EXHIBIT 10.31
LETTER OF CREDIT
REIMBURSEMENT AGREEMENT
Dated as of February 10, 1993
Among
DISTRIBUTION FUNDING CORPORATION,
▇▇▇▇▇▇ INDUSTRIES INC.,
▇▇▇▇▇▇ FUNDING INC.,
CHEMICAL BANK, as Collateral Agent,
and
THE LOC ISSUERS NAMED HEREIN
with
THE BANK OF NOVA SCOTIA,
NATIONSBANK OF NORTH CAROLINA, N.A. and
THE INDUSTRIAL BANK OF JAPAN, LIMITED, ATLANTA AGENCY,
as Lead Managers
LETTER OF CREDIT REIMBURSEMENT AGREEMENT
LETTER OF CREDIT REIMBURSEMENT AGREEMENT dated as of February 10, 1993,
among CHEMICAL BANK, NATIONSBANK OF NORTH CAROLINA, N.A. and THE BANK OF NOVA
SCOTIA (each, an "LOC Issuer", and together, the "LOC Issuers"), DISTRIBUTION
FUNDING CORPORATION (the "CP Issuer"), ▇▇▇▇▇▇ FUNDING INC. ("Funding" or the
"Transferor"), ▇▇▇▇▇▇ INDUSTRIES INC. ("Ingram" or the "Servicer"), and
CHEMICAL BANK, as collateral agent under the Pledge and Security Agreement
referred to herein (the "Collateral Agent"), with The Bank of Nova Scotia,
NationsBank of North Carolina, N.A. and the Industrial Bank of Japan, Limited,
Atlanta Agency, as Lead Managers.
W I T N E S S E T H :
WHEREAS, the CP Issuer proposes to acquire from Funding the Variable
Funding Certificate issued by ▇▇▇▇▇▇ Funding Master Trust pursuant to a
Pooling and Servicing Agreement dated as of February 10, 1993 among
Funding, as Transferor, Ingram, as Servicer, and Chemical Bank, as Trustee;
WHEREAS, the CP Issuer, Funding, Ingram, certain banks (the "Banks") and
Chemical Bank, as agent for the Banks (in such capacity, the "Liquidity
Agent"), have entered into a Liquidity Agreement, dated as of February 10,
1993, as amended from time to time (the "Liquidity Agreement"), pursuant to
which the Banks have agreed to make Loans to the CP Issuer from time to time,
and the CP Issuer will issue its Commercial Paper;
WHEREAS, the CP Issuer will utilize the proceeds of the Revolving Loans
and the proceeds of the Commercial Paper to acquire the Initial Issuer Amount,
and from time to time Issuer Additional Amounts, in respect of the Variable
Funding Certificate and to pay certain fees and expenses of the CP Issuer;
WHEREAS, the Banks have agreed to make Refunding Loans to the CP Issuer
for the sole purpose of enabling the CP Issuer to satisfy its obligations in
respect of the Commercial Paper;
WHEREAS, as a condition to the CP Issuer's acquisition of the Variable
Funding Certificate, Funding has made application to each LOC Issuer to
issue an irrevocable letter of credit in favor of the Collateral Agent,
which irrevocable letters of credit shall constitute credit support for the
Variable Funding Certificate;
WHEREAS, Ingram has conveyed the Receivables supporting the Variable
Funding Certificate to the Transferor (prior to the Transferor's conveyance of
such Receivables to the Trust), will act as Servicer thereof, and is
willing to make certain agreements for the benefit of the LOC Issuers as
provided herein;
WHEREAS, the CP Issuer and the Collateral Agent and, solely for the
limited purpose described therein, the Liquidity Agent, the LOC Issuers, the
Depositary, the CP Dealer and the Manager are entering into a Pledge and
Security Agreement, dated as of February 10, 1993, as amended from time to
time (the "Security Agreement"); and
WHEREAS, subject to the terms and conditions set forth herein, each LOC
Issuer is willing to issue its LOC to the Collateral Agent.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Letter of Credit
Reimbursement Agreement and unless the context requires a different meaning,
capitalized terms used herein and not otherwise defined have the meanings
assigned to such terms in Annex X hereto which is incorporated by reference
herein and shall include in the singular number the plural and in the plural
number the singular.
"Agreement" shall mean this Letter of Credit Reimbursement Agreement as
it may from time to time be amended, supplemented or otherwise modified in
accordance with the terms hereof.
ARTICLE II
ISSUANCE OF THE LOCs;
REIMBURSEMENT OBLIGATION
Section 2.01. Issuance of LOCs; Substitute LOCs; Extensions of the
LOCs. (a) Each LOC Issuer hereby severally agrees, on the terms and
subject to the conditions hereinafter set forth, to issue to the Collateral
Agent for the benefit of the Holder of the Variable Funding Certificate,
the holders of Commercial Paper and the Liquidity Banks, as their interests
may appear, on the Initial Closing Date its irrevocable letter of credit
(including any letter of credit issued by such LOC Issuer in replacement
thereof and as such letter of credit may be supplemented, amended, or
modified from time to time, the "LOC" and together, the "LOCs") in the form
of Exhibit A hereto, completed in accordance with such form and the terms
of this Section 2.01. Each LOC shall be dated its date of issuance and
shall be issued by the related LOC Issuer in the initial stated amount
(such respective amounts, each an "LOC Commitment Amount") equal to the
dollar equivalent of its Percentage (set forth on Schedule 1 hereto) of
$15,000,000 on the date of issuance for a term expiring on the LOC
Expiration Date, subject to extension as set forth in Section 2.01(c) and
early termination as set forth in Sections 2.03(d) and 2.08.
(b) Promptly following the appointment and qualification of any
successor to the Collateral Agent and upon compliance with the terms of the
LOC regarding transfers, each LOC Issuer shall deliver to such successor
Collateral Agent, in exchange for the outstanding LOC of such LOC Issuer held
by the predecessor Collateral Agent, a substitute irrevocable letter of credit
substantially in the form of Exhibit A hereto, having terms identical to the
then outstanding LOC of such LOC Issuer but in favor of such successor
Collateral Agent.
(c) Subject to the other provisions of this Agreement permitting or
requiring earlier termination hereof, an LOC Issuer's Percentage of the LOC
Commitment shall terminate on the LOC Expiration Date then in effect with
respect to such LOC Issuer unless such LOC Issuer elects in its sole
discretion to extend its Percentage of the LOC Commitment for an additional
two-year period following such LOC Expiration Date (each such period, an "LOC
Extension Period"). On any Business Day occurring not earlier than July
31st nor later than August 30 of the year immediately preceding the year in
which the LOC Expiration Date occurs, the CP Issuer may, by written notice
to each LOC Issuer, request such LOC Issuer to extend its Percentage of the
LOC Commitment for an additional LOC Extension Period. Not later than
October 31 of the year immediately preceding the year in which the
Expiration Date occurs, each Bank shall respond to the request to extend
its Percentage of the LOC Commitment by executing and delivering to the CP
Issuer a written notice indicating whether or not such LOC Issuer will
extend its Percentage of the LOC Commitment for such additional LOC
Extension Period, and such notice, once given, shall be irrevocable. If
any LOC Issuer does not give such notice by the time specified in the
preceding sentence, its Percentage of the LOC Commitment shall be deemed to
have been so extended. If any LOC Issuer elects, in its sole discretion,
to extend, or has been deemed to have extended, the LOC Expiration Date
with respect to its Percentage of the LOC Commitment, such LOC Expiration
Date shall be extended for two additional years, and such LOC Issuer shall,
prior to the existing Expiration Date, either (i) issue to the Collateral
Agent in exchange for its then outstanding LOC a substitute letter of
credit having terms identical to those of its then outstanding LOC but
expiring on the LOC Expiration Date, as so extended, or (ii) deliver to the
Collateral Agent an amendment to its then outstanding LOC to reflect such
extension of the LOC Expiration Date.
(d) Not later than November 15 of the year immediately
preceding the year in which the expiration Date occurs, the CP Issuer shall
notify all the LOC Issuers as to those LOC Issuers that have elected to
extend or have been deemed to have extended and those LOC Issuers that have
elected not to extend. If any LOC Issuer notifies the CP Issuer that it
does not consent to the extension of the LOC Expiration Date pursuant to
Section 2.01(c), the CP Issuer may, upon receipt of such notice, request
another LOC Issuer or obtain a successor letter of credit bank or letter of
credit banks to issue one of more replacement letters of credit and to
assume such non-extending LOC Issuer's Percentage of the LOC Commitment
under this Agreement; provided, that the addition of such successor letter
of credit bank and the withdrawal of such non-extending LOC Issuer will not
result in the reduction or withdrawal of the then current rating of the
Commercial Paper as confirmed in writing by each Rating Agency. Upon the
effectiveness of such assumption, the LOC Expiration Date then in effect
shall be extended for an LOC Extension Period.
(e) If any LOC Issuer does not extend its Percentage of the LOC
Commitment after the LOC Expiration Date then in effect pursuant to Section
2.01(c) hereof (such LOC Issuer, an "Exiting LOC Issuer"), any outstanding LOC
Disbursements made by such Exiting LOC Issuer shall continue to be required to
be paid from the reimbursement to the Holder of the Variable Funding
Certificate of Issuer Charge-Offs pursuant to Sections 4.05(d) and (g) of the
Pooling and Servicing Agreement as set forth in the Variable Funding
Supplement in accordance with this Agreement and the LOC of such Exiting LOC
Issuer. Interest on LOC Disbursements made by an Exiting LOC Issuer shall
continue to accrue and be required to be paid in accordance with this
Agreement and the LOC issued by such Exiting LOC Issuer. After all payments of
principal and interest have been paid in respect of such Exiting LOC Issuer's
LOC Disbursements, the CP Issuer shall have no further obligation to such LOC
Issuer (except with respect to obligations expressly stated herein to survive
payment of the LOC Disbursements).
(f) Any Exiting LOC Issuer shall be deemed to be an LOC Issuer for
purposes of Section 5.06 hereof for determination in matters affecting such
Exiting LOC Issuer until all LOC Disbursements made by, and other amounts
owing hereunder to, such Exiting LOC Issuer have been paid in full.
Section 2.02. Charge-off Drawings. (a) At or before 11:00 a.m.
(New York City time) on the day on which a drawing is to be made under the
LOCs, pursuant to Section 8(f) of the Security Agreement, the Collateral
Agent shall make a drawing (a "Charge-Off Drawing") under each LOC by
delivering to each LOC Issuer a duly completed drawing certificate (a
"Drawing Certificate") in the form attached as Annex A to the related LOC
in the amount of such LOC Issuer's Percentage of the aggregate amount
identified, and as otherwise instructed in the Servicer's Daily Report
delivered on such day with respect to the Variable Funding Certificate. An
LOC may be drawn upon, and the Servicer shall instruct the Collateral Agent
in writing to draw upon the LOC, only to the extent that Issuer Charge-Offs
have been allocated to the Variable Funding Certificate pursuant to Section
4.05(c) of the Pooling and Servicing Agreement as set forth in the Variable
Funding Supplement, resulting in a write-down of the Variable Funding
Certificate, in an amount equal to the amount of such write-down; provided,
that the LOCs shall only be drawn upon for such purpose on a day on which
Commercial Paper matures or on a day on which principal payments in respect
of Loans are either due or permitted to be made.
(b) Each LOC Issuer shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand by the Collateral Agent
for an LOC Disbursement to ascertain that the same appear on their face to be
in conformity with the terms and conditions of its LOC. If, after examination,
an LOC Issuer shall have determined that a demand for an LOC Disbursement does
not conform to the terms and conditions of its LOC, then such LOC Issuer
shall, without delay, give telephonic notice (promptly confirmed in writing)
to the CP Issuer and the Collateral Agent to the effect that the demand was
not in accordance with the terms and conditions of its LOC, stating the
reasons therefor and that the relevant documents are being held at the
disposal of the Collateral Agent or are being returned to the Collateral
Agent, as such LOC Issuer may elect. The Collateral Agent shall attempt to
correct any such non-conforming demand for payment under such LOC on or before
the LOC Expiration Date.
(c) It is understood and agreed that in making any payment under
its LOC, each LOC Issuer's exclusive reliance on the documents presented or
otherwise delivered to such LOC Issuer under its LOC as to any and all matters
set forth therein, including, without limitation, reliance on the amount of
any draft presented under its LOC, whether or not the amount due to the
beneficiary equals the amount of such draft and whether or not any document
presented pursuant to its LOC proves to be insufficient in any respect, if
such document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to its LOC proves to be
forged or invalid or any statement therein proves to be inaccurate or untrue
in any respect whatsoever, shall not be deemed wilful misconduct or gross
negligence of such LOC Issuer.
(d) Upon receipt of a duly completed Drawing Certificate by 11:00
a.m. (New York City time) on any Business Day, each LOC Issuer shall make
payment to the Collateral Agent by 3:00 p.m. (New York City time) on such
Business Day in an amount equal to the lesser of (i) the amount so demanded
by the Collateral Agent, which shall be such LOC Issuer's Percentage of the
amount specified by the Servicer in the Daily Report and (ii) such LOC
Issuer's Percentage of the Available LOC Amount.
Section 2.03. Downgrading of LOC Issuer; Special Drawings. (a) If a
Responsible Officer of the Collateral Agent obtains knowledge, from the
Servicer or the Depositary or otherwise, that the short-term debt rating of
any LOC Issuer by S&P or Fitch has been reduced, below A-1 or F-1,
respectively, suspended or withdrawn (a "Downgraded LOC Issuer"), the
Collateral Agent shall promptly make a drawing of the full amount of the
Available LOC Amount of the Downgraded LOC Issuer (a "Special Drawing")
under the LOC of such Downgraded LOC Issuer, establish a non-interest
bearing trust account with the trust department of the Collateral Agent,
such account to be in the name of the Collateral Agent for the purpose of
holding the proceeds of such Special Drawing (the "LOC Escrow Account"),
and deposit the funds of such Special Drawing into such LOC Escrow Account,
unless the Rating Agencies shall previously have confirmed in writing to
the Collateral Agent that the then current rating of the Commercial Paper
will not be reduced, suspended or withdrawn by such Rating Agencies because
of such reduction, suspension or withdrawal of the short-term debt rating
of such Downgraded LOC Issuer; provided, however, that if necessary to
prevent the imposition of increased regulatory capital requirements upon
such Downgraded LOC Issuer as a result of such Special Drawing, then upon
request of such Downgraded LOC Issuer the related LOC Escrow Account may be
established and maintained by the Collateral Agent in the name of the
Collateral Agent with the trust department of such Downgraded LOC Issuer.
If, after a Special Drawing has been made with respect to a Downgraded LOC
Issuer, the debt rating of such Downgraded LOC Issuer is reinstated and a
replacement letter of credit or other arrangement has not been obtained,
the Collateral Agent shall withdraw from the LOC Escrow Account funds in an
amount equal to the amount of such Special Drawing, and pay such amount to
the related LOC Issuer upon written confirmation of the reinstatement of
such LOC Issuer's LOC, or delivery of a new LOC, in such amount.
(b) The funds deposited into the LOC Escrow Account shall not
be deemed to be an LOC Disbursement, and interest shall not accrue and
shall not be payable on such funds, unless such funds are drawn upon by the
Collateral Agent in accordance with this subsection (b). The LOC Escrow
Account shall serve as a source of funds in lieu of the Percentage of the
LOC Commitment of the Downgraded LOC Issuer and may be drawn upon in
accordance with the terms and provisions hereof and for the same purposes
as an LOC may be drawn upon as provided in Section 2.02. Any disbursements
made from the funds of the LOC Escrow Account shall be treated as an LOC
Disbursement, accrue interest and be payable as provided herein, with any
repayment of such LOC Disbursement to be redeposited in the LOC Escrow
Account.
(c) Funds in an LOC Escrow Account may be invested by the
Collateral Agent in specified Permitted Investments with maturities not later
than the next Business Day; provided that Collateral Agent shall only make
such Permitted Investments upon receipt of express written directions with
respect thereto from such Downgraded LOC Issuer. Any earnings (net of losses
and investment expenses) on such invested funds shall inure to the benefit of
the Downgraded LOC Issuer.
(d) In the event one or more banks or other financial
institutions agree to provide a commitment or other arrangement with a
stated amount equal to the LOC Commitment of the Downgraded LOC Issuer
which each Rating Agency confirms in writing to the Collateral Agent would
not cause a reduction or withdrawal of the then current rating of the
Commercial Paper, this Agreement shall be so amended and the old LOC shall
be surrendered and cancelled and a replacement LOC which includes the new
LOC Issuer shall be issued; provided, however, that any reimbursement
obligation pursuant to Section 2.04 hereof shall survive such termination.
In such event, the Collateral Agent shall withdraw funds on deposit in the
LOC Escrow Account and pay such amount to such former LOC Issuer. The
Downgraded LOC Issuer shall be entitled to the LOC Fee (as defined below)
with respect to the funds in the LOC Escrow Account.
Section 2.04. Reimbursement. (a) In order to provide for
reimbursement to the LOC Issuers for any disbursement made under the LOCs
or any funds otherwise made available by the LOC Issuers pursuant to the
LOCs (each an "LOC Disbursement"), including interest thereon and the
payment of certain other amounts due hereunder, Ingram agrees to perform on
a timely basis each of its obligations set forth in the Pooling and
Servicing Agreement in accordance with its terms. The CP Issuer
acknowledges and agrees that the LOC Issuers shall be reimbursed for LOC
Disbursements, the LOC Fees and all other amounts due to the LOC Issuers
hereunder in accordance with the terms hereof. Each LOC Disbursement made
by an LOC Issuer not repaid in full prior to 5:00 p.m. (New York City
time), on the date when made, any LOC Fee not paid on the due date thereof,
and any other amount payable to an LOC Issuer under this Agreement not paid
by the 30th day after the date notice thereof is given by such LOC Issuer
to the Collateral Agent, shall bear interest from and including the date of
the making of such LOC Disbursement, the date such LOC Fee was due or the
date of such notice, as applicable, until paid in full (but excluding the
date of repayment) on the unpaid amount thereof from time to time
outstanding at a rate per annum (computed on the basis of the actual days
elapsed and a year of 365/66 days) equal to the Base Rate plus the
Applicable Margin or such other rate as may subsequently be agreed to by
the CP Issuer and the respective LOC Issuer. The Collateral Agent, on
behalf of the CP Issuer, shall pay the LOC Issuers such amounts as may be
available for repayment in accordance with Sections 8(a)(iii) and 8(b)(iv)
of the Security Agreement.
(b) Unless otherwise specified herein, all payments to be made
hereunder (including amounts owing with respect to the fees pursuant to
Section 2.06 hereof) shall be made to each LOC Issuer at its address specified
in Section 5.04 hereof (or at such other address as an LOC Issuer may have
specified for such purpose in a written notice to the Collateral Agent and the
CP Issuer) in immediately available funds. All payments hereunder shall be
made not later than 5:00 p.m. (New York City time) on the date due, and funds
received after that hour shall be deemed to have been received by such LOC
Issuer on the next succeeding Business Day.
(c) Except as provided in Section 2.04(d), upon reimbursement of an
LOC Issuer for any LOC Disbursement pursuant to the provisions of this
Agreement, the amount so reimbursed shall be reinstated immediately in such
LOC Issuer's Percentage of the Available LOC Amount.
(d) Chemical Bank, as an LOC Issuer, shall open and maintain a
separate account (the "LOC Payment Account") for the sole purposes of
receiving and accounting for disbursements, reimbursements and other payments
from the Collateral Agent or the CP Issuer for the account of Chemical Bank.
All payments to be made hereunder to Chemical Bank as an LOC Issuer (including
amounts owing with respect to the fees pursuant to Section 2.06 hereof) shall
be deposited into the LOC Payment Account not later than 3:00 P.M. (New York
City time) on the date due, and funds received after that hour shall be deemed
to have been received by Chemical Bank on the next succeeding Business Day;
provided, however, that on any day on which funds intended for deposit into
the LOC Payment Account have been received by the Collateral Agent under the
Security Agreement prior to 3:00 p.m. such amounts shall be deemed to have
been received in the LOC Payment Account prior to 3:00 p.m. on such day,
whether or not the Collateral Agent has actually transferred funds thereto
prior to 3.00 p.m. LOC Disbursements shall stop accruing interest on the date
on which amounts representing repayment thereof are received (or, in
accordance with the preceding sentence, deemed to be received) in the LOC
Payment Account to the extent of the funds so received. Chemical Bank shall
disburse and account for such funds only as provided herein. Chemical Bank
shall apply all funds in the LOC Payment Account as a reimbursement on
Wednesday of each week, except that when the balance of the funds in the LOC
Payment Account exceeds $100,000, the LOC Agent shall apply such funds as a
reimbursement immediately. The amount available under the LOC of Chemical Bank
shall be reinstated in accordance with the foregoing sentence; provided,
however, that if a Drawing Certificate is delivered for a Charge-Off Drawing
in an amount which is in excess of Chemical Bank's LOC Issuer's Percentage of
the Available LOC Amount of Chemical Bank on such day as shown by the records
of Chemical Bank, Chemical Bank shall immediately apply any available funds in
the LOC Payment Account on such day as a reimbursement of an LOC Disbursement
to the extent of such excess. Upon making an LOC Disbursement, Chemical
Bank shall debit the LOC Payment Account in the amount of such LOC
Disbursement. If the funds in the LOC Payment Account are insufficient to
cover such debit, an overdraft in such amount shall be incurred and shall
bear interest at the same rate as an LOC Disbursement.
Section 2.05. No Recourse; Obligations Absolute. Each LOC Issuer agrees
that with respect to the CP Issuer's reimbursement obligation with respect to
any LOC Disbursement, it shall have no right of set-off or banker's lien
against the CP Issuer, the Collateral Agent or any Affiliate, officer or
director of any of them. Subject to and without limiting the foregoing
provisions of this Section 2.05, the obligations of the CP Issuer under
Section 2.04 hereof and the right of each LOC Issuer to be paid in full its
LOC Disbursements, interest thereon and all other amounts payable to each LOC
Issuer under this Agreement shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this
Agreement, irrespective of any of the following circumstances (except as
expressly provided to the contrary below):
(a) any lack of validity or enforceability of any LOC, this
Agreement, the Depositary Agreement, the Liquidity Agreement or the
Security Agreement;
(b) any amendment or waiver of, or consent to or departure from,
any LOC, this Agreement, the Depositary Agreement, the Liquidity Agreement
or the Security Agreement;
(c) the existence of any claim, set-off, defense or other rights
which the Servicer, the Transferor or the CP Issuer may have at any time
against the Collateral Agent, any beneficiary or any transferee of any LOC
(or any Persons for whom the Collateral Agent, any such beneficiary or any
such transferee may be acting), any LOC Issuer or any other Person, whether
in connection with any LOC, this Agreement, the Depositary Agreement, the
Liquidity Agreement, the Security Agreement or any unrelated transactions;
(d) any statement or any document presented under any LOC proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever,
provided, that such LOC Issuer's reliance on such statement or documents
shall not have constituted gross negligence or willful misconduct of such
LOC Issuer;
(e) payment by any LOC Issuer under its LOC against presentation of
a Drawing Certificate or other draft or document which does not comply with
the terms of such LOC or this Agreement; provided, that such payment shall
not have constituted gross negligence or willful misconduct of the related
LOC Issuer;
(f) the bankruptcy or insolvency of the Transferor, the CP Issuer
or the Servicer; and
(g) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing; provided, that the same shall not have
constituted gross negligence or willful misconduct of the related LOC
Issuer.
Section 2.06. Facility Fees. (a) The CP Issuer hereby agrees to pay to
each LOC Issuer on the Initial Closing Date, a one-time arrangement fee upon
the issuance of its LOC in the amount of 0.10% multiplied by such LOC Issuer's
Percentage of the LOC Commitment.
(b) The CP Issuer hereby agrees to pay to each LOC Issuer a letter
of credit fee (the "LOC Fee") for the period from and including the Initial
Closing Date to and including the LOC Expiration Date, computed at a rate
equal to 1.00% per annum, calculated on such LOC Issuer's Percentage of the
LOC Commitment less the weighted average LOC Disbursements outstanding during
the prior quarter. The LOC Fee shall be payable in arrears commencing on the
Settlement Date following the third month anniversary of the Initial Closing
Date, quarterly thereafter, and on the date on which the LOC Commitment shall
be terminated as provided herein. The LOC Fee shall be calculated on the basis
of actual days elapsed and a year of 365/66 days.
(c) The CP Issuer hereby agrees to pay to each LOC Issuer a
transfer fee in the amount of $250 as a condition to the transfer of the
related LOC to a different beneficiary.
Section 2.07. Liability of LOC Issuers. Neither any LOC Issuer nor
any of its officers or directors shall be liable or responsible for: (a)
the use which may be made of its LOC or any acts or omissions of the
Collateral Agent or any transferee in connection therewith; (b) the
validity, sufficiency or genuineness of documents (other than its LOC), or
of any endorsement thereon, even if such documents should prove to be in
any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by such LOC Issuer against presentation of documents which do not
comply with the terms of its LOC, including failure of any documents to
bear any reference or adequate reference to such LOC; (d) the deferral of
honoring a drawing because of conflicting instructions pursuant to Section
2.11 hereof; or (e) any other circumstances whatsoever in making or failing
to make payment under such LOC; provided, that the CP Issuer and the
Collateral Agent shall have a claim against such LOC Issuer, and such LOC
Issuer shall be liable to the CP Issuer and the Collateral Agent, to the
extent of any direct, as opposed to consequential, damages suffered by the
CP Issuer or the Collateral Agent that were caused by (i) such LOC Issuer's
willful misconduct or gross negligence in determining whether documents
presented under its LOC comply with the terms of such LOC or (ii) such LOC
Issuer's gross negligence in failing to make or willful failure to make
lawful payment under its LOC after the timely presentation to such LOC
Issuer by the Collateral Agent of a Drawing Certificate strictly complying
with the terms and conditions of its LOC. In furtherance and not in
limitation of the foregoing, an LOC Issuer may accept documents that appear
on their face to be in order, without responsibility for further
investigation; provided, that an LOC Issuer shall not be excused from its
willful misconduct or gross negligence in determining whether documents
presented under its LOC comply with the terms of such LOC.
Section 2.08. Surrender of LOCs. With respect to any LOC Issuer, provided
that such LOC Issuer is not then in default under its LOC by reason of its
having wrongfully failed to honor a demand for payment previously made by
the Collateral Agent under such LOC, the Collateral Agent shall surrender
such LOC to such LOC Issuer, promptly following the earlier of (i) the LOC
Expiration Date of such LOC Issuer and (ii) the termination of the Trust.
Section 2.09. Increased Costs and Taxes.
(a) Increased Costs. Subject to Section 2.12, if after the date
hereof, the adoption of any law or guideline or any amendment or change in the
administration, interpretation or application of any existing or future law or
guideline by any Official Body charged with the administration, interpretation
or application thereof, or the compliance with any request or directive of any
Official Body (whether or not having the force of law):
(i) shall subject any LOC Issuer to any tax, duty or other charge
with respect to this Agreement or any payments made hereunder, or shall
change the basis of taxation of payments to any LOC Issuer of any
amounts due under this Agreement (except for changes in the rate of tax
on the overall net income of such LOC Issuer imposed by any jurisdiction
having authority over such LOC Issuer; or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board) against assets of, deposits with or
for the account of, or credit extended by, any LOC Issuer or shall
impose on any LOC Issuer or on the United States market for certificates
of deposit or the London interbank market any other condition affecting
this Agreement; or
(iii) imposes upon any LOC Issuer any other condition or expense
(including, without limitation, (i) loss of margin and (ii) reasonable
attorneys' fees and expenses, and expenses of litigation or preparation
therefor in contesting any of the foregoing) with respect to this
Agreement or any payments made hereunder,
and the result of any of the foregoing is to increase the cost to any LOC
Issuer of maintaining its LOC, or to reduce the amount of any sum received or
receivable by any LOC Issuer under this Agreement, by an amount deemed by such
LOC Issuer to be material, then, the CP Issuer shall pay such LOC Issuer such
additional amount or amounts as will compensate such LOC Issuer for such
increased cost or reduction. If such LOC Issuer becomes entitled to claim any
additional amounts pursuant to this Section 2.09, it shall promptly notify the
CP Issuer of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this Section
submitted by an officer of such LOC Issuer to the CP Issuer shall be
rebuttable presumptive evidence of the amount due. This covenant shall survive
the termination of this Agreement and the payment of all amounts payable
hereunder.
(b) If any LOC Issuer shall have determined that, after the
date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Official Body, or any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such Official Body, has or would have the effect of
reducing the rate of return on capital of such LOC Issuer (or its parent),
as a consequence of its LOC or such LOC Issuer's obligations hereunder, to
a level below that which such LOC Issuer (or its parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by such LOC Issuer to be material, then from time to time the CP
Issuer shall, or shall instruct the Collateral Agent, for the account of
the CP Issuer, to pay such LOC Issuer such additional amount or amounts as
will compensate such LOC Issuer (or its parent) for such reduction.
(c) Each LOC Issuer shall promptly notify the Collateral Agent and
the CP Issuer of any event of which it has knowledge, occurring after the date
hereof, which will entitle such LOC Issuer to compensation pursuant to this
Section. A certificate of any LOC Issuer claiming compensation under this
Section and setting forth the additional amount or amounts to be paid to it
hereunder shall be rebuttable presumptive evidence of the amount due. In
determining any such amount, each LOC Issuer may use any reasonable
averaging and attributing methods.
(d) Taxes. (A) All payments made under this Agreement shall be made free
and clear of, and without reduction for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges,
fees, deductions or withholdings now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority excluding, in
the case of any LOC Issuer, net income and franchise taxes based upon net
income imposed on any LOC Issuer by the jurisdiction under the laws of
which it is organized or in which is located any office from or at which
such LOC Issuer is honoring any Drawing Certificate or any political
subdivision or taxing authority thereof or therein (all such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions and withholdings
being hereinafter called "Taxes"). If any Taxes are required to be
withheld from any amounts payable to any LOC Issuer hereunder, the amounts
so payable to such LOC Issuer shall be increased to the extent
necessary to yield to such LOC Issuer (after payment of all Taxes) interest
or any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement. Whenever any Taxes are payable by the CP
Issuer, as promptly as possible thereafter the CP Issuer shall send to the
applicable LOC Issuer a certified copy of the original official receipt, if
any, received by the CP Issuer showing payment thereof.
(B) If the CP Issuer fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to an LOC Issuer the required
receipts or other required documentary evidence, the CP Issuer shall indemnify
such LOC Issuer for any incremental taxes, interest or penalties that may
become payable by such LOC Issuer as a result of any such failure. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of all amounts payable hereunder.
Section 2.10. Events of Default. Upon the occurrence of any of the
following events (each an "Event of Default"), and so long as such Event of
Default shall continue unremedied:
(a) Payments. The LOC Issuers are not paid when and as due (whether
on the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise) (i) any amount payable with respect to any
LOC Disbursements within five Business Days after the due date thereof, (ii)
interest payable on any LOC Disbursements or the LOC Fee within five Business
Days after the due date thereof, or (iii) any other payment under this
Agreement to be paid within five Business Days following the due date thereof;
provided, that amounts specified in item (iii) shall not be deemed due until
the 30th day after notice thereof has been given to the CP Issuer; or
(b) Representations. Any representation or warranty or
statement made by the Servicer in this Agreement or in the Pooling and
Servicing Agreement or made by the CP Issuer in this Agreement or in the
other Facilities Documents shall prove to have been incorrect in any
material respect when made, which continues to be incorrect in any material
respect for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to
the Servicer or the CP Issuer, as the case may be, by an LOC Issuer; or
(c) Covenants. Failure by the CP Issuer to observe or perform in
any material respect any covenant or agreement contained herein or in the
other Facilities Documents and not constituting an Event of Default under any
other clause of this Section 2.10 which continues unremedied for a period of
30 days after the earlier of actual knowledge or the date on which written
notice of such failure shall have been given; or
(d) Voluntary Bankruptcy Proceedings of the Servicer or the CP
Issuer. Either (i) an order for relief under Title 11 of the United States
Code shall be entered in a case in which the Servicer or the CP Issuer is a
debtor, or the Servicer or the CP Issuer shall become insolvent or generally
fail to pay, or admit in writing its inability to pay, its debts as they
become due, or shall voluntarily commence any proceeding or file any petition
under any bankruptcy, insolvency or similar law or seeking dissolution or
reorganization or the appointment of a receiver, trustee, custodian or
liquidator for itself or a substantial portion of its property, assets or
business or to effect a plan or other arrangement with its creditors, or
shall file any answer admitting the jurisdiction of the court and the
material allegations of an involuntary petition filed against it in any
bankruptcy, insolvency or similar proceeding, or shall be adjudicated
bankrupt, or shall make a general assignment for the benefit of creditors,
or shall consent to, or acquiesce in the appointment of, a receiver,
trustee, custodian or liquidator for itself or a substantial portion of its
property, assets or business or (ii) action shall be taken by the Servicer
or the CP Issuer for the purpose of effectuating any of the foregoing; or
(e) Involuntary Bankruptcy Proceedings against the Servicer or the
CP Issuer. Involuntary proceedings or an involuntary petition shall be
commenced or filed against the Servicer or the CP Issuer under any bankruptcy,
insolvency or similar law or seeking the dissolution or reorganization of the
Servicer or the CP Issuer or the appointment of a receiver, trustee, custodian
or liquidator for the Servicer or the CP Issuer or of a substantial part of
the property, assets or business of the Servicer, or any writ, order,
judgment, warrant of attachment, execution or similar process shall be issued
or levied against a substantial part of the property, assets or business of
the Servicer or the CP Issuer, and such proceeding or petition shall not be
dismissed, or such writ, order, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded, within 60 days
after commencement, filing or levy, as the case may be;
(f) No Valid Agreement. This Agreement or any other Facilities
Document (or any provision thereof material to the holding of the Variable
Funding Certificate) shall, at any time after its execution and delivery, for
any reason cease to be in full force and effect (unless such occurrence is in
accordance with its terms) or shall be declared to be null and void, or the
validity or enforceability thereof shall be contested by ▇▇▇▇▇▇, the
Collateral Agent, or the CP Issuer, as the case may be, or the Servicer, the
Collateral Agent, or the CP Issuer shall deny that it has any or further
liability or obligation thereunder;
(g) Security. The Security Interest purported to be created by the
Security Agreement shall fail to be a valid and enforceable perfected first
priority security interest in favor of the Collateral Agent in any of the
Collateral;
(h) Servicer Default. A Servicer Default shall have occurred and be
continuing or the Servicer shall be changed from ▇▇▇▇▇▇ (or any successor
Servicer to which each LOC Issuer has consented) without the consent of each
LOC Issuer; or
(i) Matured Default. A Matured Default under the Liquidity
Agreement shall have occurred;
then, and in any such event, the Required LOC Issuers may (i) except with
respect to paragraphs (d) and (e) which shall be automatic and require no
notice by the Required LOC Issuers, give notice to the CP Issuer, the
Transferor, the Collateral Agent, the CP Dealer and the Servicer of the
occurrence of the Event of Default, and (ii) pursue, to the extent permitted
by applicable law, any other remedy available at law or in equity, including,
without limitation, the remedy of specific performance of any covenant or
agreement herein contained (any such Event of Default, followed (except in the
case of paragraphs (d) and (e)) by the notice specified in item (i) above, a
"Matured Default").
Section 2.11. Conflicting Instructions from the Collateral Agent.
Notwithstanding any other provision of this Agreement, in the event an LOC
Issuer (i) receives a demand for a drawing to be made under the LOC and
(ii) receives any communication purportedly from the Collateral Agent or
any of its officers, employees or agents, which communication indicates
that such demand is not in order, such LOC Issuer may defer honoring such
demand until it receives further written instructions from the Collateral
Agent as to the disposition of such demand; provided that such LOC Issuer
shall not be liable for such deferral in accordance with Section 2.07
hereof. Such LOC Issuer shall promptly notify the Collateral Agent of any
such deferral.
Section 2.12. No Recourse. The obligations of the CP Issuer under this
Agreement and the LOCs are solely the corporate obligations of the CP Issuer.
No recourse shall be had for the payment of any amount owing in respect of any
LOC Disbursements or for the payment of any fee hereunder or any other
obligation or claim arising out of or based upon this Agreement and the LOCs
against any stockholder, employee, officer, director or incorporator of the CP
Issuer. Each of the LOC Issuers and the Collateral Agent also agrees that the
obligations of the CP Issuer to the LOC Issuers and the Collateral Agent
hereunder, including without limitation all obligations of the CP Issuer in
respect of fees and indemnity pursuant to Sections 2.09, 5.02 and 5.03, shall
be payable solely from the Collateral in accordance with the Security
Agreement, that the LOC Issuers and the Collateral Agent shall not look to any
other property or assets of the CP Issuer in respect of the obligations
arising under such Sections and that such obligations shall not constitute a
claim against the CP Issuer in the event that the CP Issuer's assets are
insufficient to pay in full such obligations, and that such obligations are
fully subordinated to the CP Issuer's obligations under the Commercial Paper
and the Loans.
Section 2.13. Pro Rata Treatment and Payments. Each drawing by the
Collateral Agent on behalf of the CP Issuer from the LOC Issuers hereunder,
except a Special Drawing pursuant to Section 2.03, and each payment by the CP
Issuer on account of any LOC Disbursement or fee payable hereunder and any
reduction of the LOC Commitment of the LOC Issuer shall be made pro rata
according to the respective Percentages of the LOC Issuers.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.01. Representations and Warranties of the CP Issuer. In order
to induce the LOC Issuers to enter into this Agreement and to provide the
credit facilities provided for herein, the CP Issuer herein makes the
representations and warranties contained in the Security Agreement (which are
hereby incorporated by reference in this Article III) and the following
additional representations and warranties to the LOC Issuers:
(a) Organization; Powers. The CP Issuer (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and
as proposed to be conducted, (c) is qualified to do business in every
jurisdiction where such qualification is required, and (d) has the
corporate power and authority to execute, deliver and perform its
obligations under each of the Facilities Documents and each other agreement
or instrument contemplated thereby to which it is or will be a party, to
borrow hereunder and to grant the Liens on the Collateral pursuant to the
Security Agreement.
(b) Authorization. The execution, delivery and performance by
the CP Issuer of each of the Facilities Documents and the other
transactions contemplated hereby and thereby (a) have been duly authorized
by all requisite corporate and, if required, stockholder action and (b)
will not (i) violate (1) any provision of law, statute, rule or regulation,
or of the certificate or articles of incorporation or other constitutive
documents or by-laws of the CP Issuer, (2) any order of any Governmental
Authority or (3) any provision of any indenture, agreement or other
instrument to which the CP Issuer is a party or by which it or any of its
property is or may be bound, (ii) conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under
any such indenture, agreement or other instrument or (iii) result in the
creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by the CP Issuer, except the Lien
created pursuant to the Security Agreement in favor of the Collateral
Agent.
(c) Enforceability. This Agreement has been duly executed and
delivered by the CP Issuer and constitutes, and each other Facilities
Document when executed and delivered by the CP Issuer will constitute, a
legal, valid and binding obligation of the CP Issuer enforceable against
the CP Issuer in accordance with its terms except as such enforceability is
subject to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally, and to the general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(d) Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority
is or will be required in connection with the execution and performance of the
Facilities Documents, except such as have been made or obtained and are in
full force and effect.
(e) Federal Reserve Regulations.
(i) The CP Issuer is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(ii) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase or carry Margin Stock or to extend credit to
others for the purpose of purchasing or carrying Margin Stock or to
refund indebtedness originally incurred for such purpose or (ii) for any
purpose that entails a violation of, or that is inconsistent with, the
provisions of the Regulations of the Board, including Regulation G, U
or X.
(f) Investment Company Act; Public Utility Holding Company Act.
The CP Issuer is not (i) an "investment company," or an "affiliated person"
of, or "principal underwriter" or "promoter" for, an "investment company,"
as such terms are defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended, or (ii) a "holding company" as
defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
(g) Subsidiaries. The CP Issuer has no Subsidiaries.
(h) Defaults. With respect to the CP Issuer, no Event of Default
under this Agreement, no Event of Default under the Liquidity Agreement, and
no event, which with the lapse of time or notice or both would become any of
such events, has occurred and is continuing.
Section 3.02. Representations and Warranties of Funding. In order to
induce the LOC Issuers to enter into this Agreement and to provide the credit
facilities provided for herein, Funding herein makes the following
representations and warranties to the LOC Issuers:
(a) Organization; Powers. Funding (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has all requisite power and authority
to own its property and assets and to carry on its business as now conducted
and as proposed to be conducted, (iii) is qualified to do business in every
jurisdiction where such qualification is required and where failure to so
qualify would have a material adverse effect on the Holders of Commercial
Paper and (iv) has the corporate power and authority to execute, deliver
and perform its obligations under each of the Facilities Documents and each
other agreement or instrument contemplated thereby to which it is or will
be a party.
(b) Authorization. The execution, delivery and performance by
Funding of each of the Facilities Documents to which it is a party and the
other transactions contemplated hereby and thereby (i) have been duly
authorized by all requisite corporate and, if required, stockholder action
and (ii) will not (a) violate (1) any provision of law, statute, rule or
regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of Funding, (2) any order of any
Governmental Authority or (3) any provision of any indenture, agreement or
other instrument to which Funding is a party or by which it or any material
part of its property is or may be bound, (b) conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or (c)
result in the creation or imposition of any Lien upon or with respect to
any material part of the property or assets now owned or hereafter acquired
by Funding.
(c) Enforceability. This Agreement has been duly executed and
delivered by Funding and constitutes, and each other Facilities Document to
which it is a party when executed and delivered by Funding will constitute,
a legal, valid and binding obligation of Funding enforceable against
Funding in accordance with its terms except as such enforceability is
subject to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally, and to the general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(d) Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority
is or will be required in connection with the execution and performance of the
Facilities Documents to which Funding is a party, except such as have been
made or obtained and are in full force and effect.
(e) Federal Reserve Regulations. Funding is not engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
(f) With respect to Funding, no Event of Default under this
Agreement, no Event of Default under the Liquidity Agreement, and no event,
which with the lapse of time or notice or both would become any of such
events, has occurred and is continuing.
Section 3.03. Representations and Warranties of ▇▇▇▇▇▇. In order to
induce the LOC Issuers to enter into this Agreement and to provide the credit
facilities provided for herein, ▇▇▇▇▇▇ herein makes the following
representations and warranties to the LOC Issuers:
(a) Organization; Powers. ▇▇▇▇▇▇ (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has all requisite power and
authority to own its property and assets and to carry on its business as
now conducted and as proposed to be conducted, (iii) is qualified to do
business in every jurisdiction where such qualification is required and
where failure to so qualify would have a material adverse effect on the
Holders of Commercial Paper and (iv) has the corporate power and authority
to execute, deliver and perform its obligations under each of the
Facilities Documents and each other agreement or instrument contemplated
thereby to which it is or will be a party.
(b) Authorization. The execution, delivery and performance by
▇▇▇▇▇▇ of each of the Facilities Documents to which it is a party and the
other transactions contemplated hereby and thereby (i) have been duly
authorized by all requisite corporate and, if required, stockholder action and
(ii) will not (a) violate (1) any provision of law, statute, rule or
regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of ▇▇▇▇▇▇, (2) any order of any
Governmental Authority or (3) any provision of any indenture, agreement or
other instrument to which ▇▇▇▇▇▇ is a party or by which it or any material
part of its property is or may be bound, (b) conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or (c)
result in the creation or imposition of any Lien upon or with respect to
any material part of the property or assets now owned or hereafter acquired
by ▇▇▇▇▇▇.
(c) Enforceability. This Agreement has been duly executed and
delivered by ▇▇▇▇▇▇ and constitutes, and each other Facilities Document to
which it is a party when executed and delivered by ▇▇▇▇▇▇ will constitute,
a legal, valid and binding obligation of ▇▇▇▇▇▇ enforceable against ▇▇▇▇▇▇
in accordance with its terms except as such enforceability is subject to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally, and to the general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(d) Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the execution and
performance of the Facilities Documents to which ▇▇▇▇▇▇ is a party, except
such as have been made or obtained and are in full force and effect.
(e) Federal Reserve Regulations. ▇▇▇▇▇▇ is not engaged principally,
or as one of Its Important activities, in the business of extending credit
for the purpose of purchasing or carrying Margin Stock.
(f) Defaults. With respect to ▇▇▇▇▇▇, no Event of Default under
this Agreement, no Event of Default under the Liquidity Agreement, and no
event, which with the lapse of time or notice or both would become any of such
events has occurred and is continuing.
Section 3.04. Additional Representations. ▇▇▇▇▇▇ represents and warrants
that the representations and warranties made by it in Section 3.03 of the
Pooling and Servicing Agreement are true and correct as of the dates there
so made.
Section 3.05. Covenants of Servicer. The Servicer (including, other than
with respect to subparagraph (e), any Successor Servicer) covenants and agrees
that, so long as any LOC shall remain in effect or any monetary obligation
arising hereunder or under the Pooling and Servicing Agreement shall remain
unpaid, unless each LOC Issuer shall otherwise consent in writing, it shall:
(a) for the benefit of the LOC Issuers and for so long as this
Agreement shall be in effect, perform and comply with each of its
respective agreements, warranties and indemnities contained in this
Agreement and the Pooling and Servicing Agreement; provided, that the
remedy for the breach of this clause (a) as to warranties of the
Servicer in the Pooling and Servicing Agreement, shall, to the extent
that the remedy for such breach is limited in the Pooling and
Servicing Agreement, be so limited herein;
(b) not amend or waive or consent to any amendment to or waiver
of (i) Article IV of the Pooling and Servicing Agreement as it
relates to the Variable Funding Supplement (including such portions
of Article IV which may be restated in the Variable Funding
Supplement) or any definition to the extent used therein, (ii) the
definition of Discount Factor in a manner which could cause a
reduction thereof, (iii) Section 9.02 of the Pooling and Servicing
Agreement or (iv) any other provision of the Pooling and Servicing
Agreement or any other Facilities Document to the extent an LOC
Issuer would be materially adversely affected thereby; provided,
that the addition of a Supplement for a Series will not in and of
itself cause a material adverse effect on any LOC Issuer;
(c) deliver to the LOC Issuers a copy of each amendment or
supplement to the Pooling and Servicing Agreement or of any
Supplement, the Purchase Agreement or any of the other agreements
contemplated hereby;
(d) execute and deliver to the LOC Issuers all such documents
and instruments and do all such other acts and things as may be
necessary or reasonably required by the LOC Issuers or the
Collateral Agent to enable the Collateral Agent or the LOC Issuers
to exercise and enforce their respective rights under this Agreement
and the Security Agreement and to realize thereon, and record and
file and rerecord and refile all such documents and instruments, at
such time or times in such manner and at such place or places, all
as may be necessary or reasonably required by the Collateral Agent
or the LOC Issuers to validate, preserve and protect the position of
the CP Issuer and the LOC Issuers under this Agreement and the
Security Agreement;
(e) not sell all or substantially all of its property and
assets to, or consolidate with or merge into, any other corporation;
(f) furnish to the LOC Issuers a copy of each certificate,
report, statement, notice or other communication (other than
investment instructions) furnished by or on behalf of the Transferor
or the Servicer to Certificateholders, the Collateral Agent or the
Rating Agencies concurrently therewith and furnish to each LOC
Issuer promptly after receipt thereof, a copy of each notice, demand
or other communication received by ▇▇▇▇▇▇ Funding Inc., as
Transferor, or the Servicer from the Collateral Agent, the
Certificateholders or the Rating Agencies with respect to the
Variable Funding Certificate, its LOC, this Agreement, the Security
Agreement or the Pooling and Servicing Agreement; and furnish such
other information as the LOC Issuers may reasonably request;
(g) promptly advise the LOC Issuers of the occurrence of any
Event of Termination or Servicer Default under the Pooling and
Servicing Agreement;
(h) with respect to the Receivables, promptly notify the LOC
Issuers of any material changes in the Credit and Collection Policy,
and in any event will not, except as required by law, make any
material change to the Credit and Collection Policy which could
reasonably be expected to have a material adverse effect on the
collectibility of the Receivables, taken as a whole or on the rights
of any LOC Issuer;
(i) upon reasonable written notice from an LOC Issuer, allow
employees and agents of such LOC Issuer, during the Servicer's
normal business hours, to audit the Servicer's books and records
concerning the Receivables, and the servicing thereof; provided,
however, that such audit is performed without unreasonable
disruption of the Servicer's operations; and provided, further, that
such audit may be conducted at the Servicer's expense only once each
calendar year, and all costs and expenses of any audit after the
first in any calendar year shall be paid by such LOC Issuer; and
(j) perform on a timely basis all of its obligations under the
Pooling and Servicing Agreement.
Section 3.06. Covenants of the CP Issuer. The CP Issuer covenants and
agrees that, so long as any LOC shall remain in effect or any monetary
obligation arising hereunder or under any of the other Facilities Documents
to which the CP Issuer is a party shall remain unpaid, unless each LOC Issuer
shall otherwise consent in writing, it shall:
(a) for the benefit of the LOC Issuers and for so long as this
Agreement shall be in effect, perform and comply with each of its respective
agreements, warranties and indemnities contained in this Agreement and the
other Facilities Documents to which the CP Issuer is a party; provided, that
the remedy for the breach of this clause (a) as to warranties of the CP Issuer
in the other Facilities Documents to which the CP Issuer is a party, shall, to
the extent that the remedy for such breach is limited in the other Facilities
Documents to which the CP Issuer is a party, be so limited herein;
(b) The CP Issuer shall not, without the consent of the LOC
Issuers, amend or waive or consent to any amendment to or waiver of any
provision of any Facilities Document to the extent the LOC Issuers would be
materially adversely affected thereby;
(c) deliver to the LOC Issuers a copy of each amendment or
supplement to the Liquidity Agreement or any of the other agreements
contemplated hereby;
(d) execute and deliver to the LOC Issuers all such documents and
instruments and do all such other acts and things as may be necessary or
reasonably required by the LOC Issuers or the Collateral Agent to enable the
Collateral Agent or the LOC Issuers to exercise and enforce their respective
rights under this Agreement and the Security Agreement and to realize thereon,
and record and file and rerecord and refile all such documents and
instruments, at such time or times, in such manner and at such place or
places, all as may be necessary or reasonably required by the Collateral Agent
or the LOC Issuers to validate, preserve and protect the position of the CP
Issuer and the LOC Issuers under this Agreement and the Security Agreement;
(e) not sell all or substantially all of its property and assets
to, or consolidate with or merge into, any other corporation, without the
consent of the LOC Issuers;
(f) upon reasonable written notice from an LOC Issuer, allow
employees and agents of such LOC Issuer, during the CP Issuer's normal
business hours, to audit the CP Issuer's books and records concerning the
Variable Funding Certificate; provided, however, that such audit is performed
without unreasonable disruption of the CP Issuer's operations; and provided,
further, that such audit may be conducted at the CP Issuer's expense only once
each calendar year, and all costs and expenses of any audit after the first in
any calendar year shall be paid by such LOC Issuer.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness. The following
constitute conditions precedent to the obligation of each LOC Issuer to issue
its LOC on the Initial Closing Date:
(a) Each of the LOC Issuers shall have received a fully
executed original counterpart of this Agreement, each of the other
Facilities Documents and all related documents, and such agreements
shall be in form and substance satisfactory to the LOC Issuers.
(b) On the date of issuance of the LOCs, all representations
and warranties of the CP Issuer, Funding and ▇▇▇▇▇▇ contained in
this Agreement and the Pooling and Servicing Agreement shall be true
and correct, and the LOC Issuers shall have received a certificate
from each of the CP Issuer, Funding and ▇▇▇▇▇▇ to such effect.
(c) On the date of issuance of the LOCs, the CP Issuer and
▇▇▇▇▇▇ shall not be in default of any obligation under this
Agreement or any of the other Facilities Documents.
(d) Each of the LOC Issuers shall have received the favorable
written opinion(s) of counsel to ▇▇▇▇▇▇ (who may be an employee of
▇▇▇▇▇▇) and the CP Issuer, dated the Closing Date, with respect to
the matters reasonably requested by the LOC Issuers.
(e) Each of the LOC Issuers shall have received (i) a copy of
the resolutions of the Executive Committee of the Board of Directors
of ▇▇▇▇▇▇, certified as of the Closing Date by the Secretary or
Assistant Secretary thereof, authorizing the execution, delivery and
performance of this Agreement, the other Facilities Documents to
which it is a party and the procurement of the LOCs, (ii) copies of
the Charter and By-laws of the Servicer, (iii) an incumbency
certificate of the Servicer with respect to its officers authorized
to execute this Agreement, the other Facilities Documents to which
it is a party and the documents required hereby, (iv) a copy of the
resolutions of the Board of Directors of the Transferor, certified
as of the Closing Date by the Secretary or Assistant Secretary
thereof, authorizing the execution, delivery and performance of this
Agreement, the other Facilities Documents to which it is a party and
the procurement of the LOCs, (v) copies of the Charter and By-laws
of the Transferor, (vi) an incumbency certificate of the Transferor
with respect to its officers authorized to execute this Agreement,
the other Facilities Documents to which it is a party and the
documents required hereby, (vii) a copy of the resolutions of the
Board of Directors of the CP Issuer, certified as of the Closing
Date by the Secretary or Assistant Secretary thereof, authorizing
the execution, delivery and performance of this Agreement and the
other Facilities Documents to which it is a party, (viii) copies of
the Charter and By-laws of the CP Issuer and (ix) an incumbency
certificate of the CP Issuer with respect to its officers authorized
to execute this Agreement, the other Facilities Documents to which
it is a party and the documents required hereby.
(f) The Pooling and Servicing Agreement shall be in full force
and effect and all conditions precedent to the issuance of the
Variable Funding Certificate contained therein shall have been
satisfied.
(g) Each of the LOC Issuers shall have received such other
documents, certificates, instruments, approvals and opinions
(including, without limitation, an opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ &
Sutcliffe, counsel to the LOC Issuers) as the LOC Issuers may
reasonably request.
(h) All fees pursuant to Section 2.06(a) shall have been paid.
ARTICLE V
MISCELLANEOUS
Section 5.01. [reserved]
Section 5.02. Expenses. Subject to Section 2.12, the CP Issuer
agrees to pay all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses), if any,
incurred by any LOC Issuer in connection with the negotiation, preparation,
execution, delivery, amendment, modification, waiver and enforcement of
this Agreement, the Pooling and Servicing Agreement and any other agreement
delivered in connection herewith or therewith.
Section 5.03. Indemnity. (a) Subject to Sections 2.09 and 2.12, the
CP Issuer agrees to indemnify and hold harmless each LOC Issuer and its
respective officers, directors, employees and agents (each LOC Issuer, its
respective officers, directors, employees and agents shall be individually
referred to herein as an "Indemnitee") from and against any and all claims,
damages, losses, liabilities, costs or expenses whatsoever which any such
Indemnitee may incur (or which may be claimed against any such Indemnitee)
by reason of or in connection with the execution and delivery or assignment
of, or payment under, its LOC or this Agreement or any transactions
contemplated hereby or by the Facilities Documents, or by reason of any
default in the reimbursement of any LOC Disbursement except to the extent
that any such claim, damage, loss, liability, cost or expense is caused by
the willful misconduct or gross negligence of any such Indemnitee. The
foregoing indemnity shall include any claims, damages, losses, liabilities,
costs and expenses to which any LOC Issuer may become subject under the
Securities Act of 1933, as amended (the "Act"), the Securities Exchange Act
of 1934, as amended, or other federal or state law or regulation. This
covenant shall survive the termination of this Agreement and the expiration
of the LOCs.
(b) The Servicer shall not assign (whether voluntarily or as a
result of a Servicer Default) any of its rights or obligations hereunder or
under the Pooling and Servicing Agreement (except as permitted by Section
8.07 of the Pooling and Servicing Agreement) to any Person unless (i) the
prior written consent of the LOC Issuers shall have been obtained, and (ii)
prior to the effective date of such assignment, such Person shall have
executed and delivered to the LOC Issuers a written agreement in form and
substance reasonably satisfactory to the LOC Issuers in which such Person
agrees to be bound by the terms, covenants and conditions contained herein
and in the Pooling and Servicing Agreement applicable to the Servicer, as
Servicer, and subject to the duties and obligations of the Servicer
hereunder after the effective date of its appointment and shall agree to
indemnify and hold harmless each LOC Issuer from and against any and all
claims, damages, losses, liabilities, costs or expenses whatsoever which
such LOC Issuer may incur (or which may be claimed against such LOC Issuer)
by reason of the gross negligence or willful misconduct of the Successor
Servicer in exercising its powers and carrying out its obligations herein
and under the Pooling and Servicing Agreement. Any Successor Servicer
appointed pursuant to the Pooling and Servicing Agreement shall likewise
agree to the terms set forth in clause (ii). As of the date of its
acceptance, such Successor Servicer shall be deemed to have made with
respect to itself the representations and warranties made by the Servicer
in Section 3.03. Following the effective date of appointment, the Servicer
shall be released from all duties and liabilities as Servicer hereunder,
but such release shall not affect any obligations of the Servicer that
arose prior to such date or the obligations of the Servicer under Section
2.06, this Section 5.03 or 3.05(f) (in the case of Section 3.05(f),
excluding any documents received by the Successor Servicer from anyone
other than the Servicer and also excluding any documents received by the
Servicer from the Successor Servicer) or 3.05(i) (to the extent the
Servicer retains the records referred to therein) of this Agreement,
whether arising before or after such date.
Section 5.04. Notices. Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands,
instructions and other communication required or permitted to be given to
or made upon any party hereto shall be in writing and shall be personally
delivered or sent by registered, certified or express mail, postage
prepaid, return receipt requested, or by prepaid Telex, TWX, facsimile or
telegram (with messenger delivery specified in the case of a telegram)
(any notice sent by telex, TWX, facsimile or telegram will be confirmed by
mail as provided herein) and shall be deemed to be given for purposes of
this Agreement on the day that such writing is delivered or sent to the
intended recipient thereof in accordance with the provisions of this
Section 5.04. Unless otherwise specified in a notice sent or delivered in
accordance with the foregoing provision of this Section 5.04, notices,
demands, instructions and other communications shall be given to or made
upon the respective parties hereto at their respective addresses (or to
their respective Telex, facsimile or TWX numbers) indicated below:
If to the LOC to the respective addresses set forth
Issuers: underneath their respective
names on Schedule 2 hereto
If to the CP Issuer: Distribution Funding Corporation
c/o Merrill ▇▇▇▇▇
World Financial Center, South
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Servicer: ▇▇▇▇▇▇ Industries Inc.
One Belle ▇▇▇▇▇ Plaza
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Transferor: ▇▇▇▇▇▇ Funding Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Collateral: Chemical Bank
Agent: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trustee
Administration Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section 5.05. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.06. Waivers, etc. Neither any failure nor any delay on the
part of any LOC Issuer in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of
any other right, power or privilege. No provision of this Agreement shall
be waived, amended or supplemented except by a written instrument executed
by the parties hereto.
Section 5.07. Severability. Any provisions of this Agreement which
are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceable without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
Section 5.08. Term. This Agreement shall remain in full force and
effect until the later to occur of (a) the payment of all the LOC
Disbursements and any and all other amounts payable hereunder,
notwithstanding the earlier termination of the related LOCs or (b) the
termination of all of the LOCs. The provisions of Sections 2.04, 2.09,
5.02 and 5.03 hereof shall survive termination of this Agreement.
Section 5.09. Successors and Assigns. (a) This Agreement shall be
binding upon each LOC Issuer, the CP Issuer, the Servicer, the Transferor
and the Collateral Agent and their respective successors and assigns;
provided that no party hereto may assign any of its obligations under this
Agreement or its Percentage of the LOC Commitment, as applicable, without
the prior written consent of each other party hereto; provided, further
that no assignment hereunder or under the LOC will be effective until the
Collateral Agent and the CP Issuer have received written confirmation from
each of S&P and Fitch to the effect that such assignment would not result
in a withdrawal or reduction of the then current rating of Commercial Paper
by such rating agency.
"Assignee" shall mean any bank or other financial institution which has been
assigned a portion of the LOC Commitment. Notwithstanding the foregoing,
subject to the prior written consent of ▇▇▇▇▇▇, any LOC Issuer and any
Participant (as defined below) may, at any time, grant participations, or any
existing Participant may assign all or part of its participation, to any other
person, firm or corporation (a "Participant") in all or part of its rights
under this Agreement except that the CP Issuer shall not be obligated to any
Participant for amounts under Sections 2.09, 5.02 and 5.03 hereof in excess of
such amounts which would have been owing to such LOC Issuer thereunder had
such participation not been effected unless the CP Issuer has given its prior
written consent to the participation of such Participant; provided, however,
that the amount of any participation granted to any Participant by any LOC
Issuer shall not be less than $400,000 (unless the CP Issuer shall otherwise
agree in writing) and the amount of the participation of such LOC Issuer
remaining after any such participation shall not be less than $400,000 (unless
the CP Issuer shall otherwise agree in writing). Each LOC Issuer hereby
acknowledges and agrees that any such disposition will not alter or affect
such LOC Issuer's direct obligations to the Collateral Agent, and that neither
the Servicer, the Transferor nor the Collateral Agent shall have any
obligation to communicate with or maintain a relationship with any Participant
in order to enforce such obligations of such LOC Issuer hereunder and under
its LOC. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement.
(b) Each LOC Issuer may furnish any information concerning the CP
Issuer, the Trust, the Transferor, ▇▇▇▇▇▇ or any Trust Assets in the
possession of such LOC Issuer from time to time to Assignees and
Participants (including the prospective Assignees and Participants) only
with the prior written consent of ▇▇▇▇▇▇, which consent shall be deemed to
have been so given to the Participants set forth in Schedule 3 upon the
execution of an agreement by each such Participant agreeing to abide by the
terms of the covenant set forth in Section 5.13(e). As a condition
thereto, any Assignee or Participant (other than those set forth in
Schedule 3) or proposed Assignee or Participant shall agree in writing
prior to receiving any such information to the terms set
forth in the covenant contained in Section 5.13(e) hereof.
(c) Any agreement pursuant to which any LOC Issuer may grant a
participating interest shall provide that (i) each Participant shall be
entitled to vote on any and all matters on which LOC Issuers are entitled
to vote hereunder, including without limitation any approval, consent or
waiver; (ii) such vote shall be counted based upon the percentage that
such Participant's amount of participation bears to the LOC Commitment (a
"Participant's Voting Percentage) except that on matters which require the
consent of each such LOC Issuer, such LOC Issuer shall not be entitled to
cast its vote approving such matters without the approval of each of its
Participants; (iii) such LOC Issuer shall promptly advise each Participant
in writing (or by telephone confirmed promptly thereafter in writing) of
any matters which require the approval, vote or consent of the LOC Issuers;
(iv) when voting, such LOC Issuer shall vote its Percentage severally to
reflect the manner in which it has been instructed in writing (or by
telephone confirmed promptly thereafter in writing) to vote the
Participant's Voting Percentage of each of such LOC Issuer's Participants;
and (v) each Participant agrees to the terms set forth in the covenants in
Section 5.13(e).
Section 5.10. Counterparts. This Agreement may be executed in one
or more counterparts, including a telefax transmission thereof, and by the
different parties hereto on the same or separate counterparts, each of
which shall be deemed to be an original instrument.
Section 5.11. Further Assurances. Each of the CP Issuer and the
Servicer agrees to do such further acts and things and to execute and
deliver to the LOC Issuers or the Collateral Agent such additional
assignments, agreements, powers and instruments as are required by the LOC
Issuers or the Collateral Agent to carry into effect the purposes of this
Agreement or to better assure and confirm unto the LOC Issuers or the
Collateral Agent their respective rights, powers and remedies hereunder.
Section 5.12. Captions. The various captions (including, without
limitation, the table of contents) in this Agreement are included for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement.
Section 5.13. Representations, Warranties and Covenants of the LOC
Issuers. Each LOC Issuer hereby represents, warrants and covenants to the
Servicer, the Transferor, the CP Issuer and the Collateral Agent that:
(a) it is duly authorized to enter into and perform this Agreement
and to issue its LOC for the LOC Issuer's Percentage of the LOC Commitment,
and has duly executed and delivered this Agreement, and upon the issuance
and delivery of its LOC in accordance with Section 2.01, its LOC will be
duly executed and delivered;
(b) this Agreement constitutes and, upon the issuance thereof, its
LOC will constitute, the legal, valid and binding obligations of such LOC
Issuer, enforceable in accordance with their respective terms (subject to
applicable bankruptcy, reorganization, insolvency and similar laws and to
moratorium laws and other similar laws affecting creditors' rights
generally from time to time in effect and to general equitable principles,
whether enforcement is sought at law or in equity); and
(c) no registration with or consent or approval of or other action
by any state or local government authority or regulatory body having
jurisdiction over such LOC Issuer is required in connection with the
execution, delivery or performance by it of this Agreement or its LOC other
than as may be required under the blue sky laws of any state.
(d) on the Closing Date, it will provide to the Collateral Agent,
the Depositary, the Liquidity Agent, the Liquidity Banks and the Servicer
the favorable written opinion of its counsel and of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ (as to federal law and New York law), special counsel to the LOC
Issuers, to the effect that its LOC has been duly authorized, executed and
delivered and will constitute the legal, valid and binding obligations of
such LOC Issuer, enforceable against it in accordance with its terms
(subject, as to the enforcement of remedies in case of the insolvency of
such LOC Issuer, to applicable bankruptcy, reorganization, insolvency and
similar laws and to moratorium laws and other similar laws affecting
creditors' rights generally from time to time in effect and to general
equitable principles, whether enforcement is sought at law or in equity);
and
(e) unless otherwise agreed to in writing by the CP Issuer and ▇▇▇▇▇▇,
the LOC Issuers hereby agree to keep all Proprietary Information (as
defined below) confidential and not to disclose or reveal any Proprietary
Information to any Person other than such LOC Issuer's directors, officers,
employees, Affiliates and agents, and subject to Section 5.09(b), actual or
potential Assignees and actual or potential participants; provided,
however, that any of the LOC Issuers may disclose Proprietary Information
(i) as required by law, rule, regulation or judicial process, (ii) to its
attorneys and accountants who are expected to become engaged in rendering
advice or assistance in connection therewith, (iii) as requested or
required by any state, Federal or foreign authority or examiner regulating
banks or banking or (iv) in connection with any enforcement of any of their
rights under the Facilities Documents. For purposes of this Agreement, the
term "Proprietary Information" shall include all information about the CP
Issuer, ▇▇▇▇▇▇, or any of their Affiliates which has been furnished or made
available by the CP Issuer, ▇▇▇▇▇▇, or any of their Affiliates, whether
furnished or made available before or after the date hereof, and regardless
of the manner in which it is furnished or made available; provided,
however, that Proprietary Information does not include information which
(x) is or becomes generally available to the public other than as a result
of a disclosure by any of the LOC Issuers not permitted by this Agreement,
(y) was available to any of the LOC Issuers on a nonconfidential basis
prior to its disclosure to any of the LOC Issuers by the CP Issuer, ▇▇▇▇▇▇,
or any of their Affiliates or (z) becomes available to any of the LOC
Issuers on a nonconfidential basis from a Person other than the CP Issuer,
▇▇▇▇▇▇, or any of their Affiliates who, to the best knowledge of any of the
LOC Issuers, is not otherwise bound by a confidentiality agreement with the
CP Issuer, ▇▇▇▇▇▇, or any of their Affiliates, or is not otherwise
prohibited from transmitting the information to any of the LOC Issuers.
Section 5.14. Survival of Representations, Indemnities, Warranties
and Agreements. All agreements, representations, indemnities and
warranties made herein shall survive the execution and delivery of this
Agreement.
Section 5.15. Tax Forms. Each LOC Issuer agrees to provide the CP
Issuer (with a copy to the Servicer) with (i) two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, and (ii) an Internal Revenue Service
Form W-8 or w-9 or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the
Servicer, and such extensions or renewals thereof as may reasonably be
requested by the Servicer or the CP Issuer. Each LOC Issuer shall certify
(i) in the case of a Form 1001 or 4224, that it is entitled to receive
payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless in any such case an event
(including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise
be required which renders all such forms inapplicable or which would
prevent such LOC Issuer from duly completing and delivering any such form
with respect to it and such LOC Issuer advises the Servicer that it is not
capable of so receiving payments without any deduction or withholding, and
(ii) in the case of a Form W-8 or W-9, that it is entitled to an exemption
from United States backup withholding tax. If any LOC Issuer grants a
participation pursuant to Section 5.09 hereof, such LOC Issuer shall obtain
from its Participant and shall furnish to the Servicer (with a copy to the
CP Issuer and the Collateral Agent) the form described in this Section
5.15.
Section 5.16. Jurisdiction. Each of the LOC Issuers, the Servicer,
the Transferor, the CP Issuer and the Collateral Agent hereby submits to
the non-exclusive jurisdiction of the Supreme Court of the State of New
York, County of New York and the United States District Court for the
Southern District of New York (collectively, the "Subject Courts") in
respect of any suit, action or proceeding arising out of this Agreement,
the Security Agreement, the Pooling and Servicing Agreement and the other
agreements contemplated hereby and thereby. Each of the Servicer and the
CP Issuer hereby waives any objection it may have to the laying of venue of
any such suit, action or proceeding in any of the Subject Courts, and to
the fullest extent permitted by applicable law, any claim that any such
suit, action or proceeding brought in any of the Subject Courts has been
brought in an inconvenient forum. Each of the Servicer, the Transferor,
the CP Issuer and the Collateral Agent agrees that service of all writs,
process and summonses in any suit, action or proceeding may be delivered by
the mailing thereof by first-class mail, postage prepaid, to the Servicer,
the Transferor, the CP Issuer or the Collateral Agent respectively, at its
address set forth in Section 5.04 hereof.
Section 5.17. Limitation of Liability and Collateral Agent's
Obligations. It is expressly understood and agreed by the parties hereto
that, with respect to Chemical Bank acting in its capacity as Collateral
Agent and not in its capacity as LOC Issuer, this Agreement is executed by
Chemical Bank not in its corporate and individual capacity but solely as
Collateral Agent under the Security Agreement in the exercise of the power
and authority conferred and vested in it as such Collateral Agent. It is
further understood and agreed that Chemical Bank as Collateral Agent shall
not be personally liable for any breach of any representation, warranty or
covenant of the CP Issuer, or the LOC Issuers and the holders of Commercial
Paper, contained herein or in any of the certificates, notices or
agreements delivered hereunder and nothing herein contained shall be
construed as creating any liability on Chemical Bank in its corporate and
individual capacity (other than in its capacity as an LOC Issuer hereunder)
to make any payment or to perform any covenant, agreement or undertaking
contained herein, all such liability being expressly waived by each of the
parties hereto, and that the parties hereto shall look solely to the
Variable Funding Certificate for the payment of any amounts due and payable
on account of any LOC and for the payment, performance or other
satisfaction of this Agreement and any claim against the CP Issuer or the
Collateral Agent by reason of the transactions contemplated hereby.
Section 5.18. No Bankruptcy Petition Against the CP Issuer. Each LOC
Issuer (solely in its capacity as LOC Issuer) and the Collateral Agent
(solely in its capacity as Collateral Agent) severally and not jointly,
hereby covenants and agrees that, prior to the date which is one year and
one day after the payment in full of all outstanding Commercial Paper, Loan
Notes and LOC Disbursements, it will not institute against, or join any
other Person in instituting against, the CP Issuer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 5.19. Amendment and Waiver. (a) The CP Issuer shall not
consent to any amendment, waiver, supplement, restatement, or other
modification to any provision hereof or any other Facilities Document, the
Purchase Agreement or any Subsidiary Purchase Agreement unless the same
shall be consented to by the Required LOC Issuers; provided that any
amendment that would (i) increase the amount of the LOC Commitment, (ii)
reduce any fees or commissions, (iii) result in a reduction in any interest
rate, extension of the date for any repayments of any LOC Disbursements, or
forgiveness of any debt, (iv) alter the allocation or priority of payment
of Collections set forth in Sections 8 and 9 of the Security Agreement, (v)
release the Lien of any Collateral (except as expressly permitted by the
Facilities Documents), (vi) change this Section or the percentage specified
in the definition of Required LOC Issuers, (vii) extend the Expiration
Date, or (viii) decrease the percentage set forth in the definition of
Discount Factor, may only be amended, waived, supplemented, restated,
discharged or terminated with the prior written consent of the CP Issuer
and each LOC Issuer.
(b) No amendment, waiver, supplement, restatement, discharge or
termination contemplated under this Section 5.19 shall be effective without
prior written notice from each of S&P and Fitch, respectively, to the
effect that such amendment, waiver, supplement, restatement, discharge or
termination would not result in a withdrawal or reduction of the then-
current rating on the Commercial Paper by such rating agency.
Section 5.20. Waiver And Jury Trial. EACH OF THE CP ISSUER, THE
COLLATERAL AGENT, AND EACH OF THE LOC ISSUERS HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO ANY OF THE FACILITIES DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
Please signify your agreement and acceptance of the foregoing by executing
this Agreement in the space provided below.
DISTRIBUTION FUNDING CORPORATION
/s/
By: _____________________________
Authorized Signatory
▇▇▇▇▇▇ INDUSTRIES INC.,
/s/
By: _____________________________
Authorized Signatory
▇▇▇▇▇▇ FUNDING INC.,
/s/
By: _____________________________
Authorized Signatory
CHEMICAL BANK, as Collateral Agent
/s/
By: _____________________________
Authorized Signatory
CHEMICAL BANK, as LOC Issuer
/s/
By: _____________________________
Authorized Signatory
NATIONSBANK OF NORTH CAROLINA, N.A.
as LOC Issuer
/s/
By: _____________________________
Authorized Signatory
EXHIBIT A
to the Letter of Credit
Reimbursement Agreement
IRREVOCABLE LETTER OF CREDIT
[Name of LOC Issuer]
[Address]
February 10, 1993
Letter of Credit No. _
TO: Chemical Bank
in its capacity as Collateral Agent
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trustee Administration
Department
At the request and on the instructions of Distribution Funding
Corporation (the "CP Issuer"), the undersigned issuing bank (the "LOC
Issuer") hereby establishes in your favor, as Collateral Agent, pursuant to
that certain Letter of Credit Reimbursement Agreement, dated as of February
10, 1993 (as amended from time to time, the "LOC Reimbursement Agreement"),
among the LOC Issuers named therein, you, the Transferor, the Servicer, and
the CP Issuer, this irrevocable Letter of Credit (hereinafter the "LOC") in
the amount of $______ (the "LOC Commitment Amount"), as reduced and reinstated
from time to time as herein provided, effective immediately and expiring at
4:30 p.m. on December 31, 1995 [unless otherwise extended] (the "LOC
Expiration Date"). All capitalized terms used herein and not otherwise
defined shall have the meanings assigned thereto in the LOC Reimbursement
Agreement and Annex X thereto.
Only you may make drawings under this LOC. Upon payment of the
amount specified in a Drawing Certificate (as defined below) and sight
draft (if required) hereunder, the LOC Issuer shall be fully discharged of
its obligation under this LOC to the extent of such Drawing Certificate
and sight draft (if required), and the LOC Issuer shall not thereafter be
obligated to make any further payments under this LOC with respect to such
drawing. By: paying to you or for your account any amount drawn in
accordance with this LOC, the LOC Issuer makes no representation as to the
correctness of the amount drawn.
The amount available to be drawn under this LOC, at any time, shall
equal the amount of the LOC Commitment (as in effect from time to time),
shall be reduced by an amount equal to each drawing honored by the LOC
Issuer, and shall be reinstated [upon the reimbursement to the LOC Issuer
of any drawing (or portion thereof) by the amount of such reimbursement]
[For Chemical Bank -- (a) on each Wednesday, to the extent of funds in the
LOC Payment Account on such day, and (b) at any other time that funds in
the LOC Payment Account equal or exceed $100,000, to the extent of such
funds; provided, however, that if a Drawing Certificate for a Charge-Off
Drawing is in excess of the LOC Commitment Amount in effect on such day the
LOC Commitment Amount shall be reinstated to the extent of such funds in
the LOC Payment Account on such day. LOC Disbursements under this LOC, the
reimbursement of which has not caused a reinstatement of this LOC pursuant
to the previous sentence, shall not, in the aggregate, exceed the LOC
Commitment Amount. Drawings hereunder may be made from and after the date
of issuance hereof to and including the LOC Expiration Date.
Subject to the further provisions of this LOC, drawings may be made
by you from time to time hereunder by presentation to the LOC Issuer of a
drawing certificate (a "Drawing Certificate") in the form of Annex A
(completed) with respect to Charge-Off Drawings or Annex B (completed) with
respect to Special Drawings either (i) in the form of a letter on your
letterhead accompanied by your sight draft stating on its face "Drawn Under
Irrevocable Letter of Credit, [Name of LOC Issuer No. ______________]"
or (ii) in the form of a writing transmitted by authenticated
teletransmission. Such Drawing Certificate and sight draft (if required)
shall be dated the date of presentation and shall be presented at the
Office of the LOC Issuer located at ___________________ , Attention
______________________, Telephone: (_____________) ____________________,
Telecopier (_____________) ___________________.
The LOC Issuer hereby agrees that all drawings hereunder made in
compliance with the terms of this LOC will be duly honored upon delivery of
the Drawing Certificate and sight draft (if required) as specified above
and if presented at the LOC Issuer's aforesaid office on or before the LOC
Expiration Date. Drawings may be made by you under this LOC at any time
during the LOC Issuer's business hours of 8:30 A.M. to 4:30 P.M. at its
aforesaid address, on a Business Day. If a Drawing Certificate and sight
draft (if required) is presented by you hereunder at or prior to 11:00 A.M.
(New York City time) on any Business Day and provided that such demand for
payment and the documents presented in connection therewith conform to the
terms and conditions hereof, payment shall be made to you of the amount
demanded, in immediately available funds by 3:00 P.M. New York City time
on such Business Day. If a Drawing Certificate and sight draft (if
required) presented to the LOC Issuer by you hereunder does not, in any
instance, conform to the terms and conditions of this LOC, the LOC Issuer
shall give you prompt notice that such Drawing Certificate and/or sight
draft does not comply with the terms and conditions of this LOC, stating
the reasons therefor and that it is holding any documents at your disposal
or is returning the same to you, as the LOC Issuer may elect.
This LOC shall terminate on the earlier to occur of (a) the LOC
Expiration Date or (b) upon receipt by the LOC Issuer from the beneficiary
of a duly completed and executed certificate in the form of Annex C
attached hereto. Unless the LOC Issuer is in default with respect to its
obligations under this LOC, you shall surrender this LOC to the LOC Issuer
promptly following the LOC Expiration Date.
You may transfer your rights under this LOC in their entirety (but
not in part) to any transferee who has succeeded to you as Collateral Agent
and such transferred rights may be successively transferred. Transfer of
your rights under this LOC to any such transferee shall be effected upon
the presentation to the LOC Issuer of this LOC accompanied by a transfer
letter in the form attached hereto as Annex D. This LOC shall be governed
by and construed in accordance with the laws of the State of New York. As
to matters not covered by the laws of the State of New York, this LOC shall
be subject to the Uniform Customs and Practice for Documentary Credits
(1983 Revision), International Chamber of Commerce, Publication No. 400
(the "Uniform Customs"). Communications with respect to this LOC shall be
in writing and shall be addressed to the LOC Issuer at its address set
forth above, specifically referring therein to this LOC.
This LOC sets forth in full the undertaking of the LOC Issuer, and
such undertaking shall not in any way be modified, amended, amplified or
limited by reference to any document, instrument or agreement referred to
herein; and any such reference shall not be deemed to incorporate herein by
reference any document, instrument or agreement or provision thereof except
for such definitions.
Very truly yours,
_________________________________
[Name of LOC Issuer]
By: _____________________________
Authorized Signatory
ANNEX A TO
LETTER OF CREDIT
CERTIFICATE FOR "CHARGE-OFF DRAWING"
__________________, 19__
[Name of LOC Issuer]
[Address]
Attention:
Re: Irrevocable Letter of Credit No.
Gentlemen:
The undersigned, a duly authorized officer of Chemical Bank, as collateral
agent (the "Collateral Agents) under a certain Security Agreement, dated as
of February 10, 1993, hereby certifies to [Name of LOC Issuer] with
reference to Irrevocable Letter of Credit No. _________ (the "LOC") (any
capitalized term used herein and not defined shall have the meaning set
forth in the LOC) issued by the LOC Issuer, in favor of the Collateral
Agent, that:
1. The undersigned is the Collateral Agent under the Security
Agreement.
2. As of the date set forth above, pursuant to the Daily Report
delivered to the under-signed on the date hereof, the drawing
requested hereunder does not exceed the LOC Issuer's Percentage of
the Available LOC Amount.
3. ▇▇▇▇▇▇ Industries Inc., as Servicer under the Pooling and
Servicing Agreement or a successor thereto, has instructed the
undersigned pursuant to Section 4.05(a) of the Pooling and Servicing
Agreement with respect to the [Payment Date] [Determination Date]
occurring on [insert applicable Determination Date or Payment Date]
that (a) losses have been allocated to the Variable Funding
Certificate, resulting in a write-down of $______ and (b) $______
should be drawn under the LOC in accordance with Section 2.02(a) of
the LOC Reimbursement Agreement.
4. The undersigned hereby requests payment of a Charge-Off
Drawing under the LOC in the amount of $______, and directs that such
payment be made to its account no. _________ at [Name of Bank].
5. All amounts received by the Collateral Agent from the LOC
Issuer in respect of this certificate shall be deposited in the
Collateral Account for disposition in accordance with the Security
Agreement.
IN WITNESS WHEREOF, the Collateral Agent has executed and delivered this
certificate as of this ____________ day of ___________, 19__.
CHEMICAL BANK, as Collateral Agent
By: _____________________________
Authorized Signatory
ANNEX B TO
LETTER OF CREDIT NO.
CERTIFICATE FOR "SPECIAL DRAWING"
__________________, 19__
[Name of LOC Issuer]
[Address]
Attention:
Re: Irrevocable Letter of Credit No.
Gentlemen:
The undersigned, a duly authorized officer of Chemical Bank, as Collateral
Agent (the "Collateral Agent") under a certain Security Agreement, dated as
of February 10, 1993, hereby certifies to [Name of Downgraded LOC Issuer]
(the "Downgraded LOC Issuer") with reference to irrevocable Letter of
Credit No. _________ (the "LOC") (any capitalized term used herein and not
defined shall have the meaning set forth in the LOC) issued, in favor of
the Collateral Agent that:
1. The Collateral Agent is the Collateral Agent under the
Security Agreement.
2. A Responsible Officer of the Collateral Agent has obtained
knowledge that the shortterm debt rating of the Downgraded LOC
Issuer has been reduced, suspended or withdrawn and the Rating
Agencies have not confirmed that the then current rating of the
Commercial Paper will not be reduced, suspended or withdrawn by such
Rating Agencies because of such reduction, suspension or withdrawal
of such rating of the Downgraded LOC Issuer.
3. The undersigned hereby requests payment of a Special
Drawing under the LOC in the amount of $______, which amount equals
the Downgraded LOC Issuer's Percentage of the LOC Commitment on the
Business Day preceding the date hereof, as specified in the Daily
Report or Settlement Statement delivered by the Servicer pursuant to
Section 3.04 of the Pooling and Servicing Agreement (and after
giving effect to any contemporaneous drawings under the LOC being
made with respect to the related Settlement Date or Payment Date).
4. All amounts received by the Collateral Agent from the
Downgraded LOC Issuer in respect of this certificate shall be
deposited in the LOC Escrow Account and applied in accordance with
Section 2.03 of the LOC Reimbursement Agreement.
IN WITNESS WHEREOF, the Collateral Agent has executed and delivered
this certificate as of this _____________ day of __________________, 19__.
CHEMICAL BANK, as Collateral Agent
By: _____________________________
Authorized Signatory
ANNEX C TO
LETTER OF CREDIT NO.
CERTIFICATE FOR THE TERMINATION
OF LETTER OF CREDIT NO. __________
[Name of LOC Issuer]
[Address]
Attention:
The undersigned, a duly authorized officer of Chemical Bank (the
"Collateral Agent"), hereby certifies to [Name of LOC Issuer], with
reference to Irrevocable Letter of Credit No. __________ (the "LOC"; any
capitalized terms used herein and not defined shall have the meaning set
forth in the LOC) issued by [Name of LOC Issuer] in favor of the Collateral
Agent, that the LOC shall terminate on [Date of Termination]. Accordingly,
we herewith return to you for cancellation the LOC, which is terminated, as
of the date hereof, pursuant to its terms.
Dated: ________________
CHEMICAL BANK, as Collateral Agent
By: _____________________________
Authorized Officer
ANNEX D TO
LETTER OF CREDIT NO. ____________
__________________, 19__
[Name of LOC Issuer]
[Address]
Re: Irrevocable Letter of Credit No. ____________
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably transfers
to:
__________________________
(Name of Transferee)
__________________________
(Address)
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "LOC"). The transferee has succeeded the undersigned as
Collateral Agent under the Security Agreement (as defined in the LOC).
By: this transfer, all rights of the undersigned beneficiary in the LOC
are transferred to the transferee and the transferee shall hereafter have
the sole rights as beneficiary thereof, including sole rights relating to
any amendments whether increases or extensions or other amendments and
whether now existing or hereafter made. All amendments are to be advised
direct to the transferee without necessity of any consent of or notice to
the undersigned beneficiary.
The transferee hereby directs you to make all payments of drafts
drawn by it under the LOC in immediately available funds to account number
__________ at ______________________________.
We ask you to endorse the transfer on the reverse thereof, and forward it
directly to the transferee with your customary notice of transfer.
Yours very truly,
SIGNATURE AUTHENTICATED
_____________________________ _____________________________
(Bank) Signature of Beneflclary
_____________________________
(Authorized Signature)
SIGNATURE AUTHENTICATED
_____________________________ _____________________________
(Bank) Signature of Transferee
_____________________________
(Authorized Signature)
Schedule 1
Percentage of LOC Commitment
Chemical Bank 77.1430%
NationsBank of North Carolina, N.A. 11.4285%
The Bank of Nova Scotia 11.4285%
Schedule 2
Notices
NATIONSBANK OF NORTH CAROLINA, N.A.
NationsBank of North Carolina, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Lending Support,
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to
NationsBank of North Carolina, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
THE BANK OF NOVA SCOTIA
The Bank of Nova Scotia
Atlanta Agency
#▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Representative
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
CHEMICAL BANK
Notices pertaining to funding or payment obligations of Chemical:
Chemical Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
All other notices to:
Chemical Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Schedule 3
Initial Participants
The Industrial Bank of Japan, Limited,
Atlanta Agency
NBD Bank, N.A.
First American National Bank
First Bank National Association
DG Bank
The First National Bank of Louisville
Third National Bank
Credit Lyonnais Atlanta/
Credit Lyonnais Cayman Island Branch
Bank of Scotland
ABN AMRO Bank N.V.
Generale Banque, New York Branch