORM OF MONTHLY REPORT
ANNEX B
to Receivables Purchase Agreement
FORM OF PURCHASE NOTICE