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Exhibit 10.1
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RECEIVABLES PURCHASE AGREEMENT
dated as of May 29, 1998
among
▇▇▇▇▇▇ FUNDING CORPORATION
▇▇▇▇▇▇ CO.
MARKET STREET FUNDING CORPORATION
and
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PNC BANK, NATIONAL ASSOCIATION
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TABLE OF CONTENTS
ARTICLE I.AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility................................................................1
Section 1.2. Making Purchases.................................................................1
Section 1.3. Purchased Interest Computation...................................................3
Section 1.4. Settlement Procedures............................................................3
Section 1.5. Fees.............................................................................6
Section 1.6. Payments and Computations, Etc...................................................6
Section 1.7. Dividing or Combining Portions of the Capital of the Purchased Interest..........7
Section 1.8. Increased Costs..................................................................7
Section 1.9. Requirements of Law..............................................................8
Section 1.10. Inability to Determine Eurodollar Rate..........................................8
ARTICLE II.REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants........................................9
Section 2.2. Termination Events...............................................................9
ARTICLE III.INDEMNIFICATION
Section 3.1. Indemnities by the Seller........................................................9
Section 3.2. Indemnities by the Servicer.....................................................11
ARTICLE IV.ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer.....................................................12
Section 4.2. Duties of the Servicer..........................................................12
Section 4.3. Lock-Box Arrangements...........................................................13
Section 4.4. Enforcement Rights..............................................................14
Section 4.5. Responsibilities of the Seller..................................................15
Section 4.6. Servicing Fee...................................................................15
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ARTICLE V.
MISCELLANEOUS
Section 5.1. Amendments, Etc.................................................................15
Section 5.2. Notices, Etc....................................................................16
Section 5.3. Assignability...................................................................16
Section 5.4. Costs, Expenses and Taxes.......................................................17
Section 5.5. No Proceedings; Limitation on Payments..........................................17
Section 5.6. Confidentiality.................................................................17
Section 5.7. GOVERNING LAW AND JURISDICTION..................................................18
Section 5.8. Execution in Counterparts.......................................................19
Section 5.9. Survival of Termination.........................................................19
Section 5.10. WAIVER OF JURY TRIAL...........................................................19
Section 5.11. Entire Agreement...............................................................19
Section 5.12. Headings.......................................................................19
Section 5.13. Issuer's Liabilities...........................................................19
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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 Information Package
ANNEX B Form of Purchase Notice
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This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement") is entered into as of
May 29, 1998, among ▇▇▇▇▇▇ FUNDING CORPORATION., a Delaware corporation, as
seller (the "Seller"), ▇▇▇▇▇▇ CO., a Pennsylvania corporation ("▇▇▇▇▇▇"), as
initial servicer (in such capacity, together with its successors and permitted
assigns in such capacity, the "Servicer"), MARKET STREET FUNDING CORPORATION, a
Delaware corporation (together with its successors and permitted assigns, the
"Issuer"), and PNC BANK, NATIONAL ASSOCIATION, a national banking association
("PNC"), 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, reinvestment payments that
are made by the Issuer.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section I.1. PURCHASE FACILITY. (a) On the terms and conditions
hereinafter set forth, the Issuer hereby agrees to purchase, and make
reinvestments of, undivided percentage ownership interests 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.
(b) The Seller may, upon at least 30 days' written notice to the
Administrator, terminate the purchase facility provided in this Section in whole
or, upon at least 30 days' written notice to the Administrator, from time to
time, irrevocably 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 $20,000,000.
Section I.2. MAKING PURCHASES. (a) 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
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accordance with SECTION 5.2 (which notice must be received by the Administrator
before 11:00 a.m., New York City time): (i) at least three Business Days before
the requested purchase date, in the case of a purchase to be funded at the
Alternate Rate and based upon the Eurodollar Rate, (ii) at least two Business
Days before the requested purchase date, in the case of a purchase to be funded
at the Alternate Rate and based upon the Base Rate, and (iii) at least two
Business Day before the requested purchase date, in the case of a purchase to be
funded at the CP Rate, which notice shall specify: (A) the amount requested to
be paid to the Seller (such amount, which shall not be less than $1,000,000,
being the Capital relating to the undivided percentage ownership interest then
being purchased), (B) the date of such purchase (which shall be a Business Day),
(C) the desired funding basis for such purchase (which shall be based upon the
Eurodollar Rate, the Base Rate or the CP Rate) and (D) a pro forma calculation
of the Purchased Interest after giving effect to the increase in Capital. If the
Seller has requested that the purchase be funded at the CP Rate, the
Administrator shall promptly thereafter notify the Seller whether the Issuer has
exercised its discretion not to fund such purchase with the issuance of Notes
because such purchase with the issuance of Notes would be economically
inadvisable to the Issuer, the Administrator, the Seller or any other similarly
situated Person, or otherwise not permitted, in which case the Seller shall be
deemed to have requested that the purchase be funded at the Alternate Rate and
be based upon the Base Rate.
(b) 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 PNC Bank,
National Association, account number 1006799188, ABA ▇▇▇▇▇▇▇▇▇, an amount equal
to the Capital relating to the undivided percentage ownership interest then
being purchased.
(c) 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.
(d) 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 all amounts on deposit therein, and all certificates and instruments, if
any, from time to time evidencing such Lock-Box Accounts and amounts on deposit
therein, (v) all rights (but none of the obligations) of the Seller under the
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.
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Section I.3. 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.
Section 1.4. SETTLEMENT PROCEDURES. (a) 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.
(b) The Servicer shall, on each day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or the Servicer:
(i) set aside and hold in trust (and shall, at the request of
the Administrator, segregate in a separate account approved by the
Administrator if, at the time of such request, there exists an
Unmatured Termination Event or a Termination Event or if the failure to
so segregate reasonably could be expected to cause a Material Adverse
Effect) for the Issuer, out of the Issuer's Share of such Collections,
first, an amount equal to the Discount accrued through such day for
each Portion of Capital and not previously set aside, second, an amount
equal to the fees set forth in the Fee Letter accrued and unpaid
through such day, 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 set aside,
(ii) 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 Issuer's Share of such Collections. Such remainder
shall be automatically reinvested in Pool Receivables, and in the
Related Security, Collections and other proceeds with respect thereto;
provided, however, that if the Purchased Interest would exceed 100%,
then the Servicer shall not reinvest, but shall set aside and hold in
trust for the Issuer (and shall, at the request of the Administrator,
segregate in a separate account approved by the Administrator if, at
the time of such request, there exists an Unmatured Termination Event
or a Termination Event or if the failure to so segregate reasonably
could be expected to cause a Material Adverse Effect) a portion of such
Collections that, together with the other Collections set aside
pursuant to this paragraph, shall equal the amount necessary to reduce
the Purchased Interest to 100%,
(iii) if such day is a Termination Day, set aside, segregate
and hold in trust (and shall, at the request of the Administrator,
segregate in a separate account approved by the
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Administrator) for the Issuer the entire remainder of the Issuer's
Share of the Collections; provided, that if amounts are set aside and
held in trust on any Termination Day of the type described in clause
(a) of the definition of "Termination Day" and, thereafter, the
conditions set forth in Section 2 of EXHIBIT II are satisfied or waived
by the Administrator, such previously set-aside amounts shall be
reinvested in accordance with CLAUSE (II) on the day of such subsequent
satisfaction or waiver of conditions, and
(iv) subject to the Issuer's security interest under SECTION
1.2(d), release to the Seller (subject to SECTION 1.4(f)) for its own
account any Collections in excess of: (x) amounts required to be
reinvested in accordance with CLAUSE (ii) or the proviso to CLAUSE
(iii) plus (y) the amounts that are required to be set aside pursuant
to CLAUSE (i), the proviso to CLAUSE (ii) and CLAUSE (iii) plus (z) the
Seller's Share of the Servicing Fee accrued and unpaid through such day
and all reasonable and appropriate out-of-pocket costs and expenses of
the Servicer for servicing, collecting and administering the Pool
Receivables.
(c) The Servicer shall deposit into the Administration Account (or such
other account designated by the Administrator), on each Monthly Settlement Date,
Collections held for the Issuer pursuant to CLAUSE (b)(i) or (f) plus the amount
of Collections then held for the Issuer pursuant to CLAUSES (b)(ii) and (iii) of
SECTION 1.4; provided, that if ▇▇▇▇▇▇ or an Affiliate thereof is the Servicer,
such day is not a Termination Day and the Administrator has not notified ▇▇▇▇▇▇
(or such Affiliate) that such right is revoked, ▇▇▇▇▇▇ (or such Affiliate) may
retain the portion of the Collections set aside pursuant to CLAUSE (b)(i) that
represents the Issuer's Share of the Servicing Fee. On the last day of each
Settlement Period, the Administrator will notify the Servicer by facsimile of
the amount of Discount accrued with respect to each Portion of Capital during
such Settlement Period or portion thereof.
(d) Upon receipt of funds deposited into the Administration Account
pursuant to CLAUSE (c), the Administrator shall cause such funds to be
distributed as follows:
(i) 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 and fees
(other than Servicing Fees) with respect to each Portion of Capital,
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 Monthly Settlement Date) in payment in full of the Issuer's Share
of accrued Servicing Fees so set aside, and
(ii) 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, 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 ▇▇▇▇▇▇ or an Affiliate thereof
is not the Servicer, to the Servicer in payment in full of all accrued
Servicing Fees, fourth, if the Capital and accrued Discount
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with respect to each Portion of Capital have been reduced to zero, and
all accrued Servicing Fees payable to the Servicer (if other than
▇▇▇▇▇▇ 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
hereunder and, fifth, unless such amount has been retained by the
Servicer pursuant to CLAUSE (c), then to the Servicer (if the Servicer
is ▇▇▇▇▇▇ or an Affiliate thereof) in payment in full of the Issuer's
Share of all accrued Servicing Fees.
After the Capital, Discount, fees payable pursuant to the Fee Letter and
Servicing Fees with respect to the Purchased Interest, 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.
(e) For the purposes of this SECTION 1.4:
(i) 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
the Seller or any Affiliate of the Seller, or any setoff or dispute
between 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;
(ii) if on any day any of the representations or warranties in
Section 1(g) or (n) 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;
(iii) except as provided in CLAUSE (i) or (ii), or 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
(iv) 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 in any Insolvency
Proceeding) 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.
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(f) If at any time the Seller shall wish to cause the reduction of
Capital (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:
(i) the Seller shall give the Administrator and the Servicer
(A) at least two Business Days' prior written notice thereof for any
reduction of Capital less than or equal to $10,000,000 and (B) at least
ten Business Days' prior written notice thereof for any reduction of
Capital greater than $10,000,000 (in each case such notice shall
include the amount of such proposed reduction and the proposed date on
which such reduction will commence);
(ii) 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
(iii) the Servicer shall hold such Collections in trust for
the Issuer, for payment to the Administrator on the next Monthly
Settlement Date immediately following the current Settlement Period,
and Capital 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
$1,000,000 and shall be an integral multiple of $250,000, and the
entire Capital of the Purchased Interest after giving effect to such
reduction shall be not less than $20,000,000 and shall be in an
integral multiple of $250,000 (unless Capital shall have been reduced
to zero); 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.
Section I.5. 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 Seller and the Administrator (as such letter agreement
may be amended, supplemented or otherwise modified from time to time, the "Fee
Letter").
Section I.6. PAYMENTS AND COMPUTATIONS, ETC. (a) 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 2:00 p.m. (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.
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(b) 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 2.0% per annum above the Base Rate, payable on demand.
(c) 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.
Section I.7. DIVIDING OR COMBINING PORTIONS OF THE CAPITAL OF THE
PURCHASED INTEREST. The Seller may, on the last day of any Settlement Period,
pursuant to written notice delivered to the Administrator in accordance with
SECTION 5.2: (a) at least three Business Days before such last day in the case
of a Portion of Capital to be funded based upon the Eurodollar Rate and (b) at
least two Business Days before such last day in all other cases, either: (i)
divide the Capital of the Purchased Interest into two or more portions (each a
"Portion of Capital"), which Portions of Capital may accrue Discount by
reference to different rates, equal, in aggregate, to the Capital of the
Purchased Interest; provided, that after giving effect to such division the
amount of each such Portion of Capital shall be not less than $1,000,000 and
shall be an integral multiple of $250,000, or (ii) combine any two or more
Portions of Capital outstanding on such last day and having Settlement Periods
ending on such last day into a single Portion of Capital equal to the aggregate
of the Capital of such Portions of Capital.
Section 1.8. INCREASED COSTS. (a) 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 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 sufficient to
compensate such Affected Person in the light of such circumstances, to the
extent that such Affected Person reasonably determines such increase in capital
to be allocable to the existence of any of such commitments. A certificate as to
such amounts submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.
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(b) If, due to either: (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any 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 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
sufficient to compensate such Affected Person for such increased costs. A
certificate as to 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) If such increased costs affect the related Affected Person's
portfolio of financing transactions, such Affected Person shall use reasonable
averaging and attribution methods to allocate such increased costs to the
transactions contemplated by this Agreement.
Section I.9. 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, and franchise taxes imposed on such Affected
Person, by the jurisdiction under the laws of which such Affected
Person 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 demand by such Affected
Person, the Seller shall promptly pay to such Affected Person additional amounts
necessary to compensate such Affected Person for
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such additional cost or reduced amount receivable. All such amounts shall be
payable as incurred. A certificate from such Affected Person to the Seller and
the Administrator certifying, in reasonably specific detail, the basis for,
calculation of, and amount of such additional costs or reduced amount receivable
shall be conclusive and binding for all purposes, absent manifest error;
provided, however, that no Affected Person shall be required to disclose any
confidential or tax planning information in any such certificate.
Section I.10. 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 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.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section II.1. 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.
Section II.2. 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
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default under the New York UCC and under other applicable law, which rights and
remedies shall be cumulative.
ARTICLE III.
INDEMNIFICATION
Section III.1. 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") 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 or counsel, (b) recourse (except as otherwise
specifically provided in this Agreement) for 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 any
political subdivision thereof. Without limiting or being limited by the
foregoing, and subject to the exclusions set forth in the preceding sentence,
the Seller shall pay on demand (which demand shall be accompanied by
documentation of the Indemnified Amounts, in reasonable detail) to each
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party from and against any and all Indemnified Amounts relating to or resulting
from any of the following:
(i) the 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
Information Package 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,
(ii) 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 when made,
(iii) 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,
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(iv) 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,
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool and the other Pool Assets, whether at the time of any purchase or
reinvestment or at any subsequent time,
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable in, or purporting to be in, the Receivables Pool
(including 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),
(vii) 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,
(viii) 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,
(ix) the commingling of Collections at any time with other
funds,
(x) the use of proceeds of purchases or reinvestments, or
(xi) 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.
Section II.2. 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
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information contained in an Information Package 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 as of the date made or deemed made in all respects when 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.
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section IV.1. APPOINTMENT OF THE SERVICER. (a) 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 ▇▇▇▇▇▇ (in accordance with this
Section) of the designation of a new Servicer, ▇▇▇▇▇▇ is hereby designated as,
and hereby agrees to perform the duties and obligations of, the Servicer
pursuant to the terms hereof. Upon the occurrence of a Termination Event, the
Administrator may designate as Servicer any Person (including itself) to succeed
▇▇▇▇▇▇ 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.
(b) Upon the designation of a successor Servicer as set forth in CLAUSE
(A), ▇▇▇▇▇▇ agrees that it will terminate its activities as Servicer hereunder
in a manner that the Administrator determines will facilitate the transition of
the performance of such activities to the new Servicer, and ▇▇▇▇▇▇ shall
cooperate with and assist such new Servicer. Such cooperation shall include
access to and transfer of related records and use by the new Servicer of all
licenses, hardware or software necessary or desirable to collect the Pool
Receivables and the Related Security.
(c) ▇▇▇▇▇▇ acknowledges that, in making their decision to execute and
deliver this Agreement, the Administrator and the Issuer have relied on ▇▇▇▇▇▇'▇
agreement to act as Servicer hereunder. Accordingly, ▇▇▇▇▇▇ agrees that it will
not voluntarily resign as Servicer.
(d) The Servicer may 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
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giving notice of its desire to terminate such agreement to the Servicer (and the
Servicer shall provide appropriate notice to each such Sub-Servicer); PROVIDED,
HOWEVER, that if any such delegation is to any Person other than an Originator,
the Administrator shall have consented in writing in advance to such delegation.
Section IV.2. DUTIES OF THE SERVICER. (a) 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 Policies. 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 applicable Credit and Collection
Policy, extend the maturity of any Pool Receivable (but not beyond 30 days) 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 ▇▇▇▇▇▇ or
an Affiliate thereof is serving as the Servicer, ▇▇▇▇▇▇ or such Affiliate may
make such extension or adjustment only upon the prior 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 ▇▇▇▇▇▇ or any
other Person) to commence or settle any legal action to enforce collection of
any Pool Receivable or to foreclose upon or repossess any Related Security;
PROVIDED, HOWEVER, that no such direction may be given unless a Termination
Event has occurred.
(b) 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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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.
(c) 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 ▇▇▇▇▇▇ 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
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materials that the Seller previously provided to the Servicer, or that have been
obtained by the Servicer, in connection with this Agreement.
Section IV.3. LOCK-BOX ARRANGEMENTS. Within 30 days of the initial
purchase hereunder, the Seller shall enter into Lock-Box Agreements with all of
the Lock-Box Banks and deliver original counterparts thereof to the
Administrator. Upon the occurrence of a Termination Event, the Administrator may
at any time thereafter give notice to each Lock-Box Bank that the Administrator
is exercising its rights under the Lock-Box Agreements to do any or all of the
following: (a) to have the exclusive ownership and control of the Lock-Box
Accounts transferred to the Administrator and to exercise exclusive dominion and
control over the funds deposited therein, (b) to have the proceeds that are sent
to the respective Lock-Box Accounts redirected pursuant to the Administrator's
instructions rather than deposited in the applicable Lock-Box Account, and (c)
to take any or all other actions permitted under the applicable Lock-Box
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. The parties hereto hereby acknowledge
that if at any time the Administrator takes control of any Lock-Box Account, the
Administrator shall not have any rights to the funds therein in excess of the
unpaid amounts due to the Administrator, the Issuer or any other Person
hereunder, and the Administrator shall distribute or cause to be distributed
such funds in accordance with SECTION 4.2(b) and ARTICLE I (in each case as if
such funds were held by the Servicer thereunder).
Section IV.4. ENFORCEMENT RIGHTS. (a) At any time following the
occurrence of a Termination Event:
(i) 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,
(ii) the Administrator may instruct the Seller or the Servicer
to 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 the Seller or the Servicer, as
the case may be, shall give such notice at the expense of the Seller or
the Servicer, as the case may be; PROVIDED, that if the Seller or the
Servicer, as the case may be, fails to so notify each Obligor, the
Administrator (at the Seller's or the Servicer's, as the case may be,
expense) may so notify the Obligors, and
(iii) 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 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
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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.
(b) 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 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.
Section IV.5. RESPONSIBILITIES OF THE SELLER. (a) Anything herein to
the contrary notwithstanding, the Seller shall: (i) perform all of its
obligations, if any, under the Contracts related to the Pool Receivables to the
same extent as if interests in such Pool Receivables had not been transferred
hereunder, and the exercise by the Administrator or the Issuer of their
respective rights hereunder shall not relieve the Seller from such obligations,
and (ii) 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, ▇▇▇▇▇▇ or the Originator thereunder.
(b) ▇▇▇▇▇▇ 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,
▇▇▇▇▇▇ shall conduct the data-processing functions of the administration of the
Receivables and the Collections thereon in substantially the same way that
▇▇▇▇▇▇ conducted such data-processing functions while it acted as the Servicer.
Section IV.6. SERVICING FEE. (a) Subject to CLAUSE (b), the Servicer
shall be paid a fee equal to 0.50% 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 ▇▇▇▇▇▇ 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 100% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.
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ARTICLE V.
MISCELLANEOUS
Section V.1. 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 Servicer and 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.
Section V.2. NOTICES, ETC. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and be sent or delivered to each party hereto
at its address set forth under its name on the signature pages hereof or at such
other address as shall be designated by such party in a written notice to the
other parties hereto. Notices and communications by facsimile shall be effective
when sent (and shall be followed by hard copy sent by first class mail), and
notices and communications sent by other means shall be effective when received.
Section V.3. ASSIGNABILITY. (a) 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 PNC, any Affiliate of PNC (other than a director or officer of PNC), 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 PNC or any
Affiliate of PNC. Each assignor may, in connection with the assignment, disclose
to the applicable assignee (that shall have agreed to be bound by SECTION 5.6)
any information relating to the Servicer, the Seller or the Pool Receivables
furnished to such assignor by or on behalf of the Servicer, the Seller, the
Issuer or the Administrator. The Administrator shall give prior written notice
of any assignment of the Issuer's rights and obligations (including ownership of
the Purchased Interest to any Person other than a Program Support Provider).
(b) 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
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participating interest to a Purchaser or other Program Support Provider, the
Issuer shall remain responsible for the performance of its obligations
hereunder. The Seller agrees that each Purchaser or other Program Support
Provider shall be entitled to the benefits of SECTIONS 1.8 and 1.9.
(c) 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 PNC, (ii) it becomes unlawful for PNC 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.
(d) Except as provided in SECTION 4.1(d), none of the Seller, ▇▇▇▇▇▇ or
the Servicer may assign its rights or delegate its obligations hereunder or any
interest herein without the prior written consent of the Administrator.
(e) 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.
(f) Notwithstanding the other provisions of this Section, no assignee
pursuant to CLAUSE (a) or grantee pursuant to CLAUSE (b) (other than, in either
case, any Affiliate of PNC, any Purchaser that was party to the Liquidity
Agreement on the date hereof or any other Person as to which the Seller has
provided its consent pursuant to CLAUSE (a)) shall be entitled to receive any
greater amount pursuant to SECTIONS 1.8 or 1.9 than the assignor or grantor, as
applicable, would have been entitled to receive in respect of the Purchased
Interest or rights and obligations herein.
Section V.4. COSTS, EXPENSES AND TAXES. (a) In addition to the rights
of indemnification granted under SECTION 3.1, the Seller agrees to pay on demand
(which demand shall be accompanied by documentation thereof in reasonable
detail) 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; PROVIDED,
HOWEVER, that the Seller shall not be responsible for such preparation,
execution, delivery and administration costs and expenses (including Attorney
Costs) of parties who become Purchasers under the Liquidity Agreement pursuant
to SECTION 9 thereof, other than such costs and expenses in connection with the
enforcement of this Agreement or any other Transaction Document.
(b) 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
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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.
Section V.5. NO PROCEEDINGS; LIMITATION ON PAYMENTS. Each of the
Seller, ▇▇▇▇▇▇, the Servicer, the Administrator, each assignee of the Purchased
Interest or any interest therein, and each Person that enters into a commitment
to purchase the Purchased Interest or interests 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.
Section V.6. CONFIDENTIALITY. Unless otherwise required by applicable
law or the terms of the Indenture, dated as of November 24, 1997, among ▇▇▇▇▇▇
Holding Co. (DE), Inc., the guarantors listed therein, and IBJ ▇▇▇▇▇▇▇▇ Bank &
Trust Company, each of the Seller and the Servicer agrees to maintain the
confidentiality of this Agreement and the other Transaction Documents (and all
drafts 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, and (b) the Seller's
legal counsel and auditors if they agree to hold it confidential. Unless
otherwise required by applicable law, each of the Administrator and the Issuer
agrees to maintain the confidentiality of non-public financial information
regarding ▇▇▇▇▇▇ and its Subsidiaries and other non-public information marked as
confidential by the Servicer or the Seller; 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 ▇▇▇▇▇▇, (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 ▇▇▇▇▇▇ (such consent not to be
unreasonably withheld), (iv) any Program Support Provider or potential Program
Support Provider (if they agree to hold it confidential) 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 ▇▇▇▇▇▇
(such consent not to be unreasonably withheld), (v) any placement agent placing
the Notes and (vi) any regulatory authorities having jurisdiction over PNC, the
Issuer, any Program Support Provider or any Purchaser.
Section V.7. GOVERNING LAW AND JURISDICTION. (a) 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
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COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
(b) 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.
Section V.8. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which, when so executed, shall be deemed
to be an original, and all of which, when taken together, shall constitute one
and the same agreement.
Section 5.9. SURVIVAL OF TERMINATION. The provisions of SECTIONS 1.8,
1.9, 3.1, 3.2, 5.4, 5.5, 5.6, 5.7, 5.10 and 5.13 shall survive any termination
of this Agreement.
Section V.10. 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.
Section V.11. 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 suc/h Persons, verbal or written, relating to
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the subject matter hereof and thereof, except for any prior arrangements made
with respect to the payment by the Issuer of (or any indemnification for) any
fees, costs or expenses payable to or incurred (or to be incurred) by or on
behalf of the Seller, the Servicer and the Administrator.
Section V.12. 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.
Section V.13. 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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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.
▇▇▇▇▇▇ FUNDING CORPORATION
By:___________________________________________________
Name:_____________________________________________
Title:____________________________________________
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (724) 588-2000 ext. 2732
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ CO.
By:___________________________________________________
Name:_____________________________________________
Title:____________________________________________
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (724) 588-2000 ext. 2732
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ FUNDING CORPORATION
By:______________________________________________
Name:_________________________________________
Title:________________________________________
Address:
Market Street Funding Corporation
c/o AMACAR Group, L.L.C.
▇▇▇▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
PNC Bank, National Association
One PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By:______________________________________________
Name:_________________________________________
Title:________________________________________
Address:
PNC Bank, National Association
One PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇
▇▇
▇▇▇▇▇▇▇▇▇ No.: (▇▇▇) ▇▇▇-▇▇▇▇
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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.
"Administration Account" means the account (account number 1002422076)
of the Administrator maintained at the office of PNC at One PNC Plaza, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, 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.
"Advertising Allowance" means on any date an amount, determined as of
the last day of each calender month, equal to the aggregate amounts maintained
as liabilities on the general ledger of the Originator for rebate and allowance
programs.
"Affected Person" has the meaning set forth in Section 1.8 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, at the
Seller's option: (a) 1.25% per annum above the Eurodollar Rate for such
Settlement Period, or (b) the Base Rate for such Settlement Period; PROVIDED,
HOWEVER, that in the case of:
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(i) any Settlement Period on or before the first day of which
the Administrator shall have been notified by the Issuer, a Purchaser
or any other Program Support Provider that the introduction of or any
change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other Governmental Authority asserts
that it is unlawful, for the Issuer, such Purchaser or other Program
Support Provider, as applicable, to fund any Portion of Capital based
on the Eurodollar Rate (and the Issuer, such Purchaser or other Program
Support Provider shall not have subsequently notified the Administrator
that such circumstances no longer exist),
(ii) any Settlement Period of one to (and including) 15 days,
(iii) any Settlement Period as to which: (A) the Administrator
does not receive notice before noon (New York City time) on: (1) the
second Business Day preceding the first day of such Settlement Period
that the Seller desires that the related Portion of Capital be funded
at the CP Rate, or (2) the third Business Day preceding the first day
of such Settlement Period that the Seller desires that the related
Portion of Capital be funded at the Alternate Rate and based on the
Eurodollar Rate, or (B) the Seller has given the notice contemplated by
CLAUSE (A)(1), and the Administrator shall have notified the Seller
that funding the related Portion of Capital at the CP Rate is (in the
Administrator's sole discretion) economically inadvisable to the
Issuer, the Administrator, the Seller or any similarly situated Person,
or the Issuer is not permitted to issue Notes to fund the Purchased
Interest hereunder, or
(iv) any Settlement Period relating to a Portion of Capital
that is less than $5,000,000,
the "Alternate Rate" for each such Settlement Period shall be an interest rate
per annum equal to the Base Rate in effect on each day of such Settlement
Period. The "Alternate Rate" for any day while a Termination Event exists shall
be an interest rate equal to 2% per annum above the Base Rate in effect on such
day.
"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.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978
(11 U.S.C. Section 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:
(a) the rate of interest in effect for such day as publicly
announced from time to time by PNC in Pittsburgh, Pennsylvania as its
"prime rate." Such "prime rate" is set by PNC
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based upon various factors, including PNC's costs and desired return,
general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above
or below such announced rate, and
(b) 0.50% per annum above the latest Federal Funds Rate.
"Benefit Plan" means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller, Originator, ▇▇▇▇▇▇ 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.
"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 City, New
York or Pittsburgh, Pennsylvania, 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 accordance with Section 1.7 of the Agreement, 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 ▇▇▇▇▇▇ ceases to own, directly or
indirectly, 100% of the capital stock of the Seller free and clear of all
Adverse Claims or a majority of the capital stock of Originator.
"Closing Date" means June 2, 1998.
"Collections" means, with respect to any Pool Receivable: (a) all funds
that are received by 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
Collections deemed to have been received pursuant to Section 1.4(e) of the
Agreement and (c) all other proceeds of such Pool Receivable.
"Company Note" has the meaning set forth in SECTION 3.1 of the Purchase
and Sale Agreement.
"Concentration Percentage" means: (a) for Home Depot, 35% as long as
Home Depot would be considered a Group A Obligor and for any other Group A
Obligor, 20%, (b) for any Group B
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Obligor, 14%, (c) for any Group C Obligor, 7% and (d) for True Serv and Home
Base, 4% as long as such entities would be considered a Group D Obligor and for
any other Group D Obligor, 2%; 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
"Concentration Reserve" means, at any time: (a) the aggregate Capital
at such time multiplied by (b)(i) the product of (A) 1.05, times (B) the
Concentration Reserve Percentage, divided by (ii) 100%, minus the Concentration
Reserve Percentage.
"Concentration Reserve Percentage" means, at any time, the largest of:
(a) the sum of four largest Group D Obligor Percentages, (b) the sum of the two
largest Group C Obligor Percentages and (c) the largest Group B Obligor
Percentage.
"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 means a
rate calculated by the Administrator equal to: (a) 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; PROVIDED, that if
such rate(s) is a discount rate(s), then the CP Rate shall be the rate (or if
more than one rate, the weighted average of the rates) resulting from converting
such discount rate(s) to an interest-bearing equivalent rate plus (b) the
commissions and charges charged by such placement agent or commercial paper
dealer with respect to such Notes, expressed as a percentage of the face amount
of such Notes and converted to an interest-bearing equivalent rate per annum.
Notwithstanding the foregoing, the "CP Rate" for any day while a Termination
Event exists shall be an interest rate equal to 2% above the Base Rate in effect
on such day.
"Credit and Collection Policy" means, as the context may require, those
receivables credit and collection policies and practices of Originator in effect
on the date of the Agreement and described in Schedule I to the Agreement, as
modified in compliance with the Agreement.
"Cut-off Date" has the meaning set forth in the Sale Agreement.
"Days' Sales Outstanding" means, for any calendar month, an amount
computed as of the last day of such calendar month 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 calendar months ended on the last day of such calendar
month divided by (b)(i) the aggregate credit sales made by the Originator during
the three calendar months ended on or before the last day of such calendar month
divided by (ii) 90.
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"Debt" means: (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).
"Debt-to-Capital Ratio" means, with respect to Ace Hardware, the ratio
(expressed as a percentage and rounded upward to the nearest 1/100 of 1% with
5/1000 of 1% rounded upward) computed as of the last day of each fiscal quarter
by dividing (a) Ace Hardware's total debt on such date, by (b) the sum of (i)
Ace Hardware's total debt on such date plus (ii) the total shareholder's equity
of Ace Hardware on such date.
"Defaulted Receivable" means a Receivable:
(a) as to which any payment, or part thereof, remains unpaid
for more than 60 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) that has been written off the Seller's books as
uncollectible.
"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 calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that became Defaulted Receivables during such
month, by (b) the aggregate credit sales made by the Originator during the month
that is three calendar months before such month.
"Deferred Payment Receivable" means a Receivable, the stated maturity
date of which has been extended in accordance with a specific payment deferral
marketing program; PROVIDED, HOWEVER, that (i) the stated maturity date of such
Receivable, as extended, shall in no case exceed 180 days after the original
invoice date, and (ii) such deferral marketing program is only offered in the
months of November, December or January.
"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 calendar month by dividing: (a) the aggregate
Outstanding Balance of all Pool Receivables that were Delinquent Receivables on
such day by (b) the aggregate Outstanding Balance of all Pool Receivables on
such day.
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"Delinquent Receivable" means a 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 Horizon" means, for any calendar month, the ratio (expressed
as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1%
rounded upward) computed as of the last day of such calendar month of: (a) the
aggregate credit sales made by the Originator during the most recent two
calendar months to (b) the aggregate Outstanding Balance of the Eligible
Receivables at the last day of the most recent calendar month.
"Dilution Ratio" means the ratio (expressed as a percentage and rounded
to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as
of the last day of each calendar month by dividing: (a) the aggregate amount of
payments made or owed by the Seller pursuant to Section 1.4(e)(i) of the
Agreement (other than the amount which constitutes Advertising Allowance) during
such calendar month by (b) the aggregate credit sales made by all the
Originators during the calendar month that is two months prior to such calendar
month.
"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 on such date, DIVIDED BY (ii) 100% minus the
Dilution Reserve Percentage on such date.
"Dilution Reserve Percentage" means on any date, the greater of: (a) 4%
or (b) the product of (i) the Dilution Horizon multiplied by (ii) the sum of (x)
2 times the average of the Dilution Ratios for the twelve most recent calendar
months and (y) the Spike Factor.
"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,
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C = the Portion of Capital during such
Settlement Period,
CPR = the CP Rate for the Portion of Capital for
such Settlement Period,
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, 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, the aggregate Outstanding
Balance of all Receivables of such Obligor when added to the aggregate
Outstanding Balance of all other Receivables of Obligors that are not
residents of the United States shall not exceed 2.5% of the aggregate
Outstanding Balance of Pool Receivables at such time, (ii) not a
government or a governmental subdivision, affiliate or agency, (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 ▇▇▇▇▇▇ or any
Affiliate of ▇▇▇▇▇▇,
(b) that is denominated and payable only in U.S. dollars in
the United States,
(c) that does not, except in the case of a Deferred Payment
Receivable, have a stated maturity which is more than 120 days after
the original invoice date of such Receivable; PROVIDED, HOWEVER, that
in the case of a Deferred Payment Receivable, the Outstanding Balance
of such Deferred Payment Receivable when added to the aggregate
Outstanding Balance of all other Deferred Payment Receivables, shall
not exceed 7% of the aggregate Outstanding Balance of all Pool
Receivables,
(d) that arises under a duly authorized Contract for the sale
and delivery of goods and services in the ordinary course of
Originator's business,
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(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
applicable 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 neither a Defaulted Receivable nor a Delinquent
Receivable,
(n) for which neither the Originator thereof, the Seller nor
the Servicer has established any offset arrangements with the related
Obligor,
(o) for which 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 the
Originator thereof.
"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.
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"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, Originator or ▇▇▇▇▇▇, (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, Originator or
▇▇▇▇▇▇, 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, 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) May 28,
2003, (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
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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.
"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 (i) an Obligor, not a Group A Obligor or a
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
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its long-term senior unsecured and uncredit-enhanced debt securities and (ii)
Ace Hardware, if Ace Hardware remains unrated by the Rating Agencies and
maintains a Debt-to-Capital Ratio of not greater than 45%.
"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.
"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.
"Information Package" means a report, in substantially the form of
Annex A to the Agreement, furnished to the Administrator pursuant to the
Agreement.
"Insolvency Proceeding" 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, composition, marshaling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, in each case undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.
"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.
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"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 each
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 PNC in its capacity as the Liquidity Agent
pursuant to the Liquidity Agreement.
"Liquidity Agreement" means the Liquidity Asset Purchase Agreement,
dated as of May 29, 1998 between the purchasers from time to time party thereto,
the Issuer and PNC, 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 A 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) 100% minus the Loss Reserve
Percentage on such date.
"Loss Reserve Percentage" means, on any date, the greater of: (a) 8% or
(b) (i) the product of (A) 2 times the highest average of the Default Ratios for
any three consecutive calendar months during the twelve most recent calendar
months multiplied by (B) the aggregate credit sales made during the four most
recent calendar months divided by (ii) the aggregate Outstanding Balance of
Eligible Receivables as of 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,
(b) the ability of any of such Person to perform its
obligations under the Agreement or any other Transaction Document to
which it is a party,
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(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 Settlement Date" means the fifteenth Business Day of each
calendar month.
"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 minus (c) the Advertising Allowance.
"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 Sale Agreement.
"Originator Assignment Certificate" means each assignment, in
substantially the form of EXHIBIT C to the Sale Agreement, evidencing Seller's
ownership of the Receivables generated by 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 2.1 of the Sale
Agreement.
"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.
"PNC" has the meaning set forth in the preamble to the Agreement.
"Pool Assets" has the meaning set forth in Section 1.2(d) of the
Agreement.
"Pool Receivable" means a Receivable in the Receivables Pool.
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"Portion of Capital" has the meaning set forth in Section 1.7 of the
Agreement. In addition, at any time when the Capital of the Purchased Interest
is not divided into two or more such portions, "Portion of Capital" means 100%
of the Capital.
"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 Indemnified Amounts" has the meaning set forth in
SECTION 9.1 of the Sale Agreement.
"Purchase and Sale Indemnified Party" has the meaning set forth in
SECTION 9.1 of the Sale Agreement.
"Purchase and Sale Termination Date" has the meaning set forth in
SECTION 1.4 of the Sale Agreement.
"Purchase and Sale Termination Event" has the meaning set forth in
SECTION 8.1 of the Sale Agreement.
"Purchase Facility" has the meaning set forth in SECTION 1.1 of the
Sale Agreement.
"Purchase Limit" means $50,000,000, 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 Sale
Agreement.
"Purchase Report" has the meaning set forth in SECTION 2.1 of the Sale
Agreement.
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"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 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 right of the Seller or Originator to payment
from or on behalf of, an Obligor arising in connection with the sale of goods or
the rendering of services by Originator in the ordinary course of business to
its customers, and includes the obligation to pay any finance charges, fees and
other charges with respect thereto. Any right of the Seller or Originator
arising from any one transaction, including any such right represented by an
individual invoice or agreement, shall constitute a Receivable separate from a
Receivable arising from any other transaction.
"Receivables Pool" means, at any time, all of the then outstanding
Receivables purchased or disposed of by the Seller pursuant to the Sale
Agreement prior to the Facility Termination Date.
"Reference Bank" means PNC.
"Related Rights" has the meaning set forth in SECTION 1.1 of the Sale
Agreement.
"Related Security" means, with respect to any Receivable:
(a) all of the Seller's and the 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
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to such Receivable or otherwise, together with all UCC financing
statements or similar filings relating thereto, and
(d) all of the Seller's and 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.
"Sale Agreement" means the Purchase and Sale Agreement, dated as of May
29, 1998, between the Seller and the Originator as such agreement may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
"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.
"Settlement Period" means: (a) before the Facility Termination Date:
(i) initially the period commencing on the date of the initial purchase pursuant
to Section 1.2 of the Agreement (or in the case of any fees payable hereunder,
commencing on the Closing Date) and ending on (but not including) the next
Monthly Settlement Date, and (ii) thereafter, each period commencing on such
Monthly Settlement Date and ending on (but not including) the next Monthly
Settlement Date, and (b) on and after the Facility Termination Date: such period
(including a period of one day) as shall be selected from time to time by the
Administrator or, in the absence of any such selection, each period of 30 days
from the last day of the preceding Settlement Period.
"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
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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.
"Spike Factor" means, for any calendar month, the positive difference,
if any, between: (a) the highest average of the Dilution Ratios for any three
consecutive calendar months during the twelve most recent calendar months and
(b) the arithmetic average of the Dilution Ratios for such twelve months.
"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.
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"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) the greater of (i) the sum of (A) the Loss Reserve plus (B) the
Dilution Reserve, and (ii) the Concentration Reserve.
"Transaction Documents" means the Agreement, the Lock-Box Agreements,
the Liquidity Agreement, the Fee Letter, the 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.
"Turnover Rate" means, for any Settlement Period: (a) the Outstanding
Balance of all Pool Receivables at the end of such Settlement Period divided by
(b) all Collections during such Settlement Period.
"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.
"▇▇▇▇▇▇" has the meaning set forth in the preamble to the Agreement.
"Yield Reserve" means, at any time:
(BR + SFR x 1.5(TR) x Capital)
▇-▇▇
▇▇
▇▇
where:
BR = the Base Rate in effect at such time,
TR = the Turnover Rate, and
SFR = the Servicing Fee Rate
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.
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EXHIBIT II
CONDITIONS OF PURCHASES
1. 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.
(b) Certified copies of: (i) the resolutions of the Board of Directors
of each of the Seller, the Originator and ▇▇▇▇▇▇ authorizing the execution,
delivery and performance by the Seller, Originator and ▇▇▇▇▇▇, 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 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 of the Seller,
Originator and ▇▇▇▇▇▇.
(c) A certificate of the Secretary or Assistant Secretary of the
Seller, Originator and ▇▇▇▇▇▇ 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, Originator or ▇▇▇▇▇▇, as the case may be, the Administrator
shall be entitled to rely on the last such certificate delivered to it by the
Seller, Originator or ▇▇▇▇▇▇, as the case may be.
(d) 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 and the Sale Agreement.
(e) 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 the Originator, ▇▇▇▇▇▇ or the Seller.
(f) 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 the
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 request, showing no Adverse Claims on
any Pool Assets.
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(g) Intentionally Omitted.
(h) Favorable opinions, in form and substance reasonably satisfactory
to the Administrator, of: (i) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Seller,
the Originator, ▇▇▇▇▇▇ and the Servicer, and (ii) ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.,
counsel for Seller and the Originator.
(i) 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 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.
(j) A pro forma Information Package representing the performance of the
Receivables Pool for the calendar month before closing.
(k) 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.
(l) The Fee Letter duly executed by the Seller and the Servicer.
(m) Good standing certificates with respect to each of the Seller,
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.
(n) 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.
(o) The Liquidity Agreement and all other Transaction Documents duly
executed by the parties thereto.
(p) A computer file containing all information with respect to the
Receivables as the Administrator or the Issuer may reasonably request.
(q) Such other approvals, opinions or documents as the Administrator or
the Issuer may reasonably request.
2. 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
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Information Package to reflect the level of Capital and related reserves after
such subsequent purchase; and
(b) on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):
(i) the representations and warranties contained in 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
(ii) 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; PROVIDED, HOWEVER, that the
existence of an Unmatured Termination Event (other than an Unmatured
Termination Event of the type described in clause (i) of Exhibit V to
the Agreement or resulting from the failure of the Seller or the
Servicer to deliver any Information Package when due) shall not
prohibit any reinvestment or purchase on any day that does not cause
the Capital, after giving effect to such reinvestment or purchase, to
exceed the Capital as of the opening of business on such day .
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EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants as follows:
(a) The Seller 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.
(b) 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
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 it is a party have been duly
executed and delivered by the Seller.
(c) 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.
(d) Each of the Agreement and the other Transaction Documents to which
the Seller is a party constitutes its 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.
(e) 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.
(f) No proceeds of any purchase or reinvestment will be used to acquire
any equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
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(g) 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 Sale Agreement and the Issuer
relating to the Agreement.
(h) Each Information Package (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 (except as otherwise
disclosed to the Administrator at such time) as of the date so furnished,
(i) 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.
(j) 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.
(k) The Seller is not in violation of any order of any court,
arbitrator or Governmental Authority.
(l) Neither the Seller nor any of its Affiliates has any direct or
indirect ownership or other financial interest in the Issuer.
(m) 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.
(n) Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable.
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(o) 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.
(p) The Seller has accounted for each sale of undivided percentage
ownership interests in Receivables in its books and financial statements as
sales, consistent with generally accepted accounting principles.
(q) The Seller has complied in all material respects with the Credit
and Collection Policy of Originator with regard to each Receivable originated by
Originator.
(r) 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.
(s) The Seller's complete corporate name is set forth in the preamble
to the Agreement, and it does not use and has not during the last six years used
any other corporate 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(l)(iv) of Exhibit IV to the Agreement.
(t) 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.
2. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ (INCLUDING IN ITS CAPACITY
AS THE SERVICER).▇▇▇▇▇▇, individually and in its capacity as the Servicer,
represents and warrants as follows:
(a) ▇▇▇▇▇▇ 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.
(b) The execution, delivery and performance by ▇▇▇▇▇▇ 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
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Claim upon or with respect to any of its properties. The Agreement and the other
Transaction Documents to which ▇▇▇▇▇▇ is a party have been duly executed and
delivered by ▇▇▇▇▇▇.
(c) 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 ▇▇▇▇▇▇ of the Agreement or any other
Transaction Document to which it is a party.
(d) Each of the Agreement and the other Transaction Documents to which
▇▇▇▇▇▇ is a party constitutes the legal, valid and binding obligation of ▇▇▇▇▇▇
enforceable against ▇▇▇▇▇▇ 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.
(e) The balance sheets of ▇▇▇▇▇▇ and its consolidated Subsidiaries as
at December 31, 1997, 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 ▇▇▇▇▇▇ and its
consolidated Subsidiaries as at such date and the results of the operations of
▇▇▇▇▇▇ and its Subsidiaries for the period ended on such date, all in accordance
with generally accepted accounting principles consistently applied, and since
December 31, 1997 there has been no event or circumstances which have had a
Material Adverse Effect.
(f) Except as disclosed in the most recent audited financial statements
of ▇▇▇▇▇▇ 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.
(g) No proceeds of any purchase or reinvestment will be used to acquire
any equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
(h) Each Information Package (if prepared by ▇▇▇▇▇▇ or one of its
Affiliates, or to the extent that information contained therein is supplied by
▇▇▇▇▇▇ 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.
(i) The principal place of business and chief executive office (as such
terms are used in the UCC) of ▇▇▇▇▇▇ and the office where it keeps its records
concerning the Receivables are located at the address referred to in Section
2(b) of Exhibit IV to the Agreement.
(j) ▇▇▇▇▇▇ is not in violation of any order of any court, arbitrator or
Governmental Authority, which could have a Material Adverse Effect.
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54
(k) Neither ▇▇▇▇▇▇ nor any of its Affiliates has any direct or indirect
ownership or other financial interest in the Issuer.
(l) The Servicer has complied in all material respects with the Credit
and Collection Policy of Originator with regard to each Receivable originated by
Originator.
(m) ▇▇▇▇▇▇ 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.
(n) ▇▇▇▇▇▇ 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, ▇▇▇▇▇▇ 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.
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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 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 rights,
franchises, qualifications and privileges would not have a Material Adverse
Effect.
(b) 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 (l)(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 15 days'
written notice before making any change in the Seller's name or making any other
change in the Seller's identity or corporate 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). Notwithstanding the above, in no event shall the Seller
have or maintain, or be a partner in any partnership that has or maintains, its
jurisdiction of organization, principal place of business or principal assets in
any of the states of Colorado, Kansas, New Mexico, Oklahoma, Utah or Wyoming.
(c) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION
POLICY. The Seller shall (and shall cause the Servicer to), at its expense,
timely and fully perform and comply with all material provisions, covenants and
other promises required to be observed by it under the Contracts
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related to the Receivables, and timely and fully comply in all material respects
with the applicable Credit and Collection Policies with regard to each
Receivable and the related Contract.
(d) 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.
(e) 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.
(f) 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.
(g) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. The Seller
shall not make (or permit Originator to make) any material change in the
character of its business or in any Credit and Collection Policy, or any change
in any Credit and Collection Policy that would have a Material Adverse Effect
with respect to the Receivables. The Seller shall not make (or permit Originator
to make) any other change in any Credit and Collection Policy without giving
prior written notice thereof to the Administrator.
(h) AUDITS. The Seller shall (and shall cause 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 Originator) relating to Receivables and the Related Security, including the
related Contracts, and (ii) to visit the offices and properties of the Seller
and the 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, ▇▇▇▇▇▇'▇ or the Originator's performance under the
Transaction Documents or under the Contracts with any of the officers,
employees, agents or contractors of the Seller, ▇▇▇▇▇▇ or the Originator having
knowledge of such matters.
(i) CHANGE IN LOCK-BOX BANKS, LOCK-BOX ACCOUNTS AND PAYMENT
INSTRUCTIONS TO OBLIGORS. The Seller shall not, and shall not permit the
Servicer or Originator to, add or terminate any bank as
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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, the 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.
(j) 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 Originator into Lock-Box Accounts not later than one Business Day after
receipt thereof. Each Lock-Box Account shall at all times be subject to a
Lock-Box Agreement. 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.
(k) MARKING OF RECORDS. At its expense, the Seller shall: (i) ▇▇▇▇ (or
cause the Servicer to ▇▇▇▇) its master data processing records relating to Pool
Receivables and related Contracts, including with a legend evidencing that the
undivided percentage ownership interests with regard to the Purchased Interest
related to such Receivables and related Contracts have been sold in accordance
with the Agreement, and (ii) cause Originator so to ▇▇▇▇ its master data
processing records pursuant to the Sale Agreement.
(l) REPORTING REQUIREMENTS. The Seller will provide to the
Administrator (in multiple copies, if requested by the Administrator) the
following:
(i) as soon as available and in any event within 95 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;
(ii) as soon as possible and in any event within five days
after 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;
(iii) 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
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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;
(iv) at least fifteen 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;
(v) 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;
(vi) 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 Originator;
and
(vii) 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.
(m) CERTAIN AGREEMENTS. Without the prior written consent of the
Administrator, the Seller will not (and will not permit 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.
(n) 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 Note in accordance with its terms, and (B) if no amounts are
then outstanding under the Company Note, 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 $5,000,000, 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.
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(o) 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 Note; 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.).
(p) 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 Note; and (iii)
other legal and valid corporate purposes.
(q) TANGIBLE NET WORTH. The Seller will not permit its tangible net
worth, at any time, to be less than $5,000,000.
2. COVENANTS OF THE SERVICER AND ▇▇▇▇▇▇. 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, ▇▇▇▇▇▇ shall comply (and shall cause 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.
(b) OFFICES, RECORDS AND BOOKS OF ACCOUNT, ETC. The Servicer and, to
the extent that it ceases to be the Servicer, ▇▇▇▇▇▇, shall keep (and shall
cause Originator to keep) its principal place of business and chief executive
office (as such terms or similar terms are used in the applicable UCC) and the
office where it keeps its records concerning the Receivables at the address of
the Servicer set forth under its name on the signature page to the Agreement or,
upon at least 15 days' prior written notice of a proposed change to the
Administrator, 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. The Servicer and, to the extent that it ceases to be
the Servicer, ▇▇▇▇▇▇, also will (and will cause 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
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Receivables (including records adequate to permit the daily identification of
each Receivable and all Collections of and adjustments to each existing
Receivable).
(c) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION
POLICY. The Servicer and, to the extent that it ceases to be the Servicer,
▇▇▇▇▇▇, shall (and shall cause Originator to), at its expense, timely and fully
perform and comply with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the Receivables,
and timely and fully comply in all material respects with the Credit and
Collection Policy with regard to each Receivable and the related Contract.
(d) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as provided in the
Agreement, the Servicer and, to the extent that it ceases to be the Servicer,
▇▇▇▇▇▇, shall not extend (and shall not permit Originator 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.
(e) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. The Servicer
and, to the extent that it ceases to be the Servicer, ▇▇▇▇▇▇, shall not make
(and shall not permit Originator to make) any material change in the character
of its business or in any Credit and Collection Policy, or any change in any
Credit and Collection Policy that would have a Material Adverse Effect. The
Servicer and, to the extent that it ceases to be the Servicer, ▇▇▇▇▇▇, shall not
make (and shall not permit Originator to make) any other change in any Credit
and Collection Policy without giving prior written notice thereof to the
Administrator.
(f) AUDITS. The Servicer and, to the extent that it ceases to be the
Servicer, ▇▇▇▇▇▇, shall (and shall cause 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.
(g) CHANGE IN LOCK-BOX BANKS, LOCK-BOX ACCOUNTS AND PAYMENT
INSTRUCTIONS TO OBLIGORS. The Servicer and, to the extent that it ceases to be
the Servicer, ▇▇▇▇▇▇, shall not (and shall not permit 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 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.
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(h) 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 shall at all times
be subject to a Lock-Box Agreement. 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.
(i) MARKING OF RECORDS. At its expense, the Servicer shall ▇▇▇▇ its
master data processing records relating to Pool Receivables and related
Contracts, including with a legend evidencing that the undivided percentage
ownership interests with regard to the Purchased Interest related to such
Receivables and related Contracts have been sold in accordance with the
Agreement.
(j) REPORTING REQUIREMENTS. ▇▇▇▇▇▇ shall provide to the Administrator
(in multiple copies, if requested by the Administrator) the following:
(i) as soon as available and in any event within 50 days after
the end of the first three quarters of each fiscal year of ▇▇▇▇▇▇,
balance sheets of ▇▇▇▇▇▇ Holding Co. (PA), Inc. and its consolidated
Subsidiaries as of the end of such quarter and statements of income,
retained earnings and cash flow of ▇▇▇▇▇▇ Holding Co. (PA), Inc. and
its consolidated Subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter,
certified by the chief financial officer of such Person;
(ii) as soon as available and in any event within 95 days
after the end of each fiscal year of such Person, a copy of the annual
report for such year for such Person and its consolidated Subsidiaries,
containing financial statements for such year audited by independent
certified public accountants of nationally recognized standing;
(iii) as to the Servicer only, as soon as available and in any
event not later than the twelfth Business Day after the last day of
each calendar month, an Information Package as of the last day of such
month or, if in the opinion of the Administrator reasonable grounds for
insecurity exist with respect to the collectibility of the Pool
Receivables or with respect to the Seller or Servicer's performance or
ability to perform its obligations under the Agreement, within six
Business Days of a request by the Administrator, an Information Package
for such periods as is specified by the Administrator (but in no event
more frequently than weekly);
(iv) as soon as possible and in any event within five days
after becoming aware of the occurrence of each Termination Event or
Unmatured Termination Event, a statement of the chief financial officer
of ▇▇▇▇▇▇ setting forth details of such Termination Event or
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Unmatured Termination Event and the action that such Person has taken
and proposes to take with respect thereto;
(v) promptly after the sending or filing thereof, copies of
all reports that ▇▇▇▇▇▇ sends to any of its security holders, and
copies of all reports and registration statements that ▇▇▇▇▇▇ or any
Subsidiary files with the Securities and Exchange Commission or any
national securities exchange; provided, that any filings with the
Securities and Exchange Commission that have been granted
"confidential" treatment shall be provided promptly after such filings
have become publicly available;
(vi) promptly after the filing or receiving thereof, copies of
all reports and notices that ▇▇▇▇▇▇ 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
▇▇▇▇▇▇ and/or any such Affiliate;
(vii) at least fifteen days before any change in ▇▇▇▇▇▇'▇ or
Originator's name or any other change requiring the amendment of UCC
financing statements, a notice setting forth such changes and the
effective date thereof;
(viii) promptly after ▇▇▇▇▇▇ obtains knowledge thereof, notice
of any: (A) litigation, investigation or proceeding that may exist at
any time between ▇▇▇▇▇▇ or any of its Subsidiaries and any Governmental
Authority that, if not cured or if adversely determined, as the case
may be, would have a Material Adverse Effect; (B) litigation or
proceeding adversely affecting such Person or any of its Subsidiaries
in which the amount involved is $5,000,000 or more and not covered by
insurance or in which injunctive or similar relief is sought; or (C)
litigation or proceeding relating to any Transaction Document;
(ix) promptly after the occurrence thereof, notice of a
material adverse change in the business, operations, property or
financial or other condition of ▇▇▇▇▇▇ or any of its Subsidiaries; and
(x) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of ▇▇▇▇▇▇ or any of
its Affiliates as the Administrator may from time to time reasonably
request.
3. SEPARATE EXISTENCE. Each of the Seller and ▇▇▇▇▇▇ 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
▇▇▇▇▇▇ and its Affiliates. Therefore, from and after the date hereof, each of
the
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Seller and ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ and any
other Person, and is not a division of ▇▇▇▇▇▇, 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
▇▇▇▇▇▇ shall take such actions as shall be required in order that:
(a) The Seller will be a limited purpose corporation whose
primary activities are restricted in its certificate of incorporation
to: (i) purchasing or otherwise acquiring from the Originator, owning,
holding, 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 ▇▇▇▇▇▇ or any of its
Affiliates. The certificate of incorporation 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, ▇▇▇▇▇▇ 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,
which servicer 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. The Seller will not incur any material indirect or
overhead expenses for items shared with ▇▇▇▇▇▇ (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,
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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 ▇▇▇▇▇▇ shall pay all expenses relating to the
preparation, negotiation, execution and delivery of the Transaction
Documents, including legal, agency and other fees;
(g) The Seller's operating expenses will not be paid by ▇▇▇▇▇▇
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 ▇▇▇▇▇▇ and any other Affiliate thereof;
(j) All financial statements of ▇▇▇▇▇▇ or any Affiliate
thereof that are consolidated to include Seller will contain detailed
notes clearly stating that: (i) a special purpose corporation exists as
a Subsidiary of ▇▇▇▇▇▇, and (ii) the Originator has 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 ▇▇▇▇▇▇
or any Affiliate thereof;
(l) The Seller will strictly observe corporate formalities in
its dealings with ▇▇▇▇▇▇ or any Affiliate thereof, and funds or other
assets of the Seller will not be commingled with those of ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ or any
Affiliate thereof (other than ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ or any
Subsidiary or other Affiliate of ▇▇▇▇▇▇. 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
▇▇▇▇▇▇ (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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ will immediately correct any known
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65
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) ▇▇▇▇▇▇ shall not pay the salaries of Seller's employees,
if any.
▇▇-▇▇
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇ EVENTS
Each of the following shall be a "Termination Event":
(a)(i) the Seller, ▇▇▇▇▇▇, any Originator or the Servicer (if ▇▇▇▇▇▇ or
any of its Affiliates) shall fail to perform or observe any term, covenant or
agreement under the Agreement or any other Transaction Document and, except as
otherwise provided herein, such failure shall continue for 30 days after
knowledge or notice thereof, (ii) the Seller or the Servicer 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 two Business Days or (iii) ▇▇▇▇▇▇ shall
resign as Servicer, and no successor Servicer reasonably satisfactory to the
Administrator shall have been appointed;
(b) ▇▇▇▇▇▇ (or any Affiliate thereof) shall fail to transfer to any
successor Servicer when required any rights pursuant to the Agreement that
▇▇▇▇▇▇ (or such Affiliate) then has as Servicer;
(c) any representation or warranty made or deemed made by the Seller,
▇▇▇▇▇▇ or 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, ▇▇▇▇▇▇ or 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, and shall remain incorrect or untrue for 30 days after
notice to the Seller or the Servicer of such inaccuracy;
(d) the Seller or the Servicer shall fail to deliver the Information
Package pursuant to the Agreement, and such failure shall remain unremedied for
five days;
(e) 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 each Pool Receivable, the Related Security and Collections with
respect thereto, free and clear of any Adverse Claim, or (ii) cease to create
with respect to the Pool Assets, 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,
(f) the Seller, ▇▇▇▇▇▇ or Originator shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Seller,
▇▇▇▇▇▇ or 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
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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, ▇▇▇▇▇▇ or Originator shall take any corporate action to
authorize any of the actions set forth above in this paragraph;
(g)(i) the (A) Default Ratio shall exceed 4.0% or (B) the Delinquency
Ratio shall exceed 7.0% or (ii) the average for three consecutive calendar
months of: (A) the Default Ratio shall exceed 3.0%, (B) the Delinquency Ratio
shall exceed 5.4% or (C) the Dilution Ratio shall exceed 4.5%.
(h) a Change in Control shall occur,
(i) 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 (other than amounts set aside therein representing
Discount and fees), and such circumstance shall not have been cured within five
Business Days,
(j) (i) ▇▇▇▇▇▇ 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 $10,000,000 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 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 to accelerate the maturity of such Debt and
such applicable debtholders shall not have waived such event or condition within
45 days of the occurrence thereof, 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) a contribution failure shall occur with respect to any
Benefit Plan sufficient to give rise to a lien under Section 302(f) of ERISA,
(ii) the Internal Revenue Service shall file a notice of lien asserting a claim
or claims of $100,000 or more in the aggregate pursuant to the Internal Revenue
Code with regard to any of the assets of Seller, Originator, ▇▇▇▇▇▇ or any ERISA
Affiliate and such lien shall have been filed and not released within 10 days,
or (iii) the Pension Benefit Guaranty Corporation shall, or shall indicate its
intention in writing to the Seller, Originator, ▇▇▇▇▇▇ or any ERISA Affiliate
to, either file a notice of lien asserting a claim pursuant to ERISA with regard
to any assets of the Seller, Originator, ▇▇▇▇▇▇ or any ERISA Affiliate or
terminate any Benefit Plan
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that has unfunded benefit liabilities, or any steps shall have been taken to
terminate any Benefit Plan subject to Title IV of ERISA so as to result in any
liability in excess of $1,000,000 and such lien shall have been filed and not
released within 10 days.
(l) The Days' Sales Outstanding for any calendar month shall exceed 65
days.
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SCHEDULE I
CREDIT AND COLLECTION POLICY
Schedule I-1
70
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
LOCK-BOX BANK LOCK-BOX ACCOUNTS LOCK-BOX NUMBER
------------- ----------------- ---------------
Schedule II-1
71
SCHEDULE III
TRADE NAMES
Schedule III-1
72
ANNEX A
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF INFORMATION PACKAGE
Annex A-1