EXHIBIT 10.2
RECEIVABLES PURCHASE AGREEMENT
***Indicates that a portion of the exhibit has been omitted based on a request
for confidential treatment submitted to the Securities and Exchange Commission.
The omitted portions have been filed separately with the Commission.
dated as of April 1, 2005
among
COTT USA RECEIVABLES CORPORATION,
as Seller,
COTT BEVERAGES INC.,
as Servicer,
PARK AVENUE RECEIVABLES COMPANY, LLC,
as Company,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO
as Financial Institutions,
and
JPMORGAN CHASE BANK, N.A.,
as a Financial Institution and as Agent
Table of Contents
Page
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ARTICLE I PURCHASE ARRANGEMENTS...................................................... 1
Section 1.1 Purchase Facility.......................................... 1
Section 1.2 Increases.................................................. 2
Section 1.3 Decreases ................................................. 2
Section 1.4 Payment Requirements....................................... 2
ARTICLE II PAYMENTS AND COLLECTIONS................................................... 3
Section 2.1 Payments .................................................. 3
Section 2.2 Collections Prior to Amortization.......................... 3
Section 2.3 Collections Following Amortization......................... 4
Section 2.4 Application of Collections................................. 4
Section 2.5 Payment Recission.......................................... 5
Section 2.6 Maximum Purchaser Interests................................ 5
Section 2.7 Clean Up Call.............................................. 5
ARTICLE III COMPANY FUNDING ........................................................... 5
Section 3.1 CP Costs .................................................. 5
Section 3.2 CP Costs Payments.......................................... 5
Section 3.3 Calculation of CP Costs.................................... 6
ARTICLE IV FINANCIAL INSTITUTION FUNDING.............................................. 6
Section 4.1 Financial Institution Funding.............................. 6
Section 4.2 Yield Payments............................................. 6
Section 4.3 Selection and Continuation of Tranche Periods.............. 6
Section 4.4 Financial Institution Discount Rates....................... 6
Section 4.5 Suspension of the LIBO Rate................................ 7
ARTICLE V REPRESENTATIONS AND WARRANTIES............................................. 7
Section 5.1 Representations and Warranties of the Seller............... 7
Section 5.2 Representations and Warranties of the Servicer............. 11
Section 5.3 Financial Institution Representations and Warranties....... 12
ARTICLE VI CONDITIONS OF PURCHASES.................................................... 13
Section 6.1 Conditions Precedent to Initial Incremental Purchase....... 13
Section 6.2 Conditions Precedent to All Purchases and Reinvestments.... 14
ARTICLE VII COVENANTS ................................................................. 14
Section 7.1 Affirmative Covenants of the Seller and the Servicer....... 14
Section 7.2 Negative Covenants of the Seller and the Servicer.......... 22
ARTICLE VIII ADMINISTRATION AND COLLECTION.............................................. 24
Section 8.1 Designation of Servicer.................................... 24
Section 8.2 Duties of Servicer......................................... 24
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Section 8.3 Collection Notices......................................... 26
Section 8.4 Responsibilities of Seller................................. 26
Section 8.5 Reports.................................................... 26
Section 8.6 Servicing Fees............................................. 26
ARTICLE IX AMORTIZATION EVENTS........................................................ 27
Section 9.1 Amortization Events........................................ 27
Section 9.2 Actions.................................................... 29
ARTICLE X INDEMNIFICATION............................................................ 30
Section 10.1 Indemnities by the Seller and the Servicer................. 30
Section 10.2 Increased Cost and Reduced Return.......................... 33
Section 10.3 Other Costs and Expenses................................... 34
ARTICLE XI THE AGENT.................................................................. 34
Section 11.1 Authorization and Action................................... 34
Section 11.2 Delegation of Duties....................................... 35
Section 11.3 Exculpatory Provisions..................................... 35
Section 11.4 Reliance by Agent.......................................... 35
Section 11.5 Non-Reliance on Agent and Other Purchasers................. 36
Section 11.6 Reimbursement and Indemnification.......................... 36
Section 11.7 Agent in its Individual Capacity........................... 36
Section 11.8 Successor Agent............................................ 36
ARTICLE XII ASSIGNMENTS; PARTICIPATIONS................................................ 37
Section 12.1 Assignments................................................ 37
Section 12.2 Participations............................................. 38
Section 12.3 Terminating Financial Institutions......................... 38
ARTICLE XIII MISCELLANEOUS.............................................................. 39
Section 13.1 Waivers and Amendments..................................... 39
Section 13.2 Notices.................................................... 40
Section 13.3 Ratable Payments........................................... 41
Section 13.4 Protection of Ownership Interests of the Purchasers........ 41
Section 13.5 Confidentiality............................................ 42
Section 13.6 Bankruptcy Petition........................................ 43
Section 13.7 Limitation of Liability.................................... 43
Section 13.8 CHOICE OF LAW.............................................. 43
Section 13.9 CONSENT TO JURISDICTION.................................... 43
Section 13.10 WAIVER OF JURY TRIAL....................................... 44
Section 13.11 Integration; Binding Effect; Survival of Terms............. 44
Section 13.12 Counterparts; Severability; Section References............. 44
Section 13.13 JPMorgan Roles............................................. 44
Section 13.14 Characterization........................................... 45
Section 13.15 Limited Recourse........................................... 45
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Exhibits and Schedules
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Principal Places of Business of the Seller and the Servicer;
Location(s) of Records; Federal Employer Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Forms of Collection Account Agreements
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX Form of Monthly Report
Exhibit X Form of Performance Undertaking
Exhibit XI Form of Reduction Notice
Exhibit XII Monthly Accounting Periods
Schedule A List of Financial Institutions
Schedule B List of Closing Documents
Schedule C Financial Tests
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COTT USA RECEIVABLES CORPORATION
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement dated as of April 1, 2005 is among COTT
USA RECEIVABLES CORPORATION, a Delaware corporation ("Seller"), COTT BEVERAGES
INC. ("Cott"), a Georgia corporation, as initial Servicer (together with its
permitted successors, the "Servicer"), the entities listed on Schedule A to this
Agreement (together with any of their respective successors and assigns
hereunder, the "Financial Institutions"), PARK AVENUE RECEIVABLES COMPANY, LLC
("Company") and JPMORGAN CHASE BANK, N.A., as agent for the Purchasers hereunder
or any successor agent hereunder (together with its successors and assigns
hereunder, the "Agent"). Unless defined elsewhere herein, capitalized terms used
in this Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to the Purchasers
from time to time.
Company may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.
In the event that Company declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time.
JPMorgan Chase Bank, N.A. has been requested and is willing to act as Agent
on behalf of Company and the Financial Institutions in accordance with the terms
hereof.
Cott has been requested and is willing to act as Servicer on behalf of
Seller, the Agent and the Purchasers in accordance with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions hereof, Seller
may, at its option, sell and assign Purchaser Interests to the Agent for the
benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, Company may, at its option, instruct the Agent to
purchase on behalf of Company, or if Company shall decline to purchase, the
Agent shall purchase on behalf of the Financial Institutions, Purchaser
Interests from time to time in an aggregate amount not to exceed at such time of
purchase the lesser of (i) the Purchase Limit and (ii) the aggregate amount of
the Commitments, during the period from the date hereof to but not including the
Facility Termination Date.
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(b) Seller may, upon at least ten (10) Business Days' notice to
the Agent, terminate in whole or reduce in part, ratably among the Financial
Institutions, the unused portion of the Purchase Limit; provided that each
partial reduction of the Purchase Limit shall be in an amount equal to
$5,000,000 or an integral multiple thereof.
Section 1.2 Increases.
Seller shall provide the Agent with at least two Business Days' prior
notice substantially in the form set forth as Exhibit II hereto of each
Incremental Purchase (a "Purchase Notice"). Each Purchase Notice shall be
subject to Section 6.2 hereof and, except as set forth below, shall be
irrevocable and shall specify the requested Purchase Price (which shall be equal
to $1,000,000 or an integral multiple of $100,000 in excess thereof) and date of
purchase and, in the case of an Incremental Purchase to be funded by the
Financial Institutions, the requested Discount Rate and Tranche Period. Seller
may request no more than six (6) Incremental Purchases during any Accrual
Period. Following receipt of a Purchase Notice, the Agent will determine whether
Company agrees to make the purchase. If Company declines to make a proposed
purchase, the Incremental Purchase of the Purchaser Interest will be made by the
Financial Institutions. On the date of each Incremental Purchase, upon
satisfaction of the applicable conditions precedent set forth in Article VI,
Company or the Financial Institutions, as applicable, shall initiate a wire
transfer to an account designated by Seller of immediately available funds, no
later than 12:00 noon (Chicago time), an amount equal to (i) in the case of
Company, the aggregate Purchase Price of the Purchaser Interests Company is then
purchasing or (ii) in the case of a Financial Institution, such Financial
Institution's Pro Rata Share of the aggregate Purchase Price of the Purchaser
Interests the Financial Institutions are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent with prior
notice in substantially the form set forth as Exhibit XI hereto in conformity
with the Required Notice Period (a "Reduction Notice") of any proposed reduction
of Aggregate Capital from Collections. Such Reduction Notice shall designate (i)
the date (the "Proposed Reduction Date") upon which any such reduction of
Aggregate Capital shall occur (which date shall give effect to the applicable
Required Notice Period), and (ii) the amount of Aggregate Capital to be reduced
which shall be applied ratably to the Purchaser Interests of Company and the
Financial Institutions in accordance with the amount of Capital (if any) owing
to Company, on the one hand, and the amount of Capital (if any) owing to the
Financial Institutions (ratably, based on their respective Pro Rata Shares), on
the other hand (the "Aggregate Reduction"). Only one (1) Reduction Notice shall
be outstanding at any time.
Section 1.4 Payment Requirements. All amounts to be paid or deposited
by Seller or Servicer pursuant to any provision of this Agreement shall be paid
or deposited in accordance with the terms hereof no later than 11:00 a.m.
(Chicago time) on the day when due in immediately available funds, and if not
received before 11:00 a.m. (Chicago time) shall be deemed to be received on the
next succeeding Business Day. If such amounts are payable to a Purchaser they
shall be paid to the Agent, for the account of such Purchaser, at 1 Bank One
Plaza, Chicago, Illinois 60670 until otherwise notified by the Agent. All
computations of Yield, per annum fees calculated as part of any CP Costs, per
annum fees hereunder and per annum fees under the Fee Letter shall be made on
the basis of a year of 360 days for the actual number of
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days elapsed. If any amount hereunder shall be payable on a day which is not a
Business Day, such amount shall be payable on the next succeeding Business Day.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Seller shall immediately pay to the Agent when
due, for the account of the relevant Purchaser or Purchasers, (i) such fees as
are set forth in the Fee Letter, (ii) all CP Costs, (iii) all amounts payable as
Yield, (iv) all amounts payable as Deemed Collections (which shall be due and
payable by Seller within two Business Days and applied to reduce outstanding
Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v)
all amounts required pursuant to Section 2.6, (vi) all amounts payable pursuant
to Article X, if any, (vii) all Servicer costs and expenses, including the
Servicing Fee, in connection with servicing, administering and collecting the
Receivables and (viii) all Broken Funding Costs (collectively, the
"Obligations"). If Seller fails to pay any of the Obligations when due, Seller
agrees to pay, on demand, interest on any such unpaid Obligations at the Default
Rate until such Obligations are paid in full. Notwithstanding the foregoing, no
provision of this Agreement or the Fee Letter shall require the payment or
permit the collection of any amounts hereunder in excess of the maximum
permitted by applicable law. If at any time Seller receives any Collections or
is deemed to receive any Deemed Collections, Seller shall immediately pay such
Collections or Deemed Collections to the Servicer for application in accordance
with the terms and conditions hereof and, at all times prior to such payment,
such Collections or Deemed Collections shall be held in trust by Seller for the
exclusive benefit of the Purchasers and the Agent.
Section 2.2 Collections Prior to Amortization. Prior to the
Amortization Date, any Collections received by the Servicer (including any
Deemed Collections paid by Seller to Servicer) shall be set aside and held in
trust by the Servicer for the payment of any accrued and unpaid Aggregate
Unpaids or for a Reinvestment as provided in this Section 2.2. If at any time
any Collections are received by the Servicer prior to the Amortization Date, (i)
the Servicer shall set aside the Termination Percentage (hereinafter defined) of
Collections evidenced by the Purchaser Interests of each Terminating Financial
Institution and (ii) Seller hereby requests and the Purchasers (other than any
Terminating Financial Institutions) hereby agree to make, simultaneously with
such receipt, a reinvestment (each a "Reinvestment") with that portion of the
balance of each and every Collection received by the Servicer that is part of
any Purchaser Interest (other than any Purchaser Interests of Terminating
Financial Institutions), such that after giving effect to such Reinvestment, the
amount of Capital of such Purchaser Interest immediately after such receipt and
corresponding Reinvestment shall be equal to the amount of Capital immediately
prior to such receipt. On each Settlement Date prior to the occurrence of the
Amortization Date, the Servicer shall remit to the Agent's account the
Collections (including any Deemed Collections) received by the Servicer which
have been set aside during the preceding Settlement Period and have not been
subject to a Reinvestment and apply such amounts (if not previously paid in
accordance with Section 2.1) first, to reduce unpaid Obligations and second, to
reduce the Capital of all Purchaser Interests of Terminating Financial
Institutions, applied ratably to each Terminating Financial Institution
according to its Termination Percentage. If
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such Obligations shall be reduced to zero, any additional Collections received
by the Servicer (i) if applicable, shall be remitted to the Agent's account no
later than 11:00 a.m. (Chicago time) to the extent required to fund any
Aggregate Reduction on such Settlement Date and (ii) any balance remaining
thereafter shall be remitted from the Servicer to Seller on such Settlement
Date. Each Terminating Financial Institution shall be allocated a ratable
portion of Collections from the date of any assignment by Company pursuant to
Section 13.6 (the "Termination Date") until such Terminating Financing
Institution's Capital shall be paid in full. This ratable portion shall be
calculated on the Termination Date of each Terminating Financial Institution as
a percentage equal to (i) Capital of such Terminating Financial Institution
outstanding on its Termination Date, divided by (ii) the Aggregate Capital
outstanding on such Termination Date (the "Termination Percentage"). Each
Terminating Financial Institution's Termination Percentage shall remain constant
prior to the Amortization Date. On and after the Amortization Date, each
Termination Percentage shall be disregarded, and each Terminating Financial
Institution's Capital shall be reduced ratably with all Financial Institutions
in accordance with Section 2.3.
Section 2.3 Collections Following Amortization. On the Amortization
Date and on each day thereafter until the Aggregate Unpaids shall have been
indefeasibly reduced to zero, the Servicer shall set aside and hold in trust,
for the holder of each Purchaser Interest, all Collections received on such day
and an additional amount for the payment of any accrued and unpaid Obligations
owed by Seller and not previously paid by Seller in accordance with Section 2.1.
On and after the Amortization Date, the Servicer shall, at any time upon the
request from time to time by (or pursuant to standing instructions from) the
Agent (i) remit to the Agent's account the amounts set aside pursuant to the
preceding sentence, and (ii) apply such amounts to reduce the Capital associated
with each such Purchaser Interest and any other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall be insufficient
funds on deposit for the Servicer to distribute funds in payment in full of the
aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the
Servicer shall distribute funds:
first, to the payment of the Servicer's reasonable out-of-pocket costs
and expenses in connection with servicing, administering and collecting the
Receivables, including the Servicing Fee,
second, to the reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
third, (to the extent applicable) to the ratable reduction of the
Aggregate Capital (without regard to any Termination Percentage),
fourth, for the ratable payment of all other unpaid Obligations, and
fifth, after the Aggregate Unpaids have been indefeasibly reduced to
zero, to Seller.
Collections applied to the payment of Aggregate Unpaids shall be
distributed in accordance with the aforementioned provisions, and, giving
effect to each of the priorities set
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forth in Section 2.4 above, shall be shared ratably (within each priority) among
the Agent and the Purchasers in accordance with the amount of such Aggregate
Unpaids owing to each of them in respect of each such priority.
Section 2.5 Payment Recission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Agent (for application to the Person or Persons who suffered such
recission, return or refund) the full amount thereof plus interest on any such
unpaid Aggregate Unpaids at the Default Rate from the date of any such
recission, return or refunding.
Section 2.6 Maximum Purchaser Interests. Seller shall ensure that the
Purchaser Interests of the Purchasers shall at no time exceed in the aggregate
100%. If the aggregate of the Purchaser Interests of the Purchasers exceeds
100%, Seller shall pay to the Agent within one (1) Business Day an amount to be
applied to reduce the Aggregate Capital (as allocated by the Agent), such that
after giving effect to such payment the aggregate of the Purchaser Interests
equals or is less than 100%.
Section 2.7 Clean Up Call. In addition to Seller's rights pursuant to
Section 1.3, Seller shall have the right (after providing written notice to the
Agent in accordance with the Required Notice Period), at any time following the
reduction of the Aggregate Capital to a level that is less than 10.0% of the
original Purchase Limit, to repurchase from the Purchasers all, but not less
than all, of the then outstanding Purchaser Interests. The purchase price in
respect thereof shall be an amount equal to the Aggregate Unpaids through the
date of such repurchase, payable in immediately available funds. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of, or against any Purchaser or the Agent, other than as to the
non-creation of any Adverse Claim on such Purchaser Interests by the Purchasers
and the Agent.
ARTICLE III
COMPANY FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
Capital associated with each Purchaser Interest of Company for each day that any
Capital in respect of such Purchaser Interest is outstanding. Each Purchaser
Interest funded by Company substantially with Pooled Commercial Paper will
accrue CP Costs each day on a pro rata basis, based upon the percentage share
the Capital in respect of such Purchaser Interest represents in relation to all
assets held by Company and funded substantially with Pooled Commercial Paper.
Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall
pay to the Agent (for the benefit of Company) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Company for the immediately preceding Accrual Period in
accordance with Article II.
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Section 3.3 Calculation of CP Costs. On the fifth Business Day of each
calendar month, Company shall calculate the aggregate amount of CP Costs for the
applicable Accrual Period ending on the last day of the immediately preceding
calendar month and shall notify Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Purchaser Interest of
the Financial Institutions shall accrue Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. Until Seller gives notice to the Agent of another
Discount Rate in accordance with Section 4.4, the initial Discount Rate for any
Purchaser Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Prime Rate. If the Financial
Institutions acquire by assignment from Company any Purchaser Interest pursuant
to a Liquidity Agreement, each Purchaser Interest so assigned shall each be
deemed to have a new Tranche Period commencing on the date of any such
assignment.
Section 4.2 Yield Payments. On the Settlement Date for each Purchaser
Interest of the Financial Institutions, Seller shall pay to the Agent (for the
benefit of the Financial Institutions) an aggregate amount equal to the accrued
and unpaid Yield for the entire Tranche Period of each such Purchaser Interest
in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
(a) With consultation from (and approval by) the Agent, Seller
shall from time to time request Tranche Periods for the Purchaser Interests of
the Financial Institutions, provided that, if at any time the Financial
Institutions shall have a Purchaser Interest, Seller shall always request
Tranche Periods such that at least one Tranche Period shall end on the date
specified in clause (A) of the definition of Settlement Date. Without limiting
the foregoing, in no event may the Seller request a Tranche Period for a
Purchaser Interest of Company.
(b) Seller or the Agent, upon notice to and consent by the other
received at least three (3) Business Days prior to the end of a Tranche Period
(the "Terminating Tranche") for any Purchaser Interest, may, effective on the
last day of the Terminating Tranche: (i) divide any such Purchaser Interest into
multiple Purchaser Interests, (ii) combine any such Purchaser Interest with one
or more other Purchaser Interests that have a Terminating Tranche ending on the
same day as such Terminating Tranche or (iii) combine any such Purchaser
Interest with a new Purchaser Interests to be purchased on the day such
Terminating Tranche ends. Notwithstanding the foregoing, in no event may a
Purchaser Interest of Company be combined with a Purchaser Interest of the
Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller may select
the LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being requested as a new Discount
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Rate and (ii) at least one (1) Business Day prior to the expiration of any
Terminating Tranche with respect to which the Prime Rate is being requested as a
new Discount Rate, give the Agent irrevocable notice of the new Discount Rate
for the Purchaser Interest associated with such Terminating Tranche. Unless and
until Seller gives notice to the Agent of another Discount Rate, the initial
Discount Rate for any Purchaser Interest transferred to the Financial
Institutions pursuant to the terms and conditions hereof or any Liquidity
Agreement shall be the Prime Rate.
Section 4.5 Suspension of the LIBO Rate. If any Financial Institution
notifies the Agent that it has determined that funding its Pro Rata Share of the
Purchaser Interests of the Financial Institutions at a LIBO Rate would violate
any applicable law, rule, regulation, or directive of any governmental or
regulatory authority, whether or not having the force of law, or that (i)
deposits of a type and maturity appropriate to match fund its Purchaser
Interests at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Purchaser Interest at
such LIBO Rate, then the Agent shall suspend the availability of such LIBO Rate
for such Financial Institution and require Seller to select the Prime Rate for
any Purchaser Interest accruing Yield at such LIBO Rate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Seller. Seller hereby
represents and warrants to the Agent and the Purchasers as of the date hereof
and as of the date of each Incremental Purchase and the date of each
Reinvestment that:
(a) Corporate Existence and Power. Seller is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation identified in the preamble of this Agreement. Seller is organized
solely under the law of the state identified in the preamble of this Agreement.
Seller is duly qualified to do business and is in good standing as a foreign
corporation, and has and holds all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by Seller of this Agreement and each other
Transaction Document to which it is a party, the performance of its obligations
hereunder and thereunder and Seller's use of the proceeds of purchases made
hereunder, are within its corporate powers and authority and have been duly
authorized by all necessary corporate action on its part. This Agreement and
each other Transaction Document to which Seller is a party has been duly
executed and delivered by Seller.
(c) No Conflict. The execution and delivery by Seller of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or
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affecting it or its property, and do not result in the creation or imposition of
any Adverse Claim on assets of Seller (except as created hereunder); and no
transaction contemplated hereby requires compliance with any bulk sales act or
similar law.
(d) Governmental Authorization. Other than the filing of the
financing statements contemplated hereunder, 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 and delivery by Seller of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of Seller's Knowledge, threatened, against or affecting
Seller, or any of its properties, in or before any court, arbitrator or other
body. Seller is not in default with respect to any order of any court,
arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which Seller is a party constitute the legal, valid and binding
obligations of Seller enforceable against Seller in accordance with their
respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) Accuracy of Information. All information heretofore furnished
by Seller or any of its Affiliates to the Agent or the Purchasers for purposes
of or in connection with this Agreement, any of the other Transaction Documents
or any transaction contemplated hereby or thereby is, and all such information
hereafter furnished by Seller or any of its Affiliates to the Agent or the
Purchasers will be, true and accurate in every material respect on the date such
information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
(h) Places of Business and Locations of Records. The principal
places of business and chief executive office of Seller and the offices where it
keeps all of its Records are located at the address(es) listed on Exhibit III.
Seller has taken all actions required to be taken by it under Sections 7.2(a)
and 13.4(a).
(i) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed.
(j) Material Adverse Effect. Seller represents and warrants that
since the date of this Agreement, no event has occurred that would have a
material adverse effect on (i) the financial condition or operations of Seller,
(ii) the ability of Seller to perform its obligations under the Transaction
Documents, or (iii) the collectibility of the Receivables generally or any
material portion of the Receivables (other than any portion of the Receivables
that are not Eligible Receivables and that have been identified in writing to
the Agent for purposes of this Section by the Seller or the Servicer).
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(k) Compliance with Law. Seller has complied in all respects with
all applicable laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject, except, with respect to the
Servicer, where the failure to so comply could not reasonably be expected to
have a Material Adverse Effect. Each Receivable, together with the Contract
related thereto, does not contravene 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 no part of such
Contract is in violation of any such law, rule or regulation.
(l) Compliance with Credit and Collection Policy. Seller has
complied in all material respects with the Credit and Collection Policy with
regard to each Receivable (other than New Division Receivables and Receivables
that are not Eligible Receivables and that have been identified in writing to
the Agent for purposes of this Section by the Seller or the Servicer) and the
related Contract, and has not made any material change to such Credit and
Collection Policy, except such material change as to which the Agent has been
notified in accordance with Section 7.1(a)(vii) and which, if applicable, has
been approved by the Agent.
(m) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable was on the date of its purchase
under the applicable Receivables Sale Agreement, an Eligible Receivable on such
purchase date.
(n) Use of Proceeds. No proceeds of any purchase hereunder will
be used by Seller (i) for a purpose that violates, or would be inconsistent
with, Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(o) Good Title. Immediately prior to each purchase hereunder,
Seller shall be the legal and beneficial owner of the Receivables and Related
Assets with respect thereto, free and clear of any Adverse Claim, except as
created by the Transaction Documents. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Seller's
ownership interest in each Receivable, its Collections and the Related Assets.
(p) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to, and shall, upon each
purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership interest or a valid and perfected first priority
security interest in each Receivable existing or hereafter arising and in the
Related Assets and Collections with respect thereto, free and clear of any
Adverse Claim, except as created by the Transactions Documents. There have been
duly filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Agent's (on behalf of the Purchasers) ownership or security
interest in the Receivables, the Related Assets and the Collections.
Page 9
(q) Names. Seller has not used any corporate names, trade names
or assumed names other than the name in which it has executed this Agreement.
(r) Payments to Originators. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreements, Seller has given
reasonably equivalent value to each Originator in consideration therefor and
such transfer was not made for or on account of an antecedent debt. No transfer
by any Originator of any Receivable to Seller under any Receivables Sale
Agreement is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. Sections 101 et seq.), as amended.
(s) Ownership of Seller. Provider indirectly owns 100% of the
issued and outstanding capital stock of Seller, free and clear of any Adverse
Claim. Such capital stock is validly issued, fully paid and nonassessable, and
there are no outstanding options, warrants or other rights to acquire securities
of Seller.
(t) Not a Holding Company or an Investment Company. Seller is not
a "holding company" or a "subsidiary holding company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or any successor statute. Seller is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or any successor
statute.
(u) Net Receivables Balance. Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Aggregate Reserves.
(v) Federal Employee Identification Number. Seller's Federal
Employer Identification Number is correctly set forth on Exhibit III.
(w) Lock-Boxes and Collection Accounts. The names and addresses
of all Collection Banks, together with the account numbers of the Collection
Accounts of Seller at each Collection Bank and the post office box number of
each Lock-Box, are listed on Exhibit IV. Seller has not granted any Person,
other than the Agent as contemplated by this Agreement, dominion or control of
any Lock-Box or Collection Account, or the right to take dominion and control of
any such Lock-Box or Collection Account at any time.
(x) Enforceability of Contracts. Each Contract with respect to
each Receivable (other than Receivables that are not Eligible Receivables and
that have been identified in writing to the Agent for purposes of this Section
by the Seller or the Servicer) is effective to create, and has created, a legal,
valid and binding obligation of the related Obligor to pay the Outstanding
Balance of the Receivable created thereunder (net of any related amount then
reflected in the Promotional Accrual Account for purposes of calculating Net
Eligible Receivables Balance at such time) and any accrued interest thereon,
enforceable against the Obligor in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
Page 10
Section 5.2 Representations and Warranties of the Servicer. Servicer
hereby represents and warrants to the Agent and the Purchasers as of the date
hereof and as of the date of each Incremental Purchase and the date of each
Reinvestment that:
(a) Corporate Existence and Power. Servicer is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation identified in the preamble of this Agreement. Servicer is
organized solely under the law of the state identified in the preamble of this
Agreement. Servicer is duly qualified to do business and is in good standing as
a foreign corporation, and has and holds all corporate power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted, except
where the failure to qualify to do business or obtain such corporate power and
all governmental licenses, authorizations, consents and approvals could not
reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by Servicer of this Agreement and each
other Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder are within its corporate powers and have
been duly authorized by all necessary corporate action on its part. This
Agreement and each other Transaction Document to which Servicer is a party has
been duly executed and delivered by Servicer.
(c) No Conflict. The execution and delivery by Servicer of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
indenture, credit agreement or financing agreement or any other material
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of Servicer or its
Subsidiaries; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law.
(d) Governmental Authorization. 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 and delivery by Servicer of
this Agreement and each other Transaction Document to which it is a party and
the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. Other than as disclosed in the Provider's
January 1, 2005 10-K filed with the Securities and Exchange Commission, there
are no actions, suits or proceedings pending, or to the best of Servicer's
Knowledge, threatened, against or affecting Servicer, or any of its properties,
in or before any court, arbitrator or other body, that could reasonably be
expected to have a Material Adverse Effect. Servicer is not in default with
respect to any order of any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which Servicer is a party constitute the legal, valid and binding
obligations of
Page 11
Servicer enforceable against Servicer in accordance with their respective terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished
by Servicer or any of its Subsidiaries to the Agent or the Purchasers for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by Servicer or any of its Subsidiaries to the
Agent or the Purchasers will be, true and accurate in every material respect on
the date such information is stated or certified and does not and will not
contain any material misstatement of fact or omit to state a material fact or
any fact necessary to make the statements contained therein not misleading.
(h) Places of Business and Locations of Records. The principal
places of business and chief executive office of Servicer and the offices where
it keeps all of its Records are located at the address(es) listed on Exhibit
III.
(i) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed.
(j) Material Adverse Effect. Since January 1, 2005, no event has
occurred that would have a material adverse effect on the financial condition or
operations of the Servicer or any of its Subsidiaries or the ability of the
Servicer to perform its obligations under this Agreement.
(k) Compliance with Law. Servicer has complied in all respects
with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except, where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect.
(l) Compliance with Credit and Collection Policy. Servicer has
complied in all material respects with the Credit and Collection Policy with
regard to each Receivable (other than New Division Receivables and Receivables
that are not Eligible Receivables and that have been identified in writing to
the Agent for purposes of this Section by the Seller or the Servicer) and the
related Contract, and has not made any material change to such Credit and
Collection Policy, except such material change as to which the Agent has been
notified in accordance with Section 7.1(a)(vii) and which, if applicable, has
been approved by the Agent.
(m) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable was on the date of its purchase
under the applicable Receivables Sale Agreement, an Eligible Receivable on such
purchase date.
Section 5.3 Financial Institution Representations and Warranties. Each
Financial Institution hereby represents and warrants to the Seller, the Agent
and Company that:
Page 12
(a) Existence and Power. Such Financial Institution is a
corporation or a banking association duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, and has all corporate or banking association power to perform its
obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate or banking association powers, have been duly
authorized by all necessary corporate or banking association action, do not
contravene or violate (i) its certificate or articles of incorporation or
association or by-laws (or equivalent thereof), (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on its assets. This Agreement has been duly authorized, executed and
delivered by such Financial Institution.
(c) Governmental Authorization. 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 and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder.
(d) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of such Financial Institution enforceable against such
Financial Institution in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Effectiveness/Initial Incremental
Purchase.
(a) The effectiveness of this Agreement is subject to the
conditions precedent that (i) the Agent shall have received those documents
listed on Schedule B (excluding the opinion letters described on Schedule B) and
(ii) the Agent shall have received all fees and expenses required to be paid on
such date pursuant to the terms of this Agreement and the Fee Letter.
(b) The initial Incremental Purchase of a Purchaser Interest
under this Agreement is subject to the conditions precedent that (i) each of the
conditions precedent to the effectiveness of this Agreement set forth in
paragraph (a) above shall have been satisfied and (ii) the Agent shall have
received each of the opinion letters listed on Schedule B hereto in form and
substance reasonably acceptable to the Agent and its counsel.
Page 13
Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
Each purchase of a Purchaser Interest (other than pursuant to a Liquidity
Agreement) and each Reinvestment shall be subject to the further conditions
precedent that (a) in the case of each such purchase or Reinvestment: (i) the
Servicer shall have delivered to the Agent on or prior to the date of such
purchase, in form and substance reasonably satisfactory to the Agent, all
Monthly Reports as and when due under Section 8.5 and (ii) upon the Agent's
request, the Servicer shall have delivered to the Agent at least two (2) days
prior to such purchase or Reinvestment an interim Monthly Report showing the
amount of Eligible Receivables; (b) the Facility Termination Date shall not have
occurred; (c) the Agent shall have received such other approvals, opinions or
documents as it may reasonably request and (d) on the date of each such
Incremental Purchase or Reinvestment, the following statements shall be true
(and acceptance of the proceeds of such Incremental Purchase or Reinvestment
shall be deemed a representation and warranty by Seller that such statements are
then true):
(i) the representations and warranties set forth in Sections 5.1
and 5.2 are true and correct on and as of the date of such Incremental Purchase
or Reinvestment as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from such Incremental Purchase or Reinvestment, that will constitute an
Amortization Event, and no event has occurred and is continuing, or would result
from such Incremental Purchase or Reinvestment, that would constitute a
Potential Amortization Event;
(iii) the Aggregate Capital does not exceed the Purchase Limit
and the aggregate Purchaser Interests do not exceed 100%; and
(iv) if such Incremental Purchase or Reinvestment is funded by
the Company, the Company shall be party to unexpired Liquidity Agreements with
an aggregate commitment limit equal to at least 102% of the Purchase Limit.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of the Seller and the Servicer.
Until the date on which the Aggregate Unpaids have been indefeasibly paid in
full and this Agreement
Page 14
terminates in accordance with its terms, each of Seller and the Servicer
severally, and not jointly, hereby covenants, as to itself, as set forth below:
(a) Financial Reporting. Each of Seller and Servicer will
maintain, for itself and each of its consolidated Subsidiaries, a system of
accounting established and administered in accordance with GAAP, and furnish or
cause to be furnished to the Agent:
(i) Annual Reporting. Within 90 days after the close of each
of such Person's fiscal years, financial statements (which shall include a
balance sheet, a statement of income and a statement of cash flows) for such
Person for such fiscal year certified in a manner reasonably acceptable to the
Agent by an Authorized Officer of such Person.
(ii) Quarterly Reporting. Within 45 days after the close of
the first three (3) quarterly periods of each of its respective fiscal years,
balance sheets of each Person as at the close of each such period and statements
of income and retained earnings and a statement of cash flows (in each case, on
a consolidated and consolidating basis) for each such Person for the period from
the beginning of such fiscal year to the end of such quarter, all certified by
an Authorized Officer of such Person.
(iii) Compliance Certificates. At the time of delivery of
any financial statements required hereunder, a compliance certificate in
substantially the form of Exhibit V signed by an Authorized Officer of the
Person delivering such financial statements and dated the date of such annual
financial statement or such quarterly financial statement, as the case may be.
(iv) Copies of Notices. Promptly upon its receipt of any
written notice, request for consent, financial statements, certification, report
or other similar communication under or in connection with any Transaction
Document from any Person other than the Agent or any Purchaser, copies of the
same.
(v) Change in Credit and Collection Policy. At least twenty
(20) days prior to the effectiveness of any material change in or material
amendment to the Credit and Collection Policy, a copy of the Credit and
Collection Policy then in effect and a notice (A) indicating such proposed
change or amendment, and (B) if such proposed change or amendment would be
reasonably likely to adversely affect the collectibility of the Receivables,
requesting the Agent's consent thereto.
(vi) Other Information.
(A) Promptly, from time to time, such other information,
documents, records or reports relating to the Receivables or Related Assets or
the condition or operations, financial or otherwise, of Seller or Servicer as
the Agent may from time to time reasonably request in order to protect the
interests of the Agent and the Purchasers under or as contemplated by the
Transaction Documents.
(B) In the case of the Seller, promptly, from time to time,
procure from any Originator under the applicable Receivables Sale Agreement or
the Provider under the Performance Undertaking such other information,
documents, records or
Page 15
reports relating to (1) Receivables or the Related Assets, (2) or the condition
or operations, financial or otherwise, of the Originators and the Provider or
(3) any other contractual rights or obligations of the Originators and the
Provider, in each case, as the Agent may from time to time reasonably request in
order to protect the interests of the Agent and the Purchasers under or as
contemplated by the Transaction Documents; provided, that, with respect to the
information, documents, records or reports required to be delivered under clause
(B)(3) of this Section 7.1(a)(vi), if the Seller is required to provide the
Agent and the Purchasers with any information for which the applicable
Originator or the Provider owes a third party a duty of confidentiality, the
Agent and the Purchasers will cooperate with the Seller, the Originators and the
Provider (as applicable) to obtain such third party's consent to disclose such
information to the Agent and the Purchasers and will agree to any reasonable
confidentiality undertakings required by such third party to obtain such
consent.
(b) Notices. Seller and the Servicer will notify the Agent in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) Amortization Events or Potential Amortization Events.
The occurrence of any Amortization Event and each Potential Amortization Event,
by a statement of an Authorized Officer of such Person.
(ii) Judgment and Proceedings.
(A) The entry of any judgment or decree against the
Provider, Servicer, any Originator or any of their respective Subsidiaries not
satisfied or dismissed if the aggregate amount of all judgments and decrees then
outstanding against Provider, the Originators, Servicer and their Subsidiaries
exceeds $15,000,000,
(B) The institution of any litigation, arbitration
proceeding or governmental proceeding against the Servicer or any of its
Subsidiaries which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, or
(C) The entry of any judgment or decree or the institution
of any litigation, arbitration proceeding or governmental proceeding against
Seller.
(iii) Material Adverse Effect. The occurrence of any event
or condition that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(iv) Termination Date. The occurrence of the "Termination
Date" under and as defined in any Receivables Sale Agreement.
(v) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any other financing arrangement pursuant to
which the Servicer is a debtor or an obligor and/or the occurrence of any "Event
of Default" or "Default" under the Credit Agreement.
Page 16
(c) Compliance with Laws and Preservation of Corporate Existence.
Each of Seller and the Servicer will comply in all respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject; except, in the case of the Servicer, where
such non-compliance could not reasonably be expected to have a Material Adverse
Effect. Each of Seller and the Servicer will 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 its business is conducted, except, in the
case of the Servicer, where failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(d) Audits. Each of Seller and the Servicer will furnish to the
Agent from time to time such information with respect to it and the Receivables
as the Agent may reasonably request. Each of Seller and the Servicer will, from
time to time during regular business hours as requested by the Agent upon
reasonable notice and at the sole reasonable cost of Seller or the Servicer (as
applicable and, in the case of the Servicer, subject to the Servicer's
reimbursesment for such costs pursuant to Section 2.1(vii) of this Agreement),
permit the Agent, or its agents or representatives, (i) to examine and make
copies of and abstracts from all Records in the possession or under the control
of such Person relating to the Receivables and the Related Assets, including,
without limitation, the related Contracts, and (ii) to visit the offices and
properties of such Person for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to such Person's financial
condition or the Receivables and the Related Assets or any Person's performance
under any of the Transaction Documents or any Person's performance under the
Contracts and, in each case, with (A) after the occurrence and during the
continuance of an Amortization Event, any officer, director or employee of the
Seller or the Servicer the Agent deems reasonably necessary or desirable to
evaluate the Receivables and the Related Assets and (B) prior to the occurrence
and continuation of an Amortization Event, any officer or director of the Seller
or any Authorized Officer of the Servicer, and upon the request of the Agent,
the Servicer will make available such other officers, directors and employees of
the Servicer that the Agent deems reasonably necessary or desirable to
supplement the Agent's evaluation of the Receivables and the Related Assets;
provided, that, unless an Amortization Event shall have occurred and be
continuing at the time any such audit is requested by the Agent, neither Seller
nor Servicer shall be required to reimburse the Agent or any of the Purchasers
for the costs or expenses in respect of more than one audit during any calendar
year unless all of the audits previously conducted at the expense of the Seller
and the Servicer during such calendar year have not produced audit results
reasonably satisfactory to the Agent.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will maintain and implement administrative
and operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit the
immediate identification of each new Receivable and all Collections of and
adjustments to each existing Receivable). The Servicer will give the Agent
notice of any material change in the administrative and operating procedures
referred to in the previous sentence.
Page 17
(ii) Each of Seller and the Servicer will (A) on or prior to
the date hereof, mark its master data processing records and other books and
records relating to the Purchaser Interests with a legend, acceptable to the
Agent, describing the Purchaser Interests and (B) upon the request of the Agent
after an Amortization Event (x) mark each Contract with a legend describing the
Purchaser Interests and (y) deliver to the Agent complete copies of all
Contracts relating to the Receivables; provided, that to the extent that any
Contracts constitute "chattel paper" or "instruments" (in each case, as defined
in Section 9-102 of the UCC) or the possession of which is otherwise deemed
necessary or desirable to the Agent, in the Agent's sole discretion, to protect
the interests of the Agent and the Purchasers hereunder, Seller and Servicer
shall deliver to the Agent originals of such Contracts.
(f) Compliance with Contracts and Credit and Collection Policy.
Each of Seller and Servicer (but solely in its capacity as Servicer) will timely
and fully (i) perform and comply with all provisions, covenants and other
promises required to be observed by it under the Contracts to the extent that
such provisions, covenants and other promises are related to the Receivables
(other than New Division Receivables and Receivables that are not Eligible
Receivables and that have been identified in writing to the Agent for purposes
of this Section by the Seller or the Servicer), and (ii) comply in all material
respects with the Credit and Collection Policy in regard to each Receivable and
the related Contract.
(g) Performance and Enforcement of Transaction Documents.
(i) Seller will perform its obligations and undertakings
under and pursuant to the applicable Receivables Sale Agreement, will purchase
Receivables thereunder in strict compliance with the terms thereof and will
vigorously enforce the rights and remedies accorded to Seller under each
Receivables Sale Agreement. Seller will take all actions to exercise, perfect
and enforce its rights and interests (and the rights and interests of the Agent
and the Purchasers as assignees of Seller) under the Receivables Sale Agreements
as the Agent may from time to time reasonably request, including, without
limitation, (A) facilitating access by the Agent to copies of the Records
maintained at and the offices of each Originator and (B) making claims to which
it may be entitled under any indemnity, reimbursement or similar provision
contained in any Receivables Sale Agreement. Without limiting the generality of
Section 7.1(a)(iv), Seller will promptly deliver to the Agent a copy of all
notices, certificates or other information delivered to Seller pursuant to or in
connection with any Receivables Sale Agreement.
(ii) Seller will require the Provider to perform its
obligations and undertakings under and pursuant to the Performance Undertaking
and will vigorously enforce the rights accorded to Seller under the Performance
Undertaking. Seller will take all actions to perfect and enforce its rights and
interests (and the rights and interests of the Agent and the Purchasers as
assignees of Seller) under the Performance Undertaking as the Agent may from
time to time reasonably request. Without limiting the generality of Section 7.
1(a)(iv), Seller will promptly deliver to the Agent a copy of all notices,
certificates or other information delivered to Seller pursuant to or in
connection with the Performance Undertaking.
(h) Ownership. Seller will take all necessary action to (i) vest
legal and equitable title to the Receivables, the Related Assets and the
Collections purchased under the
Page 18
Receivables Sale Agreements irrevocably in Seller, free and clear of any Adverse
Claims other than Adverse Claims in favor of the Agent and the Purchasers
(including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect Seller's interest in such
Receivables, Related Assets and Collections and such other action to perfect,
protect or more fully evidence the interest of Seller therein as the Agent may
reasonably request), and (ii) establish and maintain, in favor of the Agent, for
the benefit of the Purchasers, a valid and perfected first priority undivided
percentage ownership interest (and/or a valid and perfected first priority
security interest) in all Receivables, Related Assets and Collections to the
full extent contemplated herein, free and clear of any Adverse Claims
(including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect the Agent's (for the benefit of the
Purchasers) interest in such Receivables, Related Assets and Collections and
such other action to perfect, protect or more fully evidence the interest of the
Agent for the benefit of the Purchasers as the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the Purchasers
are entering into the transactions contemplated by this Agreement in reliance
upon Seller's identity as a legal entity that is separate from the Provider, the
Servicer and each Originator. Therefore, from and after the date of execution
and delivery of this Agreement, Seller shall take all reasonable steps,
including, without limitation, all steps that the Agent or any Purchaser may
from time to time reasonably request, to maintain Seller's identity as a
separate legal entity and to make it manifest to third parties that Seller is an
entity with assets and liabilities distinct from those of the Originators, the
Servicer, the Provider and any Affiliates thereof and not just a division of the
Provider, the Servicer, any Originator or any such Affiliate. Without limiting
the generality of the foregoing and in addition to the other covenants set forth
herein, Seller will:
(A) conduct its own business in its own name and require
that all full time employees of Seller, if any, identify themselves as such and
not as employees of any Originator, the Servicer or the Provider (including,
without limitation, by means of providing appropriate employees with business or
identification cards identifying such employees as Seller's employees);
(B) compensate all employees, consultants and agents
directly, from Seller's own funds, for services provided to Seller by such
employees, consultants and agents and, to the extent any employee, consultant or
agent of Seller is also an employee, consultant or agent of any Originator, the
Servicer, the Provider or any Affiliate thereof, allocate the compensation of
such employee, consultant or agent between Seller and such Originator, the
Servicer, the Provider or such Affiliate, as applicable, on a basis that
reflects the services rendered to Seller and such Originator, the Servicer, the
Provider or such Affiliate, as applicable;
(C) clearly identify its offices (by signage or otherwise)
as its offices and, if any such office is located in the offices of any
Originator, the Servicer, the Provider or any Affiliate thereof, Seller shall
lease such office at a fair market rent;
(D) have a separate telephone number, which will be answered
only in its name and separate stationery, invoices and checks in its own name;
Page 19
(E) conduct all transactions with the Provider, the
Originators and the Servicer (including, without limitation, any delegation of
its obligations hereunder as Servicer) strictly on an arm's length basis,
allocate all overhead expenses (including, without limitation, telephone and
other utility charges) for items shared between Seller, the Servicer, the
Provider or any Originator on the basis of actual use to the extent practicable
and, to the extent such allocation is not practicable, on a basis reasonably
related to actual use;
(F) at all times have a Board of Directors consisting of
three members, at least one member of which is an Independent Director;
(G) observe all corporate formalities as a distinct entity,
and ensure that all corporate actions relating to (A) the selection, maintenance
or replacement of the Independent Director, (B) the dissolution or liquidation
of Seller or (C) the initiation of, participation in, acquiescence in or consent
to any bankruptcy, insolvency, reorganization or similar proceeding involving
Seller, are duly authorized by unanimous vote of its Board of Directors
(including the Independent Director);
(H) maintain Seller's books and records separate from those
of the Originators, the Servicer, the Provider and any Affiliate thereof and
otherwise readily identifiable as its own assets rather than assets of the
Originators, the Servicer, the Provider and any Affiliate thereof;
(I) prepare its financial statements separately from those
of the Originators, the Servicer, the Provider or any Affiliate thereof and
insure that any consolidated financial statements of the Originators, the
Servicer, the Provider or any Affiliate thereof that include Seller and that are
filed with the Securities and Exchange Commission or any other governmental
agency have notes clearly stating that Seller is a separate corporate entity and
that its assets will be available first and foremost to satisfy the claims of
the creditors of Seller;
(J) except as herein specifically otherwise provided,
maintain the funds or other assets of Seller separate from, and not commingled
with, those of any Originator, the Servicer, the Provider or any Affiliate
thereof and only maintain bank accounts or other depository accounts to which
Seller alone is the account party, into which Seller alone makes deposits and
from which Seller alone (or the Agent hereunder) has the power to make
withdrawals;
(K) pay all of Seller's operating expenses from Seller's own
assets (except for certain payments by the Originators, the Servicer, the
Provider or other Persons pursuant to allocation arrangements that comply with
the requirements of this Section 7.1(i));
(L) operate its business and activities such that: it does
not engage in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement, contract, lease or
other undertaking, other than the transactions contemplated and authorized by
this Agreement and the Receivables Sale Agreements; and does
Page 20
not create, incur, guarantee, assume or suffer to exist any indebtedness or
other liabilities, whether direct or contingent, other than (1) as a result of
the endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, (2) the incurrence of
obligations under this Agreement, (3) the incurrence of obligations, as
expressly contemplated in the Receivables Sale Agreements, to make payment to
the Originators thereunder for the purchase of Receivables from the Originators
under the Receivables Sale Agreements, and (4) the incurrence of operating
expenses in the ordinary course of business of the type otherwise contemplated
by this Agreement;
(M) maintain its corporate charter in conformity with this
Agreement, such that it does not amend, restate, supplement or otherwise modify
its articles of incorporation or by-laws (or equivalent thereof) in any respect
that would impair its ability to comply with the terms or provisions of any of
the Transaction Documents, including, without limitation, Section 7.1(i) of this
Agreement;
(N) maintain the effectiveness of, and continue to perform
under each Receivables Sale Agreement and the Performance Undertaking, such that
it does not amend, restate, supplement, cancel, terminate or otherwise modify
any Receivables Sale Agreement or the Performance Undertaking, or give any
consent, waiver, directive or approval thereunder or waive any default, action,
omission or breach under any Receivables Sale Agreement or the Performance
Undertaking or otherwise grant any indulgence thereunder, without (in each case)
the prior written consent of the Agent;
(O) maintain its corporate separateness such that it does
not merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions, and
except as otherwise contemplated herein) all or substantially all of its assets
(whether now owned or hereafter acquired) to, or acquire all or substantially
all of the assets of, any Person, nor at any time create, have, acquire,
maintain or hold any interest in any Subsidiary.
(P) maintain at all times the Required Capital Amount (as
defined in each Receivables Sale Agreement) and refrain from making any
dividend, distribution, redemption of capital stock or payment of any
subordinated indebtedness which would cause the Required Capital Amount to cease
to be so maintained; and
(Q) take such other actions as are necessary on its part to
ensure that the facts and assumptions set forth in the opinion letter issued by
Drinker Biddle & Reath LLP, as counsel for Seller, in connection with the
closing or initial Incremental Purchase under this Agreement and relating to
substantive consolidation issues, and in the certificates accompanying such
opinion, remain true and correct in all material respects at all times.
(j) Collections. Each of Seller and the Servicer will cause (1)
all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank
into a Collection Account and (2) each Lock-Box and Collection Account to be
subject at all times to a Collection Account Agreement that is in full force and
effect. In the event any payments relating to Receivables are remitted directly
to Seller or any Affiliate of Seller, Seller will remit (or will use its best
efforts to cause all such payments to be remitted) directly to a Collection Bank
and
Page 21
deposited into a Collection Account within two (2) Business Days following
receipt thereof, and, at all times prior to such remittance, Seller will itself
hold or, if applicable, will cause such payments to be held in trust for the
exclusive benefit of the Agent and the Purchasers. Seller will maintain
exclusive ownership, dominion and control (subject to the terms of this
Agreement) of each Lock-Box and Collection Account and shall not grant the right
to take dominion and control of any Lock-Box or Collection Account at any time,
except to the Agent as contemplated by this Agreement. Until the Agent delivers
a Collection Notice to the applicable Collection Bank, the Agent shall permit
Seller and the Servicer to provide instructions to such Collection Bank with
respect to the Collection Accounts and Lock-Boxes maintained by such Collection
Bank.
(k) Taxes. Each of Seller and the Servicer will file all tax
returns and reports required by law to be filed by it and will promptly pay all
taxes and governmental charges at any time owing, except in the case of the
Servicer where such taxes are being contested in good faith and in respect of
which Servicer shall have established adequate reserves and no enforcement
proceeding has been commenced. Seller will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of Company, the Agent or any Financial Institution.
(l) Payment to Originators. With respect to any Receivable
purchased by Seller from any Originator, such sale shall be effected under, and
in strict compliance with the terms of, the applicable Receivables Sale
Agreement, including, without limitation, the terms relating to the amount and
timing of payments to be made to such Originator in respect of the purchase
price for such Receivable.
Section 7.2 Negative Covenants of Seller and the Servicer. Until the
date on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each of Seller and the
Servicer hereby severally, and not jointly, covenants, as to itself, that:
(a) Name Change, Offices and Records. Seller will not make any
change to its name (within the meaning of Section 9-507(c) of any applicable
enactment of the UCC), identity, or jurisdiction of organization, unless (i) at
least forty-five (45) days prior to the effective date of any such change,
Seller provides written notice thereof to the Agent, (ii) at least ten (10) days
prior to such effective date, Seller delivers to the Agent such financing
statements (Forms UCC-1 and UCC-3), executed by Seller (if required under
applicable law) which the Agent or any Purchaser may reasonably request to
reflect such change, together with such other documents and instruments that the
Agent or any Purchaser may reasonably request in connection therewith, (iii) at
least ten (10) days prior to such effective date, Seller has taken all other
steps to ensure that the Agent, for the benefit of itself and the Purchasers,
continues to have a first priority perfected ownership in the Receivables, the
Related Assets related thereto and any Collections thereon and (iv) in the case
of any change in its jurisdiction of organization, if requested by the Agent or
any Purchaser, the Agent and such Purchaser shall have received, prior to such
change, an opinion of counsel, in form and substance reasonably satisfactory to
the Agent and such Purchaser, as to such incorporation and Seller's valid
existence and good standing and the perfection and preservation of priority of
the Agent's ownership or security interest in, the Receivables, the Related
Assets and Collections.
Page 22
(b) Change in Payment Instructions to Obligors. Except as may be
required by the Agent pursuant to Section 8.2(b), neither Seller nor Servicer
will add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that the Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy.
Without the Agent's prior written consent, Seller will not agree to make any
change to the Credit and Collection Policy that could reasonably be expected to
adversely affect the collectibility of the Receivables. Except as provided in
Section 8.2(d), the Servicer will not and will not agree to, extend, amend or
otherwise modify the terms of any outstanding Receivable or the terms of any
Contract related thereto to the extent that such terms relate to such Receivable
other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of
law or otherwise) or otherwise dispose of, or grant any option with respect to,
or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Assets or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of the Agent and
the Purchasers provided for herein), and Seller will defend the right, title and
interest of the Agent and the Purchasers in, to and under any of the foregoing
property, against all claims of third parties claiming through or under Seller
or any Originator. Seller will not create or suffer to exist any mortgage,
pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory, except in favor of the Agent and the
Purchasers as provided hereunder.
(e) Net Receivables Balance. At no time prior to the Amortization
Date shall Seller permit the Net Receivables Balance to be less than an amount
equal to the sum of (i) the Aggregate Capital plus (ii) the Aggregate Reserves.
(f) Termination Date Determination. Seller will not designate the
Termination Date (as defined in any Receivables Sale Agreement), or send any
written notice to any Originator in respect thereof, without the prior written
consent of the Agent, except with respect to the occurrence of such Termination
Date arising pursuant to Section 5.1(d) of a Receivables Sale Agreement.
(g) Restricted Junior Payments. From and after the continuance of
any Amortization Event, Seller will not make any Restricted Junior Payment if,
after giving effect thereto, Seller would fail to meet its obligations set forth
in Section 7.2(e).
Page 23
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer. (a) The servicing, administration
and collection of the Receivables shall be conducted by the Servicer so
designated from time to time in accordance with this Section 8.1. The Agent and
the Purchasers hereby appoint Seller to perform all such servicing,
administration and collection tasks. Seller hereby delegates such servicing,
administration and collection tasks to Cott and the Agent and the Purchasers
consent to such delegation. Cott hereby accepts such delegation from Seller and
agrees to perform the duties and obligations of the Servicer pursuant to the
terms of this Agreement. The Agent may, or upon the direction of the Required
Financial Institutions, the Agent shall, at any time after the occurrence and
during the continuance of an Amortization Event, designate any Person to succeed
Cott as Servicer. From and after the designation of any Person as the successor
Servicer to Cott, the Agent may, or upon the direction of the Required Financial
Institutions, the Agent shall designate any Person as a subsequent successor
Servicer at any time.
(b) Without the prior written consent of the Agent and the
Required Financial Institutions, Seller, Cott and any other Person subsequently
designated as Servicer by the Agent in accordance with Section 8.1(a)) shall not
be permitted to delegate any of its duties or responsibilities as Servicer to
any Person other than (i) Seller, (ii) Cott and (iii) with respect to certain
Charged-Off Receivables, outside collection agencies and attorneys in accordance
with its customary practices. If at any time the Agent shall designate any
successor Servicer, all duties and responsibilities theretofore delegated to the
Servicer being replaced may, at the discretion of the Agent, be terminated
forthwith on notice given by the Agent to the Servicer being replaced and to
Seller.
(c) Notwithstanding the foregoing subsection (b), for so long as
Cott shall serve as the Servicer (i) Cott shall be and remain primarily liable
to the Agent and the Purchasers for the full and prompt performance of all
duties and responsibilities of the Servicer hereunder and (ii) the Agent and the
Purchasers shall be entitled to deal exclusively with Cott in matters relating
to the discharge by the Servicer of its duties and responsibilities hereunder.
The Agent and the Purchasers shall not be required to give notice, demand or
other communication to any Person other than Cott in order for communication to
the Servicer and its sub-servicer or other delegate with respect thereto to be
accomplished. Cott, at all times that it is the Servicer, shall be responsible
for providing any sub-servicer or other delegate of the Servicer with any notice
given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer. (a) The Servicer shall take or cause
to be taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
(b) The Servicer will instruct all Obligors to pay all
Collections directly to a Lock-Box or Collection Account owned by and maintained
in the name of Seller. The Servicer shall enter into and cause to be in effect
at all times a Collection Account Agreement substantially in the form of one of
the agreements attached hereto as Exhibit VI (or such other form as the Agent
may agree in writing) with each bank maintaining a Collection
Page 24
Account at any time. In the case of any remittances received in any Lock-Box or
Collection Account that shall have been identified, to the satisfaction of the
Servicer, to not constitute Collections or other proceeds of the Receivables or
the Related Assets, the Servicer shall promptly remit such items to the Person
identified to it as being the owner of such remittances. From and after the date
the Agent delivers to any Collection Bank a Collection Notice pursuant to
Section 8.3, the Agent may request that the Servicer, and the Servicer thereupon
promptly shall, instruct all Obligors with respect to the Receivables to remit
all payments thereon to a new depositary account specified by the Agent and, at
all times thereafter, Seller and the Servicer shall not deposit or otherwise
credit, and shall not permit any other Person to deposit or otherwise credit to
such new depositary account any cash or payment item other than Collections.
(c) The Servicer shall administer the Collections in accordance
with the procedures described herein and in Article II. The Servicer shall set
aside and hold in trust for the account of Seller and the Purchasers their
respective shares of the Collections in accordance with Article II. The Servicer
shall, upon the request of the Agent, segregate, in a manner reasonably
acceptable to the Agent, all cash, checks and other instruments received by it
from time to time constituting Collections from the general funds of the
Servicer or Seller prior to the remittance thereof in accordance with Article
II. If the Servicer shall be required to segregate Collections pursuant to the
preceding sentence, the Servicer shall segregate and deposit with a bank
designated by the Agent such allocable share of Collections of Receivables set
aside for the Purchasers on the first Business Day following the date of receipt
by the Servicer of such Collections, duly endorsed or with duly executed
instruments of transfer; provided, that if such Collections are not received
until after 11:00 a.m. (Chicago time), the Servicer shall not be required to set
aside such Collections in accordance with this sentence until the second
Business Day following receipt of such Collections.
(d) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Defaulted Receivable, Delinquent Receivable or Charged-Off Receivable or limit
the rights of the Agent or the Purchasers under this Agreement. Notwithstanding
anything to the contrary contained herein, at any time after the occurrence and
during the continuance of an Amortization Event, the Agent shall have the
absolute and unlimited right to direct the Servicer to commence or settle any
legal action with respect to any Receivable or to foreclose upon or repossess
any Related Assets.
(e) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Assets or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent following an Amortization Event, deliver or make available
to the Agent all such Records, at a place selected by the Agent. The Servicer
shall, from time to time at the request of any Purchaser, furnish to the
Purchasers (promptly after any such request) a calculation of the amounts set
aside for the Purchasers pursuant to Article II.
Page 25
(f) Any payment by an Obligor in respect of any Indebtedness owed
by it to any Originator or Seller shall, except as otherwise specified by such
Obligor or otherwise required by contract or law and unless otherwise instructed
by the Agent, be applied as a Collection of any Receivable of such Obligor
(starting with the oldest such Receivable) to the extent of any amounts then due
and payable thereunder before being applied to any other receivable or other
obligation of such Obligor. The Servicer shall, as soon as practicable following
receipt thereof turn over to Seller any cash collections or other cash proceeds
received with respect to Indebtedness of an Obligor not constituting
Receivables.
Section 8.3 Collection Notices. The Agent is authorized at any time to
date and to deliver to the Collection Banks the Collection Notices. The Agent
agrees to deliver to Servicer a copy of any Collection Notice promptly following
delivery thereof to a Collection Bank; provided, that any failure or delay in
delivering any Collection Notice shall not impair or adversely affect the
effectiveness of any such Collection Notice. Seller hereby transfers to the
Agent for the benefit of the Purchasers, exclusive dominion and control of each
Lock-Box and Collection Account and, effective when the Agent delivers any
Collection Notice, the exclusive ownership of each Lock-Box and the Collection
Accounts. Until the Agent delivers a Collection Notice to the applicable
Collection Bank, the Agent shall permit Seller and the Servicer to provide
instructions to such Collection Bank with respect to the applicable Collection
Accounts and Lock-Boxes. In case any authorized signatory of Seller whose
signature appears on a Collection Account Agreement shall cease to have such
authority before the delivery of such notice, such Collection Notice shall
nevertheless be valid as if such authority had remained in force. Seller hereby
authorizes the Agent, and agrees that the Agent shall be entitled to (i) endorse
Seller's name on checks and other instruments representing Collections, (ii)
enforce the Receivables, the related Contracts and the Related Assets and (iii)
take such action as shall be necessary or desirable to cause all cash, checks
and other instruments constituting Collections of Receivables to come into the
possession of the Agent rather than Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not release the Servicer, any Originator or Seller from
any of their respective duties or obligations with respect to any Receivables or
under the related Contracts. The Purchasers shall have no obligation or
liability with respect to any Receivables or related Contracts, nor shall any of
them be obligated to perform the obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and forward to the
Agent (i) on the 15th day of each calendar month and at such times as the Agent
shall reasonably request, a Monthly Report in respect of the Monthly Accounting
Period then most recently ended and (ii) at such times as the Agent shall
reasonably request, a listing by Obligor of all Receivables together with an
aging of such Receivables.
Section 8.6 Servicing Fees. In consideration of Cott's agreement to
act as Servicer hereunder, the Purchasers hereby agree that, so long as Cott
shall continue to perform as Servicer hereunder, Seller shall pay over to Cott a
fee (the "Servicing Fee") on each Settlement Date, in arrears for the
immediately preceding Accrual Period, equal to 1.00% per annum of the average
aggregate Outstanding Balance of all Receivables during the preceding Accrual
Period, as compensation for its servicing activities.
Page 26
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of
the following events shall constitute an Amortization Event:
(a) Any of Seller or Servicer shall fail (i) to make any payment
or deposit required hereunder when due or (ii) to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (i) of this
paragraph (a) and Section 9.1(e)) and such failure continues for three (3)
consecutive Business Days after an Authorized Officer of Seller or Servicer
becomes aware of such failure.
(b) (i) Any representation or warranty made by Seller or
Servicer in this Agreement shall prove to have been incorrect when made or
deemed made, or (ii) any representation, warranty, certification or statement
made by Seller or Servicer in any other Transaction Document or in any other
document delivered pursuant hereto or thereto shall prove to have been incorrect
in any material respect when made or deemed made.
(c) The occurrence of any of the following:
(i) Failure of Seller to pay any Indebtedness when due;
(ii) The default by Seller in the performance of any term,
provision or condition contained in any agreement (besides this Agreement) under
which any Indebtedness was created or is governed, the effect of which is to
cause, or to permit the holder or holders of any Indebtedness to cause
Indebtedness to become due prior to its stated maturity; or any Indebtedness
shall be declared to be due and payable or required to be prepaid (other than by
a regularly scheduled payment) prior to the date of maturity thereof;
(iii) The failure of the Servicer to pay any Indebtedness
when due which Indebtedness individually or in the aggregate exceeds $15,000,000
("Material Indebtedness");
(iv) The default by the Servicer in the performance of any
term, provision or condition contained in any agreement under which any Material
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of Material Indebtedness to cause Material
Indebtedness to become due prior to its stated maturity; or any Material
Indebtedness shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the date of maturity
thereof; or
(v) Any (A) "Event of Default" under or in connection with
the Credit Agreement or (B) event, circumstance or condition having the effect
of permitting termination of any financing commitments or the acceleration of
any outstanding Indebtedness or recourse to any guaranty or collateral for any
outstanding Indebtedness under the Credit Agreement shall occur or exist;
provided, that, in the absence of an "Event of Default," (1) a refinancing or
replacement of the Credit Agreement or (2) the expiration of the
Page 27
commitments thereunder on "March 31, 2010" shall not constitute an Amortization
Event hereunder.
(d) (i) Any of the Servicer or Seller 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 (ii) any proceeding shall be instituted by or against any the
Servicer or Seller seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property); provided that, in the
case of any proceeding instituted against Servicer, such event shall not
constitute an Amortization Event until either (A) such proceeding shall have
remained undismissed or unstayed for a period of thirty (30) days, (B) an order
for relief shall have been entered against Servicer under the Federal bankruptcy
laws or (C) Servicer shall have taken corporate action consenting to, approving
or acquiescing in the commencement or maintenance of such proceeding; or (iii)
Servicer or Seller shall take any corporate action to authorize any of the
actions set forth in clauses (i) or (ii) above in this subsection (d).
(e) Seller shall fail to comply with the terms of Section 2.6
hereof.
(f) As at the end of any Monthly Accounting Period,
(i) the average Default Ratio, with respect to the three
Monthly Accounting Periods then most recently ended, shall exceed 1.25%,
(ii) the average Delinquency Ratio, with respect to the
three Monthly Accounting Periods then most recently ended, shall exceed 6.75%,
or
(iii) the average Dilution Ratio, with respect to the three
Monthly Accounting Periods then most recently ended, shall exceed 2.50%.
(g) A Change of Control shall occur.
(h) One or more final judgments for the payment of money shall be
entered against Seller or one or more final judgments for the payment of money
in an amount in excess of the $15,000,000, individually or in the aggregate,
shall be entered against the Servicer on claims not covered by insurance or as
to which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for fifteen (15) consecutive days
without a stay of execution.
(i) Any "Termination Event" under and as defined in any
Receivables Sale Agreement shall occur; or the "Termination Date" under and as
defined in any Receivables Sale Agreement shall occur under such Receivables
Sale Agreement; or any Originator shall for any reason cease to transfer, or
cease to have the legal capacity to transfer, or otherwise be incapable of
transferring Receivables to Seller under the applicable Receivables Sale
Agreement.
Page 28
(j) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Seller, or any Obligor shall
directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Assets and the Collections with respect thereto and
the Collection Accounts.
(k) The Provider shall fail, to perform or observe, in any
material respect, any term, covenant or agreement required to be performed by it
under the Performance Undertaking; any representation, warranty, certification
or statement made by the Provider in any Transaction Document or in any other
document delivered pursuant hereto or thereto shall prove to have been
incorrect, in any material respect, when made or deemed made; the Provider shall
fail to make any payment when due under the Performance Undertaking; or the
Performance Undertaking or any Transaction Document to which the Provider is
party shall cease to be effective or to be the legally valid, binding and
enforceable obligation of the Provider, or the Provider shall directly or
indirectly contest in any manner such effectiveness, validity, binding nature or
enforceability.
(l) Any party to the Asset Allocation Agreement shall fail to
perform or observe, in any material respect, any term, covenant or agreement
required to be performed by it under the Asset Allocation Agreement; any
representation, warranty, certification or statement made by any party to the
Asset Allocation Agreement shall prove to have been incorrect, in any material
respect, when made or deemed made; or the Asset Allocation Agreement shall cease
to be effective or to be the legally valid, binding and enforceable obligation
of each party thereto, or any Person shall directly or indirectly contest in any
manner such effectiveness, validity, binding nature or enforceability.
(m) Cott Corporation and its Subsidiaries shall fail to perform,
maintain or otherwise satisfy a financial test described in Schedule C.
Section 9.2 Actions. Upon the occurrence and during the continuation
of an Amortization Event, the Agent may, or upon the direction of the Required
Financial Institutions shall, take any of the following actions: (i) replace the
Person then acting as Servicer, (ii) declare the Amortization Date to have
occurred, whereupon the Amortization Date shall forthwith occur, without demand,
protest or further notice of any kind, all of which are hereby expressly waived
by Seller and Servicer; provided, however, that upon the occurrence of an
Amortization Event described in Section 9.1(d)(ii), or of an actual or deemed
entry of an order for relief with respect to Seller or Servicer under the
Federal Bankruptcy Code, the Amortization Date shall automatically occur,
without demand, protest or any notice of any kind, all of which are hereby
expressly waived by Seller and Servicer, (iii) to the fullest extent permitted
by applicable law, declare that the Default Rate shall accrue with respect to
any of the Aggregate Unpaids outstanding at such time, (iv) deliver the
Collection Notices to the Collection Banks, and (v) notify Obligors of the
Purchaser Interests in the Receivables. The aforementioned rights shall be
without limitation, and shall be in addition to all other rights of the Agent
and the Purchasers otherwise available under any other provision of this
Agreement, by operation of law, at equity
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or otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights provided under the UCC, all of which rights shall be
cumulative.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by the Seller and the Servicer.
(a) Indemnification by the Seller. Without limiting any other
rights that the Agent or any Purchaser may have hereunder or under applicable
law, Seller hereby agrees to indemnify (and pay upon demand to) the Agent, the
Arranger and each Purchaser and their respective assigns, officers, directors,
agents and employees (each an "Indemnified Party") from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees (which attorneys may be
employees of the Agent or such Purchaser) and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or any other Transaction Document or the acquisition, either directly
or indirectly, by a Purchaser of an interest in the Receivables, excluding,
however, in all of the foregoing instances:
(x) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts resulted
from gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(y) Indemnified Amounts to the extent the same includes
losses in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor or due
to the failure of any Obligor to pay any amounts in respect of any Receivable
(other than any such failure directly or indirectly related to any action or
omission on the part of Seller or any of its Affiliates or any adverse
development in the relationship between such Obligor and Seller or any of its
Affiliates other than to the extent such adverse development arises due to an
adverse development in the creditworthiness of such Obligor); or
(z) taxes imposed by such Indemnified Party's jurisdiction
of organization, on or measured by the overall net income or revenues of such
Indemnified Party;
provided, however, that nothing contained in this sentence shall limit the
liability of the Seller for amounts otherwise specifically provided to be paid
by the Seller under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, but subject to the limitations in clauses (x),
(y) and (z) above, Seller shall indemnify each Indemnified Party for Indemnified
Amounts relating to or resulting from:
(i) any representation or warranty made by Seller, Servicer,
Provider or any Originator (or any officers of any such Person) under or in
connection with this Agreement, any other Transaction Document or any other
information or report delivered by any
Page 30
such Person pursuant hereto or thereto, which shall have been false or incorrect
when made or deemed made;
(ii) the failure by Seller, the Servicer or any Originator
to comply with any applicable law, rule or regulation with respect to any
Receivable or Contract related thereto, or the nonconformity of any Receivable
or Contract included therein with any such applicable law, rule or regulation or
any failure of any Originator to keep or perform any of its obligations, express
or implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer, the Provider or
any Originator to perform its duties, covenants or other obligations in
accordance with the provisions of this Agreement or any other Transaction
Document;
(iv) any products liability, personal injury or damage suit,
or other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset (other than (A) an offset
properly recorded in a Promotional Accrual Account and included in the
calculation of Net Eligible Receivables Balance or (B) any discount on the
payment of any Receivable set forth in the terms of the Contract related thereto
in respect of the applicable Obligor's early payment of the amounts owing under
such Contract) or defense of the Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or service related to such Receivable
or the furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any
time with other funds;
(vii) any investigation, litigation or proceeding related to
or arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of an Incremental
Purchase or a Reinvestment, the ownership of the Purchaser Interests or any
other investigation, litigation or proceeding relating to Seller, the Servicer,
Provider or any Originator in which any Indemnified Party becomes involved as a
result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such Obligor being immune
from civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event;
(x) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of any Receivable and the Related Assets and
Collections with respect thereto from any Originator, free and clear of any
Adverse Claim (other than as created under the Transaction Documents); or any
failure of Seller to give reasonably equivalent value to
Page 31
any Originator under the applicable Receivables Sale Agreement in consideration
of the transfer by such Originator of any Receivable, or any attempt by any
Person to void such transfer under statutory provisions or common law or
equitable action;
(xi) any failure to vest and maintain vested in the Agent
for the benefit of the Purchasers, or to transfer to the Agent for the benefit
of the Purchasers, legal and equitable title to, and ownership of, a first
priority perfected undivided percentage ownership interest (to the extent of the
Purchaser Interests contemplated hereunder) or a first priority perfected
security interest in the Receivables, the Related Assets and the Collections,
free and clear of any Adverse Claim (except as created by the Transaction
Documents);
(xii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivable, the Related Assets and Collections with respect thereto, and the
proceeds of any thereof, whether at the time of any Incremental Purchase or
Reinvestment or at any subsequent time;
(xiii) any action improperly taken, any omission of any
action required to be taken, or any other action elected to be taken by Seller
or Servicer which reduces or impairs the rights of the Agent or the Purchasers
with respect to any Receivable or the value of any such Receivable;
(xiv) any attempt by any Person (other than Agent, Arranger
or any Person) to void any Incremental Purchase or Reinvestment hereunder under
statutory provisions or common law or equitable action; and
(xv) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to be an
Eligible Receivable at the time so included.
(b) Indemnification by the Servicer. Without limiting any other
rights that the Agent or any Purchaser may have hereunder or under applicable
law, the Servicer hereby agrees to indemnify (and pay upon demand to) each
Indemnified Party for Indemnified Amounts awarded against or incurred by any of
them arising out of the Servicer's activities as Servicer hereunder excluding,
however, in all of the foregoing instances:
(x) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts resulted
from gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(y) Indemnified Amounts to the extent the same includes
losses in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor or due
to the failure of any Obligor to pay any amounts in respect of such Receivable
(other than any such failure directly or indirectly related to any action or
omission on the part of Servicer or any of its Affiliates or any adverse
development in the relationship between such Obligor and Servicer or any of its
Affiliates other than to the extent such adverse development arises due to an
adverse development in the creditworthiness of such Obligor)); or
Page 32
(z) taxes imposed by such Indemnified Party's jurisdiction
of organization, on or measured by the overall net income or revenues of such
Indemnified Party;
provided, however, that nothing contained in this sentence shall limit the
liability of the Servicer for amounts otherwise specifically provided to be paid
by the Servicer under the terms of this Agreement. Without limiting the
generality of the foregoing indemnification, but subject to the limitations in
clauses (x), (y) and (z) above, Servicer shall indemnify each Indemnified Party
for Indemnified Amounts relating to or resulting from:
(i) any representation or warranty made by the Servicer (or
any officers of the Servicer) under or in connection with this Agreement, any
other Transaction Document or any other information or report delivered by any
such Person pursuant hereto or thereto, which shall have been false or incorrect
when made or deemed made;
(ii) the failure by the Servicer to comply with any
applicable law, rule or regulation with respect to any Receivable or Contract
related thereto;
(iii) any failure of the Servicer to perform its duties,
covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) the commingling of Collections of Receivables by or
under the supervision of the Servicer at any time with other funds;
(v) any investigation, litigation or proceeding related to
or arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, or any other investigation, litigation or
proceeding relating to the Servicer in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated hereby;
(vi) any Amortization Event arising out of an action or
omission by the Servicer;
(vii) any action improperly taken, any omission of any
action required to be taken, or any other action elected to be taken by Servicer
which reduces or impairs the rights of the Agent or the Purchasers with respect
to any Receivable or the value of any such Receivable; and
(viii) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to be an
Eligible Receivable at the time so included.
Section 10.2 Increased Cost and Reduced Return.
If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
Page 33
compliance with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency (a "Regulatory
Change"): (i) that subjects any Funding Source to any charge or withholding on
or with respect to any Funding Agreement or a Funding Source's obligations under
a Funding Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of payments to any Funding Source of any amounts payable under
any Funding Agreement (except for changes in the rate of tax on the overall net
income or revenue of a Funding Source or taxes excluded by Section 10.1) or (ii)
that imposes, modifies or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits with
or for the account of a Funding Source, or credit extended by a Funding Source
pursuant to a Funding Agreement or (iii) that imposes any other condition the
result of which is to increase the cost to a Funding Source of performing its
obligations under a Funding Agreement, or to reduce the rate of return on a
Funding Source's capital as a consequence of its obligations under a Funding
Agreement, or to reduce the amount of any sum received or receivable by a
Funding Source under a Funding Agreement or to require any payment calculated by
reference to the amount of interests or loans held or interest received by it,
then, upon demand by the Agent, Seller shall pay to the Agent, for the benefit
of the relevant Funding Source, such amounts charged to such Funding Source or
such amounts to otherwise reimburse such Funding Source for the amount of such
increased cost or such reduction.
Section 10.3 Other Costs and Expenses.
(a) Seller shall pay to the Arranger, the Purchasers, the Agent
and Company on demand (i) all reasonable costs and out-of-pocket expenses in
connection with the preparation, execution, delivery, administration of this
Agreement, the transactions contemplated hereby and the other documents to be
delivered hereunder and (ii) all costs and out-of-pocket expenses in connection
with the enforcement of this Agreement, the transactions contemplated hereby and
the other documents to be delivered hereunder, including without limitation, (A)
the cost of Company's auditors auditing the books, records and procedures of
Seller, (B) reasonable fees and out-of-pocket expenses of legal counsel for
Company and the Agent (which such counsel may be employees of Company or the
Agent) with respect thereto and with respect to advising Company and the Agent
as to their respective rights and remedies under this Agreement, (C) the costs
and expenses of the Arranger of the facility contemplated herein, and (D) all
costs and expenses incurred in connection with any amendment or restructuring or
workout of this Agreement or such documents.
(b) Without limiting the generality of Section 10.3(a), Seller
shall reimburse the Agent and Company on demand in respect of all reasonable
fees and expenses incurred in connection with any audit conducted of any
Originator, Seller or Servicer.
ARTICLE XI
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby
designates and appoints JPMorgan to act as its agent hereunder and under each
other Transaction Document,
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and authorizes the Agent to take such actions as agent on its behalf and to
exercise such powers as are delegated to the Agent by the terms of this
Agreement and the other Transaction Documents together with such powers as are
reasonably incidental thereto. The Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for Seller or Servicer or any of such Person's respective successors or
assigns. The Agent shall not be required to take any action that exposes the
Agent to personal liability or that is contrary to this Agreement, any other
Transaction Document or applicable law. The appointment and authority of the
Agent hereunder shall terminate upon the indefeasible payment in full of all
Aggregate Unpaids. Each Purchaser hereby authorizes the Agent to execute each of
the Uniform Commercial Code financing statements, on behalf of such Purchaser
(the terms of which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by Seller or Servicer contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of Seller or Servicer to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Seller and the Servicer. The
Agent shall not be deemed to have knowledge of any Amortization Event or
Potential Amortization Event unless the Agent has received notice from Seller or
a Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or
Page 35
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Seller), independent accountants and other experts
selected by the Agent. The Agent shall in all cases be fully justified in
failing or refusing to take any action under this Agreement or any other
Transaction Document unless it shall first receive such advice or concurrence of
Company or the Required Financial Institutions or all of the Purchasers, as
applicable, as it deems appropriate and it shall first be indemnified to its
satisfaction by the Purchasers, provided that unless and until the Agent shall
have received such advice, the Agent may take or refrain from taking any action,
as the Agent shall deem advisable and in the best interests of the Purchasers.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, in accordance with a request of Company or the Required Financial
Institutions or all of the Purchasers, as applicable, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of the Seller
and the Servicer, shall be deemed to constitute any representation or warranty
by the Agent. Each Purchaser represents and warrants to the Agent that it has
and will, independently and without reliance upon the Agent or any other
Purchaser and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of Seller and made its own decision to enter into this
Agreement, the other Transaction Documents and all other documents related
hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller and the Servicer
(i) for any amounts for which the Agent, acting in its capacity as Agent, is
entitled to reimbursement by the Seller and the Servicer hereunder and (ii) for
any other expenses incurred by the Agent, in its capacity as Agent and acting on
behalf of the Purchasers, in connection with the administration and enforcement
of this Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Seller or any Affiliate of Seller as though the Agent were
not the Agent hereunder. With respect to the acquisition of Purchaser Interests
pursuant to this Agreement, the Agent shall have the same rights and powers
under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "Financial
Institution," "Purchaser," "Financial Institutions" and "Purchasers" shall
include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon five days' notice to
Seller and the Purchasers, and the Agent will, upon the direction of all of the
Purchasers (other than the Agent, in its individual capacity) resign as Agent.
If the Agent shall resign, then the Required Financial Institutions during such
five-day period shall appoint from among the Purchasers a
Page 36
successor agent. Notwithstanding anything herein to the contrary, so long as no
Amortization Event or Potential Amortization Event has occurred and is
continuing, each such successor Agent (other than any successor Agent that is an
Affiliate of JPMorgan) shall be subject to approval by Seller, which approval
shall not be unreasonably withheld or delayed. If for any reason no successor
Agent is appointed by the Required Financial Institutions during such five-day
period, then effective upon the termination of such five day period, the
Purchasers shall perform all of the duties of the Agent hereunder and under the
other Transaction Documents and Seller and the Servicer (as applicable) shall
make all payments in respect of the Aggregate Unpaids directly to the applicable
Purchasers and for all purposes shall deal directly with the Purchasers. After
the effectiveness of any retiring Agent's resignation hereunder as Agent, the
retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Transaction Documents and the provisions of this Article XI and
Article X shall continue in effect for its benefit with respect to any actions
taken or omitted to be taken by it while it was Agent under this Agreement and
under the other Transaction Documents.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments. (a) Seller and each Financial Institution
hereby agree and consent to the complete or partial assignment by Company of all
or any portion of its rights under, interest in, title to and obligations under
this Agreement to the Financial Institutions pursuant to a Liquidity Agreement
or to any other Person, and upon such assignment, Company shall be released from
its obligations so assigned. Notwithstanding anything herein to the contrary, so
long as no Amortization Event or Potential Amortization Event has occurred and
is continuing, each such assignee of Company shall be subject to approval by
Seller, which approval shall not be unreasonably withheld or delayed; provided,
that assignments by the Company (1) pursuant to any Liquidity Agreement, (2) to
any Person administered or managed by the Agent whose primary business is
participating in securitizations and similar financial transactions or (3) to
any Affiliate of the Agent, shall not be subject to the consent of the Seller.
Further, Seller and each Financial Institution hereby agree that any assignee of
Company of this Agreement or all or any of the Purchaser Interests of Company
shall have all of the rights and benefits under this Agreement as if the term
"Company" explicitly referred to such party, and no such assignment shall in any
way impair the rights and benefits of Company hereunder. Neither Seller nor the
Servicer shall have the right to assign its rights or obligations under this
Agreement.
(b) Any Financial Institution may at any time and from time to
time assign to one or more Persons ("Purchasing Financial Institutions") all or
any part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the "Assignment Agreement") executed by such Purchasing Financial Institution
and such selling Financial Institution. The consent of Company shall be required
prior to the effectiveness of any such assignment. In addition, so long as no
Amortization Event or Potential Amortization Event has occurred and is
continuing, each such assignee of any Financial Institution shall be subject to
approval by Seller, which approval shall not be unreasonably withheld or
delayed; provided, that assignments by an Financial Institution
Page 37
to any Affiliate to any Affiliate of such Financial Institution, shall not be
subject to the consent of the Seller. Each assignee of a Financial Institution
must (i) have a short-term debt rating of A-1 or better by S&P and P-1 by
Moody's and (ii) agree to deliver to the Agent, promptly following any request
therefor by the Agent or Company, an enforceability opinion in form and
substance satisfactory to the Agent and Company. Upon delivery of the executed
Assignment Agreement to the Agent, such selling Financial Institution shall be
released from its obligations hereunder to the extent of such assignment.
Thereafter the Purchasing Financial Institution shall for all purposes be a
Financial Institution party to this Agreement and shall have all the rights and
obligations of a Financial Institution under this Agreement to the same extent
as if it were an original party hereto and no further consent or action by
Seller, the Purchasers or the Agent shall be required.
(c) Each of the Financial Institutions agrees that in the event
that it shall cease to have a short-term debt rating of A-1 or better by S&P and
P-1 by Moody's (an "Affected Financial Institution"), such Affected Financial
Institution shall be obliged, at the request of Company or the Agent, to assign
all of its rights and obligations hereunder to (x) another Financial Institution
or (y) another funding entity nominated by the Agent and acceptable to Company,
and willing to participate in this Agreement and the related Liquidity Agreement
through the Liquidity Termination Date in the place of such Affected Financial
Institution; provided that the Affected Financial Institution receives payment
in full, pursuant to an Assignment Agreement, of an amount equal to such
Financial Institution's Pro Rata Share of the Aggregate Capital and Yield owing
to the Financial Institutions and all accrued but unpaid fees and other costs
and expenses payable in respect of its Pro Rata Share of the Purchaser Interests
of the Financial Institutions.
Section 12.2 Participations. Any Financial Institution may, in the
ordinary course of its business at any time sell to one or more Persons (each a
"Participant") participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, its obligation to the Company pursuant
to a Liquidity Agreement or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Company and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 13.1(b)(i).
Section 12.3 Terminating Financial Institutions.
(a) Each Financial Institution hereby agrees to deliver written
notice to the Agent and Seller not more than 30 Business Days and not less than
5 Business Days prior to the Liquidity Termination Date indicating whether such
Financial Institution intends to renew its Commitment hereunder. If any
Financial Institution fails to deliver such notice on or prior to the date that
is 5 Business Days prior to the Liquidity Termination Date, such Financial
Institution
Page 38
will be deemed to have declined to renew its Commitment (each Financial
Institution which has declined or has been deemed to have declined to renew its
Commitment hereunder, a "Non-Renewing Financial Institution"). The Agent shall
promptly notify Company of each Non-Renewing Financial Institution and Company,
in its sole discretion, may (A) to the extent of Commitment Availability,
declare that such Non-Renewing Financial Institution's Commitment shall, to such
extent, automatically terminate on a date specified by Company on or before the
Liquidity Termination Date or (B) upon one (1) Business Days' notice to such
Non-Renewing Financial Institution assign to such Non-Renewing Financial
Institution on a date specified by Company its Pro Rata Share of the aggregate
Purchaser Interests then held by Company, subject to, and in accordance with the
applicable Liquidity Agreement. In addition, Company may, in its sole
discretion, at any time (x) to the extent of Commitment Availability, declare
that any Affected Financial Institution's Commitment shall automatically
terminate on a date specified by Company or (y) assign to any Affected Financial
Institution on a date specified by Company its Pro Rata Share of the aggregate
Purchaser Interests then held by Company, subject to, and in accordance with the
applicable Liquidity Agreement (each Affected Financial Institution or each
Non-Renewing Financial Institution is hereinafter referred to as a "Terminating
Financial Institution"). The parties hereto expressly acknowledge that any
declaration of the termination of any Commitment, any assignment pursuant to
this Section 12.3 and the order of priority of any such termination or
assignment among Terminating Financial Institutions shall be made by Company in
its sole and absolute discretion.
(b) Upon any assignment to a Terminating Financial Institution as
provided in this Section 12.3, any remaining Commitment of such Terminating
Financial Institution shall automatically terminate. Upon reduction to zero of
the Capital of all of the Purchaser Interests of a Terminating Financial
Institution (after application of Collections thereto pursuant to Sections 2.2
and 2.3) all rights and obligations of such Terminating Financial Institution
hereunder shall be terminated and such Terminating Financial Institution shall
no longer be a "Financial Institution" hereunder; provided, however, that the
provisions of Article X shall continue in effect for its benefit with respect to
Purchaser Interests held by such Terminating Financial Institution prior to its
termination as a Financial Institution.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Waivers and Amendments. (a) No failure or delay on the
part of the Agent or any Purchaser in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The rights
and remedies herein provided shall be cumulative and nonexclusive of any rights
or remedies provided by law. Any waiver of this Agreement shall be effective
only in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 13.1(b). Company, Seller and, at the direction of the Required Financial
Institutions, the Agent, may enter
Page 39
into written modifications or waivers of any provisions of this Agreement,
provided, however, that no such modification or waiver shall:
(i) without the consent of each affected Purchaser, (A)
extend the Liquidity Termination Date or the date of any payment or deposit of
Collections by Seller or the Servicer, (B) reduce the rate or extend the time of
payment of Yield or any CP Costs (or any component of Yield or CP Costs), (C)
reduce any fee payable to the Agent for the benefit of the Purchasers, (D)
except pursuant to Article XII hereof, change the amount of the Capital of any
Purchaser, any Financial Institution's Pro Rata Share (except as may be required
pursuant to a Liquidity Agreement) or any Financial Institution's Commitment,
(E) amend, modify or waive any provision of the definition of Required Financial
Institutions or this Section 13.1(b), (F) consent to or permit the assignment or
transfer by Seller of any of its rights and obligations under this Agreement,
(G) change the definition of "Eligible Receivable", "Receivable", "New Division
Receivable" or any of the terms used in the determination of "Aggregate
Reserves" or (H) amend or modify any defined term (or any defined term used
directly or indirectly in such defined term) used in clauses (A) through (G)
above in a manner that would circumvent the intention of the restrictions set
forth in such clauses;
(ii) without the written consent of the then Agent, amend,
modify or waive any provision of this Agreement if the effect thereof is to
affect the rights or duties of the Agent; or
(iii) without the written consent of the then Servicer,
amend, modify or waive any provision of this Agreement if the effect thereof is
to affect the rights or duties of the Servicer;
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Company may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII
or Section 13.13 without the consent of Seller, provided that such amendment has
no negative impact upon Seller. Any modification or waiver made in accordance
with this Section 13.1 shall apply to each of the Purchasers equally and shall
be binding upon Seller, the Purchasers and the Agent.
Section 13.2 Notices. Except as provided in this Section 13.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 13.2. Seller hereby authorizes the Agent to effect purchases and Tranche
Period and Discount Rate selections based on telephonic notices made by any
Person whom the Agent in good faith believes to be acting on behalf of Seller.
Seller agrees to deliver promptly to the
Page 40
Agent a written confirmation of each telephonic notice signed by an Authorized
Officer of Seller; provided, however, the absence of such confirmation shall not
affect the validity of such notice. If the written confirmation differs from the
action taken by the Agent, the records of the Agent shall govern absent manifest
error. Notwithstanding anything to the contrary set forth herein, any
communications or notices delivered by telecopy, electronic facsimile or similar
writing after 4:00 p.m. (New York City time) on any day shall be deemed to have
been delivered to such Person on the Business Day immediately following such
day.
Section 13.3 Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 13.4 Protection of Ownership Interests of the Purchasers.
(a) Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may reasonably
request, to perfect, protect or more fully evidence the Purchaser Interests, or
to enable the Agent or the Purchasers to exercise and enforce their rights and
remedies hereunder. At any time, the Agent may, or the Agent may direct Seller
or the Servicer to, notify the Obligors of Receivables, at Seller's expense, of
the ownership or security interests of the Purchasers under this Agreement and
may also direct that payments of all amounts due or that become due under any or
all Receivables be made directly to the Agent or its designee. Seller or the
Servicer (as applicable) shall, at any Purchaser's request, withhold the
identity of such Purchaser in any such notification.
(b) If Seller or Servicer fails to perform any of its obligations
hereunder, the Agent or any Purchaser may (but shall not be required to)
perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Seller irrevocably authorizes the Agent
at any time and from time to time in the sole discretion of the Agent, and
appoints the Agent as its attorney-in-fact, to act on behalf of Seller (i)
within the meaning of Section 9-509 of any applicable enactment of the UCC, as
secured party for the benefit of itself and of the Purchasers, to file against
the Seller or any Originator, as debtors, the UCC financing statements
contemplated herein and under the Receivables Sale Agreements (ii) to file
financing statements necessary or desirable in the Agent's sole discretion to
perfect and to maintain the perfection and priority of the interest of the
Purchasers in the Receivables and (iii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Receivables as a financing statement in such offices as the Agent in its sole
discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of
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the interests of the Purchasers in the Receivables. This appointment is coupled
with an interest and is irrevocable.
Section 13.5 Confidentiality.
(a) Each party hereto shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of this Agreement and the
other confidential or proprietary information with respect to the other parties
hereto and their respective businesses obtained by it or them in connection with
the structuring, negotiating and execution of the transactions contemplated
herein, including, without limitation confidential information contained in any
Contracts ("Transaction Information"), except that such Person and its officers
and employees may disclose such information to its external accountants and
attorneys, to regulators having oversight of such Person and as required by any
applicable law or order of any judicial or administrative proceeding.
Notwithstanding the foregoing, each party hereto may (i) disclose Transaction
Information to the extent required by applicable law, regulation, subpoena or
other legal process, (ii) file copies of the Transaction Documents with the
Securities Exchange Commission to the extent required by law, rule or regulation
and (iii) submit copies of this Agreement to the Bank Agent and the Bank Lenders
as required by the Bank Agent and the Bank Lenders, provided, that the Seller
and the Servicer agree to use their reasonable best efforts to maintain the
confidentiality of the terms of the Fee Letter and the terms used in the
determination of any Special Concentration Limit, the definition of "LIBO Rate",
the definition of "Aggregate Reserves" or any other terms or provisions
identified by JPMorgan as containing confidential commercial or financial
information. In addition, the Transaction Information may be disclosed by the
Seller or its Affiliates to any Person with the Agent's prior written consent.
(b) Anything herein to the contrary notwithstanding, Seller and
Servicer hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Financial Institutions or Company by each
other, (ii) by the Arranger, the Agent or the Purchasers to any prospective or
actual assignee or participant of any of them, and (iii) by the Agent or the
Arranger to any rating agency, Commercial Paper dealer or provider of a surety,
guaranty or credit or liquidity enhancement to Company or any entity organized
for the purpose of purchasing, or making loans secured by, financial assets for
which JPMorgan acts as the administrative agent and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing. In
addition, the Arranger, the Purchasers and the Agent may disclose any such
nonpublic information pursuant to any law, rule, regulation, direction, request
or order of any judicial, administrative or regulatory authority or proceedings
(whether or not having the force or effect of law).
(c) Anything herein to the contrary notwithstanding, Seller,
Servicer, each Purchaser, the Agent, the Arranger, each Indemnified Party and
any successor or assign of any of the foregoing (and each employee,
representative or other agent of any of the foregoing) may disclose to any and
all Persons, without limitation of any kind, the "tax treatment" and "tax
structure" (in each case, within the meaning of Treasury Regulation Section
1.6011-4) of the transactions contemplated herein and all materials of any kind
(including opinions or other tax analyses) that are or have been provided to any
of the foregoing relating to such tax treatment or
Page 42
tax structure, and it is hereby confirmed that each of the foregoing have been
so authorized since the commencement of discussions regarding the transactions.
Section 13.6 Bankruptcy Petition. Seller, the Servicer, the Agent and
each Financial Institution hereby covenants and agrees that, prior to the date
that is one year and one day after the payment in full of all outstanding senior
indebtedness of Company, it will not institute against, or join any other Person
in instituting against, Company or Seller any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States. The
provisions of this Section 13.6 shall survive termination of this Agreement.
Section 13.7 Limitation of Liability. No claim may be made by any
Person against Seller, Servicer, Company, the Agent or any Financial Institution
or their respective Affiliates, directors, officers, employees, attorneys or
agents for any special, indirect, consequential or punitive damages in respect
of any claim for breach of contract or any other theory of liability arising out
of or related to the transactions contemplated by this Agreement, or any act,
omission or event occurring in connection therewith; and each party hereto
hereby waives, releases, and agrees not to sue upon any claim for any such
special, indirect, consequential or punitive damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
Section 13.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
Section 13.9 CONSENT TO JURISDICTION. EACH OF SELLER AND SERVICER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH OF SELLER
AND SERVICER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
PURCHASER TO BRING PROCEEDINGS AGAINST SELLER OR SERVICER IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY SELLER OR SERVICER AGAINST THE
AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SELLER OR SERVICER
PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW
YORK.
Page 43
Section 13.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY
SELLER OR SERVICER PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 13.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns
(including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by Seller or
Servicer pursuant to Article V, (ii) the indemnification and payment provisions
of Article X, and Sections 13.5 and 13.6 shall be continuing and shall survive
any termination of this Agreement.
Section 13.12 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
Section 13.13 JPMorgan Roles. Each of the Financial Institutions
acknowledges that JPMorgan acts, or may in the future act, (i) as administrative
agent for Company or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Company or any Financial Institution (collectively, the
"JPMorgan Roles"). Without limiting the generality of this Section 13.13, each
Financial Institution hereby acknowledges and consents to any and all JPMorgan
Roles and agrees that in connection with any JPMorgan Role, JPMorgan may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Company, and the giving of notice to the Agent of a mandatory purchase
pursuant to a Liquidity Agreement.
Page 44
Section 13.14 Characterization. (a) It is the intention of the parties
hereto that each purchase hereunder shall constitute and be treated as an
absolute and irrevocable sale, which purchase shall provide the applicable
Purchaser with the full benefits of ownership of the applicable Purchaser
Interest. Except as specifically provided in this Agreement, each sale of a
Purchaser Interest hereunder is made without recourse to Seller or Servicer;
provided, however, that (i) Seller shall be liable to (A) each Purchaser and the
Agent for all representations, warranties, covenants and indemnities made by
Seller pursuant to the terms of this Agreement and (B) the Agent, the Purchasers
and the Servicer for the items described in Section 2.1 of this Agreement, (ii)
Servicer shall be liable to each Purchaser and the Agent for all
representations, warranties, covenants and indemnities made by Servicer pursuant
to the terms of this Agreement and (iii) such sale does not constitute and is
not intended to result in an assumption by any Purchaser or the Agent or any
assignee thereof of any obligation of Seller or any Originator or any other
Person arising in connection with the Receivables, the Related Assets, or the
related Contracts, or any other obligations of Seller or any Originator.
(b) In addition to any ownership interest which the Agent may
from time to time acquire pursuant hereto, Seller hereby grants to the Agent for
the ratable benefit of the Purchasers a valid and perfected security interest in
all of Seller's right, title and interest in, to and under, all Receivables now
existing or hereafter arising, the Collections, each Lock-Box, each Collection
Account, all Related Assets with respect to such Receivables, all other rights
with respect to such Receivables, and all proceeds of any thereof, prior to all
other liens on and security interests therein, to secure the prompt and complete
payment of the Aggregate Unpaids. The Agent and the Purchasers shall have, in
addition to the rights and remedies that they may have under this Agreement, all
other rights and remedies provided to a secured creditor under the UCC and other
applicable law, which rights and remedies shall be cumulative.
Section 13.15 Limited Recourse.
(a) Notwithstanding anything to the contrary contained herein,
the obligations of the Company under this Agreement are solely the obligations
of the Company and, in the case of obligations of the Company other than
Commercial Paper, shall be payable at such time as funds are received by or are
available to the Company in excess of funds necessary to pay in full all
outstanding Commercial Paper and, to the extent funds are not available to pay
such obligations, the claims relating thereto shall not constitute a claim
against the Company but shall continue to accrue. Each party hereto agrees that
the payment of any claim (as defined in the Federal Bankruptcy Code) of any such
party as against the Company shall be subordinated to the payment in full of all
Commercial Paper.
(b) The Agent and the Purchasers acknowledge and agree that
Seller is a separate legal entity from the Originators, the Servicer and
Provider. The Agent and the Purchasers further acknowledge and agree that the
Seller itself is not granting recourse to the stock or assets of the
Originators, the Servicer or the Provider; provided however, that Agent and the
Purchasers have claims and nothing herein shall be construed to impair,
subordinate, or in any way limit the claims of the Agent and the Purchasers (i)
against the Servicer under this Agreement, (ii) against the Originators under
the Receivables Sale Agreements (as assignee of all of the Seller's right, title
and interest in the Receivables Sale Agreements) and (iii) against the Provider
under the Performance Undertaking (as assignee of all of the Seller's right,
title and
Page 45
interest in the Performance Undertaking). In addition, for purposes of
clarification and without in any way limiting Cott's obligations as Servicer
hereunder, nothing in this Agreement shall cause Cott to be directly or
indirectly liable for any indebtedness (as reflected as a liability on the
balance sheet) of the Seller created hereunder or constitute credit support for
any indebtedness (as reflected as a liability on a balance sheet) of the Seller
created hereunder.
[SIGNATURE PAGES FOLLOW]
Page 46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly Authorized Officers as of the date
hereof.
COTT USA RECEIVABLES CORPORATION,
as Seller
By: /s/ Catherine Brennan
------------------------------------
Name: Catherine Brennan
Title: Vice President, Treasurer
Address: 4328 Director Drive
San Antonio, TX 78219
COTT BEVERAGES INC.,
as initial Servicer
By: /s/ Catherine Brennan
------------------------------------
Name: Catherine Brennan
Title: Vice President, Treasurer
Address: 4211 W. Boyscout Boulevard
Suite 290
Tampa, FL 33607
Signature Page to Receivables Purchase Agreement
Cott USA Receivables Corporation
PARK AVENUE RECEIVABLES COMPANY, LLC,
as Company
By: /s/ Ronald J. Atkins
------------------------------------
Name: Ronald J. Atkins
Title: Authorized Signer
Address: c/o JPMORGAN CHASE BANK, N.A.,
1 Bank One Plaza
10 South Dearborn Street
Chicago, IL 60670
JPMORGAN CHASE BANK, N.A., as a
Financial Institution and as Agent
By: /s/ Ronald J. Atkins
------------------------------------
Name: Ronald J. Atkins
Title: Vice President, Capital Markets
Address: 1 Bank One Plaza
10 South Dearborn Street
Chicago, IL 60670
Signature Page to Receivables Purchase Agreement
Cott USA Receivables Corporation
EXHIBIT I
DEFINITIONS
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):
"Accrual Period" means each calendar month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the calendar month
thereafter.
"Adverse Claim" means a lien, security interest, charge or encumbrance, or
other right or claim in, of or on any Person's assets or properties in favor of
any other Person.
"Affected Financial Institution" has the meaning specified in Section
12.1(c).
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person or any Subsidiary of such Person. A Person shall be
deemed to control another Person if the controlling Person owns 10% or more of
any class of voting securities of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agent" has the meaning set forth in the preamble to this Agreement.
"Aggregate Capital" means, on any date of determination, the aggregate
amount of Capital of all Purchaser Interests outstanding on such date.
"Aggregate Reduction" has the meaning specified in Section 1.3.
"Aggregate Reserves" means, on any date of determination, the sum of the
Loss Reserve, the Yield and Servicing Reserve and the Dilution Reserve.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of all
Aggregate Capital and all other unpaid Obligations (whether due or accrued) at
such time.
"Agreement" means this Receivables Purchase Agreement, as it may be amended
or modified and in effect from time to time.
"Amortization Date" means the earliest to occur of (i) the day on which any
of the conditions precedent set forth in Section 6.2 are not satisfied, (ii) the
Business Day immediately prior to the occurrence of an Amortization Event set
forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written
notice from the Agent following the occurrence of any other Amortization Event,
and (iv) the date which is 30 Business Days after the Agent's receipt of written
notice from Seller that it wishes to terminate the facility evidenced by this
Agreement.
"Amortization Event" has the meaning specified in Article IX.
1
"Applicable LIBO Margin" means the following percentages per annum, based
upon the Total Leverage Ratio set forth in the most recent Compliance
Certificate received by the Agent pursuant to Section 7.1(a):
Applicable
LIBO
Pricing Level Total Leverage Ratio Margin
- ------------- -------------------- ----------
Level I Greater than or equal to 2.50 to 1.00 [***]
Level II Greater than or equal to 2.25 to 1.00 but less than 2.50 to 1.00 [***]
Level III Greater than or equal 1.75 to 1.00 but less than 2.25 to 1.00 [***]
Level IV Greater than or equal to 1.50 to 1.00 but less than 1.75 to 1.00 [***]
Level V Greater than or equal to 1.25 to 1.00 but less than 1.50 to 1.00 [***]
Level VI Less than 1.25 [***]
Any increase or decrease in the Applicable LIBO Rate resulting from a
change in the Total Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 7.1(a); provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Level I shall apply as of the first Business Day after the date on which
such Compliance Certificate was required to have been delivered. The Applicable
LIBO Rate shall be determined based upon Pricing Level IV beginning on the date
of this Agreement and continuing through the date on which the Agent shall have
received a Compliance Certificate pursuant to Section 7.1(a).
"Arranger" means J.P. Morgan Securities Inc., in its individual capacity
and its successors.
"Asset Allocation Agreement" means an agreement in form and substance
satisfactory to the Agent between the Agent, on behalf of the Purchasers, and
the Bank Group Agent, relating to the respective interests and priorities of the
Purchasers and the Bank Group in the other assets and interests in property of
the Originators and Seller.
"Assignment Agreement" has the meaning set forth in Section 12.1(b).
"Authorized Officer" means, with respect to any Person, its chief executive
officer, chief operating officer, president, corporate controller, treasurer,
chief financial officer, general counsel, any assistant treasurer, any
vice-president or the shared service central manager.
"Bank Agent" means Wachovia Bank, National Association, as "Administrative
Agent" for the Bank Group under the Credit Agreement, and any successor thereto.
"Bank Group" means the "Lenders" and other financial institutions from time
to time parties to the Credit Agreement.
2
"Broken Funding Costs" means for any Purchaser Interest which: (i) has its
Capital reduced without compliance by Seller with the notice requirements
hereunder or (ii) does not become subject to an Aggregate Reduction following
the delivery of any Reduction Notice or (iii) is assigned pursuant to a
Liquidity Agreement or terminated prior to the date on which it was originally
scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or
Yield (as applicable and in each case, excluding any applicable margin), that
would have accrued during the remainder of the Tranche Periods or the tranche
periods for Commercial Paper determined by the Agent to relate to such Purchaser
Interest (as applicable) subsequent to the date of such reduction, assignment or
termination (or in respect of clause (ii) above, the date such Aggregate
Reduction was designated to occur pursuant to the Reduction Notice) of the
Capital of such Purchaser Interest if such reduction, assignment or termination
had not occurred or such Reduction Notice had not been delivered, over (B) the
sum of (x) to the extent all or a portion of such Capital is allocated to
another Purchaser Interest, the amount of CP Costs or Yield actually accrued
during the remainder of such period on such Capital for the new Purchaser
Interest, and (y) to the extent such Capital is not allocated to another
Purchaser Interest, the income, if any, actually received during the remainder
of such period by the holder of such Purchaser Interest from investing the
portion of such Capital not so allocated. In the event that the amount referred
to in clause (B) exceeds the amount referred to in clause (A), the relevant
Purchaser or Purchasers agree to pay to Seller the amount of such excess. All
Broken Funding Costs shall be due and payable hereunder upon demand.
"Business Day" means any day on which banks are not authorized or required
to close in New York, New York, Toronto, Ontario or Chicago, Illinois and The
Depository Trust Company of New York is open for business, and, if the
applicable Business Day relates to any computation or payment to be made with
respect to the LIBO Rate, any day on which dealings in dollar deposits are
carried on in the London interbank market.
"Capital" of any Purchaser Interest means, at any time, (A) the Purchase
Price of such Purchaser Interest, minus (B) the sum of the aggregate amount of
Collections, Deemed Collections and other payments received by the Agent which
in each case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be restored (in
accordance with Section 2.5) in the amount of any Collections or other payments
so received and applied if at any time the distribution of such Collections or
payments are rescinded, returned or refunded for any reason.
"Change of Control" means any of the following (i) the acquisition by any
Person, or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of an amount greater than or equal to
the 40% of the outstanding shares of voting stock of the Provider or (ii) the
failure at any time of any Originator, the Servicer or Seller to be a
wholly-owned Subsidiary of the Provider.
"Charged-Off Receivable" means a Receivable: (i) as to which the Obligor
thereof has taken any action, or suffered any event to occur, of the type
described in Section 9.1(d) (as if references to Seller and Servicer therein
refer to such Obligor); (ii) as to which the Obligor thereof, if a natural
person, is deceased, (iii) which, consistent with the Credit and Collection
Policy, would be written off Seller's books as uncollectible, (iv) which has
been identified by
3
Seller as uncollectible or (v) which was converted to a note or other debt
instrument for credit or collection measures.
"Collection Account" means each concentration account, depositary account,
lock-box account or similar account in which any Collections are collected or
deposited and which is listed on Exhibit IV.
"Collection Account Agreement" means an agreement substantially in the form
of one of the agreements attached hereto as Exhibit VI among Seller, the
Servicer, the Agent, applicable Collection Bank and, if applicable, the
applicable Originator.
"Collection Bank" means, at any time, any of the banks holding one or more
Collection Accounts.
"Collection Notice" means a notice, in substantially the form of Annex A to
one of the agreements attached hereto as Exhibit VI, from the Agent to a
Collection Bank.
"Collections" means, with respect to any Receivable, all cash collections
and other cash proceeds in respect of such Receivable, including, without
limitation, all yield, Finance Charges or other related amounts accruing in
respect thereof and all cash proceeds of Related Assets with respect to such
Receivable.
"Commercial Paper" means promissory notes of Company issued by Company in
the commercial paper market.
"Commitment" means, for each Financial Institution, the commitment of such
Financial Institution to purchase Purchaser Interests from (i) Seller and (ii)
Company, in an amount not to exceed (A) in the aggregate, the amount set forth
opposite such Financial Institution's name on Schedule A to this Agreement, as
such amount may be modified in accordance with the terms hereof and (B) with
respect to any individual purchase hereunder, its Pro Rata Share of the Purchase
Price therefor. Solely for purposes of reference, Schedule A also sets forth the
commitment of each Financial Institution as of the date hereof to purchase its
ratable share of Purchaser Interests from the Company in accordance with the
terms and provisions of the applicable Liquidity Agreement between the Company
and such Financial Institution, it being understood that such amount may be
modified from time to time in accordance with the terms of such Liquidity
Agreement.
"Commitment Availability" means at any time the positive difference (if
any) between (a) an amount equal to the aggregate amount of the Commitments
minus (b) the Aggregate Capital at such time.
"Company" has the meaning set forth in the preamble to this Agreement.
"Concentration Limit" means, at any time, for any Obligor, 6.67% of the Net
Eligible Receivables Balance at such time, or such other amount (a "Special
Concentration Limit") for such Obligor as the Agent may designate from time to
time; provided, that in the case of an Obligor and any Affiliate of such
Obligor, the Concentration Limit or Special Concentration Limit, as applicable,
shall be calculated as if such Obligor and such Affiliate are one Obligor;
4
and provided, further, that, unless otherwise provided herein, the Agent may,
upon not less than three Business Days' notice to Seller, cancel or otherwise
modify any Special Concentration Limit.
[***]
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.
"Contract" means, with respect to any Receivable, any and all instruments,
agreements, invoices or other writings pursuant to which such Receivable arises
or which evidences such Receivable.
"Cott" has the meaning set forth in the preamble to this Agreement.
"CP Costs" means, for each day, the sum of (i) discount or yield accrued on
Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions
in respect of placement agents and Commercial Paper dealers, and issuing and
paying agent fees incurred, in respect of such Pooled Commercial Paper for such
day, plus (iii) other costs incurred in connection with funding small or odd-lot
amounts with respect to all receivable purchase facilities which are funded by
Pooled Commercial Paper for such day, minus (iv) any accrual of income net of
expenses received on such day from investment of collections received under all
receivable purchase facilities funded substantially with Pooled Commercial
Paper, minus (v) any payment received on such day net of expenses in respect of
Broken Funding Costs related to the prepayment of any Purchaser Interest of
Company pursuant to the terms of any receivable purchase facilities funded
substantially with Pooled Commercial Paper. In addition to the foregoing costs,
if Seller shall request any Incremental Purchase during any period of time
determined by the Agent in its sole discretion to result in incrementally higher
CP Costs applicable to such Incremental Purchase, the Capital associated with
any such Incremental Purchase shall, during such period, be deemed to be funded
by Company in a special pool (which may include capital associated with other
receivable purchase facilities) for purposes of determining such additional CP
Costs applicable only to such special pool and charged each day during such
period against such Capital. Notwithstanding the foregoing, at all times
following the occurrence and during the continuance of an Amortization Event, CP
Costs shall be calculated based on the Default Rate.
"Credit Agreement" means that certain Credit Agreement dated as of March
31, 2005 among the Provider, Cott, Cott Beverages Limited., Cott Embotelladores
de Mexico S.A. de C.V., the Bank Group and the Bank Agent, as the same may from
time to time be amended, restated, supplemented or otherwise modified from time
to time in accordance with the terms of the Credit Agreement.
5
"Credit and Collection Policy" means Seller's credit and collection
policies and practices relating to Contracts and Receivables existing on the
date hereof and summarized in Exhibit VIII hereto, as modified from time to time
in accordance with this Agreement.
"Deemed Collections" means the aggregate of all amounts Seller shall have
been deemed to have received as a Collection of a Receivable. Seller shall be
deemed to have received a Collection in full of a Receivable if at any time any
of the representations or warranties in Article V are no longer true when made
with respect to such Receivable. If Outstanding Balance of any Receivable is
either (x) reduced as a result of any defective or rejected goods or services,
any discount or any adjustment or otherwise by Seller (including, without
limitation, any adjustment of a type that would customarily be anticipated in a
Promotional Accrual Account, but excluding cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction), Seller shall be deemed to have
received a Collection with respect to a Receivable to the extent of such
reduction or cancellation.
"Default Rate" means a rate per annum equal to 2% above the Prime Rate.
"Default Ratio" means, the ratio (expressed as a percentage) with respect
to any Monthly Accounting Period, equal to (i) the sum of (A) the aggregate
Outstanding Balance of all Receivables that have remained unpaid for [***] to
[***] days past the original due date as of the last day of such Monthly
Accounting Period and (B) the aggregate Outstanding Balance of all Receivables
that became Charged-Off Receivables during such Monthly Accounting Period and
that were less than [***] days past the original due date therefor, divided by
(ii) the aggregate Original Balance of all Receivables generated by the
Originators during the Monthly Accounting Period ended four Monthly Accounting
Periods prior to such Monthly Accounting Period.
"Defaulted Receivable" means a Receivable as to which payment or part
thereof, remains unpaid for [***] days or more from the original due date for
such payment.
"Delinquency Ratio" means, the ratio (expressed as a percentage) with
respect to any Monthly Accounting Period, equal to (i) the aggregate Outstanding
Balance of all Receivables that were Delinquent Receivables as of the last day
of such Monthly Accounting Period divided by (ii) the aggregate Outstanding
Balance of Receivables as of the last day of such Monthly Accounting Period.
"Delinquent Receivable" means a Receivable as to which any payment, or part
thereof, remains unpaid for [***] days or more from the original due date for
such payment.
"Designated Obligor" means an Obligor indicated by the Agent to Seller in
writing.
"Dilution Horizon Ratio" means, the ratio (expressed as a percentage) at
any time equal to (i) the aggregate Original Balance of all Receivables
generated by the Originators during the three Monthly Accounting Periods then
most recently ended divided by (ii) the Net Eligible Receivables Balance as of
the last day of the Monthly Accounting Period then most recently ended.
6
"Dilution Ratio" means, the ratio (expressed as a percentage) with respect
to any Monthly Accounting Period, equal to (i) the aggregate amount of Dilutions
which occurred during such Monthly Accounting Period, divided by (ii) the
aggregate Original Balance of all Receivables generated by the Originators
during the Monthly Accounting Period ended three months prior to such Monthly
Accounting Period.
"Dilution Reserve" means, on any date, an amount equal to (i) the Dilution
Reserve Percentage, determined in reference to the then most recently issued
Monthly Report, multiplied by (ii) the Net Receivables Balance as of the close
of business of the Servicer on such date.
"Dilution Reserve Percentage" means, as of any date of determination, the
greater of (i) [***]% and (ii) a percentage calculated in accordance with the
following formula:
DRP = ([***] x ED) + ((DS-ED) x DS/ED) x DHR
where:
DRP = Dilution Reserve Percentage;
ED = Expected Dilutions at such time;
DS = Dilution Spike at such time; and
DHR = Dilution Horizon Ratio at such time.
"Dilution Spike" means, [***].
"Dilutions" means, at any time in respect of any period, the aggregate
amount of reductions or cancellations to Receivables during such period as a
result of claims arising from warranty, short shipments, damages, and other
assertions by obligors for product, service or delivery defects.
"Discount Rate" means, the LIBO Rate or the Prime Rate, as applicable, with
respect to each Purchaser Interest of the Financial Institutions; provided,
that, at all times following the occurrence and during the continuance of an
Amortization Event, the Discount Rate shall be equal to the Default Rate.
"DSO" means, for any Monthly Accounting Period, an amount equal to (i)
ninety (90) multiplied by (ii) (A) the Outstanding Balance of all Receivables
(as reported in the Monthly Report for such Monthly Accounting Period) divided
by (B) the aggregate Original Balance of all Receivables generated by the
Originators during the three (3) Monthly Accounting Periods then most recently
ended.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a resident of the
United States or, if a corporation or other business organization, is
organized under the laws of the United States or any political subdivision
thereof and has its chief executive office in the
7
United States; (b) is not an Affiliate of any of the parties hereto; (c) is
not a Designated Obligor and (d) is not a government or a governmental
subdivision or agency,
(ii) the Obligor of which is not the Obligor of any Charged-Off
Receivable,
(iii) which is not a Charged-Off Receivable or a Delinquent
Receivable,
(iv) which by its terms is due and payable within sixty (60) days of
the original billing date therefor and has not had its payment terms
extended;
(v) which is an "account" within the meaning of Section 9-102(a)(2) of
the UCC of all applicable jurisdictions,
(vi) which is denominated and payable only in United States dollars in
the United States,
(vii) which arises under a Contract, which, together with such
Receivable, is in full force and effect and constitutes the legal, valid
and binding obligation of the related Obligor enforceable against such
Obligor in accordance with its terms subject to no offset, counterclaim or
other defense and does not required that the Obligor be notified of any
assignment of such Contract,
(viii) which arises under a Contract which (A) does not require the
Obligor under such Contract to consent to the transfer, sale or assignment
of the rights and duties of any Originator or any of its assignees under
such Contract, except in such instances where (1) such consent has been
obtained, (2) such consent is in full force and effect until the
Outstanding Balance of such Receivable is reduced to zero and (3) the Agent
has been notified in writing of the requirement for such consent, (B) does
not contain a confidentiality provision that purports to restrict the
ability of any Purchaser to exercise its rights under this Agreement,
including, without limitation, its right to review the Contract and (C) is
governed by the federal law of the United States of America or the law of
any state of the United States of America,
(ix) which constitutes an obligation to pay a specified sum of money
representing all or part of the sales price of merchandise, insurance or
services within the meaning of the Investment Company Act of 1940, Section
3(c)5 (as amended),
(x) which, together with the Contract related thereto, does not
contravene any law, rule or regulation applicable thereto (including,
without limitation, any law, rule and regulation relating to truth in
lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect
to which no part of the Contract related thereto is in violation of any
such law, rule or regulation,
(xi) which satisfies all applicable requirements of the Credit and
Collection Policy,
(xii) which was generated in the ordinary course of the applicable
Originator's business,
8
(xiii) which arises solely from the sale of goods or the provision of
services to the related Obligor by the applicable Originator, and not by
any other Person (in whole or in part),
(xiv) as to which the Agent has not notified Seller that the Agent has
determined that such Receivable or class of Receivables is not acceptable
as an Eligible Receivable, including, without limitation, because such
Receivable arises under a Contract that is not acceptable to the Agent,
(xv) which is not subject to any right of rescission, set-off (except
(A) to the extent properly reflected in a Promotional Accrual Account or
(B) in respect of customary terms providing for a discount not to exceed 2%
of the Original Balance of such Receivable if the related Obligor pays all
other amounts owing under such Receivable within ten days of the date such
Receivable was originated), counterclaim, any other defense (including
defenses arising out of violations of usury laws) of the applicable Obligor
against any Originator or any other Adverse Claim, and the Obligor thereon
holds no right as against any Originator to cause such Originator to
repurchase the goods or merchandise the sale of which shall have given rise
to such Receivable (except with respect to sale discounts effected pursuant
to the Contract, or defective goods returned in accordance with the terms
of the Contract),
(xvi) as to which applicable Originator has satisfied and fully
performed all obligations on its part with respect to such Receivable
required to be fulfilled by it, and no further action is required to be
performed by any Person with respect thereto other than payment thereon by
the applicable Obligor. Without limiting the generality of the foregoing, a
Receivable shall not constitute an "Eligible Receivable" if it is a "bill
and hold" Receivable or otherwise is represented by an invoice that has
been issued during the period prior to the shipment of the goods or other
completion of the performance of obligations by the applicable Originator
related to such Receivable,
(xvii) all right, title and interest to and in which has been validly
transferred by an Originator directly to Seller under and in accordance
with the applicable Receivables Sale Agreement, and Seller has good and
marketable title thereto free and clear of any Adverse Claim,
(xviii) if the Obligor thereon is the Obligor of any Delinquent
Receivables, the aggregate Outstanding Balance of such Delinquent
Receivables does not exceed an amount equal to 25% of the aggregate
Outstanding Balance of all Receivables of such Obligor at such time, and
(xix) which is not a New Division Receivable.
"Expected Dilutions" means, as of the last day of any Monthly Accounting
Period, the average Dilution Ratio in respect of the twelve Monthly Accounting
Periods then most recently ended.
"Facility Termination Date" means the earlier of (i) the Liquidity
Termination Date and (ii) the Amortization Date.
9
"Federal Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as amended and any successor statute thereto.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"Fee Letter" means that certain letter agreement dated as of the date
hereof among Seller, the Company, the Arranger and the Agent, as it may be
amended or modified and in effect from time to time.
"Finance Charges" means, with respect to a Contract, any finance, interest,
late payment charges or similar charges owing by an Obligor pursuant to such
Contract.
"Financial Institutions" has the meaning set forth in the preamble in this
Agreement.
"Funding Agreement" means this Agreement and any agreement or instrument
executed by any Funding Source with or for the benefit of Company.
"Funding Source" means (i) any Financial Institution or (ii) any insurance
company, bank or other funding entity providing liquidity, credit enhancement or
back-up purchase support or facilities to Company.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
"Incremental Purchase" means a purchase of one or more Purchaser Interests
which increases the total outstanding Aggregate Capital hereunder.
"Indebtedness" of a Person means such Person's (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by liens or payable out of the proceeds or
production from property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, or other instruments, (v)
capitalized lease obligations, (vi) net liabilities under interest rate swap,
exchange or cap agreements, (vii) Contingent Obligations and (viii) liabilities
in respect of unfunded vested benefits under plans covered by Title IV of ERISA.
"Independent Director" shall mean a member of the Board of Directors of
Seller who is not at such time, and has not been at any time, (A) a director
(other than as an "Independent Director" of Seller), officer, employee or
affiliate of Seller, Provider, any Originator, or any of
10
their respective Subsidiaries or Affiliates, or (B) the beneficial owner (at the
time of such individual's appointment as an Independent Director or at any time
thereafter while serving as an Independent Director) of any of the outstanding
common shares of Seller, Provider, any Originator, or any of their respective
Subsidiaries or Affiliates, having general voting rights.
"JPMorgan" means JPMorgan Chase Bank, N.A. in its individual capacity and
its successors.
"Knowledge" means, (a) with respect to Seller, the actual knowledge
(without investigation) of any of Seller's officers or directors or (b) with
respect to Servicer, the actual knowledge (without investigation) of any of the
Authorized Officers of Servicer.
"LIBO Rate" means the rate per annum equal to the sum (rounded, if
necessary, to the next higher 1/100 of 1%) of:
(i) (a) the applicable British Bankers' Association Interest Settlement
Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00
a.m. (London time) two Business Days prior to the first day of the relevant
Tranche Period, and having a maturity equal to such Tranche Period, provided
that, (I) if Reuters Screen FRBD is not available to the Agent for any reason,
the applicable LIBO Rate for the relevant Tranche Period shall instead be the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars as reported by any other generally recognized financial information
service as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Tranche Period, and having a maturity equal to such Tranche Period, and
(II) if no such British Bankers' Association Interest Settlement Rate is
available to the Agent, the applicable LIBO Rate for the relevant Tranche Period
shall instead be the rate determined by the Agent to be the rate at which
JPMorgan offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Tranche Period, in the approximate amount to
be funded at the LIBO Rate and having a maturity equal to such Tranche Period,
divided by (b) one minus the maximum aggregate reserve requirement (including
all basic, supplemental, marginal or other reserves) which is imposed against
the Agent in respect of Eurocurrency liabilities, as defined in Regulation D of
the Board of Governors of the Federal Reserve System as in effect from time to
time (expressed as a decimal), applicable to such Tranche Period' plus
(ii) the Applicable LIBO Margin, plus
(iii) [***]% per annum.
"Liquidity Agreement" means any agreement as may be in effect from time to
time among the Company and the Financial Institutions or any Funding Source
providing for the commitment of such Financial Institutions or any Funding
Source to purchase from the Company at any time all or any portion of the
Company's Purchaser Interests.
"Liquidity Termination Date" means April 1, 2008 or such later date as
shall be the earliest termination date under the any of the Liquidity Agreement
then in effect.
11
"Lock-Box" means each locked postal box with respect to which a bank who
has executed a Collection Account Agreement has been granted exclusive access
for the purpose of retrieving and processing payments made on the Receivables
and which is listed on Exhibit IV.
"Loss Horizon Ratio" means, the ratio (expressed as a percentage) at any
time equal to (i) the aggregate Original Balance of all Receivables generated by
the Originators during the three Monthly Accounting Periods then most recently
ended divided by (ii) the aggregate Net Eligible Receivables Balance as of the
end of the most recently ended Monthly Accounting Period.
"Loss Reserve" means, on any date, an amount equal to the product of (i)
the Loss Reserve Percentage on such date and (ii) the Net Receivables Balance as
of the close of business of the Servicer on such date.
"Loss Reserve Percentage" means, as of any date of determination, the
greater of (i) [***]% and (ii) a percentage calculated in accordance with the
following formula:
LRP = [***] x DR x LHR
where:
LRP = Loss Reserve Percentage;
DR = Default Ratio at such time; and
LHR = Loss Horizon Ratio at such time.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of (A) Seller, (B) Servicer, (C) any
Originator or (D) the Provider, (ii) the ability of Seller, Servicer, the
Provider or any Originator to perform its obligations under this Agreement or
any other Transaction Document, (iii) the legality, validity or enforceability
of this Agreement or any other Transaction Document, (iv) any Purchaser's
interest in the Receivables generally or in any significant portion of the
Receivables, the Related Assets or the Collections with respect thereto, or (v)
the collectibility of the Receivables generally or of any material portion of
the Receivables.
"Monthly Accounting Period" means a fiscal month of Cott, the initial such
fiscal months after the date of this Agreement being those accounting periods
set forth in Exhibit XII hereto, as the dates of such accounting periods may be
modified with the prior written consent of the Agent.
"Monthly Report" means a report, in substantially the form of Exhibit IX
hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to Section 8.5.
"Moody's" means Moody's Investors Service, Inc. and any successor thereto.
"Net Eligible Receivables Balance" means, at any time, the aggregate
Outstanding Balance of all Eligible Receivables at such time reduced by (i) at
any time that the Ratings Threshold is satisfied, 75% of the aggregate balance
of the Promotional Accrual Accounts at
12
such time and (ii) at any time that the Ratings Threshold is not satisfied, 100%
of the aggregate balance of the Promotional Accrual Accounts at such time.
"Net Receivables Balance" means, at any time, the Net Eligible Receivables
Balance at such time reduced by the aggregate amount by which the Outstanding
Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds
the Concentration Limit for such Obligor.
"New Division Receivable" means those Receivables arising in connection
with the sale of goods or the rendering of services by any division of any
Originator that is acquired after the date of this Agreement; provided, that
such Receivables shall cease to be "New Division Receivables" hereunder upon the
written acknowledgement of the Seller, the Agent and each Purchaser.
"Non-Renewing Financial Institution" has the meaning set forth in Section
13.6(a).
"Obligations" shall have the meaning set forth in Section 2.1.
"Obligor" means a Person obligated to make payments on a Receivable.
"Original Balance" means, with respect to any Receivable, the Outstanding
Balance of such Receivable on the date it was generated.
"Originators" means, collectively, (i) Cott, (ii) Cott Beverages Wyomissing
Inc., a Pennsylvania corporation, and (iii) Cott Vending Inc., a Delaware
corporation.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Participant" has the meaning set forth in Section 12.2.
"Performance Undertaking" means that certain Performance Undertaking dated
as of the date hereof by the Provider in favor of Seller, substantially in the
form of Exhibit X, as the same may be amended, restated or otherwise modified
from time to time.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Pooled Commercial Paper" means Commercial Paper notes of Company subject
to any particular pooling arrangement by Company, but excluding Commercial Paper
issued by Company for a tenor and in an amount specifically requested by any
Person in connection with any agreement effected by Company.
"Potential Amortization Event" means an event which, with the passage of
time or the giving of notice, or both, would constitute an Amortization Event.
13
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by JPMorgan as its prime rate in effect at its principal office;
each change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective.
"Pro Rata Share" means, for each Financial Institution, a percentage equal
to (i) the commitment of such Financial Institution to purchase Purchaser
Interests from Seller, divided by (ii) the aggregate amount of all such
commitments of all Financial Institutions hereunder.
"Promotional Accrual Accounts" means, collectively, (i) the rebate accrual
accounts of the Originators, (ii) the volume incentive accrual accounts of the
Originators, (iii) the discretionary promotional accrual accounts of the
Originators and (iv) and any similar promotional accrual account maintained on
the general ledger or other books and records of any Originator.
"Proposed Reduction Date" has the meaning set forth in Section 1.3.
"Provider" means Cott Corporation, a company organized under the laws of
Canada.
"Purchase Limit" means $75,000,000 as such amount may be increased or
decreased hereunder.
"Purchase Notice" has the meaning set forth in Section 1.2.
"Purchase Price" means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to Seller for such Purchaser Interest which
shall not exceed the least of (i) the amount requested by Seller in the
applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the
applicable purchase date and (iii) the excess, if any, of the Net Receivables
Balance (less the Aggregate Reserves) on the applicable purchase date over the
aggregate outstanding amount of Aggregate Capital determined as of the date of
the most recent Monthly Report, taking into account such proposed Incremental
Purchase.
"Purchasers" means Company and each Financial Institution.
"Purchaser Interest" means, at any time, an undivided percentage ownership
interest (computed as set forth below) associated with a designated amount of
Capital, selected pursuant to the terms and conditions hereof in (i) each
Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Assets with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:
C
--------
NRB - AR
where:
C = the Capital of such Purchaser Interest.
14
AR = the Aggregate Reserves.
NRB = the Net Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
"Purchasing Financial Institution" has the meaning set forth in Section
12.1(b).
"Rating Level" shall mean any of the following, as determined at any time
in reference to the short term debt rating then assigned to [***] by Moody's
(the "Moody's Rating") and S&P (the "S&P Rating"):
Rating Level 1 [***]
Rating Level 2 [***]
Rating Level 3 [***]
Rating Level 4 [***]
"Rating Threshold" shall be satisfied on any date that (i) the issuer
rating then assigned to Cott Corporation by Moody's is Ba3 or better AND (b) the
long term local issuer credit rating then assigned to Cott Corporation by S&P is
BB-or better.
"Receivable" means all indebtedness and other obligations owed to Seller or
any Originator (at the time it arises, and before giving effect to any transfer
or conveyance under any Receivables Sale Agreement or hereunder) or in which
Seller or any Originator has a security interest or other interest, including,
without limitation, any indebtedness, obligation or interest constituting an
account, chattel paper, instrument, financial asset, investment property, letter
of credit right, supporting obligation or general intangible, arising in
connection with the sale of goods or the rendering of services by such
Originator, and further includes, without limitation, the obligation to pay any
Finance Charges with respect thereto. Indebtedness and other rights and
obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Receivable separate from a Receivable consisting of
the indebtedness and other rights and obligations arising from any other
transaction; provided further, that any indebtedness, rights or obligations
referred to in the immediately preceding sentence shall be a Receivable
regardless of whether the account debtor or Seller treats such indebtedness,
rights or obligations as a separate payment obligation. Notwithstanding the
foregoing, no indebtedness or other obligations owed to the
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Seller or Cott arising in connection with the sale of goods or the rendering of
services by (i) (A) any Originator to Cott Corporation or any Subsidiary of Cott
Corporation or (B) unless until the Agent and the Seller otherwise agree in
writing, any Originator to Safeway, Inc. or (ii)(A) the Concentrates (division
code - 57), RC International (division code -54) or Cott International (division
code 50) divisions of Cott, as such divisions exist on the date of this
agreement or (B) [***], shall constitute a "Receivable" hereunder.
"Receivables Sale Agreements" means each of (i) the Receivables Sale
Agreement dated as of the date hereof between the Seller and Cott, (ii) the
Receivables Sale Agreement dated as of the date hereof between the Seller and
Cott Vending Inc., and (iii) the Receivables Sale Agreement dated as of the date
hereof between the Seller and Cott Beverages Wyomissing Inc., as each such
agreement may be amended, restated, supplemented or otherwise modified from time
to time.
"Records" means, with respect to any Receivable, all Contracts, purchase
orders and other documents, books, records and other information (including,
without limitation, computer programs, tapes, disks, punch cards, data
processing software and related property and rights) relating to such
Receivable, any Related Assets therefor and the related Obligor.
"Reduction Notice" has the meaning set forth in Section 1.3.
"Regulatory Change" has the meaning set forth in Section 10.2(a).
"Reinvestment" has the meaning set forth in Section 2.2.
"Related Assets" means, with respect to any Receivable:
(i) all of Seller or the applicable Originator's interest in the
inventory and goods the sale, financing or lease of which by the applicable
Originator gave rise to such Receivable (but only to the extent such
inventory or goods consist of returned or repossessed inventory or goods),
and all insurance contracts with respect thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance 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, but only to the extent
that such guaranties, letters of credit, insurance and other agreements or
arrangements relate to such Receivable,
(iv) all Contracts, service contracts and other contracts and
agreements associated with such Receivable but only to the extent that such
service contracts and other contracts relate to such Receivable,
(v) all Records (other than Contracts) related to such Receivable,
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(vi) all of Seller's right, title and interest in and to such
Receivable and under any Receivables Sale Agreement,
(vii) all of Seller's right, title and interest in any Collection
Accounts, Lockboxes and under the Performance Undertaking, and
(viii) all proceeds of any of the foregoing.
"Required Financial Institutions" means, at any time, Financial
Institutions with Commitments to purchase Purchaser Interests from Seller in
excess of 66-2/3% of the Purchase Limit.
"Required Notice Period" means two (2) Business Days.
"Restricted Junior Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of capital stock of
Seller now or hereafter outstanding, except a dividend payable solely in shares
of that class of stock or in any junior class of stock of Seller, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of capital
stock of Seller now or hereafter outstanding, (iii) any payment or prepayment of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to the Subordinated
Loans (as defined in any Receivables Sale Agreement), (iv) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
capital stock of Seller now or hereafter outstanding, and (v) any payment of
management fees by Seller (except for reasonable management fees to Cott or its
Affiliates in reimbursement of actual management services performed). For
purposes of clarification, the Servicing Fee shall not constitute a "Restricted
Junior Payment" hereunder.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.
"Seller" has the meaning set forth in the preamble to this Agreement.
"Servicer" means at any time the Person (which may be the Agent) then
authorized pursuant to Article VIII to service, administer and collect
Receivables.
"Servicing Fee" has the meaning set forth in Section 8.6.
"Settlement Date" means, (A) in any month, the date occurring two (2)
Business Days following the date the Monthly Report is required to be delivered
in such month in accordance with Section 8.5, and (B) the last day of the
relevant Tranche Period in respect of each Purchaser Interest of the Financial
Institutions.
"Settlement Period" means (A) in respect of each Purchaser Interest of
Company, the immediately preceding Accrual Period, and (B) in respect of each
Purchaser Interest of the Financial Institutions, the entire Tranche Period of
such Purchaser Interest.
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"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
"Termination Date" has the meaning set forth in Section 2.2.
"Termination Percentage" has the meaning set forth in Section 2.2.
"Terminating Financial Institution" has the meaning set forth in Section
12.3(a).
"Terminating Tranche" has the meaning set forth in Section 4.3(b).
"Total Leverage Ratio" has the meaning set forth in Schedule C.
"Tranche Period" means, with respect to any Purchaser Interest held by a
Financial Institution, including any Purchaser Interest or an undivided interest
in a Purchaser Interest assigned to a Financial Institution pursuant to a
Liquidity Agreement:
(a) if Yield for such Purchaser Interest is calculated on the basis of the
LIBO Rate, a period of one, two, three or six months, or such other period as
may be mutually agreeable to the Agent and Seller, commencing on a Business Day
selected by Seller or the Agent pursuant to this Agreement. Such Tranche Period
shall end on the day in the applicable succeeding calendar month which
corresponds numerically to the beginning day of such Tranche Period, provided,
however, that if there is no such numerically corresponding day in such
succeeding month, such Tranche Period shall end on the last Business Day of such
succeeding month; or
(b) if Yield for such Purchaser Interest is calculated on the basis of the
Prime Rate, a period commencing on a Business Day selected by Seller and agreed
to by the Agent, provided no such period shall exceed one month.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the Agent.
"Transaction Documents" means, collectively, this Agreement, the Asset
Allocation Agreement, each Purchase Notice, the Receivables Sale Agreements,
each Collection Account Agreement, the Performance Undertaking, the Fee Letter
and all other instruments, documents and agreements executed and delivered in
connection herewith.
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"UCC" means the Uniform Commercial Code as from time to time in effect in
the specified jurisdiction.
[***]
[***]
[***]
[***]
"Yield" means for each respective Tranche Period relating to Purchaser
Interests of the Financial Institutions, including, without limitation, any
Purchaser Interests or undivided interests in Purchaser Interests assigned to a
Financial Institution pursuant to a Liquidity Agreement, an amount equal to the
product of the applicable Discount Rate for each Purchaser Interest multiplied
by the Capital of such Purchaser Interest for each day elapsed during such
Tranche Period, annualized on a 360 day basis.
"Yield and Servicing Reserve" means, on any date, an amount equal to the
sum of:
(i) the product of:
(A) the greater of
(I) the Prime Rate plus [***] %, and
(II) the Federal Funds Effective Rate plus [***]%; and
(B) the quotient of:
(I) product of
(aa) DSO,
(bb) [***], and
(II) [***]; and
(ii) the quotient of:
(A) product of:
(I) DSO,
(II) the Servicing Fee for the most recently ended Accrual
Period, and
(III) [***]; and
(B) [***].
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All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of New
York, and not specifically defined herein, are used herein as defined in such
Article 9.
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