EXHIBIT 10.60
_______________________________________________________________
TRANSFER AND ADMINISTRATION AGREEMENT
between
ENTERPRISE FUNDING CORPORATION,
as Company
and
IMC-AGRICO COMPANY
as Transferor and Collection Agent
Dated as of October 31, 1994
_______________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms 1
SECTION 1.2. Other Terms 23
SECTION 1.3. Computation of Time Periods 23
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility 24
SECTION 2.2. Transfers; Company Certificate;
Eligible Receivables 24
SECTION 2.3. Selection of Tranche Periods and
Tranche Rates 27
SECTION 2.4. Discount, Fees and Other Costs and
Expenses 28
SECTION 2.5. Non-Liquidation Settlement and
Reinvestment Procedures 28
SECTION 2.6. Liquidation Settlement Procedures 29
SECTION 2.7. Fees 30
SECTION 2.8. Protection of Ownership Interest of the
Company 30
SECTION 2.9. Deemed Collections; Application of
Payments 32
SECTION 2.10. Payments and Computations, Etc. 33
SECTION 2.11. Reports 34
SECTION 2.12. Collection Account 34
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the
Transferor 35
SECTION 3.2. Reaffirmation of Representations and
Warranties of the Transferor 38
i
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. 40
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Transferor 43
SECTION 5.2. Negative Covenants of Transferor 47
SECTION 5.3. Financial Covenants 48
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent 50
SECTION 6.2. Duties of Collection Agent 50
SECTION 6.3. Rights After Designation of New
Collection Agent 52
SECTION 6.4. Responsibilities of the Transferor 53
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events 54
SECTION 7.2. Termination 56
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor 57
SECTION 8.2. Indemnity for Taxes, Reserves and
Expenses 59
SECTION 8.3. Other Costs, Expenses and Related
Matters 62
SECTION 8.4. Reconveyance Under Certain
Circumstances 62
ii
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Term of Agreement 63
SECTION 9.2. Waivers; Amendments 63
SECTION 9.3. Notices 63
SECTION 9.4. Governing Law; Submission to
Jurisdiction; Integration 65
SECTION 9.5. Severability; Counterparts 66
SECTION 9.6. Successors and Assigns 66
SECTION 9.7. Waiver of Confidentiality 66
SECTION 9.8. Confidentiality Agreement 67
SECTION 9.9. No Bankruptcy Petition Against the
Company 67
SECTION 9.10. No Recourse Against Stockholders,
Officers and Directors 68
SECTION 9.11. Characterization of the Transactions
Contemplated by the Agreement 68
EXHIBITS
EXHIBIT A Form of Contract
EXHIBIT B Credit and Collection Policies and
Practices
EXHIBIT C List of Lock-Box Banks
EXHIBIT D Form of Lock-Box Agreement
EXHIBIT E Form of Investor Report
EXHIBIT F Form of Transfer Certificate
EXHIBIT G Certain Definitions
EXHIBIT H List of Actions and Suits
EXHIBIT I [Reserved]
EXHIBIT J [Reserved]
EXHIBIT K Form of Opinion of Counsel for the
Transferor
iii
EXHIBIT L Form of Responsible Officer's Certificate
EXHIBIT M Form of Company Certificate
iv
TRANSFER AND ADMINISTRATION AGREEMENT
TRANSFER AND ADMINISTRATION AGREEMENT (this "Agreement"),
dated as of October 31, 1994, between IMC-AGRICO COMPANY, a general
partnership formed under the laws of the State of Delaware, as
transferor (in such capacity, the "Transferor") and as collection agent
(in such capacity, the "Collection Agent"), and ENTERPRISE FUNDING
CORPORATION, a Delaware corporation (the "Company").
PRELIMINARY STATEMENTS
WHEREAS, the Transferor may desire to convey, transfer and
assign, from time to time, undivided percentage interests in certain
accounts receivable, and the Company may desire to accept such
conveyance, transfer and assignment of such undivided percentage
interests, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this
agreement, the following terms shall have the following meanings:
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets
or properties in favor of any other Person.
"Administrative Agent" means NationsBank of North Carolina,
N.A., as administrative agent.
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through
ownership of voting stock, by contract or otherwise.
"Affiliated Obligor" means any Obligor which is an Affiliate
of another Obligor.
"Aggregate Unpaids" means, at any time, an amount equal to
the sum of (i) the aggregate accrued and unpaid Discount with respect
to all Tranche Periods at such time, (ii) the Net Investment at such
time, and (iii) all other amounts owed (whether due or accrued)
hereunder by Transferor to the Company at such time.
"Arrangement Fee" means the fee payable by the Transferor to
the Administrative Agent pursuant to Section 2.7 hereof, the terms of
which are set forth in the Fee Letter.
"Base Rate" or "BR" means, a rate per annum equal to the
greater of (i) the prime rate of interest announced by the Liquidity
Provider from time to time, changing when and as said prime rate
changes (such rate not necessarily being the lowest or best rate
charged by the Liquidity Provider) and (ii) the rate equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Liquidity Provider from three Federal
funds brokers of recognized standing selected by it plus 2%.
"Business Day" means any day excluding Saturday, Sunday and
any day on which banks in New York, New York, Charlotte, North
Carolina, Dallas, Texas or Chicago, Illinois are authorized or required
by law to close, and, when used with respect to the determination of
any Eurodollar Rate or any notice with respect thereto, any such day
which is also a day for trading by and between banks in United States
dollar deposits in the London interbank market.
"BR Tranche" means a Tranche as to which Discount is
calculated at the Base Rate.
"BR Tranche Period" means, with respect to a BR Tranche,
prior to the Termination Date, a period of up to 30 days requested by
the Transferor and agreed to by the Company or the Liquidity Provider
, as the case may be, commencing on a Business Day requested by the
Transferor and agreed to by the Company or the Liquidity Provider , as
the case may be, and after the Termination Date, a period of one day.
If such BR Tranche Period would end on a day which is not a Business
Day, such BR Tranche Period shall end on the next succeeding Business
Day.
"Capitalized Lease" of a Person means any lease of property
by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with generally accepted
accounting principles.
"CD Rate" shall mean, with respect to any CD Tranche Period,
a rate which is .75% in excess of a rate per annum equal to the sum
(rounded upward to the nearest 1/100 of 1%) of (A) the rate obtained by
dividing (x) the Certificate of Deposit Rate for such CD Tranche Period
by (y) a percentage equal to 100% minus the stated maximum rate for all
reserve requirements as specified in Regulation D (including without
limitation any marginal, emergency, supplemental, special or other
reserves) that would be applicable during such Tranche Period to a
negotiable certificate of deposit in excess of $100,000, with a
maturity approximately equal to such Tranche Period, of any member bank
of the Federal Reserve System plus (B) the then daily net annual
assessment rate (rounded upward, if necessary, to the nearest 1/100 of
1%) as estimated by the Liquidity Provider for determining the current
annual assessment payable by the Liquidity Provider to the Federal
Deposit Insurance Corporation for insuring such certificates of
deposit.
"CD Tranche" means a Tranche as to which Discount is
calculated at the CD Rate.
"CD Tranche Period" means, with respect to a CD Tranche,
prior to the Termination Date, a period of up to one month requested by
the Transferor and agreed to by the Company or the Liquidity Provider,
as the case may be, commencing on a Business Day requested by the
Transferor and agreed to by the Company or the Liquidity Provider, as
the case may be, and after the Termination Date, a period of one day.
If such CD Tranche Period would end on a day which is not a Business
Day, such CD Tranche Period shall end on the next succeeding Business
Day.
"Certificate of Deposit Rate" means, with respect to any CD
Tranche Period, the average of the bid rates determined by the
Liquidity Provider to be bid rates per annum, at approximately 10:00
a.m. (New York City time) on the Business Day before the first day of
the CD Tranche Period for which such CD Rate is to be applicable, of
two or more New York certificate of deposit dealers of recognized
standing selected by the Liquidity Provider for the purchase in New
York from the Liquidity Provider at face value of certificates of
deposit of the Liquidity Provider in an aggregate amount approximately
comparable to the amount of the CD Tranche to which such CD Rate is to
be applicable and with a maturity approximately equal to the applicable
CD Tranche Period.
"Closing Date" means October 31, 1994.
"Collateral Agent" means NationsBank of North Carolina, N.A.,
as collateral agent for any Liquidity Provider, any Credit Support
Provider, the holders of Commercial Paper and certain other parties.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including,
without limitation, all Finance Charges, if any, and cash proceeds of
Related Security with respect to such Receivable.
"Collection Account" means the account, established by the
Collateral Agent, for the benefit of the Company, pursuant to Section
2.12.
"Collection Agent" means at any time the Person then
authorized pursuant to Section 6.1 to service, administer and collect
Receivables.
"Collection Delay" means 30 days, or upon written notice to
the Collection Agent, such higher number of days as the Administrative
Agent may estimate to be necessary for the collection of a Receivable.
"Collection Period" means at any time a period of days
(rounded up to the next whole day) equal to the product of (i) a
fraction the numerator of which shall be the amount set forth in the
most recent Investor Report as the "Beginning Balance" of the
Receivables and the denominator of which shall be the Collections as
set forth in the most recent Investor Report and (ii) thirty (30).
"Commercial Paper" means the promissory notes of the Company
issued by the Company in the commercial paper market.
"Company Certificate" means the certificate issued to the
Company pursuant to Section 2.2 hereof.
"Concentration Factor" means for any Designated Obligor (a)
3% of the Outstanding Balance of all Eligible Receivables at such time;
provided however, that with respect to any Designated Obligor and its
affiliates whose long term unsecured debt obligations are rated at
▇▇▇▇▇ "▇▇" by Moody's and at least "A+" by Standard & Poor's and with
respect to which rating neither Moody's nor Standard & Poor's shall
have made a public announcement anticipating a downgrading of such
Designated Obligor's long term unsecured debt obligations to a rating
less than the aforementioned ratings ("A1/A+ Rated Obligors") 5% of the
Outstanding Balance of all Eligible Receivables at such time; provided
further, however, that with respect to Phosphate Chemicals Export
Association, Inc. (a "Special Obligor"), 30% of the Outstanding Balance
of all Eligible Receivables at such time, provided that such amount
shall not exceed $25,000,000 and the Company shall have full recourse
to the Transferor for all Receivables payable by Phosphate Chemicals
Export Association, Inc., or (b) such other amount determined by the
Company in the reasonable exercise of its good faith judgment and
disclosed in a written notice delivered to the Transferor.
"Contract" means an agreement or invoice in substantially the
form of one of the forms set forth in Exhibit A or otherwise approved
by the Company, pursuant to or under which an Obligor shall be
obligated to pay for merchandise purchased or services rendered.
"CP Rate" means, with respect to any CP Tranche Period, the
rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) at which Commercial Paper having a term equal to
such CP Tranche Period may be sold by any placement agent or commercial
paper dealer selected by the Company, provided, however, that if the
rate (or rates) as agreed between any such agent or dealer and the
Company is a discount rate, then the rate (or if more than one rate,
the weighted average of the rates) resulting from the Company's
converting such discount rate (or rates) to an interest-bearing
equivalent rate per annum.
"CP Tranche" means a Tranche as to which Discount is
calculated at a CP Rate.
"CP Tranche Period" means, with respect to a CP Tranche, a
period of days not to exceed 120 days commencing on a Business Day
requested by the Transferor and agreed to by the Company pursuant to
Section 2.3. If such CP Tranche Period would end on a day which is not
a Business Day, such CP Tranche Period shall end on the next succeeding
Business Day.
"Credit and Collection Policy" shall mean the Transferor's
credit and collection policy or policies and practices, relating to
Contracts and Receivables existing on the date hereof and referred to
in Exhibit B attached hereto, as modified from time to time in
compliance with Section 5.2(c).
"Credit Support Agreement" means the agreement between the
Company and the Credit Support Provider evidencing the obligation of
the Credit Support Provider to provide credit support to the Company in
connection with the issuance by the Company of Commercial Paper.
"Credit Support Provider" means the Person or Persons who
will provide credit support to the Company in connection with the
issuance by the Company of Commercial Paper.
"Dealer Fee" means the fee payable by the Transferor to the
Collateral Agent, pursuant to Section 2.4 hereof, the terms of which
are set forth in the Fee Letter.
"Deemed Collections" means any Collections on any Receivable
deemed to have been received pursuant to Section 2.9(a) or (b).
"Defaulted Receivable" means a Receivable: (i) as to which
any payment, or part thereof, remains unpaid for 90 days or more from
the original due date for such Receivable; (ii) as to which an Event of
Bankruptcy has occurred with respect to the Obligor thereof; (iii)
which has been identified by the Collection Agent as uncollectible; or
(iv) which, consistent with the Credit and Collection Policy, should be
written off the Transferor's books as uncollectible.
"Delinquency Ratio" means, the ratio (expressed as a
percentage) computed as of the last day of each calendar month by
dividing (i) the aggregate Outstanding Balance of all Delinquent
Receivables as of such date by (ii) the aggregate Outstanding Balance
of all Receivables as of such date less Defaulted Receivables as of
such date.
"Delinquent Receivable" means a Receivable: (i) as to which
any payment, or part thereof, remains unpaid for more than 30 days from
the original due date for such Receivable and (ii) which is not a
Defaulted Receivable.
"Designated Obligor" means, at any time, each Obligor;
provided, however, that any Obligor shall cease to be a Designated
Obligor upon notice to the Transferor from the Company, delivered at
any time.
"Dilution Ratio" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the
aggregate amount of credits, rebates, discounts, disputes, warranty
claims, repossessed or returned goods, charge back allowances and other
dilutive factors, and any other billing or other adjustment by the
Transferor or the Collection Agent, provided to Obligors in respect of
Receivables during such calendar month by (ii) the aggregate
Outstanding Balance of all Receivables which arose during the
immediately preceding calendar month.
"Discount" means, with respect to any Tranche Period:
(TR x TNI x AD)
---
360
Where:
TR = the Tranche Rate applicable to such Tranche Period.
TNI = the portion of the Net Investment allocated to such Tranche
Period.
AD = the actual number of days during such Tranche Period.
provided, however, that no provision of this Agreement shall require
the payment or permit the collection of Discount in excess of the
maximum permitted by applicable law; and provided, further, that
Discount shall not be considered paid by any distribution if at any
time such distribution is rescinded or must be returned for any reason.
"Discount Reserve" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Discount for all Tranche Periods.
LY = the Liquidation Yield
"Early Collection Fee" means, for any Tranche Period (such
Tranche Period to be determined without regard to the last sentence in
Section 2.3(a)) during which the portion of the Net Investment that was
allocated to such Tranche Period is reduced, the excess, if any, of (i)
the additional Discount that would have accrued during such Tranche
Period if such reductions had not occurred, minus (ii) the income, if
any, received by the Company from investing the proceeds of such
reductions.
"Eligible Investments" shall mean (a) negotiable instruments
or securities represented by instruments in bearer or registered or in
book-entry form which evidence (i) obligations fully guaranteed by the
United States of America; (ii) time deposits in, or bankers acceptances
issued by, any depositary institution or trust company incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by Federal or state banking or
depositary institution authorities; provided, however, that at the time
of investment or contractual commitment to invest therein, the
certificates of deposit or short-term deposits, if any, or long-term
unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such
institution or trust company) of such depositary institution or trust
company shall have a credit rating from Moody's and S&P of at least "P-
1" and "A-1", respectively, in the case of the certificates of deposit
or short-term deposits, or a rating not lower than one of the two
highest investment categories granted by Moody's and by S&P; (iii)
certificates of deposit having, at the time of investment or
contractual commitment to invest therein, a rating from Moody's and S&P
of at least "P-1" and "A-1", respectively; (iv) investments in money
market funds rated in the highest investment category or otherwise
approved in writing by the applicable rating agencies, (b) demand
deposits in any depositary institution or trust company referred to in
(a)(ii) above, (c) commercial paper (having original or remaining
maturities of no more than 30 days) having, at the time of investment
or contractual commitment to invest therein, a credit rating from
Moody's and S&P of at least "P-1" and "A-1", respectively, (d)
Eurodollar time deposits having a credit rating from Moody's and S&P of
at least "P-1" and "A-1", respectively, and (e) repurchase agreements
involving any of the Eligible Investments described in clauses (a)(i),
(a)(iii) and (d) hereof so long as the other party to the repurchase
agreement has at the time of investment therein, a rating from Moody's
and S&P of at least "P-1" and "A-1", respectively.
"Eligible Receivable" means, at any time, any Receivable:
(i) which has been originated by the
Transferor and to which the Transferor has good title
thereto, free and clear of all Adverse Claims;
(ii) the Obligor of which is a United States
resident, is a Designated Obligor at the time of the initial
creation of an interest therein hereunder, is not an
Affiliate of any of the parties hereto, and is not a
government or a governmental subdivision or agency;
(iii) which is not a Defaulted Receivable at
the time of the initial creation of an interest of the
Company therein;
(iv) which is not a Delinquent Receivable at
the time of the initial creation of an interest of the
Company therein;
(v) which, according to the Contract related
thereto, is required to be paid in full within 30 days of the
original billing date therefor; provided that not more than
5.0% of the Receivables (determined by reference to the
Outstanding Balance of such Receivables and the aggregate
Outstanding Balance of all Receivables) may be required to be
paid in full in greater than 30 days but within 90 days of
the original billing date therefor;
(vi) which is an "eligible asset" as defined
in Rule 3a-7 under the Investment Company Act of 1940, as
amended;
(vii) a purchase of which with the proceeds
of Commercial Paper would constitute a "current transaction"
within the meaning of Section 3(a)(3) of the Securities Act
of 1933, as amended;
(viii) which is an "account" or "chattel
paper" within the meaning of Article 9 of the UCC of all
applicable jurisdictions;
(ix) which is denominated and payable only in
United States dollars in the United States;
(x) which, arises under a Contract that
together with the Receivable related thereto, is in full
force and effect and constitutes the legal, valid and binding
obligation of the related Obligor enforceable against such
Obligor in accordance with its terms and is not subject to
any offset, counterclaim or other defense at such time;
(xi) which, together with the Contract
related thereto, does not contravene in any material respect
any laws, rules or regulations applicable thereto (including,
without limitation, laws, rules and regulations relating to
truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of the Contract
related thereto is in violation of any such law, rule or
regulation in any material respect;
(xii) which (A) satisfies all applicable
requirements of the Credit and Collection Policy and (B)
arises pursuant to a Contract with respect to which the
Transferor has performed all obligations required to be
performed by it thereunder, including without limitation
shipment of the merchandise purchased thereunder;
(xiii) which was generated in the ordinary
course of the Transferor's business;
(xiv) the Obligor of which has been directed
to make all payments to a specified account of the Collection
Agent with respect to which there shall be a Lock-Box
Agreement in effect; and
(xv) as to which the Company has not notified
the Transferor that the Company has determined that such
Receivable or class of Receivables is not acceptable for
purchase hereunder because of the nature of the business of
the Obligor or because of a potential conflict of interest
between the interests of the Transferor and the Company, any
Liquidity Provider, any Credit Support Provider or any of
their affiliates.
"Estimated Maturity Period" means, at any time, the period,
rounded upward to the nearest whole number of days, equal to the
weighted average days until due of the Receivables as calculated by the
Collection Agent in good faith and set forth in the most recent
Investor Report, such calculation to be based on the assumptions that
(a) each Receivable within a particular aging category, (as set forth
in the Investor Report) will be paid on the last day of such aging
category and (b) the last day of the last such aging category coincides
with the last date on which any Outstanding Balance of any Receivables
would be written off as uncollectible or charged against any applicable
reserve or similar account in accordance with the objective
requirements of the Credit and Collection Policy and the Transferor's
normal accounting practices applied on a basis consistent with those
reflected in the Transferor's financial statements, provided, however,
that if the Company shall reasonably disagree with any such
calculation, the Company may recalculate the Estimated Maturity Period,
and such recalculation, in the absence of manifest error, shall be
conclusive.
"Eurodollar Rate" means, with respect to any Eurodollar
Tranche Period, a rate which is .625% in excess of a rate per annum
equal to the sum (rounded upwards, if necessary, to the next higher
1/100 of 1%) of (A) the rate obtained by dividing (i) the applicable
LIBOR Rate by (ii) a percentage equal to 100% minus the reserve
percentage used for determining the maximum reserve requirement as
specified in Regulation D (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) that is applicable
to the Liquidity Provider during such Eurodollar Tranche Period in
respect of eurocurrency or eurodollar funding, lending or liabilities
(or, if more than one percentage shall be so applicable, the daily
average of such percentage for those days in such Eurodollar Tranche
Period during which any such percentage shall be applicable) plus (B)
the then daily net annual assessment rate (rounded upwards, if
necessary, to the nearest 1/100 of 1%) as estimated by the Liquidity
Provider for determining the current annual assessment payable by the
Liquidity Provider to the Federal Deposit Insurance Corporation in
respect of eurocurrency or eurodollar funding, lending or liabilities.
"Eurodollar Tranche" means a Tranche as to which Discount is
calculated at the Eurodollar Rate.
"Eurodollar Tranche Period" means, with respect to a
Eurodollar Tranche, prior to the Termination Date, a period of up to
one month requested by the Transferor and agreed to by the Company or
the Liquidity Provider, as the case may be, commencing on a Business
Day requested by the Transferor and agreed to by the Company; provided,
however, that if such Eurodollar Tranche Period would expire on a day
which is not a Business Day, such Eurodollar Tranche Period shall
expire on the next succeeding Business Day; provided, further, that if
such Eurodollar Tranche Period would expire on (a) a day which is not a
Business Day but is a day of the month after which no further Business
Day occurs in such month, such Eurodollar Tranche Period shall expire
on the next preceding Business Day or (b) a Business Day for which
there is no numerically corresponding day in the applicable subsequent
calendar month, such Eurodollar Tranche Period shall expire on the last
Business Day of such month.
"Event of Bankruptcy", with respect to any Person, shall mean
(i) that such Person shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against such
Person seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee or other similar official for it or any
substantial part of its property provided that in the case of any such
proceeding instituted against such Person, either such proceeding shall
remain undismissed or unstayed for a period of thirty (30) days or any
action sought in such proceeding shall occur or (ii) if such Person is
a corporation, such Person or any Subsidiary shall take any corporate
action to authorize any of the actions set forth in the preceding
clause (i).
"Fee Letter" means the letter agreement dated the date hereof
between the Transferor and the Company, as amended, modified or
supplemented from time to time.
"Finance Charges" means, with respect to a Contract, any
finance, interest, late or similar charges owing by an Obligor pursuant
to such Contract.
"Guaranty" of a Person means any agreement by which such
Person assumes, guarantees, endorses, contingently agrees to purchase
or provide funds for the payment of, or otherwise becomes liable upon,
the obligation of any other Person, or agrees to maintain the net worth
or working capital or other financial condition of any other Person or
otherwise assures any other creditor of such other Person against loss,
including, without limitation, any comfort letter, operating agreement
or take-or-pay contract and shall include, without limitation, the
contingent liability of such Person in connection with any application
for a letter of credit.
"Incremental Transfer" means a Transfer which is made
pursuant to Section 2.2(a).
"Indebtedness" of a Person means such Person's (i)
obligations for borrowed money, (ii) obligations representing the
deferred purchase price of property other than accounts payable arising
in the ordinary course of such Person's business on terms customary in
the trade, (iii) obligations, whether or not assumed, secured by liens
or payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person, (iv) obligations which are
evidenced by notes, acceptances, or other instruments, (v) Capitalized
Lease obligations and (vi) obligations for which such Person is
obligated pursuant to a Guaranty.
"Indemnified Amounts" has the meaning specified in Section
8.1.
"Indemnified Parties" has the meaning specified in Section
8.1.
"Investor Report" means a report, in substantially the form
of Exhibit E or in such other form as is mutually agreed to by the
Transferor and the Company, furnished by the Collection Agent to the
Company and the Administrative Agent pursuant to Section 2.11.
"Law" shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance, order,
injunction, writ, decree or award of any Official Body.
"LIBOR Rate" shall mean, with respect to any Eurodollar
Tranche Period, the rate at which deposits in dollars are offered to
the Liquidity Provider in the London interbank market at approximately
11:00 a.m. (London time) two Business Days before the first day of such
Eurodollar Tranche Period in an amount approximately equal to the
Eurodollar Tranche to which the Eurodollar Rate is to apply and for a
period of time approximately equal to the applicable Eurodollar Tranche
Period.
"Liquidation Yield" means, at any time, an amount equal
to:
(RVF x LBR x NI) x (EM + CD)
-------
360
Where:
RVF = the Rate Variance Factor.
LBR = the Base Rate which is applicable to the liquidation
period of the Net Investment at such time.
NI = the Net Investment.
EM = the Estimated Maturity Period of the Receivables.
CD = the Collection Delay.
"Liquidity Provider Agreement" means the agreement between
the Company and the Liquidity Provider evidencing the obligation of the
Liquidity Provider to provide liquidity support to the Company in
connection with the issuance by the Company of Commercial Paper.
"Liquidity Provider" means the Person or Persons who will
provide liquidity support to the Company in connection with the
issuance by the Company of Commercial Paper.
"Lock-Box Account" means an account maintained by the
Collection Agent at a Lock-Box Bank for the purpose of receiving
Collections from Receivables.
"Lock-Box Agreement" means an agreement among the Collateral
Agent, the Collection Agent and a Lock-Box Bank in substantially the
form of Exhibit D hereto.
"Lock-Box Bank" means each of the banks set forth in Exhibit
C hereto and such banks as may be added thereto or deleted therefrom
pursuant to Section 2.8.
"Loss Percentage" means on any day the greater of (i) five
(5) times the highest Loss-to-Liquidation Ratio as of the last day of
the 12 calendar months preceding the then current calendar month, (ii)
three (3) times the highest Concentration Factor of all Designated
Obligors (exclusive of A1/A+ Rated Obligors and Special Obligors) and
(iii) 10%.
"Loss Reserve" means, on any day, an amount equal to:
LP x (NI + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the
Collection Agent on such day.
NI = the Net Investment at the close of business of the
Collection Agent on such day.
DR = the Discount Reserve at the close of business of the
Collection Agent on such day.
SFR = the Servicing Fee Reserve at the close of business of
the Collection Agent on such day.
Notwithstanding the foregoing, the Loss Reserve shall at all times be
at least equal to $7,500,000.
"Loss-to-Liquidation Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each calendar month by
dividing (i) the aggregate Outstanding Balance of all Receivables which
became Defaulted Receivables during such calendar month, by (ii) the
aggregate amount of Collections received by the Collection Agent during
such calendar month.
"Maximum Net Investment" means $75,000,000.
"Maximum Percentage Factor" means 95%.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Investment" means the sum of the amounts paid to the
Transferor for each Incremental Transfer less the aggregate amount of
Collections received and applied by the Company to reduce such Net
Investment pursuant to Section 2.6 or Section 2.9; provided that the
Net Investment shall be restored in the amount of any Collections so
received and applied if at any time the distribution of such
Collections is rescinded or must otherwise be returned for any reason.
"Net Receivables Balance" means at any time the Outstanding
Balance of the Eligible Receivables at such time reduced by the sum of
(i) the aggregate amount by which the Outstanding Balance of all
Eligible Receivables of each Designated Obligor exceeds the
Concentration Factor for such Designated Obligor, plus (ii) the
aggregate Outstanding Balance of all Eligible Receivables which are
Defaulted Receivables, plus (iii) the aggregate Outstanding Balance of
all Eligible Receivables of each Obligor with respect to which 50% or
more of such Obligor's Receivables are Delinquent Receivables, plus
(iv) at any time from and after May 1, 1995, an amount equal to the
amount of Collections paid by Obligors to any account or location other
than a Lock-Box Account during the immediately preceding calendar month
and not deposited in a Lock-Box Account as required pursuant to Section
5.1(i).
"Obligor" means a Person obligated to make payments for the
provision of goods and services pursuant to a Contract.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand
jury or arbitrator, in each case whether foreign or domestic.
"Other Transferor" means any Person other than the Transferor
that has entered into a receivables purchase agreement or transfer and
administration agreement with the Company.
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal amount thereof including any accrued and
outstanding Finance Charges related thereto.
"Percentage Factor" means the percentage computed at any time
of determination as follows:
NI + LR + DR + SFR
------------------
NRB
Where:
NI = the Net Investment at the time of such computation.
LR = the Loss Reserve at the time of such computation.
DR = the Discount Reserve at the time of such computation.
SFR = the Servicing Fee Reserve at the time of such
computation.
NRB = the Net Receivables Balance at the time of such
computation.
Notwithstanding the foregoing computation, the Percentage
Factor shall not exceed one hundred percent (100%). The Percentage
Factor shall be calculated by the Collection Agent on the day of the
initial Incremental Transfer hereunder. Thereafter, until the
Termination Date, the Collection Agent shall daily recompute the
Percentage Factor and report such recomputations to the Company monthly
in the Investor Report or as requested by the Company. The Percentage
Factor shall remain constant from the time as of which any such
computation or recomputation is made until the time as of which the
next such recomputation shall be made, notwithstanding any additional
Receivables arising, any Incremental Transfer made pursuant to Section
2.2(a) or any reinvestment Transfer made pursuant to Section 2.2(b) and
2.5 during any period between computations of the Percentage Factor.
The Percentage Factor, as calculated at the close of business on the
Business Day immediately preceding the Termination Date, shall remain
constant at all times thereafter until such time as the Company shall
have received the Aggregate Unpaids, at which time the Percentage
Factor shall be recomputed in accordance with Section 2.6.
"Person" means any corporation, natural person, firm, joint
venture, partnership, trust, unincorporated organization, enterprise,
government or any department or agency of any government.
"Potential Termination Event" means an event which but for
the lapse of time or the giving of notice, or both, would constitute a
Termination Event.
"Proceeds" means "proceeds" as defined in Section 9-306(1) of
the UCC.
"Program Fee" means the fee payable by the Transferor to the
Company pursuant to Section 2.7 hereof, the terms of which are set
forth in the Fee Letter.
"Purchased Interest" means the interest in the Receivables
acquired by the Liquidity Provider through purchase pursuant to the
terms of the Liquidity Provider Agreement.
"Rate Variance Factor" means the number, computed from time
to time in good faith by the Company, that reflects the largest
potential variance (from minimum to maximum) in selected interest rates
over a period of time selected by the Company from time to time, set
forth in a written notice by the Company to the Transferor and the
Collection Agent.
"Receivable" means the indebtedness owed to the Transferor by
any Obligor (without giving effect to any purchase hereunder by the
Company at any time) under a Contract whether constituting an account,
chattel paper, instrument or general intangible, arising in connection
with the sale of merchandise or services by the Transferor, and
includes the right to payment of any Finance Charges and other
obligations of such Obligor with respect thereto. Notwithstanding the
foregoing, once a Receivable has been deemed collected pursuant to
Section 2.9 hereof, it shall no longer constitute a Receivable
hereunder.
"Records" means all Contracts and other documents, books,
records and other information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and
related property and rights) maintained with respect to Receivables and
the related Obligors.
"Related Security" means with respect to any Receivable:
(xvi) all of the Transferor's interest, if any, in
the merchandise (including returned merchandise), if any, the sale
of which by the Transferor gave rise to such Receivable;
(xvii) all other security interests or liens and
property subject thereto from time to time, if any, purporting to
secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with
all financing statements signed by an Obligor describing any
collateral securing such Receivable;
(xviii) all guarantees, insurance or other
agreements or arrangements of any kind from time to time
supporting or securing payment of such Receivable whether pursuant
to the Contract related to such Receivable or otherwise; and
(xix) all Records.
"Section 8.2 Costs" has the meaning specified in Section
8.2(d).
"Servicing Fee" shall mean the fee payable by the Company to
the Collection Agent, with respect to a Tranche, in an amount equal to
0.75% per annum on the amount of the Net Investment allocated to such
Tranche pursuant to Section 2.3. Such fee shall accrue from the date
of the initial purchase of an ownership interest in the Receivables to
the later of the Termination Date or the date on which the Net
Investment is reduced to zero. On or prior to the Termination Date
such fee shall be payable only from Collections pursuant to, and
subject to the priority of payments set forth in, Section 2.5. After
the Termination Date such fee shall be payable only from Collections
pursuant to, and subject to the priority of payments set forth in,
Section 2.6.
"Servicing Fee Reserve" means at any time the sum of (i) the
Servicing Fee for all outstanding Tranches and (ii) an amount equal to
the product of (A) the Net Investment at such time, and (B) the
Servicing Fee percentage and (C) a fraction having as the numerator,
the sum of the Estimated Maturity Period and the Collection Delay and
as the denominator, 360.
"Standard & Poor's" or "S&P" means Standard & Poor's Ratings
Group.
"Subsidiary" of a Person means any corporation more than 50%
of the outstanding voting securities of which shall at any time be
owned or controlled, directly or indirectly, by such Person or by one
or more Subsidiaries of such Person or any similar business
organization which is so owned or controlled.
"Termination Date" means the earliest of (i) that Business
Day designated by the Transferor to the Company as the Termination Date
at any time following 60 days' written notice to the Company, (ii) the
date of termination of the commitment of the Liquidity Provider under
the Liquidity Provider Agreement, (iii) the date of termination of the
commitment of the Credit Support Provider under the Credit Support
Agreement, (iv) the day on which a Termination Event occurs pursuant to
Section 7.1, or (v) October 30, 1995.
"Termination Event" means an event described in Section 7.1.
"Tranche" means a portion of the Net Investment allocated to
a Tranche Period pursuant to Section 2.3.
"Tranche Period" means a CP Tranche Period, a BR Tranche
Period, a CD Tranche Period or a Eurodollar Tranche Period.
"Tranche Rate" means the CP Rate, the Base Rate, the CD Rate
or the Eurodollar Rate.
"Transaction Costs" has the meaning specified in Section
8.3(a).
"Transfer" means a conveyance, transfer and assignment by the
Transferor to the Company of an undivided percentage ownership
interest in Receivables hereunder.
"Transfer Certificate" has the meaning given to it in Section
2.2(a).
"Transfer Date" means, with respect to each Transfer, the
Business Day on which such Transfer is made.
"Transfer Price" means with respect to any Incremental
Transfer, the amount paid to the Transferor by the Company as described
in the Transfer Certificate.
"Transferred Interest" means, at any time of determination,
an undivided percentage ownership interest in (i) each and every then
outstanding Receivable, (ii) all Related Security with respect to each
such Receivable, (iii) all Collections with respect thereto, and (iv)
other Proceeds of the foregoing, equal to the Percentage Factor at such
time, and only at such time (without regard to prior calculations).
The Transferred Interest in each Receivable, together with Related
Security and Collections with respect thereto, shall at all times be
equal to the Transferred Interest in each other Receivable, together
with Related Security and Collections. To the extent that the
Transferred Interest shall decrease as a result of a recalculation of
the Percentage Factor, the Company shall be considered to have
reconveyed to the Transferor an undivided percentage ownership interest
in each Receivable, together with Related Security and Collections, in
an amount equal to such decrease such that in each case the Transferred
Interest in each Receivable shall be equal to the Transferred Interest
in each other Receivable.
"UCC" means, with respect to any state, the Uniform
Commercial Code as from time to time in effect in such state.
"Unused Facility Fee" means the fee payable by the Transferor
to the Company pursuant to Section 2.7 hereof, the terms of which are
set forth in the Fee Letter.
SECTION 1.2. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
SECTION 1.3. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from
and including" and the words "to" and "until" each means "to but
excluding."
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Upon the terms and subject to the conditions
herein set forth the Transferor may, at its option, convey, transfer
and assign to the Company, and the Company shall accept such
conveyance, transfer and assignment from the Transferor, without
recourse except as provided herein, undivided percentage ownership
interests in the Receivables, together with Related Security and
Collections with respect thereto, from time to time.
SECTION 2.2. Transfers; Company Certificate; Eligible
Receivables (a) Incremental Transfers. Upon the terms and subject to
the conditions herein set forth the Transferor may, at its option,
convey, transfer and assign to the Company, and the Company shall
accept such conveyance, transfer and assignment from the Transferor,
without recourse except as provided herein, undivided percentage
ownership interests in the Receivables, together with Related Security
and Collections with respect thereto (each, an "Incremental Transfer")
from time to time prior to the Termination Date for an aggregate
Transfer Price not to exceed the Maximum Net Investment. The
Transferor shall by notice given by telefax offer to convey, transfer
and assign to the Company undivided percentage ownership interests in
the Receivables at least three (3) Business Days prior to the proposed
date of transfer. Each such notice shall specify the desired Transfer
Price (which shall be at least $5,000,000 or integral multiples of
$1,000,000 in excess thereof) and the desired date of such Incremental
Transfer, together with the desired Tranche Period (or range) related
thereto as required by Section 2.3. The Company shall accept such
offer to convey, transfer and assign undivided percentage ownership
interests by notice given to the Transferor by telephone or telefax.
Each notice of proposed Transfer shall be irrevocable and binding on
the Transferor and the Transferor shall indemnify the Company against
any loss or expense incurred by the Company, either directly or through
the Liquidity Provider Agreement as a result of any failure by the
Transferor to complete such Incremental Transfer including, without
limitation, any loss (including loss of anticipated profits) or expense
incurred by the Company, either directly or pursuant to the Liquidity
Provider Agreement, by reason of the liquidation or reemployment of
funds acquired by the Company or the Liquidity Provider (including,
without limitation, funds obtained by issuing commercial paper or
promissory notes or obtaining deposits or loans from third parties) for
the Company to fund such Incremental Transfer. Notwithstanding any
other provision hereof, the Company shall have no obligation to accept
any Transfer if it is unable to obtain funds therefor in the commercial
paper market or under the Liquidity Provider Agreement.
On the date of the initial Incremental Transfer, the Company
shall deliver written confirmation to the Transferor of the Transfer
Price, the Tranche Period(s) and the Tranche Rate(s) relating to such
Transfer and the Transferor shall deliver to the Company the Transfer
Certificate in the form of Exhibit F hereto (the "Transfer
Certificate"). The Company shall indicate the amount of the initial
Incremental Transfer together with the date thereof on the grid
attached to the Transfer Certificate. On the date of each subsequent
Incremental Transfer, the Company shall send written confirmation to
the Transferor of the Transfer Price, the Tranche Period(s), the
Transfer Date and the Tranche Rate(s) applicable to such Incremental
Transfer. The Company shall indicate the amount of the Incremental
Transfer together with the date thereof as well as any decrease in the
Net Investment on the grid attached to the Transfer Certificate. The
Transfer Certificate shall evidence the Incremental Transfers.
Following each Incremental Transfer, the Company shall deposit to the
Transferor's account at the location indicated in Section 9.3, in
immediately available funds, an amount equal to the Transfer Price for
such Incremental Transfer.
(b) Reinvestment Transfers. On each Business Day
occurring after the initial Incremental Transfer hereunder and prior to
the Termination Date, the Transferor hereby agrees to convey, transfer
and assign to the Company, and in consideration of Transferor's
agreement to maintain at all times prior to the Termination Date a Net
Receivables Balance in an amount at least sufficient to maintain the
Percentage Factor at an amount not greater than the Maximum Percentage
Factor, the Company hereby agrees to purchase from the Transferor
undivided percentage ownership interests in each and every Receivable,
together with Related Security and Collections with respect thereto, to
the extent that Collections are available for such Transfer in
accordance with Section 2.5, such that after giving effect to such
Transfer, (i) the amount of the Company's Net Investment at the close
of the Company's business on such Business Day shall be equal to the
amount of the Company's Net Investment at the close of the Company's
business on the Business Day immediately preceding such Business Day
plus the Transfer Price of any Incremental Transfer made on such day,
if any, and (ii) the Company's Transferred Interest in each Receivable,
together with Related Security and Collections with respect thereto,
shall be equal to its Transferred Interest in each other Receivable,
together with Related Security and Collections with respect thereto.
(c) All Transfers. Each Transfer shall constitute a
purchase of undivided percentage ownership interests in each and every
Receivable, together with Related Security and Collections with respect
thereto, then existing, as well as in each and every Receivable,
together with Related Security and Collections with respect thereto,
which arises at any time after the date of such Transfer but prior to
the date on which the Net Investment shall become zero and all amounts
due hereunder from the Transferor shall be paid in full. The Company's
aggregate undivided percentage ownership interest in the Receivables,
together with Related Security and Collections with respect thereto,
shall equal the Percentage Factor in effect from time to time.
(d) Company Certificate. The Transferor shall issue to
the Company the Company Certificate, in the form of Exhibit M, on or
prior to the date hereof.
(e) Percentage Factor. The Percentage Factor shall be
initially computed as of the opening of business of the Collection
Agent on the date of the initial Incremental Transfer hereunder.
Thereafter until the Termination Date, the Percentage Factor shall be
automatically recomputed as of the close of business of the Collection
Agent on each day (other than a day after the Termination Date). The
Percentage Factor shall remain constant from the time as of which any
such computation or recomputation is made until the time as of which
the next such recomputation, if any, shall be made. The Percentage
Factor, as computed as of the day immediately preceding the Termination
Date, shall remain constant at all times on and after such Termination
Date until the date on which the Net Investment shall become zero.
SECTION 2.3. Selection of Tranche Periods and Tranche Rates.
(a) At all times hereafter, but prior to the occurrence
of a Termination Event, the Transferor shall, subject to the Company's
approval and the limitations described below, request Tranche Periods
and allocate a portion of the Net Investment to each selected Tranche
Period, so that the aggregate amounts allocated to outstanding Tranche
Periods at all times shall equal the Net Investment. The Transferor
shall give the Company irrevocable notice by telephone of the new
requested Tranche Period(s) at least three (3) Business Days prior to
the expiration of any then existing Tranche Period; provided, however,
that the Company may select, in its sole discretion, any such new
Tranche Period if (i) the Transferor fails to provide such notice on a
timely basis or (ii) the Company determines, in its sole discretion,
that the Tranche Period requested by the Transferor is unavailable or
for any reason commercially undesirable. The Company confirms that it
is its intention to allocate all or substantially all of the Net
Investment to one or more CP Tranche Periods; provided that the Company
may determine, from time to time, in its sole discretion, that funding
such Net Investment by means of one or more CP Tranche Periods is not
desirable for any reason. If the Liquidity Provider acquires a
Purchased Interest with respect to the Receivables pursuant to the
terms of the Liquidity Provider Agreement, the Liquidity Provider may
exercise the right of selection granted to the Company hereby. The
Tranche Rate applicable to any such Purchased Interest shall be
selected by the Liquidity Provider and shall be any of the BR Rate, the
CD Rate or the Eurodollar Rate (in each case as defined herein). In
the case of any Tranche Period outstanding upon the occurrence of a
Termination Event, such Tranche Period shall end on the date of such
occurrence.
(b) At all times on and after the occurrence of a
Termination Event, the Company or the Liquidity Provider, as
applicable, shall select all Tranche Periods and Tranche Rates
applicable thereto.
SECTION 2.4. Discount, Fees and Other Costs and Expenses.
Notwithstanding the limitation on recourse under Section 2.1, the
Transferor shall pay, as and when due in accordance with this
Agreement, all fees hereunder, Discount, all amounts payable pursuant
to Article VIII hereof, if any, and the Servicing Fee. On the last day
of each Tranche Period the Transferor shall pay to the Company an
amount equal to the discount accrued on the Company's Commercial Paper
notes to the extent such notes were issued in order to fund the
Transferred Interest in an amount in excess of the Transfer Price of an
Incremental Transfer. The Transferor shall pay to the Company, on each
day on which Commercial Paper is issued by the Company, the Dealer Fee.
Discount shall accrue with respect to each Tranche on each day
occurring during the Tranche Period related thereto. Nothing in this
Agreement shall limit in any way the obligations of the Transferor to
pay the amounts set forth in this Section 2.4.
SECTION 2.5. Non-Liquidation Settlement and Reinvestment
Procedures. On each day after the date of any Incremental Transfer but
prior to the Termination Date and provided that no Potential
Termination Event shall have occurred and be continuing, the Collection
Agent shall out of the Percentage Factor of Collections received on or
prior to such day and not previously applied or accounted for: (i) set
aside and hold in trust for the Company (or deposit into the Collection
Account if so required pursuant to Section 2.12) an amount equal to all
Discount and the Servicing Fee accrued through such day and not so
previously set aside or paid and (ii) apply the balance of such
Percentage Factor of Collections remaining after application of
Collections as provided in clause (i) of this Section 2.5 to the
Transferor, for the benefit of the Company to the purchase of
additional undivided percentage interests in each Receivable pursuant
to Section 2.2(b). On the last day of each Tranche Period, from the
amounts set aside as described in clause (i) of the first sentence of
this Section 2.5, the Collection Agent shall deposit to the Company's
account, an amount equal to the accrued and unpaid Discount for such
Tranche Period and shall deposit to its account an amount equal to the
accrued and unpaid Servicing Fee for such Tranche Period. As provided
in Section 6.2(b), the Collection Agent shall remit to the Transferor,
as soon as practicable after receipt, such portion of Collections not
allocated to the Company.
SECTION 2.6. Liquidation Settlement Procedures. If on the
Termination Date, the Percentage Factor is greater than the Maximum
Percentage Factor, then the Transferor shall immediately pay to the
Company from previously received Collections, an amount equal to the
amount such that, when applied in reduction of the Net Investment, will
result in a Percentage Factor less than or equal to the Maximum
Percentage Factor. Such amount shall be applied by the Company to the
reduction of the Net Investment of Tranche Periods selected by the
Company. On the Termination Date and on each day thereafter, and on
each day on which a Potential Termination Event has occurred and is
continuing, the Collection Agent shall set aside and hold in trust for
the Company (or deposit into the Collection Account if so required
pursuant to Section 2.12) the Percentage Factor of all Collections
received on such day. On the Termination Date or the day on which a
Potential Termination Event occurs, the Collection Agent shall deposit
to the Company's account any remaining amounts set aside pursuant to
Section 2.5(i) above. On the last day of each Tranche Period to occur
on or after the Termination Date or during the continuance of a
Potential Termination Event, the Collection Agent shall deposit to the
Company's account, the amounts set aside pursuant to the preceding
sentence, together with any remaining amounts set aside pursuant to
Section 2.5(i) prior to the Termination Date or the day on which a
Potential Termination Event occurs but not to exceed the sum of (i) the
accrued Discount for such Tranche Period, (ii) the portion of the Net
Investment allocated to such Tranche Period, and (iii) the aggregate of
all other amounts then owed (whether due or accrued) hereunder by
Transferor to the Company. On such day, the Collection Agent shall
deposit to its account, from the amounts set aside pursuant to the
preceding sentence which remain after payment in full of the
aforementioned amounts, the accrued Servicing Fee for such Tranche
Period. If there shall be insufficient funds on deposit for the
Collection Agent to distribute funds in payment in full of the
aforementioned amounts, the Collection Agent shall distribute funds
first, in payment of the accrued Discount, second, in payment of all
fees and expenses payable to the Company hereunder, third, if the
Transferor is not the Collection Agent, to the Collection Agent's
account, in payment of the Servicing Fee payable to the Collection
Agent, fourth, in reduction of the Net Investment allocated to such
Tranche Period, fifth, in payment of all other amounts payable to the
Company and sixth, if the Transferor is the Collection Agent, to its
account as Collection Agent, in payment of the Servicing Fee payable to
the Transferor as Collection Agent. Following the date on which the
Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees have been paid in full and all other Aggregate Unpaids
have been paid in full, (i) the Collection Agent shall recompute the
Percentage Factor, (ii) the Company shall be considered to have
reconveyed to the Transferor any interest in the Receivables (including
the Transferred Interest), (iii) the Collection Agent shall pay to
Transferor any remaining Collections set aside and held by the
Collection Agent pursuant to the second sentence of this Section 2.6
and (iv) the Company shall execute and deliver to the Transferor, at
the Transferor's expense, such documents or instruments as are
necessary to terminate the Company's interest in the Receivables. Any
such documents shall be prepared by or on behalf of the Transferor.
SECTION 2.7. Fees. Notwithstanding any limitation on
recourse contained in this Agreement, the Transferor shall pay the
following non-refundable fees:
(a) On the last day of each calendar month, to the
Company, the Program Fee and the Unused Facility Fee.
(b) On the date of execution hereof, to the
Administrative Agent, the Arrangement Fee.
SECTION 2.8. Protection of Ownership Interest of the
Company. (a) The Transferor agrees that from time to time, at its
expense, it will promptly execute and deliver all instruments and
documents and take all actions as may be necessary or as the Company
may reasonably request in order to perfect or protect the Transferred
Interest or as are necessary to enable the Company to exercise or
enforce any of its rights hereunder. Without limiting the foregoing,
the Transferor will, upon the request of the Company, in order to
accurately reflect this purchase and sale transaction, execute and file
such financing or continuation statements or amendments thereto or
assignments thereof (as permitted pursuant to Section 9.6 hereof) as
may be requested by the Company and ▇▇▇▇ its master data processing
records and other documents with a legend describing the purchase by
the Company of the Transferred Interest. The Transferor shall, upon
request of the Company, obtain such additional search reports as the
Company shall request. To the fullest extent permitted by applicable
law, the Company shall be permitted to sign and file continuation
statements and amendments thereto and assignments thereof without the
Transferor's signature. Carbon, photographic or other reproduction of
this Agreement or any financing statement shall be sufficient as a
financing statement. The Transferor shall neither change its name,
identity or corporate structure (within the meaning of Section 9-402(7)
of the UCC as in effect in the States of New York and Illinois) nor
relocate its chief executive office or any office where Records are
kept unless it shall have: (i) given the Company at least thirty (30)
days prior notice thereof and (ii) prepared at Transferor's expense and
delivered to the Company all financing statements, instruments and
other documents necessary to preserve and protect the Transferred
Interest or requested by the Company in connection with such change or
relocation. Any filings under the UCC or otherwise that are occasioned
by such change in name or location shall be made at the expense of
Transferor.
(b) The Collection Agent shall instruct all Obligors to
cause all Collections to be deposited directly with a Lock-Box Bank.
Any Lock-Box Account maintained by a Lock-Box Bank pursuant to the
related Lock-Box Agreement shall be under the ownership and control of
the Collateral Agent. The Collection Agent shall be permitted to give
instructions to the Lock-Box Banks for so long as either a Collection
Agent default or any other Termination Event has not occurred
hereunder. The Collection Agent shall not add any bank as a Lock-Box
Bank to those listed on Exhibit C unless such bank has entered into a
Lock-Box Agreement. The Collection Agent shall not terminate any bank
as a Lock-Box Bank unless the Administrative Agent shall have received
fifteen (15) days' prior notice of such termination. If the Transferor
or the Collection Agent receives any Collections or the Transferor is
deemed to receive any Collections pursuant to Section 2.9, the
Transferor or the Collection Agent, as applicable, shall immediately,
but in any event within forty-eight (48) hours of receipt, remit such
Collections to a Lock-Box Account. Notwithstanding anything in this
Agreement to the contrary, until November 15, 1994 The Northern Trust
Company shall be considered a Lock-Box Bank and the lock-box account
maintained by the Transferor at such bank shall be considered a Lock-
Box Account, in each case notwithstanding that no Lock-Box Agreement
shall be in effect with respect to the lock-box account maintained at
such bank, provided that after such date The Northern Trust Company
shall not be considered a Lock-Box Bank and the lock-box account
maintained by the Transferor at such bank shall not be considered a
Lock-Box Account unless on or prior to November 15, 1994, the
Transferor shall have delivered to the Collateral Agent a Lock-Box
Agreement with respect to the lock-box account maintained by the
Transferor at such bank.
SECTION 2.9. Deemed Collections; Application of Payments.
(a) If on any day the Outstanding Balance of a Receivable is either (x)
reduced as a result of any defective, rejected or returned goods or
services, any cash discount, credit, rebate, allowance or other
dilution factor, any billing adjustment or other adjustment, or (y)
reduced or canceled as a result of a setoff or offset in respect of any
claim by any Person (whether such claim arises out of the same or a
related transaction or an unrelated transaction), the Transferor shall
be deemed to have received on such day a collection of such Receivable
in the amount of such reduction or cancellation and the Transferor
shall pay to the Collection Agent an amount equal to such reduction or
cancellation and such amount shall be applied by the Collection Agent
as a Collection in accordance with Section 2.5 or 2.6, as applicable.
The Net Investment shall be reduced by the amount of such payment
actually received by the Company.
(b) If on any day any of the representations or
warranties in Article III is no longer true with respect to a
Receivable, the Transferor shall be deemed to have received on such day
a Collection of such Receivable in full and the Transferor shall on
such day pay to the Collection Agent an amount equal to the aggregate
Percentage Factor of the Outstanding Balance of such Receivable and
such amount shall be allocated to the Company and applied by the
Collection Agent as a Collection allocable to the Transferred Interest
in accordance with Section 2.5 or 2.6, as applicable. The Net
Investment shall be reduced by the amount of such payment actually
received by the Company.
(c) Any payment by an Obligor in respect of any
indebtedness owed by it to the Transferor shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and
unless otherwise instructed by the Company, be applied as a Collection
of any Receivable of such Obligor included in the Transferred Interest
(starting with the oldest such Receivable) to the extent of any amounts
then due and payable thereunder before being applied to any other
receivable or other indebtedness of such Obligor.
(d) If on any day any Receivable owed by Phosphate
Chemicals Export Association, Inc. is determined to be either a
Delinquent Receivable or a Defaulted Receivable, the Transferor shall
within two (2) Business Days thereafter pay to the Collection Agent an
amount equal to the aggregate Percentage Factor of the Outstanding
Balance of such Receivable and such amount shall be allocated to the
Company and applied by the Collection Agent as a Collection allocable
to the Transferred Interest in accordance with Section 2.5 or 2.6, as
applicable. The Net Investment shall be reduced by the amount of such
payment actually received by the Company.
SECTION 2.10. Payments and Computations, Etc. All amounts
to be paid or deposited by the Transferor or the Collection Agent
hereunder shall be paid or deposited in accordance with the terms
hereof no later than 1:00 p.m. (New York City time) on the day when due
in immediately available funds; if such amounts are payable to the
Company they shall be paid or deposited in the account indicated on the
signature page hereof, until otherwise notified by the Company. The
Transferor shall, to the extent permitted by law, pay to the Company
upon demand, interest on all amounts not paid or deposited when due to
the Company hereunder at a rate equal to 2% per annum plus the Base
Rate. All computations of discount, interest and all per annum fees
hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first but excluding the last day)
elapsed. Any computations of amounts payable by the Transferor
hereunder to the Company, the Liquidity Provider or the Credit Support
Provider shall be binding absent manifest error.
SECTION 2.11. Reports. Prior to the fifteenth day of each
month, the Collection Agent shall prepare and forward to the
Administrative Agent (i) an Investor Report as of the end of the last
day of the immediately preceding month, (ii) if requested by the
Company or the Administrative Agent, a listing by Obligor of all
Receivables together with an aging of such Receivables and (iii) such
other information as the Company or the Administrative Agent may
reasonably request.
SECTION 2.12. Collection Account. There shall be
established on the day of the initial Incremental Transfer hereunder
and maintained, for the benefit of the Company, with the Collateral
Agent, a segregated account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Company. The Collection Agent shall remit
daily within forty-eight hours of receipt to the Collection Account all
Collections received with respect to any Receivables; provided,
however, the Collection Agent shall be permitted to make payments to
the Company on the last day of each Tranche Period instead of
depositing funds into the Collection Account on a daily basis for so
long as, and only for so long as no Collection Agent default and no
other Termination Event has occurred hereunder. Funds on deposit in
the Collection Account (other than investment earnings) shall be
invested by the Collateral Agent in Eligible Investments that will
mature so that such funds will be available prior to the last day of
each successive Tranche Period following such investment. On the last
day of each calendar month, all interest and earnings (net of losses
and investment expenses) on funds on deposit in the Collection Account
shall be retained in the Collection Account and be available to make
any payments required to be made hereunder (including Discount) to the
Company. On the date on which the Net Investment is zero and all
amounts payable hereunder have been paid to the Company, any funds
remaining on deposit in the Collection Account shall be paid to the
Transferor.
ARTICLE IIIREPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the
Transferor. The Transferor represents and warrants to the Company
that:
(a) Existence and Power. The Transferor is a general
partnership formed and validly existing under the laws of the State of
Delaware and has all power and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted
where the failure to have such governmental licenses, authorizations,
consents and approvals would have a material adverse effect on (i) the
Transferor's business or properties, (ii) the Transferor's ability to
perform its obligations hereunder or (iii) the Company's interest in
the Receivables.
(b) Authorization; Contravention. The execution,
delivery and performance by the Transferor of this Agreement, the Fee
Letter, the Company Certificate and the Transfer Certificate are within
the Transferor's partnership powers, have been duly authorized by all
necessary action, require no action by or in respect of, or filing
with, any governmental body, agency or official (except as contemplated
by Section 2.8), and do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the partnership
agreement of the Transferor or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Transferor or result
in the creation or imposition of any lien on assets of the Transferor
or any of its Subsidiaries (except as contemplated by Section 2.8).
(c) Binding Effect. Each of this Agreement, the Fee
Letter and the Company Certificate constitutes and the Transfer
Certificate upon payment by the Company of the Transfer Price set forth
therein will constitute the legal, valid and binding obligation of the
Transferor, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors.
(d) Perfection. Immediately preceding each Transfer
hereunder, the Transferor shall be the owner of all of the Receivables,
free and clear of all liens, encumbrances, security interests,
preferences or other security arrangement of any kind or nature
whatsoever. On or prior to each Transfer and each recomputation of the
Transferred Interest, all financing statements and other documents
required to be recorded or filed in order to perfect and protect the
Transferred Interest against all creditors of and purchasers from the
Transferor will have been duly filed in each filing office necessary
for such purpose and all filing fees and taxes, if any, payable in
connection with such filings shall have been paid in full.
(e) Accuracy of Information. All information
heretofore furnished by the Transferor (including without limitation,
the Investor Reports, any reports delivered pursuant to Section 2.11
and the Transferor's financial statements) to the Company or the
Administrative Agent for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Transferor to the Company or the
Administrative Agent will be, true and accurate in every material
respect, on the date such information is stated or certified.
(f) Tax Status. The Transferor has filed all tax
returns (federal, state and local) required to be filed and has paid or
made adequate provision for the payment of all taxes, assessments and
other governmental charges.
(g) Action, Suits. Except as set forth in Exhibit H,
there are no actions, suits or proceedings pending or, to the knowledge
of the Transferor, threatened, against or affecting the Transferor or
any Affiliate of the Transferor or their respective properties, in or
before any court, arbitrator or other body, which may materially
adversely affect the financial condition of the Transferor and its
Subsidiaries taken as a whole or materially adversely affect the
ability of Transferor to perform its obligations under this Agreement.
(h) Place of Business. The chief place of business and
chief executive office of the Transferor and the offices where the
Transferor keeps all its Records relating to the Receivables are
located at the address of the Transferor indicated in Section 9.3
hereof or such other locations notified to the Company in accordance
with Section 2.8 in jurisdictions where all action required by Section
2.8 has been taken and completed.
(i) Good Title. Upon each Transfer and each
recomputation of the Transferred Interest, the Company shall acquire a
valid and perfected first priority undivided percentage ownership
interest to the extent of the Transferred Interest or a first priority
perfected security interest in each Receivable that exists on the date
of such Transfer and recomputation and in the Related Security and
Collections with respect thereto free and clear of any Adverse Claim.
(j) Tradenames, Etc. As of the date hereof: (i) the
Transferor has no subsidiaries or divisions; and (ii) the Transferor
has, since formation, not operated under any tradenames, and, since
formation, has not changed its name, merged with or into or
consolidated with any other corporation or been the subject of any
proceeding under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (Bankruptcy).
(k) Nature of Receivables. Each Receivable is an
Eligible Receivable and an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act, of 1940, as amended.
(l) Coverage Requirement; Amount of Receivables. The
Percentage Factor does not exceed the Maximum Percentage Factor. As of
October 28, 1994, the aggregate Outstanding Balance of the Receivables
in existence was $75,755,807 and the Net Receivable Balance was
$54,379,444.
(m) Credit and Collection Policy. Since September 1,
1994, there have been no material changes in the Credit and Collection
Policy; since such date, the Collection Period of the Receivables has
not been greater than 35 days.
(n) Collections and Servicing. Since June 30, 1994,
there has been no material adverse change in the ability of the
Transferor to service and collect the Receivables.
(o) No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination
Event or a Potential Termination Event.
(p) Not an Investment Company. The Transferor is not
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, or is exempt from all provisions of such Act.
(q) ERISA. The Transferor is in compliance in all
material respects with ERISA and no lien in favor of the Pension
Benefit Guaranty Corporation on any of the Receivables shall exist.
(r) Lock-Box Accounts. The names and addresses of all
the Lock-Box Banks, together with the account numbers of the Lock-Box
Accounts at such Lock-Box Banks, are specified in Exhibit C hereto (or
at such other Lock-Box Banks and/or with such other Lock-Box Accounts
as have been notified to the Collateral Agent and for which Lock-Box
Agreements have been executed in accordance with Section 2.8(b) and
delivered to the Collection Agent). All Obligors have been instructed
to make payment to a Lock-Box Account and only Collections are
deposited into the Lock-Box Accounts.
Any document, instrument, certificate or notice delivered to
the Company hereunder shall be deemed a representation and warranty by
the Transferor.
SECTION 3.2. Reaffirmation of Representations and Warranties
by the Transferor. On each day that a Transfer is made hereunder, the
Transferor, by accepting the proceeds of such Transfer, whether
delivered to the Transferor pursuant to Section 2.2(a) or Section 2.5,
shall be deemed to have certified that all representations and
warranties described in Section 3.1 are correct on and as of such day
as though made on and as of such day. Each Incremental Transfer shall
be subject to the further condition precedent that prior to the date of
such Transfer, the Collection Agent shall have delivered to the
Collateral Agent, in form and substance satisfactory to the
Administrative Agent, a completed Investor Report dated within fourteen
(14) days prior to the date of such Incremental Transfer, together with
a listing by Obligor, if requested, and such additional information as
may be reasonably requested by the Administrative Agent; and the
Transferor shall be deemed to have represented and warranted that such
conditions precedent have been satisfied.
ARTICLE IVCONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. On or prior to the date
of execution hereof, the Transferor shall deliver to the Company the
following documents, instruments and fees all of which shall be in a
form and substance acceptable to the Company:
(a) A copy of the Resolutions of the Board of Directors
of IMC-Agrico MP, Inc., a Delaware corporation, the managing general
partner of the Transferor (the "Managing Partner") certified by its
Secretary approving the Agreement and the other documents to be
delivered by the Transferor hereunder.
(b) The partnership agreement of the Transferor, the
Registration of Tradenames Partnerships and Associations of the
Transferor, the Certificate of Incorporation of the Managing Partner
certified by the Secretary of State or other similar official of
Delaware and the By-laws of the Managing Partner certified by the
secretary of the Managing Partner.
(c) A Good Standing Certificate for the Managing
Partner issued by the Secretary of State or a similar official of
Delaware and certificates of qualification as a foreign corporation
issued by the Secretaries of State or other similar officials of each
jurisdiction when such qualification is material to the transactions
contemplated by this Agreement.
(d) A Certificate of the Secretary of the Managing
Partner certifying the names and signatures of the officers authorized
on its behalf to execute this Agreement, the Company Certificate, the
Transfer Certificate, the Fee Letter and any other documents to be
delivered by it hereunder (on which certificates the Company may
conclusively rely until such time as the Company shall receive from the
Transferor a revised certificate meeting the requirements of this
clause (d)(i)).
(e) Copies of proper financing statements (Form UCC-1),
dated a date reasonably near to the date of the initial Incremental
Transfer naming the Transferor as the debtor in favor of the Company
and showing the Collateral Agent as assignee of the secured party or
other similar instruments or documents as may be necessary or in the
reasonable opinion of the Company desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the
Company's ownership interest in all Receivables.
(f) Copies of proper financing statements (Form UCC-3),
if any, necessary to terminate all security interests and other rights
of any person in Receivables previously granted by Transferor.
(g) Certified copies of requests for information or
copies (Form UCC-11) (or a similar search report certified by parties
acceptable to the Company) dated a date reasonably near the date of the
initial Incremental Transfer listing all effective financing statements
which name the Transferor (under its present name and any previous
name) as debtor and which are filed in jurisdictions in which the
filings were made pursuant to item (e) above together with copies of
such financing statements (none of which shall cover any Receivables or
Contracts).
(h) Executed copies of the Lock-Box Agreements.
(i) Opinions of (i) ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ and
Handler, special counsel to the Transferor, covering certain of the
matters set forth in Exhibit K hereto and certain bankruptcy matters,
in each case in form and substance acceptable to the Administrative
Agent and (ii) ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President and General
Counsel of IMC Global Inc., as to certain of the matters set forth in
Exhibit K hereto, in form and substance acceptable to the
Administrative Agent.
(j) A computer tape setting forth all Receivables and
the Outstanding Balances thereon and such other information as the
Company may reasonably request.
(k) An executed copy of the Fee Letter.
(l) The Transfer Certificate, duly executed by the
Transferor.
(m) The Company Certificate, duly executed by the
Transferor and appropriately completed.
(n) The Arrangement Fee in accordance with Section
2.7(b).
(o) An Investor Report dated September 30, 1994.
(p) Such other documents as the Company shall
reasonably request.
ARTICLE VCOVENANTS
SECTION 5.1. Affirmative Covenants of Transferor. At all
times from the date hereof to the later to occur of (i) the Termination
Date or (ii) the date on which the Company's Transferred Interest shall
be equal to zero, unless the Company shall otherwise consent in
writing:
(a) Financial Reporting. The Transferor will maintain,
for itself and each Subsidiary, a system of accounting established and
administered in accordance with generally accepted accounting
principles, and furnish to the Administrative Agent:
(i) Annual Reporting. Within ninety (90) days
after the close of each of its fiscal years, audited financial
statements, prepared in accordance with generally accepted
accounting principles on a consolidated and consolidating basis
(consolidating statements need not be audited by such
accountants) for itself and its Subsidiaries (if any), including
balance sheets as of the end of such period, related statements
of operations, partner's equity and cash flows, accompanied by
an unqualified audit report certified by independent certified
public accountants, acceptable to the Administrative Agent,
prepared in accordance with generally accepted auditing
principles and any management letter prepared by said
accountants.
(ii) Quarterly Reporting. Within forty-five
(45) days after the close of the first three quarterly periods
of each of its fiscal years, for itself and its Subsidiaries (if
any), consolidated and consolidating unaudited balance sheets as
at the close of each such period and consolidated and
consolidating related statements of operations, partner's equity
and cash flows for the period from the beginning of such fiscal
year to the end of such quarter, all certified by its chief
financial officer.
(iii) Compliance Certificate. Together with
the financial statements required hereunder, a compliance
certificate signed by its chief financial officer stating that
no Termination Event or Potential Termination Event exists, or
if any Termination Event or Potential Termination Event exists,
stating the nature and status thereof and showing the
computation of, and showing compliance with, each of the
financial ratios and restrictions set forth in Section 5.3.
(iv) Partners Statements. Promptly upon the
furnishing thereof to the partners of the Transferor, copies of
all financial statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing
thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which the Transferor
or any subsidiary files with the Securities and Exchange
Commission.
(vi) Notice of Termination Events or Potential
Termination Events. As soon as possible and in any event within
three (3) days after the occurrence of each Termination Event or
each Potential Termination Event, a statement of the chief
financial officer, chief accounting officer or treasurer of the
Transferor setting forth details of such Termination Event or
Potential Termination Event and the action which the Transferor
proposes to take with respect thereto.
(vii) Change in Credit and Collection Policy.
Within ten (10) days after the date any material change in or
amendment to the Credit and Collection Policy is made, a copy of
the Credit and Collection Policy then in effect indicating such
change or amendment.
(viii) Credit and Collection Policy. Upon
request of the Administrative Agent, a complete copy of the
Credit and Collection Policy then in effect.
(ix) Other Information. Such other
information including non-financial information) as the
Administrative Agent may from time to time reasonably request.
(b) Conduct of Business. The Transferor will, and will
cause each of its Subsidiaries to, (x) carry on and conduct its
business in substantially the same manner and in substantially the same
fields of enterprise as it is presently conducted and (y) do all things
necessary to remain validly existing as a domestic partnership in the
State of Delaware and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted where
the failure to maintain such authority would have a material adverse
effect on (i) the Transferor's business or properties, (ii) the
Transferor's ability to perform its obligations hereunder or (iii) the
Company's interest in the Receivables.
(c) Compliance with Laws. The Transferor will, and
will cause each of its Subsidiaries to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards
to which it may be subject.
(d) Furnishing of Information and Inspection of
Records. The Transferor will furnish to the Company from time to time
such information with respect to the Receivables as the Company may
reasonably request, including, without limitation, listings identifying
the Obligor and the Outstanding Balance for each Receivable. The
Transferor will at any time and from time to time during regular
business hours permit the Company, or its agents or representatives,
(i) to examine and make copies of and abstracts from all Records and
(ii) to visit the offices and properties of the Transferor for the
purpose of examining such Records, and to discuss matters relating to
Receivables or the Transferor's performance hereunder with any of the
officers, directors, employees or independent public accountants of the
Transferor having knowledge of such matters.
(e) Keeping of Records and Books of Account. The
Transferor will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain, all documents, books,
records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records
adequate to permit the daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable). The
Transferor will give the Company notice of any material change in the
administrative and operating procedures referred to in the previous
sentence.
(f) Performance and Compliance with Receivables and
Contracts. The Transferor, at its expense, will timely and fully
perform and comply with all material provisions, covenants and other
promises required to be observed by it under the Contracts related to
the Receivables.
(g) Credit and Collection Policies. The Transferor
will comply in all material respects with the Credit and Collection
Policy in regard to each Receivable and the related Contract.
(h) Collections. The Transferor shall instruct all
Obligors to cause all Collections to be deposited directly to a Lock-
Box Account.
(i) Collections Received. The Transferor shall hold in
trust, and deposit or mail for deposit, immediately, but in any event
not later than forty-eight (48) hours of its receipt thereof, to a Lock-
Box Account all Collections received from time to time by the
Transferor (including without limitation all Collections deemed to have
been received by the Transferor under Section 2.9).
(j) Sale Treatment. The Transferor shall report the
transactions contemplated by the Agreement on its financial statements
as a sale of the Transferred Interest to the Company.
(k) Certain Actions. The Transferor shall conduct its
business and its relationships with its Affiliates in such a manner so
as to comply with the facts and assumptions set forth in paragraphs 6
through 19, inclusive, of the opinion of ▇▇▇▇, Scholer, Fierman, ▇▇▇▇
and Handler, special counsel to the Transferor, dated the date hereof
and addressed to the Company and the Collateral Agent, covering certain
bankruptcy matters.
SECTION 5.2. Negative Covenants of Transferor. During the
term of this Agreement, unless the Company shall otherwise consent in
writing:
(a) No Sales, Liens, Etc. Except as otherwise provided
herein, the Transferor will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon (or the filing of any financing statement) or with
respect to, any inventory or goods, the sale of which will give rise to
a Receivable, or any Receivable or related Contract, or upon or with
respect to any account which concentrates in a Lock-Box Bank to which
any Collections of any Receivable are sent, or assign any right to
receive income in respect thereof.
(b) No Extension or Amendment of Receivables. Except
as otherwise permitted in Section 6.2, the Transferor will not extend,
amend or otherwise modify the terms of any Receivable, or amend, modify
or waive any term or condition of any Contract related thereto.
(c) No Change in Business or Credit and Collection
Policy. The Transferor will not make any material change in the
character of its business or in the Credit and Collection Policy, which
change would, in either case, impair the collectibility of any
Receivable.
(d) No Mergers, Etc. The Transferor will not (i)
consolidate or merge with or into any other Person, or (ii) sell, lease
or transfer all or substantially all of its assets to any other person.
(e) Change in Payment Instructions to Obligors. The
Transferor will not add or terminate any bank as a Lock-Box Bank or any
account as a Lock-Box Account to or from those listed in Exhibit C
hereto or make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box Account, unless (i) such
instructions are to deposit such payments to another existing Lock-Box
Account or (ii) the Administrative Agent shall have received written
notice of such addition, termination or change at least 30 days prior
thereto and the Administrative Agent shall have received a Lock-Box
Agreement executed by each new Lock-Box Bank or an existing Lock-Box
Bank with respect to each new Lock-Box Account, as applicable.
(f) Deposits to Lock-Box Accounts. The Transferor will
not deposit or otherwise credit, or cause or permit to be so deposited
or credited, to any Lock-Box Account cash or cash proceeds other than
Collections of Receivables.
(g) Change of Name, Etc. The Transferor will not
change its name, identity or structure or its chief executive office,
unless at least 10 days prior to the effective date of any such change
the Transferor delivers to the Collateral Agent (i) UCC financing
statements, executed by the Transferor, necessary to reflect such
change and to continue the perfection of the Company's ownership
interests or security interests in the Receivables and (ii) the Lock-
Box Agreements and, in the case of the Lock-Box Agreements, the Lock-
Box Banks necessary to reflect such change and to continue to enable
the Collateral Agent to exercise its rights contained in Section 2.8.
(h) Changes to Partnership Agreement. The Transferor
will not amend or otherwise modify the definition of "Distributable
Cash" or the provisions relating thereto in its partnership agreement
(including, without limitation, Section 5.07 thereof) without the prior
written consent of the Company.
SECTION 5.3. Financial Covenants of Transferor. During the
term of this Agreement, unless the Company shall otherwise consent in
writing:
(a) The Transferor shall not permit Partners' Capital at any
time to be less than $1,350,000,000;
(b) The Transferor shall maintain, for a period of four
consecutive fiscal quarters ending as of each fiscal quarter, a ratio
of (x) EBITDA minus Capital Expenditures to (y) the sum of (i) cash
interest payable on, and amortization of debt discount in respect of,
all Indebtedness during such period plus (ii) regularly scheduled
principal amounts of all Indebtedness (including current obligations
owing under Capitalized Leases) payable during the period of the next
four consecutive fiscal quarters beginning on the day after such date
of determination, of 5.0 to 1.0 or greater; and
(c) The Transferor shall maintain a ratio of Current Assets
to Current Liabilities of 1.5 to 1.0 or greater.
(d) Capitalized terms used in this Section 5.3 (other than
"Agreement" and "Transferor") are used as defined in Exhibit G hereto.
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent. The
servicing, administering and collection of the Receivables shall be
conducted by such Person (the "Collection Agent") so designated from
time to time in accordance with this Section 6.1. Until the Company
gives notice to IMC-AGRICO COMPANY of the designation of a new
Collection Agent pursuant to the succeeding sentence, IMC-AGRICO
COMPANY is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Collection Agent pursuant to the terms
hereof. The Company may, upon the occurrence of a Collection Agent
default or any Termination Event designate as Collection Agent any
Person (including itself) to succeed IMC-AGRICO COMPANY or any
successor Collection Agent, on the condition in each case that any such
Person so designated shall agree to perform the duties and obligations
of the Collection Agent pursuant to the terms hereof. The Company may
notify any Obligor of the Transferred Interest.
SECTION 6.2. Duties of Collection Agent.
(a) The Collection Agent shall take or cause to be
taken all such action as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws,
rules and regulations, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy. Each of the
Transferor and the Company hereby appoints as its agent the Collection
Agent, from time to time designated pursuant to Section 6.1, to enforce
its respective rights and interests in and under the Receivables, the
Related Security and the Contracts. The Collection Agent shall set
aside for the account of the Transferor and the Company their
respective allocable shares of the Collections of Receivables in
accordance with Sections 2.5 and 2.6. The Collection Agent shall
segregate and deposit to the Company's account the Company's allocable
share of Collections of Receivables when required pursuant to Article
II hereof. The Transferor may not extend the maturity of Receivables.
So long as no Termination Event shall have occurred and be continuing,
the Transferor may, in accordance with the Credit and Collection
Policy, adjust the Outstanding Balance of Receivables as the Transferor
may determine to be appropriate to maximize Collections thereof;
provided, however, that such adjustment shall not alter the amount of
such Receivable considered as a Delinquent Receivable or a Defaulted
Receivable. The Transferor shall deliver to the Collection Agent and
the Collection Agent shall hold in trust for the Transferor and the
Company in accordance with their respective interests, all Records
which evidence or relate to Receivables or Related Security.
Notwithstanding anything to the contrary contained herein, the Company
shall have the absolute and unlimited right to direct the Collection
Agent (whether the Collection Agent is the Transferor or any other
Person) to commence or settle any legal action to enforce collection of
any Receivable or to foreclose upon or repossess any Related Security.
(b) The Collection Agent shall hold for the benefit of
the Transferor Collections received minus the Percentage Factor of such
Collections. On the last day of each Tranche Period, the Collection
Agent shall deduct from such Collections and pay to the Company in
reduction of the Net Investment any amounts due under Section 2.9
hereof and unpaid from the Transferor and turn the remainder of such
Collections over to the Transferor. In addition, the Collection Agent
shall, as soon as practicable following receipt thereof, turn over to
the Transferor any collections of any indebtedness of any Obligor which
is not a Receivable. If the Transferor is not the Collection Agent,
the Collection Agent, by giving three Business Days' prior written
notice to the Company, may revise the percentage used to calculate the
Servicing Fee so long as the revised percentage will not result in a
Servicing Fee that exceeds 110% of the reasonable and appropriate out-
of-pocket costs and expenses of such Collection Agent incurred in
connection with the performance of its obligations hereunder as
documented to the reasonable satisfaction of the Company. The
Collection Agent, if other than the Transferor, shall as soon as
practicable upon demand, deliver to the Transferor all Records in its
possession which evidence or relate to indebtedness of an Obligor which
is not a Receivable.
(c) On or before 90 days after the end of each fiscal
year of the Collection Agent, beginning with the fiscal year ending
June 30, 1995, the Collection Agent shall cause a firm of independent
public accountants (who may also render other services to the
Collection Agent or the Transferor) to furnish a report to the Company
to the effect that they have (i) compared the information contained in
the Investor Reports delivered during such fiscal year with the
information contained in the Contracts and the Collection Agent's
records and computer systems for such period, and that, on the basis of
such examination and comparison, such firm is of the opinion that the
information contained in the Investor Reports reconciles with the
information contained in the Contracts and the Collection Agent's
records and computer system and that the servicing of the Receivables
has been conducted in compliance with this Agreement, and (ii) verified
that the Receivables treated by the Collection Agent as Eligible
Receivables in fact satisfied the requirements of the definition
thereof contained herein, except, in each case for (a) such exceptions
as such firm shall believe to be immaterial (which exceptions need not
be enumerated) and (b) such other exceptions as shall be set forth in
such statement.
(d) Notwithstanding anything to the contrary contained
in this Article VI, the Collection Agent, if not the Transferor, shall
have no obligation to collect, enforce or take any other action
described in this Article VI with respect to any Receivable that is not
included in the Transferred Interest other than to deliver to the
Transferor the Collections and documents with respect to any such
Receivable as described in Section 6.2(b).
SECTION 6.3. Rights After Designation of New Collection
Agent. At any time following the designation of a Collection Agent
(other than the Transferor) pursuant to Section 6.1:
(i) The Company may direct that payment of all
amounts payable under any Receivable be made directly to the
Company or its designee.
(ii) The Transferor shall, at the Company's
request and at the Transferor's expense, give notice of the
Company's ownership of Receivables to each Obligor and direct
that payments be made directly to the Company or its designee.
(iii) The Transferor shall, at the Company's
request, (A) assemble all of the Records, and shall make the
same available to the Company at a place selected by the Company
or its designee, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to the Company
and shall, promptly upon receipt, remit all such cash, checks
and instruments, duly endorsed or with duly executed instruments
of transfer, to the Company or its designee.
(iv) The Transferor hereby authorizes the
Company to take any and all steps in the Transferor's name and
on behalf of the Transferor necessary or desirable, in the
determination of the Company, to collect all amounts due under
any and all Receivables, including, without limitation,
endorsing the Transferor's name on checks and other instruments
representing Collections and enforcing such Receivables and the
related Contracts.
SECTION 6.4. Responsibilities of the Transferor. Anything
herein to the contrary notwithstanding, the Transferor shall (i)
perform all of its obligations under the Contracts related to the
Receivables to the same extent as if interests in such Receivables had
not been sold hereunder and the exercise by the Company of its rights
hereunder shall not relieve the Transferor from such obligations and
(ii) pay when due any taxes, including without limitation, any sales
taxes payable in connection with the Receivables and their creation and
satisfaction. The Company shall not have any obligation or liability
with respect to any Receivable or related Contracts, nor shall it be
obligated to perform any of the obligations of the Transferor
thereunder.
ARTICLE VIITERMINATION EVENTS
SECTION 7.1. Termination Events. The occurrence of any one
or more of the following events shall constitute a Termination Event:
(a) (i) the Collection Agent shall fail to perform or
observe any term, covenant or agreement hereunder (other than as
referred to in clause (ii) of this Section 7.1(a)) and such failure
shall remain unremedied for ten (10) days after the earlier of (x) the
date on which the Company notifies the Collection Agent thereof and (y)
the date the Collection Agent knew of any such breach, or (ii) either
the Collection Agent or the Transferor shall fail to make any payment
or deposit to be made by it hereunder when due or the Collection Agent
shall fail to observe or perform any term, covenant or agreement on the
Collection Agent's part to be performed under Section 2.8(b) hereof; or
(b) any representation, warranty, certification or
statement made by the Transferor in this Agreement or in any other
document delivered pursuant hereto shall prove to have been incorrect
in any material respect when made or deemed made; or
(c) the Transferor shall default in the performance of
any payment or undertaking (other than those covered by clause (a)
above) (i) to be performed or observed under Sections 5.1(a)(vi),
5.1(a)(vii), 5.1(b)(x), 5.1(f), 5.1(g), 5.1(h), 5.1(k), 5.2(a), (c),
(d), (e), (g)(ii) or (h) or Section 5.3 or (ii) to be performed or
observed under any other provision hereof and such default in the case
of this clause (ii) shall continue for ten (10) days after the earlier
of (x) the date on which the Company notifies the Transferor thereof
and (y) the date the Transferor knew of any such default; or
(d) with respect to any Indebtedness in excess of
$10,000,000 in the aggregate for the Transferor or any of its
Subsidiaries, (i) the Borrower or any such Subsidiary shall (A) default
in any payment (beyond the applicable grace period with respect
thereto, if any) with respect to any such Indebtedness, or (B) default
in the observance or performance relating to such Indebtedness or
contained in any agreement or instrument evidencing, securing or
relating thereto, or any other event or condition shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated
maturity; or (ii) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or
(e) any Event of Bankruptcy shall occur with respect to
(i) the Transferor or the Collection Agent, (ii) any Subsidiary of
either the Transferor or the Collection Agent, (iii) any general
partner of the Transferor or (iv) any of Freeport McMoRan, Inc., FRP GP
Co., Freeport McMoRan Resource Partners, IMC Global Inc. or IMC
Fertilizer, Inc. or any of their successors; or
(f) the Company shall, for any reason, fail to have a
valid and perfected first priority security interest in the
Receivables; or
(g) the Transferor shall enter into any transaction or
merger whereby it is not the surviving entity; or
(h) there shall have occurred any material adverse
change in the operations of the Transferor or the Collection Agent
since June 30, 1994 or any other event shall have occurred which
materially affects the Transferor's or the Collection Agent's ability
to either collect the Receivables or to perform under this Agreement;
or
(i) the Liquidity Provider or the Credit Support
Provider shall have given notice that an event of default has occurred
and is continuing under its agreements with the Company; or
(j) the Commercial Paper issued by the Company shall
not be rated at least "A-2" by Standard & Poor's and at least "P-2" by
▇▇▇▇▇'▇, unless such downgrading is the result of the Credit Support
Provider being downgraded; or
(k) the Percentage Factor exceeds the Maximum
Percentage Factor unless the Transferor reduces the Net Investment
within three Business Days, bringing the Percentage Factor to less than
or equal to 95% or the Percentage Factor equals or exceeds 100% at any
time; or
(l) the Dilution Ratio averaged for any three
consecutive months exceeds 3.50%; or
(m) the Loss to Liquidation Ratio averaged for any
three consecutive months exceeds 1.25%; or
(n) the Delinquency Ratio averaged for any three
consecutive months exceeds 5.0%.
SECTION 7.2. Termination. (a) If a Termination Event
occurs, the Company may, by notice to the Transferor, declare all
outstanding Tranche Periods to be ended and designate the Base Rate
plus 2% to be applicable to the Net Investment.
(b) In addition, if any Termination Event occurs the
Company and the Collateral Agent shall have all of the rights and
remedies provided to a secured creditor or a purchaser of accounts
under the UCC by applicable law in respect thereto.
ARTICLE VIIIINDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor. Without
limiting any other rights which the Company may have hereunder or under
applicable law, the Transferor hereby agrees to indemnify the Company,
the Liquidity Provider and the Credit Support Provider and any
permitted assigns and their respective officers, directors and
employees (collectively, "Indemnified Parties") from and against any
and all damages, losses, claims, liabilities, costs and expenses,
including reasonable attorneys' fees (which such attorneys may be
employees of the Liquidity Provider, the Credit Support Provider or the
Company) and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by
any of them arising out of or as a result of this Agreement or the
ownership, either directly or indirectly, by the Company of the
Transferred Interest excluding, however, (i) Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on the
part of an Indemnified Party or (ii) recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables
or (iii) income or franchise taxes payable by any Indemnified Party on
amounts received under this Agreement. Without limiting the generality
of the foregoing, the Transferor shall indemnify each Indemnified Party
for Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty
made by the Transferor (or any officers of the Transferor) under
or in connection with this Agreement, any Investor Report or any
other information or report delivered by the Transferor pursuant
hereto, which shall have been false or incorrect in any material
respect when made or deemed made;
(ii) the failure by the Transferor to comply
with any applicable law, rule or regulation with respect to any
Receivable or the related Contract, or the nonconformity of any
Receivable or the related Contract with any such applicable law,
rule or regulation;
(iii) the failure to vest and maintain vested
in the Company an undivided percentage ownership interest, to
the extent of the Transferred Interest, in the Receivables
included in the Transferred Interest, free and clear of any
Adverse Claim;
(iv) the failure to file, or any delay in
filing, financing statements, continuation statements, or other
similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any
Receivable included in the Transferred Interest;
(v) any dispute, claim, offset or defense
(other than discharge in bankruptcy) of the Obligor to the
payment of any Receivable included in the Transferred Interest
(including, without limitation, a defense based on such
Receivable or the related Contract not being legal, valid and
binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from
the sale of merchandise or services related to such Receivable
or the furnishing or failure to furnish such merchandise or
services;
(vi) any failure of the Transferor, as
Collection Agent or otherwise, to perform its duties or
obligations in accordance with the provisions of Article VI; or
(vii) any products liability claim or personal
injury or property damage suit or other similar or related claim
or action of whatever sort arising out of or in connection with
merchandise or services which are the subject of any Receivable;
provided, however, that if the Company enters into agreements
for the purchase of interests in receivables from one or more
Other Transferors, the Company shall allocate such Indemnified
Amounts which are in connection with the Liquidity Provider
Agreement, the Credit Support Agreement or the credit support
furnished by the Credit Support Provider to the Transferor and
each Other Transferor; and provided, further, that if such
Indemnified Amounts are attributable to the Transferor and not
attributable to any Other Transferor, the Transferor shall be
solely liable for such Indemnified Amounts or if such
Indemnified Amounts are attributable to Other Transferors and
not attributable to the Transferor, such Other Transferors shall
be solely liable for such Indemnified Amounts.
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses.
(a) If after the date hereof, the adoption of any Law or bank
regulatory guideline or any amendment or change in the interpretation
of any existing or future Law or bank regulatory guideline by any
Official Body charged with the administration, interpretation or
application thereof (and, in the case of a change in the interpretation
of any such Law or regulatory guideline, such change has been generally
accepted by institutions to which such Law or regulatory guideline is
applicable), or the compliance with any directive of any Official Body
(in the case of any bank regulatory guideline, whether or not having
the force of Law):
(i) shall subject any Indemnified Party to any
tax, duty or other charge with respect to this Agreement, the
Transferred Interest, the Receivables or payments of amounts due
hereunder, or shall change the basis of taxation of payments to
any Indemnified Party of amounts payable in respect of this
Agreement, the Transferred Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds
under the Liquidity Provider Agreement or the credit support
furnished by the Credit Support Provider or otherwise in
respect of this Agreement, the Transferred Interest or the
Receivables (except for income or franchise taxes payable by any
Indemnified Party on amounts received under this Agreement);
(ii) shall impose, modify or deem applicable
any reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System) against assets of,
deposits with or for the account of, or credit extended by, any
Indemnified Party or shall impose on any Indemnified Party or on
the United States market for certificates of deposit or the
London interbank market any other condition affecting this
Agreement, the Transferred Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds
under the Liquidity Provider Agreement or the credit support
provided by the Credit Support Provider or otherwise in respect
of this Agreement, the Transferred Interest or the Receivables;
or
(iii) imposes upon any Indemnified Party any
other expense (including, without limitation, reasonable
attorneys' fees and expenses, and expenses of litigation or
preparation therefor in contesting any of the foregoing) with
respect to this Agreement, the Transferred Interest, the
Receivables or payments of amounts due hereunder or its
obligation to advance funds under the Liquidity Provider
Agreement or the credit support furnished by the Credit Support
Provider or otherwise in respect of this Agreement, the
Transferred Interests or the Receivables,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the Transferred
Interest, the Receivables, the obligations hereunder, the funding of
any purchases hereunder, the Liquidity Provider Agreement or the Credit
Support Agreement, by an amount deemed by such Indemnified Party to be
material, then, within ten (10) days after demand by the Company, the
Transferor shall pay to the Company such additional amount or amounts
as will compensate such Indemnified Party for such increased cost or
reduction; provided, however, that such demand shall not seek
additional amounts incurred earlier than the ninetieth day immediately
succeeding the date of such demand.
(b) If any Indemnified Party shall have determined that
after the date hereof, the adoption of any applicable Law or bank
regulatory guideline regarding capital adequacy, or any change therein,
or any change in the interpretation thereof by any Official Body (which
change has been generally accepted by institutions to which such Law or
regulatory guideline is applicable), or any directive regarding capital
adequacy (in the case of any bank regulatory guideline, whether or not
having the force of law) of any such Official Body, has or would have
the effect of reducing the rate of return on capital of such
Indemnified Party (or its parent) as a consequence of such Indemnified
Party's obligations hereunder or with respect hereto to a level below
that which such Indemnified Party (or its 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 Indemnified Party to be material, then from time
to time, within ten (10) days after demand by the Company, the
Transferor shall pay to the Company such additional amount or amounts
as will compensate such Indemnified Party (or its parent) for such
reduction; provided, however, that such demand shall not seek
additional amounts incurred earlier than the ninetieth day immediately
succeeding the date of such demand.
(c) The Company will promptly notify the Transferor of
any event of which it has knowledge, occurring after the date hereof,
which will entitle an Indemnified Party to compensation pursuant to
this Section. A notice by the Company claiming compensation under this
Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of manifest error.
In determining such amount, the Company may use any reasonable
averaging and attributing methods.
(d) Anything in this Section 8.2 to the contrary
notwithstanding, if the Company enters into agreements for the
acquisition of interests in receivables from one or more Other
Transferors, the Company shall allocate the liability for any amounts
under this Section 8.2 ("Section 8.2 Costs") to the Transferor and each
Other Transferor; and provided, further, that if such Section 8.2 Costs
are attributable to the Transferor and not attributable to any Other
Transferor, the Transferor shall be solely liable for such Section 8.2
Costs or if such Section 8.2 Costs are attributable to Other
Transferors and not attributable to the Transferor, such Other
Transferors shall be solely liable for such Section 8.2 Costs.
SECTION 8.3. Other Costs Expenses and Related Matters. (a)
The Transferor agrees, upon receipt of a written invoice, to pay or
cause to be paid, and to save the Company and the Administrative Agent
harmless against liability for the payment of, all reasonable out-of-
pocket expenses (including, without limitation, reasonable attorneys',
accountant's and other third parties' fees and expenses, any filing
fees and expenses incurred by officers or employees of the Company)
incurred by or on behalf of the Company and the Administrative Agent
(i) in connection with the negotiation, execution, delivery and
preparation of this Agreement and any documents or instruments
delivered pursuant hereto and the transactions contemplated hereby
(including, without limitation, the perfection or protection of the
Transferred Interest) and (ii) from time to time (a) relating to any
amendments, waivers or consents under this Agreement, (b) arising in
connection with the Company's or its agent's enforcement or
preservation of rights (including, without limitation, the perfection
and protection of the Transferred Interest under this Agreement), or
(c) arising in connection with any audit, dispute, disagreement,
litigation or preparation for litigation involving this Agreement (all
of such amounts, collectively, "Transaction Costs").
(b) Transferor shall pay the Company on demand any
Early Collection Fee due on account of the reduction of a Tranche on a
day prior to the last day of its Tranche Period.
SECTION 8.4. Reconveyance Under Certain Circumstances.
Transferor agrees to accept the reconveyance from the Company of the
Transferred Interest if the Company notifies Transferor of a material
breach of any representation or warranty made or deemed made pursuant
to Article III of this Agreement and Transferor shall fail to cure such
breach within 15 days (or, in the case of the representations and
warranties in Sections 3.1(d) and 3.1(j), 3 days) of such notice. The
reconveyance price shall be paid by the Transferor to the Company in
immediately available funds on such 15th day (or 3rd day, if
applicable) in an amount equal to the Aggregate Unpaids.
ARTICLE IXMISCELLANEOUS
SECTION 9.1. Term of Agreement. This Agreement shall
terminate following the Termination Date when the Net Investment has
been reduced to zero, all accrued Discount has been paid in full and
all other Aggregate Unpaids have been paid in full; provided, however,
that (i) the rights and remedies of the Company with respect to any
representation and warranty made or deemed to be made by Transferor
pursuant to this Agreement, (ii) the indemnification and payment
provisions of Article VIII, and (iii) the agreement set forth in
Section 9.9, shall be continuing and shall survive any termination of
this Agreement.
SECTION 9.2. Waivers; Amendments. No failure or delay on
the part of the Company in exercising any power, right or remedy under
this Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or remedy preclude any
other further exercise thereof or the exercise of any other power,
right or remedy. The rights and remedies herein provided shall be
cumulative and nonexclusive of any rights or remedies provided by law.
Any provision of this Agreement may be amended if, but only if, such
amendment is in writing and is signed by the Transferor and the
Company.
SECTION 9.3. Notices. Except as provided below, all
communications and notices provided for hereunder shall be in writing
(including bank wire, telex, telecopy or electronic facsimile
transmission or similar writing) and shall be given to the other party
at its address or telecopy number set forth below or at such other
address or telecopy number as such party may hereafter specify for the
purposes of notice to such party. Each such notice or other
communication shall be effective (i) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this
Section and confirmation is received, (ii) if given by mail 3 Business
Days following such posting, or (iii) if given by any other means, when
received at the address specified in this Section. However, anything
in this Agreement to the contrary notwithstanding, the Transferor
hereby authorizes the Company to effect Transfers, Tranche Period and
Tranche Rate selections based on telephonic notices made by any Person
which the Company in good faith believes to be acting on behalf of the
Transferor. The Transferor agrees to deliver promptly to the Company a
written confirmation of each telephonic notice signed by an authorized
officer of Transferor. However, the absence of such confirmation shall
not affect the validity of such notice. If the written confirmation
differs in any material respect from the action taken by the Company,
the records of the Company shall govern absent manifest error.
If to the Company:
Enterprise Funding Corporation
c/o Merrill ▇▇▇▇▇ Money Markets Inc.
World Financial Center--South Tower
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to the Administrative Agent)
If to the Transferor:
IMC-AGRICO COMPANY
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer
Payment Information:
NationsBank of North Carolina, N.A.
ABA ▇▇▇▇▇▇▇▇▇
Account 000279224
Reference IMC-Agrico Company
If to the Collateral Agent:
NationsBank of North Carolina, N.A.
NationsBank Corporate ▇▇▇▇▇▇--▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇--
Investment Banking
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Administrative Agent:
NationsBank of North Carolina, N.A.
NationsBank Corporate ▇▇▇▇▇▇--▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇--
Investment Banking
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.4. Governing Law; Submission to Jurisdiction;
Integration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO CONFLICTS OF LAWS PRINCIPLES AND THE PERFECTION AND THE EFFECT OF
PERFECTION OR NONPERFECTION OF ANY "SECURITY INTEREST" (AS DEFINED IN
THE UCC AS IN EFFECT IN THE STATE OF NEW YORK) GRANTED HEREUNDER SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS. THE TRANSFEROR
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW
YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. The Transferor hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection
which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum. Nothing in this Section 9.4 shall affect the right of the
Company to bring any action or proceeding against the Transferor or its
property in the courts of other jurisdictions.
(b) This Agreement contains the final and complete
integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire Agreement
among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
SECTION 9.5. Severability; Counterparts. This Agreement may
be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same Agreement. Any provisions of this
Agreement which are prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 9.6. Successors and Assigns. (a) This Agreement
shall be binding on the parties hereto and their respective successors
and assigns; provided, however, that the Transferor may not assign any
of its rights or delegate any of its duties hereunder without the prior
written consent of the Company. No provision of this Agreement shall
in any manner restrict the ability of the Company to assign,
participate, grant security interests in, or otherwise transfer any
portion of the Transferred Interest.
(b) The Transferor hereby agrees and consents to the
assignment by the Company from time to time of all or any part of its
rights under, interest in and title to this Agreement and the
Transferred Interest to any Liquidity Provider. In addition, the
Transferor hereby agrees and consents to the complete assignment by the
Company of all of its rights under, interest in and title to this
Agreement and the Transferred Interest to the Collateral Agent.
SECTION 9.7. Waiver of Confidentiality. The Transferor
hereby consents to the disclosure of any non-public information with
respect to it received by the Company or the Administrative Agent (i)
to any nationally recognized rating agency rating the Company's
commercial paper provided such rating agencies are informed of the
highly confidential nature of such information, (ii) to any of the
Company, the Administrative Agent, the Liquidity Provider, the Credit
Support Provider or any placement agent for the Company's Commercial
Paper in relation to this Agreement, provided any such Person agrees to
hold such information confidential, or any of such Person's auditors,
attorneys or financial advisors provided such parties are informed of
the highly confidential nature of such information, (iii) as otherwise
required by applicable law or order of a court of competent
jurisdiction or as requested by any regulatory authority having
jurisdiction over the Company or the Administrative Agent or (iv) as
requested by the Liquidity Provider, the Credit Support Provider or any
placement agent for the Company's Commercial Paper solely as a result
of a requirement of applicable law or order of a court of competent
jurisdiction or solely as a result of a request by any regulatory
authority having jurisdiction over any such Person. Notwithstanding
the foregoing, the Company shall be permitted to disclose portfolio
data regarding the Receivables to holders (and prospective holders) of
its Commercial Paper provided that such information does not contain
the name of the Transferor.
SECTION 9.8. Confidentiality Agreement. The Transferor
hereby agrees that it will not disclose the contents of this Agreement
or any other proprietary or confidential information of the Company,
the Collateral Agent, the Administrative Agent, the Liquidity Provider
or the Credit Support Provider to any other Person except (i) its
auditors and attorneys or financial advisors (other than any commercial
bank) and any nationally recognized rating agency, provided such
auditors, attorneys, financial advisors or rating agencies are informed
of the highly confidential nature of such information or (ii) as
otherwise required by applicable law or order of a court of competent
jurisdiction or as requested by any regulatory authority having
jurisdiction over the Transferor.
SECTION 9.9. No Bankruptcy Petition Against the Company.
The Transferor hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of all
outstanding Commercial Paper or other indebtedness of the Company, it
will not institute against, or join any other Person in instituting
against, the Company 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 9.10. No Recourse Against Stockholders, Officers or
Directors. No recourse under any obligation, covenant or agreement of
the Company contained in this Agreement shall be had against ▇▇▇▇▇▇▇
▇▇▇▇▇ Money Markets Inc. (or any affiliate thereof), or any
stockholder, officer or director of the Company, as such, by the
enforcement of any assessment or by any legal or equitable proceeding,
by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely a corporate obligation of the
Company, and that no personal liability whatever shall attach to or be
incurred by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Inc. (or any affiliate
thereof), or the stockholders, officers or directors of the Company, as
such, or any of them, under or by reason of any of the obligations,
covenants or agreements of the Company contained in this Agreement, or
implied therefrom, and that any and all personal liability for breaches
by the Company of any of such obligations, covenants or agreements,
either at common law or at equity, or by statute or constitution, of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Inc. (or any affiliate thereof) and every
such stockholder, officer or director is hereby expressly waived as a
condition of and consideration for the execution of this Agreement.
SECTION 9.11. Characterization of the Transactions
Contemplated by the Agreement. It is the intention of the parties that
the transactions contemplated hereby constitute the sale of the
Transferred Interest, conveying good title thereto free and clear of
any Adverse Claims to the Company and that the Transferred Interest not
be part of the Transferor's estate in the event of an insolvency. If,
notwithstanding the foregoing, the transactions contemplated hereby
should be deemed a financing, the parties intend that the Transferor
shall be deemed to have granted to the Company, and the Transferor
hereby grants to the Company, a first priority perfected security
interest in all of the Transferor's right, title and interest in, to
and under the Receivables, together with Related Security and
Collections with respect thereto, and that this Agreement shall
constitute a security agreement under applicable law.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Transfer and Administration Agreement as of the date
first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VICE PRESIDENT
IMC-AGRICO COMPANY,
as Transferor and
Collection Agent
BY: IMC-AGRICO MP, INC., a
general partner
By:
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Transfer and Administration Agreement as of the date
first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By:
----------------
Name:
Title:
IMC-AGRICO COMPANY,
as Transferor and
Collection Agent
BY: IMC-AGRICO MP, INC., a
general partner
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: