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EXHIBIT 10.39
AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
by and among
REDWOOD RECEIVABLES CORPORATION,
as a Conduit,
PARK AVENUE RECEIVABLES CORPORATION,
as a Conduit,
MP RECEIVABLES COMPANY,
as Transferor,
CAREMARK INC.,
as Originator and as Collection Agent,
THE CHASE MANHATTAN BANK,
as the PARCO Group Agent,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Redwood Group Agent and as the Funding Agent
Dated as of January 31, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................................. 2
Section 1.1 Certain Defined Terms..................................................................... 2
Section 1.2 Other Terms............................................................................... 2
Section 1.3 Computation of Time Periods............................................................... 2
ARTICLE II PURCHASES AND SETTLEMENTS.............................................................................. 2
Section 2.1 Facility.................................................................................. 2
Section 2.2 Transfers; Transfer Certificates and Percentage Factor.................................... 3
Section 2.3 Selection of Tranche Periods for BR Tranches and Eurodollar Tranches...................... 5
Section 2.4 Discount, Fees and Other Costs and Expenses............................................... 5
Section 2.5 Non-Liquidation Settlement and Reinvestment Procedures.................................... 6
Section 2.6 Liquidation Settlement Procedures......................................................... 8
Section 2.7 Fees...................................................................................... 9
Section 2.8 Protection of Ownership Interest of Funding Agent......................................... 9
Section 2.9 Deemed Collections; Application of Payments............................................... 10
Section 2.10 Payments and Computations, Etc............................................................ 11
Section 2.11 Reports................................................................................... 11
Section 2.12 Collection Account........................................................................ 12
Section 2.13 Right of Setoff........................................................................... 12
Section 2.14 Sharing of Payments, Etc.................................................................. 13
Section 2.15 Broken Funding............................................................................ 13
Section 2.16 Conversion and Continuation of Outstanding Tranches Funded by the APA Banks............... 13
Section 2.17 Illegality................................................................................ 14
Section 2.18 Inability to Determine Eurodollar Rate.................................................... 15
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................................ 15
Section 3.1 Representations and Warranties of the Transferor.......................................... 16
Section 3.2 Reaffirmation of Representations and Warranties by the Transferor......................... 19
Section 3.3 Representations and Warranties of the Originator.......................................... 19
ARTICLE IV CONDITIONS PRECEDENT................................................................................... 19
Section 4.1 Conditions to Effectiveness............................................................... 19
ARTICLE V COVENANTS............................................................................................... 22
Section 5.1 Affirmative Covenants..................................................................... 22
Section 5.3 Representations, Warranties and Covenants of the Originator............................... 29
ARTICLE VI ADMINISTRATION AND COLLECTIONS......................................................................... 30
Section 6.1 Appointment of Collection Agent........................................................... 30
Section 6.2 Duties of Collection Agent................................................................ 30
Section 6.3 Rights After Designation of Collection Agent.............................................. 32
Section 6.4 Collection Agent Default.................................................................. 32
Section 6.5 Indemnities by the Collection Agent....................................................... 34
Section 6.6 Responsibilities of the Originator........................................................ 34
ARTICLE VII TERMINATION EVENTS.................................................................................... 34
Section 7.1 Termination Events........................................................................ 35
Section 7.2 Remedies Upon the Occurrence of a Termination Event....................................... 37
Section 7.3 Reconveyance Under Certain Circumstances.................................................. 38
ARTICLE VIII INDEMNIFICATION; EXPENSES; RELATED MATTERS........................................................... 39
Section 8.1 Indemnities by the Transferor............................................................. 39
Section 8.2 Indemnity for Reserves and Expenses....................................................... 41
Section 8.3 Indemnity for Taxes....................................................................... 42
Section 8.4 Other Costs, Expenses and Related Matters................................................. 43
ARTICLE IX MISCELLANEOUS.......................................................................................... 44
Section 9.1 Term of Agreement......................................................................... 44
Section 9.2 Waivers; Amendments....................................................................... 44
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Section 9.3 Notices................................................................................... 45
Section 9.4 Governing Law; Submission to Jurisdiction; Integration.................................... 47
Section 9.5 Severability; Counterparts................................................................ 48
Section 9.6 Successors and Assigns.................................................................... 48
Section 9.7 Confidentiality........................................................................... 48
Section 9.8 No Bankruptcy Petition Against Redwood or PARCO........................................... 49
Section 9.9 Limited Recourse.......................................................................... 49
Section 9.10 Characterization of the Transactions Contemplated by the Agreement........................ 50
Section 9.11 Waiver of Setoff.......................................................................... 51
Section 9.12 Conflict Waivers.......................................................................... 51
Section 9.13 Liability of Funding Agent................................................................ 51
Section 9.16 No Bankruptcy Petition against Transferor................................................. 53
Section 9.17 Limitation of Liability................................................................... 54
Section 9.18 Third Party Beneficiary................................................................... 54
EXHIBITS
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EXHIBIT A Form of Contract
EXHIBIT B Form of Deposit Report
EXHIBIT C List of Lock-Box Banks and Accounts
EXHIBIT D Form of Lock-Box Agreement
EXHIBIT E Form of Settlement Report
EXHIBIT F Form of Transfer Certificate
EXHIBIT G List of Actions and Suits
EXHIBIT H Location of Records
EXHIBIT I List of Subsidiaries, Divisions and Tradenames
EXHIBIT J Form of Secretary's Certificate
SCHEDULES
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SCHEDULE A Schedule of Definitions
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AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement"), dated as of January 31, 2001, by and among MP RECEIVABLES COMPANY,
a Delaware corporation, as transferor (in such capacity, the "Transferor"),
CAREMARK INC., a California corporation, individually (the "Originator") and as
collection agent (in such capacity, the "Collection Agent"), REDWOOD RECEIVABLES
CORPORATION, a Delaware corporation ("Redwood"), PARK AVENUE RECEIVABLES
CORPORATION, a Delaware corporation ("PARCO"), THE CHASE MANHATTAN BANK, a New
York state banking corporation ("Chase"), as agent for PARCO and the PARCO APA
Banks (in such capacity, the "PARCO Group Agent") and GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation ("GE Capital"), as agent for Redwood and the
Redwood Liquidity Providers (in such capacity, the "Redwood Group Agent") and as
funding agent for the benefit of the Conduits, the Group Agents and the APA
Banks (in such capacity, the "Funding Agent").
PRELIMINARY STATEMENTS
WHEREAS, pursuant to the Receivables Transfer Agreement, dated as of
December 4, 1998, by and among the Transferor, the Originator, PARCO and Chase
(the "Original Transfer Agreement"), the Transferor has conveyed, transferred
and assigned, from time to time, undivided percentage interests in certain
accounts receivable, and PARCO has, and the APA Banks, if requested by PARCO,
have, accepted such conveyances, transfers and assignments of such undivided
percentage interests, subject to the terms and conditions of the Original
Transfer Agreement.
WHEREAS, the parties hereto intend to amend and restate that Original
Transfer Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
and restate the Original Transfer Agreement as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS.
Capitalized terms used herein shall have the meanings assigned to such
terms in, or incorporated by reference into, Schedule A attached hereto, which
Schedule A is incorporated by reference herein.
SECTION 1.2 OTHER TERMS.
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP.
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", the words "to" and "until" each means "to but
excluding", and the word "within" means "from and excluding a specified date and
to and including a later specified date".
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1 FACILITY.
Upon the terms and subject to the conditions set forth herein and in
the other Transaction Documents prior to the Termination Date, the Transferor
may, at its option, convey, transfer and assign to the Funding Agent, as agent
for the Transferees, undivided percentage ownership interests in the
Receivables, together with Related Security, Collections and Proceeds with
respect thereto, from time to time. The Funding Agent shall act on behalf of the
Transferees in this regard.
The Transferees shall accept Incremental Transfers from the Effective
Date until the Termination Date as follows:
(a) with respect to the Redwood Group and its Share of the
Transfer Price for any Incremental Transfer, Redwood (prior to the occurrence of
the Redwood Termination Date) and the Redwood Committed Transferee (after the
occurrence of the Redwood Committed Transferee Funding Event) severally agree to
make available such Share of such Transfer Price, and
(b) with respect to the PARCO Group and its Share of the Transfer
Price for any Incremental Transfer, PARCO may, in its sole discretion, and, if
PARCO does not make
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available such Share of such Transfer Price, then the PARCO APA Banks shall make
available such Share of such Transfer Price.
Under no circumstances shall any Transferee have any obligation to pay
any portion of the Transfer Price related to any Incremental Transfer if, after
giving effect to such Incremental Transfer and the payment of such portion of
the Transfer Price, (w) any of the representations and warranties made or to be
made by the Transferor on the date of such Transfer pursuant to Section 3.2 is
not true or correct on such date as if made on such date, (x) the Net Investment
outstanding hereunder would exceed the Facility Limit, (y) such Transferee
Group's Transferee Group Net Investment would, after giving effect to such
Incremental Transfer, exceed such Transferee Group's Transferee Group Limit or
(z) the Percentage Factor would exceed the Maximum Percentage Factor.
By accepting any conveyance, transfer and assignment hereunder, the
Conduits, the Funding Agent, any Group Agent and/or any APA Bank neither assume
nor shall any of them have any obligations or liability under any of the
Contracts, all of which shall remain the obligations and liabilities of the
Originator.
SECTION 2.2 TRANSFERS; TRANSFER CERTIFICATES AND PERCENTAGE
FACTOR.
(a) Incremental Transfers. Subject to Section 2.1, the Transferor
shall, by notice to each Group Agent given by telecopy, offer to convey,
transfer and assign to the Funding Agent, for the benefit of the Transferees,
undivided percentage ownership interests in the Receivables and Related
Security, Collections and Proceeds with respect thereto (each, an "Incremental
Transfer") at least three (3) Business Days prior to the proposed date of any
Incremental Transfer. Each such notice shall specify (i) the desired Transfer
Price (which shall be at least $1,000,000 or integral multiples of $100,000 in
excess thereof) or, to the extent that the then available unused portion of the
Facility Limit is less than such amount, such lesser amount equal to such
available portion of the Facility Limit and each Transferee Group's Share of
such Transfer Price; (ii) the desired date of such Incremental Transfer; and
(iii) if such Incremental Transfer is to be funded as a BR Tranche or a
Eurodollar Tranche, the desired Tranche Period(s) (it being understood that all
CP Tranches shall have a Tranche Period as defined in the definition of CP
Tranche Period). Each Incremental Transfer shall be subject to the condition
precedent that the Collection Agent shall have delivered to the Funding Agent
and each Group Agent, as and when due in accordance with this Agreement, a
completed Deposit Report prior to the desired date of such Incremental Transfer,
together with such other additional information as the Funding Agent or the
Group Agent may reasonably request. Each Group Agent shall immediately notify
the members of its Transferee Group of a request for an Incremental Transfer
received by it. On the date requested for such Incremental Transfer (provided
the prior notice for such Incremental Transfer has been given), each Group Agent
shall deposit to the Transferor's account at the location indicated in Section
9.3 hereof, in immediately available funds, an amount equal to its Transferee
Group's Share of the cash portion of the Transfer Price for such Incremental
Transfer.
Each notice of proposed Incremental Transfer shall be irrevocable and
binding on the Transferor, and the Transferor shall indemnify the Transferees
against any loss or expense
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incurred by any Transferee, either directly or indirectly, 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 any Transferee, either directly or indirectly, by reason of the
liquidation or reemployment of funds acquired by any such Transferee (including,
without limitation, funds obtained by issuing Commercial Paper or promissory
notes, obtaining deposits as loans from third parties and reemployment of funds)
to fund such Incremental Transfer.
On the date of the initial Incremental Transfer, the Transferor shall
deliver to the Funding Agent, a Transfer Certificate in the form of Exhibit F
hereto (the "Transfer Certificate"). On the date of each Incremental Transfer,
each Group Agent shall send written confirmation to the Transferor of the cash
portion of such Group Agent's Transferee Group's Share of the Transfer Price,
the Tranche Period(s) (if applicable), the Transfer Date and the Tranche Rate(s)
applicable to such Incremental Transfer. The Funding Agent shall indicate the
amount of each Transferee Group's Share of each 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 Transfers.
(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 Funding
Agent on behalf of the Transferees undivided percentage ownership interests in
each and every Receivable, together with Related Security, Collections and
Proceeds with respect thereto, to the extent that Collections are available for
such Transfer in accordance with Section 2.5(a) hereof, such that, after giving
effect to such Transfer, (i) the amount of the Net Investment at the close of
business on such Business Day shall be equal to the amount of the Net Investment
at the close of the business on the Business Day immediately preceding such
Business Day plus the cash portion of the Transfer Price of any Incremental
Transfer made on such day, if any, and (ii) the Transferred Interest in each
Receivable, together with Related Security, Collections and Proceeds with
respect thereto, shall be equal to the Transferred Interest in each other
Receivable, together with Related Security, Collections and Proceeds with
respect thereto.
(c) All Transfers. Each Transfer shall constitute a purchase of an
undivided percentage ownership interest in each and every Receivable, together
with Related Security, Collections and Proceeds with respect thereto, then
existing, as well as in each and every Receivable, together with Related
Security, Collections and Proceeds with respect thereto, which arises at any
time after the date of such Transfer. The aggregate undivided percentage
ownership interest of the Funding Agent on behalf of the Transferees in the
Receivables, together with the Related Security, Collections and Proceeds with
respect thereto, shall equal the Percentage Factor in effect from time to time.
(d) 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
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which any such computation or recomputation is made until the time as of which
the next such recomputation, if any, shall be made. At all times on and after
the Termination Date until the date on which the Net Investment has been reduced
to zero and all accrued Discount, Servicing Fees and all other Aggregate Unpaids
have been paid in full, the Percentage Factor shall be fixed and shall remain at
100%. Following any assignment of any portion of the Transferred Interest to the
Redwood Liquidity Providers pursuant to the Redwood Liquidity Agreement, the
Redwood Group Agent shall, at all times and from time to time, calculate
Redwood's and each Redwood Liquidity Bank's pro rata interest in the Percentage
Factor and regularly report thereon to Redwood and the Redwood Liquidity
Providers (with copies thereof to the Transferor and the Funding Agent).
Following any assignment of any portion of the Transferred Interest to the PARCO
APA Banks pursuant to the PARCO Asset Purchase Agreement, the PARCO Group Agent
shall, at all times and from time to time, calculate PARCO's and each PARCO APA
Bank's pro rata interest in the Percentage Factor and regularly report thereon
to PARCO and the PARCO APA Banks (with copies thereof to the Transferor and the
Funding Agent).
SECTION 2.3 SELECTION OF TRANCHE PERIODS FOR BR TRANCHES AND
EURODOLLAR TRANCHES.
(a) Prior to the Termination Date. At all times with respect to
any portion of the Transferred Interest which has been transferred to the APA
Banks (or any of them) prior to the Termination Date or the occurrence of a
Potential Termination Event, the initial Tranche Period applicable to such
portion of the Net Investment allocable thereto shall be a period of not greater
than three (3) days, and such Tranche shall be a BR Tranche. Thereafter (but
prior to the Termination Date or the occurrence and continuation of a Potential
Termination Event), with respect to such portion, and with respect to any other
portion of the Transferred Interest held by the APA Banks (or any of them), the
Tranche Period applicable thereto shall be, at the Transferor's option, either a
BR Tranche or a Eurodollar Tranche. The Transferor shall give the applicable
Group Agent irrevocable notice by telephone of the new requested Tranche Period
at least three (3) Business Days prior to the expiration of any then existing
Tranche Period, and, if the Transferor fails to give any such notice, then the
Tranche shall be a BR Tranche and the Tranche Period shall continue until the
applicable notice is given, unless the Termination Date or a Potential
Termination Event shall occur, in which case the provisions of Section 2.3(b)
shall apply. Any Tranche Period maintained by the APA Banks which is outstanding
on the Termination Date shall end on the Termination Date.
(b) After the Termination Date. At all times on and after the
Termination Date, with respect to any portion of the Transferred Interest which
shall have been owned by, or transferred to, the APA Banks (or any of them), the
applicable Group Agent shall select all Tranche Periods and Tranche Rates
applicable thereto.
SECTION 2.4 DISCOUNT, FEES AND OTHER COSTS AND EXPENSES.
Notwithstanding any limitation on recourse contained in this Agreement,
the Transferor shall pay, as and when due in accordance with this Agreement and
the other Transaction Documents, all fees hereunder, Discount, Servicing Fees
and other Aggregate Unpaids that are properly due and payable by it. On the last
day of each Tranche Period or as otherwise provided
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in Section 2.6, the Transferor shall pay to the Redwood Group Agent, on behalf
of Redwood and the Redwood Liquidity Providers , and/or the PARCO Group Agent,
on behalf of PARCO and the PARCO APA Banks, as applicable, an amount equal to
the accrued and unpaid Discount for such Tranche Period; provided that (a) in
the event of any repayment or prepayment of a BR Tranche or a Eurodollar
Tranche, accrued Discount on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (b) in the event of any
conversion of a BR Tranche or a Eurodollar Tranche, accrued Discount on such BR
Tranche or Eurodollar Tranche shall be payable on the effective date of such
conversion. Discount shall accrue with respect to each Tranche on each day
occurring during the Tranche Period related thereto.
Nothing in this Agreement or the other Transaction Documents 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.
(a) Procedures Prior to Any Partial Liquidation. On each day after
the date of any Transfer but prior to the earlier of (x) any Partial Liquidation
and (y) the Termination Date, and provided that no Potential Termination Event
shall have occurred and be continuing, the Collection Agent shall, out of the
Collections received on or prior to such day and not previously applied or
accounted for:
(i) set aside and hold in trust for each Transferee Group
(or deposit into the Collection Account if so required pursuant to
Section 2.12 hereof) an amount equal to all Discount on all Tranches,
and the Servicing Fee, in each case accrued through such day and not so
previously set aside or paid, and
(ii) apply the balance of such Collections to the purchase
of additional undivided percentage interests in each Receivable
pursuant to Section 2.2(b) hereof.
Prior to the occurrence of the Termination Date and the occurrence and
continuance of a Potential Termination Event, 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(a) hereof, the Collection Agent shall deposit to
the Redwood Funding Account and/or the PARCO Funding Account, as applicable, an
amount equal to the accrued and unpaid Discount for such Tranche and Tranche
Period and shall deposit to its own account an amount equal to the accrued and
unpaid Servicing Fee for such Tranche Period. Each Group Agent, upon its receipt
of such amounts in the applicable Funding Account, shall distribute such amounts
to the Conduits and/or the APA Banks entitled thereto as set forth above;
provided that if the Group Agents shall have insufficient funds to pay all of
the above amounts in full on any such date, the Group Agents shall notify the
Transferor and the Transferor shall immediately pay to the Group Agents, from
funds previously paid to the Transferor, an amount equal to such insufficiency.
(b) Procedures During Any Partial Liquidation. On each day during
a Partial Liquidation but prior to the Termination Date, and provided that no
Potential Termination Event
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shall have occurred and be continuing, the Collection Agent shall, out of the
Collections received on or prior to such day and not previously applied or
accounted for:
(i) set aside and hold in trust for each Transferee Group (or
deposit into the Collection Account if so required pursuant to Section
2.12 hereof) an amount equal to all Discount on all Tranches, and the
Servicing Fee, in each case accrued through such day and not so
previously set aside or paid, and pay to the Group Agent for the
Liquidating Group the amount of the Discount on all Tranches that has
accrued on such day with respect to Tranches funded by such Transferee
Group, in payment of such Discount;
(ii) pay to the Group Agent for the Liquidating Group an
amount equal to such Transferee Group's Liquidation Share of all
remaining Collections, up to the amount of such Transferee Group's
Transferee Group Net Investment, in payment of such Transferee Group
Net Investment;
(iii) apply the balance of such Collections to the purchase of
additional undivided percentage interests in each Receivable pursuant
to Section 2.2(b) hereof.
Prior to the occurrence of the Termination Date and the occurrence and
continuance of a Potential Termination Event, 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(b) hereof, the Collection Agent shall deposit to
the Redwood Funding Account and/or the PARCO Funding Account (whichever
Transferee Group is not then undergoing a Partial Liquidation), an amount equal
to the accrued and unpaid Discount for such Tranche and Tranche Period and shall
deposit to its own account an amount equal to the accrued and unpaid Servicing
Fee for such Tranche Period. Each Group Agent, upon its receipt of such amounts
in the applicable Funding Account, shall distribute such amounts to the Conduits
and/or the APA Banks entitled thereto as set forth above; provided that if the
Group Agents shall have insufficient funds to pay all of the above amounts in
full on any such date, the Group Agents shall notify the Transferor and the
Transferor shall immediately pay to the Group Agents, from funds previously paid
to the Transferor, an amount equal to such insufficiency.
(c) Payments to Reduce the Net Investment. If at any time prior to
the Termination Date or the occurrence and continuance of a Potential
Termination Event, the Percentage Factor is greater than the Maximum Percentage
Factor, then the Transferor shall immediately pay to each Group Agent, for the
benefit of its respective Transferee Group, from previously received
Collections, such Transferee Group's Share of 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 to the reduction of the Net Investment of Tranche
Periods selected by each Group Agent.
(d) Payments to the Transferor of Excess Amounts. In addition, the
Collection Agent shall remit to the Transferor, on each Settlement Date, such
portion of Collections not allocated or applied pursuant to the provisions of
this Section 2.5.
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SECTION 2.6 LIQUIDATION SETTLEMENT PROCEDURES.
On each day on and after the Termination Date and on each day on which
a Potential Termination Event shall be continuing, the Collection Agent shall
deposit to the Redwood Funding Account, for the benefit of the Redwood Group,
and to the PARCO Funding Account, for the benefit of the PARCO Group, such
Transferee Group's Share of all Collections received on such day, but not to
exceed, in the aggregate, the sum of (a) the accrued Discount for all Tranches,
(b) the Net Investment and (c) all other Aggregate Unpaids. On each day on which
Collections are received by the Group Agents, the appropriate Group Agent shall
apply such amounts in the following order of priority:
(i) first, in payment of the accrued Discount for all
Tranche Periods,
(ii) second, if none of the Transferor, the Originator or
any Affiliate of the Transferor or the Originator is then the
Collection Agent, to the Collection Agent's account, in payment of the
Servicing Fee payable to the Collection Agent, to the extent accrued
through such day,
(iii) third, in reduction of the Net Investment,
(iv) fourth, in payment of all fees payable by the
Transferor hereunder, to the extent accrued through such day,
(v) fifth, in payment of all other Aggregate Unpaids,
(vi) sixth, if the Transferor, the Originator or any
Affiliate of the Transferor or the Originator is the Collection Agent,
to its account as Collection Agent, in payment of the Servicing Fee
payable to such Person as Collection Agent, to the extent accrued
through such day, and
(vii) seventh, all remaining amounts to the Transferor or
its designee.
Each Group Agent, upon its receipt of such amounts in the applicable
Funding Account, shall distribute such amounts to the Conduits and/or the APA
Banks entitled thereto as set forth above; provided that if the Group Agents
shall have insufficient funds to pay all of the above amounts in full on any
such date, the Group Agents shall pay such amounts in the order of priority set
forth above and, with respect to any such category above for which the Group
Agents shall have insufficient funds to pay all amounts owing on such date,
ratably (based on the amounts in such categories owing to such Persons) among
all such Persons entitled to payment thereof.
Following the date on which the Net Investment has been reduced to zero
and all accrued Discount, Servicing Fees and all other Aggregate Unpaids have
been paid in full, (A) the Collection Agent shall recompute the Percentage
Factor, (B) the Funding Agent, on behalf of the Transferees, shall be deemed to
have reconveyed to the Transferor all of its right, title and interest in, to
and under the Receivables and Related Security, Collections and Proceeds with
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respect thereto, (C) all remaining Collections shall be paid to the Transferor
or its designees and (D) the Funding Agent, as agent for the Transferees, shall
execute and deliver to the Transferor, at the Transferor's expense, such
documents or instruments as are necessary to terminate the Funding Agent's
interests in the Receivables and Related Security, Collections and Proceeds with
respect thereto. 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, as and when due in accordance with the Fee Letters,
the fees specified in each of the Fee Letters.
SECTION 2.8 PROTECTION OF OWNERSHIP INTEREST OF FUNDING AGENT.
(a) Each of the Transferor and the Originator agrees that it will,
from time to time, at its expense, promptly execute and deliver all instruments
and documents and take all actions as may be necessary or as the Funding Agent
may reasonably request in order to perfect or protect the Transferred Interest
or to enable the Funding Agent, on behalf of the Transferees, to exercise or
enforce any of its rights hereunder. Without limiting the foregoing, each of the
Transferor and the Originator will, upon the request of the Funding Agent, in
order to accurately reflect this purchase and sale transaction, (i) execute and
file such financing or continuation statements or amendments thereto or
assignments thereof (as permitted pursuant to Section 10.6 hereof) as may be
requested by the Funding Agent as agent for the Transferees and (ii) ▇▇▇▇ its
master data processing records and other documents with a legend describing the
conveyance of Receivables by the Originator to the Transferor and the conveyance
of the Transferred Interest by the Transferor to the Funding Agent as agent for
the Transferees. Each of the Transferor and the Originator shall, upon request
of the Funding Agent, obtain such additional search reports as the Funding Agent
shall request. To the fullest extent permitted by applicable law, the Funding
Agent shall be permitted to sign and file continuation statements and amendments
thereto and assignments thereof without the Transferor's or the Originator's
signature. Carbon, photographic or other reproduction of this Agreement or any
financing statement shall be sufficient as a financing statement. Neither the
Transferor nor the Originator shall change its name, identity or corporate
structure, nor relocate its respective chief executive office or any office
where Records are kept unless it shall have: (A) given the Funding Agent at
least ten (10) days' prior notice thereof and (B) prepared and filed at
Transferor's or Originator's expense, as the case may be, and delivered to the
Funding Agent all financing statements, instruments and other documents
necessary to preserve and protect the Transferred Interest or requested by the
Funding Agent (acting at the direction of the Group Agents) in connection with
such change or relocation. Any filings under the Relevant 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 into a Lock-Box Account. Any Lock-Box
Account maintained by a Lock-Box Bank pursuant to the related Lock-Box Agreement
shall be under the exclusive ownership and control of the Funding Agent as agent
for the Transferees which is hereby granted to the Funding Agent as agent for
the Transferees by the Transferor (as assignee of the Originator). The
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Collection Agent shall be permitted to give instructions to the Lock-Box Banks
for so long as neither a Collection Agent Default nor any other Termination
Event or Potential Termination Event has occurred and is continuing hereunder.
Upon the occurrence of either a Collection Agent Default or any other
Termination Event or Potential Termination Event, the Funding Agent (acting at
the direction of the Required APA Banks) may, pursuant to the Lock-Box
Agreements, deliver notices to the Lock-Box Banks and terminate the Collection
Agent's ability to provide instructions to the Lock-Box Banks. The Collection
Agent shall not add any bank as a Lock-Box Bank to those listed on Exhibit C
attached hereto unless such bank has entered into a Lock-Box Agreement and the
Funding Agent has received a Lock-Box Agreement executed by such Lock-Box Bank
with respect to each new Lock-Box Account. The Collection Agent shall not
terminate any bank as a Lock-Box Bank unless the Funding Agent shall have
received thirty (30) days' prior notice of such termination and, prior to such
termination, arrangements satisfactory to the Group Agents have been made to
assure that all Collections that were directed to be sent to such Lock-Box Bank
have been or will be directed to be sent to an alternate Lock-Box Bank. If the
Transferor, the Originator or the Collection Agent receives any Collections,
then the Transferor, the Originator or the Collection Agent, as applicable,
shall immediately, but in no event later than one (1) Business Day after receipt
thereof, remit such Collections to a Lock-Box Account.
SECTION 2.9 DEEMED COLLECTIONS; APPLICATION OF PAYMENTS.
(a) If on any day a Receivable becomes a Diluted Receivable, 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. Any such amount shall be applied by the Collection Agent as a
Collection in accordance with Section 2.5 or 2.6 hereof, as applicable. The Net
Investment shall be reduced by the amount of such payment actually received by
the Group Agents.
(b) If, on any day, any representation or warranty made herein
with respect to any Receivable is determined to be incorrect or untrue in any
material respect as of the date such representation or warranty was made, 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 Outstanding Balance of such Receivable and such
amount shall be allocated and applied by the Collection Agent as a Collection
allocable to the Transferred Interest in accordance with Section 2.5 or 2.6
hereof, as applicable. The Net Investment shall be reduced by the amount of such
payment actually received by the Group Agents. Simultaneously with any such
payment by the Transferor, the Funding Agent, as agent for the Transferees,
shall be deemed to convey all of its right, title and interest in such
Receivable and Related Security to the Transferor, and shall, at the sole cost
and expense of the Transferor, take all action reasonably requested by the
Transferor to effectuate such conveyance.
(c) Any payment by an Obligor in respect of a Receivable shall,
except as otherwise specified by such Obligor or otherwise required by contract
or law and unless otherwise instructed by the Funding Agent, 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
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amounts then due and payable thereunder before being applied to any other
receivable or other indebtedness of such Obligor.
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 11:00 A.M. (New York time) on the day when due in immediately
available funds. If such amounts are payable to the Redwood Group, they shall be
paid or deposited in the Redwood Funding Account, until otherwise notified by
the Redwood Group Agent. If such amounts are payable to the PARCO Group, they
shall be deposited to the PARCO Funding Account, until otherwise notified by the
PARCO Group Agent. No later than 3:00 P.M. (New York time) on the date of any
Incremental Transfer hereunder, the Conduits or the APA Banks, as applicable,
will make available to the Transferor, in immediately available funds, the cash
portion of the Transfer Price of such Transfer on such day by remitting such
amount to an account of the Transferor specified in the related notice of
Transfer. The Transferor shall, to the extent permitted by law, pay to the
applicable Group Agent, for the benefit of the applicable Transferee Group, upon
demand, interest on all amounts not paid or deposited when due 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 (or, in the case of Discount calculated at the Base Rate, a year of
365 or 366 days, as applicable) for the actual number of days (including the
first but excluding the last day) elapsed. Any computations by the Funding Agent
and/or any Group Agent of amounts payable by the Transferor hereunder shall be
binding upon the Transferor absent manifest error.
SECTION 2.11 REPORTS.
(a) The Collection Agent shall prepare and forward to each Group
Agent, the Funding Agent and the Transferor (i) on each Settlement Date, a
Settlement Statement as of the end of the last day of the immediately preceding
Settlement Period and (ii) on any other Business Day, such other information as
the Transferor, any Group Agent or Funding Agent may reasonably request.
(b) The Collection Agent shall submit to each Group Agent and the
Funding Agent, no later than 1:00 P.M. (New York time) on each Weekly Settlement
Date (or, after the occurrence and continuation of a Termination Event or
Potential Termination Event, on each Business Day), a written report
substantially in the form attached hereto as Exhibit B (the "Deposit Report")
setting forth total Collections deposited in the Lock-Box Account and, if
applicable, the Collection Account, Receivables and Eligible Receivables created
during the immediately preceding calendar week (or immediately preceding day, if
such report is being delivered on each Business Day), and such other information
as any Group Agent or the Funding Agent may reasonably request. The Deposit
Report may be delivered in an electronic format mutually agreed upon by the
Collection Agent, each Group Agent and the Funding Agent or, pending such
agreement, by facsimile. By delivery of a Deposit Report, the Originator shall
be deemed to have made a representation and warranty that the information set
forth therein is true and correct in all material respects.
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SECTION 2.12 COLLECTION ACCOUNT.
There shall be established on the day of the initial Transfer hereunder
and maintained, for the benefit of the Funding Agent, as agent for the
Transferees, a segregated account with Bank One, N.A., or such other financial
institution as may be acceptable to the Funding Agent (the "Collection
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Funding Agent, as agent for the
Transferees. On and after the occurrence of a Collection Agent Default or a
Termination Event or a Potential Termination Event, the Collection Agent shall
remit daily to the Collection Account all Collections received with respect to
any Receivables. Funds on deposit in the Collection Account (other than
investment earnings) shall be invested by the Funding Agent in Permitted
Investments that will mature on the next Business Day. 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) by the Transferor.
On the date on which the Net Investment is zero, all accrued Discount, Servicing
Fees and all other Aggregate Unpaids have been paid in full, any funds remaining
on deposit in the Collection Account shall be paid to the Transferor.
SECTION 2.13 RIGHT OF SETOFF.
The Funding Agent, each Group Agent, each of the Conduits and each of
the APA Banks is hereby authorized (in addition to any other rights it may have)
at any time after the occurrence of the Termination Date and at any time after
the occurrence, and during the continuation, of a Potential Termination Event,
to set-off, appropriate and apply (without presentment, demand, protest or other
notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by any such Person to, or for the account of, the
Transferor against the amount of the Aggregate Unpaids owing by the Transferor
to such Person (even if contingent or unmatured).
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SECTION 2.14 SHARING OF PAYMENTS, ETC.
If the Funding Agent, any Group Agent, any of the Conduits or any of
the APA Banks (for purposes of this Section 2.14 only, being a "Recipient")
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of setoff, or otherwise) on account of the Aggregate Unpaids in
excess of its Share of the Aggregate Unpaids, such Recipient shall forthwith
purchase from each other Conduit and/or APA Bank entitled to a share of such
amount participations in the percentage interests owned by such Persons as shall
be necessary to cause such Recipient to share the excess payment ratably with
each such other Person entitled thereto; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such Recipient, such
purchase from each such other Person shall be rescinded and each such other
Person shall repay to the Recipient the purchase price paid by such Recipient
for such participation to the extent of such recovery, together with an amount
equal to such other Person's ratable share (according to the proportion of (a)
the amount of such other Person's required payment to (b) the total amount so
recovered from the Recipient) of any interest or other amount paid or payable by
the Recipient in respect of the total amount so recovered.
SECTION 2.15 BROKEN FUNDING.
In the event of (a) the payment of any principal of any Eurodollar
Tranche other than on the last day of the Eurodollar Tranche Period applicable
thereto (including as a result of the occurrence of the Termination Date or an
optional prepayment of a Eurodollar Tranche), (b) the conversion of any
Eurodollar Tranche other than on the last day of the related Eurodollar Tranche
Period, or (c) any failure to borrow, convert, continue or prepay any Eurodollar
Tranche on the date specified in any notice delivered pursuant hereto, then, in
any such event, the Transferor shall compensate the APA Banks for the loss, cost
and expense attributable to such event. Such loss, cost or expense to any APA
Bank shall be deemed to include an amount determined by such APA Bank to be the
excess, if any, of (i) the amount of Discount which would have accrued on the
principal amount of such Eurodollar Tranche had such event not occurred, at the
Eurodollar Rate that would have been applicable to such Eurodollar Tranche, for
the period from the date of such event to the last day of the Eurodollar Tranche
Period (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the related Eurodollar Tranche Period), over (ii)
the amount of interest which would accrue on such principal amount for such
period at the interest rate which such APA Bank would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the interbank eurodollar market. Within forty-five
(45) days after any APA Bank hereunder receives actual knowledge of any of the
events specified in this Section 2.15, a certificate of such APA Bank setting
forth any amount or amounts that such APA Bank is entitled to receive pursuant
to this Section 2.15 and the reason(s) therefor shall be delivered to the
Transferor (with a copy to the Funding Agent and the applicable Group Agent) and
shall be conclusive absent manifest error. The Transferor shall pay each such
APA Bank the amount shown as due on any such certificate within ten (10) days
after receipt thereof.
SECTION 2.16 CONVERSION AND CONTINUATION OF OUTSTANDING TRANCHES
FUNDED BY THE APA BANKS.
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Prior to the occurrence of the Termination Date or a Potential
Termination Event, (a) each BR Tranche hereunder may, at the option of the
Transferor, be converted to a Eurodollar Tranche and (b) each Eurodollar Tranche
may, at the option of the Transferor, be continued as a Eurodollar Tranche or
converted to a BR Tranche. If the Termination Date has occurred or a Potential
Termination Event has occurred and is continuing, then (i) no outstanding
Tranche funded by the APA Banks may be converted to, or continued as, a
Eurodollar Tranche and (ii) unless repaid, each Eurodollar Tranche shall be
converted to an BR Tranche on the last day of the Tranche Period related
thereto. For any such conversion or continuation, the Transferor shall give the
Funding Agent (who shall immediately notify the appropriate Group Agent thereof
by forwarding to such Group Agent a copy of such notice) irrevocable notice
(each, a "Conversion/Continuation Notice") of such request not later than 12:30
P.M. (New York time) (A) in the case of a conversion of a BR Tranche into a
Eurodollar Tranche, or a continuation of a Eurodollar Tranche as a Eurodollar
Tranche, three (3) Business Days before the date of such conversion or
continuation, as applicable, and (B) following the Termination Date or the
occurrence and continuation of a Potential Termination Event, in the case of a
conversion of a Eurodollar Tranche into a BR Tranche or a continuation of a BR
Tranche as a BR Tranche, on the Business Day of such conversion. If a
Conversion/Continuation Notice has not been timely delivered with respect to any
BR Tranche or Eurodollar Tranche, such Tranche shall be automatically continued
as, or converted to, a BR Tranche. Each Conversion/Continuation Notice shall
specify (1) the requested date (which shall be a Business Day) of such
conversion or continuation, (2) the aggregate amount and rate option applicable
to the Tranche which is to be converted or continued and (3) the amount and rate
option(s) of Tranche(s) into which such Tranche is to be converted or continued.
SECTION 2.17 ILLEGALITY.
(a) Notwithstanding any other provision herein, if, after the
Effective Date, 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, 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), shall make it unlawful for any APA Bank to acquire or
maintain a Eurodollar Tranche as contemplated by this Agreement, (i) such APA
Bank shall, within thirty (30) days after receiving actual knowledge thereof,
deliver a certificate to the Transferor (with a copy to the Funding Agent and
the applicable Group Agent) setting forth the basis for such illegality, which
certificate shall be conclusive absent manifest error, (ii) the commitment of
such APA Bank hereunder to make a portion of a Eurodollar Tranche, continue any
portion of a Eurodollar Tranche as such and convert a BR Tranche to a Eurodollar
Tranche shall forthwith be cancelled, and such cancellation shall remain in
effect so long as the circumstance described above exists, and (iii) such APA
Bank's portion of any Eurodollar Tranche then outstanding shall be converted
automatically to a BR Tranche on the last day of the related Eurodollar Tranche
Period, or within such earlier period as required by law.
If any such conversion of a portion of a Eurodollar Tranche occurs on a
day which is not the last day of the related Eurodollar Tranche Period, the
Transferor shall pay to such APA Bank such amounts, if any, as may be required
to compensate such APA Bank. If circumstances
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subsequently change so that it is no longer unlawful for an affected APA Bank to
acquire or to maintain a portion of a Eurodollar Tranche as contemplated
hereunder, such APA Bank will, as soon as reasonably practicable after such APA
Bank knows of such change in circumstances, notify the Transferor, the
applicable Group Agent and the Funding Agent, and upon receipt of such notice,
the obligations of such APA Bank to acquire or maintain its acquisition of
portions of Eurodollar Tranches or to convert its portion of a BR Tranche into
portions of Eurodollar Tranches shall be reinstated.
(b) Each APA Bank agrees that, upon the occurrence of any event
giving rise to the operation of Section 2.17(a) with respect to such APA Bank,
it will, if requested by the Transferor and to the extent permitted by law or by
the relevant Official Body, endeavor in good faith to change the office at which
it books its portions of Eurodollar Tranches hereunder if such change would make
it lawful for such APA Bank to continue to acquire or to maintain its
acquisition of portions of Eurodollar Tranches hereunder; provided, however,
that such change may be made in such manner that such APA Bank, in its sole
determination, suffers no unreimbursed cost or expense or any other disadvantage
whatsoever.
SECTION 2.18 INABILITY TO DETERMINE EURODOLLAR RATE.
If, prior to the first day of any Eurodollar Tranche Period:
(a) any Group Agent on behalf of its Transferee Group shall have
determined (which determination in the absence of manifest error shall be
conclusive and binding upon the Transferor) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Eurodollar Tranche Period; or
(b) any Group Agent on behalf of its Transferee Group shall have
received notice from the APA Banks for its Transferee Group that the Eurodollar
Rate determined or to be determined for such Eurodollar Tranche Period will not
adequately and fairly reflect the cost to such APA Banks (as conclusively
certified by such APA Banks) of purchasing or maintaining their affected
portions of Eurodollar Tranches during such Eurodollar Tranche Period;
then, in either such event, such Group Agent shall give telecopy or telephonic
notice thereof (confirmed in writing) to the Transferor as soon as practicable
(but, in any event, within thirty (30) days after such determination or notice,
as applicable) thereafter. Until such notice has been withdrawn by such Group
Agent, no further Eurodollar Tranches shall be made by the related Transferee
Group. Each Group Agent agrees to withdraw any such notice as soon as reasonably
practicable after it is notified of a change in circumstances which makes such
notice inapplicable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
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SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR.
The Transferor hereby represents and warrants to the Funding Agent, the
Group Agents and the Transferees that:
(a) Corporate Existence and Power. The Transferor is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate 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. The
Transferor is duly qualified to do business in, and is in good standing in,
every other jurisdiction in which the nature of its business requires it to be
so qualified, except where the failure to be so qualified or in good standing
would not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Transferor of this Agreement and the
other Transaction Documents to which the Transferor is a party are within the
Transferor's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
Official Body or official thereof (except as contemplated by Section 2.8
hereof), and do not contravene, or constitute a default under, any provision of
applicable law, rule or regulation or of the Certificate of Incorporation or
Bylaws of the Transferor or of any agreement or of any judgment, injunction,
order, writ, decree or other instrument binding upon the Transferor or result in
the creation or imposition of any Adverse Claim on the assets of the Transferor
(except as contemplated by Section 2.8 hereof).
(c) Binding Effect. Each of this Agreement and the other
Transaction Documents to which the Transferor is a party constitutes, and the
Transfer Certificate, upon payment of the Transfer Price set forth therein, will
constitute the legal, valid and binding obligation of the Transferor,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of
creditors generally and general equitable principles (whether considered in a
proceeding at law or in equity).
(d) Perfection. Immediately preceding each Transfer hereunder, the
Transferor shall be the owner of all of the Receivables, free and clear of all
Adverse Claims (other than Adverse Claims in favor of the Funding Agent, as
agent for the Transferees). 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 and the
Originator 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 or on behalf of the Transferor (including, without limitation, the Deposit
Reports, any reports delivered pursuant to Section 2.11 hereof and the
Transferor's financial statements) to any Conduit, any APA Bank, any Group Agent
or the Funding Agent for purposes of, or in connection with, this Agreement and
the other Transaction Documents are, and all such information hereafter
furnished by or on behalf of the Transferor to any Conduit, any APA Bank, any
Group Agent or the Funding Agent
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will be, true and correct in all material respects, 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 G hereof (as may
be amended by the Transferor from time to time), 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, individually or in the aggregate, have a Material Adverse Effect.
(h) Use of Proceeds. No proceeds of any Transfer will be used by
the Transferor (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 13 or 14 of the Securities Exchange Act
of 1934, as amended.
(i) Place of Business. The principal place of business and chief
executive office of the Transferor is located at the address indicated in
Section 9.3 hereof, and the offices where the Transferor keeps all its Records,
are located at the address(es) described on Exhibit H or such other locations
notified to the Funding Agent in accordance with Section 2.8 hereof in
jurisdictions where all action required by Section 2.8 hereof has been taken and
completed.
(j) Good Title. Upon each Transfer and each recomputation of the
Transferred Interest, the Funding Agent, as agent for the Transferees, shall
acquire (i) a valid and perfected first priority undivided percentage ownership
interest to the extent of the Transferred Interest or (ii) a first priority
perfected security interest in each Receivable that exists on the date of such
Transfer and recomputation and in the Related Security, Collections and Proceeds
with respect thereto, in either case free and clear of any Adverse Claim.
(k) Tradenames, Etc. As of the date hereof: (i) each of the
Transferor and the Originator has only the divisions listed on Exhibit I hereto;
and (ii) each of the Transferor and the Originator has, within the last five (5)
years, operated only under the tradenames identified in Exhibit I hereto, and,
within the last five (5) years, has not changed its name, merged with or into or
consolidated with any other corporation or been the subject of any proceeding
under the Bankruptcy Code, except as disclosed in Exhibit I hereto.
(l) Nature of Receivables. Each Receivable (i) represented by the
Transferor or the Collection Agent to be an Eligible Receivable (including in
any Settlement Report or other report delivered pursuant to Section 2.11 hereof)
or (ii) included in the calculation of the Net Receivables Balance in fact
satisfies at such time the definition of "Eligible Receivable".
(m) Coverage Requirement. The Percentage Factor does not exceed
the Maximum Percentage Factor.
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(n) Credit and Collection Policy. Since January 1, 2001, there
have been no material changes in the Credit and Collection Policy, other than as
permitted hereunder. Since such date, no material adverse change has occurred in
the overall rate of collection of the Receivables.
(o) Collections and Servicing. Since January 1, 2001, there has
been no material adverse change in the ability of the Collection Agent (to the
extent it is the Originator, the Transferor or any Subsidiary or Affiliate of
any of the foregoing) to service and collect the Receivables.
(p) No Termination Event. No event has occurred and is continuing
and no condition exists which constitutes a Termination Event or a Potential
Termination Event.
(q) Not an Investment Company. The Transferor is not, and is not
controlled by, an "investment company" within the meaning of the Investment Act,
or is exempt from all provisions of such Act.
(r) ERISA. Each of the Transferor and its ERISA Affiliates is in
compliance in all material respects with ERISA, and no lien exists in favor of
the Pension Benefit Guaranty Corporation on any of the Receivables.
(s) 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
Funding Agent and for which Lock-Box Agreements have been executed in accordance
with Section 2.8(b) hereof 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 a Lock-Box Account.
(t) Bulk Sales. No transaction contemplated hereby or by the
Receivables Purchase Agreement requires compliance with any "bulk sales" act or
similar law.
(u) Transfers Under Receivables Purchase Agreement. Each
Receivable which has been transferred to the Transferor by the Originator has
been purchased by the Transferor from the Originator pursuant to, and in
accordance with, the terms of the Receivables Purchase Agreement.
(v) Preference; Voidability. The Transferor shall have given
reasonably equivalent value to the Originator in consideration for the transfer
to the Transferor of the Receivables and Related Security, Collections and
Proceeds with respect thereto from the Originator, and each such transfer shall
not have been made for or on account of an antecedent debt owed by the
Originator to the Transferor, and no such transfer is or may be voidable under
the Bankruptcy Code.
(w) Subsidiaries. The Transferor has no Subsidiaries and is not
engaged in any joint venture with any other Person.
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(x) Ownership. All of the Transferor's issued and outstanding
capital stock is owned by the Originator. There are no outstanding rights to
purchase, options, warrants or similar rights or agreements pursuant to which
the Transferor may be required to issue, sell, repurchase or redeem any of its
capital stock or other equity securities.
(y) Separateness. The Transferor is operated in such a manner that
the separate corporate existence of the Transferor will not be disregarded in
the event of a bankruptcy or insolvency of the Originator, including, without
limitation, as required pursuant to Section 5.1(o) hereof.
(z) Brokers. No broker or finder acting on behalf of the
Transferor was employed or utilized in connection with this Agreement or the
other Transaction Documents or the transactions contemplated hereby or thereby
and the Transferor has no obligation to any Person in respect of any finder's or
brokerage fees in connection therewith.
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(a) hereof, shall be deemed to have
certified that all representations and warranties described in Section 3.1
hereof are true and correct on and as of such day as though made on and as of
such day.
SECTION 3.3 REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR.
The Originator hereby reaffirms to the Funding Agent, each Group Agent,
each Conduit and the APA Banks its representations and warranties made to the
Transferor in Article IV of the Receivables Purchase Agreement as of the date
made or deemed made thereunder.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO EFFECTIVENESS.
This Agreement shall become effective on the first day on which the
Funding Agent shall have received the following documents, instruments and fees,
all of which shall be in a form and substance reasonably acceptable to the
Funding Agent and the Group Agents (such day, the "Effective Date"):
(a) A Certificate of the Secretary or any Assistant Secretary of
the Transferor in substantially the form of Exhibit J hereto certifying (i) the
names and signatures of the officers and employees authorized on its behalf to
execute this Agreement and any other documents to be delivered by it hereunder
(on which Certificate the Funding Agent, the Group Agents and the Transferees
may conclusively rely until such time as the Funding Agent shall receive from
the
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Transferor a revised Certificate meeting the requirements of this clause
(a)(i)), (ii) a copy of the Transferor's Certificate of Incorporation, certified
by the Secretary of State of the State of Delaware, (iii) a copy of the
Transferor's By-Laws, (iv) a copy of resolutions of the Board of Directors of
the Transferor approving this transaction and (v) certificate of the Secretary
of State of the State of Illinois certifying the Transferor's good standing
under the laws of the State of Illinois.
(b) A Certificate of the Secretary or any Assistant Secretary of
the Originator in substantially the form of Exhibit J hereto certifying (i) the
names and signatures of the officers and employees authorized on its behalf to
execute this Agreement and any other documents to be delivered by it hereunder
(on which Certificate the Funding Agent, the Group Agents and the Transferees)
may conclusively rely until such time as the Funding Agent shall receive from
the Originator a revised Certificate meeting the requirements of this clause
(b)(i)), (ii) a copy of the Originator's Certificate of Incorporation, (iii) a
copy of the Originator's By-Laws, (iv) a copy of resolutions of the Board of
Directors of the Originator approving this transaction and (v) certificate of
the Secretary of State of the State of Illinois certifying the Originator's good
standing under the laws of the State of Illinois.
(c) Copies of proper financing statements (Form UCC-1), dated a
date reasonably near to the Effective Date, naming the Transferor as the debtor,
the Funding Agent, as agent for the Transferees, as secured party, and other
similar instruments or documents as may be necessary or, in the reasonable
opinion of the Funding Agent, desirable under the Relevant UCC of all
appropriate jurisdictions or any comparable law to perfect the security interest
in favor of the Funding Agent, as agent for the Transferees, in all Receivables,
Related Security and Collections.
(d) Copies of proper financing statements (Form UCC-1), dated a
date reasonably near to the Effective Date, naming the Originator as
debtor/seller, the Transferor as secured party/purchaser, and the Funding Agent,
as agent for the Transferees, as assignee of the secured party/purchaser, and
other similar instruments or documents as may be necessary or, in the reasonable
opinion of the Funding Agent, desirable under the Relevant UCC of all
appropriate jurisdictions or any comparable law to perfect the Transferor's
interest in all Receivables, Related Security and Collections.
(e) Copies of proper financing statements (Form UCC-3), if any,
necessary to terminate or assign to the Funding Agent, as agent for the
Transferees, all security interests and other rights of any person in
Receivables previously granted by the Transferor.
(f) Copies of proper financing statements (Form UCC-3), if any,
necessary to terminate all security interests and other rights of any person
(other than the Transferor) in Receivables previously granted by the Originator.
(g) Certified copies of requests for information or copies (Form
UCC-11) (or a similar search report certified by parties acceptable to the
Funding Agent), dated a date reasonably near the Effective Date, listing all
effective financing statements which name the Transferor and the Originator
(under their respective present names and any previous names) as
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debtor and which are filed in jurisdictions in which the filings were made
pursuant to items (i) or (j) 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 relating to each of
the Lock-Box Banks and the Lock-Box Accounts.
(i) An opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, special California counsel to
the Parent, regarding corporate matters.
(j) An opinion of King & Spalding, special counsel to the
Transferor and the Originator, regarding the application of the doctrine of
substantive consolidation and that the assets and liabilities of the Transferor
will not be substantively consolidated with those of its parent.
(k) An opinion of King & Spalding, special counsel to the
Transferor and the Originator, regarding the characterization of the transfers
of the Receivables by the Originator to the Transferor under the Receivables
Purchase Agreement as "true sales" thereof and accordingly that such transferred
Receivables and the proceeds thereof would not constitute property of the estate
of the Originator in the event the Originator became the subject of a proceeding
under the Bankruptcy Code.
(l) An opinion of King & Spalding, special counsel to the
Transferor and the Originator, regarding the enforceability of the Transaction
Documents to which each is a party, the validity of the security interests
granted under the Transaction Documents and other corporate matters.
(m) An opinion of Winston & ▇▇▇▇▇▇, special Illinois counsel to
the Originator, regarding the perfection and priority of the interest conveyed
by the Originator to the Transferor.
(n) An opinion of Winston & ▇▇▇▇▇▇, special Illinois counsel to
the Transferor, regarding the perfection and priority of the security interest
granted by the Transferor to the Funding Agent.
(o) An executed copy of this Agreement and each other Transaction
Document, together with a copy of the Credit Agreement and all amendments
thereto.
(p) Evidence that the fees specified in each of the Fee Letters
for payment on or prior to the Effective Date have been paid to the Persons
entitled to receive such fees.
(q) A Settlement Statement for the month ending December 31, 2000
and a Deposit Report for the period ending January 31, 2001.
(r) Rating confirmation letters of Standard & Poor's and ▇▇▇▇▇'▇
relating to the Commercial Paper for Redwood and for PARCO.
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(s) The Redwood Group Agent shall have received an executed copy
of the Redwood Insurance Commitment.
(t) Such other documents, instruments, certificates and opinions
as the Funding Agent or a Group Agent shall reasonably request.
ARTICLE V
COVENANTS
SECTION 5.1 AFFIRMATIVE COVENANTS.
At all times from the date hereof to the later to occur of (a) the
Termination Date or (b) the date on which the Net Investment has been reduced to
zero, all accrued Discount, Servicing Fees and all other Aggregate Unpaids shall
have been paid in full, in cash, unless the Funding Agent shall otherwise
consent in writing:
(a) Financial Reporting. The Originator will maintain, for itself
and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to the Funding Agent and each
Group Agent:
(i) Annual Reporting. Within ninety-five (95) days after
the close of the Transferor's and the Parent's fiscal years, unaudited
annual financial statements (in the case of the Transferor) and audited
financial statements (in the case of the Parent), prepared in
accordance with GAAP on a consolidated basis (in the case of Parent)
for (A) the Transferor and (B) the Parent including balance sheets as
of the end of such period, related statements of operations,
shareholder's equity and cash flows, accompanied by an unqualified
audit report certified by Ernst & Young or other independent certified
public accountants, acceptable to the Funding Agent, prepared in
accordance with generally accepted auditing standards and any
management letter prepared by said accountants and by a certificate of
said accountants that, in the course of their regular audit, such
accountants have not obtained any knowledge of any Termination Event or
Potential Termination Event that has occurred, or if, in the opinion of
such accountants, any Termination Event or Potential Termination Event
shall exist, stating the nature and status thereof.
(ii) Quarterly Reporting. Within fifty (50) days after the
close of the first three (3) quarterly periods of the Transferor's and
the Parent's fiscal years, unaudited financial statements for the
Parent and the Transferor, consolidated (in the case of Parent)
unaudited balance sheets as at the close of each such period and
consolidated (in the case of Parent) related statements of operations,
shareholder's equity and cash flows for the period from the beginning
of such fiscal year to the end of such quarter, all certified by each
of its senior financial officer.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate signed by the
Transferor's or the Parent's, as
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applicable, chief financial officer stating that (A) the attached
financial statements have been prepared in accordance with GAAP and
accurately reflect the financial condition (except, in the case of
quarterly financial statements, for year-end audit adjustments) of the
Transferor or the Parent, as applicable, subject to normal year-end
adjusting entries and (B) to the best of such Person's knowledge, no
Termination Event or Potential Termination Event exists, or if any
Termination Event or Potential Termination Event exists, stating the
nature and status thereof.
(iv) Shareholders Statements and Reports. Promptly upon
the furnishing thereof to the shareholders of the Transferor or
generally to the shareholders of the Parent, copies of all financial
statements, reports and proxy statements so furnished.
(v) Filings. Promptly upon the filing thereof, copies of
all registration statements and annual, quarterly, monthly or other
regular reports which the Parent or any Subsidiary of the Parent files
with the Securities and Exchange Commission.
(vi) Notice of Termination Events or Potential Termination
Events. Immediately, but in any event no later than one (1) Business
Day after a Responsible Officer of the Transferor knows of the
occurrence of a Termination Event or a Potential Termination Event, a
statement of the chief financial officer or chief accounting officer 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 and Debt
Ratings. Within ten (10) days after the date of any material change in
the Credit and Collection Policy, a written notice by the chief
financial officer or chief accounting officer of the Transferor setting
forth the details of such change (provided that if the Credit and
Collection Policy is ever in written form, a copy thereof to the
Funding Agent and, if a material change is made in such written policy,
a copy of the Credit and Collection Policy then in effect indicating
such change or amendment). Within five (5) days after the date of any
change in the Transferor's public or private debt ratings, if any, a
written certification of the Transferor's public and private debt
ratings after giving effect to any such change.
(viii) Credit and Collection Policy. Within ninety-five (95)
days after the close of each of the Originator's and the Transferor's
fiscal years, if the Credit and Collection Policy is in written form, a
complete copy of the Credit and Collection Policy then in effect.
(ix) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to any
Reportable Event (as defined in Article IV of ERISA) which the
Transferor, the Originator or any ERISA Affiliate of the Transferor or
the Originator files under ERISA with the Internal Revenue Service, the
Pension Benefit Guaranty Corporation or the U.S. Department of Labor or
which the Transferor, the Originator or any ERISA Affiliates of the
Transferor or the Originator receives from the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor.
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(x) Operating Plan. Within a reasonable time after
requested by the Funding Agent (but no longer than 30 days after such a
request) at least 30 days after the end of any fiscal year, an annual
operating plan for the Prescription Services Division of the
Originator, approved by the board of directors of the Originator, for
the following year, which will (i) include quarterly balance sheets and
a quarterly budget for the following year and (ii) integrate sales,
gross profits, operating expenses, operating profit and cash flow
projections, all prepared on the same basis and in similar detail as
that on which operating results of the Parent are publicly reported
(and in the case of cash flow projections, representing management's
good faith estimates of future financial performance based on
historical performance).
(iii) Other Information. Such other information (including
non-financial information) as the Funding Agent or any Group Agent may
from time to time reasonably request with respect to the Originator,
the Transferor or any Subsidiary of any of the foregoing.
(b) Conduct of Business. Each of the Originator and the Transferor
will, and the Originator will cause the Originator's Affiliates to, 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 do all things
necessary to remain duly incorporated, validly existing and in good standing as
a domestic corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except in each case where the failure to do so is not
likely to have a Material Adverse Effect.
(c) Compliance with Laws. Each of the Originator and the
Transferor will, and the Originator will cause the Originator's Affiliates to,
comply with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it or its respective properties may be subject,
except where the failure to be in compliance is not likely to have a Material
Adverse Effect.
(d) Furnishing of Information and Inspection of Records. Each of
the Transferor and the Originator will furnish to the Funding Agent from time to
time such information with respect to the Receivables as the Funding Agent or
any Group Agent may reasonably request, including, without limitation, listings
identifying the Obligor and the Outstanding Balance for each Receivable,
together with an aging of Receivables. Each of the Transferor and the Originator
will at any time and from time to time during regular business hours and upon
reasonable notice permit the Funding Agent or any Group Agent, or any of their
respective 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 or the Originator, as applicable, for the purpose of examining such
Records, and to discuss matters relating to Receivables or the Transferor's or
the Originator's performance hereunder and under the other Transaction Documents
to which such Person is a party with any of the officers, directors, employees
or independent public accountants of the Transferor or the Originator, as
applicable, having knowledge of such matters.
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(e) Keeping of Records and Books of Account. Each of the
Transferor and the Originator 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). Each of the Transferor and the Originator will give
the Funding Agent notice of any material change in the administrative and
operating procedures of the Transferor or the Originator, as applicable,
referred to in the previous sentence.
(f) Performance and Compliance with Receivables and Contracts. The
Originator will timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by the
Originator under the Contracts related to the Receivables.
(g) Credit and Collection Policies. Each of the Transferor and the
Originator will comply in all material respects with the Credit and Collection
Policy in regard to each Receivable and the related Contract.
(h) Collections. Each of the Transferor and the Originator shall
instruct all Obligors to remit Collections directly to a Lock-Box Account.
(i) Collections Received. The Transferor and the Originator shall
hold in trust, and remit immediately (but in any event no later than one (1)
Business Day following its receipt thereof) to a Lock-Box Account all
Collections received from time to time by the Transferor or the Originator, as
the case may be.
(j) Sale Treatment. The Transferor and the Originator will not (i)
account for (including for accounting purposes), or otherwise treat, the
transactions contemplated by the Receivables Purchase Agreement in any manner
other than as a sale of Receivables or capital contribution by the Originator to
the Transferor, or (ii) account for (other than for tax purposes) or otherwise
treat the transactions contemplated hereby in any manner other than as a sale of
Receivables by the Transferor to the Funding Agent as agent for the Transferees.
In addition, each of the Transferor and the Originator shall disclose (in a
footnote or otherwise) in all of its respective financial statements (including
any such financial statements consolidated with any other Persons' financial
statements) the existence and nature of the transactions contemplated hereby and
by the Receivables Purchase Agreement and the interest of the Transferor (in the
case of the Originator's financial statements) and the Funding Agent, as agent
for the Transferees, in the Receivables and Related Security, Collections and
Proceeds with respect thereto.
(k) Separate Business. The Transferor shall not engage in any
business not permitted by its Certificate of Incorporation as in effect on the
Effective Date.
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(l) Corporate Documents. The Transferor shall only amend, alter,
change or repeal its Certificate of Incorporation with the prior written consent
of the Funding Agent (acting at the direction of the Group Agents).
(m) Net Worth. The Transferor shall at all times have a net worth
(as defined in accordance with GAAP) of at least $20,000,000.
(n) Enforcement of Receivables Purchase Agreement. The Transferor
shall use its best efforts to enforce all rights held by it under the
Receivables Purchase Agreement and shall not waive any breach of any covenant
contained in Section 5.1 thereunder without the prior written consent of the
Funding Agent.
(o) Separate Existence. The Transferor shall at all times:
(i) maintain its own deposit account or accounts,
separate from those of any Affiliate, with commercial banking
institutions and ensure that the funds of the Transferor will not be
diverted to any other Person or for other than corporate uses of the
Transferor, nor will such funds be commingled with the funds of the
Originator or any subsidiary or Affiliate of the Originator (other than
funds deposited to a Lock-Box Account, which funds may be commingled
for a period not exceeding two (2) Business Days);
(ii) to the extent that it shares the same officers or
other employees as any of its Affiliates, the salaries of and the
expenses related to providing benefits to such officers and other
employees shall be fairly allocated among such entities, and each such
entity shall bear its fair share of the salary and benefit costs
associated with all such common officers and employees;
(iii) to the extent that it jointly contracts with any of
its Affiliates to do business with vendors or service providers or to
share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall bear
its fair share of such costs. To the extent that the Transferor
contracts or does business with venders or service providers where the
goods and services provided are partially for the benefit of any other
Person, the costs incurred in so doing shall be fairly allocated to or
among such entities for whose benefit the goods or services are
provided, and each such entity shall bear its fair share of such costs;
(iv) enter into all material transactions between the
Transferor and any of its Affiliates, whether currently existing or
hereafter entered into, only on an arm's length basis, it being
understood and agreed that the transactions contemplated in the
Transaction Documents meet the requirements of this clause (iv);
(v) maintain office space that is physically segregated
from the office space of the Originator and its Affiliates and, to the
extent that the Transferor and any of its Affiliates have offices in
the same location, there shall be a fair and appropriate
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allocation of overhead costs among them, and each such entity shall
bear its fair share of such expenses;
(vi) conduct its affairs strictly in accordance with its
certificate of incorporation and observe all necessary, appropriate and
customary corporate formalities, including, but not limited to, holding
all regular and special stockholders' and directors' meetings
appropriate to authorize all corporate action, keeping separate and
accurate minutes of its meetings, passing all resolutions or consents
necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts, including, but not
limited to, payroll and intercompany transaction accounts;
(vii) not assume or guarantee any of the liabilities of the
Originator or any Affiliate thereof;
(viii) have at least two (2) Independent Directors who have
been engaged through Global Securitization Services, Lord Securities
Corporation, AMACAR Group LLC or any other provider acceptable to the
Funding Agent; and
(ix) take, or refrain from taking, as the case may be, all
other actions that are necessary to be taken or not to be taken in
order to comply with this Section 5.1(o).
(p) Use of Proceeds. The Transferor shall utilize the proceeds of
the Transfers made hereunder solely for (i) the purchase of Receivables from the
Originator pursuant to the Receivables Purchase Agreement, (ii) the payment of
dividends to its Stockholders, (iii) the repayment of Advances, (iv) the payment
of administrative fees or Servicing Fees or expenses to the Collection Agent or
routine administrative or operating expenses, and (v) other general corporate
purposes in each case to the extent any such use would not be in violation of
any of the terms of this Agreement and/or the other Transaction Documents.
SECTION 5.2 NEGATIVE COVENANTS.
During the term of this Agreement, unless the Funding Agent shall
otherwise consent in writing:
(a) No Sales, Liens, Etc. Except as otherwise provided herein and
in the Receivables Purchase Agreement, the Transferor and the Originator 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 (i) any of the Receivables or Related Security,
(ii) any inventory or goods, the sale of which may give rise to a Receivable
(provided that the Originator may sell inventory and goods in the ordinary
course of its business), or (iii) 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. 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, except
that if no Termination Event or Potential
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Termination Event shall have occurred and be continuing, the Transferor may, in
accordance with the Credit and Collection Policy, extend the maturity or adjust
the Outstanding Balance of any Receivable as the Transferor deems appropriate to
maximize Collections thereof or otherwise amend or modify the terms of any
Receivable; provided, that the classification of any such Receivable as a
Defaulted Receivable shall not be affected by such extension; provided, further,
that no such amendment, modification or waiver shall cause or result in the
affected Receivable becoming an Eligible Receivable if, prior to amendment,
modification or waiver, the affected Receivable was not an Eligible Receivable
or prevent such affected Receivable from being excluded as an Eligible
Receivable if such affected Receivable would have been excluded as an Eligible
Receivable if such amendment, modification or waiver had not been made or
granted.
(c) No Change in Business or Credit and Collection Policy. The
Transferor and the Originator will not make any change in the character of their
respective businesses or in the Credit and Collection Policy, which change
would, in either case, be reasonably likely to impair the collectibility of a
material portion of the Receivables or otherwise result in a Material Adverse
Effect.
(d) No Mergers, Etc. The Transferor will not (i) consolidate or
merge with or into any other Person, or (ii) sell, lease or transfer any of the
Receivables, the Related Security or any other of its material assets to any
other Person (except pursuant to the Transaction Documents).
(e) Change in Payment Instructions to Obligors; Deposits to
Lock-Box Accounts. The Transferor and the Originator 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 Funding Agent shall have received written notice of such addition,
termination or change at least thirty (30) days prior thereto, the Funding Agent
shall have received prior to such termination or change 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 and the Funding Agent shall have
consented to such addition or termination, as applicable.
(f) Change of Name, Etc. Neither the Transferor nor the Originator
will change its name, identity or structure or the location of its chief
executive office, unless at least ten (10) days prior to the effective date of
any such change the Transferor or the Originator, as applicable, delivers to the
Funding Agent (i) such documents, instruments or agreements, executed by the
Transferor or the Originator, as applicable, as are necessary to reflect such
change and to continue the perfection of the Funding Agent's ownership interests
or security interests in the Receivables and Related Security, Collections and
Proceeds with respect thereto and (ii) new or revised Lock-Box Agreements
executed by the Lock-Box Banks which reflect such change and enable the Funding
Agent to continue to exercise its rights contained in Section 2.8 hereof.
(g) Amendment to Receivables Purchase Agreement. The Transferor
and the Originator will not amend, modify, or supplement the Receivables
Purchase Agreement, except with the prior written consent of the Funding Agent
(acting at the direction of the Group Agents);
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nor shall the Transferor nor the Originator take any other action under the
Receivables Purchase Agreement that shall have a Material Adverse Effect or
which is inconsistent with the terms of this Agreement.
(h) Other Debt. Except as provided for herein, the Transferor will
not create, incur, assume or suffer to exist any indebtedness whether current or
funded, or any other liability other than (i) indebtedness of the Transferor
representing fees, expenses and indemnities arising hereunder or under the
Receivables Purchase Agreement, (ii) indebtedness representing the purchase
price of the Receivables under the Receivables Purchase Agreement and (iii)
other indebtedness incurred in the ordinary course of its business in an amount
not to exceed $10,500 at any one time outstanding.
(i) ERISA Matters. Neither the Transferor nor the Originator will
(i) engage or permit any of its respective ERISA Affiliates to engage in any
prohibited transaction (as defined in Section 4975 of the Code and Section 406
of ERISA) for which an exemption is not available or has not previously been
obtained from the U.S. Department of Labor; (ii) permit to exist any accumulated
funding deficiency (as defined in Section 302(a) of ERISA and Section 412(a) of
the Code) with respect to any Benefit Plan other than a Multiemployer Plan;
(iii) fail to make any payments to any Multiemployer Plan that the Transferor,
the Originator or any ERISA Affiliate of the Transferor or the Originator is
required to make under the agreement relating to such Multiemployer Plan or any
law pertaining thereto; (iv) terminate any Benefit Plan so as to result in any
liability (other than obligations or liabilities existing as of the date of
termination of such Benefit Plan); or (v) permit to exist any occurrence of any
reportable event described in Section 4043 of ERISA which represents a material
risk of a liability to the Transferor, the Originator, or any ERISA Affiliate of
the Transferor or the Originator under ERISA or the Code, if such prohibited
transactions, accumulated funding deficiencies, payments, terminations and
reportable events occurring within any fiscal year of the Transferor and the
Originator, in the aggregate, involve a payment of money or an incurrence of
liability by the Transferor, the Originator or any ERISA Affiliate of the
Transferor or the Originator.
(j) Payment to the Originator. With respect to each Receivable
sold by the Originator to the Transferor, the Transferor and the Originator
shall effect such sale under, and pursuant to the terms of, the Receivables
Purchase Agreement, including, without limitation, the payment by the Transferor
either in cash, by a capital contribution or by increase in the amount of the
Subordinated Note to the Originator of an amount equal to the purchase price for
such Receivable as required by the terms of the Receivables Purchase Agreement.
SECTION 5.3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
ORIGINATOR.
The Originator hereby reaffirms to the Funding Agent, each Group Agent,
the Conduits, and the APA Banks its covenants made to the Transferor in Article
V of the Receivables Purchase Agreement.
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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 Funding Agent (acting at the
direction of the Group Agents) gives notice to the Originator of the designation
of a new Collection Agent pursuant to the next sentence, the Originator is
hereby designated as, and hereby agrees to perform the duties and obligations
of, the Collection Agent pursuant to the terms hereof. The Funding Agent (acting
at the direction of the Group Agents) may, after the occurrence of a Collection
Agent Default or any other Termination Event, designate as Collection Agent any
Person (including itself) to succeed the Originator 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. Following a Collection Agent Default or a Termination Event,
the Funding Agent may notify any Obligor of the Transferred Interest of the
designation of a successor Collection Agent. The Collection Agent may not
delegate any of its rights, duties or obligations hereunder, or designate a
substitute Collection Agent, without the prior written consent of the Funding
Agent; provided that the Originator shall be permitted to delegate its duties
hereunder to any of its Affiliates or their agents, but such delegation shall
not relieve the Originator of its duties and obligations hereunder.
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, each of the Transferees, the Funding Agent and
each of the Group Agents, hereby appoints as its agent the Collection Agent,
from time to time designated pursuant to Section 6.1 hereof, to enforce its
respective rights and interests in and under the Receivables and Related
Security, Collections and Proceeds with respect thereto. To the extent permitted
by applicable law, each of the Transferor and the Originator (to the extent not
then acting as Collection Agent hereunder) hereby grants to any Collection Agent
appointed hereunder an irrevocable power of attorney to take in the Transferor's
and/or the Originator's name and on behalf of the Transferor or the Originator
any and all steps necessary or desirable, in the reasonable determination of the
Collection Agent, to collect all amounts due under any and all Receivables,
including, without limitation, endorsing the Transferor's and/or the
Originator's name on checks and other instruments representing Collections and
enforcing such Receivables and the related Contracts. The Collection Agent shall
set aside for the account of the Transferees the Collections of Receivables in
accordance with Sections 2.5 and 2.6 hereof. The Collection Agent shall
segregate and deposit to the appropriate Funding Account each Transferee Group's
allocable share of Collections of Receivables when required pursuant to Article
II hereof. The Transferor shall deliver to the Collection Agent and the
Collection Agent shall hold in trust for the Transferor, the Funding
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Agent, the Group Agents and the Transferees, in accordance with their respective
interests, all Records which evidence or relate to Receivables, Related Security
or Collections. Notwithstanding anything to the contrary contained herein,
following a Termination Event or Potential Termination Event, the Funding Agent
shall have the absolute and unlimited right to direct the Collection Agent
(whether the Collection Agent is the Originator 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. The Collection Agent shall not
make the Funding Agent, any Group Agent or any Transferee a party to any
litigation without the prior written consent of such Person.
(b) The Collection Agent shall, as soon as practicable following
receipt thereof, turn over to the Originator any collections of any indebtedness
of any Person which is not on account of a Receivable. If the Collection Agent
is not the Transferor, the Originator or an Affiliate of the Transferor or the
Originator, the Collection Agent, by giving three (3) Business Days' prior
written notice to the Funding Agent, may revise the Servicing Fee, provided that
such revised Servicing Fee payable to such successor Collection Agent shall be a
fee agreed upon by the Collection Agent and the Funding Agent on an arms-length
basis reflecting rates and terms prevailing at such time (it being understood
that the Servicing Fee represents an arms-length arrangement as of the date of
this Agreement). The Collection Agent, if other than the Originator or an
Affiliate of the Originator, shall as soon as practicable upon demand, deliver
to the Originator all Records in its possession which evidence or relate to
indebtedness of an Obligor which is not a Receivable.
(c) On or before ninety (90) days after the end of each fiscal
year of the Collection Agent, beginning with the fiscal year ending December 31,
2000, the Collection Agent shall cause a firm of independent public accountants
(with the assistance of the Collection Agent's internal accounting personnel)
acceptable to the Funding Agent (with the consents of the Group Agents) at the
expense of the Transferor (who may also render other services to the Collection
Agent, the Transferor, the Originator or any Affiliates of any of the foregoing)
to furnish a report to the Funding Agent to the effect that they have (i)
selected at least one Settlement Statement for each fiscal quarter delivered
during the fiscal year then ended and verified that the amounts presented on
such Settlement Statement relating to sales, total dilution, net sales,
collections, write-offs and aging of Receivables agreed with the information
contained within the Collection Agent's underlying accounting records for such
Settlement Period, (ii) recalculated the Net Receivables Balance as of the end
of at least one Settlement Period of each fiscal quarter, (iii) verified that
the Receivables treated by the Collection Agent as Eligible Receivables in fact
satisfied the requirements of clauses (iii), (iv) and (viii) of the definition
of such term contained herein, (iv) selected at least one Settlement Statement
for each fiscal quarter and conducted a "negative confirmation" of a sample of
twenty-five (25) Receivables (or such other sample consented to by the Funding
Agent (at the direction of the Group Agents), which consent shall not be
unreasonably withheld) and verified that the Collection Agent's records and
computer system used in servicing the Receivables contained correct information
with regard to outstanding balances, and (v) selected at least one Settlement
Statement for each fiscal quarter and selected a sample of twenty-five (25)
Receivables (or such other sample consented to by the Funding Agent (at the
direction of the Group Agents), which consent shall not be unreasonably
withheld) (which can be the same sample selected in clause (iv) above) and
verified that such
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Receivables were included in the proper aging category on such Settlement
Statement based on the dates listed on the original Contracts for such
Receivables, except, in each case for (vi) such exceptions as such firm shall
believe to be immaterial (which exceptions need not be enumerated) and (vii)
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 shall have no obligation to collect, enforce or
take any other action described in this Article VI with respect to any
indebtedness which is not on account of a Receivable other than to deliver to
the Originator the collections and documents with respect to any such
indebtedness as described in Section 6.2(b) hereof.
SECTION 6.3 RIGHTS AFTER DESIGNATION OF COLLECTION AGENT.
At any time following the designation of a Collection Agent pursuant to
Section 6.1:
(a) The Funding Agent (at the direction of the Group Agents) may,
direct that payment of all amounts payable under any Receivable be made directly
to the Funding Agent or its designee, for the benefit of the Transferees.
(b) The Transferor shall, at the Funding Agent's request (at the
direction of the Group Agents) and at the Transferor's expense, give notice of
the ownership of Receivables by the Funding Agent, as agent for the Transferees,
to each Obligor and direct that payments be made directly to the Funding Agent
or its designee.
(c) The Transferor shall, at the Funding Agent's request (at the
direction of the Group Agents), (i) assemble all of the Records, and shall make
the same available to the Funding Agent or its designee at a place selected by
the Funding Agent or its designee, and (ii) segregate all cash, checks and other
instruments received by it from time to time constituting Collections of
Receivables in a manner acceptable to the Funding Agent and shall, promptly upon
receipt, remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to the Funding Agent or its designee.
(d) The Transferor and the Originator hereby authorize the Funding
Agent to take any and all steps in the Transferor's or the Originator's name and
on behalf of the Transferor and the Originator necessary or desirable, in the
determination of the Funding Agent (at the direction of the Group Agents), to
collect all amounts due under any and all Receivables, including, without
limitation, endorsing the Transferor's or the Originator's name on checks and
other instruments representing Collections and enforcing such Receivables and
the related Contracts.
SECTION 6.4 COLLECTION AGENT DEFAULT.
The occurrence of any one or more of the following events shall
constitute a default by the Collection Agent (each, a "Collection Agent
Default"):
(a) (i) the Collection Agent or, to the extent that the
Transferor, the Originator or any Affiliate of the Transferor or the Originator
is then acting as Collection Agent, the Transferor,
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the Originator or such Affiliate, as applicable, shall fail to observe or
perform any term, covenant or agreement hereunder (other than as referred to in
clause (ii) of this Section 6.4(a)) or under any of the other Transaction
Documents to which such Person is a party or by which such Person is bound, and
such failure shall remain unremedied for ten (10) days, or (ii) the Collection
Agent or, to the extent that the Transferor, the Originator or any Affiliate of
the Transferor or the Originator is then acting as Collection Agent, the
Transferor, the Originator or such Affiliate, as applicable, shall fail to make
any payment or deposit required to be made by it hereunder and such failure
remains uncured for two (2) Business Days from the due date therefor or the
Collection Agent shall fail to observe or perform in any material respect 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 Collection Agent or the Transferor, the Originator or any Affiliate of
the Transferor or the Originator (in the event that the Transferor, the
Originator or such Affiliate is then acting as the Collection Agent) in this
Agreement, the Receivables Purchase Agreement or in any of the other Transaction
Documents or in any certificate or report delivered by it pursuant to any of the
foregoing shall prove to have been incorrect in any material respect when made
or deemed made; or
(c) (i) failure of the Collection Agent or any of its Affiliates
to pay any principal of, premium or interest on, or any other amount payable in
respect of, one or more items of Indebtedness of the Collection Agent or its
Affiliates that is outstanding (or under which one or more Persons have a
commitment to extend credit) in an aggregate principal amount of at least
$10,000,000 at the time of such failure, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreements or instruments relating to all such
Indebtedness; or (ii) any other event shall occur or condition shall exist under
the agreements or instruments relating to one or more items of Indebtedness of
the Collection Agent or any of its Affiliates that is outstanding (or under
which one or more Persons have a commitment to extend credit) in an aggregate
principal amount of at least $10,000,000 at the time of such other event or
condition, and shall continue after the applicable grace period, if any,
specified in all such agreements or instruments, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness or otherwise to cause, or to permit the holder thereof to
cause, such Indebtedness to mature; or (iii) one or more items of Indebtedness
of the Collection Agent or its Affiliates that is outstanding (or under which
one or more Persons have a commitment to extend credit) in an aggregate
principal amount of at least $10,000,000 shall be declared to be due and payable
or required to be prepaid or redeemed (other than by a regularly scheduled or
required prepayment or redemption), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Indebtedness shall be required to be
made, in each case prior to the stated maturity thereof (provided that, in the
case of a default or failure in respect of an Affiliate of the Collection Agent
(other than the Transferor) provided in this clause (c), such default or failure
shall constitute a Collection Agent Default hereunder solely to the extent such
default or failure is reasonably likely to result in a Material Adverse Effect);
or
(d) any Event of Bankruptcy shall occur with respect to the
Collection Agent or any Affiliate of the Collection Agent; provided, however,
that (1) with respect to any such Event of
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Bankruptcy that is described in clause (ii) of the definition thereof, which
relates to a proceeding instituted against such Person, unless an order of
relief or similar order has been granted, such condition shall have continued
undismissed or unstayed for sixty (60) consecutive days and (2) in any Event of
Bankruptcy relating to an Affiliate of the Collection Agent (other than the
Transferor), such Event of Bankruptcy shall be a Collection Agent Default only
if such Event of Bankruptcy relating to an Affiliate of the Collection Agent
(other than the Transferor) is reasonably likely to have a Material Adverse
Effect; or
(e) there shall have occurred any event which, in the commercially
reasonable judgment of the Funding Agent, materially and adversely affects the
Collection Agent's ability to collect the Receivables in accordance with the
terms of this Agreement.
SECTION 6.5 INDEMNITIES BY THE COLLECTION AGENT.
Without limiting any other rights that the Funding Agent, the Group
Agents, the Conduits, the APA Banks, the Redwood Insurer or any Indemnified
Party may have hereunder or under applicable law and in consideration of its
appointment as Collection Agent, the Collection Agent hereby agrees to indemnify
each Indemnified Party from and against any and all Indemnified Amounts arising
out of or resulting from (whether directly or indirectly): (a) the failure of
any information provided to the Funding Agent, the Group Agents, the Conduits or
the APA Banks by the Collection Agent to be true and correct in all material
respects, (b) the failure of any representation, warranty or statement made or
deemed made by or on behalf of the Collection Agent under or in connection with
this Agreement to have been true and correct in all respects as of the date made
or deemed made, (c) the failure by the Collection Agent to comply with any
applicable law, rule or regulation with respect to any Receivable or the related
Contract or (d) any failure of the Collection Agent to perform its covenants,
duties or obligations in accordance with the provisions hereof.
SECTION 6.6 RESPONSIBILITIES OF THE ORIGINATOR.
Anything herein to the contrary notwithstanding, the Originator shall
(a) perform all of the Originator's obligations under the Contracts related to
the Receivables to the same extent as if the Receivables had not been sold under
the Receivables Purchase Agreement and interests in such Receivables had not
been sold hereunder and the exercise by the Funding Agent, the Group Agents, the
Conduits or the APA Banks of their rights hereunder and under the Receivables
Purchase Agreement shall not relieve the Originator from such obligations and
(b) pay when due any taxes, including without limitation, any sales taxes
payable in connection with the Receivables and their creation and satisfaction.
Neither the Funding Agent, the Group Agents, the Conduits nor any of the APA
Banks shall 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 Originator thereunder.
ARTICLE VII
TERMINATION EVENTS
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SECTION 7.1 TERMINATION EVENTS.
The occurrence of any one or more of the following events shall
constitute a Termination Event:
(a) the Transferor, the Originator or the Collection Agent shall
fail to make any payment or deposit to be made by it hereunder or under any of
the Transaction Documents when due hereunder or thereunder; or
(b) any representation, warranty, certification or statement made
by the Transferor or the Originator in this Agreement, any other Transaction
Document to which it is a party or in any other document delivered pursuant
hereto or thereto shall prove to have been incorrect in any material respect
when made or deemed made; or
(c) the Transferor, the Originator, or the Collection Agent shall
default in the performance of any covenant or indemnity (other than those
covered by clause (a) above) under any Transaction Document and such default
shall continue uncured for a period of five (5) days after notice thereof; or
(d) failure of the Transferor to pay any Indebtedness (other than
as described in clause (a) above) owing by the Transferor and greater than
$25,000 when due; or
(e) any Event of Bankruptcy shall occur with respect to the
Transferor, any Affiliate of the Transferor, or the Originator; provided,
however, that (1) with respect to any such Event of Bankruptcy that is described
in clause (ii) of the definition thereof, which relates to a proceeding
instituted against such Person, unless an order of relief or similar order has
been granted, such condition shall have continued undismissed or unstayed for
sixty (60) consecutive days and (2) in any Event of Bankruptcy relating to an
Affiliate of the Originator (other than the Transferor), such Event of
Bankruptcy relating to an Affiliate of the Originator (other than the
Transferor) shall be a Termination Event only if such Event of Bankruptcy is
reasonably likely to have a Material Adverse Effect; or
(f) the Funding Agent, as agent for the Transferees, shall, for
any reason (other than as a result of the gross negligence or willful misconduct
of the Funding Agent or any Transferee), fail or cease to have a valid and
perfected first priority ownership or security interest in the Receivables and
Related Security, Collections and Proceeds with respect thereto, free and clear
of any Adverse Claims; or
(g) a Collection Agent Default shall have occurred; or
(h) the Purchase Termination Date shall have occurred under the
Receivables Purchase Agreement; or
(i) the Transferor or the Originator shall enter into any
transaction or merger which is reasonably likely to have a Material Adverse
Effect; or
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(j) (i) the Percentage Factor exceeds the Maximum Percentage
Factor unless the Transferor reduces the Net Investment or increases the balance
of the Receivables on the next Business Day after the earlier of (A) the date on
which a Responsible Officer of the Transferor or the Collection Agent knew, or
should have known, of such condition and (B) the date of delivery of the most
recent Settlement Statement or Deposit Report to the Funding Agent, so as to
reduce the Percentage Factor to less than or equal to 100%; or (ii) the Net
Investment shall exceed the Facility Limit; or
(k) the average Dilution Ratio for the two (2) preceding
Settlement Periods exceeds 0.20%; or
(l) the average Aged Receivables Ratio for the two (2) preceding
Settlement Periods exceeds 2.40%; or
(m) an Event of Default (as such term is defined in the Credit
Agreement) shall have occurred and be continuing under the Credit Agreement; or
(n) a notice of Lien has been filed against the Transferor, the
Originator or the Collection Agent under Section 412(n) of the Code or Section
302(f) of ERISA for a failure to make a required installment or other payment to
a plan to which such provisions apply; or
(o) the Vendor DSO for the preceding Settlement Periods exceeds
two hundred and twenty five (225) days; or
(p) the Fixed Charge Coverage Ratio shall have been breached; or
(q) [reserved]; or
(r) a judgment or order for the payment of money shall be rendered
against the Transferor; or
(s) [reserved]; or
(t) the Originator or the Transferor shall challenge the
enforceability of any Transaction Document or shall assert in writing, or engage
in any action or inaction based on any such assertion, that any provision of any
of the Transaction Documents has ceased to be or otherwise is not valid, binding
and enforceable in accordance with its terms;
(u) if Asset Guaranty Insurance Company has not executed the
Redwood Insurance Agreement and issued the Redwood Insurance Policy, providing a
minimum amount of $70,000,000 of excess loss coverage, under terms acceptable to
the Redwood Group Agent by March 31, 2001; provided, however, if on or before
March 31, 2001, the Redwood Insurance Commitment is not binding upon Asset
Guaranty Insurance Company for any reason, other than based upon any fault of GE
Capital, Redwood or any other member of the Redwood Group (excluding the Redwood
Insurer), then no Termination Event shall occur under this clause (u) if
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an alternate insurance policy, upon terms acceptable to the Redwood Group Agent,
is issued by an insurer acceptable to the Redwood Group Agent by June 1, 2001;
or
(v) on any day after the effective date of the Redwood Insurance
Agreement and Redwood Insurance Policy, (i) the Redwood Insurance Agreement or
the Redwood Insurance Policy shall for any reason cease to be in full force and
effect, other than as a result of the parties thereto mutually agreeing to
terminate such Redwood Insurance Agreement or Redwood Insurance Policy, (ii) the
Redwood Insurer shall deny all or any material portion of its liability under
the Redwood Insurance Policy, or (iii) the Redwood Insurer shall have a claims
paying ability of less than BBB- from S&P, and in each case, the Redwood Group
Agent shall not have replaced the Redwood Insurance Agreement and the Redwood
Insurance Policy within 120 days after the occurrence thereof with a similar
arrangement satisfactory to the Redwood Group Agent in its sole discretion,
which arrangement is on substantially the same terms and issued by an insurance
company or other financial institution with a claims paying ability of BBB or
better by S&P or otherwise acceptable to the Redwood Group Agent in its sole
discretion.
SECTION 7.2 REMEDIES UPON THE OCCURRENCE OF A TERMINATION EVENT.
(a) Upon the occurrence of any Termination Event, the Funding
Agent may, and shall, at the direction of the Required APA Banks, by notice to
the Transferor and the Collection Agent, declare the Termination Date to have
occurred; provided, however, that in the case of any event described in Section
7.1(e), 7.1(f), 7.1(j) and 7.1(n) above, the Termination Date shall be deemed to
have occurred automatically upon the occurrence of such event. At all times
after the declaration or automatic occurrence of the Termination Date pursuant
to this Section 7.2(a), the Funding Agent may, and shall, at the direction of
the Required APA Banks, declare all outstanding Tranches to be ended and
designate the Base Rate plus (i) for the period prior to the occurrence of a
Redwood Insurance Draw, 2.00% and (ii) for the period on and after the
occurrence of a Redwood Insurance Draw, 3.00% as the Tranche Rate applicable to
the Net Investment. If an event or condition shall have occurred which
constitutes a Potential Termination Event, the Funding Agent may, and shall, at
the direction of the Required APA Banks, by notice to the Transferor, declare
such event or condition a Potential Termination Event.
(b) In addition, if any Termination Event occurs hereunder, (i)
the Funding Agent may and shall, at the direction of the Required APA Banks,
promptly notify the Transferor in writing whether it has declared a Termination
Event or a Potential Termination Event and whether it will be exercising the
remedies specified in this Section 7.2, (ii) the Funding Agent, as agent for the
Transferees, shall have all of the rights and remedies provided to a secured
creditor or a purchaser of accounts under the Relevant UCC by applicable law in
respect thereto, (iii) the Facility Limit shall be reduced as of each calendar
date thereafter equal to the Net Investment as of such date, (iv) each
Transferee Group's Transferee Group Limit shall be reduced as of each calendar
date thereafter equal to such Transferee Group's Transferee Group Net Investment
as of such date, (v) the Percentage Factor shall be increased to 100%, (vi) the
Redwood Termination Date shall be deemed to have automatically occurred and
(vii) a PARCO Termination Date shall be deemed to have automatically occurred.
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SECTION 7.3 RECONVEYANCE UNDER CERTAIN CIRCUMSTANCES.
The Transferor agrees to accept the reconveyance from the Funding
Agent, as agent for the Transferees, of the Transferred Interest if the Funding
Agent notifies the Transferor of a material breach of any representation or
warranty made or deemed made pursuant to Article III of this Agreement, and the
Transferor shall fail to cure or cause to be cured such breach within thirty
(30) days (or, in the case of the representations and warranties in Sections
3.1(d) and 3.1(j), five (5) Business Days of such notice). The reconveyance
price shall be paid by the Transferor to the Funding Agent, as agent for the
Transferees, in immediately available funds on such 30th day (or 5th day, if
applicable) in an amount equal to the Aggregate Unpaids.
SECTION 7.4 OBLIGATIONS OF REDWOOD GROUP AGENT.
The Redwood Group Agent acknowledges and agrees for the benefit of the
Transferor that upon the occurrence of any of the events described in (a)
Section 7.1(v), the Redwood Group Agent shall (i) provide written notification
to the Transferor, with a copy to the Collection Agent of the occurrence of any
such event and (ii) exercise commercially reasonable efforts to replace the
Redwood Insurance Agreement and Redwood Insurance Policy or (b) Section 7.1(u),
the Redwood Group Agent shall exercise commercially reasonable efforts to obtain
an alternate insurance policy by June 1, 2001.
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ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1 INDEMNITIES BY THE TRANSFEROR.
Without limiting any other rights which the Funding Agent, the Group
Agents, the Redwood Insurer or any of the Transferees may have hereunder or
under applicable law, the Transferor hereby agrees to indemnify the Funding
Agent, the Group Agents, the Redwood Insurer and the Transferees and any
successors and permitted assigns and their respective officers, directors,
agents and employees (collectively, "Indemnified Parties") from and against any
and all damages, losses, claims, liabilities, costs and expenses, including,
without limitation, reasonable attorneys' fees and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them in any action or proceeding arising out of or
as a result of this Agreement, the other Transaction Documents, the ownership or
maintenance, either directly or indirectly, by any Indemnified Party of the
Transferred Interest or any of the other transactions contemplated hereby or
thereby, excluding, however, (a) Indemnified Amounts to the extent resulting
from gross negligence or willful misconduct on the part of such Indemnified
Party; (b) recourse (except as otherwise specifically provided in this
Agreement) for uncollectible Receivables or (c) any income or franchise taxes
incurred by such Indemnified Party arising out of or as a result of this
Agreement or the ownership of the Transferred Interest. Without limiting the
generality of the foregoing, the Transferor shall indemnify each Indemnified
Party for Indemnified Amounts relating to or resulting from:
(i) any representation or warranty made by the Transferor
or any officers of the Transferor under or in connection with this
Agreement, any of the other Transaction Documents, any Settlement
Statement or any other information or report delivered by any of them
pursuant hereto or thereto, which shall have been false or incorrect in
any material respect when made or deemed made;
(ii) the failure by the Transferor or the Originator
(including, in its capacity as the Collection Agent) 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 (A) vest and maintain vested in the
Funding Agent, as agent for the Transferees, an undivided first
priority, perfected percentage ownership interest, to the extent of the
Transferred Interest, in the Receivables and Related Security,
Collections and Proceeds with respect thereto, free and clear of any
Adverse Claim or (B) to create or maintain a valid and perfected first
priority security interest in favor of the Funding Agent, as agent for
the Transferees, in the Transferor's ownership interest in, and lien
on, the Receivables and Related Security, Collections and Proceeds with
respect thereto, free and clear of any Adverse Claim;
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(iv) the failure to file, or any delay in filing,
financing statements, continuation statements, or other similar
instruments or documents under the Relevant UCC or other applicable
laws with respect to any of the Receivables or Related Security,
Collections and Proceeds with respect thereto;
(v) any dispute, claim, offset or defense (other than
financial inability to pay or discharge in bankruptcy) of the Obligor
to the payment of any Receivable (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 Collection Agent to perform its
duties or obligations in accordance with the provisions hereof;
(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;
(viii) the failure by the Transferor to comply with any
term, provision or covenant contained in this Agreement or any of the
other Transaction Documents to which it is a party;
(ix) the Percentage Factor exceeding the Maximum
Percentage Factor at any time on or prior to the Termination Date;
(x) any repayment by any Indemnified Party of any amount
previously distributed in reduction of Net Investment which is required
to be made;
(xi) the commingling of Collections of Receivables at any
time with other funds;
(xii) any investigation, litigation or proceeding related
to this Agreement, any of the other Transaction Documents, the use of
proceeds of Transfers, the ownership of Transferred Interests, or any
Receivable, Related Security or Contract;
(xiii) the failure of any Lock-Box Bank to remit any amounts
held in the Lock-Box Accounts pursuant to the instructions of the
Collection Agent, the Transferor, the Originator or the Funding Agent
(to the extent such Person is entitled to give such instructions in
accordance with the terms hereof and of any applicable Lock-Box
Agreement) whether by reason of the exercise of set-off rights or
otherwise;
(xiv) any inability to obtain any judgment in or utilize
the court or other adjudication system of, any state in which an
Obligor may be located as a result of the
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failure to qualify to do business or file any notice of business
activity report or any similar report;
(xv) any failure of the Transferor to give reasonably
equivalent value to the Originator in consideration of the purchase by
the Transferor from the Originator of any Receivable, or any attempt by
any Person to void, rescind or set-aside any such transfer under
statutory provisions or common law or equitable action, including,
without limitation, any provision of the Bankruptcy Code; or
(xvi) any action taken by the Transferor or any Affiliate
or designee of the Transferor in the enforcement or collection of any
Receivable.
SECTION 8.2 INDEMNITY FOR 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, 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 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 other Transaction Documents, the ownership,
maintenance or financing of the Transferred Interest, the Receivables
or payments of amounts due hereunder or its obligation to advance funds
hereunder or under the other Transaction Documents, the ownership,
maintenance or financing of the Transferred Interest or the
Receivables; or
(ii) 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
other Transaction Documents, the ownership, maintenance or financing of
the Transferred Interest, the Receivables or payments of amounts due
hereunder or its obligation to advance funds hereunder or otherwise in
respect of this Agreement, the other Transaction Documents, the
ownership, maintenance or financing of 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 other Transaction
Documents, the ownership, maintenance or financing of the Transferred Interest,
the Receivables, the obligations hereunder, the funding of any Purchases
hereunder or under the other Transaction Documents, by an amount deemed by such
Indemnified Party to be material, then, within ten (10) days after demand by
such Indemnified Party through the Funding Agent, the Transferor shall pay to
the Funding Agent, for
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the benefit of such Indemnified Party, such additional amount or amounts as will
compensate such Indemnified Party for such increased cost or reduction; provided
that no such amount shall be payable with respect to any period commencing more
than two hundred seventy (270) days prior to the date the Funding Agent first
notifies the Transferor of its intention to demand compensation therefor under
this Section 8.2(a); provided further that if such change in Law, rule or
regulation giving rise to such increased costs or reductions is retroactive,
then such 270-day period shall be extended to include the period of retroactive
effect thereof.
(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, 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 such Indemnified Party through the Funding
Agent, the Transferor shall pay to the Funding Agent, for the benefit of such
Indemnified Party, such additional amount or amounts as will compensate such
Indemnified Party (or its parent) for such reduction; provided that no such
amount shall be payable with respect to any period commencing more than two
hundred seventy (270) days prior to the date the Funding Agent first notifies
the Transferor of its intention to demand compensation therefor under this
Section 8.2(a); provided further that if such change in Law, rule or regulation
giving rise to such increased costs or reductions is retroactive, then such
270-day period shall be extended to include the period of retroactive effect
thereof.
SECTION 8.3 INDEMNITY FOR TAXES.
(a) All payments made by the Transferor, the Originator or the
Collection Agent to any Indemnified Party under this Agreement and any other
Transaction Document shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any Official
Body, excluding (i) taxes imposed on the net income of such Indemnified Party,
however denominated, and (ii) franchise taxes imposed on the net income of such
Indemnified Party, in each case imposed: (A) by the United States or any
political subdivision or taxing authority thereof or therein; (B) by any
jurisdiction under the laws of which such Indemnified Party or lending office is
organized or in which its lending office is located, managed or controlled or in
which its principal office is located or any political subdivision or taxing
authority thereof or therein; or (C) by reason of any connection between the
jurisdiction imposing such tax and such Indemnified Party or such lending office
other than a connection arising solely from this Agreement or any other
Transaction Document or any transaction hereunder or thereunder (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, collectively or individually, "Taxes"). If any such Taxes are
required to be withheld from any amounts payable to any Indemnified Party
hereunder, the amounts so payable to such
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Indemnified Party shall be increased to the extent necessary to yield to such
Indemnified Party (after payment of all Taxes) all amounts payable hereunder at
the rates or in the amounts specified in this Agreement and the other
Transaction Documents. The Transferor shall indemnify each Indemnified Party for
the full amount of any such Taxes within ten (10) days after the date of written
demand therefor by the Funding Agent.
(b) Each Indemnified Party that is not incorporated under the laws
of the United States of America or a state thereof or the District of Columbia
shall:
(i) deliver to the Transferor and the Funding Agent (A)
two duly completed copies of IRS Form 1001 or Form 4224, or successor
applicable form, as the case may be, and (B) an IRS Form W-8 or W-9, or
successor applicable form, as the case may be;
(ii) deliver to the Transferor and the Funding Agent two
(2) further copies of any such form or certification on or before the
date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Transferor; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested by
the Transferor or the Funding Agent;
unless, in any such case, an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Indemnified Party from duly completing and
delivering any such form with respect to it, and such Indemnified Party so
advises the Transferor and the Funding Agent. Each such Indemnified Party so
organized shall certify (A) in the case of an IRS Form W-8ECI, that it is
entitled to receive payments under the this Agreement and the other Transaction
Documents without deduction or withholding of any United States federal income
taxes and (B) in the case of an IRS Form W-8BEN, that it is entitled to an
exemption from United States backup withholding tax. Each Person that is a
Transferee or Participant hereunder, or which otherwise becomes a party to this
Agreement as an APA Bank, shall, prior to the effectiveness of such assignment,
participation or addition, as applicable, be required to provide all of the
forms and statements required pursuant to this Section 8.3.
SECTION 8.4 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 each Indemnified Party harmless against
liability for the payment of, all reasonable out-of-pocket expenses (including,
without limitation, attorneys', accountants' and other third parties' fees and
expenses, any filing fees and expenses incurred by officers or employees of such
Indemnified Party) or intangible, documentary or recording taxes incurred by or
on behalf of any such Indemnified Party (i) in connection with the negotiation,
execution, delivery and preparation of this Agreement, the other Transaction
Documents and any documents or instruments delivered pursuant hereto and thereto
and the transactions contemplated hereby or thereby (including, without
limitation, the perfection or protection of the
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Transferred Interest) and (ii) from time to time (A) relating to any amendments,
waivers or consents under this Agreement and the other Transaction Documents,
(B) arising in connection with any Indemnified Party'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 or any of the other Transaction Documents
(all of such amounts, collectively, "Transaction Costs").
(b) The Transferor shall pay the Funding Agent, for the account of
the Conduits and the APA Banks, as applicable, on demand any Early Collection
Fee due on account of the reduction of a Tranche on any day prior to the last
day of its Tranche Period.
(c) The Funding Agent will within forty-five (45) days after
receipt of notice of any event occurring after the date hereof which will
entitle an Indemnified Party to compensation pursuant to this Article VIII,
notify the Transferor in writing. Any notice by the Funding Agent claiming
compensation under this Article VIII 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 Funding Agent or any applicable
Indemnified Party may use any reasonable averaging and attributing methods.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 TERM OF AGREEMENT.
This Agreement shall terminate on the date following the Termination
Date upon which the Net Investment has been reduced to zero, and all accrued
Discount, Servicing Fees and all other Aggregate Unpaids have been paid in full,
in each case, in cash; provided, however, that (a) the indemnification and
payment provisions of Article VIII hereof, and (b) the agreements set forth in
Section 9.8 and 9.9 hereof, 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 Funding Agent, any Group Agent
or any Transferee 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. This Agreement may be amended, waived, modified or restated in whole or
in part if, but only if, (a) such amendment, modification, waiver or restatement
is in writing and is signed by the Transferor, the Collection Agent, the
Originator and the Funding Agent and the prior written consent of the Required
APA Banks has been obtained; provided, however, amendments, modifications and
waivers to (i) Section 7.1(e), Section 7.1(f), Section 7.1(j), Section 7.1(n),
Section 7.2, Section 9.15 and this Section 9.2, (ii) extend the date of any
payment
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or deposit of Collections by the Transferor or the Collection Agent, (iii)
reduce the rate or extend the time of payment of any Discount (or any component
thereof), (iv) reduce any fee payable to any Group Agent or the Funding Agent
for the benefit of the Transferees, (v) increase the Facility Limit or change
the Net Investment owned by any Transferee, or an APA Bank's pro rata share of
the Commitment, (vi) change the definitions of Eligible Receivable, Net
Receivables Balance, Concentration Factor, Percentage Factor, Termination Event
or (vii) modify any defined term (or any defined term used directly or
indirectly in such defined term used in clauses (i) through (vi) above, in a
manner which would circumvent the intention of the restrictions set forth in
such clauses, shall require the consent and approval of all of the Group Agents
(acting at the direction of the related Transferee Group Required APA Banks),
provided, further, however, that any amendment, modification or waiver relating
to the Redwood Commitment Expiry Date shall require the consent of each of the
Redwood Liquidity Providers and any amendment, modification or waiver relating
to the PARCO Commitment Expiry Date shall require the consent of each of the
PARCO APA Banks, (b) each Group Agent shall have provided notice to the rating
agencies of such amendment and (c) for material amendments, each Group Agent for
each Transferee Group that is not the subject of a Partial Liquidation shall
have received a Rating Confirmation.
SECTION 9.3 NOTICES.
Except as provided below, all communications and notices provided for
hereunder shall be in writing (including 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 (a) if given
by telecopy, when such telecopy is transmitted to the telecopy number specified
in this Section 9.3 and confirmation is received, (b) if given by mail three (3)
Business Days following such posting, postage prepaid, U.S. certified or
registered, (c) if given by overnight courier, one (1) Business Day after
deposit thereof with a national overnight courier service, or (d) if given by
any other means, when received at the address specified in this Section 9.3.
However, anything in this Section 9.3 to the contrary notwithstanding, the
Transferor hereby authorizes the Funding Agent to effect Transfers and each
Group Agent to effect Tranche Period and Tranche Rate selections based on
telephonic notices made by any Person which the Funding Agent or such Group
Agent in good faith believes to be acting on behalf of the Transferor. The
Transferor agrees to deliver promptly to the Funding Agent and the applicable
Group Agent 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 telephonic notice. If the written
confirmation differs in any material respect from the action taken by the
Funding Agent or a Group Agent, the records of the Funding Agent or such Group
Agent shall govern absent manifest error.
If to Redwood:
REDWOOD RECEIVABLES CORPORATION
c/o General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to the Redwood Group Agent)
If to the Redwood Group Agent or the Funding Agent:
GENERAL ELECTRIC CAPITAL CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Portfolio/Caremark Inc.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
Bankers Trust Company
ABA ▇▇▇▇▇▇▇▇▇
Account No. ▇▇▇▇▇▇▇▇
Reference: MP Receivables Collection Account,
Reference # 031152
If to PARCO:
PARK AVENUE RECEIVABLES CORPORATION
c/o Global Securitization Services, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to the PARCO Group Agent)
If to the Transferor:
MP RECEIVABLES COMPANY
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
The Chase Manhattan Bank
ABA ▇▇▇▇▇▇▇▇▇
Account 323051057
Reference MP Receivables Company
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If to the Originator:
CAREMARK INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the PARCO Group Agent:
THE CHASE MANHATTAN BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: PARCO Administration
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the APA Banks, at their respective addresses set forth in the
Redwood Liquidity Agreement and the PARCO Asset Purchase Agreement, as
applicable.
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. Each of the parties hereto
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.
Each of the parties hereto 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
Funding Agent, any Group Agent, any Conduit or any APA Bank to bring any action
or proceeding against the Transferor, the Originator, the Collection Agent or
their respective properties in the courts of other jurisdictions.
(b) Each of the parties hereto hereby waives any right to have a
jury participate in resolving any dispute, whether sounding in contract, tort or
otherwise among any of them arising out of, connected with, relating to or
incidental to the relationship between them in connection with this Agreement or
the other Transaction Documents.
(c) 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.
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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. Delivery of an executed counterpart
of a signature page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this 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, except as
specifically provided herein or in the other Transaction Documents, neither the
Transferor, nor the Originator may assign any of its rights or delegate any of
its duties hereunder or under any of the other Transaction Documents to which it
is a party without the prior written consent of the Funding Agent (acting at the
direction of the Group Agents). No provision of this Agreement shall in any
manner restrict the ability of any Conduit or any APA Bank to assign,
participate, grant security interests in, or otherwise transfer any portion of
its interest in the Transferred Interest. Without limiting the foregoing,
Redwood may (with the consent of each Redwood Liquidity Bank) and PARCO may
(with the consent of each PARCO APA Bank), in one or a series of transactions,
transfer all or any portion of its interest in the Transferred Interest, and its
rights and obligations under this Agreement and the other Transaction Documents
to which it is a party, to a Conduit Assignee. The Transferor hereby
acknowledges that in accordance with the Redwood Liquidity Agreement, (i) the
Redwood Committed Transferee may purchase from Redwood all or any part of the
Transferred Interest transferred by the Transferor hereunder on each Transfer
Date prior to the occurrence of a Redwood Committed Transferee Funding Event,
and (ii) Redwood may assign all or any part of its rights and interests in the
Receivables and Related Security to a Redwood Committed Transferee.
(b) The Transferor, the Originator, the Collection Agent and the
PARCO Group Agent each hereby acknowledges and agrees that each of Redwood, the
Redwood Group Agent and the Redwood Liquidity Providers may assign all or any
part of its rights and interests under this Agreement to the Redwood Insurer.
SECTION 9.7 CONFIDENTIALITY.
(a) Each of the Transferor and the Originator shall maintain, and
shall cause each officer, employee and agent of itself and its Affiliates to
maintain, the confidentiality of the Transaction Documents and all other
confidential proprietary information with respect to the Conduits, the Funding
Agent, the Group Agents and/or the APA Banks and/or each of their respective
businesses obtained by them in connection with the structuring, negotiation and
execution of the transactions contemplated herein and in the other Transaction
Documents,
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except for information that has become publicly available or information
disclosed (i) to legal counsel, accountants and other professional advisors to
the Transferor, the Originator and their Affiliates, (ii) as required by law,
regulation or legal process or (iii) in connection with any legal or regulatory
proceeding to which the Transferor, the Originator or any of their Affiliates is
subject. Each of the Transferor and the Originator hereby consents to the
disclosure of any non-public information with respect to it received by any
Conduit, the Funding Agent, any Group Agent or any APA Bank to (A) any of the
Conduits, the Funding Agent, any of the Group Agents and any APA Bank, (B) any
nationally recognized rating agency providing a rating or proposing to provide a
rating to Redwood's or PARCO's Commercial Paper, (C) any placement agent which
proposes to offer and sell Redwood's or PARCO's Commercial Paper, (D) any
provider of Redwood's or PARCO's program-wide liquidity or credit support
facilities, (E) any potential APA Bank or (F) any Participant or potential
Participant.
(b) Each Conduit, the Funding Agent, each Group Agent and the APA
Banks shall maintain, and shall cause each officer, employee and agent of itself
and its Affiliates to maintain, the confidentiality of the Transaction Documents
and all other confidential proprietary information with respect to the
Transferor, the Originator and their Affiliates and each of their respective
businesses obtained by them in connection with the structuring, negotiation and
execution of the transactions contemplated herein and in the other Transaction
Documents, except for information that has become publicly available or
information disclosed (i) to legal counsel, accountants and other professional
advisors to the Conduits, the Funding Agent, a Group Agent and the APA Banks,
(ii) as required by law, regulation or legal process or (iii) in connection with
any legal or regulatory proceeding to which any Conduit, the Funding Agent, any
Group Agent or any APA Bank is subject.
SECTION 9.8 NO BANKRUPTCY PETITION AGAINST REDWOOD OR PARCO.
Each of the Funding Agent, the Group Agents, the APA Banks, PARCO, the
Transferor and the Originator 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 Redwood, it will not institute
against, or join any other Person in instituting against, Redwood 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.
Each of the Funding Agent, the Group Agents, the APA Banks, Redwood,
the Transferor and the Originator 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 PARCO, it will not institute against,
or join any other Person in instituting against, PARCO 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 9.9 LIMITED RECOURSE.
Notwithstanding anything to the contrary contained herein, the
obligations of each Conduit under this Agreement are solely the corporate
obligations of such Conduit and, in the case of obligations of such Conduit
other than Commercial Paper, shall be payable at such time
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as funds are actually received by, or are available to, such Conduit in excess
of funds necessary to pay in full all of its respective outstanding Commercial
Paper and, to the extent funds are not available to pay such obligations, the
claims relating thereto shall not constitute a claim (as defined in Section 101
of the Bankruptcy Code) against such Conduit but shall continue to accrue. Each
party hereto agrees that the payment of any claim (as defined in Section 101 of
the Bankruptcy Code) of any such party shall be subordinated to the payment in
full of all of its respective Commercial Paper.
No recourse under any obligation, covenant or agreement of any Conduit
contained in this Agreement shall be had against any incorporator, stockholder,
officer, director, member, manager, employee, agent, administrative agent or
manager of any Conduit or any of their Affiliates (solely by virtue of such
capacity) 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 the obligations of each Conduit under this Agreement are solely
corporate obligations of such Conduit, and that no personal liability whatever
shall attach to or be incurred by any incorporator, stockholder, officer,
director, member, manager, employee, agent, administrative agent or manager of
any Conduit or any of their Affiliates (solely by virtue of such capacity) or
any of them under or by reason of any of the obligations, covenants or
agreements of such Conduit contained in this Agreement, or implied therefrom,
and that any and all personal liability for breaches by any Conduit of any of
such obligations, covenants or agreements, either at common law or at equity, or
by statute, rule or regulation, of every such incorporator, stockholder,
officer, director, member, manager, employee or agent is hereby expressly waived
as a condition of and in consideration for the execution of this Agreement;
provided that the foregoing shall not relieve any such Person from any liability
it might otherwise have as a result of fraudulent actions taken or fraudulent
omissions made by them.
SECTION 9.10 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 Funding Agent, as agent for
the Transferees, 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
Funding Agent, as agent for the Transferees, and the Transferor hereby grants to
the Funding Agent, as agent for the Transferees, a first priority perfected and
continuing security interest in all of the Transferor's right, title and
interest in, to and under the Receivables, together with Related Security,
Collections and Proceeds with respect thereto, and together with all of the
Transferor's rights under the Receivables Purchase Agreement with respect to the
Receivables and with respect to any obligations thereunder of the Originator
with respect to the Receivables, and that this Agreement shall constitute a
security agreement under applicable law. The Transferor hereby assigns to the
Funding Agent, as agent for the Transferees, all of its rights and remedies
under the Receivables Purchase Agreement with respect to the Receivables and
with respect to any obligations thereunder of the Originator with respect to the
Receivables. The Transferor agrees that it shall
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not give any consent or waiver required or permitted to be given under the
Receivables Purchase Agreement without the prior consent of the Funding Agent.
SECTION 9.11 WAIVER OF SETOFF.
Each of the Funding Agent, the Transferor, the Collection Agent, the
Group Agents, and the Originator hereby waives any right of setoff it may have
or to which it may be entitled under this Agreement from time to time against
the Conduits or its assets.
SECTION 9.12 CONFLICT WAIVERS.
(a) GE Capital acts as the Redwood Group Agent and as Funding
Agent for the Transferees and in certain other capacities for Redwood and in
respect of Redwood's Commercial Paper and may provide other services or
facilities from time to time (the "GE Capital Roles"). Each of the parties
hereto hereby acknowledges and consents to any and all GE Capital Roles, waives
any objections it may have to any actual or potential conflict of interest
caused by GE Capital acting as the Redwood Group Agent, as a Redwood Liquidity
Bank under the Redwood Liquidity Agreement, as the Funding Agent and acting as
or maintaining any of the GE Capital Roles, and agrees that in connection with
any GE Capital Role, GE Capital may take, or refrain from taking, any action
which it in its discretion deems appropriate.
(b) Chase acts as PARCO Group Agent for PARCO, as issuing and
paying agent for PARCO's Commercial Paper, as provider of other backup
facilities for PARCO, and may provide other services or facilities from time to
time (the "Chase Roles"). Each of the parties hereto hereby acknowledges and
consents to any and all Chase Roles, waives any objections it may have to any
actual or potential conflict of interest caused by Chase's acting as the PARCO
Group Agent or as a PARCO APA Bank under the PARCO Asset Purchase Agreement and
acting as or maintaining any of the Chase Roles, and agrees that in connection
with any Chase Role, Chase may take, or refrain from taking, any action which it
in its discretion deems appropriate.
SECTION 9.13 LIABILITY OF FUNDING AGENT.
Notwithstanding any provision of this Agreement: (a) the Funding Agent
shall not have any obligations under this Agreement other than those
specifically set forth herein, and no implied obligations of the Funding Agent
shall be read into this Agreement; and (b) in no event shall the Funding Agent
be liable under or in connection with this Agreement for indirect, special, or
consequential losses or damages of any kind, including lost profits, even if
advised of the possibility thereof and regardless of the form of action by which
such losses or damages may be claimed. Neither the Funding Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken in good faith by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limiting the foregoing, the Funding Agent (i) may consult with legal
counsel (including counsel for the Conduits), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts, (ii) shall not be
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responsible to the Conduits, the Transferor, the Originator, the APA Banks, the
Group Agents or the Collection Agent for any statements, warranties or
representations made in or in connection with this Agreement or the other
Transaction Documents, (iii) shall not be responsible to the Conduits, the
Transferor, the Originator, the APA Banks, the Group Agents or the Collection
Agent for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Transaction Documents, (iv)
shall incur no liability under or in respect of any of the Commercial Paper or
other obligations of the Conduits under this Agreement or the other Transaction
Documents and (v) shall incur no liability under or in respect of this Agreement
or the other Transaction Documents by acting upon any notice (including notice
by telephone), consent, certificate or other instrument or writing (which may be
by facsimile) believed by it to be genuine and signed or sent by the proper
party or parties. Notwithstanding anything else herein or in the other
Transaction Documents, it is agreed that where the Funding Agent may be required
under this Agreement or the other Transaction Documents to give notice of any
event or condition or to take any action as a result of the occurrence of any
event or the existence of any condition, the Funding Agent agrees to give such
notice or take such action only to the extent that it has actual knowledge of
the occurrence of such event or the existence of such condition, and shall incur
no liability for any failure to give such notice or take such action in the
absence of such knowledge. The Funding Agent shall have no obligation to act in
any circumstance where the direction of the Group Agents is required, unless all
Group Agents have unanimously agreed on the instruction to be given to the
Funding Agent. The Funding Agent shall have no liability for any action taken at
the direction of the Group Agents or at the direction of the Transferee Group
Required APA Banks.
SECTION 9.14 INFORMATION RECEIVED BY FUNDING AGENT.
The Funding Agent hereby agrees that promptly upon receipt of any
notices, reports, documents, statements or other information from or on behalf
of the Originator, the Transferor or the Collection Agent, the Funding Agent
will deliver a copy of such notice, report, document or statement received by it
to the Group Agents.
SECTION 9.15 PARTIAL LIQUIDATIONS.
In the event that any amendment, modification, waiver or any other
action requiring the consent of the Required APA Banks, in any case relating to
any material provision of any Transaction Document is agreed to notwithstanding
that the Transferee Group Required APA Banks for a Transferee Group do not
consent to amendment, modification or waiver, such Transferee Group may, at the
direction of the related Transferee Group Required APA Banks elect to terminate
the Commitment of the APA Banks for such Transferee Group, declare that such
Transferee Group's Termination Date has occurred and cause the procedures under
Section 2.5(b) to be immediately implemented with respect to the application of
Collections (a "Partial Liquidation").
Upon electing to commence a Partial Liquidation and notwithstanding
anything to the contrary contained in this Agreement or any other Transaction
Document, a Liquidating Group, its related APA Banks, and such Liquidating
Group's Group Agent shall have no further right to vote or consent to any
amendment, modification or waiver of this Agreement or any other
52
56
Transaction Document or any provision of any of the foregoing or give any
direction to the Funding Agent with respect to any action the Funding Agent may
be permitted or required to take or refrain from taking, but in each case, only
to the extent such amendment, modification, waiver or action would not have any
effect upon such Liquidating Group. Notwithstanding that a Liquidating Group
shall not have any right to vote on an amendment, modification or waiver as
described in the immediately preceding sentence, promptly upon execution of any
amendment, modification or waiver to any provision of any Transaction Document
that does not require the consent of any such Liquidating Group or any member
thereof, the Collection Agent shall deliver (or cause to be delivered) executed
copies of any such amendment, modification or waiver to the Group Agent of such
Liquidating Group.
SECTION 9.16 NO BANKRUPTCY PETITION AGAINST TRANSFEROR.
Each of the Funding Agent, the Group Agents, the APA Banks, the
Conduits, the Collection Agent and the Originator hereby covenants and agrees
that, prior to the date that is one year and one day after the payment in full
of all outstanding obligations of Transferor under this Agreement, it will not
institute, take any action in furtherance of instituting, take any action to
cause any Person to institute or join any other Person in instituting, against
Transferor any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under any applicable law;
notwithstanding the foregoing, the Funding Agent, on behalf of the Transferees
may, at the direction of the Transferee Group Required APA Banks take any action
described above in this Section 9.16; for the avoidance of doubt, any Transferee
and any Group Agent shall not be precluded by this Section 9.16 from taking any
action if any proceeding described in this Section 9.16 is commenced with
respect to the Transferor, but each Transferee and each Group Agent agrees it
will take no action otherwise prohibited by this Section 9.16 prior to the
commencement of any such proceeding. The agreements of the parties under this
Section 9.16 shall survive the termination of this Agreement.
53
57
SECTION 9.17 LIMITATION OF LIABILITY.
The Originator and the Collection Agent each covenants and agrees that
it will not make any claim against Transferor for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement or the other Transaction Documents, or any act,
omission or event occurring in connection herewith or therewith; and Originator
and the Collection Agent each hereby waives, releases, and agrees not to ▇▇▇
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor. Notwithstanding anything in the
Receivables Purchase Agreement to the contrary, Transferor shall not be
permitted to make any payment with respect to any of its obligations to pay to
the Originator or the Collection Agent any amount otherwise required to be paid
by it hereunder, under the Receivables Purchase Agreement or under any other
Transaction Document in excess of any amount available to Transferor after
paying or making provision for the payment of its obligations under this
Agreement. All payment obligations of Transferor under the Receivables Purchase
Agreement and under the Subordinated Note are subject to the availability of
funds in excess of the amounts necessary for Purchaser to pay its obligations
under this Agreement.
SECTION 9.18 THIRD PARTY BENEFICIARY.
The Redwood Insurer is an intended third-party beneficiary of this
Agreement entitled to enforce the provisions hereof as if a party hereto. At
such time as this Agreement shall terminate in accordance with Section 9.1
hereof, the Redwood Insurer's rights hereunder shall terminate; provided,
however, that the Redwood Insurer shall continue to have the benefit of (a) the
indemnification and payment provisions of Article VIII hereof, and (b) the
agreements set forth in Section 9.8 and 9.9 hereof, shall survive any
termination of this Agreement or the termination of any other rights of the
Redwood Insurer hereunder;. provided, further, that if, following the payment in
full of the Aggregate Unpaids, there is a Redwood Insurance Draw as a result of
any action taken in connection with any Event of Bankruptcy relating to any
Obligor, the Originator, the Collection Agent, the Transferor or any Affiliate
of any of the foregoing, then all rights under this Agreement shall be
automatically reinstated in full and shall remain in full force and effect until
the parties hereunder have been indefeasibly paid in full.
[remainder of page intentionally left blank]
54
58
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amended and Restated Receivables Transfer Agreement as of the date first written
above.
MP RECEIVABLES COMPANY,
as Transferor
By:
----------------------------------------
Name:
Title:
CAREMARK INC.,
as Originator and as Collection Agent
By:
----------------------------------------
Name:
Title:
59
REDWOOD RECEIVABLES CORPORATION
By:
----------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Redwood Group Agent and as Funding Agent
By:
----------------------------------------
Name:
Title: Duly Authorized Signatory
▇▇
▇▇▇▇ ▇▇▇▇▇▇ RECEIVABLES CORPORATION
By:
----------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as PARCO Group Agent
By:
----------------------------------------
Name:
Title:
61
EXHIBIT A
[FORM OF CONTRACT]
Exhibit A - Page 1
62
EXHIBIT B
[FORM OF DEPOSIT REPORT]
Exhibit B - Page 1
63
EXHIBIT C
List of Lock-Box Banks and Accounts
Bank Bank One, N.A.
Account MP Receivables Company
Account Number 58-08219
Exhibit C - Page 1
64
EXHIBIT D
FORM OF LOCK-BOX AGREEMENT
[DATE]
[NAME AND ADDRESS
OF LOCK-BOX BANK]
Re: [COLLECTION AGENT]
Lock-Box Account
No[S]. ___________
Ladies and Gentlemen:
[COLLECTION AGENT] ("COLLECTION AGENT") hereby notifies The First
National Bank of Chicago that in connection with certain transactions involving
its accounts receivable, it has transferred exclusive ownership and dominion of
its lock-box account no[S]. __________ maintained with you (collectively the
"Accounts") to MP Receivables Company ("Transferor"), which then transferred
exclusive ownership and dominion of the Accounts to General Electric Capital
Corporation, as agent for the Transferees (the "Funding Agent"), and that
[COLLECTION AGENT] and Transferor will transfer exclusive control of the
Accounts to the Funding Agent effective upon delivery to you of the Notice of
Effectiveness (as hereinafter defined). The Lockbox Service Terms dated
_________ are incorporated into this Agreement by reference; provided, however,
in the event of a conflict between the provisions of the Lockbox Service Terms
and this Agreement, the provisions of this Agreement shall control.
In furtherance of the foregoing, [COLLECTION AGENT], Transferor and the
Funding Agent hereby instruct you, beginning on the date of your receipt of the
Notice of Effectiveness: (i) to collect the monies, checks, instruments and
other items of payment mailed to the Accounts; (ii) to deposit into the Accounts
all such monies, checks, instruments and other items of payment or all funds
collected with respect thereto (unless otherwise instructed by the Funding
Agent); and (iii) to transfer all funds deposited and collected in the Accounts
pursuant to instructions given to you by the Funding Agent from time to time.
You are hereby further instructed: (i) unless and until the Funding
Agent notifies you to the contrary at any time after your receipt of the Notice
of Effectiveness, to make such transfers from the Accounts at such times and in
such manner as [COLLECTION AGENT], in its capacity as collection agent for the
Funding Agent and Transferor, shall from time to time instruct to the extent
such instructions are not inconsistent with the instructions set forth herein,
and (ii) to permit [COLLECTION AGENT] (in its capacity as collection agent for
the Funding Agent and Transferor), Transferor and the Funding Agent to obtain
upon request any information
Exhibit D - Page 1
65
relating to the Accounts, including, without limitation, any information
regarding the balance or activity of the Accounts.
Each of [COLLECTION AGENT] and Transferor also hereby notifies you
that, beginning on the date of your receipt of the Notice of Effectiveness and
notwithstanding anything herein or elsewhere to the contrary, the Funding Agent,
and not the Collection Agent or Transferor, shall be irrevocably entitled to
exercise any and all rights in respect of or in connection with the Accounts,
including, without limitation, the right to specify when payments are to be made
out of or in connection with the Accounts. The Funding Agent has a continuing
interest in all of the checks and their proceeds and all monies and earnings, if
any, thereon in the Accounts, and you shall be the Funding Agent's agent for the
purpose of holding and collecting such property. The monies, checks, instruments
and other items of payment mailed to, and funds deposited to, the Accounts will
not be subject to deduction, set-off, banker's lien, or any other right in favor
of any person other than the Funding Agent (except that you may set off (i) all
amounts due to you in respect of your customary fees and expenses for the
routine maintenance and operation of the Accounts, and (ii) the amount of any
checks and any ACH transactions which have been credited to the Accounts and
returned for any reason.
You may terminate this Agreement at any time with 30 days prior written
notice to the Funding Agent.
None of the Collection Agent, Funding Agent or you may assign or
transfer any of its rights or obligations under this Agreement, except that you
may assign or transfer your rights hereunder to a wholly owner subsidiary.
Subject to the preceding sentence, this Agreement shall be binding upon each of
the parties hereto and their respective successors and assigns, and shall inure
to the benefit of, and be enforceable by, the Funding Agent, each of the parties
hereto and their respective successors and assigns.
You hereby represent that the person signing this Agreement on your
behalf is duly authorized by you to so sign.
You agree to give the Funding Agent, Transferor and [COLLECTION AGENT]
prompt notice if the Accounts become subject to any writ, garnishment, judgment,
warrant of attachment, execution or similar process.
[COLLECTION AGENT] AGREES TO INDEMNIFY AND HOLD YOU HARMLESS FROM AND
AGAINST ANY AND ALL LIABILITIES, LOSSES, COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES) WHICH YOU MAY SUFFER OR INCUR IN CONNECTION WITH
THIS AGREEMENT OR THE MAINTENANCE OF THE ACCOUNTS, INCLUDING BUT NOT LIMITED TO
THOSE WHICH IN WHOLE OR IN PART ARISE OUT OF YOUR NEGLIGENCE, BUT NOT INCLUDING
THOSE ARISING OUT OF YOUR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. YOU WILL BE
LIABLE ONLY FOR DIRECT DAMAGES IN THE EVENT THAT YOU FAIL TO EXERCISE ORDINARY
CARE. IN NO EVENT SHALL YOU BE
Exhibit D - Page 2
66
LIABLE FOR ANY INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES.
Notwithstanding any other provision of this Agreement, you shall not be
liable for any failure, inability to perform, or delay in performance hereunder,
if such failure, inability, or delay is due to acts of God, war, civil
commotion, governmental action, fire, explosion, terrorist activities, strikes,
other industrial disturbances, equipment malfunction, outages of computers,
action, non-action or delayed action on the part of [COLLECTION AGENT],
Transferor or Funding Agent, or any other entity or any other causes that are
beyond your reasonable control, or for any such failure, or delay resulting from
your reasonable belief that the action would violate any guideline, rule or
regulation of any governmental authority.
Any notice, demand or other communication required or permitted to be
given hereunder shall be in writing and may be personally served or sent by
facsimile or by courier service or by United States mail and shall be deemed to
have been delivered when delivered in person or by courier service or by
facsimile or three (3) Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly addressed). For the
purposes hereof, (i) the addresses of the parties hereto shall be as set forth
below each party's name below, or, as to each party, at such other address as
may be designated by such party in a written notice to the other party and the
Funding Agent and (ii) the address of the Funding Agent shall be General
Electric Capital Corporation, _________________, Attention: _____________,
Telephone: _______________, Telecopy: ______________ or at such other address as
may be designated by the Funding Agent in a written notice to each of the
parties hereto.
Please agree to the terms of, and acknowledge receipt of, this notice
by signing in the space provided below.
The transfer of control of the Accounts, referred to in the first
paragraph of this letter, shall become effective upon delivery to you of a
notice (the "Notice of Effectiveness") in substantially the form attached hereto
as Annex "1".
Very truly yours,
[COLLECTION AGENT]
By:
----------------------------------------
Title:
-------------------------------------
Attention:
---------------------------------
Facsimile No.:
-----------------------------
Exhibit D - Page 3
67
ACKNOWLEDGED AND AGREED:
[NAME OF LOCK-BOX BANK] GENERAL ELECTRIC CAPITAL
CORPORATION
By: By:
----------------------------- --------------------------------
Title: Title:
-------------------------- -----------------------------
Date: Date:
--------------------------- ------------------------------
[ADDRESS] [ADDRESS]
Attention: Attention:
---------------------- -------------------------
Facsimile No.: Facsimile No.:
------------------ ---------------------
MP RECEIVABLES COMPANY
By:
-----------------------------
Title:
--------------------------
Date:
---------------------------
[ADDRESS]
Attention:
----------------------
Facsimile No.:
------------------
Exhibit D - Page 4
68
ANNEX 1
TO LOCK-BOX AGREEMENT
[FORM OF NOTICE OF EFFECTIVENESS]
DATED: , 200
-------------- -
TO: [NAME OF LOCK-BOX BANK]
[ADDRESS]
ATTN:
----------------------
Re: Lock-Box Account No[S].
-------
Ladies and Gentlemen:
We hereby give you notice that the transfer of control of the
above-referenced Lock-Box ACCOUNT[S], as described in our letter agreement with
you dated ______________ , 2001 is effective as of the date hereof. You are
hereby instructed to comply immediately with the instructions set forth in that
letter.
Very truly yours,
[NAME OF COLLECTION AGENT]
By:
----------------------------------------
Title:
-------------------------------------
ACKNOWLEDGED AND AGREED:
[NAME OF LOCK-BOX BANK]
By:
------------------------------
Title:
---------------------------
Date:
----------------------------
[ADDRESS]
Attention:
-----------------------
Facsimile No.:
-------------------
69
EXHIBIT E
[FORM OF SETTLEMENT REPORT]
Exhibit E - Page 1
70
EXHIBIT F
[FORM OF TRANSFER CERTIFICATE]
TRANSFER CERTIFICATE
Reference is made to the Amended and Restated Receivables Transfer
Agreement, dated as of January 31, 2001 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Agreement"), by and among MP
Receivables Company, as transferor (in such capacity, the "Transferor"),
Caremark Inc., as originator and as collection agent (in such capacity, the
"Collection Agent"), Redwood Receivables Corporation ("Redwood"), Park Avenue
Receivables Corporation ("PARCO"), The Chase Manhattan Bank and General Electric
Capital Corporation, as funding agent. Terms defined in the Agreement, or
incorporated therein by reference, are used herein as therein defined.
The Transferor hereby conveys, transfers and assigns to the Funding
Agent, as agent for the Transferees, an undivided ownership interest in the
Receivables and the Related Security, Collections and Proceeds with respect
thereto (each, an "Incremental Transfer"). Each Incremental Transfer by the
Transferor to the Funding Agent, as agent for the Transferees, and each
reduction or increase in the Net Investment in respect of each Incremental
Transfer evidenced hereby, shall be indicated by the Funding Agent on the grid
attached hereto which is part of this Transfer Certificate.
This Transfer Certificate is made without recourse except as otherwise
provided in the Agreement.
This Transfer Certificate shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Transfer
Certificate to be duly executed and delivered by its duly authorized officer as
of the date first above written.
MP RECEIVABLES COMPANY
By
----------------------------------------
Name:
Title:
Exhibit F - Page 1
71
GRID
Net Investment
Date of Amount of (Giving Effect to
Incremental Transfer Incremental Transfer Incremental Transfer)
-------------------- -------------------- ---------------------
Exhibit F - Page 2
72
EXHIBIT G
List of Actions and Suits
Exhibit G - Page 1
73
EXHIBIT H
Location of Records
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇ ▇/▇▇▇-▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Iron Mountain
205/328-3282 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇▇/▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
800/541-2934 ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇/▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇., ▇-▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Management ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇/▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇. 847/634-7600
Ft. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Chicago Records Management
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
954/384-5500 847/676-0002
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 847/634-7900
813/881-0848
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
Iron Mountain Record Storage ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 847/559-5770
770/242-8480
▇▇▇▇▇ & Co., Inc.
Iron Mountain ▇.▇. ▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Exhibit H - Page 1
74
847/675-1900 Park West One, Suite ▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇/▇▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
913/599-5166 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Suite 209 901/386-6108
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
502/822-8774 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Suite 150 972/623-1126
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
410/381-7770 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇/▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
508/634-6800 Bldg. C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
248/473-5858 210/521-3000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
651/635-5505 210/521-3000
▇▇ ▇▇ ▇▇▇. ▇▇▇▇▇ ▇▇▇ Safesite Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
800/447-4791 210/520-1841
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
919/787-0292 425/402-9199
Exhibit H - Page 2
75
EXHIBIT I
List of Subsidiaries, Divisions and Tradenames
Subsidiaries:
MP Receivables Company
Prescription Health Services, Inc.
Divisions:
None.
Tradenames:
None.
76
EXHIBIT J
FORM OF SECRETARY'S CERTIFICATE
I, __________________, the undersigned ________________ of (" "), a
________ corporation, DO HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Incorporation of _______________________as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
By-laws of _____________ as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Board of Directors of___________________________
[ADOPTED BY CONSENT] as of______________________, 2001, authorizing the
execution, delivery and performance of each of the documents mentioned therein,
which resolutions have not been revoked, modified, amended or rescinded and are
still in full force and effect.
4. Attached hereto as Annex D are copies of good standing
certificates of___________________, certified by the Secretaries of State of the
States of ___________ and ___________.
5. The below-named persons have been duly qualified as and at all
times since ________________, 2001, to and including the date hereof have been
officers or representatives of_____________________ holding the respective
offices or positions below set opposite their names and are authorized to
execute on behalf of_______________ the below-mentioned Receivables Transfer
Agreement and all other Transaction Documents (as defined in such Receivables
Transfer Agreement) to which _____________ is a party and the signatures below
set opposite their names are their genuine signatures:
Name Office Signatures
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77
The representations and warranties of ________________contained in
Article III of the Amended and Restated Receivables Transfer Agreement (the
"Receivables Transfer Agreement"), dated as of January 31, 2001 among Redwood
Receivables Corporation, General Electric Capital Corporation, MP Receivables
Company, Caremark Inc., Park Avenue Receivables Corporation and The Chase
Manhattan Bank are true and correct as if made on the date hereof.
WITNESS my hand and seal of _________________ as of this ____ day of
__________, 2001.
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Secretary
I, the undersigned, __________________ of _______________ , DO HEREBY
CERTIFY that _____________________ is the duly elected and qualified Secretary
of____________ and the signature above is his/her genuine signature.
WITNESS my hand as of this ____ day of __________, 2001.
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[OFFICER]