RECEIVABLES
PURCHASE AND SALE AGREEMENT
Dated as of December 14, 1993
Among
THE CONTINENTAL INSURANCE COMPANY
BOSTON OLD COLONY INSURANCE COMPANY
THE BUCKEYE UNION INSURANCE COMPANY
CASUALTY INSURANCE COMPANY
COMMERCIAL INSURANCE COMPANY OF NEWARK, N.J.
THE CONTINENTAL INSURANCE COMPANY OF NEW JERSEY
CONTINENTAL LLOYD'S INSURANCE COMPANY
CONTINENTAL REINSURANCE CORPORATION
THE FIDELITY AND CASUALTY COMPANY OF NEW YORK
FIREMEN'S INSURANCE COMPANY OF NEWARK, NEW JERSEY
THE GLENS FALLS INSURANCE COMPANY
KANSAS CITY FIRE AND MARINE INSURANCE COMPANY
THE MAYFLOWER INSURANCE COMPANY, LTD.
NATIONAL-BEN FRANKLIN INSURANCE COMPANY OF ILLINOIS
NIAGARA FIRE INSURANCE COMPANY
PACIFIC INSURANCE COMPANY
WORKERS' COMPENSATION AND INDEMNITY COMPANY OF CALIFORNIA
Collectively as Seller
and
THE PURCHASERS NAMED HEREIN
as Purchasers
and
CITICORP NORTH AMERICA, INC.
as Agent
TABLE OF CONTENTS
Section Page
Preliminary Statements.................. 1
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms................... 2
Adverse Claim........................... 2
Affiliate............................... 2
Assignee................................ 3
Assignment.............................. 3
Business Day............................ 3
Cash Purchase Price..................... 3
Citibank................................ 3
Collection Agent........................ 3
Collection Agent Fee.................... 3
Collections............................. 3
Company................................. 4
Continental............................. 4
Contract................................ 4
Credit and Collection Policy............ 4
Debt.................................... 4
Default Rate............................ 4
Defaulted Receivable.................... 5
Eligible Receivable..................... 5
ERISA................................... 7
Holdback Amount......................... 7
Holdback Termination Date............... 7
Initial Purchasers...................... 7
Insured................................. 7
Intercompany Pooling Agreement.......... 7
Majority Purchasers..................... 8
Originator.............................. 8
Outstanding Balance..................... 8
Ownership Document...................... 8
Past Due................................ 8
Person.................................. 8
Purchase................................ 8
Purchased Receivables................... 8
Purchaser............................... 9
Purchaser Report........................ 9
Receivable.............................. 9
Related Security........................ 9
Section Page
Seller.................................. 9
Settlement Date......................... 10
Share Percentage........................ 10
Target Amount........................... 10
UCC..................................... 10
Section 1.02 Other Terms............................. 10
Section 1.03 Computation of Time Periods............. 10
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASE
Section 2.01 The Purchase............................ 11
Section 2.02 Making the Purchase from the Seller..... 11
Section 2.03 Fees.................................... 12
Section 2.04 Settlement Procedures................... 12
Section 2.05 Commissions............................. 15
Section 2.06 Payments and Computations, Etc.......... 16
Section 2.07 Sharing of Payments, Etc................ 16
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.01 Conditions Precedent to Purchase........ 17
Section 3.02 Conditions Subsequent to Purchase....... 20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of
Each Originator......................... 20
Section Page
ARTICLE V
GENERAL COVENANTS OF EACH ORIGINATOR
Section 5.01 Affirmative Covenants of Each
Originator.............................. 25
Section 5.02 Negative Covenants of Each Originator... 27
ARTICLE VI
ADMINISTRATION AND COLLECTION
Section 6.01 Designation of Collection Agent......... 28
Section 6.02 Duties of Collection Agent.............. 29
Section 6.03 Rights of the Agent..................... 31
Section 6.04 Responsibilities of the Seller.......... 32
Section 6.05 Further Action Evidencing
the Purchase.......................... 33
Section 6.06 Application of Collections.............. 34
ARTICLE VII
THE AGENT
Section 7.01 Authorization and Action................ 34
Section 7.02 Agent's Reliance, Etc................... 35
Section 7.03 CNA and Affiliates...................... 36
Section 7.04 Purchaser's Purchase Decision........... 36
ARTICLE VIII
ASSIGNMENT OF SHARE PERCENTAGE
Section 8.01 Assignment.............................. 36
Section 8.02 Authorization of Agent.................. 37
Section Page
Section 8.03 Payments to Agent....................... 37
Section 8.04 Assignment to Seller.................... 37
ARTICLE IX
INDEMNIFICATION
Section 9.01 Indemnities by the Seller and
the Originators....................... 38
ARTICLE X
MISCELLANEOUS
Section 10.01 Amendments, Etc......................... 40
Section 10.02 Notices, Etc............................ 41
Section 10.03 No Waiver; Remedies..................... 41
Section 10.04 Binding Effect; Assignability........... 41
Section 10.05 Governing Law........................... 42
Section 10.06 Costs, Expenses and Taxes............... 42
Section 10.07 No Proceedings.......................... 43
Section 10.08 Confidentiality......................... 43
Section 10.09 Trigger Events.......................... 45
Section 10.10 Independent Decision.................... 48
Section 10.11 Execution in Counterparts............... 48
LIST OF SCHEDULES AND EXHIBITS
SCHEDULE I List of Purchased Receivables
SCHEDULE II Purchaser Allocations
SCHEDULE III Forecasted Collections and Agents' Commissions
EXHIBIT A Form of Ownership Document
EXHIBIT B Form of Assignment of Purchased Receivable
EXHIBIT C Form of Contracts
EXHIBIT D Form of Purchaser Report
EXHIBIT E Form of Opinion(s) of Counsel for Seller and
Each Originator
EXHIBIT E-1 Form of Opinion of Counsel for The Continental
Corporation
EXHIBIT E-2 Form of Opinion of Counsel for Seller and
Each Originator
EXHIBIT F List of Offices of Each Originator Where
Records Are Kept
EXHIBIT G Form of Company Agreement
RECEIVABLES
PURCHASE AND SALE AGREEMENT
Dated as of December 14, 1993
THE CONTINENTAL INSURANCE COMPANY, a New Hampshire
corporation, BOSTON OLD COLONY INSURANCE COMPANY, a Massachusetts
corporation, THE BUCKEYE UNION INSURANCE COMPANY, an Ohio
corporation, CASUALTY INSURANCE COMPANY, an Illinois corporation,
COMMERCIAL INSURANCE COMPANY OF NEWARK, N.J., a New Jersey
corporation, THE CONTINENTAL INSURANCE COMPANY OF NEW JERSEY, a New
Jersey corporation, CONTINENTAL LLOYD'S INSURANCE COMPANY, a
Lloyd's organization formed under the Texas Insurance Code,
CONTINENTAL REINSURANCE CORPORATION, a California corporation, THE
FIDELITY AND CASUALTY COMPANY OF NEW YORK, a New Hampshire
corporation, FIREMEN'S INSURANCE COMPANY OF NEWARK, NEW JERSEY, a
New Jersey corporation, THE GLENS FALLS INSURANCE COMPANY, a
Delaware corporation, KANSAS CITY FIRE AND MARINE INSURANCE
COMPANY, a Missouri corporation, THE MAYFLOWER INSURANCE COMPANY,
LTD., an Indiana corporation, NATIONAL-BEN FRANKLIN INSURANCE
COMPANY OF ILLINOIS, an Illinois corporation, NIAGARA FIRE
INSURANCE COMPANY, a Delaware corporation, PACIFIC INSURANCE
COMPANY, a California corporation, and WORKERS' COMPENSATION AND
INDEMNITY COMPANY OF CALIFORNIA, a California corporation (each
such corporation, individually, being herein referred to as an
"Originator" and, collectively, as the "Originators" or the
"Seller"), the purchasers listed on the signature pages hereof
(collectively with any Person that has become an Assignee hereunder
pursuant to Section 8.01, being the "Purchasers" and, individually,
a "Purchaser"), and CITICORP NORTH AMERICA, INC., a Delaware
corporation, individually ("CNA") and as agent for the Purchasers
(the "Agent"), agree as follows:
PRELIMINARY STATEMENTS. (1) Certain terms which are
capitalized and used throughout this Agreement (in addition to
those defined above) are defined in Article I of this Agreement.
(2) As of the date hereof, the Originators constitute all
of the parties to that certain Intercompany Pooling Agreement
effective January 1, 1984 as heretofore amended by certain addenda
thereto (as so amended and as further, from time to time, amended,
modified or supplemented pursuant to one or more addenda or
otherwise, the "Intercompany Pooling Agreement"), pursuant to which
each Originator (other than Continental, Pacific Insurance Company,
Casualty Insurance Company and Workers' Compensation and Indemnity
Company of California) sold, transferred and assigned, and
continues to sell, transfer and assign, to Continental certain
accounts receivable, including the Receivables, to the extent of
such Originator's right, title and interest therein, and
simultaneously therewith Continental sold, transferred and
assigned, and continues to sell, transfer and assign, to each
Originator (other than Continental) a percentage interest and
participation in such accounts receivable and in certain of its
accounts receivable, including the Receivables, to the extent of
its right, title and interest therein.
(3) The Seller wishes to sell and the Purchasers are
prepared to purchase certain Receivables and to assume the
liabilities for commission expenses related thereto.
(4) CNA has been requested and is prepared to act as
Agent.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim of any Person other than a
right or claim (i) created by this Agreement in favor of the
Purchasers, (ii) as against any Contract (but not the related
Purchased Receivables) for payment of a loss, asserted by a Person
who is a loss payee under such Contract, (iii) as against any
Contract (but not the related Purchased Receivables) for
contribution for payment of a loss, asserted by any Originator by
reason of reinsurance provided for in the Intercompany Pooling
Agreement or (iv) asserted by any insurance agent with respect to
commissions, including any lien, security interest, charge or
encumbrance relating to such agent's claim, but only to the extent
the rights and claims referred to in this clause (iv) do not in the
aggregate exceed the amount referred to in Section 4.01(p).
"Affiliate" means (i) as to any Person, any other Person
that (x) directly or indirectly is in control of, is controlled by
or is under common control with such Person or (y) is a director or
officer of such Person or of any other Person that directly or
indirectly is in control of, is controlled by or is under common
control with such Person, (ii) as to CNA, shall also include
Corporate Asset Funding Company, Inc., (iii) as to Atlantic Asset
Securitization Corp., shall also include Credit Lyonnais, (iv) as
to Falcon Asset Securitization Corporation, shall also include The
First National Bank of Chicago and (v) as to Sheffield Receivables
Corporation, shall also include Barclays Bank PLC.
"Assignee" means any Person to which a Share Percentage of
Purchased Receivables has been, or shall be, assigned by a
Purchaser pursuant to Section 8.01; provided, however, that
"Assignee" shall not include any Person that is engaged primarily,
or is a member of a group (consisting of such Person and all of its
Affiliates) which is engaged primarily, in the business of
underwriting or selling insurance.
"Assignment" means an assignment, in substantially the
form of Exhibit B, by which any Share Percentage shall be assigned.
"Business Day" means any day other than a Saturday, Sunday
or public holiday or the equivalent for banks in New York City or
Chicago.
"Cash Purchase Price" for a Purchaser means the amount
shown as the "Cash Purchase Price" for such Purchaser on Schedule
II.
"Citibank" means Citibank, N.A., a national banking
association.
"Collection Agent" means at any time the Person then
authorized pursuant to Article VI to service, administer and
collect on behalf of the Purchasers the Receivables.
"Collection Agent Fee" has the meaning assigned to that
term in Section 2.03.
"Collections" means, with respect to any Purchased
Receivable, all cash collections and other cash proceeds of such
Purchased Receivable, including, without limitation, all cash
proceeds of Related Security with respect to such Purchased
Receivable, and any Collection of such Purchased Receivable deemed
to have been received pursuant to clauses (i) and (ii) of Section
2.04(c).
"Company" means The Continental Corporation, a New York
corporation.
"Continental" means The Continental Insurance Company, a
New Hampshire corporation, and any corporation which may succeed to
the business and assets of such corporation by merger or
consolidation or acquisition of assets.
"Contract" means a policy of insurance issued by an
Originator in favor of another Person, and billed by an invoice in
substantially the form set forth in Exhibit C, pursuant to or under
which such Originator shall provide insurance to such other Person.
"Credit and Collection Policy" means those credit and
collection policies and practices existing on the date hereof which
are being followed by the Seller with respect to Contracts and
Receivables related thereto, including those policies and practices
maintained by the Seller's computer system, as modified in
compliance with Section 5.02(c).
"Debt" means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations to pay the deferred purchase price
of property or services, (iv) obligations as lessee under leases
which shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (v)
obligations under direct or indirect guaranties (other than
obligations arising under insurance policies and bonds issued by
any Originator in the ordinary course of its business) in respect
of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (i) through (iv) above (other than
obligations arising under insurance policies and bonds issued by
any Originator in the ordinary course of its business), and (vi)
liabilities in respect of unfunded benefits under plans covered by
Title IV of ERISA.
"Default Rate" means a fluctuating interest rate per annum
as shall be in effect from time to time, which rate per annum shall
at all times be equal to 2% per annum plus the higher of:
(a) the rate of interest announced publicly by Citibank
in New York, New York, from time to time as Citibank's base
rate; or
(b) 1/2 of one percent above the latest three-week moving
average of secondary market morning offering rates in the
United States for three-month certificates of deposit of major
United States money market banks, such three-week moving
average being determined weekly on each Monday (or if such day
is not a Business Day, on the next succeeding Business Day) for
the three-week period ending on the previous Friday by Citibank
on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New
York or, if such publication shall be suspended or terminated,
on the basis of quotations for such rates received by Citibank
from three New York certificate of deposit dealers of
recognized standing, in either case adjusted to the nearest 1/4
of one percent or, if there is no nearest 1/4 of one percent,
to the next higher 1/4 of one percent.
"Defaulted Receivable" means a Receivable:
(i) as to which any payment, or part thereof, is Past
Due;
(ii) as to which the Insured thereof or any other Person
obligated thereon or owning any Related Security in respect
thereof, has taken any action, or suffered any event to occur,
of the type described in Section 10.09(h);
(iii) which, consistent with the Credit and Collection
Policy, would be written off the Seller's books as
uncollectible;
(iv) as to which the Insured thereof or the Seller has
breached the Contract relating thereto; or
(v) which the insurance agent responsible for the
collection thereof has been unable to collect and an Originator
has undertaken to collect directly from the Insured.
"Eligible Receivable" means a Receivable:
(i) the Insured of which is a United States resident and
is not a government or a governmental subdivision or agency;
provided that the Insured may be a government or a governmental
subdivision or agency so long as the aggregate Outstanding
Balance of Receivables of such Insureds purchased hereunder
does not exceed 10% of the aggregate Cash Purchase Price for
all Purchasers;
(ii) the Insured of which is listed on Schedule I hereto;
(iii) the Insured of which is not the Insured on any
Contract with respect to which there is a Defaulted Receivable;
(iv) which arises under a Contract currently in effect or
the effective date of which will be within 30 days after the
date of Purchase;
(v) which, on the date of Purchase, is not a Defaulted
Receivable;
(vi) which, according to the Contract related thereto, is
required to be paid in full by the earlier of (a) one year
after the effective date of the Contract giving rise thereto or
(b) one year after the date of Purchase hereunder;
(vii) which arises under a Contract which has been duly
authorized and which, together with such Receivable, is in full
force and effect (or which will be in full force and effect
within 30 days after the date of Purchase) and which is not on
the date of Purchase the subject of any dispute;
(viii) which does not arise under a Contract underwritten by
the Marine Office of America Corporation or Associated Aviation
Underwriters providing for commercial marine or commercial
aviation insurance;
(ix) which, together with the Contract related thereto,
does not contravene in any material respect any laws, rules or
regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and
with respect to which Receivable the Originator is not in
violation of any such law, rule or regulation in any material
respect;
(x) which satisfies all applicable requirements of the
Credit and Collection Policy;
(xi) which is an "account receivable representing all or
part of the sales price of merchandise, insurance or services"
within the meaning of Section 3(c)(5) of the Investment Company
Act of 1940, as amended;
(xii) which arose under a transaction which is a "current
transaction" within the meaning of Section 3(a)(3) of the
Securities Act of 1933, as amended;
(xiii) which is an "account" or "general intangible" within
the meaning of Section 9-106 of the UCC of all applicable
jurisdictions;
(xiv) which is denominated and payable only in United
States dollars in the United States of America;
(xv) as to which, at or prior to the time of Purchase
hereunder, the Agent has not notified the Seller that the Agent
has determined, in its sole discretion, that such Receivable
(or class of Receivables) is not acceptable for purchase by a
Purchaser hereunder; and
(xvi) the Outstanding Balance of which, together with the
Outstanding Balance of each other Purchased Receivable of the
same Insured, does not exceed more than 33% of the aggregate
Holdback Amount for all Purchasers.
"ERISA" means the U.S. Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Holdback Amount" for a Purchaser means the amount shown
as the "Holdback Amount" for such Purchaser on Schedule II.
"Holdback Termination Date" has the meaning specified in
Section 2.04(d).
"Initial Purchasers" means the Purchasers as of the date
of the Purchase.
"Insured" means a Person party to a Contract in favor of
whom the policy of insurance evidenced by such Contract has been
issued.
"Intercompany Pooling Agreement" has the meaning specified
in the Preliminary Statements.
"Majority Purchasers" means at any time at least two
Purchasers owning in aggregate a Share Percentage of the Purchased
Receivables of more than 50.00%.
"Originator" has the meaning assigned to such term in the
paragraph preceding the Preliminary Statements.
"Outstanding Balance" means, with respect to any
Receivable at any time, the then outstanding principal balance
thereof without giving effect to any deductions for the payment of
commissions to agents of the Originators in accordance with
Section 2.05, and "Outstanding Balance" means, with respect to all
Purchased Receivables at any time, the then outstanding aggregate
principal balance of all Purchased Receivables without giving
effect to any deductions for the payment of commissions to agents
of the Originators in accordance with Section 2.05.
"Ownership Document" means a document delivered by the
Seller to a Purchaser, in substantially the form of Exhibit A,
evidencing such Purchaser's undivided ownership interest in the
Purchased Receivables.
"Past Due" means, with respect to a Receivable billed
directly by the Seller, 30 days past the date on which such
Receivable is originally due from the Insured to the Seller under
the terms of the Contract, and with respect to a Receivable billed
by an insurance agent of the Seller, 45 days after the last day of
the calendar month in which such Receivable was originally due to
such agent by the Insured under the terms of the Contract (but in
no event more than 75 days past the date such Receivable was
originally due from the Insured to such agent under the terms of
the Contract); for administrative convenience, February shall be
deemed to have 30 days.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Purchase" means the purchase of the Purchased Receivables
that are listed on Schedule I.
"Purchased Receivables" means Receivables purchased from
the Seller, in accordance with Section 2.02(a) and listed on
Schedule I hereto.
"Purchaser" shall have the meaning specified in the
introductory paragraph hereof.
"Purchaser Report" means a report, in substantially the
form of Exhibit D and including such other information as any of
the Initial Purchasers or the Agent, as applicable, may reasonably
request, furnished by the Collection Agent to the Initial
Purchasers or the Agent pursuant to Section 2.04(e).
"Receivable" means all amounts (including premiums and
advance billings for premiums but excluding service charges imposed
on installment payments) from time to time payable by an Insured to
an Originator under (or, in the case of advance billings, relating
to) a Contract arising out of the sale of insurance. For purposes
of Section 2.04(c)(i), each invoice for payment pursuant to such
Contract shall be deemed, for administrative convenience, to
represent a separate Receivable for purposes of this Agreement. In
the case of Receivables arising from a Contract in respect of
worker's compensation or other coverages subject to retrospective
adjustment, the Receivable shall mean the deposit premium without
adjustment for subsequent audit.
"Related Security" means with respect to any Receivable:
(i) all security interests or liens and property subject
thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such
Receivable or otherwise; and
(ii) all guarantees and other agreements or arrangements
of whatever character from time to time supporting or securing
payment of such Receivable, whether pursuant to the Contract
related to such Receivable or otherwise.
"Seller" has the meaning assigned to such term in the
paragraph preceding the Preliminary Statements. The parties hereto
agree that at any time and from time to time the Originators may
designate a single Originator to act for and on behalf of the
Seller for all purposes under this Agreement; Continental is hereby
so designated (any redesignation shall be effective for purposes
hereof by notice from each of the Originators to the Agent
designating another Originator to act for and on behalf of the
Seller hereunder).
"Settlement Date" means each date set forth on Schedule
III as a "Settlement Date", and in the case of any month subsequent
to such dates, the 15th Business Day after the last day of each
such calendar month.
"Share Percentage" means (a) for each Initial Purchaser,
the undivided percentage interest set forth for such Purchaser on
Schedule II to this Agreement; and (b) immediately following each
assignment pursuant to Article VIII by any assignor to any
Assignee(s), an undivided percentage interest equal (i) in the case
of the Share Percentage of such Assignee, to the product of (A) the
Share Percentage of such assignor immediately prior to such
assignment multiplied by (B) 100% (in the case of an assignment in
full) or the fraction indicated in the related Assignment (in the
case of a partial Assignment) and (ii) in the case of the Share
Percentage of such assignor, to the difference between the Share
Percentage of such assignor immediately prior to giving effect to
such assignment and the related Share Percentage of such
Assignee(s) calculated pursuant to clause (i) above.
"Target Amount" for a Purchaser means the amount shown as
"Target Amount" for such Purchaser on Schedule II.
"UCC" means the Uniform Commercial Code as from time to
time in effect in the specified jurisdiction.
SECTION 1.02. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles. All terms used in
Article 9 of the UCC in effect in the State of New York and not
specifically defined herein are used herein as defined in such
Article 9.
SECTION 1.03. Computation of Time Periods. Unless
otherwise stated in this Agreement, in the computation of a period
of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until"
each means "to but excluding".
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASE
SECTION 2.01. The Purchase. On the terms and conditions
hereinafter set forth, each Purchaser may, in its sole discretion,
purchase from the Seller, without recourse except for such limited
recourse as is expressly provided for herein, such Purchaser's
Share Percentage of the Receivables to be listed on Schedule I
hereto for a purchase price set forth in Section 2.02.
SECTION 2.02. Making the Purchase from the Seller. (a)
The Purchase shall be made on at least two Business Days' notice
(or such lesser notice as the Purchasers may accept) from the
Seller to the Agent, which notice shall specify the date of the
Purchase. The Agent shall promptly thereafter notify each
Purchaser of the date of the Purchase, and each Purchaser shall
promptly notify the Agent, which shall promptly notify the Seller,
whether such Purchaser has determined to make the Purchase. If any
Purchaser elects to make the Purchase, such Purchaser shall, upon
satisfaction of the conditions precedent set forth in Article III,
pay such Purchaser's Cash Purchase Price as provided in subsection
(b) below and such Purchaser's Holdback Amount as and when provided
in Section 2.04 and assume the liability for commissions as set
forth in Section 2.05. If any Purchaser does not elect to purchase
its Share Percentage of the Receivables on the date specified in
this Section 2.02(a), the Seller may in its sole discretion elect
to sell to one or more other Purchasers a modified Share Percentage
of such Receivables as may be agreed between the Seller and such
Purchaser or Purchasers.
(b) If any Purchaser elects to make the Purchase, on the
date of the Purchase such Purchaser shall, upon satisfaction of the
conditions precedent set forth in Article III, make available to
the Agent at its address referred to in Section 10.02 such
Purchaser's Cash Purchase Price payable to the Seller, as set forth
in Section 2.02(a) above, at an account maintained by the Agent
with Citibank as set forth on the signature pages hereof in
immediately available funds. After receipt by the Agent of such
funds, the Agent will pay the same by wire transfer in same day
funds to the Seller, at Chemical Bank, 270 Park Avenue, New York,
New York 10017, Attention: Tony Forgione, for credit to The
Continental Insurance Company (Account Number 140-0-50093).
SECTION 2.03. Fees. Each Purchaser shall pay to the
Collection Agent until the Holdback Termination Date for each
calendar month such Purchaser's Share Percentage of a collection
fee (the "Collection Agent Fee") in an amount equal to 1/4 of 1% of
the amount of Collections collected during such calendar month.
The Collection Agent Fee for any calendar month shall be deducted
by the Collection Agent from the amount due each Purchaser on
account of such Purchased Receivables for such calendar month
unless the Purchasers and the Collection Agent otherwise agree that
such Collection Agent Fee shall be paid monthly in arrears by each
Purchaser, in an amount equal to such Purchaser's Share Percentage
of the Collection Agent Fee, on the Settlement Date immediately
succeeding such calendar month.
SECTION 2.04. Settlement Procedures. (a) The Collection
Agent shall, on each day on which Collections of Purchased
Receivables are received by it with respect to any Purchased
Receivable (after removing and remitting to the Originator any
service charges excluded from the definition of "Receivables"),
hold such amount in trust for the Purchasers to be applied as
provided in Section 2.04(b) below.
(b) The Collection Agent shall deposit, to the account of
each Initial Purchaser, or, in the case of all other Purchasers, to
the account of the Agent, such Purchaser's Share Percentage of
Collections of Purchased Receivables into such account maintained
with such financial institution as shall be notified from time to
time in writing by the Agent to the Collection Agent (it being
understood that in the case of each Initial Purchaser such account
shall initially be the account set forth on the signature pages
hereof and in the case of all other Purchasers such account shall
initially be the Agent's account, number 4056-3772, maintained with
Citibank) as follows:
(i) Except as provided in (ii) below, all Collections
received in accordance with Section 2.04 on or before the last
day of each calendar month and not previously deposited in such
accounts by the Collection Agent on a prior Settlement Date
shall be so deposited on the Settlement Date occurring in the
immediately succeeding month; and
(ii) At any time that the Majority Purchasers are
reasonably insecure as to the ability of the Collection Agent
or an Originator to perform under this Agreement or are
reasonably dissatisfied with the collection performance of the
Purchased Receivables, and the Agent has been so advised, or if
any event of a type listed in Section 10.09 (without giving
effect to any grace period or required notice) shall occur and
be continuing, and in each case upon three Business Days'
notice from the Agent (such notice to be delivered at the
request of the Majority Purchasers), the Collection Agent shall
(a) segregate, as soon as possible given the practices in
effect on the date hereof, and (b) deposit as soon as possible,
but no less frequently than weekly, in such accounts all
amounts held in trust for the Purchasers in accordance with
Section 2.04 and not previously deposited in such accounts by
the Collection Agent; provided, however, that if the Purchasers
and the Collection Agent so agree in accordance with Section
2.03, the Collection Agent Fee shall be deducted from deposits
made by the Collection Agent pursuant to this Section 2.04(b).
Promptly after its receipt of any such Collections, the Agent
shall make distribution thereof to each Purchaser other than an
Initial Purchaser in an amount equal to such Purchaser's Share
Percentage of such Collections.
(c) For the purposes of this Section 2.04:
(i) if on any day the Outstanding Balance of any
Purchased Receivable is, or is deemed to be, reduced or
adjusted or no longer payable as a result of any cancellation
or deemed cancellation of a Contract, return of any premium, or
failure of an insurance agent to pay over any premium due to
the Seller or to the Collection Agent, or any adjustment made
by the Seller of such Purchased Receivable, then (x) in the
case of any return of any premium, or failure of an insurance
agent to pay over any premium due to the Seller or to the
Collection Agent, or any adjustment made by the Seller thereof,
the Seller shall be deemed to have received on such day a
Collection in respect of such Purchased Receivable in the
amount of such reduction or adjustment; (y) in the case of any
cancellation or deemed cancellation of a Contract, the Seller
shall be deemed to have received (on the date of such
cancellation or deemed cancellation) Collections in respect of
Purchased Receivables relating to such Contract that are not
then due, but the Seller shall not be deemed to have received
Collections in respect of Purchased Receivables that on the
date of the deemed cancellation are Past Due (however,
Collections on such Past Due Purchased Receivables from time to
time actually received shall be paid to the Purchasers in
accordance with Section 2.04); provided that, for the purposes
hereof, the Seller shall be deemed to have (whether or not it
actually has) cancelled any Contract for which a Purchased
Receivable is Past Due, such cancellation being deemed
effective on the date such Receivable becomes Past Due or such
lesser time period pursuant to the Seller's Credit and
Collection Policy;
(ii) if on any day any of the representations or
warranties in Section 4.01(h) is no longer true with respect to
any Purchased Receivable, the Seller shall be deemed to have
received on such day a Collection of such Purchased Receivable
in full; and each Purchaser shall, in accordance with Section
8.04, assign to the Seller all of such Purchaser's Share
Percentage of Purchased Receivables in respect of which the
Seller has been deemed under paragraph (i) or (ii) of this
Section 2.04(c) to have collected in full; for purposes of
determining under clause (ii) of said Section 4.01(h) whether
a Receivable was an "Eligible Receivable", reference shall only
be made to whether it was an "Eligible Receivable" at the time
of the Purchase;
(iii) except as provided in paragraph (i) or (ii) of this
Section 2.04(c), or as otherwise required by law or the
relevant Contract, all collections (whether or not Collections)
received from an Insured of any Receivable shall be applied to
the Receivables of such Insured in the order of the age of such
Receivables, starting with the oldest such Receivable, unless
such Insured designates its payment for application to specific
Receivables; and
(iv) if and to the extent any Purchaser shall be required
for any reason to pay over to an Insured any amount received on
its behalf hereunder, such amount shall be deemed not to have
been so received but rather to have been retained by the
Originator of such Insured's Receivable and, accordingly, such
Purchaser shall have a claim for such amount, payable when and
to the extent that any distribution from or on behalf of such
Insured is made in respect thereof.
(d) On and after the date (the "Holdback Termination
Date") on which each Purchaser shall have received Collections in
an aggregate amount (net of Collection Agent Fees payable pursuant
to Section 2.03 and commissions payable to insurance agents
pursuant to Section 2.05) equal to the sum of (x) the Cash Purchase
Price of such Purchaser and (y) the Target Amount of such
Purchaser, each Purchaser shall (A) pay such portion, if any, of
such Purchaser's Holdback Amount that the Seller may be entitled to
by remitting to the Seller an amount equal to any additional
Collections received by such Purchaser and may, at its option, by
notice to the Collection Agent, direct the Collection Agent to
deposit with the Seller all Collections received after the date
specified in such notice (in which case and notwithstanding
anything to the contrary the Seller shall undertake to pay the fees
of the Collection Agent and all commissions payable to the agents
of the Originators out of Collections on the Purchased Receivables
from such Collections), and (B) not earlier than 180 days after the
invoice date of the Purchased Receivable having the latest maturity
date, assign each Defaulted Receivable to the Originator thereof
without recourse.
(e) The Collection Agent shall prepare and forward to
each Initial Purchaser, not later than two Business Days prior to
each Settlement Date, a Purchaser Report based upon such
Purchaser's Share Percentage of Purchased Receivables, in
substantially the form of Exhibit D hereto. If there are
Purchasers other than the Initial Purchasers, the Collection Agent
shall prepare and forward to the Agent, for such Purchasers, not
later than two Business Days prior to each Settlement Date, a
Purchaser Report relating to the Purchased Receivables.
SECTION 2.05. Commissions. Each Purchaser undertakes to
pay its Share Percentage of all commissions payable to the agents
of the Originators out of and to the extent of its Share Percentage
of Collections on the Purchased Receivables hereunder, but such
Purchaser shall have no liability for any such commission (i) to
the extent it is in excess of the amount represented in Section
4.01(p) hereof or in any schedule or other writing delivered prior
to the purchase date by the Seller or the Originators hereunder or
(ii) for which there has been any failure, neglect, breach of duty
or other fault of an Originator serving as Collection Agent, or a
failure by any Originator to make payments to the Collection Agent
of sums required to be paid hereunder. Each Purchaser authorizes
the Collection Agent, out of Collections, to pay such commissions
promptly when due, and directs the Collection Agent to include a
report of such payments in the Purchaser Reports delivered
hereunder. Each urchaser consents (i) to the withholding by the
agents of the Originators of sums due to them as commissions in
respect of the Purchased Receivables, pursuant to their agency
contracts or practices, and (ii) to the withholding by the
Originators of amounts equal to commissions on Receivables deemed
collected hereunder, in each case not in excess of the amount
referred to in the first sentence of this Section 2.05. Each
Purchaser shall have a credit against its undertaking to pay
commissions hereunder for all commissions paid out of Collections
by the Collection Agent or withheld by agents or Originators
pursuant to the two preceding sentences.
SECTION 2.06. Payments and Computations, Etc. (a) All
amounts to be paid or deposited by the Seller or the Collection
Agent hereunder shall be paid or deposited in accordance with the
terms hereof into the accounts referred to in Section 2.04(b) no
later than 11:00 A.M. (New York City time) on the day when due in
lawful money of the United States of America by wire transfer in
same day funds at the office of the financial institution
designated by each Initial Purchaser on the signature pages hereof
or, as to each other Purchaser, as designated by such Purchaser to
the Agent.
(b) If the Collection Agent is not an Originator, the
Collection Agent shall pay all amounts due to the Seller within
five Business Days after the due date, plus, on any amount not so
paid by the Collection Agent, interest at the Default Rate
commencing after such fifth Business Day, provided, however, that
such interest rate shall not at any time exceed the maximum rate
permitted by applicable law.
(c) The Seller shall, to the extent permitted by
applicable law, pay interest to the Agent on any amount not paid by
the Seller when required to be paid by it hereunder, at an interest
rate per annum equal to the Default Rate, payable on demand,
provided, however, that such interest rate shall not at any time
exceed the maximum rate permitted by applicable law. Such interest
shall be for the account of, and shall be distributed to, each
Purchaser in an amount equal to such Purchaser's Share Percentage
of such interest and shall be paid by the Seller free and clear of,
and without deduction for, any taxes of any kind whatsoever.
(d) All computations of interest under subsection (c)
above shall be made on the basis of a year of 360 days for the
actual number of days (including the first but excluding the last
day) elapsed. Whenever any payment or deposit to be made hereunder
shall be stated to be due on a day other than a Business Day, such
payment or deposit shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in
the computation of such payment or deposit.
SECTION 2.07. Sharing of Payments, Etc. If any Purchaser
shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of setoff, or otherwise) on account of
its Share Percentage of Purchased Receivables in excess of its
ratable share of payments on account of the Purchased Receivables,
such Purchaser shall forthwith purchase from the other Purchasers
such participations in the Share Percentages of Purchased
Receivables owned by them as shall be necessary to cause such
purchasing Purchaser to share the excess payment ratably according
to the amounts due to each Purchaser with each of them; provided,
however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Purchaser, such purchase
from each other Purchaser shall be rescinded and each other
Purchaser shall repay to the purchasing Purchaser the purchase
price to the extent of such recovery, together with an amount equal
to such Purchaser's ratable share (according to the proportion of
(i) the amount of such Purchaser's required payment to (ii) the
total amount so recovered from the purchasing Purchaser) of any
interest or other amount paid or payable by the purchasing
Purchaser in respect of the total amount so recovered. For
purposes of this Section 2.07, each reference to any Purchaser or
Purchasers shall be deemed to refer to each such Purchaser and each
of its Affiliates that is a Purchaser hereunder.
ARTICLE III
CONDITIONS OF PURCHASE
SECTION 3.01. Conditions Precedent to Purchase. The
Purchase hereunder is subject to the conditions precedent that the
Agent shall have received on or before the date of Purchase the
following, each (unless otherwise indicated) dated such date, in
form and substance satisfactory to the Agent:
(a) Duly executed Ownership Documents for each Purchaser;
(b) Schedules I, II and III;
(c) A copy of the resolutions of the Executive Committee
of the Board of Directors or the Board of Directors of each
Originator (other than Continental Lloyd's Insurance Company)
and a Certificate of Attorney-in-Fact from Continental Lloyd's
Insurance Company authorizing this Agreement, the Ownership
Documents and the other documents to be delivered by it
hereunder and the transactions contemplated hereby, certified
as of such date by its Secretary or Assistant Secretary or, in
the case of Continental Lloyd's Insurance Company, its
Attorney-in-Fact;
(d) A certificate of the Secretary or Assistant Secretary
of each Originator or, in the case of Continental Lloyd's
Insurance Company, its Attorney-in-Fact, certifying the names
and true signatures of the officers authorized on its behalf to
sign this Agreement, the Ownership Documents and the other
documents to be delivered by it hereunder (on which certificate
the Agent and the Purchasers may conclusively rely unless and
until such time as the Agent shall receive from such Originator
a replacement certificate meeting the requirements of this
subsection (d));
(e) From each Originator, oral confirmation from an
appropriate person that proper Financing Statements (Form
UCC-1) have been filed or, if available, time stamped copies of
proper Financing Statements (Form UCC-1), dated a date
reasonably near to the date of the Purchase, naming such
Originator as the assignor of Purchased Receivables and Related
Security and CNA, as Agent, as assignee, or other similar
instruments or documents, as may be necessary or, in the
opinion of the Agent, desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the
Purchasers' ownership interests in all Purchased Receivables
and Related Security;
(f) From each Originator, time stamped copies of proper
Financing Statements (Form UCC-3), if any, necessary to release
all security interests and other rights of any person in the
Purchased Receivables and Related Security previously granted
by such Originator;
(g) Certified copies of Requests for Information (or a
similar search report certified by a party acceptable to the
Agent), dated a date reasonably near to the date of the
Purchase, listing all effective financing statements which name
each Originator (under its present name and any previous name)
as debtor and which are filed in the jurisdictions in which
filings were made pursuant to subsection (e) above, together
with copies of such financing statements (none of which, except
for the Financing Statements referred to in Section 3.01(e) or
financing statements released by the Financing Statements (Form
UCC-3) referred to in Section 3.01(f), shall cover any
Receivables, Related Security or Contracts);
(h) A favorable opinion of counsel for each Originator
and the opinion of counsel for the Company, in substantially
the form of Exhibit E and Exhibit E-1, respectively, and as to
such other matters as the Agent may reasonably request;
(i) A favorable opinion of Shearman & Sterling, counsel
for the Agent, as the Agent may reasonably request;
(j) From each Originator, a certificate of its chief
financial officer, controller or vice president or, in the case
of Continental Lloyd's Insurance Company, its Attorney-in-Fact,
that the representations and warranties contained in Section
4.01 are correct on and as of such date as though made on and
as of such date;
(k) From Continental, a certificate of its chief
financial officer, controller or vice president that the
information set forth in each document delivered by or on
behalf of the Seller relating to the actual writeoffs and
reserves for losses of the Seller's Receivables is true and
correct, which documents shall be attached to such certificate;
provided, however, that this subsection (k) shall not limit the
representation and warranty set forth in Section 4.01(i);
(l) An agreement of the Company, in favor of the Agent on
behalf of the Purchasers, in substantially the form of Exhibit
G;
(m) A copy of the resolutions of the Board of Directors
of the Company authorizing the agreement referred to in clause
(l) above;
(n) A certificate of the Secretary or Assistant Secretary
of the Company certifying the names and true signatures of the
officers authorized on its behalf to sign the agreement
referred to in clause (l) above; and
(o) Such other approvals, opinions or documents as the
Agent or any Purchaser may reasonably request.
SECTION 3.02. Conditions Subsequent to Purchase. When
available, and in any event within 45 days after the Purchase
hereunder, the Seller shall deliver to the Agent (i) certified
copies of Requests for Information or Copies (Form UCC-11) (or a
similar search report certified by a party acceptable to the
Agent), dated subsequent to the date of the filings made pursuant
to Section 3.01(e), listing all effective financing statements
which name each Originator (under its present name or any previous
name) as debtor and which are filed in the jurisdictions in which
filings were made pursuant to Section 3.01(e), together with copies
of such financing statements (none of which, except for the
Financing Statements referred to in Section 3.01(e), shall cover
any Purchased Receivables, Related Security or Contracts) and (ii)
an opinion of counsel to each Originator, who may be in-house
counsel, in the form appended hereto as Exhibit E-2, confirming
that the Agent, on behalf of the Purchasers, has acquired legal and
equitable title to, and ownership of, the Purchased Receivables
hereunder and the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of Each
Originator. Each Originator (including the Collection Agent, if an
Originator) represents and warrants as follows:
(a) Such Originator is a corporation duly incorporated,
or, in the case of Continental Lloyd's Insurance Company, duly
formed, validly existing and in good standing under the laws of
the jurisdiction of its organization and is duly qualified to
do business, and is in good standing, in every jurisdiction
where the failure to so qualify would materially adversely
affect such Originator's condition, financial or otherwise,
operations or prospects.
(b) The execution, delivery and performance by
suchOriginator of this Agreement, the Ownership Documents and
the other instruments and documents to be delivered by it
hereunder, and the transactions contemplated hereby and
thereby, are within such Originator's corporate powers, have
been duly authorized by all necessary corporate action, do not
contravene (i) such Originator's charter, by-laws or articles
of agreement, (ii) any law, rule or regulation applicable to
such Originator, (iii) any contractual restriction contained in
any indenture, loan or credit agreement, lease, mortgage,
security agreement, bond, note, or other agreement or
instrument binding on or affecting such Originator or its
property or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting such Originator or its
property, and do not result in or require the creation of any
lien, security interest or other charge or encumbrance upon or
with respect to any of its properties other than as
contemplated herein; and no transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
This Agreement has been duly executed and delivered by such
Originator.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by such Originator of this Agreement, the Ownership
Documents or any other document or instrument to be delivered
hereunder except for the filing of the UCC Financing Statements
referred to in Article III, all of which, at the time required
in Article III, shall have been duly made and shall be in full
force and effect.
(d) This Agreement constitutes, and the Ownership
Documents when executed and delivered hereunder shall
constitute, the legal, valid and binding obligation and act of
such Originator.
(e) The Ownership Documents, when executed and delivered
hereunder, will effect the transfer to each Initial Purchaser
of legal and equitable title to, and an undivided percentage
ownership, to the extent of such Purchaser's Share Percentage,
of Receivables purchased or purported to be purchased pursuant
to this Agreement, free and clear of any Adverse Claim.
(f) The statutory balance sheet of such Originator
(including the initial Collection Agent) as at December 31,
1992, and the related statutory statements of income and
surplus of such Originator for the fiscal year then ended, and
the statutory balance sheet for such Originator as at September
30, 1993, and the related statutory statements of income and
surplus of such Originator for the nine-month period then
ended, in each case certified by the controller or other
appropriate officer of such Originator, copies of which have
been furnished to the Agent, fairly present the financial
condition of such Originator for the periods ended on such
dates, all in accordance with accounting principles prescribed
or permitted and authorized by the department of insurance of
the state of incorporation of such Originator and consistently
applied to such financial statements, and since September 30,
1993, there has been no material adverse change in such
condition or operations.
(g) There are no actions, suits or proceedings pending,
or to the knowledge of such Originator threatened, against or
affecting such Originator or any subsidiary, or the property of
such Originator or of any subsidiary, in any court, or before
any arbitrator of any kind, or before or by any governmental
body, which may materially adversely affect either the
financial condition or operations of such Originator or such
Originator and its subsidiaries taken as a whole or the ability
of such Originator to perform its obligations under this
Agreement or the Ownership Documents delivered pursuant hereto.
Neither such Originator nor any subsidiary is in default with
respect to any order of any court, arbitrator or governmental
body, except for defaults, if any, with respect to orders of
governmental agencies which defaults do not have a material
adverse effect on the business or operations of such Originator
or any subsidiary.
(h) Each Receivable that is purchased pursuant to this
Agreement is assignable in accordance with this Agreement and
shall (i) on the date of the Purchase, immediately prior to
such Purchase, be owned by the Originators free and clear of
any Adverse Claim, (ii) at the time of the Purchase, be an
Eligible Receivable, and (iii) together with the Contract
related thereto, at all times after such time be free and clear
of any Adverse Claim. Upon the Purchase, each Purchaser shall
acquire legal and equitable title to, and an undivided
percentage ownership, to the extent of such Purchaser's Share
Percentage, of each Receivable listed on Schedule I hereto and
the Related Security, related Contract and Collections with
respect thereto free and clear of any Adverse Claim; and no
effective financing statement or other instrument similar in
effect covering any such Receivable or the Related Security,
related Contract or Collections with respect thereto shall at
any time be on file in any recording office, or otherwise be
effective, except such as may be filed in favor of the Agent in
accordance with this Agreement.
(i) No Purchaser Report (if prepared by Continental on
behalf of such Originator, or any Person with which the Seller
has subcontracted pursuant to Section 6.01, or to the extent
that information contained therein is supplied by the Seller on
behalf of such Originator or such other Person), information,
exhibit, financial statement, document, book, record or report
furnished or to be furnished by the Seller to the Agent or any
Purchaser in connection with this Agreement is or shall be
inaccurate in any material respect or omits or shall omit to
state a material fact or any fact necessary to make the
statements contained therein not materially misleading.
(j) The chief executive office of such Originator, other
than Continental Lloyd's Insurance Company and Casualty
Insurance Company, is located at 180 Maiden Lane, New York, New
York 10038. The chief executive office of Continental Lloyd's
Insurance Company is located at 600 North Pearl Street, Dallas,
Texas 75201 and the chief executive office of Casualty
Insurance Company is located at 321 South Clark Street,
Chicago, Illinois 60610. The offices where such Originator
keeps all its books, records and documents evidencing Purchased
Receivables or the related Contracts are located at the
addresses specified in Exhibit F (or at such other locations,
notified to the Agent in accordance with Section 5.01(f), in
jurisdictions where all action required by Section 6.05 has
been taken and completed).
(k) The transactions in which the Receivables
constituting the Purchased Receivables were created and
acquired by the Originators constituted "current transactions"
within the meaning of Section 3(a)(3) of the Securities Act of
1933, as amended. The Receivables constituting the Purchased
Receivables are "notes, drafts, acceptances, open accounts
receivable or other obligations representing part or all of the
sales price of merchandise, insurance or services" within the
meaning of Section 3(c)(5) of the Investment Company Act of
1940, as amended.
(l) All of the capital stock of such Originator, other
than Continental Lloyd's Insurance Company, is directly or
indirectly owned beneficially and of record by the Company.
All of the interests in Continental Lloyd's Insurance Company
are directly or indirectly beneficially owned by the Company.
(m) Each Purchased Receivable is assignable under
applicable law, and is not subject to any restriction or
limitation upon assignment under the Contract relating thereto.
(n) The Intercompany Pooling Agreement constitutes the
legal, valid and binding obligation of such Originator
enforceable against such Originator in accordance with its
terms. Pursuant to the Intercompany Pooling Agreement, each
Originator (i) has purchased and, immediately prior to the
Purchase, owns, free and clear of any Adverse Claim, a discrete
participation and percentage interest in each Purchased
Receivable, (ii) receives, in connection with the Purchase, an
amount equal to such percentage of the aggregate Cash Purchase
Price therefor, and (iii) together with each other Originator,
is, immediately prior to the Purchase, the owner of such
Purchased Receivable in its entirety.
(o) The invoices in respect of each Purchased Receivable
will be sent to the pertinent Insured in accordance with
Schedule I. According to the Contracts related to the
Purchased Receivables, the Outstanding Balance will be due no
later than the dates shown on Schedule I.
(p) Not more than 20% of the Collections of any Purchased
Receivable is required to be paid to insurance agents as
commissions, and the aggregate amount required to be paid to
insurance agents as commissions is not more than the amount set
forth in Schedule III.
(q) Pursuant to the Credit and Collection Policy, such
Originator is entitled to cancel any Contract on the date any
Purchased Receivable under such Contract becomes Past Due.
(r) Commissions with respect to each Contract are payable
to any insurance agent solely from, and in all material
respects proportionately to the extent of, premiums actually
received from the Insured under such Contract produced by such
insurance agent.
ARTICLE V
GENERAL COVENANTS OF EACH ORIGINATOR
SECTION 5.01. Affirmative Covenants of Each Originator.
Until the Holdback Termination Date, each Originator will, unless
the Agent upon the direction of the Majority Purchasers shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material
respects with all applicable laws, rules, regulations and
orders with respect to it, its business and properties and all
Purchased Receivables, Related Security and related Contracts,
the non-compliance with which (a) would materially adversely
affect it, its business and properties or (b) would materially
adversely affect, in the aggregate, any Purchaser's interest in
the Purchased Receivables, Related Security or related
Contracts.
(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and
qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect the interests
of any Purchaser or the Agent hereunder or in the Purchased
Receivables, or the ability of such Originator or the
Collection Agent to perform their respective obligations under
this Agreement and the Ownership Documents.
(c) Audits. At any time and from time to time during
regular business hours upon two Business Days' prior
notification to such Originator, permit (or, if such
Originator, being the Collection Agent, has subcontracted with
any Person pursuant to Section 6.01, cause such Person to
permit) the Agent, any Initial Purchaser, or any Purchaser
holding a Share Percentage of at least 25%, or its agents or
representatives, (i) to examine and make copies of and
abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession
or under the control of such Originator (or any Person with
which such Originator, being the Collection Agent, has
subcontracted pursuant to Section 6.01) relating to Purchased
Receivables, including, without limitation, the related
Contracts and Related Security, and (ii) to visit the offices
and properties of such Originator (or any Person with which
such Originator, being the Collection Agent, has subcontracted
pursuant to Section 6.01) for the purpose of examining such
materials described in clause (i) above, and to discuss matters
relating to Purchased Receivables sold by it or such
Originator's performance hereunder with any of the responsible
officers or employees of such Originator (or any Person with
which such Originator, being the Collection Agent, has
subcontracted pursuant to Section 6.01) having knowledge of
such matters; provided, however, that no Initial Purchaser that
is also an insurance company, or is a member of a group
(consisting of such Purchaser and all of its Affiliates) that
is engaged primarily in the business of underwriting or selling
insurance, shall be permitted to so examine the materials
described in this Section 5.01(c); provided, further, that no
Purchaser (other than an Initial Purchaser) that is also an
insurance company or an Affiliate of an insurance company shall
be permitted to so examine the materials described in this
Section 5.01(c).
(d) Keeping of Records and Books of Account. Maintain
and implement, or cause to be maintained and implemented,
administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Purchased
Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain,
or cause to be kept and maintained, all documents, books,
records and other information reasonably necessary or advisable
for the collection of all Purchased Receivables (including,
without limitation, records adequate to permit the
identification of each Purchased Receivable and all Collections
of and adjustments to each Purchased Receivable sold by it).
(e) Performance and Compliance with Receivables and
Contracts. At its expense, timely and fully perform and comply
with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to
the Purchased Receivables.
(f) Location of Records. Keep its chief executive
office, and the offices where it keeps its records concerning
the Purchased Receivables and all Contracts related thereto
(and all original documents relating thereto), at the
address(es) of such Originator (or any Person with which such
Originator, if the Collection Agent, has subcontracted pursuant
to Section 6.01) referred to in Section 4.01(j) or, upon 30
days' prior written notice to the Agent, at such other
locations in a jurisdiction where all action required by
Section 6.05 shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all
material respects with the Credit and Collection Policy in
regard to each Purchased Receivable sold by it and the related
Contract.
(h) Reporting. Furnish to the Agent, each Initial
Purchaser, and each Purchaser holding a Share Percentage of at
least 25%:
(i) as soon as available and in any event within 60
days after the end of each of the first three quarters of
each fiscal year of such Originator, a statutory balance
sheet of such Originator as of the end of such quarter,
and statutory statements of income and surplus of such
Originator each for the period commencing at the end of
the previous fiscal year and ending with the end of such
quarter, certified by the controller or other appropriate
officer of such Originator; and
(ii) as soon as available and in any event within 120
days after the end of each fiscal year of such Originator,
a copy of the statutory balance sheet of such Originator
as of the end of such year and the related statutory
statements of income and surplus of such Originator for
such year each reported on by the controller or other
appropriate officer of such Originator.
SECTION 5.02. Negative Covenants of Each Originator.
Until the Holdback Termination Date, no Originator shall without
the written consent of the Agent upon the direction of the Majority
Purchasers:
(a) Sales, Liens, Etc. Sell, assign (by operation of law
or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, any Purchased
Receivable, Related Security, related Contract or Collections,
or assign any right to receive income in respect thereof.
(b) Extension or Amendment of Receivables. Extend, amend
or otherwise modify the terms of any Purchased Receivable, or
amend, modify or waive any term or condition of any Contract
related thereto if the effect of such amendment, modification
or waiver of Contract would materially adversely affect the
timeliness of payment or collectibility of the Purchased
Receivables.
(c) Change in Business or Credit and Collection Policy.
Make any change in the character of its business or in the
Credit and Collection Policy, which change would, in either
case, materially impair the timeliness of payment or
collectibility of any Purchased Receivable.
(d) Change in Payment Instructions to Insureds. Make any
change in its instructions to Insureds regarding payments to be
made to such Originator if the effect of such change would
materially adversely affect the timeliness of payment or
collectibility of the Purchased Receivables, unless the Agent
and the Initial Purchasers shall have received prior written
notice of such change.
(e) No Actions Against Insureds. Commence or settle any
legal action to enforce collection of any Purchased Receivable.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent. The
administration and collection of the Purchased Receivables shall be
conducted by such Person (the "Collection Agent") so designated
from time to time in accordance with this Section 6.01. Until the
Agent gives notice to the Seller of a designation of a new
Collection Agent, Continental is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Collection
Agent pursuant to the terms hereof. The Agent shall, at any time
that it has been so advised by the Majority Purchasers that such
Majority Purchasers are reasonably insecure as to the ability of
the Collection Agent to perform hereunder or are reasonably
dissatisfied with the collection performance of the Purchased
Receivables or if any event of a type listed in Section 10.09
(without giving effect to any grace period or required notice)
shall occur and be continuing, upon three Business Days' notice to
the Seller, designate as the Collection Agent any Person (including
itself), other than a Person in the business of issuing or selling
insurance or any Affiliate of such Person, to succeed Continental
or any successor Collection Agent, on the condition in each case
that any such Person so designated agrees in writing for the
benefit of the parties hereto (a) to perform the duties and
obligations of the Collection Agent pursuant to the terms hereof
and (b) to adhere to the provisions of Section 10.07, which
agreement shall survive the termination of this Agreement or such
writing. For purposes of satisfying the condition contained in the
preceding sentence, the Agent hereby agrees that if and when it
shall designate itself as the Collection Agent, it shall perform
the duties and obligations of the Collection Agent pursuant to the
terms hereof. The Collection Agent may, with the prior consent of
the Agent acting at the direction of the Majority Purchasers,
subcontract with any other Person for the administration and
collection of such Purchased Receivables, provided that the
Collection Agent shall remain liable for the performance of the
duties and obligations of the Collection Agent pursuant to the
terms hereof.
SECTION 6.02. Duties of Collection Agent. (a) The
Collection Agent shall (unless the Agent at the direction of the
Majority Purchasers directs otherwise) take or cause to be taken
only such actions as shall be necessary or customary to collect
each Purchased Receivable, all in accordance with applicable laws,
rules and regulations, with reasonable care and diligence, and
solely in accordance with the Credit and Collection Policy. Each
of the Seller, each Purchaser and the Agent hereby appoints as its
agent the Collection Agent, from time to time designated pursuant
to Section 6.01, to enforce its respective rights and interests in
and under the Purchased Receivables, the Related Security and the
related Contracts. The Collection Agent shall not incur any
expense that would result in a material increase in the Collection
Agent Fee without first obtaining the consent of the Agent at the
direction of all of the Purchasers.
(b) The Collection Agent shall set aside for the
Purchasers the Collections of Purchased Receivables in accordance
with Section 2.04, but shall not be required (except to the extent
set forth in Section 2.04 or requested by the Agent at the
direction of the Majority Purchasers) to segregate the funds
constituting such portion of such Collections prior to the
remittance thereof in accordance with said Section.
(c) The Collection Agent (if not an Originator) may not
extend, amend or otherwise modify the terms of any Purchased
Receivable, or amend, modify or waive any term or condition of any
Contract related thereto, or extend, amend or otherwise modify the
rights of any Originator, in each case, without such Originator's
consent. The Collection Agent may not commence or settle any legal
action to enforce collection of any Purchased Receivable, unless
the Agent at the direction of the Majority Purchasers shall have
otherwise consented in writing.
(d) Each Originator shall deliver to the Collection
Agent, and the Collection Agent shall hold in trust and legend
appropriately for the Seller and the Agent, acting on behalf of the
Purchasers, all computer tapes or disks which evidence or relate to
Purchased Receivables. Upon the Agent's request at the direction
of the Majority Purchasers, the Seller shall deliver to the
Collection Agent, and the Collection Agent shall hold in trust and
legend appropriately for the Seller and the Agent, acting on behalf
of the Purchasers, all documents, instruments and other records
which evidence or relate to Purchased Receivables.
(e) The Collection Agent shall, as soon as practicable
following receipt, turn over to the Seller the Collections of any
Receivable which is not a Purchased Receivable.
(f) The Collection Agent, if other than an Originator,
shall as soon as practicable upon demand deliver to the Seller all
documents, instruments and other records (including, without
limitation, computer tapes or disks) in its possession which
evidence or relate solely to Receivables other than Purchased
Receivables, and copies of documents, instruments and other records
in its possession which evidence or relate to Purchased
Receivables.
(g) The Collection Agent shall, at any time and from time
to time at the request of the Agent at the direction of the
Majority Purchasers, furnish to the Agent (within five Business
Days after any such request) a calculation of the amounts set aside
for the Purchasers pursuant to Section 2.04(b)(ii).
(h) The Collection Agent shall, to the extent permitted
by applicable law, pay interest to the Agent on any amount not paid
by the Collection Agent when required to be paid by it hereunder,
at an interest rate per annum equal to the Default Rate, payable on
demand, provided, however, that such interest rate shall not at any
time exceed the maximum rate permitted by applicable law. Such
interest shall be for the account of, and shall be distributed to,
the Purchasers and shall be paid by the Collection Agent free and
clear of and without deduction for any taxes of any kind
whatsoever.
(i) Except as set forth in Section 2.04(d), the
Collection Agent's authorization under this Agreement shall
terminate on the Holdback Termination Date.
SECTION 6.03. Rights of the Agent. At any time following
the designation of a Collection Agent other than any Originator
pursuant to Section 6.01:
(a) The Agent at the direction of the Majority Purchasers
may direct any or all of the Insureds of Purchased Receivables
to make payment of all amounts payable under any Purchased
Receivable directly to the Agent or its designee.
(b) The Seller shall, at the Agent's request at the
direction of the Majority Purchasers and at the Seller's
expense, give notice of the ownership of the Purchased
Receivables by the Purchasers to each said Insured and direct
that payments be made directly to the Agent or its designee.
(c) The Seller shall, at the Agent's request at the
direction of the Majority Purchasers and at the Seller's
expense, (i) assemble all of the documents instruments and
other records (including, without limitation, computer tapes
and disks), or true and correct copies thereof, which evidence
or relate to the Purchased Receivables, and the related
Contracts and Related Security, or which are otherwise
necessary or desirable to collect such Purchased Receivables,
and shall make the same available to the Agent at a place
selected by the Agent or its designee, and (ii) without
limiting any other rights under this Agreement, segregate all
cash, checks and other instruments received by it from time to
time constituting Collections of Purchased Receivables in a
manner acceptable to the Agent and shall, promptly upon
receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the
Agent or its designee.
(d) The Seller and each Purchaser each hereby authorizes
the Agent to take any and all steps in the Seller's name and on
behalf of the Seller and the Purchasers necessary or desirable,
in the determination of the Agent, to collect all amounts due
under any and all Purchased Receivables sold by it, including,
without limitation, endorsing any Originator's name on checks
and other instruments representing Collections of Purchased
Receivables and enforcing such Purchased Receivables and taking
action or causing action to be taken with respect to any
Related Security, including with respect to transferring
possession of the same to the Agent or its designee.
SECTION 6.04. Responsibilities of the Seller.
(a) The Seller shall remain responsible and liable to perform all
of its duties and obligations under the Contracts related to the
Purchased Receivables, to the extent set forth therein; provided
that the Seller shall have no obligation under such Contracts or
otherwise with respect to commissions payable to its agents until
the Holdback Termination Date.
(b) The exercise by the Agent or any Purchaser of any of
its rights hereunder shall not release the Seller from any of its
duties or obligations with respect to any Purchased Receivables or
under the Contracts related to such Purchased Receivables.
(c) Neither the Agent nor any Purchaser shall have any
obligation or liability (other than expressly provided in Section
2.05 herein) with respect to any Purchased Receivables or related
Contracts, nor shall any of them be obligated to perform any of the
obligations of the Seller or any Originator thereunder.
(d) The Seller shall promptly notify the Agent and the
Initial Purchasers of any claim or threatened claim probable, in
the opinion of the management of the Seller, to result in any
liability referred to in Article IX.
(e) The Seller shall, within ten Business Days of such
time as the Agent at the direction of the Majority Purchasers may
request, furnish to the Agent such Purchaser Reports, and other
report, information, document, book or record as the Agent at the
direction of the Majority Purchasers may reasonably request
relating to the Purchased Receivables.
(f) The Seller shall, within ten Business Days after the
end of each calendar month, or at such other times as the
Collection Agent shall reasonably request, provide to the
Collection Agent such information and records as are necessary for
the determination of commissions required to be paid to insurance
agents out of Collections.
SECTION 6.05. Further Action Evidencing the Purchase.
(a) The Seller agrees that from time to time, at its expense, it
will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or
that the Agent at the direction of the Majority Purchasers may
reasonably request in order to perfect, protect or more fully
evidence the Purchased Receivables, or to enable the Purchasers or
the Agent to exercise or enforce any of their respective rights
hereunder or under the Ownership Documents. Without limiting the
generality of the foregoing, each Originator will create separate
data processing records evidencing such Purchased Receivables and
related Contracts with a legend, acceptable to the Agent,
evidencing that the Purchased Receivables have been sold in
accordance with this Agreement and will, upon the request of the
Agent at the direction of the Majority Purchasers: (i) execute and
file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate; and (ii) mark
conspicuously each invoice sent by it and use its best efforts to
cause its agents to mark conspicuously each invoice sent by them
evidencing each Purchased Receivable and the related Contract with
a legend, acceptable to the Agent, evidencing that the Purchased
Receivable has been sold in accordance with this Agreement.
(b) The Seller hereby authorizes the Agent to file or
cause to be filed one or more financing or continuation statements,
and amendments thereto and assignments thereof, relative to all or
any of the Purchased Receivables and the Related Security now
existing or hereafter arising without the signature of the Seller
or any Originator where permitted by law.
(c) If the Seller fails to perform any of its agreements
or obligations under this Agreement, the Agent may (but shall not
be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Agent incurred in
connection therewith shall be payable by the Seller as provided in
Section 10.06.
SECTION 6.06. Application of Collections. Any payment
made by an Insured to any Originator shall, except as otherwise
specified by such Insured or otherwise required by contract or law
and unless otherwise instructed by the Agent at the direction of
the Majority Purchasers, be applied as a collection of any
Purchased Receivable or any other Receivables of such Insured to
the extent of any amounts then due and payable thereunder before
being applied to any other indebtedness of such Insured.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. (a) Each
Purchaser hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. In
furtherance, and without limiting the generality, of the foregoing,
each Purchaser hereby appoints the Agent as its agent to execute
and deliver all further instruments and documents, and take all
further action that the Agent may deem necessary or appropriate in
order to protect or more fully evidence the Share Percentage of
Purchased Receivables purchased by the Purchasers hereunder, or to
enable any of the Purchasers to exercise or enforce any of their
respective rights hereunder or under the Ownership Documents,
including, without limitation, the execution by the Agent as
assignee of such financing, release or termination statements, or
amendments thereto or assignments thereof, relative to all or any
of the Purchased Receivables and the Related Security now existing
or hereafter arising, and such other instruments or notices, as may
be necessary or appropriate for the purposes stated hereinabove.
(b) Each Purchaser and the Seller expressly recognize and
agree that the Agent may be listed as the assignee of record on the
various UCC filings required to be made hereunder in order to
protect or evidence the transfer of the Purchased Receivables from
the Seller to the Purchasers, that the Agent shall sign UCC
financing, release or termination statements and shall otherwise
act as agent for the Purchasers as undivided percentage owners of
all of the Purchased Receivables. In addition, such listing shall
impose no duties on the Agent other than those expressly and
specifically undertaken in accordance with the provisions of this
Article VII.
(c) The Seller shall be entitled to rely without
investigation upon any notice or request received from the Agent or
other action by the Agent that recites that it is appropriately
authorized pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be
liable to any Purchaser or Assignee for any action taken or omitted
to be taken by it or them as Agent under or in connection with this
Agreement (including, without limitation, any action taken or
omitted to be taken by it or them if designated as the Collection
Agent pursuant to Section 6.01), except for its or their own gross
negligence or willful misconduct. Without limiting the foregoing,
the Agent: (i) may consult with legal counsel (including counsel
for the Seller), 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) makes no
warranty or representation to any Purchaser and shall not be
responsible to any Purchaser for any statements, warranties or
representations made in or in connection with this Agreement; (iii)
shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Seller, any
Originator or the Collection Agent or to inspect the property
(including the books and records) of any Originator or the
Collection Agent; (iv) shall not be responsible to any Purchaser
for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Ownership
Documents or any other instrument or document furnished pursuant
hereto; and (v) shall incur no liability under or in respect of
this Agreement by acting upon any notice (including notice by
telephone), consent, certificate or other instrument or writing
(which may be by telex) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 7.03. CNA and Affiliates. With respect to any
Share Percentage which may be held by CNA, CNA shall have the same
rights and powers under this Agreement as would any other Purchaser
and may exercise the same as though it were not the Agent. CNA and
its Affiliates may generally engage in any kind of business with
the Seller or any Insured, any of their respective Affiliates and
any Person who may do business with or own securities of the Seller
or any Insured or any of their respective Affiliates, all as if CNA
were not the Agent and without any duty to account therefor to any
Purchaser.
SECTION 7.04. Purchaser's Purchase Decision. Each
Purchaser acknowledges that it has, independently and without
reliance upon the Agent or any of its Affiliates and based on such
documents and information as it has deemed appropriate, made its
own evaluation and decision to enter into this Agreement and, if it
so determines, to purchase Eligible Receivables hereunder. Each
Purchaser also acknowledges that it will, independently and without
reliance upon the Agent or any of its Affiliates and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own decisions in taking or not taking action
under this Agreement.
ARTICLE VIII
ASSIGNMENT OF SHARE PERCENTAGE
SECTION 8.01. Assignment. Each Purchaser may assign to
any Assignee, and any such Assignee may assign to any other
Assignee, such Purchaser's Share Percentage of any Purchased
Receivable owned by it, in whole or in part, and, upon any such
assignment, the Assignee shall become the Purchaser of such Share
Percentage of Purchased Receivables. Such assignments shall be
upon such terms and conditions as the assignor and the Assignee of
such Share Percentage of Purchased Receivables may mutually agree.
The assignor of any Share Percentage of Purchased Receivables shall
deliver to the Assignee an Assignment, duly executed by such
assignor, assigning such Share Percentage of Purchased Receivables,
in whole or in part, to the Assignee (indicating, in each case
whether such assignment is in whole or in part and the fraction of
Share Percentage being assigned), and such assignor shall promptly
execute and deliver all further instruments and documents, and take
all further action, that the Assignee may reasonably request, in
order to perfect, protect or more fully evidence the Assignee's
right, title and interest in and to such Share Percentage of
Purchased Receivables, and to enable the Assignee to exercise or
enforce any rights hereunder or under the Ownership Documents
relating to such Share Percentage of Purchased Receivables. The
Assignee shall promptly execute and deliver a written undertaking
agreeing to the terms of Section 10.07, which agreement shall
survive the termination of this Agreement or such undertaking.
Upon the assignment of any Share Percentage of Purchased
Receivables as described above, the Assignee thereof shall have all
of the rights and obligations of a Purchaser hereunder with respect
to such Share Percentage of Purchased Receivables. An assignor of
a Share Percentage of Purchased Receivables shall provide notice to
the Agent and the Seller of any assignment of a Share Percentage of
Purchased Receivables by such assignor hereunder, which notice
shall state the Share Percentage of the Assignee's interest and the
remaining Share Percentage, if any, of the assignor's interest.
The Agent and the Seller are entitled to rely conclusively upon
such notice or the absence thereof and shall not be required to
treat an Assignee as a Purchaser in the absence of such notice.
SECTION 8.02. Authorization of Agent. Each of the
Purchasers authorizes the Agent to, and the Agent agrees that it
shall, endorse the applicable Ownership Document to reflect any
assignments made pursuant to Section 8.01 or otherwise.
SECTION 8.03. Payments to Agent. Notwithstanding any
assignment pursuant to Section 8.01, the Collection Agent may pay
the Agent for the account of each Purchaser, other than the Initial
Purchasers, all amounts owing to such Purchaser, and neither the
Collection Agent nor the Seller shall have any duty or obligation
with respect to the Agent's application of such amount.
SECTION 8.04. Assignment to Seller. The Purchasers shall
assign to the Seller by execution of an Assignment, in addition to
any assignments required pursuant to Section 2.04(d), such
Purchaser's Share Percentage of all Purchased Receivables that have
been deemed to have been collected in full under Section 2.04(c),
or which are the subject of indemnification under Section 9.01, and
such indemnification has been made.
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. Indemnities by the Seller and the
Originators. Without limiting any other rights that the Agent, the
Purchasers or their Affiliates may have hereunder or under
applicable law, the Seller and each Originator hereby agree to
indemnify such Persons and their Affiliates from and against any
and all damages, losses, claims, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements,
awarded against or incurred by any of them arising out of or as a
result of:
(i) any Receivable, at the time of the Purchase, not
being an Eligible Receivable;
(ii) its reliance on any representation or warranty made
or deemed made by any Originator or the Seller (or any of its
officers) under or in connection with this Agreement, any
Purchaser Report or any other information or report delivered
by such Originator or the Seller pursuant hereto, which shall
have been false or incorrect in any material respect when made
or deemed made;
(iii) the failure by any Originator or the Seller to comply
with any applicable law, rule or regulation with respect to any
Purchased Receivable, Related Security or the related Contract,
or the nonconformity of any Purchased Receivable, Related
Security or the related Contract with any such applicable law,
rule or regulation;
(iv) the failure to vest in any Purchaser, or to transfer
to any Purchaser, legal and equitable title to, and ownership
of, to the extent of such Purchaser's Share Percentage, each
Purchased Receivable, free and clear of any and all Adverse
Claims and keep the same vested free and clear of any and all
Adverse Claims;
(v) the failure to file, or any delay in filing,
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Purchased Receivable, any
Contract or Related Security whether at the time of any
Purchase or at any subsequent time;
(vi) any dispute or claim resulting from the sale of the
insurance related to such Purchased Receivable or the
furnishing or failure to furnish such insurance;
(vii) any failure of any Originator, as Collection Agent or
otherwise, to perform its duties or obligations including,
without limitation, sending invoices to the pertinent Insured
in accordance with Schedule I and the turnover of amounts
pursuant to Section 2.04, in accordance with the provisions of
Article VI;
(viii) the commingling of Collections of Purchased
Receivables at any time with other funds;
(ix) any dispute or offset or Adverse Claim against or
with respect to Purchased Receivables, or any sale, pledge, or
assignment (by operation of law or otherwise) or other
disposition of Collections of Purchased Receivables by the
Seller or any Originator, as Collection Agent or otherwise;
(x) any action or omission by any Originator or any
Affiliate of such Originator, whether as Collection Agent or
otherwise, reducing or impairing the rights of any Purchaser
with respect to any Purchased Receivable or the value of any
Purchased Receivable, including, but not limited to, the
cancellation, extension, amendment, modification, compromise or
settlement of any Purchased Receivable or any term thereof, the
extension, amendment, modification or waiver of any term or
condition of any Contract related thereto, the sale, pledge or
assignment of, or grant of security interest in, any Purchased
Receivable, any change in the character of its business or in
the Credit and Collection Policy, the commencement or
settlement of any legal action to enforce collection of any
Purchased Receivable, the failure to send the invoice in
respect of a Purchased Receivable to the pertinent Insured in
accordance with Schedule I, the failure to comply with any
material provision, covenant or other promise required to be
observed by such Originator under any Contract related to any
Purchased Receivable, the failure to comply with the Credit and
Collection Policy, or the withdrawal, cancellation or other
termination for any reason of any insurance policy related to
any Purchased Receivable or the failure of any insurance policy
or Contract related to any Purchased Receivable to be issued or
to become effective;
(xi) any failure by an insurance agent to pay to any
Originator, the Seller or the Collection Agent the amount of
any insurance premium or other Collections received from any
Insured;
(xii) any investigation, litigation, or proceeding related
to any use of the proceeds of the Purchase or related to any
acquisition or proposed acquisition by any Originator, or by
any subsidiary of such Originator, of all or any portion of the
stock or substantially all the assets of any person whether or
not the Agent, any Purchaser or any of their Affiliates is a
party thereto; or
(xiii) failure of a Contract to become effective within 30
days after Purchase.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement nor consent to any departure by
any Originator or the Seller therefrom shall in any event be
effective unless the same shall be in writing and signed by the
Seller, the Agent and the Majority Purchasers, and then such
amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by the Seller, the Agent and all the
Purchasers, do any of the following: (a) waive any of the
conditions specified in Section 3.01 or 3.02, (b) change the Share
Percentage of any Purchaser or subject the Purchasers to any
additional obligations, (c) change the definition of "Eligible
Receivable", "Defaulted Receivable", "Share Percentage" or
"Majority Purchasers", (d) postpone any Settlement Date, (e) change
the Purchasers' Share Percentage of Receivables which shall be
required for the Purchasers or any of them to take any action
hereunder, (f) amend Section 2.04(c), (g) amend this Section 10.01,
(h) amend or release any provision of the Agreement of the Company
in favor of the Agent on behalf of the Purchasers provided pursuant
to Section 3.01(l) herein, or (i) increase the Collection Agent
Fee; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the
Seller and the Purchasers required above to take such action,
affect the rights or duties of the Agent under this Agreement.
This Agreement contains a final and complete integration of all
prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof,
superseding all prior oral or written understandings.
SECTION 10.02. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including telex communication) and
mailed or telexed or delivered, as to each party hereto, at its
address set forth under its name on the signature pages hereof or
at such other address as shall be designated by such party in a
written notice to the other parties hereto; provided, however, that
any such notice or communication to the Seller or any Originator
shall be mailed or delivered to Continental. All such notices and
communications shall be effective, in the case of written notice,
when deposited in the mails, and, in the case of notice by telex,
when telexed against receipt of answer back, in each case addressed
as aforesaid, except that notices and communications pursuant to
Article II shall not be effective until received. All amounts
deposited by the Collection Agent into such accounts referred to in
Section 2.04 shall be deposited at the offices of such financial
institutions designated by each Initial Purchaser on the signature
pages hereof or as notified to the Agent, or as to each other
Purchaser, as designated by such Purchaser to the Agent.
SECTION 10.03. No Waiver; Remedies. No failure on the
part of the Agent or any Purchaser to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 10.04. Binding Effect; Assignability. (a) This
Agreement shall be binding upon and inure to the benefit of the
Seller, each Originator, the Agent, each Purchaser and their
respective successors and assigns; provided, however, that neither
the Seller nor any Originator shall assign its rights or
obligations hereunder or any interest herein (other than pursuant
to the Intercompany Pooling Agreement, as may be amended) without
the prior written consent of the Agent and all the Purchasers and
provided further that the Agent shall not assign its rights and
obligations hereunder and no other Person shall be appointed in
substitution of the Agent named herein, except in each case such
Person that is (i) an Affiliate (other than an Affiliate that is a
natural person) of an Initial Purchaser or (ii) a commercial bank
organized or licensed in the United States with a combined capital
and surplus of at least $500,000,000 and is approved by the Seller,
which approval shall not be unreasonably withheld.
(b) The following shall be continuing and shall survive
any termination of this Agreement: (i) the rights of any Purchaser
to collect the Outstanding Balance of all Purchased Receivables,
(ii) the rights and remedies of any Purchaser with respect to any
breach of any representation and warranty made by any Originator
pursuant to Article IV or Section 3.01, (iii) the indemnification
provisions of Article IX and Section 10.06, (iv) the rights of the
Agent and the Collection Agent to be paid the fees, costs and
expenses provided for hereunder, (v) the agreement set forth in
Section 10.07, (vi) the right of the Seller to collect the Holdback
Amount from any Purchaser (or such portion thereof, if any, that
the Seller may be entitled to), (vii) the obligations of the Agent
under Section 2.05 and (viii) the obligations under Section 10.08.
SECTION 10.05. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York, except to the extent that the perfection of the
interests of any Purchaser in the Receivables, the Related Security
and the Collections, or remedies hereunder in respect thereof, are
governed by the laws of a jurisdiction other than the State of New
York.
SECTION 10.06. Costs, Expenses and Taxes. (a) In
addition to the rights of indemnification granted under Article IX
hereof, the Seller hereby agrees to pay on demand (i) all costs and
expenses in connection with the preparation, execution, delivery
and administration (including periodic auditing) of this Agreement,
the Ownership Documents and other documents in connection herewith,
including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent with respect
thereto and with respect to advising the Agent and the Purchasers
as to their respective rights and remedies under this Agreement,
and (ii) all costs and expenses, if any (including reasonable
counsel fees and expenses), incurred by any Purchaser in connection
with the enforcement of this Agreement, the Ownership Documents and
other documents in connection herewith; provided that nothing in
this Section 10.06(a) shall obligate the Seller or any Originator
to pay any Collection Agent Fees, other costs of collecting the
Purchased Receivables or commissions of the insurance agents of any
Originator or costs with respect to any assignment of the Purchased
Receivables by any Purchaser.
(b) In addition, the Seller hereby agrees to pay any and
all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing,
recording or enforcement of this Agreement, the Ownership Documents
or the other documents to be delivered hereunder (except with
respect to any assignment of Purchased Receivables delivered
hereunder), and agrees to save each Purchaser and the Agent
harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such taxes
and fees; provided that each Purchaser will pay (or reimburse the
Seller or such Originator for) all property, excise, sales or
similar taxes imposed on Purchased Receivables (except to the
extent such taxes are imposed because of the initial assignment by
the Seller of Purchased Receivables).
SECTION 10.07. No Proceedings. The Seller, each
Originator, each Purchaser and the Agent each hereby agrees that it
will not institute against any Purchaser that is a Purchaser which
primarily engages in the business of purchasing or accepting
assignments or transfers of, or making secured loans in respect of,
accounts receivable, chattel paper or general intangibles or
interests therein or, in the case of each Purchaser, any other such
Purchaser, any proceeding of the type referred to in clause (i) of
Section 10.09(h) so long as any commercial paper issued by such
Purchaser shall be outstanding or there shall not have elapsed one
year plus one day since the last day on which any such commercial
paper shall have been outstanding. Any provision in this Agreement
notwithstanding, no Purchaser shall have any obligation to make any
payments under this Agreement otherwise than by deducting such
amounts from Collections.
SECTION 10.08. Confidentiality. (a) Unless otherwise
required by applicable law, the Seller and each Originator agrees
to maintain the confidentiality of this Agreement (and all drafts
thereof) in communications with third parties and otherwise;
provided, however, that this Agreement may be disclosed to third
parties to the extent such disclosure is (i) required in connection
with a sale of securities of such Originator, (ii) made solely to
persons who are legal counsel for the purchaser or underwriter of
such securities, (iii) limited in scope to the provisions of
Articles V and VI, and, to the extent defined terms are used in
Articles V and VI, such terms defined in Article I of this
Agreement and (iv) made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to
the Agent; provided further, however, that the Agreement may be
disclosed to the Seller's accountants and legal counsel retained in
connection with the negotiation, execution and delivery of this
Agreement; and provided further, however, that the Seller shall
have no obligation of confidentiality in respect of any information
which may be generally available to the public or become available
to the public through no fault of the Seller.
(b) Each Purchaser, the Agent and the Collection Agent,
if other than an Originator, each hereby acknowledges that in
connection with this Agreement each Originator will be required (i)
to disclose to the Agent, the Collection Agent, if other than the
Originator, and their respective agents and representatives certain
confidential and proprietary information relating to such
Originator's business activities, including, without limitation,
certain books, lists, records and documents (including computer
tapes and disks) in the possession or under the control of such
Originator relating to the Purchased Receivables, including,
without limitation, the related Contracts and Related Security,
(ii) to allow the Agent or its agents and representatives to visit
the offices of such Originator for the purpose of examining the
materials described in clause (i) above, and (iii) to allow the
Agent or its agents or representatives to discuss matters relating
to Purchased Receivables sold by such Originator or such
Originator's performance hereunder with any of the responsible
officers or employees of such Originator having knowledge of such
matters. Each Purchaser, the Agent and the Collection Agent, if
other than an Originator, each hereby agrees that (i) it will not
disclose and will not permit any of such agents or representatives
to disclose (other than to its employees, auditors or counsel) any
information with respect to any Originator which is furnished or
delivered pursuant to Section 5.01(c), (ii) it will refrain from
using and will not permit any of such agents or representatives to
use any such information except as permitted by the terms of this
Agreement, and (iii) it will maintain the confidentiality of this
Agreement (and all drafts thereof); provided, however, that each
Purchaser, the Agent or the Collection Agent, if other than an
Originator, and such agents or representatives, may make such
disclosure (A) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over it,
(B) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, (C) as may be
required by or in order to comply with any law, order, regulation
or ruling (D) as may be required or appropriate to any Assignee or
to any prospective Assignee, (E) as may be required or appropriate
to any rating agency that rates or may rate the securities of any
Purchaser or (F) as may be required or appropriate to any Person
providing credit or liquidity support to a Purchaser, provided that
such a Person providing liquidity support is not also an insurance
company or a member of a group (consisting of such agency or Person
and all of its Affiliates) that is engaged primarily in the
business of underwriting or selling insurance other than financial
guarantors and provided, further, in the case of any disclosure
permitted by clause (D), (E) or (F) hereof, that any such Assignee,
prospective Assignee, rating agency or Person providing credit or
liquidity support agrees to treat such disclosure confidentially;
provided further, however, that there shall be no obligation of
confidentiality in respect of any information which may be
generally available to the public or become available to the public
through no fault of such Purchaser, the Agent or the Collection
Agent, if other than an Originator, as the case may be.
SECTION 10.09. Trigger Events. If any of the following
events shall occur and be continuing:
(a) The Collection Agent (if other than the Agent or its
designee) (i) shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in
clause (ii) of this subsection (a)) and such failure shall
remain unremedied for three Business Days or (ii) shall fail to
make any payment or deposit to be made by it hereunder when
due; or
(b) Any Originator shall fail (i) to transfer to the
Agent when requested by the Agent any rights pursuant to this
Agreement which it has as Collection Agent, (ii) to make any
payment required under Section 9.01 or (iii) to turn over to
the Collection Agent the amounts referred to in Sections
2.04(c)(i) and (ii); or
(c) Any representation or warranty made or deemed made by
any Originator or the Seller (or any of its officers) under or
in connection with this Agreement, any Purchaser Report or any
other information or report delivered pursuant hereto shall
prove to have been incorrect in any material respect when made
or deemed made; or
(d) The Seller or any Originator shall fail to perform or
observe any other term, covenant or agreement contained in this
Agreement on its part to be performed or observed and any such
failure shall remain unremedied for 10 days after written
notice thereof shall have been given to the Seller by the Agent
at the direction of the Majority Purchasers; or
(e) Any Originator or any of its subsidiaries shall fail
to pay any principal of or premium or interest on any Debt
which is outstanding in a principal amount of at least
$5,000,000 in the aggregate of such Originator or such
subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified
in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared
to be due and payable, or required to be prepaid (other than by
a regularly scheduled required prepayment), prior to the stated
maturity thereof; or
(f) An event of default as defined in any agreement,
mortgage, indenture or instrument under which there may be
issued, or by which there may be secured or evidenced any Debt
of the Company whether such Debt now exists or shall hereafter
be created, in a principal amount then outstanding of
$25,000,000 or more, shall occur and shall result in such Debt
of the Company becoming or being declared due and payable prior
to the date on which it would otherwise become due and payable,
and such acceleration shall not be rescinded or annulled; or
(g) The Purchase of Purchased Receivables pursuant hereto
shall for any reason, except to the extent permitted by the
terms hereof, cease to create legal and equitable title to, and
ownership of, each Purchased Receivable and the Related
Security and Collections with respect thereto; or any Ownership
Document delivered hereunder shall for any reason cease to
evidence the transfer to the owner thereof of legal and
equitable title to, and ownership of, Purchased Receivables and
Related Security to the extent of the Receivable purchased (or
purported to be purchased) thereunder; or
(h) (i) Any Originator, any of its subsidiaries or the
Company shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or
against any Originator or any of its subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property
and, if instituted against any Originator or any of its
subsidiaries, either such proceeding shall not be stayed or
dismissed for 45 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an
order for relief against it or the appointment of a receiver,
trustee, custodian or other similar official for it or for any
substantial part of its property) shall occur; or any person or
entity having authority over such Originator shall commence any
delinquency proceeding or initiate any action or enter any
order asserting or seeking to assert powers of supervision,
rehabilitation or liquidation with respect to such Originator
pursuant to applicable laws; or (ii) any Originator or any of
its subsidiaries shall take any corporate action to authorize
any of the actions set forth in clause (i) above in this
subsection (h); or
(i) There shall have been any material adverse change in
the financial condition or operations of any Originator or the
Company since September 30, 1993; or there shall have occurred
any event which may materially adversely affect the ability of
the Seller to perform its obligations under this Agreement and
the Ownership Documents; or
(j) The agreement referred to in Section 3.01(l) shall no
longer be in full force and effect; or
(k) The Company shall not maintain a long-term senior
debt rating of at least BBB- by Standard & Poor's Corporation
and at least Baa3 by Moody's Investors Service, Inc; then, and
in any such event, (i) the Agent and each Purchaser shall have,
in addition to the rights and remedies which they may have
under this Agreement or at law, including, without limitation,
the right to require the Collection Agent to segregate and
deposit in each Purchaser's account all amounts held in trust
and the right to replace the Collection Agent, all other rights
and remedies provided under the UCC of the applicable
jurisdiction or jurisdictions and other applicable laws, which
rights shall be cumulative, and (ii) the Seller shall pay each
Purchaser an amount equal to .25% of the then Outstanding
Balance of each Purchaser's Share Percentage of Purchased
Receivables.
SECTION 10.10. Independent Decision. The Seller and each
Originator acknowledges that it has, independently and without
reliance upon any Purchaser, the Agent, CNA, any financial
institution designated by any Initial Purchaser on the signature
page hereof or any Affiliate thereof and based upon such documents
and information as it has deemed appropriate, made its own analysis
and decision to enter into this Agreement.
SECTION 10.11. Execution in 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.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
SELLER: THE CONTINENTAL INSURANCE COMPANY
By /s/J. Heath Fitzsimmons
Senior Vice President
180 Maiden Lane, 12th Floor
New York, New York 10038
Attention: Martin D. Haber, Esq.
General Counsel
Telecopy No.: (212) 440-7982
with a copy to:
The Continental Insurance Companies
One Continental Drive
Cranbury, New Jersey 08570
Attention: Mr. Francis M. Colalucci
Vice President
Telecopy No.: (609) 395-5957
BOSTON OLD COLONY INSURANCE COMPANY
By /s/J. Heath Fitzsimmons
Senior Vice President
THE BUCKEYE UNION INSURANCE COMPANY
By /s/J. Heath Fitzsimmons
Senior Vice President
CASUALTY INSURANCE COMPANY
By /s/Charles Parker
Vice President
COMMERCIAL INSURANCE COMPANY OF NEWARK, N.J.
By /s/J. Heath Fitzsimmons
Senior Vice President
THE CONTINENTAL INSURANCE COMPANY OF
NEW JERSEY
By /s/J. Heath Fitzsimmons
Senior Vice President
CONTINENTAL LLOYD'S INSURANCE COMPANY
By /s/J. Heath Fitzsimmons
Attorney-in-Fact
CONTINENTAL REINSURANCE CORPORATION
By /s/J. Heath Fitzsimmons
Senior Vice President
THE FIDELITY AND CASUALTY COMPANY OF NEW YORK
By /s/J. Heath Fitzsimmons
Senior Vice President
FIREMEN'S INSURANCE COMPANY OF NEWARK,
NEW JERSEY
By /s/J. Heath Fitzsimmons
Senior Vice President
THE GLENS FALLS INSURANCE COMPANY
By /s/J. Heath Fitzsimmons
Senior Vice President
KANSAS CITY FIRE AND MARINE INSURANCE COMPANY
By /s/J. Heath Fitzsimmons
Senior Vice President
THE MAYFLOWER INSURANCE COMPANY, LTD.
By /s/J. Heath Fitzsimmons
Senior Vice President
NATIONAL-BEN FRANKLIN INSURANCE COMPANY
OF ILLINOIS
By /s/J. Heath Fitzsimmons
Senior Vice President
NIAGARA FIRE INSURANCE COMPANY
By /s/J. Heath Fitzsimmons
Senior Vice President
PACIFIC INSURANCE COMPANY
By /s/J. Heath Fitzsimmons
Senior Vice President
WORKERS' COMPENSATION AND INDEMNITY COMPANY
OF CALIFORNIA
By /s/Charles Parker
Vice President
AGENT: CITICORP NORTH AMERICA, INC.,
Individually and as Agent
By /s/Robin M. Beckett
Vice President
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: Corporate Asset Funding
Department
Telex No.: TWX 510 600 5528
Answerback: CIC CAF UD
Telecopy No.: (914) 899-7890
PURCHASERS: CORPORATE ASSET FUNDING COMPANY, INC.
By CITICORP NORTH AMERICA, INC.,
its Managing Agent
By /s/Robin M. Beckett
Vice President
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: Corporate Asset Funding
Department
Telex No.: TWX 510 600 5528
Answerback: CIC CAF UD
Telecopy No.: (914) 899-7890
Account for Deposits:
Bank: Citibank, N.A.
399 Park Avenue
New York, New York 10043
Account Name: Citicorp North America, Inc.,
as managing agent for
Corporate Asset Funding
Company, Inc.
Account Number: 4056-3414
FALCON ASSET SECURITIZATION CORPORATION
By /s/Sheila Stamps
Authorized Signor
One First National Plaza
Suite 0596, 21st Floor
Chicago, Illinois 60670
Attention: The Asset-Backed
Markets Division
Telecopy No.: (312) 732-4487
Account for Deposits:
Bank: The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Account Name: Falcon Asset Securitization
Corporation
Account Number: 58-14810
ATLANTIC ASSET SECURITIZATION CORP.
Credit Lyonnais New York Branch
as Attorney-in-fact for Atlantic Asset
Securitization Corp.
By /s/Barbara Kellc
Authorized Signor
1301 Avenue of the Americas
18th Floor
New York, NY 10019
Facsimile No.: (212) 459-3258
Attention: Merchant Banking
Barbara Kellc
Account for Deposits:
Bank: Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, NY 10019
Account Name: Atlantic Asset Securitization
Corp.
Account Number: 1-25680-0001-00
ABA Number: 0260-0807-3
SHEFFIELD RECEIVABLES CORPORATION
By /s/James F. Moore
Authorized Signor
222 Broadway
New York, New York 10038
Account for Deposits:
Bank: Barclays Bank PLC
75 Wall Street
New York, New York 10065
Account Name: Sheffield Receivables Corporation
Account No.: 050-786393
ABA Number: 026002574