Exhibit 10-k
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SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
DATED AS OF SEPTEMBER 26, 2002
AMONG
ARVINMERITOR RECEIVABLES CORPORATION,
AS THE SELLER,
ARVINMERITOR, INC.,
AS THE INITIAL COLLECTION AGENT,
CREDIT LYONNAIS,
ACTING THROUGH ITS NEW YORK BRANCH,
AS THE AGENT AND AS A PURCHASER AGENT,
BAYERISCHE LANDESBANK, NEW YORK BRANCH,
AS A PURCHASER AGENT
ABN AMRO BANK N.V., AS A PURCHASER AGENT
THE OTHER PURCHASER AGENTS
FROM TIME TO TIME HERETO,
THE RELATED COMMITTED PURCHASERS
FROM TIME TO TIME PARTY HERETO,
GIRO BALANCED FUNDING CORPORATION,
AS A CONDUIT PURCHASER,
LA FAYETTE ASSET SECURITIZATION LLC,
AS A CONDUIT PURCHASER,
AMSTERDAM FUNDING CORPORATION,
AS A CONDUIT PURCHASER
AND
THE OTHER CONDUIT PURCHASERS
FROM TIME TO TIME PARTY HERETO
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Exhibit 10-k
TABLE OF CONTENTS
PAGE
ARTICLE I PURCHASES FROM SELLER AND SETTLEMENTS..................................................1
Section 1.1. Sales..................................................................................1
Section 1.2. Interim Liquidations...................................................................4
Section 1.3. Selection of Discount Rates and Tranche Periods........................................4
Section 1.4. Fees and Other Costs and Expenses......................................................4
Section 1.5. Maintenance of Sold Interest; Deemed Collection........................................5
Section 1.6. Reduction in Commitments...............................................................5
Section 1.7. Repurchases............................................................................5
Section 1.8. Security Interest......................................................................6
ARTICLE II SALES TO AND FROM CONDUIT PURCHASERS; ALLOCATIONS......................................7
Section 2.1. Required Purchases from a Conduit Purchaser............................................7
Section 2.2. Purchases by a Conduit Purchaser.......................................................7
Section 2.3. Allocations and Distributions..........................................................7
ARTICLE III ADMINISTRATION AND COLLECTIONS.........................................................9
Section 3.1. Appointment of Collection Agent........................................................9
Section 3.2. Duties of Collection Agent............................................................10
Section 3.3. Reports...............................................................................10
Section 3.4. Lock-Box Arrangements.................................................................11
Section 3.5. Enforcement Rights....................................................................11
Section 3.6. Collection Agent Fee..................................................................11
Section 3.7. Responsibilities of the Seller........................................................12
Section 3.8. Actions by Seller.....................................................................12
Section 3.9. Indemnities by the Collection Agent...................................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................13
Section 4.1. Representations and Warranties of the Seller..........................................13
Section 4.2. Representations and Warrants of the Initial Collection Agent..........................15
ARTICLE V COVENANTS.............................................................................17
Section 5.1. Covenants of the Seller...............................................................17
Section 5.2. Covenants of the Initial Collection Agent.............................................22
ARTICLE VI INDEMNIFICATION.......................................................................25
Section 6.1. Indemnities by the Seller.............................................................25
Section 6.2. Increased Cost and Reduced Return.....................................................27
Section 6.3. Other Costs and Expenses..............................................................27
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PAGE
Section 6.4. Withholding Taxes.....................................................................28
Section 6.5. Payments and Allocations..............................................................29
ARTICLE VII CONDITIONS PRECEDENT..................................................................29
Section 7.1. Conditions to Closing.................................................................29
Section 7.2. Conditions to Each Purchase...........................................................30
Section 7.3. Addition and Removal of Originators...................................................30
ARTICLE VIII THE AGENT.............................................................................32
Section 8.1. Appointment and Authorization.........................................................32
Section 8.2. Delegation of Duties..................................................................32
Section 8.3. Exculpatory Provisions................................................................32
Section 8.4. Reliance by Agent and Purchaser Agents................................................33
Section 8.5. Assumed Payments......................................................................33
Section 8.6. Notice of Termination Events..........................................................34
Section 8.7. Non-Reliance on Agent and Other Purchasers............................................34
Section 8.8. Agent, Purchaser Agents and Affiliates................................................34
Section 8.9. Indemnification.......................................................................35
Section 8.10. Successor Agent.......................................................................35
ARTICLE IX MISCELLANEOUS.........................................................................35
Section 9.1. Termination...........................................................................35
Section 9.2. Notices...............................................................................35
Section 9.3. Payments and Computations.............................................................36
Section 9.4. Sharing of Recoveries.................................................................36
Section 9.5. Right of Setoff.......................................................................37
Section 9.6. Amendments............................................................................37
Section 9.7. Waivers...............................................................................37
Section 9.8. Successors and Assigns; Participations; Assignments...................................38
Section 9.9. Waiver of Confidentiality.............................................................40
Section 9.10. Confidentiality of Agreement..........................................................40
Section 9.11. Agreement Not to Petition.............................................................40
Section 9.12. Excess Funds..........................................................................41
Section 9.13. No Recourse...........................................................................41
Section 9.14. Headings; Counterparts................................................................41
Section 9.15. Cumulative Rights and Severability....................................................41
Section 9.16. Governing Law; Submission to Jurisdiction.............................................42
Section 9.17. Waiver of Trial by Jury...............................................................42
Section 9.18. Intended Tax Characterization.........................................................42
Section 9.19. Entire Agreement......................................................................42
Section 9.20. Extensions of Scheduled Termination Date..............................................42
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SCHEDULES DESCRIPTION
Schedule I Definitions
Schedule II Purchasers
EXHIBITS DESCRIPTION
Exhibit A Form of Incremental Purchase Request
Exhibit B Form of Periodic Report
Exhibit C Addresses and Names of Seller and Originators
Exhibit D Lock-Boxes and Lock-Box Banks
Exhibit E Form of Lock-Box Letter
Exhibit F Form of Compliance Certificate
Exhibit G Credit and Collection Policy
Exhibit H Form of Amendment and Reaffirmation of Limited Guaranty
Exhibit I Form of Supplement to Schedules
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Exhibit 10-k
SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
THIS SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT, dated as of
September 26, 2002, among ArvinMeritor Receivables Corporation, a Delaware
corporation (the "Seller"), ArvinMeritor, Inc., an Indiana corporation (the
"Initial Collection Agent," and, together with any successor thereto, the
"Collection Agent"), the Related Committed Purchasers party hereto (the "Related
Committed Purchasers"), Giro Balanced Funding Corporation ("GBFC"), La Fayette
Asset Securitization LLC ("La Fayette"), Amsterdam Funding Corporation
("Amsterdam"), the other Conduit Purchasers from time to time party hereto,
Credit Lyonnais, acting through its New York Branch, as agent for the Purchasers
(the "Agent") and as a Purchaser Agent, Bayerische Landesbank, New York Branch
("BLB"), as a Purchaser Agent, ABN AMRO Bank N.V. ("ABN AMRO"), as a Purchaser
Agent and the other Purchaser Agents from time to time to the party hereto.
Certain capitalized terms used herein, and certain rules of construction, are
defined in Schedule I.
PRELIMINARY STATEMENT
The Seller, Initial Collection Agent, Agent, BLB, Atlantic Asset
Securitization Corp. ("Atlantic"), GBFC, La Fayette, ABN AMRO, Amsterdam, and
certain related committed purchasers are parties to an Amended and Restated
Receivables Sale Agreement, dated as of September 27, 2001 (such Amended and
Restated Receivables Sale Agreement, as heretofore amended, being referred to
herein as the "Original Agreement"); and
Subject to and upon the terms and conditions set forth herein, the parties
desire to amend and restate the Original Agreement in the form of this Agreement
to, among other things, provide for the appointment of Credit Lyonnais, acting
through its New York Branch, as successor agent under this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and the other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
PURCHASES FROM SELLER AND SETTLEMENTS
Section 1.1. Sales. (a) The Sold Interest. Subject to the terms and
conditions hereof, the Seller may, from time to time before the Termination
Date, sell to the Conduit Purchasers or, only if a Conduit Purchaser declines to
make the applicable purchase, ratably to the Related Committed Purchasers for
such Conduit Purchaser, an undivided percentage ownership interest in the
Receivables, the Related Security and all related Collections. Any such purchase
(a "Purchase") shall be made by each relevant Purchaser remitting funds to the
Seller, through the
Agent, pursuant to Section 1.1(c) or by the Collection Agent remitting
Collections to the Seller pursuant to Section 1.1(d). The aggregate percentage
ownership interest so acquired by a Purchaser in the Receivables, the Related
Security and related Collections (its "Purchase Interest") shall equal at any
time the sum of the following percentages:
I + PRP
-----
ER
where:
I = the outstanding Investment of such Purchaser at such time;
ER = the Eligible Receivables Balance at such time; and
PRP = the Purchaser Reserve Percentage at such time.
Except during a Liquidation Period for a Purchaser, such Purchaser's Purchase
Interest will change whenever its Investment, its Purchaser Reserve Percentage
or the Eligible Receivables Balance changes. During a Liquidation Period for a
Purchaser its Purchase Interest shall remain constant at the percentage in
effect as of the day immediately preceding the commencement of the relevant
Liquidation Period, except for redeterminations to reflect Investment acquired
from or transferred to another Purchaser under the Transfer Agreement. The sum
of all Purchasers' Purchase Interests at any time is referred to herein as the
"Sold Interest," which at any time is the aggregate percentage ownership
interest then held by the Purchasers in the Receivables, the Related Security
and Collections.
(b) Conduit Purchasers' Purchase Option and Committed Purchasers'
Commitments. Subject to Section 1.1(d) concerning Reinvestment Purchases, at no
time will a Conduit Purchaser have any obligation to make a Purchase. Each
Committed Purchaser severally hereby agrees, subject to Section 7.2 and the
other terms and conditions hereof, (including, in the case of an Incremental
Purchase (as defined below), that the related Conduit Purchaser has refused to
make a requested Purchase), to make Purchases before the Termination Date, based
on the applicable Purchaser Group's Ratable Share of each Purchase (and, in the
case of each Committed Purchaser, its Commitment Percentage of its Purchaser
Group's Ratable Share of such Purchase), to the extent its Investment would not
thereby exceed its Commitment and the Matured Aggregate Investment would not
thereby exceed the Aggregate Commitments. Each Purchaser's first Purchase and
each additional Purchase by such Purchaser not made from Collections pursuant to
Section 1.1(d) is referred to herein as an "Incremental Purchase." Each Purchase
made by a Purchaser with the proceeds of Collections in which it has a Purchase
Interest, which does not increase the outstanding Investment of such Purchaser,
is referred to herein as a "Reinvestment Purchase." All Purchases hereunder
shall be made ratably by each Purchaser Group in accordance with the Commitment
of such Purchaser Group.
(c) Incremental Purchases. In order to request an Incremental Purchase
from a Purchaser, the Seller must provide to the Agent and each Purchaser Agent
an irrevocable written request (including by telecopier or other facsimile
communication) substantially in the form of Exhibit A, by (i) 10:00 a.m. (New
York City time) three Business Days before the requested date
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(the "Purchase Date") of such Purchase, in the case of each Purchase by a
Conduit Purchaser and in the case of each Purchase by the Committed Purchasers
that is to accrue Discount at the Eurodollar Rate and (ii) 10:00 a.m. (New York
City time) one Business Day before the requested Purchase Date in the case of
each Purchase by the Committed Purchasers that is to accrue Discount at the
Prime Rate. Each such notice shall specify the requested Purchase Date (which
must be a Business Day) and the requested amount (the "Purchase Amount") of such
Purchase, which must be in a minimum amount of $1,000,000 and multiples thereof
(or, if less, an amount equal to the Maximum Incremental Purchase Amount). All
Incremental Purchases must be requested ratably from all Conduit Purchasers
unless upon such request, a Conduit Purchaser, in its sole discretion,
determines not to make its Ratable Share of the requested Purchase (which
determination shall be made within one Business Day after the Seller's request
for an Incremental Purchase), in which case the Seller may request such Ratable
Share of the Incremental Purchase be made by the Related Committed Purchasers of
such Conduit Purchaser on the originally requested Purchase Date. Each Purchaser
Agent shall promptly notify the related Purchasers from which a Purchase is
requested of the contents of such request. If a Ratable Share of an Incremental
Purchase is requested from a Conduit Purchaser and such Conduit Purchaser
determines, in its sole discretion, to make the requested Purchase, such Conduit
Purchaser shall transfer to the Agent's Account its Ratable Share of such
Incremental Purchase by no later than 12:00 noon (New York City time) on the
Purchase Date. If a Ratable Share of an Incremental Purchase is requested from
the Committed Purchasers for a Purchaser Group, subject to Section 7.2 and the
other terms and conditions hereof, each Committed Purchaser for a Purchaser
Group shall transfer the applicable Purchaser Group's Ratable Share of the
requested Purchase Amount (and, in the case of each Committed Purchaser, its
Commitment Percentage of its Purchaser Group's Ratable Share of such Purchase)
into the Agent's Account by no later than 12:00 noon (New York City time) on the
Purchase Date. The Agent shall transfer to the Seller Account the proceeds of
any Incremental Purchase delivered into the Agent's Account.
(d) Reinvestment Purchases. Unless a Conduit Purchaser has provided to the
Agent, its Purchaser Agent, the Seller, and the Collection Agent a notice (which
notice has not been revoked) that it no longer wishes to make Reinvestment
Purchases (in which case such Conduit Purchaser's Reinvestment Purchases, but
not those of its Related Committed Purchasers shall cease), on each day before
the Termination Date that any Collections are received by the Collection Agent
and no Interim Liquidation is in effect a Purchaser's Purchase Interest in such
Collections shall automatically be used to make a Reinvestment Purchase by such
Purchaser, but only to the extent such Reinvestment Purchase would not cause the
Purchaser's Investment to increase above the amount of such Investment at the
start of the day plus any Incremental Purchases made by the Purchaser on that
day. A Conduit Purchaser may revoke any notice provided under the first sentence
of this Section 1.1(d) by notifying the Agent, its Purchaser Agent, the Seller
and the Collection Agent that it will make Reinvestment Purchases.
(e) Assignments. Pursuant to the Original Agreement, the Purchaser Agents
(on behalf of the related Conduit Purchasers) have from time to time purchased
Receivables which are currently outstanding in the amount of $105,000,000. The
parties hereto are amending and restating the Original Agreement in order to
remove Atlantic as a Conduit Purchaser hereunder and ABN AMRO as the Agent.
Pursuant to the terms of a Transfer Supplement, Atlantic has
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sold and assigned to La Fayette, and La Fayette has purchased and assumed from
Atlantic a Purchased Interest in the Receivables which are held by Credit
Lyonnais for the benefit of Atlantic in the amount of $10,500,000 for La
Fayette. Amsterdam hereby sells and assigns to La Fayette, and La Fayette hereby
purchases and assumes from Amsterdam, a Purchased Interest in the Receivables
which are held by ABN AMRO for the benefit of Amsterdam in the amount of
$10,500,000 such that the Purchased Interests of La Fayette in Receivables which
are outstanding on the date hereof shall equal $42,000,000 and the Purchased
Interest of Amsterdam shall equal $31,500,000. Amsterdam represents and warrants
that it is the legal and beneficial owner of the Purchased Interest assigned by
it hereunder and that such Purchased Interest is free and clear of any Adverse
Claim created by ABN AMRO and/or Amsterdam.
Section 1.2. Interim Liquidations. (a) Optional. The Seller may at any
time direct that Reinvestment Purchases cease and that an Interim Liquidation
commence for all Purchasers by giving the Agent, each Purchaser Agent and the
Collection Agent at least three Business Days' prior written (including telecopy
or other facsimile communication) notice specifying the date on which the
Interim Liquidation shall commence and, if desired, when such Interim
Liquidation shall cease (identified as a specific date prior to the Termination
Date or as when the Aggregate Investment is reduced to a specified amount). If
the Seller does not so specify the date on which an Interim Liquidation shall
cease, it may cause such Interim Liquidation to cease at any time before the
Termination Date, subject to Section 1.2(b) below, by notifying the Agent, each
Purchaser Agent and the Collection Agent in writing (including by telecopy or
other facsimile communication) at least three Business Days before the date on
which it desires such Interim Liquidation to cease.
(b) Mandatory. If at any time before the Termination Date any condition in
Section 7.2 is not fulfilled, the Seller shall immediately notify the Agent,
each Purchaser Agent and the Collection Agent, whereupon Reinvestment Purchases
shall cease and an Interim Liquidation shall commence, which shall only cease
upon the Seller confirming to the Agent that the conditions in Section 7.2 are
fulfilled.
Section 1.3. Selection of Discount Rates and Tranche Periods. The Discount
Rates, Tranche Periods and related matters for all Investment of each Purchaser
Group shall be set forth in and governed by the terms of, the Rate Supplement
for such Purchaser Group. Each such Rate Supplement shall supplement this
Agreement with respect to the terms and provisions set forth therein.
Section 1.4. Fees and Other Costs and Expenses. (a) The Seller shall pay
to each Purchaser Agent for the benefit of its Purchaser Group, such amounts as
agreed to with the Seller in the Fee Letter for such Purchaser Group.
(b) Investment and Discount shall be payable solely from Collections and
from amounts payable under Sections 1.5, 1.7 and 6.1 (to the extent amounts paid
under Section 6.1 indemnify against reductions in or non-payment of
Receivables). The Seller shall pay, as a full recourse obligation, all other
amounts payable hereunder and under the Rate Supplements (other than Discount),
including, without limitation, fees described in the Fee Letters and amounts
payable under Article VI.
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Section 1.5. Maintenance of Sold Interest; Deemed Collection. (a) General.
If at any time before the Termination Date the Eligible Receivables Balance is
less than the sum of the Aggregate Investment (or, if a Termination Event
exists, the Matured Aggregate Investment) plus the Total Reserve, the Seller
shall immediately pay to the Agent an amount equal to such deficiency for
application to reduce the Investments of the Purchasers ratably in accordance
with the principal amount of their respective Investments, applied with respect
to each such Purchaser first to such Purchaser's Prime Tranches, if any, and
second to the other Tranches applicable to the Investment of such Purchaser with
the shortest remaining maturities unless otherwise specified by the Seller.
(b) Deemed Collections. If on any day the outstanding balance of a
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including any adjustment
resulting from the application of any special refund or other discounts or any
reconciliation), any setoff or credit (whether such claim or credit arises out
of the same, a related, or an unrelated transaction) or any other reason other
than the financial inability of the Obligor to pay undisputed indebtedness, the
Seller shall be deemed to have received on such day a Collection on such
Receivable in the amount of such reduction or cancellation. If on any day any
representation, warranty, covenant or other agreement of the Seller related to a
Receivable is not true or is not satisfied, the Seller shall be deemed to have
received on such day a Collection in the amount of the outstanding balance of
such Receivable. All such Collections deemed received by the Seller under this
Section 1.5(b) shall be remitted by the Seller to the Collection Agent in
accordance with Section 5.1(i).
(c) Adjustment to Sold Interest. At any time before the Termination Date
that the Seller is deemed to have received any Collection under Section 1.5(b)
("Deemed Collections") that derives from a Receivable that is otherwise reported
as an Eligible Receivable, so long as no Liquidation Period then exists, the
Seller may satisfy its obligations to deliver such amount to the Collection
Agent by instead notifying the Agent that the Sold Interest should be
recalculated by decreasing the Eligible Receivables Balance by the amount of
such Deemed Collections, so long as such adjustment does not cause the Sold
Interest to exceed 100%.
(d) Payment Assumption. Unless an Obligor otherwise specifies or another
application is required by contract or law, any payment received by the Seller
from any Obligor shall be applied as a Collection of Receivables of such Obligor
(starting with the oldest such Receivable) and remitted to the Collection Agent
as such.
Section 1.6. Reduction in Commitments. The Seller may, upon thirty days'
notice to the Agent and each Purchaser Agent, reduce the Aggregate Commitment in
increments of $1,000,000, so long as the Aggregate Commitment as so reduced is
no less than the Matured Aggregate Investment. Each such reduction in the
Aggregate Commitment shall reduce the Commitment of each Purchaser Group in
accordance with its Ratable Share (and, in the case of each Committed Purchaser,
its Commitment in accordance with its Commitment Percentage of its Purchaser
Group's Ratable Share of such reduction).
Section 1.7. Optional Repurchases. At any time that the Aggregate
Investment is less than 10% of the Aggregate Commitment in effect on the date
hereof, the Seller may, upon thirty
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days' notice to the Agent and each Purchaser Agent, repurchase the entire Sold
Interest from the Purchasers at a price equal to the outstanding Matured
Aggregate Investment and all other amounts then owed hereunder.
Section 1.8. Security Interest. (a) The Seller hereby grants to the Agent,
for its own benefit and for the ratable benefit of the Purchaser Agents and
Purchasers, a security interest in all Receivables, Related Security,
Collections and Lock-Box Accounts to secure the payment of all amounts other
than Investment owing hereunder and (to the extent of the Sold Interest) to
secure the repayment of all Investment.
(b) The Seller hereby assigns and otherwise transfers to the Agent (for
the benefit of the Agent, each Purchaser Agent, each Purchaser and any other
Person to whom any amount is owed hereunder), all of the Seller's right, title
and interest in, to and under the Purchase Agreement. The Seller shall execute,
file and record all financing statements, continuation statements and other
documents required to perfect or protect such assignment. This assignment
includes (a) all monies due and to become due to the Seller from the Originators
under or in connection with the Purchase Agreement (including fees, expenses,
costs, indemnities and damages for the breach of any obligation or
representation related to such agreements) and (b) all rights, remedies, powers,
privileges and claims of the Seller against the Originators under or in
connection with the Purchase Agreement. All provisions of the Purchase Agreement
shall inure to the benefit of, and may be relied upon by, the Agent, each
Purchaser Agent, each Purchaser and each such other Person. At any time that a
Termination Event has occurred and is continuing, the Agent shall have the sole
right to enforce the Seller's rights and remedies under the Purchase Agreement
to the same extent as the Seller could absent this assignment, but without any
obligation on the part of the Agent, any Purchaser Agent, any Purchaser or any
other such Person to perform any of the obligations of the Seller under the
Purchase Agreement (or the promissory note executed thereunder). All amounts
distributed to the Seller under the Purchase Agreement from Receivables sold to
the Seller thereunder shall constitute Collections hereunder and shall be
applied in accordance herewith.
(c) This agreement shall be a security agreement for purposes of the UCC.
Upon the occurrence of a Termination Event, the Agent shall have all rights and
remedies provided under the UCC as in effect in all applicable jurisdictions.
(d) ABN AMRO as the prior Agent under the Original Agreement (the "Prior
Agent") hereby assigns and transfers to Credit Lyonnais as the Agent under this
Agreement all of its right, title and interest in, to and under the liens and
security interests granted to ABN AMRO as the Prior Agent pursuant to Section
1.8 of the Original Agreement and all financing statements filed in connection
therewith, all without recourse, representation and warranty of any nature
whatsoever.
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ARTICLE II
SALES TO AND FROM CONDUIT PURCHASERS; ALLOCATIONS
Section 2.1. Required Purchases from a Conduit Purchaser. (a) Each Conduit
Purchaser may, at any time, sell to its Related Committed Purchasers pursuant to
the relevant Transfer Agreement any percentage designated by such Conduit
Purchaser of such Conduit Purchaser's Investment and its related Conduit
Purchaser Settlement (each, a "Put").
(b) Any portion of any Investment of a Conduit Purchaser and related
Conduit Purchaser Settlement purchased by a Committed Purchaser shall be
considered part of such Committed Purchaser's Investment and related Conduit
Purchaser Settlement from the date of the relevant Put. Immediately upon any
purchase by a Committed Purchaser of any portion of the relevant Conduit
Purchaser's Investment, the Seller shall pay to the relevant Purchaser Agent
(for the ratable benefit of each such Purchaser) an amount equal to the sum of
(i) the Assigned Settlement and (ii) all unpaid Discount owed to such Conduit
Purchaser (whether or not then due) to the end of each applicable Tranche Period
to which any Investment being Put has been allocated, (iii) all accrued but
unpaid fees (whether or not then due) payable to such Conduit Purchaser in
connection herewith at the time of such purchase and (iv) all accrued and unpaid
costs, expenses and indemnities due to such Conduit Purchaser from the Seller in
connection herewith.
Section 2.2. Purchases by a Conduit Purchaser. Each Conduit Purchaser may
at any time deliver to its Purchaser Agent and each of its Related Committed
Purchasers a notification of assignment in substantially the form provided by
the relevant Transfer Agreement. If a Conduit Purchaser delivers such notice,
each of its Related Committed Purchasers shall sell to such Conduit Purchaser
and such Conduit Purchaser shall purchase in full from each such Related
Committed Purchasers, the Investment of such Related Committed Purchasers on the
last day of the relevant Tranche Periods, at a purchase price equal to such
Investment plus accrued and unpaid Discount thereon. Any sale from any Related
Committed Purchaser to the relevant Conduit Purchaser pursuant to this Section
2.2 shall be without recourse, representation or warranty except for the
representation and warranty that the Investment sold by such Related Committed
Purchaser is free and clear of any Adverse Claim created or granted by such
Related Committed Purchaser and that such Related Committed Purchaser has not
suffered a Bankruptcy Event.
Section 2.3. Allocations and Distributions. (a) Non-Reinvestment Periods.
Before the Termination Date unless an Interim Liquidation is in effect, on each
day during a period that a Conduit Purchaser is not making Reinvestment
Purchases (as established under Section 1.1(d)), the Collection Agent (i) shall
set aside and hold in trust solely for the benefit of the applicable Conduit
Purchaser (or deliver to the applicable Purchaser Agent, if so instructed
pursuant to Section 3.2(a)) such Conduit Purchaser's Purchase Interest in all
Collections received on such day and (ii) shall distribute on the last day of
each CP Tranche Period to the applicable Purchaser Agent (for the benefit of
such Conduit Purchaser) the amounts so set aside up to the amount of such
Conduit Purchaser's Purchase Interest and, to the extent not already paid in
full, all Discount thereon and all other amounts then due from the Seller in
connection with such
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Purchase Interest and Tranche Period. If any part of the Sold Interest in any
Collections is applied to pay any such amounts pursuant to this Section 2.3(a)
and after giving effect to such application the Sold Interest is greater than
100%, the Seller shall pay for distribution as part of the Sold Interest in
Collections, to the Collection Agent the amount so applied to the extent
necessary so that after giving effect to such payment the Sold Interest is no
greater than 100%.
(b) Termination Date and Interim Liquidations. On each day during any
Interim Liquidation and on each day on and after the Termination Date, the
Collection Agent shall set aside and hold solely for the account of each
Purchaser Agent, for the benefit of each Purchaser Group to the extent provided
below, (or deliver to each Purchaser Agent, if so instructed pursuant to Section
3.2(a)) and for the account of the Agent, all Collections received on such day
and such Collections shall be allocated as follows:
(i) first, to the Collection Agent until all amounts owed to the
Collection Agent under the Agreement have been paid in full;
(ii) second, ratably to each Purchaser Group until all Investment
of, and Discount and interest due but not already paid to, each Purchaser
Group has been paid in full;
(iii) third, ratably to such Purchaser Group until all other amounts
owed to such Purchaser Group under the Transaction Documents have been
paid in full;
(iv) fourth, to the Agent until all amounts owed to the Agent (other
than amounts owing the Agent in its role as a Purchaser Agent) have been
paid in full;
(v) fifth, to each Purchaser Agent until all amounts owed to the
Purchaser Agents under the Transaction Documents have been paid in full;
(vi) sixth, to any other Person to whom any amounts are owed under
the Transaction Documents until all such amounts have been paid in full;
and
(vii) seventh, to the Seller (or as otherwise required by applicable
law).
Unless an Interim Liquidation has ended by such date (in which case Reinvestment
Purchases shall resume to the extent provided in Section 1.1(d)), on the last
day of each Tranche Period (unless otherwise instructed by a Purchaser Agent
pursuant to Section 3.2(a)), the Collection Agent shall pay to the appropriate
parties, from such set aside Collections, all amounts allocated to such Tranche
Period and all Tranche Periods that ended before such date that are due in
accordance with the priorities in clauses (ii) and (iii) above. No distributions
shall be made to pay amounts under clauses (iv), (v), (vi) and (vii) above until
sufficient Collections have been set aside to pay all amounts described in
clauses (ii) and (iii) that may become payable for all outstanding Tranche
Periods. All distributions by the Agent shall be made ratably within each
priority level in accordance with the respective amounts then due each Person
included in such level unless otherwise agreed by all Purchaser Agents. If any
part of the Sold Interest in any Collections is applied to pay any amounts,
payable hereunder that are obligations of the Seller
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pursuant to Section 1.4(b) and after giving effect to such application the Sold
Interest is greater than 100%, the Seller shall pay for distribution in respect
of each applicable Purchaser's Investment as part of the Sold Interest in
Collections, to the Collection Agent the amount so applied to the extent
necessary so that after giving effect to such payment the Sold Interest is no
greater than 100%.
ARTICLE III
ADMINISTRATION AND COLLECTIONS
Section 3.1. Appointment of Collection Agent. (a) The servicing,
administering and collecting of the Receivables shall be conducted by a Person
(the "Collection Agent") designated to so act on behalf of the Purchasers under
this Article III. As the Initial Collection Agent, the Parent is hereby
designated as, and agrees to perform the duties and obligations of, the
Collection Agent. The Initial Collection Agent acknowledges that the Agent, each
Purchaser Agent, and each Purchaser have relied on the Initial Collection
Agent's agreement to act as Collection Agent (and the agreement of any of the
sub-collection agents to so act) in making the decision to execute and deliver
this Agreement and agrees that it will not voluntarily resign as Collection
Agent nor permit any sub-collection agent to voluntarily resign as a
sub-collection agent. At any time after the occurrence and during the
continuance of a Termination Event, the Agent may designate a new Collection
Agent to succeed the Initial Collection Agent (or any successor Collection
Agent).
(b) The Initial Collection Agent may (with prior written notice to the
Agent), and if requested by the Agent shall, delegate its duties and obligations
as Collection Agent to an Affiliate of the Initial Collection Agent (acting as a
sub-collection agent). The Initial Collection Agent shall delegate certain
duties with respect to Receivables originated by such respective Originator to
that respective Originator pursuant to the terms of the Letter Agreement.
Notwithstanding such delegation, the Initial Collection Agent shall remain
primarily liable for the performance of the duties and obligations so delegated,
and the Agent, each Purchaser Agent and each Purchaser shall have the right to
look solely to the Initial Collection Agent for such performance. The Agent may
at any time remove or replace any sub-collection agent.
(c) If replaced, the Collection Agent agrees it will terminate, and will
cause each existing sub-collection agent to terminate, its collection activities
in a manner requested by the Agent to facilitate the transition to a new
Collection Agent. The Collection Agent shall cooperate with and assist any new
Collection Agent (including providing access to, and transferring, all Records
and allowing (to the extent permitted by applicable law and contract) the new
Collection Agent to use all licenses, hardware or software necessary or
desirable to collect the Receivables). The Initial Collection Agent irrevocably
agrees to act (if requested to do so) as the data-processing agent for any new
Collection Agent (in substantially the same manner as the Initial Collection
Agent conducted such data-processing functions while it acted as the Collection
Agent).
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Section 3.2. Duties of Collection Agent. (a) The Collection Agent shall
take, or cause to be taken, all action necessary or advisable to collect each
Receivable in accordance with this Agreement, the Credit and Collection Policy
and all applicable laws, rules and regulations using the skill and attention the
Collection Agent exercises in collecting other receivables or obligations owed
solely to it. The Collection Agent shall, in accordance herewith, set aside all
Collections to which a Purchaser is entitled and pay from such Collections all
Discount and the fees set forth in the Fee Letters when due. If so instructed by
the Agent, the Collection Agent shall transfer to the Agent the amount of
Collections to which the Agent, each Purchaser Agent and the Purchasers are
entitled by the Business Day following receipt. Each party hereto hereby
appoints the Collection Agent to enforce such Person's rights and interests in
the Receivables, but (notwithstanding any other provision in any Transaction
Document) the Agent shall at all times have the sole right to direct the
Collection Agent to commence or settle any legal action to enforce collection of
any Receivable.
(b) If no Termination Event exists and the Collection Agent determines
that such action is appropriate in order to maximize the Collections, the
Collection Agent may, in accordance with the applicable Credit and Collection
Policy, extend the maturity of any Receivable, and extend the maturity or adjust
the outstanding balance of any Defaulted Receivables as the Collection Agent may
determine to be appropriate to maximize collections thereof; provided, however,
that if a Termination Event has occurred the Collection Agent may make such
extension or adjustment only upon written approval of the Agent. Any such
extension or adjustment shall not alter the status of a Receivable as a
Defaulted Receivable, affect the computation of the Delinquency Ratio or limit
any rights of the Agent or the Purchasers hereunder. If a Termination Event
exists, the Collection Agent may make such extensions or adjustments only with
the prior consent of the Instructing Group.
(c) The Collection Agent shall turn over to the Seller (i) any percentage
of Collections in excess of the Sold Interest, less all reasonable costs and
expenses of the Collection Agent for servicing, collecting and administering the
Receivables and (ii) subject to Section 1.5(d), the collections and records for
any indebtedness owed to the Seller that is not a Receivable. The Collection
Agent shall have no obligation to remit any such funds or records to the Seller
until the Collection Agent receives evidence (satisfactory to the Agent) that
the Seller is entitled to such items. The Collection Agent has no obligations
concerning indebtedness that is not a Receivable other than to deliver the
collections and records for such indebtedness to the Seller when required by
this Section 3.2(c).
Section 3.3. Reports. On or before the 25th day of each month, and, after
the occurrence and during the continuance of a Termination Event, at such other
times covering such other periods as is requested by the Agent or the
Instructing Group, the Collection Agent shall deliver to the Agent and each
Purchaser Agent a report reflecting information as of the close of business of
the Collection Agent for the immediately preceding calendar month or such other
preceding period as is requested (each a "Periodic Report"), containing the
information described on Exhibit B (with such modifications or additional
information as requested by the Agent or the Instructing Group); provided,
however, if the Parent's long-term unsecured debt rating from both Moody's and
S&P is less than Baa3 and BBB-, the Collection Agent shall deliver the Periodic
Report to the Agent and each Purchaser Agent on or before Wednesday of each week
for the
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immediately preceding calendar week; provided, further, however, if the Parent's
long-term unsecured debt rating is less than "Ba2" from Moody's or less than
"BB" from S&P, respectively, the Collection Agent shall deliver the Periodic
Report to the Agent and each Purchaser Agent on each Business Day.
Section 3.4. Lock-Box Arrangements. The Agent is hereby authorized to give
notice at any time to any or all Lock-Box Banks that the Agent is exercising its
rights under the Lock-Box Letters and to take all actions permitted under the
Lock-Box Letters. The Seller agrees to take any action requested by the Agent to
facilitate the foregoing. After the Agent takes any such action under the
Lock-Box Letters, the Seller shall immediately deliver to the Agent any
Collections received by the Seller. If the Agent takes control of any Lock-Box
Account, the Agent shall distribute Collections it receives in accordance
herewith and shall deliver to the Collection Agent, for distribution under
Section 3.2, all other amounts it receives from such Lock-Box Account.
Section 3.5. Enforcement Rights. (a) The Agent may, at any time, direct
the Obligors and the Lock-Box Banks to make all payments on the Receivables
directly to the Agent or its designee. The Agent may, and the Seller shall at
the Agent's request, withhold the identity of the Purchasers from the Obligors
and Lock-Box Banks. Upon the Agent's request and only after a Potential
Termination Event, the Seller (at the Seller's expense) shall (i) give notice to
each Obligor of the Purchasers' ownership of the Sold Interest and direct that
payments on Receivables be made directly to the Agent or its designee, (ii)
assemble for the Agent all Records and collateral security for the Receivables
and the Related Security and transfer to the Agent (or its designee), or (to the
extent permitted by applicable law and contract) license to the Agent (or its
designee) the use of, all software useful to collect the Receivables and (iii)
segregate in a manner acceptable to the Agent all Collections the Seller
receives and, promptly upon receipt, remit such Collections in the form
received, duly endorsed or with duly executed instruments of transfer, to the
Agent or its designee.
(b) The Seller hereby irrevocably appoints the Agent as its
attorney-in-fact coupled with an interest, with full power of substitution and
with full authority in the place of the Seller, to take any and all steps deemed
desirable by the Agent, in the name and on behalf of the Seller to (i) collect
any amounts due under any Receivable, including endorsing the name of the Seller
on checks and other instruments representing Collections and enforcing such
Receivables and the Related Security, and (ii) exercise any and all of the
Seller's rights and remedies under the Purchase Agreement. The Agent's powers
under this Section 3.5(b) shall not subject the Agent to any liability if any
action taken by it proves to be inadequate or invalid, nor shall such powers
confer any obligation whatsoever upon the Agent.
(c) None of the Agent, any Purchaser Agent or any Purchaser shall have any
obligation to take or consent to any action to realize upon any Receivable or
Related Security or to enforce any rights or remedies related thereto.
Section 3.6. Collection Agent Fee. On or before the 25th day of each
calendar month, the Seller shall pay to the Collection Agent a fee for the
immediately preceding calendar month as compensation for its services (the
"Collection Agent Fee") equal to (a) at all times the Initial
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Collection Agent or an Affiliate of the Initial Collection Agent is the
Collection Agent, the Seller Servicing Fee, the sufficiency of which is hereby
acknowledged, and (b) at all times any other Person is the Collection Agent, the
Outside Servicing Fee. The Agent may, with the consent of the Instructing Group,
pay the Collection Agent Fee to the Collection Agent from the Sold Interest in
Collections. The Seller shall be obligated to reimburse any such payment to the
extent required by Section 1.5 or 2.3.
Section 3.7. Responsibilities of the Seller. The Seller shall pay when due
all Taxes payable in connection with the Receivables and the Related Security or
their creation or satisfaction. The Seller shall cause each Originator to
perform all of its obligations under agreements related to the Receivables and
the Related Security to the same extent as if interests in the Receivables and
the Related Security had not been transferred hereunder or under the Purchase
Agreement. The Agent's or any Purchaser's exercise of any rights hereunder shall
not relieve the Seller or an Originator from such obligations. None of the
Agent, any Purchaser Agent or any Purchaser shall have any obligation to perform
any obligation of the Seller or an Originator or any other obligation or
liability in connection with the Receivables or the Related Security.
Section 3.8. Actions by Seller. If any goods related to a Receivable are
repossessed, the Seller agrees to resell, or to have the related Originator or
another Affiliate resell, such goods in a commercially reasonable manner for the
account of the Agent and remit, or have remitted, to the Agent the Purchasers'
share in the gross sale proceeds thereof net of any out-of-pocket expenses and
any equity of redemption of the Obligor thereon. Any such moneys collected by
the Seller or the related Originator or other Affiliate of the Seller pursuant
to this Section 3.8 shall be segregated and held in trust for the Agent and
remitted to the Agent's Account within one Business Day of receipt as part of
the Sold Interest in Collections for application as provided herein.
Section 3.9. Indemnities by the Collection Agent. Without limiting any
other rights any Person may have hereunder or under applicable law, the
Collection Agent hereby indemnifies and holds harmless the Agent, each Purchaser
Agent and each Purchaser and their respective officers, directors, agents and
employees (each a "Collection Agent Indemnified Party") from and against any and
all damages, losses, claims, liabilities, penalties, Taxes, costs and expenses
(including reasonable attorneys' fees and court costs) (all of the foregoing
collectively, the "Collection Agent Indemnified Losses") at any time imposed on
or incurred by any Collection Agent Indemnified Party arising out of or
otherwise relating to:
(i) any representation or warranty made by, on behalf of or in
respect of, the Collection Agent in this Agreement, any other Transaction
Document, any Periodic Report or any other information or report delivered
by the Collection Agent pursuant hereto, which shall have been false or
incorrect in any material respect when made;
(ii) the failure by the Collection Agent to comply with any
applicable law, rule or regulation related to any Receivable or the
Related Security;
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(iii) any loss of a perfected security interest (or in the priority
of such security interest) as a result of any commingling by the
Collection Agent of funds to which the Agent, any Purchaser Agent or any
Purchaser is entitled hereunder with any other funds;
(iv) the imposition of any Adverse Claim with respect to any
Receivable, Related Security or Lock-Box Account as a result of any action
taken by the Collection Agent; or
(v) any failure of the Collection Agent to perform its duties or
obligations in accordance with the provisions of this Agreement
(including, without limitation, compliance with the Credit and Collection
Policy) or any other Transaction Document to which the Collection Agent is
a party;
whether arising by reason of the acts to be performed by the Collection Agent
hereunder or otherwise, excluding only Collection Agent Indemnified Losses to
the extent (a) a final judgment of a court of competent jurisdiction determined
that such Collection Agent Indemnified Losses resulted from gross negligence or
willful misconduct of the Collection Agent Indemnified Party seeking
indemnification, (b) solely due to the credit risk of the Obligor and for which
reimbursement would constitute recourse to the Collection Agent for uncollected
or uncollectible Receivables, or (c) such Collection Agent Indemnified Losses
include Taxes on, or measured by, the overall net income of the Agent or any
Purchaser computed in accordance with the Intended Tax Characterization;
provided, however, that nothing contained in this sentence shall limit the
liability of the Collection Agent or limit the recourse of the Agent, any
Purchaser Agent and each Purchaser to the Collection Agent for any amounts
otherwise specifically provided to be paid by the Collection Agent hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Seller. The Seller
represents and warrants to the Agent, each Purchaser Agent and each Purchaser
that:
(a) Corporate Existence and Power. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and in each jurisdiction in which the conduct of its
business requires that it be qualified to do business in such jurisdiction
and has all corporate power and authority and all governmental licenses,
authorizations, consents and approvals required to carry on its business
in each jurisdiction in which its business is now conducted, except where
failure to obtain such license, authorization, consent or approval would
not have a material adverse effect on (i) its ability to perform its
obligations under, or the enforceability of, any Transaction Document,
(ii) its business or financial condition, (iii) the interests of the
Agent, any Purchaser Agent or any Purchaser under any Transaction Document
or (iv) the enforceability or collectibility of any material portion of
the Receivables.
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(b) Corporate Authorization and No Contravention. The execution,
delivery and performance by the Seller of each Transaction Document to
which it is a party (i) are within its corporate powers, (ii) have been
duly authorized by all necessary corporate action, (iii) do not contravene
or constitute a default under (A) any applicable law, rule or regulation,
(B) its charter or by-laws or (C) any agreement, order or other instrument
to which it is a party or its property is subject and (iv) will not result
in any Adverse Claim on any Receivable, the Related Security or
Collections (other than the Sold Interest) or give cause for the
acceleration of any indebtedness of the Seller.
(c) No Consent Required. No approval, authorization or other action
by, or filings with, any Governmental Authority or other Person is
required in connection with the execution, delivery and performance by the
Seller of any Transaction Document or any transaction contemplated
thereby.
(d) Binding Effect. Each Transaction Document to which the Seller is
a party constitutes the legal, valid and binding obligation of the Seller
enforceable against it in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting the enforcement of creditor's rights generally.
(e) Perfection of Ownership Interest. The Seller owns the
Receivables free of any Adverse Claim other than the interests of the
Agent, the Purchaser Agent and the Purchasers therein that are created
hereby, and each Purchaser shall at all times have a valid undivided
percentage ownership interest, which shall be a first priority perfected
security interest for purposes of Article 9 of the applicable Uniform
Commercial Code, in the Receivables, the Related Security and Collections
to the extent of its Purchase Interest then in effect.
(f) Accuracy of Information. All written information furnished by
the Seller to the Agent, any Purchaser Agent or any Purchaser in
connection with any Transaction Document, or any transaction contemplated
thereby, is true and accurate in all material respects as of the date of
such information or the date furnished, as applicable (and is not
incomplete by omitting any information necessary to prevent such
information from being materially misleading as of the date of such
information or the date furnished, as applicable).
(g) No Actions, Suits. There are no actions, suits or other
proceedings (including matters relating to environmental liability)
pending or threatened against or affecting the Seller or any of its
properties, that (i) if adversely determined (individually or in the
aggregate), may have a material adverse effect on the financial condition
of the Seller or on the collectibility of the Receivables or (ii) involve
any Transaction Document or any transaction contemplated thereby. The
Seller is not in default of any contractual obligation or in violation of
any order, rule or regulation of any Governmental Authority, which default
or violation may have a material adverse effect upon (i) the financial
condition of the Seller or (ii) the collectibility of the Receivables.
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(h) No Material Adverse Change. Since the date of its formation
there has been no material adverse change in the collectibility of the
Receivables or the Seller's (i) financial condition, business, operations
or prospects or (ii) ability to perform its obligations under any
Transaction Document.
(i) Accuracy of Exhibits; Lock-Box Arrangements. All information on
Exhibits C-D (listing offices and states of organization of the Seller and
the Originators and where they maintain Records; and Lock-Boxes) is true
and complete, subject to any changes permitted by, and notified to the
Agent in accordance with, Article V. The Seller has not granted any
interest in any Lock-Box or Lock-Box Account to any Person other than the
Agent and, upon execution and delivery of the Lock-Box Agreements and
delivery to a Lock-Box Bank of the related Lock-Box Letter, the Seller
will have title to each Lock-Box Account and the Agent will have exclusive
ownership and control of the Lock-Box Account at such Lock-Box Bank.
(j) Sales by an Originator. Each sale by each Originator to the
Seller of an interest in Receivables originated by such Originator and
Collections thereof has been made in accordance with the terms of the
Purchase Agreement, including the payment by the Seller to such Originator
of the purchase price described in the Purchase Agreement. Each such sale
has been made for "reasonably equivalent value" (as such term is used in
Section 548 of the Bankruptcy Code) and not for or on account of
"antecedent debt" (as such term is used in Section 547 of the Bankruptcy
Code) owed by such Originator to the Seller.
(k) No Potential Termination Event. No Potential Termination Event
has occurred and is continuing.
(l) Eligible Receivables. Each Receivable included in the Eligible
Receivables Balance as an Eligible Receivable on the date of any Purchase
or Incremental Purchase or listed as such on a Periodic Report is an
Eligible Receivable.
(m) Underwriting/Collection Practices. To the extent that the
Initial Collection Agent is the Collection Agent and the Originators are
sub-collection agents, it has complied with the Credit and Collection
Policy in all material respects, and such policy has not changed in any
material respect since the date hereof.
Section 4.2. Representations and Warrants of the Initial Collection Agent.
The Initial Collection Agent represents and warrants to the Agent, each
Purchaser Agent and each Purchaser that:
(a) Corporate Existence and Power. The Initial Collection Agent is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Indiana and in each jurisdiction in which the
conduct of its business requires that it be qualified to do business in
such jurisdiction and has all corporate power and authority and all
governmental licenses, authorizations, consents and approvals required to
carry on its business in each jurisdiction in which its business is now
conducted, except
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where failure to obtain such license, authorization, consent or approval
would not have a material adverse effect on (i) its ability to perform its
obligations under, or the enforceability of, any Transaction Document,
(ii) its business or financial condition, (iii) the interests of the
Agent, any Purchaser Agent or any Purchaser under any Transaction Document
or (iv) the enforceability or collectibility of any material portion of
the Receivables.
(b) Corporate Authorization and No Contravention. The execution,
delivery and performance by the Initial Collection Agent of each
Transaction Document to which it is a party (i) are within its corporate
powers, (ii) have been duly authorized by all necessary corporate action,
(iii) do not contravene or constitute a default under (A) any applicable
law, rule or regulation, (B) its charter or by-laws or (C) any agreement,
order or other instrument to which it is a party or its property is
subject where the contravention or default would have a material adverse
effect on (w) its ability to perform its obligations under, or the
enforceability of, any Transaction Document, (x) its business or financial
condition, (y) the interests of the Agent, any Purchaser Agent or any
Purchaser under any Transaction Document or (z) the enforceability or
collectibility of any material portion of the Receivables and (iv) will
not result in any Adverse Claim on any Receivable, the Related Security or
Collections other than the Sold Interest or give cause for the
acceleration of any indebtedness of the Initial Collection Agent.
(c) No Consent Required. No approval, authorization or other action
by, or filings with, any Governmental Authority or other Person is
required in connection with the execution, delivery and performance by the
Initial Collection Agent of any Transaction Document or any transaction
contemplated thereby.
(d) Binding Effect. Each Transaction Document to which the Initial
Collection Agent is a party constitutes the legal, valid and binding
obligation of the Initial Collection Agent enforceable against it in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditor's rights generally.
(e) Accuracy of Information. All written information furnished by
the Initial Collection Agent to the Agent, any Purchaser Agent or any
Purchaser in connection with any Transaction Document, or any transaction
contemplated thereby, is true and accurate in all material respects as of
the date of such information or the date furnished, as applicable (and is
not incomplete by omitting any information necessary to prevent such
information from being materially misleading as of the date of such
information or the date furnished, as applicable).
(f) No Actions, Suits. There are no actions, suits or other
proceedings (including matters relating to environmental liability)
pending or threatened against or affecting the Initial Collection Agent,
or any of its properties, that (i) if adversely determined (individually
or in the aggregate), is likely to have a material adverse effect on the
financial condition of the Initial Collection Agent and its Subsidiaries,
taken as whole, or on the collectibility of the Receivables or (ii)
involve any Transaction
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Document or any transaction contemplated thereby. The Initial Collection
Agent is not in default of any contractual obligation or in violation of
any order, rule or regulation of any Governmental Authority, which default
or violation is likely to have a material adverse effect upon (i) the
financial condition of the Initial Collection Agent and its Subsidiaries,
taken as whole, or (ii) the collectibility of the Receivables.
(g) No Material Adverse Change. Since December 31, 2001, there has
been no material adverse change in the collectibility of the Receivables
or the Initial Collection Agent's (i) financial condition, business,
operations or prospects other than as publicly disclosed prior to the date
hereof or (ii) ability to perform its obligations under any Transaction
Document.
(h) Accuracy of Exhibits; Lock-Box Arrangements. All information on
Exhibits C-D (listing offices of the Initial Collection Agent and the
Originators and where they maintain Records; and Lock-Boxes) is true and
complete, subject to any changes permitted by, and notified to the Agent
in accordance with, Article V.
(i) No Potential Termination Event. No Potential Termination Event
has occurred and is continuing.
(j) Underwriting/Collection Practices. To the extent that the
Initial Collection Agent is the Collection Agent and the Originators are
sub-collection agents, it has complied with the Credit and Collection
Policy in all material respects, and such policy has not changed in any
material respect since the date hereof.
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Seller. The Seller hereby covenants and
agrees to comply with the following covenants and agreements, unless the Agent
(with the consent of the Instructing Group) shall otherwise consent:
(a) Financial Reporting. The Seller will maintain a system of
accounting established and administered in accordance with GAAP and will
furnish to the Agent, each Purchaser Agent and each Purchaser:
(i) Annual Financial Statements. Within 120 days after each
fiscal year of the Seller copies of its annual balance sheet (and an
annual profit and loss statement), certified by a Designated
Financial Officer thereof, prepared on a consolidated basis in
conformity with GAAP;
(ii) Quarterly Financial Statements. Within 60 days after each
(except the last) fiscal quarter of each fiscal year of the Seller,
copies of its quarterly balance sheet (and a profit and loss
statement) for the period from the beginning
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of the fiscal year to the close of such quarter), certified by a
Designated Financial Officer and prepared in a manner consistent
with the financial statements described in clause (i) of this
Section 5.l(a);
(iii) Officer's Certificate. Each time financial statements
are furnished pursuant to clause (i) or (ii) of Section 5.1(a), a
compliance certificate (in substantially the form of Exhibit F)
signed by a Designated Financial Officer, dated the date of such
financial statements;
(iv) Public Reports. Promptly upon becoming available, a copy
of each report or proxy statement filed by the Parent with the
Securities and Exchange Commission or any securities exchange; and
(v) Other Information. With reasonable promptness, such other
information (including non-financial information) respecting the
Receivables or the conditions and operations, financial or
otherwise, of the Seller and any Seller Entity as the Agent or any
Purchaser Agent from time to time reasonably may request in order to
protect the interests of the Agent or Committed Purchasers under
this Agreement.
(b) Notices. As soon as possible and in any event within 5 Business
Days of becoming actually aware of any of the following the Seller will
notify the Agent and each Purchaser Agent and provide a description of:
(i) Potential Termination Events. The occurrence of any
Potential Termination Event;
(ii) Downgrading. The downgrading, withdrawal or suspension of
any rating by any rating agency of any indebtedness of any Special
Obligor or of the Parent; or
(iii) Further Information. Any other information that the
Parent is required to deliver pursuant to the Credit Agreement at
the same time the Parent delivers such information to the required
parties pursuant to the Credit Agreement.
(c) Conduct of Business. The Seller will perform all actions
necessary to remain duly incorporated, validly existing and in good
standing in its jurisdiction of incorporation and to maintain all
requisite authority to conduct its business in each jurisdiction in which
it conducts business.
(d) Compliance with Laws. The Seller will comply with all laws,
regulations, judgments and other directions or orders imposed by any
Governmental Authority to which it or any Receivable, any Related Security
or Collection may be subject.
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(e) Furnishing Information and Inspection of Records. The Seller
will furnish to the Agent, the Purchaser Agents and the Purchasers such
information concerning the Receivables and the Related Security as the
Agent, a Purchaser Agent or a Purchaser may request. The Seller will, and
will cause each Originator to, permit, at any time during regular business
hours upon reasonable notice to the Seller, the Agent, any Purchaser (or
any representatives thereof) (i) to examine and make copies of all
Records, (ii) to visit the offices and properties of the Seller and each
Originator for the purpose of examining the Records and (iii) to discuss
matters relating hereto with any of the Seller's or such Originator's
officers, directors, employees or independent public accountants having
knowledge of such matters. No more than once a calendar year or any time
after the occurrence of a Termination Event, the Agent may (at the expense
of the Seller) or at any time (at the expense of the Purchasers) have an
independent public accounting firm conduct an audit of the Records or make
test verifications of the Receivables and Collections.
(f) Keeping Records. (i) The Seller will, and will cause each
Originator to, have and maintain (A) administrative and operating
procedures (including an ability to recreate Records if originals are
destroyed), (B) adequate facilities, personnel and equipment and (C) all
Records and other information necessary or advisable for collecting the
Receivables (including Records adequate to permit the immediate
identification of each new Receivable and all Collections of, and
adjustments to, each existing Receivable). The Seller will give the Agent
prior notice of any material change in such administrative and operating
procedures.
(ii) The Seller will, (A) at all times from and after the date
hereof, clearly and conspicuously mark its computer and master data
processing books and records with a legend describing the Agent's and the
Purchasers' interest in the Receivables and the Collections and (B) upon
the request of the Agent, so mark each contract relating to a Receivable
and deliver to the Agent all such contracts (including all multiple
originals of such contracts), with any appropriate endorsement or
assignment, or segregate (from all other receivables then owned or being
serviced by the Seller) the Receivables and all contracts relating to each
Receivable and hold in trust and safely keep such contracts so legended in
separate filing cabinets or other suitable containers at such locations as
the Agent may specify.
(g) Perfection. (i) The Seller will, and will cause each Originator
to, at its expense, promptly execute and deliver all instruments and
documents and take all action necessary or requested by the Agent
(including the execution and filing of financing or continuation
statements, amendments thereto or assignments thereof) to enable the Agent
to exercise and enforce all its rights hereunder and to vest and maintain
vested in the Agent a valid, first priority perfected security interest in
the Receivables, the Collections, the Related Security, the Purchase
Agreement, the Lock-Box Accounts and proceeds thereof free and clear of
any Adverse Claim other than the Seller's interest therein (and a
perfected ownership interest in the Receivables, Related Security and
Collections to the extent of the Sold Interest). The Agent will be
permitted to sign and file any continuation
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statements, amendments thereto and assignments thereof without the
Seller's signature, but shall provide prompt notice to the Seller of any
such filing.
(ii) The Seller will only change its name, identity or corporate
structure or relocate its state of organization or its chief executive
office or the Records following notice to the Agent and the delivery to
the Agent of all financing statements, instruments and other documents
(including direction letters) requested by the Agent.
(iii) The Seller will at all times maintain its chief executive
offices within a jurisdiction in the USA (other than in the states of
Alabama, Florida, Maryland and Tennessee) in which Article 9 of the UCC is
in effect. If the Seller or an Originator moves its chief executive office
to a location that imposes Taxes, fees or other charges to perfect the
Agent's and the Purchasers' interests hereunder or the Seller's interests
under the Purchase Agreement, the Seller will pay all such amounts and any
other costs and expenses incurred in order to maintain the enforceability
of the Transaction Documents, the Sold Interest and the interests of the
Agent, the Purchaser Agents and the Purchasers in the Receivables, the
Related Security, Collections, Purchase Agreement and Lock-Box Accounts.
(h) Performance of Duties. The Seller will perform its duties or
obligations in accordance with the provisions of each of the Transaction
Documents. The Seller (at its expense) will (i) fully and timely perform
in all material respects all agreements required to be observed by it in
connection with each Receivable, (ii) comply in all material respects with
the Credit and Collection Policy, and (iii) refrain from any action that
may impair the rights of the Agent, the Purchaser Agents or the Purchasers
in the Receivables, the Related Security, Collections, Purchase Agreement
or Lock-Box Accounts.
(i) Payments on Receivables, Lock-Box Accounts. The Seller will, and
will cause each Originator to, at all times instruct all Obligors to
deliver payments on the Receivables (including Deemed Collections) to a
Lock-Box or Lock-Box Account and will not change any such instructions
without the prior written consent of the Agent. If any such payments or
other Collections are received by the Seller, it shall hold such payments
in trust for the benefit of the Agent, the Purchaser Agents and the
Purchasers and promptly (but in any event within two Business Days after
receipt) remit such funds into a Lock-Box Account. The Seller will cause
each Lock-Box Bank to comply with the terms of each applicable Lock-Box
Letter. The Seller will only permit Collections to be deposited into any
Lock-Box Account. If such funds are nevertheless deposited into any
Lock-Box Account, the Seller will promptly identify and separate such
funds for segregation. The Seller will not, and will not permit any
Collection Agent or other Person to, commingle Collections or other funds
to which the Agent or any Purchaser is entitled with any other funds
(other than funds of Affiliates of the Seller in concentration accounts).
The Seller shall only add a Lock-Box Bank, Lock-Box, or Lock-Box Account
to those listed on Exhibit D if the Agent has received notice of and has
consented to such addition, a copy of any new Lock-Box Agreement and an
executed and acknowledged copy of a Lock-Box Letter substantially in the
form of Exhibit E (with such changes as are acceptable to the Agent) from
any new Lock-Box Bank. The Seller shall only
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terminate a Lock-Box Bank or Lock-Box, or close a Lock-Box Account, upon
30 days advance notice to the Agent.
(j) Sales and Adverse Claims Relating to Receivables or Related
Security. Except as otherwise provided herein, the Seller will not (by
operation of law or otherwise), dispose of or otherwise transfer, or
create or suffer to exist any Adverse Claim upon, any Receivables, Related
Security or any proceeds thereof.
(k) Extension or Amendment of Receivables. Except as otherwise
permitted in Section 3.2(b) and then subject to Section 1.5, the Seller
will not extend, amend, rescind or cancel any Receivable.
(l) Change in Credit and Collection Policy. The Seller will not make
any change in its Credit and Collection Policy which change would impair
the collectibility of any Receivable.
(m) Accounting for Sale. The Seller will not, account for, or
otherwise treat, the transactions contemplated hereby other than as a sale
of Receivables or inconsistent with the Purchasers' ownership interests in
the Receivables, Related Security and Collections.
(n) Certain Agreements. Except as otherwise permitted by this
Agreement, the Seller will not amend, modify, waive, revoke or terminate
any Transaction Document to which it is a party or any provision of
Seller's certificate of incorporation or by-laws.
(o) Other Business. The Seller will not: (i) engage in any business
other than the transactions contemplated by the Transaction Documents,
(ii) create, incur or permit to exist any Debt of any kind (or cause or
permit to be issued for its account any letters of credit or bankers'
acceptances) other than pursuant to this Agreement and the Subordinated
Notes, or (iii) form any Subsidiary or make any investments in any other
Person; provided, however, that the Seller shall be permitted to incur
minimal obligations to the extent necessary for the day-to-day operations
of the Seller (such as expenses for stationery, audits, maintenance of
legal status, etc.).
(p) Net Worth. The Seller shall not, as of the last day of each
calendar quarter, permit Net Worth to be less than $9,000,000.
(q) Nonconsolidation. The Seller will operate in such a manner that
the separate corporate existence of the Seller and each Seller Entity and
Affiliate thereof would not be disregarded in the event of the bankruptcy
or insolvency of any Seller Entity and Affiliate thereof and, without
limiting the generality of the foregoing:
(i) the Seller will not engage in any activity other than
those activities expressly permitted under the Seller's
organizational documents and the Transaction Documents, nor will the
Seller enter into any agreement other than this Agreement, the other
Transaction Documents to which it is a party and, with
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the prior written consent of the Agent, any other agreement
necessary to carry out more effectively the provisions and purposes
hereof or thereof;
(ii) the Seller will cause the financial statements and books
and records of the Seller and each Seller Entity to reflect the
separate corporate existence of the Seller;
(iii) except as otherwise expressly permitted hereunder, under
the other Transaction Documents and under the Seller's
organizational documents, the Seller will not permit any Seller
Entity or Affiliate thereof to (A) pay the Seller's expenses, (B)
guarantee the Seller's obligations, or (C) advance funds to the
Seller for the payment of expenses or otherwise;
(iv) the Seller will not act as agent for any Seller Entity or
Affiliate, but instead will present itself to the public as a
corporation separate from each such Person and independently engaged
in the business of purchasing and financing Receivables; and
(v) the Seller will always have an independent director on its
Board of Directors.
(r) Lock-Box Letters. Not later than October 25, 2002 the Seller
shall deliver to the Agent fully executed Lock-Box Letters with respect to
each Lock-Box set forth on Exhibit D hereto.
Section 5.2. Covenants of the Initial Collection Agent. The Initial
Collection Agent hereby covenants and agrees to comply with the following
covenants and agreements, unless the Agent (with the consent of the Instructing
Group) shall otherwise consent:
(a) Financial Reporting. The Initial Collection Agent will maintain
a system of accounting established and administered in accordance with
GAAP and will furnish to the Agent, each Purchaser Agent and each
Purchaser:
(i) Annual Financial Statements. Within 120 days after each
fiscal year of the Parent copies of its annual audited financial
statements (including a consolidated balance sheet, consolidated
statement of income and retained earnings and statement of cash
flows, with related footnotes) certified by Deloitte & Touche, LLP
or another firm of independent certified public accountants of
nationally recognized standing (which accountants shall have
acknowledged the reliance of the Agent, the Purchaser Agents and the
Purchasers on the financial statements audited by such accountants)
and prepared on a consolidated basis in conformity with GAAP;
(ii) Quarterly Financial Statements. Within 60 days after each
(except the last) fiscal quarter of each fiscal year of the Parent,
copies of its unaudited financial statements (including at least a
consolidated balance sheet as of the close
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of such quarter and statements of earnings and sources and
applications of funds for the period from the beginning of the
fiscal year to the close of such quarter) certified by a Designated
Financial Officer and prepared in a manner consistent with the
financial statements described in clause (i) of this Section 5.l(a);
(iii) Officer's Certificate. Each time financial statements
are furnished pursuant to clause (i) or (ii) of Section 5.1(a), a
compliance certificate (in substantially the form of Exhibit F)
signed by a Designated Financial Officer, dated the date of such
financial statements;
(iv) Public Reports. Promptly upon becoming available, a copy
of each report or proxy statement filed by the Parent with the
Securities and Exchange Commission or any securities exchange; and
(v) Other Information. With reasonable promptness, such other
information (including non-financial information) respecting the
Receivables or the conditions and operations, financial or
otherwise, of the Initial Collection Agent and any Seller Entity as
the Agent from time to time reasonably may request in order to
protect the interests of the Agent or Committed Purchasers under
this Agreement.
(b) Notices. As soon as possible and in any event within 5 Business
Days of becoming actually aware of any of the following the Initial
Collection Agent will notify the Agent and each Purchaser Agent and
provide a description of:
(i) Potential Termination Events. The occurrence of any
Potential Termination Event;
(ii) Downgrading. The downgrading, withdrawal or suspension of
any rating by any rating agency of any indebtedness of any Special
Obligor or of the Parent; or
(iii) Further Information. Any other information that the
Parent is required to deliver pursuant to the Credit Agreement at
the same time the Parent delivers such information to the required
parties pursuant to the Credit Agreement.
If the Agent or any Purchaser Agent receives such a notice, the Agent or
such Purchaser Agent shall promptly give notice thereof to each Purchaser
and, until each Conduit Purchaser has no Investment after the Termination
Date, to each CP Dealer and each Rating Agency.
(c) Conduct of Business. The Initial Collection Agent will perform
all actions necessary to remain duly incorporated, validly existing and in
good standing in its jurisdiction of incorporation and to maintain all
requisite authority to conduct its business in each jurisdiction in which
it conducts business.
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(d) Compliance with Laws. The Initial Collection Agent will comply
with all laws, regulations, judgments and other directions or orders
imposed by any Governmental Authority to which it or any Receivable, any
Related Security or Collection may be subject.
(e) Furnishing Information and Inspection of Records. The Initial
Collection Agent will furnish to the Agent, the Purchaser Agents and the
Purchasers such information concerning the Receivables and the Related
Security as the Agent, a Purchaser Agent or a Purchaser may request. The
Initial Collection Agent will, and will cause each Originator to, permit,
at any time during regular business hours upon reasonable notice to the
Initial Collection Agent, the Agent, any Purchaser Agent or any Purchaser
(or any representatives thereof) (i) to examine and make copies of all
Records, (ii) to visit the offices and properties of the Initial
Collection Agent and each Originator for the purpose of examining the
Records and (iii) to discuss matters relating hereto with any of the
Initial Collection Agent's or such Originator's officers, directors,
employees or independent public accountants having knowledge of such
matters. No more than once a calendar year or any time after the
occurrence of a Termination Event, the Agent may (at the expense of the
Initial Collection Agent) or at any time (at the expense of the
Purchasers) have an independent public accounting firm conduct an audit of
the Records or make test verifications of the Receivables and Collections.
(f) Keeping Records. (i) The Initial Collection Agent will, and will
cause each Originator to, have and maintain (A) administrative and
operating procedures (including an ability to recreate Records if
originals are destroyed), (B) adequate facilities, personnel and equipment
and (C) all Records and other information necessary or advisable for
collecting the Receivables (including Records adequate to permit the
immediate identification of each Obligor and each new Receivable and all
Collections of, and adjustments to, each existing Receivable). The Initial
Collection Agent will give the Agent prior notice of any material change
in such administrative and operating procedures.
(ii) The Initial Collection Agent will, (A) at all times from and
after the date hereof, clearly and conspicuously mark its computer and
master data processing books and records with a legend describing the
Agent's and the Purchasers' interest in the Receivables and the
Collections and (B) upon the request of the Agent, so mark each contract
relating to a Receivable and deliver to the Agent all such contracts
(including all multiple originals of such contracts), with any appropriate
endorsement or assignment, or segregate (from all other receivables then
owned or being serviced by the Initial Collection Agent) the Receivables
and all contracts relating to each Receivable and hold in trust and safely
keep such contracts so legended in separate filing cabinets or other
suitable containers at such locations as the Agent may specify.
(g) Performance of Duties. The Initial Collection Agent will perform
its duties or obligations in accordance with the provisions of each of the
Transaction Documents. The Initial Collection Agent (at its expense) will
(i) fully and timely perform in all material respects all agreements
required to be observed by it in connection
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with each Receivable, (ii) comply in all material respects with the Credit
and Collection Policy, and (iii) refrain from any action that may impair
the rights of the Agent, the Purchaser Agents or the Purchasers in the
Receivables, the Related Security, Collections, Purchase Agreement or
Lock-Box Accounts.
(h) Payments on Receivables, Lock-Box Accounts. If any payments on
Receivables or other Collections are received by the Initial Collection
Agent, it shall hold such payments in trust for the benefit of the Agent,
the Purchaser Agents and the Purchasers and promptly (but in any event
within two Business Days after receipt) remit such funds into a Lock-Box
Account. Except as set forth in Section 5.1(i) hereof, the Initial
Collection Agent will only permit Collections to be deposited into any
Lock-Box Account. If such funds of any Affiliate or Seller Entity are
deposited into any Lock-Box Account, the Initial Collection Agent will
promptly identify and separate such funds for segregation. Except as set
forth in Section 5.1(i) hereof, the Initial Collection Agent will not, and
will not permit any other Person to, commingle Collections or other funds
to which the Agent or any Purchaser is entitled with any other funds.
(i) Extension or Amendment of Receivables. Except as otherwise
permitted in Section 3.2(b) and then subject to Section 1.5, the Initial
Collection Agent will not extend, amend, rescind or cancel any Receivable.
(j) Change in Business or Credit and Collection Policy. The Initial
Collection Agent will not make any change in its business or in the
Originator's Credit and Collection Policy which change would impair the
collectibility of any Receivable.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnities by the Seller. Without limiting any other rights
any such Person may have hereunder or under applicable law, the Seller hereby
indemnifies and holds harmless, on an after-Tax basis, the Agent, each Purchaser
Agent and each Purchaser and their respective officers, directors, agents and
employees (each an "Indemnified Party") from and against any and all damages,
losses, claims, liabilities, penalties, Taxes, costs and expenses (including
reasonable attorneys' fees and court costs) (all of the foregoing collectively,
the "Indemnified Losses") at any time imposed on or incurred by any Indemnified
Party arising out of or otherwise relating to any Transaction Document, the
transactions contemplated thereby or the acquisition of any portion of the Sold
Interest, any commingling of funds, any failure of a Lock-Box Bank to comply
with the terms of a Lock-Box Letter, any Receivables or Collections, or any
action taken or omitted by any of the Indemnified Parties (including any action
taken by the Agent as attorney-in-fact for the Seller pursuant to Section
3.5(b)), whether arising by reason of the acts to be performed by the Seller
hereunder or otherwise, excluding only Indemnified Losses to the extent (a) such
Indemnified Losses to the extent such losses result from gross negligence or
willful misconduct of the Indemnified Party seeking indemnification, (b) solely
due to the credit risk of the Obligor and for which reimbursement would
constitute recourse to
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the Seller or the Collection Agent for uncollected or uncollectible Receivables
or (c) such Indemnified Losses are, or include Taxes on, or measured by, the
overall net income or gross receipts of the Agent, any Purchaser Agent or any
Purchaser computed in accordance with the Intended Tax Characterization;
provided, however, that nothing contained in this sentence shall limit the
liability of the Seller or the Collection Agent or limit the recourse of the
Agent, each Purchaser Agent and each Purchaser to the Seller or the Collection
Agent for any amounts otherwise specifically provided to be paid by the Seller
or the Collection Agent hereunder. Without limiting the foregoing
indemnification, but subject to the limitation set forth in clauses (a), (b) and
(c) of the previous sentence, the Seller shall indemnify the Agent, each
Purchaser Agent and each Purchaser for Indemnified Losses (including losses in
respect of uncollectible Receivables, regardless of whether reimbursement
therefor would constitute recourse to the Seller or the Collection Agent)
relating to or resulting from:
(i) reliance on any representation or warranty made by the Seller or
Collection Agent (or any officers of the Seller or the Collection Agent)
under or in connection with this Agreement, any Periodic Report or any
other information or report delivered by the Seller or the Collection
Agent pursuant hereto, which shall have been false or incorrect in any
material respect when made or deemed made;
(ii) the failure by the Seller or any Seller Entity to comply with
any applicable law, rule or regulation with respect to any Receivable, or
the nonconformity of any Receivable with any such applicable law, rule or
regulation;
(iii) the failure of the Seller to vest and maintain vested in the
Agent, for the benefit of the Purchaser Agents and the Purchasers, a
perfected interest in the Sold Interest and the property conveyed pursuant
to Section 1.1(a) and Section 1.8, free and clear of any Adverse Claim;
(iv) any commingling of funds to which the Agent, any Purchaser
Agent or any Purchaser is entitled hereunder with any other funds;
(v) failure of any Lock Box Bank (if appointed or designated by the
Seller or if otherwise a Lock Box Bank on the date hereof) to comply with
the terms of the applicable Lock Box Letter;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
resulting from the sale or lease of goods or the rendering of services
related to such Receivable or the furnishing or failure to furnish any
such goods or services;
(vii) any failure of the Seller or any Seller Entity to perform its
duties or obligations in accordance with the provisions of this Agreement
and each of the other Transaction Documents to which it is a party; or
(viii) any environmental liability claim, products liability claim
or personal injury or property damage suit or other similar or related
claim or action of whatever sort,
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arising out of or in connection with any Receivable or any other suit,
claim or action of whatever sort relating to any of the Transaction
Documents.
Section 6.2. Increased Cost and Reduced Return. By way of clarification,
and not of limitation, of Section 6.1, if the adoption of any applicable law,
rule or regulation not in effect as of the date hereof, or any change therein,
or any change in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Funding Source, the Agent, any Purchaser Agent or
any Purchaser (collectively, the "Funding Parties") with any request or
directive (whether or not having the force of law) of any such Governmental
Authority (a "Regulatory Change") (a) subjects any Funding Party to any charge
or withholding on or in connection with a Funding Agreement or this Agreement
(collectively, the "Funding Documents") or any Receivable, (b) changes the basis
of taxation of payments to any of the Funding Parties of any amounts payable
under any of the Funding Documents (except for changes in the rate of Tax on the
overall net income of such Funding Party), (c) 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, or any
credit extended by, any of the Funding Parties, (d) has the effect of reducing
the rate of return on such Funding Party's capital to a level below that which
such Funding Party could have achieved but for such adoption, change or
compliance (taking into consideration such Funding Party's policies concerning
capital adequacy) or (e) imposes any other condition, and the result of any of
the foregoing is (x) to impose a cost on, or increase the cost to, any Funding
Party of its commitment under any Funding Document or of purchasing, maintaining
or funding any interest acquired under any Funding Document, (y) to reduce the
amount of any sum received or receivable by, or to reduce the rate of return of,
any Funding Party under any Funding Document or (z) to require any payment
calculated by reference to the amount of interests held or amounts received by
it hereunder, then, upon demand by the Agent, the Seller shall pay to the Agent
for the account of the Person such additional amounts as will compensate such
Agent, such Purchaser Agent or such Purchaser (or, in the case of a Conduit
Purchaser, will enable a Conduit Purchaser to compensate any Funding Source) for
such increased cost or reduction. Without limiting the foregoing, the Seller
acknowledges and agrees that the fees and other amounts payable by the Seller to
the Purchasers and the Agent have been negotiated on the basis that the unused
portion of each Committed Purchaser's Commitment is treated as a "short term
commitment" for which there is no regulatory capital requirement. If any
Committed Purchaser determines it is required to maintain capital against its
Unused Commitment (or any Purchaser is required to maintain capital against its
Investment) in excess of the amount of capital it would be required to maintain
against a funded loan in the same amount, such Purchaser shall be entitled to
compensation under this Section 6.2.
Section 6.3. Other Costs and Expenses. Also by way of clarification, and
not of limitation, of Section 6.1, the Seller shall pay to the Agent (with
respect to amounts owned to it) or the applicable Purchaser Agent (with respect
to amounts owed to it or any Purchaser in its Purchaser Group) on demand all
costs and expenses in connection with (a) the preparation, execution, delivery
and administration (including amendments of any provision) of the Transaction
Documents, (b) the sale of the Sold Interest, (c) the perfection of the Agent's
rights in the Receivables, Related Security and Collections, (d) the enforcement
by the Agent, any Purchaser Agent or the Purchasers of the obligations of the
Seller under the Transaction
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Documents or of any Obligor under a Receivable and (e) the maintenance by the
Agent of the Lock-Boxes and Lock-Box Accounts, including fees, costs and
expenses of legal counsel for the Agent and each Purchaser Agent relating to any
of the foregoing or to advising the Agent, any Purchaser Agent and any Funding
Source about its rights and remedies under any Transaction Document or any
related Funding Agreement and all costs and expenses (including counsel fees and
expenses) of the Agent, each Purchaser Agent, each Purchaser and each Funding
Source in connection with the enforcement of the Transaction Documents or any
Funding Agreement and in connection with the administration of the Transaction
Documents following a Termination Event. The Seller shall reimburse the Agent
and each Conduit Purchaser for the cost of the Agent's or such Conduit
Purchaser's auditors (which may be employees of such Person) auditing the books,
records and procedures of the Seller. The Seller shall reimburse each Conduit
Purchaser for any amounts such Conduit Purchaser must pay to any Committed
Purchaser pursuant to the related Transfer Agreement, this Agreement and the
Funding Agreements related thereto on account of any Tax. The Seller shall
reimburse each Conduit Purchaser on demand for all other costs and expenses
incurred by such Conduit Purchaser or any shareholder of such Conduit Purchaser
in connection with the Transaction Documents or the transactions contemplated
thereby, including the cost of auditing such Conduit Purchaser's books by
certified public accountants, the cost of the Ratings and the fees and
out-of-pocket expenses of counsel of the Agent, each Conduit Purchaser or any
shareholder, or administrator, of such Conduit Purchaser for advice relating to
such Conduit Purchaser's operation.
Section 6.4. Withholding Taxes. (a) All payments made by the Seller
hereunder shall be made without withholding for or on account of any present or
future taxes (other than overall net income taxes on the recipient). If any such
withholding is so required, the Seller shall make the withholding, pay the
amount withheld to the appropriate authority before penalties attach thereto or
interest accrues thereon and pay such additional amount as may be necessary to
ensure that the net amount actually received by each Purchaser, each Purchaser
Agent and the Agent free and clear of such taxes (including such taxes on such
additional amount) is equal to the amount that such Purchaser, such Purchaser
Agent or the Agent (as the case may be) would have received had such withholding
not been made. If the Agent, any Purchaser Agent or any Purchaser pays any such
taxes, penalties or interest the Seller shall reimburse the Agent, Purchaser
Agent or such Purchaser for that payment on demand. If the Seller pays any such
taxes, penalties or interest, it shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Purchaser, each Purchaser Agent
or the Agent on whose account such withholding was made (with a copy to the
Agent if not the recipient of the original) on or before the thirtieth day after
payment.
(b) Before the first date on which any amount is payable hereunder for the
account of any Purchaser not incorporated under the laws of the USA such
Purchaser shall deliver to the Seller and the Agent each two (2) duly completed
copies of United States Internal Revenue Service Form W-8BEN or W-8ECI (or
successor applicable form) certifying that such Purchaser is entitled to receive
payments hereunder without deduction or withholding of any United States federal
income taxes. Each such Purchaser shall replace or update such forms when
necessary to maintain any applicable exemption and as requested by the Agent or
the Seller.
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Section 6.5. Payments and Allocations. If any Person seeks compensation
pursuant to this Article VI, such Person shall deliver to the Seller and its
Purchaser Agent a certificate setting forth the amount due to such Person, a
description of the circumstance giving rise thereto and the basis of the
calculations of such amount, which certificate shall be conclusive absent
manifest error. The Seller shall pay to the Agent amounts owed to it or to the
applicable Purchaser Agent amounts owed to such Purchaser Agent or owed to any
Purchaser in its Purchase Group, for the account of such Person the amount shown
as due on any such certificate within thirty (30) days after receipt of the
notice.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions to Closing. This Agreement shall become effective
on the first date all conditions in this Section 7.1 are satisfied. On or before
such date, the Seller (or, in the case of Section 7.1(e)(ii), the Committed
Purchasers) shall deliver to the Agent the following documents in form,
substance and quantity acceptable to the Agent:
(a) A certificate of the Secretary of the Seller and each Seller
Entity certifying (i) the resolutions of the Seller's and each Seller
Entity's board of directors approving each Transaction Document to which
it is a party, (ii) the name, signature, and authority of each officer who
executes on the Seller's or each Seller Entity's behalf a Transaction
Document (on which certificate the Agent, each Purchaser Agent and each
Purchaser may conclusively rely until a revised certificate is received),
(iii) the Seller's and each Seller Entity's certificate or articles of
incorporation or limited liability company agreement, as applicable,
certified by the Secretary or Assistant Secretary of such entity, (iv) a
copy of the Seller's and each Seller Entity's by-laws and (v) good
standing certificates issued by the Secretaries of State of each
jurisdiction where the Seller and each Seller Entity is organized.
(b) All instruments and other documents required, or deemed
desirable by the Agent, to perfect the Agent's first priority interest in
the Receivables, Related Security, Collections, the Purchase Agreement and
the Lock-Box Accounts in all appropriate jurisdictions.
(c) UCC search reports from all jurisdictions the Agent requests.
(d) Executed copies of (i) all consents and authorizations necessary
in connection with the Transaction Documents (ii) direction letters
executed by the Seller authorizing the Agent to inspect and make copies
from the Seller's books and records maintained at any off-site data
processing or storage facilities, (iii) a Periodic Report covering the
month ended August 31, 2002, and (iv) each Transaction Document.
(e) Favorable opinions of counsel to the Seller and each Seller
Entity covering such matters as any Purchaser Agent or the Agent may
request.
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(f) A fully executed assignment agreement from ABN AMRO to the Agent
pursuant to which ABN AMRO assigns all of its right, title and interest
in, to and under the Lock-Box Letters and related Lock-Boxes in form and
substance satisfactory to the Agent.
(g) Such other approvals, opinions or documents as the Agent or any
Purchaser Agent may reasonably request.
Section 7.2. Conditions to Each Purchase. The obligation of each Committed
Purchaser to make any Purchase, and the right of the Seller to request or accept
any Purchase, are subject to the conditions (and each Purchase shall evidence
the Seller's representation and warranty that clauses (a)-(d) of this Section
7.2 have been satisfied) that on the date of such Purchase before and after
giving effect to the Purchase:
(a) no Potential Termination Event shall then exist or shall occur
as a result of the Purchase;
(b) the Termination Date has not occurred and, after giving effect
to the application of the proceeds of such Purchase, the outstanding
Matured Aggregate Investment would not exceed the Aggregate Commitment;
(c) the representations and warranties of the Seller, each
Originator and the Collection Agent contained herein or in any other
Transaction Document are true and correct in all material respects on and
as of such date (except to the extent such representations and warranties
relate solely to an earlier date and then as of such earlier date);
(d) each of the Seller and each Seller Entity is in full compliance
with the Transaction Documents to which it is a party (including all
covenants and agreements in Article V); and
(e) all legal matters related to the Purchase are reasonably
satisfactory to the Purchasers.
Nothing in this Section 7.2 limits the obligations (including those in Section
2.1) of each Related Committed Purchaser to its related Conduit Purchaser
(including any applicable Transfer Agreement).
Section 7.3. Addition and Removal of Originators. (a) Addition of
Originators. From time to time the Seller may request that an additional entity
(a "New Originator") be added as an Originator hereunder and under the Purchase
Agreement. Each such New Originator shall become a party to the Purchase
Agreement and an Originator hereunder on the date all of the conditions set
forth in this Section 7.3(a) are satisfied. On or before such date, the Seller
shall deliver to the Agent the following documents in form, substance and
quantity acceptable to the Agent:
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(i) a certificate of the Secretary of the New Originator certifying
(A) the resolutions of the New Originator's board of directors approving
each Transaction Document to which it is a party, (B) the name, signature,
and authority of each officer who executes on the New Originator's behalf
a Transaction Document (on which certificate the Agent, each Purchaser
Agent and each Purchaser may conclusively rely until a revised certificate
is received), (C) the New Originator's certificate or articles of
incorporation or limited liability company agreement, as applicable,
certified by the Secretary or Assistant Secretary of such entity, (D) a
copy of the New Originator's by-laws and (v) good standing certificates
issued by the Secretaries of State of each jurisdiction where the New
Originator is organized;
(ii) all instruments and other documents required, or deemed
desirable by the Agent, to perfect the Agent's first priority interest in
the Receivables, Related Security, Collections, the Purchase Agreement and
the Lock-Box Accounts in all appropriate jurisdictions;
(iii) UCC search reports from all jurisdictions the Agent requests;
(iv) executed copies of (A) a fully executed Joinder Agreement from
the New Originator in the form attached to the Purchase Agreement as
Exhibit B, (B) a fully executed Amendment and Reaffirmation of Limited
Guaranty executed by the Parent in the form attached hereto as Exhibit H
and (C) a fully executed Supplement to Exhibits in the form attached
hereto as Exhibit I;
(v) favorable opinions of counsel to the Seller and each Seller
Entity covering such matters as any Purchaser Agent or the Agent may
request;
(vi) the written consent of the Agent and the Purchaser Agents to
the addition of the New Originator; and
(vii) such other approvals, opinions or documents as the Agent or
any Purchaser Agent may reasonably request.
(b) Removal of Originator. From time to time, the Seller may request
that one or more Originators be removed as "Originators" hereunder and under the
Purchase Agreement by delivery to the Agent of written notice of such request,
which notice shall set forth the date on which such Originator(s) shall be
removed (a "Removal Date"), which date shall be no earlier than five Business
Days after the date such notice was delivered. On the Removal Date, the
Purchasers shall no longer purchase any Receivables originated by such
Originator; provided, however, that in no event shall such Originator be
relieved of any of its obligations under the Purchase Agreement or other
Transaction Documents with respect to any Receivables previously sold to the
Seller.
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ARTICLE VIII
THE AGENT
Section 8.1. Appointment and Authorization. (a) Each Purchaser and each
Purchaser Agent hereby irrevocably designates and appoints Credit Lyonnais,
acting through its New York Branch, as the "Agent" under the Transaction
Documents and authorizes the Agent to take such actions and to exercise such
powers as are delegated to the Agent hereby and to exercise such other powers as
are reasonably incidental thereto. The Agent shall hold, in its name, for the
benefit of each Purchaser, the Purchase Interest of such Purchaser. The Agent
shall not have any duties other than those expressly set forth in the
Transaction Documents or any fiduciary relationship with any Purchaser, and no
implied obligations or liabilities shall be read into any Transaction Document,
or otherwise exist, against the Agent. The Agent does not assume, nor shall it
be deemed to have assumed, any obligation to, or relationship of trust or agency
with, the Seller. Notwithstanding any provision of this Agreement or any other
Transaction Document, in no event shall the Agent ever be required to take any
action which exposes the Agent to personal liability or which is contrary to the
provision of any Transaction Document or applicable law.
(b) Each Purchaser hereby irrevocably designates and appoints the
respective institution identified on the applicable signature page hereto or in
the related Transfer Supplement (as applicable) as its Purchaser Agent
hereunder, and each authorizes such Purchaser Agent to take such action on its
behalf under the provisions of this Agreement and to exercise such powers and
perform such duties as are expressly delegated to such Purchaser Agent by the
terms of this Agreement, if any, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Purchaser Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser or other Purchaser Agent or the Agent, and no
implied obligations or liabilities on the part of such Purchaser Agent shall be
read into this Agreement or otherwise exist against such Purchaser Agent. No
Purchaser Agent assumes, nor shall it be deemed to have assumed, any obligation
to, or relationship of trust or agency with, the Seller.
Section 8.2. Delegation of Duties. The Agent and each Purchaser Agent may
execute any of its duties through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Neither the Agent nor any Purchaser Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 8.3. Exculpatory Provisions. None of the Agent, any Purchaser
Agent or any of their respective directors, officers, agents or employees shall
be liable for any action taken or omitted (i) with the consent or at the
direction of the Instructing Group or (ii) in the absence of such Persons gross
negligence or willful misconduct. Neither the Agent nor any Purchaser Agent
shall be responsible to any Purchaser or other Person for any recitals,
representations, warranties or other statements made by the Seller, any Seller
Entity or any of its Affiliates, (ii) the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any Transaction Document, (iii)
any failure of the Seller, and Seller Entity or any of its Affiliates to perform
any obligation or (iv) the satisfaction of any condition specified in Article
VII. Neither
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the Agent nor any Purchaser Agent shall have any obligation to any Purchaser to
ascertain or inquire about the observance or performance of any agreement
contained in any Transaction Document or to inspect the properties, books or
records of the Seller, any Seller Entity or any of its Affiliates.
Section 8.4. Reliance by Agent and Purchaser Agents. (a) The Agent and
each Purchaser Agent shall in all cases be entitled to rely, and shall be fully
protected in relying, upon any document, other writing or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person and upon advice and statements of legal counsel (including counsel
to the Seller), independent accountants and other experts selected by the Agent
or such Purchaser Agent. The Agent and each Purchaser Agent shall in all cases
be fully justified in failing or refusing to take any action under any
Transaction Document unless it shall first receive such advice or concurrence of
the Purchasers, and assurance of its indemnification, as it deems appropriate.
(b) The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the
Instructing Group, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Purchasers, the Agent and Purchaser
Agents.
(c) Each Purchaser Agent shall determine with its Purchaser Group the
number of such Purchasers (each, a "Voting Block"), which shall be required to
request or direct such Purchaser Agent to take action, or refrain from taking
action, under this Agreement on behalf of such Purchasers. Such Purchaser Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement in accordance with a request of its appropriate Voting
Block, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of such Purchaser Agent's Purchasers.
(d) Unless otherwise advised in writing by a Purchaser Agent or by any
Purchaser on whose behalf such Purchaser Agent is purportedly acting, each party
to this Agreement may assume that (i) such Purchaser Agent is acting for the
benefit and on behalf of each of the Purchasers in respect of which such
Purchaser Agent is identified as being the "Purchaser Agent" in the definition
of "Purchaser Agent" hereto, as well as for the benefit of each assignee or
other transferee from any such Person, and (ii) each action taken by such
Purchaser Agent has been duly authorized and approved by all necessary action on
the part of the Purchasers on whose behalf it is purportedly acting. Each
Purchaser Agent and the Purchasers in its Purchaser Group shall agree amongst
themselves as to the circumstances and procedures for removal and resignation of
such Purchaser Agent.
Section 8.5. Assumed Payments. Unless the Agent shall have received notice
from the applicable Purchaser Agent before the date of any Incremental Purchase
that the applicable Purchaser Group will not make available to the Agent the
amount it is scheduled to remit as part of such Incremental Purchase, the Agent
may assume such Purchaser Group has made such amount available to the Agent when
due (an "Assumed Payment") and, in reliance upon such assumption, the Agent may
(but shall have no obligation to) make available such amount to the appropriate
Person. If and to the extent that any Purchaser in a Purchaser Group shall not
have
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made its Assumed Payment available to the Agent, such Purchaser and the Seller
hereby agree to pay the Agent forthwith on demand such unpaid portion of such
Assumed Payment up to the amount of funds actually paid by the Agent, together
with interest thereon for each day from the date of such payment by the Agent
until the date the requisite amount is repaid to the Agent, at a rate per annum
equal to the Federal Funds Rate for the first three days such amounts are past
due and thereafter at a rate per annum equal to the Federal Funds Rate plus 2%.
Section 8.6. Notice of Termination Events. Neither any Purchaser Agent nor
the Agent shall be deemed to have knowledge or notice of the occurrence of any
Potential Termination Event unless the Agent or such Purchaser Agent has
received notice from any Purchaser or the Seller stating that a Potential
Termination Event has occurred hereunder and describing such Potential
Termination Event. If the Agent receives such a notice, it shall promptly give
notice thereof to each Purchaser Agent whereupon each Purchaser Agent shall
promptly give notice thereof to the members of its Purchaser Group. If a
Purchaser Agent receives such a notice from any Person other than the Agent, it
shall promptly give notice thereof to the Agent and each Purchaser Agent
whereupon each Purchaser Agent shall promptly give notice thereof to the members
of its Purchaser Group. The Agent shall take such action concerning a Potential
Termination Event as may be directed by the Instructing Group (or, if required
for such action, all of the Purchasers), but until the Agent receives such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, as the Agent deems advisable and in the best
interests of the Purchasers.
Section 8.7. Non-Reliance on Agent and Other Purchasers. Each Purchaser
expressly acknowledges that none of the Agent, the Purchaser Agents nor any of
their respective 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 any review of the affairs of the Seller or
any Seller Entity, shall be deemed to constitute any representation or warranty
by the Agent. Each Purchaser represents and warrants to the Agent and the
Purchaser Agents that, independently and without reliance upon the Agent, any
Purchaser Agent or any other Purchaser and based on such documents and
information as it has deemed appropriate, it has made and will continue to make
its own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Seller,
the Seller Entities and the Receivables and its own decision to enter into this
Agreement and to take, or omit, action under any Transaction Document. The Agent
shall deliver each month to any Purchaser that so requests a copy of the
Periodic Report(s) received covering the preceding calendar month. Except for
items specifically required to be delivered hereunder, the Agent shall not have
any duty or responsibility to provide any Purchaser or any Purchaser Agent with
any information concerning the Seller, any Seller Entity or any of its
Affiliates that comes into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
Section 8.8. Agent, Purchaser Agents and Affiliates. The Agent, each
Purchaser Agent and their respective Affiliates may extend credit to, accept
deposits from and generally engage in any kind of business with the Seller, any
Seller Entity or any of their Affiliates and Credit Lyonnais may exercise or
refrain from exercising its rights and powers as if it were not the Agent. The
parties acknowledge that Credit Lyonnais acts as agent for La Fayette and
subagent
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for La Fayette's management company in various capacities, as well as providing
credit facilities and other support for La Fayette not contained in the
Transaction Documents.
Section 8.9. Indemnification. Each Purchaser Group shall indemnify and
hold harmless the Agent and its officers, directors, employees, representatives
and agents (to the extent not reimbursed by the Seller or any Seller Entity and
without limiting the obligation of the Seller or any Seller Entity to do so),
ratably in accordance with its Ratable Share from and against any and all
liabilities, claims, obligations, losses, damages, penalties, costs, expenses
and disbursements of any kind whatsoever that may at any time be imposed on,
incurred by or asserted against the Agent or such Person as a result of or
related to, any of the transactions contemplated by the Transaction Documents or
the execution, delivery or performance of the Transaction Documents or any other
document furnished in connection therewith (but excluding any such liabilities,
claims, obligations, losses, damages, penalties, costs, expenses or
disbursements resulting solely from the gross negligence or willful misconduct
of the Agent or such Person as finally determined by a court of competent
jurisdiction).
Section 8.10. Successor Agent. The Agent may, upon at least five (5) days
notice to the Seller and each Purchaser Agent, resign as Agent. Such resignation
shall not become effective until a successor agent is appointed by an
Instructing Group and has accepted such appointment. Upon such acceptance of its
appointment as Agent hereunder by a successor Agent, such successor Agent shall
succeed to and become vested with all the rights and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Transaction Documents. After any retiring Agent's
resignation hereunder, the provisions of Article VI and this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Termination. Each Conduit Purchaser shall cease to be a party
hereto when the Termination Date has occurred, such Conduit Purchaser holds no
Investment and all amounts payable to it hereunder have been indefeasibly paid
in full. This Agreement shall terminate following the Termination Date when no
Investment is held by a Purchaser and all other amounts payable hereunder have
been indefeasibly paid in full, but the rights and remedies of the Agent, each
Purchaser Agent and each Purchaser concerning any representation, warranty or
covenant made, or deemed to be made, by the Seller, and under Section 3.9,
Article VI, Section 8.9, Section 9.12 and Section 9.13, shall survive such
termination.
Section 9.2. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. Each party hereto, however, authorizes the
Agent and each Purchaser Agent to act on telephone notices of Purchases and
Discount Rate and
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Tranche Period selections from any person the Agent or such Purchaser Agent in
good faith believes to be acting on behalf of the relevant party and, at the
Agent's or such Purchaser Agent's option, to tape record any such telephone
conversation. Each party hereto agrees to deliver promptly to the Agent and each
Purchaser Agent a confirmation of each telephone notice given or received by
such party (signed by an authorized officer of such party), but the absence of
such confirmation shall not affect the validity of the telephone notice. The
Agent's or such Purchaser Agent's records of all such conversations shall be
deemed correct and, if the confirmation of a conversation differs in any
material respect from the action taken by the Agent or such Purchaser Agent, the
records of the Agent or such Purchaser Agent shall govern absent manifest error.
The number of days for any advance notice required hereunder may be waived
(orally or in writing) by the Person receiving such notice and, in the case of
notices to the Agent or such Purchaser Agent, the consent of each Person to
which the Agent or such Purchaser Agent is required to forward such notice.
Section 9.3. Payments and Computations. Notwithstanding anything herein to
the contrary, any amounts to be paid or transferred by the Seller or the
Collection Agent to, or for the benefit of, any Purchaser, or any other Person
shall be paid or transferred to the Agent or the appropriate Purchaser Agent
(for the benefit of such Purchaser or other Person). The Agent or the
appropriate Purchaser Agent shall promptly (and, if reasonably practicable, on
the day it receives such amounts) forward each such amount to the Person
entitled thereto and such Person shall apply the amount in accordance herewith.
All amounts to be paid or deposited hereunder shall be paid or transferred on
the day when due in immediately available Dollars (and, if due from the Seller
or Collection Agent, by 11:00 a.m. (New York City time), with amounts received
after such time being deemed paid on the Business Day following such receipt).
The Seller hereby authorizes the Agent to debit the Seller Account for
application to any amounts owed by the Seller hereunder. The Seller shall, to
the extent permitted by law, pay to the Agent or the appropriate Purchaser Agent
upon demand, for the account of the applicable Person, interest on all amounts
not paid or transferred by the Seller or the Collection Agent when due hereunder
at a rate equal to the Prime Rate plus 1%, calculated from the date any such
amount became due until the date paid in full. Any payment or other transfer of
funds scheduled to be made on a day that is not a Business Day shall be made on
the next Business Day, and any Discount Rate or interest rate accruing on such
amount to be paid or transferred shall continue to accrue to such next Business
Day. All computations of interest, fees and Discount shall be calculated for the
actual days elapsed based on a 360 day year.
Section 9.4. Sharing of Recoveries. Each Purchaser agrees that if it
receives any recovery, through set-off, judicial action or otherwise, on any
amount payable or recoverable hereunder in a greater proportion than should have
been received hereunder or otherwise inconsistent with the provisions hereof,
then the recipient of such recovery shall purchase for cash an interest in
amounts owing to the other Purchasers (as return of Investment or otherwise),
without representation or warranty except for the representation and warranty
that such interest is being sold by each such other Purchaser free and clear of
any Adverse Claim created or granted by such other Purchaser, in the amount
necessary to create proportional participation by the Purchasers in such
recovery (as if such recovery were distributed pursuant to Section 2.3). If all
or any portion of such amount is thereafter recovered from the recipient, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
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Section 9.5. Right of Setoff. During a Termination Event, each Purchaser
is hereby authorized (in addition to any other rights it may have) to setoff,
appropriate and apply (without presentment, demand, protest or other notice
which are hereby expressly waived) any deposits and any other indebtedness held
or owing by such Purchaser (including by any branches or agencies of such
Purchaser) to, or for the account of, the Seller against amounts owing by the
Seller hereunder (even if contingent or unmatured).
Section 9.6. Amendments. Except as otherwise expressly provided herein, no
amendment or waiver hereof shall be effective unless signed by the Seller and
the Instructing Group. In addition, no amendment of any Transaction Document
shall, without the consent of (a) all the Related Committed Purchasers, (i)
extend the Termination Date (including an extension effected through a waiver of
a Termination Event) or the date of any payment or transfer of Collections by
the Seller to the Collection Agent or by the Collection Agent to the Agent, (ii)
reduce the rate or extend the time of payment of Discount for any Eurodollar
Tranche or Prime Tranche, (iii) reduce or extend the time of payment of any fee
payable to the Related Committed Purchasers, (iv) except as provided herein,
release, transfer or modify any Committed Purchaser's Purchase Interest or
change any Commitment, (v) amend the definition of Instructing Group,
Termination Event or Section 1.1, 1.2, 1.5, 1.8, 2.1, 2.2, 2.3, 6.1, 6.2, 6.3,
6.4, 7.2 or 9.6 or any provision of the Limited Guaranty, (vi) consent to the
assignment or transfer by the Seller or any Originator of any interest in the
Receivables other than transfers hereunder, or (vii) amend any defined term
relevant to the restrictions in clauses (i) through (vi) in a manner which would
circumvent the intention of such restrictions or (b) the Agent and each affected
Purchaser Agent, amend any provision hereof if the effect thereof is to affect
the indemnities to, or the rights or duties of, the Agent or any Purchaser Agent
or to reduce any fee payable for the Agent's or such Purchaser Agent's own
account. Notwithstanding the foregoing, the amount of any fee or other payment
due and payable from the Seller to any Person may be changed or otherwise
adjusted solely with the consent of the Seller and the party to which such
payment is payable. Any amendment hereof shall apply to each Purchaser equally
and shall be binding upon the Seller, the Purchasers, each Purchaser Agent and
the Agent. If required by the Rating Agencies for any Conduit Purchaser, no
material amendment hereof or assignment, termination, resignation or removal
hereunder shall be effective unless a statement is obtained from the applicable
Rating Agencies that its Rating will not be downgraded, withdrawn or suspended
as a result of such amendment, assignment, termination, resignation or removal.
Section 9.7. Waivers. No failure or delay of the Agent, any Purchaser
Agent or any Purchaser in exercising any power, right, privilege or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right, privilege or remedy preclude any other or
further exercise thereof or the exercise of any other power, right, privilege or
remedy. Any waiver hereof shall be effective only in the specific instance and
for the specific purpose for which such waiver was given; provided that any
waiver of a Termination Event shall be in writing. After any waiver, the Seller,
the Purchasers, the Purchaser Agents and the Agent shall be restored to their
former position and rights and any Potential Termination Event waived shall be
deemed to be cured and not continuing, but no such waiver shall extend to (or
impair any right consequent upon) any subsequent or other Potential Termination
Event. Any additional Discount that has accrued after a Termination Event before
the execution of a waiver thereof,
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solely as a result of the occurrence of such Termination Event, may be waived by
the Agent or related Purchaser Agent at the direction of the Purchaser entitled
thereto.
Section 9.8. Successors and Assigns; Participations; Assignments. (a)
Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Except as otherwise provided herein, the Seller may not assign or transfer any
of its rights or delegate any of its duties without the prior consent of the
Agent and the Purchasers Agents.
(b) Participations. Any Purchaser may sell to one or more Persons
affiliated with the Purchaser without the prior consent of the Seller, and to
one or more other Persons with the prior consent of the Seller (which consent
shall not be unreasonably withheld) (each a "Participant") participating
interests in the interests of such Purchaser hereunder and under the applicable
Transfer Agreement. Such Purchaser shall remain solely responsible for
performing its obligations hereunder, and the Seller, the applicable Purchaser
Agent and the Agent shall continue to deal solely and directly with such
Purchaser in connection with such Purchaser's rights and obligations hereunder
and under the applicable Transfer Agreement. Each Participant shall be entitled
to the benefits of Article VI and shall have the right of setoff through its
participation in amounts owing hereunder and under the applicable Transfer
Agreement to the same extent as if it were a Purchaser hereunder and under the
applicable Transfer Agreement, which right of setoff is subject to such
Participant's obligation to share with the Purchasers as provided in Section
9.4. A Purchaser shall not agree with a Participant to restrict such Purchaser's
right to agree to any amendment hereto or to the applicable Transfer Agreement,
except amendments described in clause (a) of Section 9.6.
(c) Assignments by Related Committed Purchasers. Any Related Committed
Purchaser may assign to one or more Persons ("Purchasing Committed Purchasers"),
acceptable to the applicable Purchaser Agent in its sole discretion and, prior
to the occurrence of a Termination Event, subject to the prior written consent
of the Seller (which consent will not be unreasonably withheld) any portion of
its Commitment as a Related Committed Purchaser hereunder and under the
applicable Transfer Agreement and Purchase Interest pursuant to a supplement
hereto and to the Transfer Agreement (a "Transfer Supplement") in form
satisfactory to the applicable Purchaser Agent executed by each such Purchasing
Committed Purchaser, such selling Committed Purchaser and the applicable
Purchaser Agent. Any such assignment by a Related Committed Purchaser must be
for an amount of at least Ten Million Dollars. Each Purchasing Committed
Purchaser shall pay a fee of Three Thousand Dollars to the applicable Purchaser
Agent. Any partial assignment shall be an assignment of an identical percentage
of such selling Related Committed Purchaser Investment and its Commitment as a
Related Committed Purchaser hereunder and under any applicable Transfer
Agreement. Upon the execution and delivery to the applicable Purchaser Agent of
the Transfer Supplement and payment by the Purchasing Committed Purchaser to the
selling Related Committed Purchaser of the agreed purchase price, such selling
Related Committed Purchaser shall be released from its obligations hereunder and
under the applicable Transfer Agreement to the extent of such assignment and
such Purchasing Committed Purchaser shall for all purposes be a Related
Committed Purchaser party hereto and shall have all the rights and obligations
of a Related Committed Purchaser hereunder to the same extent as if it were an
original party hereto and to the applicable Transfer
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Agreement with a Commitment as a Related Committed Purchaser, any Investment and
any related Assigned Settlement described in the Transfer Supplement.
(d) Replaceable Related Committed Purchaser. If any Related Committed
Purchaser other than a Committed Purchaser (including Credit Lyonnais) that
provides program enhancement to a Conduit Purchaser (a "Replaceable Purchaser")
shall (i) petition the Seller for any amounts under Section 6.2 or 6.4 or (ii)
have a short-term debt rating lower than the "A-1" by S&P and "P-1" by Moody's,
and, if the commercial paper of the applicable Conduit Purchaser is rated by
Fitch, "F1" by Fitch, the Seller or applicable Conduit Purchaser may designate a
replacement financial institution (a "Replacement Related Committed Purchaser")
acceptable to the Agent and the applicable Conduit Purchaser, in its sole
discretion and, prior to the occurrence of a Termination Event, subject to the
prior written consent of the Seller (which consent will not be unreasonably
withheld) to which such Replaceable Related Committed Purchaser shall, subject
to its receipt of an amount equal to its Investment, any related Assigned
Settlement, and accrued Discount and fees thereon (plus, from the Seller, any
Early Payment Fee that would have been payable if such transferred Investment
had been paid on such date) and all amounts payable under Section 6.2, promptly
assign all of its rights, obligations and Commitment hereunder and under the
applicable Transfer Agreement, together with all of its Purchase Interest, and
any related Assigned Settlement, to the Replacement Related Committed Purchaser
in accordance with Section 9.8(c).
(e) Assignment by Conduit Purchasers. Each party hereto agrees and
consents (i) to each Conduit Purchaser's assignment, participation, grant of
security interests in or other transfers of any portion of not less than
$25,000,000 of, or any of its beneficial interest in, the Purchase Interest and
the related Assigned Settlement and (ii) to the complete assignment by such
Conduit Purchaser of all of its rights and obligations hereunder to any Person
reasonably acceptable to Agent, and upon such assignment such Conduit Purchaser
shall be released from all obligations and duties hereunder; provided, however,
that a Conduit Purchaser may not, without the prior consent of its Related
Committed Purchaser, transfer any of its rights under the related Transfer
Agreement to cause its Related Committed Purchaser to purchase the Purchaser
Interest of such Conduit Purchaser and the Assigned Settlement unless the
assignee (i) is a corporation whose principal business is the purchase of assets
similar to the Receivables, (ii) has the related Purchaser Agent as its
administrative agent and (iii) issues commercial paper with credit ratings
substantially comparable to the then current ratings of such Conduit Purchaser.
Each new Conduit Purchaser shall pay a fee of Three Thousand Dollars to the
Agent. Each Conduit Purchaser shall notify the Seller prior to any such
assignment and shall promptly notify each other party hereto of any such
assignment. Upon such an assignment of any portion of a Conduit Purchaser's
Purchase Interest and the related Assigned Settlement and the payment to the
Agent of the fee specified above, the assignee shall have all of the rights of
such Conduit Purchaser hereunder relate to such Purchase Interest and related
Assigned Settlement.
(f) Opinions of Counsel. If required by the Agent or any Purchaser Agent
or to maintain the Ratings, each Transfer Supplement must be accompanied by an
opinion of counsel of the assignee as to such matters as the Agent or such
Purchaser Agent may reasonably request.
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Section 9.9. Waiver of Confidentiality. The Seller hereby consents to the
disclosure of any nonpublic information relating thereto among the Agent, the
Purchaser Agents and the Purchasers and by the Agent, the Purchaser Agents or
the Purchasers to (i) any officers, directors, members, managers, employees or
outside accountants, auditors or attorneys thereof, (ii) any prospective or
actual assignee or participant, (iii) any rating agency, surety, guarantor or
credit or liquidity enhancer to the Agent, any Purchaser Agent or any Purchaser,
(iv) any entity organized to purchase, or make loans secured by, financial
assets for which a Purchaser Agent provides managerial services or acts as an
administrative agent, (v) any Conduit Purchaser's administrator, management
company, referral agents, issuing agents or depositaries or CP Dealers and (vi)
Governmental Authorities with appropriate jurisdiction.
Section 9.10. Confidentiality of Agreement. (a) Unless otherwise required
by applicable law, order of any court or administrative agency, or otherwise by
any governmental authority, the Seller agrees to maintain the confidentiality of
the Transaction Documents (and all drafts thereof) in its communications with
third parties and otherwise; provided, however, that the Transaction Documents
may be disclosed to third parties to the extent such disclosure is (i) required
in connection with a sale of receivables of Seller, (ii) made solely to Persons
who are legal counsel for the purchaser of such receivables, and (iii) made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Agent and each Purchaser Agent; provided further,
however, that the Transaction Documents may be disclosed to the Seller's legal
counsel and independent auditors; and provided further, however, that neither
the Seller nor the Collection Agent have any obligation of confidentiality in
respect of any information which may be generally available to the public or
becomes available to the public through no fault of the Seller or the Collection
Agent.
(b) Unless otherwise required by applicable law, order of any court or
administrative agency, or otherwise by any Governmental Authority, the Agent and
each Purchaser Agent agree to maintain the confidentiality, in its
communications with third parties and otherwise, of any information regarding
the Seller obtained in connection with the Transaction Documents which has been
identified by the Seller to the Agent as confidential in nature (the
"Confidential Material"); provided, however, that the Confidential Material may
be disclosed to third parties to the extent such disclosure is (i) to a Rating
Agency, (ii) required in connection with the exercise of any remedy hereunder or
under any related documents, instruments and agreements, or (iii) to any actual
or proposed participant or assignee of all or part of its rights hereunder, or
an actual or proposed liquidity or enhancement provider, in each case which has
agreed in writing to be bound by the provisions of this Section, or (iv) to any
Committed Purchaser; provided further, however, that the Transaction Documents
may be disclosed to each of the Purchaser Agent's and the Agent's respective
legal counsel and independent auditors; and provided further, however, that the
Agent and each Purchaser Agent shall not have any obligation of confidentiality
in respect of any information which may be generally available to the public or
becomes available to the public through no fault of such Person.
Section 9.11. Agreement Not to Petition. Each party hereto agrees, for the
benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for each Conduit Purchaser, not, prior to the date which is one
(1) year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, encourage, assist,
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join, invoke, or cause such Conduit Purchaser to invoke, the process of any
Governmental Authority for the purpose of (a) commencing or sustaining a case
against such Conduit Purchaser under any federal or state bankruptcy, insolvency
or similar law (including the Federal Bankruptcy Code), (b) appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for such Conduit Purchaser, or any substantial part of its
property, or (c) ordering the winding up or liquidation of the affairs of such
Conduit Purchaser.
Section 9.12. Excess Funds. Other than amounts payable under Section 9.4,
each Conduit Purchaser shall be required to make payment of the amounts required
to be paid pursuant hereto only if such Conduit Purchaser has Excess Funds (as
defined below). If such Conduit Purchaser does not have Excess Funds, the excess
of the amount due hereunder (other than pursuant to Section 9.4) over the amount
paid shall not constitute a "claim" (as defined in Section 101(5) of the Federal
Bankruptcy Code) against such Conduit Purchaser until such time as such Conduit
Purchaser has Excess Funds. If such Conduit Purchaser does not have sufficient
Excess Funds to make any payment due hereunder (other than pursuant to Section
9.4), then such Conduit Purchaser may pay a lesser amount and make additional
payments that in the aggregate equal the amount of deficiency as soon as
possible thereafter. The term "Excess Funds" means the excess of (a) the
aggregate projected value of such Conduit Purchaser's assets and other property
(including cash and cash equivalents), over (b) the sum of (i) the sum of all
scheduled payments of principal, interest and other amounts payable on publicly
or privately placed indebtedness of such Conduit Purchaser for borrowed money,
plus (ii) the sum of all other liabilities, indebtedness and other obligations
of such Conduit Purchaser for borrowed money or owed to any credit or liquidity
provider, together with all unpaid interest then accrued thereon, plus (iii) all
taxes payable by such Conduit Purchaser to the Internal Revenue Service, plus
(iv) all other indebtedness, liabilities and obligations of such Conduit
Purchaser then due and payable, but the amount of any liability, indebtedness or
obligation of such Conduit Purchaser shall not exceed the projected value of the
assets to which recourse for such liability, indebtedness or obligation is
limited. Excess Funds shall be calculated once each Business Day.
Section 9.13. No Recourse. The obligations of each Conduit Purchaser,
their respective management companies, their respective administrators and
referral agents (each a "Program Administrator") under any Transaction Document
or other document (each, a "Program Document") to which a Program Administrator
is a party are solely the corporate obligations of such Program Administrator
and no recourse shall be had for such obligations against any Affiliate,
director, officer, member, manager, employee, attorney or agent of any Program
Administrator.
Section 9.14. Headings; Counterparts. Article and Section Headings in this
Agreement are for reference only and shall not affect the construction of this
Agreement. This Agreement may be executed by different parties on any number of
counterparts, each of which shall constitute an original and all of which, taken
together, shall constitute one and the same agreement.
Section 9.15. Cumulative Rights and Severability. All rights and remedies
of the Purchasers, the Purchaser Agents and Agent hereunder shall be cumulative
and non-exclusive of any rights or remedies such Persons have under law or
otherwise. Any provision hereof that is
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prohibited or unenforceable in any jurisdiction shall, in such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and without affecting such
provision in any other jurisdiction.
Section 9.16. Governing Law; Submission to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND
NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. THE SELLER HEREBY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF, OR RELATING
TO, THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. The
Seller hereby irrevocably waives, to the fullest extent permitted by law, any
objection it may now or hereafter have to the venue of any such proceeding and
any claim that any such proceeding has been brought in an inconvenient forum.
Nothing in this Section 9.16 shall affect the right of the Agent, any Purchaser
Agent or any Purchaser to bring any action or proceeding against the Seller or
its property in the courts of other jurisdictions.
Section 9.17. Waiver of Trial by Jury. To the extent permitted by
applicable law, each party hereto irrevocably waives all right of trial by jury
in any action, proceeding or counterclaim arising out of, or in connection with,
any transaction document or any matter arising thereunder.
Section 9.18. Intended Tax Characterization. It is the intention of the
parties hereto that, for the purposes of all Taxes, the transactions
contemplated hereby shall be treated as a loan by the Purchasers (through the
Agent) to the Seller that is secured by the Receivables (the "Intended Tax
Characterization"). The parties hereto agree to report and otherwise to act for
the purposes of all Taxes in a manner consistent with the Intended Tax
Characterization.
Section 9.19. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superceded thereby.
Section 9.20. Extensions of Scheduled Termination Date. Not more than 90
days, but prior to 75 days before the Scheduled Termination Date then in effect,
the Seller may request that each Committed Purchaser extend its Commitment for
an additional 364 days. Each Committed Purchaser shall respond to such request
not later than 45 days before the then Scheduled Termination Date. If, by the
date 45 days before the then Scheduled Termination Date, any Committed Purchaser
(a "Non-Consenting Purchaser") has not notified the Agent it agrees to so extend
its Commitment for an additional 364 day period, unless any other Committed
Purchaser (including any Person who thereby becomes a Committed Purchaser)
assumes the Commitment of each such Non-Consenting Lender on or before the date
45 days before the then Scheduled Termination Date and agrees to extend such
Commitment for an additional 364 day period, the Scheduled Termination Date
shall not be extended. If all Committed Purchasers agree to extend the Scheduled
Termination Date, or if the Commitment of each Non-Consenting Purchaser is
assumed by another Committed Purchaser pursuant to the
-42-
preceding sentence, the Scheduled Termination Date shall be extended for an
additional 364 day period. Otherwise the Scheduled Termination Date shall take
place as scheduled.
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Exhibit 10-k
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.
LA FAYETTE ASSET SECURITIZATION LLC, CREDIT LYONNAIS, acting through its
as a Conduit Purchaser New York Branch, as the Agent, a Purchaser
Agent and a Committed Purchaser
By: By:
----------------------------------------- -----------------------------------------
Title: Title:
---------------------------------- ----------------------------------
Address: c/o Credit Lyonnais Address: 1301 Avenue of the Americas
1301 Avenue of the Americas New York, New York 10019-6022
New York, New York 10019-6022 Attn: Ms. Konstantina Kourmpetis-
Attn: Ms. Konstantina Kourmpetis- Transaction Manager/
Transaction Manager/Structured Structured Finance
Finance Telephone: 212-261-7814
Telephone: 212-261-7814 Telecopy: 212-459-3258
Telecopy: 212-459-3258
Signature Page for
Receivables Sale Agreement
GIRO BALANCED FUNDING CORPORATION, BAYERISCHE LANDESBANK, New York Branch,
as a Conduit Purchaser as a Purchaser Agent
By: By:
----------------------------------------- -----------------------------------------
Title: Kevin Burns/Vice President Title: Alexander Kohnert/First VP
Address: 114 West 47th Street, Suite 1715 By:
New York, New York 10036 ----------------------------------------
Attention: Kevin Burns - Title: Lori-Ann Wynter/Vice President
Vice President
Telephone: (212)302-5151
Telecopy: (212)302-8767 Address: 560 Lexington Avenue
New York, New York 10022
Attention: Asset Securitization
Telephone: (212) 230-9005
Telecopy: (212) 230-9020
BAYERISCHE LANDESBANK, Cayman Islands Branch,
as a Committed Purchaser
By:
-----------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Title:
-----------------------------------
Address: 560 Lexington Avenue
New York, New York 10022
Attention: Corporate Lending
Telephone: (212) 230-9012
Telecopy: (212) 310-9868
Signature Page for
Receivables Sale Agreement
AMSTERDAM FUNDING CORPORATION, ABN AMRO BANK N.V., as a Purchaser Agent
as a Conduit Purchaser and a Committed Purchaser
By: By:
----------------------------------------- -----------------------------------------
Title: Title:
---------------------------------- ----------------------------------
Address:
Global Securitization Services, LLC By:
114 West 47th Street -----------------------------------------
New York, New York 10036 Title:
Attention: Andrew Stidd -----------------------------------
Telephone: (212) 302-5151
Telecopy: (212) 302-8767
Address:
Structured Finance, Asset Securitization
with a copy to: 135 South LaSalle Street
ABN AMRO BANK N.V. Chicago, Illinois 60674-9135
Address: Structured Finance, Attention: Purchaser Agent - Amsterdam
Asset Securitization Telephone: (312) 904-2737
135 South LaSalle Street Telecopy: (312) 904-6376
Chicago, Illinois 60674-9135
Attention: Administrator-
Amsterdam
Telephone: (312) 904-2737
Telecopy: (312) 904-6376
Signature Page for
Receivables Sale Agreement
ARVINMERITOR RECEIVABLES
CORPORATION, as the Seller
By:
-----------------------------------------
Title:
---------------------------------------
Address: 2135 West Maple Road
Troy, Michigan 48084
Attention:
--------------------------
Telephone:
--------------------------
Telecopy:
--------------------------
ARVINMERITOR, INC., as the Initial
Collection Agent
By:
-----------------------------------------
Title:
---------------------------------------
Address: 2135 West Maple Road
Troy, Michigan 48084
Attention:
--------------------------
Telephone:
--------------------------
Telecopy:
--------------------------
Signature Page for
Receivables Sale Agreement
Exhibit 10-k
SCHEDULE I
DEFINITIONS
The following terms have the meanings set forth, or referred to, below:
"Adverse Claim" means, for any asset or property of a Person, a lien,
security interest, charge, mortgage, pledge, hypothecation, assignment or
encumbrance, or any other right or claim, in, of or on such asset or property in
favor of any other Person, except those in favor of the Seller and the Agent and
each Purchaser Agent and Purchaser Group in connection with the Transaction
Documents.
"Affiliate" means, for any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person. For purposes of this definition, "control" means the power,
directly or indirectly, to either (i) vote ten percent (10%) or more of the
securities having ordinary voting power for the election of directors of a
Person or (ii) cause the direction of the management and policies of a Person.
"Aged Receivables Ratio" means, at any time the same is to be determined,
the ratio of (i) the sum of (a) the aggregate outstanding principal balance of
all Receivables that became Delinquent Receivables during the most recently
completed calendar month, plus (b) the outstanding principal balance of all
Receivables that became Charge-Offs during such calendar month to (ii) the
amount of sales generated during the calendar month that ended four months prior
to the most recently completed calendar month.
"Agent" is defined in the first paragraph hereof.
"Agent's Account" means the account designated to the Seller and the
Purchasers by the Agent.
"Aggregate Commitment" means the aggregate of all Commitments of each
Purchaser Group, as such amount may be reduced pursuant to Section 1.6.
"Aggregate Investment" means the sum of the Investments of all Purchasers.
"Assigned Settlement" means, for each Related Committed Purchaser for a
Conduit Purchaser for any Put, the product of such Related Committed Purchaser's
Purchased Percentage and the amount of the Conduit Purchaser Settlement being
transferred pursuant to such Put.
"Bankruptcy Event" means, for any Person, that (a) such Person makes a
general assignment for the benefit of creditors or any proceeding is instituted
by or against such Person seeking to adjudicate it bankrupt or insolvent, or
seeking the 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 and, if instituted
against such Person, such proceeding remains undismissed and unstayed for a
period of 30 days, 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 or such Person generally
does not pay its debts as such debts become due or admits in writing its
inability to pay its debts generally or (b) such Person takes any corporate
action to authorize any such action.
"Business Day" means any day other than (a) a Saturday, Sunday or other
day on which banks in New York, New York are authorized or required to close,
(b) a holiday on the Federal Reserve calendar and, solely for matters relating
to a Eurodollar Tranche, (c) a day on which dealings in Dollars are not carried
on in the London interbank market.
"Changeover Receivable" means a Receivable generated from the sale of
merchandise not manufactured by Parent or one of its Subsidiaries which
merchandise has been purchased by one of the Seller Entities from one of its
customers.
"Charge-Off" means any Receivable that has or should have been (in
accordance with the Credit and Collection Policy) (i) charged off or written off
by the Seller, or (ii) reserved against as a doubtful account by the Seller.
"Collection" means any amount paid, or deemed paid, on a Receivable,
including from the proceeds of collateral securing such Receivables or paid by
the Seller as a Deemed Collection under Section 1.5(b).
"Collection Agent" is defined in Section 3.1(a).
"Collection Agent Fee" is defined in Section 3.6.
"Commitment" means, for each Committed Purchaser, the amount set forth on
Schedule II for such Committed Purchaser or in a Transfer Supplement, and, for
each Purchaser Group, the amount set forth on Schedule II for such Purchaser
Group, in each case, as adjusted in accordance with Sections 1.6 and 9.8.
"Commitment Percentage" means, for each Related Committed Purchaser in a
Purchaser Group, such Related Committed Purchaser's Commitment divided by the
total of all Commitments of all Related Committed Purchasers in such Purchaser
Group.
"Committed Conduit Purchaser" means each Person party to this Agreement
and listed as such on Schedule II hereto and each other Person that becomes a
Conduit Purchaser pursuant to a Transfer Supplement.
"Committed Purchaser" means each Related Committed Purchaser for a Conduit
Purchaser.
"Concentration Limit" means (i) an amount not to exceed 10% of the
aggregate outstanding principal balance of all Eligible Receivables for Obligors
(other than Special Obligors) with unsecured debt ratings of at least "A-" and
"A3" by S&P and Moody's, respectively, (ii) an amount not to exceed 5% of the
aggregate outstanding principal balance of all Eligible Receivables for Obligors
(other than Special Obligors) with unsecured debt ratings of
-2-
at least "BBB-" and "Baa3" but less than A- and A3 by S&P and Moody's,
respectively, and (iii) an amount not to exceed 2.5% of the aggregate
outstanding principal balance of all Eligible Receivables for Obligors (other
than Special Obligors) with unsecured debt ratings of below BBB- and Baa3 by S&P
and Moody's, respectively; provided, however, that if any Obligor (other than
Special Obligors) is not rated by either S&P or Moody's, the applicable
Concentration Limit shall be 2.5%.
"Conduit Purchaser" means each Person party to this Agreement and listed
as such on Schedule II hereto and each other Person that becomes a Conduit
Purchaser pursuant to a Transfer Supplement.
"Conduit Purchaser Investment Percentage" means a fraction, expressed as a
decimal, obtained by dividing the Investment of a Conduit Purchaser by the
Investment of all Purchasers.
"Conduit Purchaser Settlement" means the sum of all claims and rights to
payment pursuant to Section 1.5 or 1.7 or any other provision owed to a Conduit
Purchaser (or owed to the Agent or Purchaser Agent or the Collection Agent for
the benefit of a Conduit Purchaser) by the Seller that, if paid, would be
applied to reduce Investment.
"CP Dealer" means, at any time, each Person a Conduit Purchaser then
engages as a placement agent or commercial paper dealer.
"CP Discount" means, for any Discount Period, the amount of interest or
discount accrued, during such Discount Period on all the outstanding commercial
paper, or portion thereof, issued by a Conduit Purchaser to fund its Investment,
including all dealer commissions and other costs of issuing commercial paper,
whether any such commercial paper was issued specifically to fund such
Investment or is allocated, in whole or in part, to such funding.
"CP Rate" means, for any CP Tranche, a rate per annum as established
pursuant to the applicable Rate Supplement.
"Credit Agreement" means that certain Amended and Restated 5-Year
Revolving Credit Agreement dated as of June 27, 2001, among the Parent, certain
foreign subsidiaries, the lenders from time to time party thereto, Bank One, NA,
as administrative agent, The Chase Manhattan Bank, as syndication agent, and
Citicorp USA, Inc. and Bank of America, N.A., as documentation agents, as
amended from time to time in accordance with its terms.
"Credit and Collection Policy" means the Seller's credit and collection
policy and practices relating to Receivables attached hereto as Exhibit G.
"Credit Lyonnais" means Credit Lyonnais, acting through its New York
Branch, in its individual capacity and not in its capacity as the Agent.
"Days Sales Outstanding" means, at any time the same is to be determined,
an amount equal to the product of (i) the number of days in the most recently
completed calendar month and
-3-
(ii) the quotient obtained by dividing the outstanding balance of all
Receivables as of the last day of such calendar month by the aggregate amount of
sales generated during such month.
"Deemed Collections" is defined in Section 1.5(c).
"Default Ratio" means, at any time the same is to be determined, the ratio
of (i) the aggregate outstanding principal balance of all Defaulted Receivables
(minus Charge-Offs) on the last day of the most recently completed calendar
month to (ii) the aggregate outstanding principal balance of all Receivables on
the last day of such calendar month.
"Defaulted Receivable" means any Receivable (a) on which any amount is
unpaid more than 90 days past its original due date or (b) the Obligor on which
has suffered a Bankruptcy Event.
"Delinquency Ratio" means, at any time the same is to be determined, the
ratio of (a) the aggregate outstanding principal balance of all Delinquent
Receivables on the last day of the most recently completed calendar month to (b)
the aggregate outstanding principal balance of all Receivables on the last day
of such calendar month.
"Delinquent Receivable" means any Receivable (other than a Defaulted
Receivable), the outstanding balance on which any amount is 61 to 90 days past
due.
"Designated Financial Officer" means any Vice President and the Treasurer
of the Seller.
"Dilution" means, for any calendar month, the amount of Deemed Collections
deemed to be received during such calendar month pursuant to Section 1.5(b).
"Dilution Horizon Ratio" means, at any time the same is to be determined,
an amount calculated by dividing (a) the amount of sales generated during the
Dilution Horizon Ratio Period by (b) the Eligible Receivables Balance as of the
end of the most recently completed calendar month.
"Dilution Horizon Ratio Period" means, at any time the same is to be
determined, (i) for the period from the date hereof through and including
December 31, 2002, the two most recently completed months and (ii) at all times
thereafter, the period of time designated by the Agent on or prior to December
31, 2002, at the direction of the Purchaser Agents, to the Seller and the
Initial Collection Agent (after consultation thereof with each such party).
"Dilution Ratio" means, at any time the same is to be determined, the
ratio of (i) the total amount of decreases in outstanding principal balances of
Receivables due to Dilutions during the most recently completed calendar month
to (ii) the amount of sales generated during the Dilution Ratio Period.
"Dilution Ratio Period" means, at any time the same is to be determined,
(i) for the period from the date hereof through and including December 31, 2002,
the calendar month two
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months prior to the most recently completed calendar month and (ii) at all times
thereafter, the period of time designated by the Agent on or prior to December
31, 2002, at the direction of the Purchaser Agents, to the Seller and the
Initial Collection Agent (after consultation thereof with each such party).
"Dilution Reserve" means, at any time the same is to be determined, the
product of (i) the Dilution Reserve Percentage multiplied by (ii) the Eligible
Receivables Balance as of the end of the most recently completed calendar month.
"Dilution Reserve Percentage" means 17%; provided, however, that (i) while
a Downgrade is in effect or (ii) during any Performance Trigger Period, the
Dilution Reserve Percentage, at any time the same is to be determined, shall be
a percentage equal to the higher of (I) the product of (a) the sum of (x) 2.25
times the Expected Dilution Ratio, plus (y) the Dilution Volatility Component,
multiplied by (b) the Dilution Horizon Ratio and (II) 17%.
"Dilution Volatility Component" means, at any time the same is to be
determined, an amount (expressed as a percentage) equal to the product of (i)
the difference between (a) the highest Dilution Ratio for the preceding 12
calendar months and (b) the Expected Dilution Ratio multiplied by (ii) a
fraction, the numerator of which is equal to the amount calculated in (i)(a) of
this definition and the denominator of which is equal to the amount calculated
in (i)(b) of this definition.
"Discount" means, for any Tranche Period, (a) the product of (i) the
Discount Rate for such Tranche Period, (ii) the total amount of Investment
allocated to such Tranche Period, and (iii) the number of days elapsed during
the Tranche Period divided by (b) 360.
"Discount Period" means either (A), with respect to any Settlement Date or
the Termination Date, the period from and including the preceding Settlement
Date (or if none, the date that the first Incremental Purchase is made
hereunder) to but not including such Settlement Date or Termination Date, as
applicable, or (B), with respect to Atlantic, from the first day to the last day
of the Tranche Period.
"Discount Rate" means, for any Tranche Period, the CP Rate, the Eurodollar
Rate or the Prime Rate, as applicable, but after the occurrence of a Termination
Event each such rate shall be equal to the Prime Rate plus 1.50% per annum with
respect to the Investment of the Purchasers.
"Discount Reserve" means, at any time the same is to be determined, the
sum of (a) the product of (i) 2.25, (ii) the Prime Rate, (iii) the Eligible
Receivables Balance, and (iv) the Days Sales Outstanding divided by 360 and (b)
accrued and unpaid Discount at such time.
"Dollar" and "$" means lawful currency of the United States of America.
"Downgrade" means any day that the Parent's long-term unsecured,
unsubordinated indebtedness rating by Moody's is below "Baa3" or by S&P is below
"BBB-" (or Moody's or S&P has withdrawn or suspended such rating).
-5-
"Early Payment Fee" is defined in the applicable Rate Supplement.
"Eligible Receivable" means, at any time, any Receivable:
(i) the Obligor of which (a) is a resident of, or organized under
the laws of, or with its chief executive office in, the USA; (b) is not an
Affiliate of any of the parties hereto or any Originator; (c) is not a
government or a governmental subdivision or agency; and (d) has not
suffered a Bankruptcy Event;
(ii) evidenced by a purchase order and a conforming invoice or a
conforming notice of shipment and due and payable within 60 days after the
invoice therefor; provided, however, up to 10% of the aggregate
outstanding principal balance of all Eligible Receivables may be stated to
be due and payable within 120 days after the invoice therefor;
(iii) which is not a Defaulted Receivable, a Delinquent Receivable
or a Charge-Off;
(iv) which is an "account" or "chattel paper" within the meaning of
Section 9-102 of the UCC of all applicable jurisdictions;
(v) which is denominated and payable only in Dollars in the USA;
(vi) which arises under a contract that 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 (whether or not relating to the delivered goods
giving rise to the Receivable, including partial offsets), counterclaim,
defense or other Adverse Claim, and is not an executory contract or
unexpired lease within the meaning of Section 365 of the Bankruptcy Code;
(vii) which arises under a contract that (A) contains an obligation
to pay a specified sum of money, contingent only upon the sale or lease of
goods or the provision of services by the Originator, (B) does not require
the Obligor under such contract to consent to the transfer, sale or
assignment of the rights of the related Originator under such contract,
(C) does not contain a confidentiality provision that purports to restrict
any Purchaser's exercise of rights under this Agreement, including,
without limitation, the right to review such contract, and (D) directs
that payment be made to a Lock-Box;
(viii) which does not, in whole or in part, contravene any law, rule
or regulation applicable thereto (including, without limitation, those
relating to usury, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy);
(ix) which satisfies all applicable requirements of the Credit and
Collection Policy and was generated in the ordinary course of the related
Originator's business from the sale of goods or provision of services to a
related Obligor solely by such Originator;
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(x) is not evidenced by any promissory note or other instrument;
(xi) does not represent any amount due with respect to any sales or
similar tax;
(xii) is not a Changeover Receivable;
(xiii) is not due from any Obligor the Defaulted Receivables of
which exceed 25% of such Obligor's Receivables; and
(xiv) which is not a re-billing of a previously performed and
invoiced delivery of goods with a date different from the original invoice
date.
"Eligible Receivables Balance" means, at any time, the aggregate
outstanding principal balance of all Eligible Receivables at such time, less the
portion of the aggregate outstanding principal balance of (a) Eligible
Receivables of any Obligor (other than a Special Obligor) at such time which
exceed the Concentration Limit, and (b) Eligible Receivables of any Special
Obligor which exceed the Special Limit, at such time.
"Eurodollar Rate" means, for any Tranche Period for a LIBOR Tranche, a
rate established pursuant to the applicable Rate Supplement.
"Expected Dilution Ratio" means, at any time the same is to be determined,
the 12-month rolling average of the Dilution Ratio for the 12 calendar months
then most recently ended.
"Face Amount" means the face amount of any Conduit Purchaser commercial
paper issued on a discount basis or, if not issued on a discount basis, the
principal amount of such note and interest accrued and scheduled to accrue
thereon to its stated maturity.
"Federal Funds Rate" means, for each Purchaser Group, for any day the
greater of (i) the average rate per annum as determined by the applicable
Purchaser Agent at which overnight Federal funds are offered to such Purchaser
Agent for such day by major banks in the interbank market, and (ii) if Credit
Lyonnais is borrowing overnight funds from a Federal Reserve Bank that day, the
average rate per annum at which such overnight borrowings are made on that day.
Each determination of the Federal Funds Rate by the applicable Purchaser Agent
shall be conclusive and binding on the Seller except in the case of manifest
error.
"Fee Letter" means, for each Purchaser Group, the letter agreement, if
any, between the Seller and the Purchaser Agent for the applicable Purchaser
Group.
"Fitch" means Fitch, Inc., and its successors in interest.
"Funding Agreement" means any agreement or instrument executed by a
Conduit Purchaser and executed by or in favor of any Funding Source or executed
by any Funding Source at the request of a Conduit Purchaser.
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"Funding Source" means, for a Conduit Purchaser, any insurance company,
bank or other financial institution providing liquidity, back-up purchase or
credit support for such Conduit Purchaser.
"GAAP" means generally accepted accounting principles in the USA, applied
on a consistent basis.
"Governmental Authority" means any (a) Federal, state, municipal or other
governmental entity, board, bureau, agency or instrumentality, (b)
administrative or regulatory authority (including any central bank or similar
authority) or (c) court, judicial authority or arbitrator, in each case, whether
foreign or domestic.
"Incremental Purchase" is defined in Section 1.1(b).
"Initial Collection Agent" is defined in the first paragraph hereof.
"Instructing Group" means (i) at any time there are three or more
Purchaser Groups, the Purchaser Agents representing Purchaser Groups with at
least 66-2/3% of the Commitments and (ii) at any time there are fewer than three
Purchaser Groups, the Purchaser Agents representing Purchaser Groups with 100%
of the Commitments.
"Intended Tax Characterization" is defined in Section 9.18.
"Interim Liquidation" means that no Reinvestment Purchases are made by any
Purchaser at a time before the Termination Date, as established pursuant to
Section 1.2.
"Investment" means, for each Purchaser (or Purchaser Group), (a) the sum
of (i) all Incremental Purchases by such Purchaser (or Purchaser Group) and (ii)
the aggregate amount of any payments or exchanges made by, or on behalf of, such
Purchaser (or Purchaser Group) to any other Purchaser (or Purchaser Group) to
acquire Investment from such other Purchaser minus (b) all Collections, amounts
received from other Purchasers and other amounts received or exchanged and, in
each case, applied by the Agent or such Purchaser (or Purchaser Group) to reduce
such Purchaser's (or Purchaser Group's) Investment. A Purchaser's (or Purchaser
Group's) Investment shall be restored to the extent any amounts so received or
exchanged and applied are rescinded or must be returned for any reason.
"La Fayette" is defined in the first paragraph hereof.
"Letter Agreement" means that certain Letter Agreement dated as of
September 27, 2001 between ArvinMeritor, Inc. and the Originators.
"Limited Guaranty" means the Limited Guaranty, dated the date hereof, by
the Parent in favor of the Agent.
"Liquidation Period" for any Purchaser means all times (x) during an
Interim Liquidation and (y) on and after the Termination Date and, for a Conduit
Purchaser only, also
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means all times when such Conduit Purchaser is not making Reinvestment Purchases
pursuant to Section 1.1(d).
"Lock-Box" means each post office box or bank box listed on Exhibit D, as
revised pursuant to Section 5.1(i).
"Lock-Box Account" means each account maintained by the Seller at a
Lock-Box Bank for the purpose of receiving or concentrating Collections.
"Lock-Box Agreement" means each agreement between the Seller and/or an
Originator(s) and a Lock-Box Bank concerning a Lock-Box Account.
"Lock-Box Bank" means each bank listed on Exhibit D, as revised pursuant
to Section 5.1(i).
"Lock-Box Letter" means a letter in substantially the form of Exhibit E
(or otherwise acceptable to the Agent) from the Seller to each Lock-Box Bank,
acknowledged and accepted by such Lock-Box Bank and the Agent.
"Loss Horizon Ratio" means, at any time the same is to be determined, the
ratio of (i) the aggregate outstanding balance of Receivables generated by the
Originators during the most recent four month period to (ii) the Eligible
Receivables Balance as of the last day of such period.
"Loss Ratio" means, at any time the same is to be determined, the highest
average Aged Receivables Ratio for any consecutive three month period ended
during the previous 12 months.
"Loss Reserve" means, at any time the same is to be determined, the
product of (i) the Eligible Receivables Balance as of the end of the most
recently completed calendar month multiplied by (ii) the Loss Reserve
Percentage.
"Loss Reserve Percentage" means, at any time the same is to be determined,
the greater of (i) 15.0% and (ii) the product of (a) 2.25, (b) the Loss Ratio
and (c) the Loss Horizon Ratio.
"Loss-to-Liquidation Ratio" means, at any time the same is to be
determined, the ratio of (i) the outstanding balance of Receivables that become
Charge-Offs during the most recently completed calendar month to (ii) the
aggregate amount of Collections during such calendar month.
"Matured Aggregate Investment" means, at any time, the aggregate Matured
Value of all Conduit Purchasers' Investments plus the total Investments of all
other Purchasers then outstanding.
"Matured Value" means, of any Investment, the sum of such Investment and
all unpaid Discount, fees and other amounts scheduled to become due (whether or
not then due) on such
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Investment during all Tranche Periods to which any portion of such Investment
has been allocated.
"Maximum Incremental Purchase Amount" means, at any time, the lesser of
(a) the difference between the Aggregate Commitment and the Aggregate Investment
then outstanding and (b) the difference between the Aggregate Commitment and the
Matured Aggregate Investment then outstanding.
"Moody's" means Moody's Investors Service, and its successors in interest.
"Net Worth" means, at any time the same is to be determined, the total
shareholders' equity (including capital stock, additional paid-in capital and
retained earnings after deducting treasury stock) which would appear on the
balance sheet of the Seller determined in accordance with GAAP.
"Obligor" means, for any Receivable, each Person obligated to pay such
Receivable and each guarantor of such obligation.
"Originators" means Maremont Exhaust Products, Inc., a Delaware
corporation, Purolator Products NA, Inc., a Delaware corporation, Gabriel Ride
Control Products, Inc., a Delaware corporation, Meritor Heavy Vehicle Systems,
LLC, a Delaware limited liability company, Meritor Heavy Vehicle Braking Systems
(USA), Inc., a Delaware corporation, Euclid Industries, LLC, a Delaware limited
liability company, ArvinMeritor OE, LLC, a Delaware limited liability company,
Roll Coater, Inc., an Indiana corporation, AVM, Inc., a South Carolina
corporation and each other entity which becomes an "Originator" hereunder
pursuant to Section 7.3 hereof, but excluding any of the foregoing entities
which is removed as an "Originator" hereunder pursuant to Section 7.3 hereof.
"Outside Servicing Fee" means the fee agreed to by the Collection Agent,
the Seller and the Agent.
"Parent" means ArvinMeritor, Inc., an Indiana corporation.
"Performance Trigger Period" shall mean the period of time commencing on
the date that the Dilution Ratio exceeds 9.25% and ending on the date the
Dilution Ratio is 8.0% or less for three consecutive calendar months.
"Periodic Report" is defined in Section 3.3.
"Person" means an individual, partnership, corporation, limited liability
company, association, joint venture, Governmental Authority or other entity of
any kind.
"Potential Termination Event" means any Termination Event or any event or
condition that with the lapse of time or giving of notice, or both, would
constitute a Termination Event.
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"Prime Rate" means, for each Purchaser Group, (A) for any period, the
daily average during such period of the greater of (i) the floating commercial
loan rate per annum of the applicable Purchaser Agent (which rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer by the applicable Purchaser Agent) announced from time to time
as its prime rate or equivalent for Dollar loans in the USA, changing as and
when said rate changes and (ii) the Federal Funds Rate plus 0.50% or (B) in
reference to a Prime Tranche, the "Prime Rate" specified in the applicable Rate
Supplement.
"Purchase" is defined in Section 1.1(a).
"Purchase Agreement" means the Amended and Restated Purchase and Sale
Agreement dated as of the date hereof between the Seller and the Originators.
"Purchase Amount" is defined in Section 1.1(c).
"Purchase Date" is defined in Section 1.1(c).
"Purchase Interest" means, for a Purchaser, the percentage ownership
interest in the Receivables and Collections held by such Purchaser, calculated
when and as described in Section 1.1(a); provided, however, that (except for
purposes of computing a Purchase Interest or the Sold Interest in Section 1.5,
1.7 or the last sentence in Section 2.3 (a) and (b)) at any time the Sold
Interest would otherwise exceed 100% each Purchaser then holding any Investment
shall have its Purchase Interest reduced by multiplying such Purchase Interest
by a fraction equal to 100% divided by the Sold Interest otherwise then in
effect, so that the Sold Interest is thereby reduced to 100%.
"Purchased Percentage" means, for any Put, for each Committed Purchaser,
its Commitment Percentage or such lesser percentage as is necessary to prevent
the Purchase Price of such Purchaser from exceeding its Unused Commitment.
"Purchaser" means each Conduit Purchaser and the Related Committed
Purchasers.
"Purchaser Agent" means each Person party to this Agreement and listed as
such on Schedule II hereto and each other Person who becomes a party to this
Agreement as a Purchaser Agent pursuant to a Transfer Supplement.
"Purchaser Group" means, for each Conduit Purchaser, such Conduit
Purchaser, its Related Committed Purchasers (if any), and the Purchasers party
to its Transfer Agreement.
"Purchaser Reserve Percentage" means, for each Purchaser, the Reserve
Percentage multiplied by a fraction, the numerator of which is such Purchaser's
outstanding Investment and the denominator of which is the Aggregate Investment.
"Put" is defined in Section 2.l(a).
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"Ratable Share" means, for each Purchaser Group, such Purchaser Group's
aggregate Commitments divided by the aggregate Commitments of all Purchaser
Groups.
"Rate Supplement" means each agreement among the Seller, the Collection
Agent, a Purchaser Agent and the applicable Related Committed Purchasers
designated a "Rate Supplement" for purposes of this Agreement.
"Rating Agency" means, for any Conduit Purchaser, each rating agency such
Conduit Purchaser chooses to rate its commercial paper notes at any time.
"Ratings" means, for any Conduit Purchaser, the ratings by the Rating
Agencies of the indebtedness for borrowed money of such Conduit Purchaser.
"Receivable" means the obligation of an Obligor to pay for merchandise
sold or services rendered by an Originator and includes the Seller's rights to
payment of any interest or finance charges and in the merchandise (including
returned goods) and contracts relating to such Receivable, all security
interests, guaranties and property securing or supporting payment of such
Receivable, all Records and all proceeds of the foregoing. During any Interim
Liquidation and on and after the Termination Date, the term "Receivable" shall
only include receivables existing on the date such Interim Liquidation commenced
or Termination Date occurred, as applicable. Deemed Collections shall reduce the
outstanding balance of Receivables hereunder, so that any Receivable that has
its outstanding balance deemed collected shall cease to be a Receivable
hereunder after (x) the Collection Agent receives payment of such Deemed
Collections under Section 1.5(b) or (y) if such Deemed Collection is received
before the Termination Date, an adjustment to the Sold Interest permitted by
Section 1.5(c) is made.
"Receivables Turnover Ratio" means, with respect to a calendar month, an
amount, expressed in days, obtained by multiplying (a) a fraction, (i) the
numerator of which is equal to the aggregate outstanding principal balance of
all Receivables as of the first day of such calendar month and (ii) the
denominator of which is equal to Collections during the same such calendar
month; times (b) 30.
"Records" means, for any Receivable, all contracts, books, records and
other documents or information (including computer programs, tapes, disks,
software and related property and rights) relating to such Receivable or the
related Obligor.
"Reinvestment Purchase" is defined in Section 1.1(b).
"Related Committed Purchaser" means each Person party to this Agreement
and listed as such on Schedule II hereto and each other Person that becomes a
Related Committed Purchaser pursuant to a Transfer Supplement.
"Related Security" means all of each Originator's rights in the
merchandise (including returned goods) and contracts relating to the
Receivables, all security interests, guaranties and property securing or
supporting payment of the Receivables, all Records and all proceeds of the
foregoing and all of the Seller's rights under the Purchase Agreement.
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"Reserve Percentage" means, at any time, the quotient obtained by dividing
(a) the Total Reserve by (b) the Eligible Receivables Balance.
"Scheduled Termination Date" means September 25, 2003.
"Seller" is defined in the first paragraph hereof.
"Seller Account" means an account designated by the Seller to the Agent
with at least ten (10) days prior notice.
"Seller Entity" means the Parent and each Originator.
"Seller Servicing Fee" means, for each month, the fee agreed to by the
Collection Agent, the Seller and the Agent.
"Servicer Reserve" means, at any time the same is to be determined, the
sum of (a) the product of (i) 2.25, (ii) 0.50%, (iii) the Eligible Receivables
Balance and (iv) the Days Sales Outstanding divided by 360 and (b) the accrued
and unpaid Seller Servicing Fee or Outside Servicing Fee, as applicable.
"Settlement Date" means the 25th day of each calendar month.
"Sold Interest" is defined in Section 1.1(a).
"Special Limit" means (i) an amount not to exceed 35% of the aggregate
outstanding principal balance of all Eligible Receivables for Special Obligors
with unsecured debt ratings of at least "A-" and "A3" by S&P and Moody's,
respectively, (ii) an amount not to exceed 15% of the aggregate outstanding
principal balance of all Eligible Receivables for Special Obligors with
unsecured debt ratings of at least "BBB+" and "Baa1" but less than "A-" and "A3"
by S&P and Moody's, respectively, (iii) an amount not to exceed 10% of the
aggregate outstanding principal balance of all Eligible Receivables for Special
Obligors with unsecured debt ratings of at least "BBB" and "Baa2" but less than
"BBB+" and "Baa1" by S&P and Moody's, respectively, (iv) an amount not to exceed
7.5% of the aggregate outstanding principal balance of all Eligible Receivables
for Special Obligors with unsecured debt ratings of at least "BBB-" and "Baa3"
but less than "BBB" and "Baa2" by S&P and Moody's, respectively, and (v) an
amount not to exceed 2.5% of the aggregate outstanding principal balance of all
Eligible Receivables for Special Obligors with unsecured debt ratings of below
"BBB-" and "Baa3" by S&P and Moody's, respectively; provided, however, that if
any Special Obligor is not rated by either S&P or Moody's, the applicable
Concentration Limit shall be 2.5%.
"Special Obligors" means Ford Motor Company and its consolidated
subsidiaries, General Motors Corporation and its consolidated subsidiaries and
Daimler Chrysler Corporation and its consolidated subsidiaries.
"S&P" means Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, and its successors in interest.
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"Subordinated Note" means each revolving promissory note issued by the
Seller to an Originator under the Purchase Agreement.
"Subsidiary" means any Person of which at least a majority of the voting
stock (or equivalent equity interests) is owned or controlled by the Parent or
any Originator or by one or more other Subsidiaries of the Parent or any
Originator.
"Taxes" means all taxes, charges, fees, levies or other assessments
(including income, gross receipts, profits, withholding, excise, property,
sales, use, license, occupation and franchise taxes and including any related
interest, penalties or other additions) imposed by any jurisdiction or taxing
authority (whether foreign or domestic).
"Termination Date" means the earliest of (a) the date of the occurrence of
a Termination Event described in clause (e) of the definition of Termination
Event, (b) the date designated by the Agent to the Seller at any time after the
occurrence and during the continuance of any other Termination Event, (c) the
Business Day designated by the Seller with no less than thirty (30) Business
Days prior notice to the Agent and (d) the Scheduled Termination Date.
"Termination Event" means the occurrence of any one or more of the
following:
(a) any representation, warranty, certification or statement made,
or deemed made by the Seller, any Seller Entity or the Collection Agent
in, or pursuant to, any Transaction Document proves to have been incorrect
in any material respect when made or deemed made; or
(b) the Collection Agent or the Seller fails to make any payment or
other transfer of funds hereunder that is to be applied to (i) Aggregate
Investment when due (which shall include, without limitation, any payment
required to be made by the Seller pursuant to Section 1.5 hereof), (ii)
Discount within five (5) days when due or (iii) any and all other amounts
due hereunder within ten (10) days when due; or
(c) the Seller fails to observe or perform any covenant or agreement
contained in Sections 5.1(b), (g), (i), (j), (k) or (p), the Collection
Agent fails to observe or perform any covenant or agreement contained in
Sections 3.3, 5.2(b), (g), (i) or (j) or an Originator fails to perform
any covenant or agreement in Sections 5.1(b), (g), (h), (i) or (j) of the
Purchase Agreement; or
(d) the Seller, any Seller Entity or the Collection Agent (or any
sub-collection agent) fails to observe or perform any other term, covenant
or agreement under any Transaction Document not otherwise governed by the
provisions of clause (b) or (c) above, and such failure remains unremedied
for ten Business Days; or
(e) the Seller, the Collection Agent, any Seller Entity or any
Subsidiary suffers a Bankruptcy Event; or
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(f) the average Delinquency Ratio for the three most recently
completed calendar months exceeds 5%, the average Default Ratio for the
three most recently completed calendar months exceeds 7%, the average
Dilution Ratio for the three most recently completed calendar months
exceeds 7%, the Loss-to Liquidation Ratio exceeds 2.5% or the average
Turnover Ratio for the three most recently completed calendar months
exceeds 90 days; or
(g) (i) the Seller, any Seller Entity or any Affiliate, directly or
indirectly, disaffirms or contests the validity or enforceability of any
Transaction Document or (ii) any Transaction Document fails to be the
enforceable obligation of the Seller, any Seller Entity or any Affiliate
party thereto; or
(h) the Seller, any Seller Entity or any Subsidiary generally does
not pay its debts as such debts become due or admits in writing its
inability to pay its debts generally; or
(i) the Parent's long-term unsecured, unsubordinated indebtedness is
rated less than "BB-" by S&P or "Ba3" by Moody's (or S&P or Moody's has
withdrawn or suspended such rating); or
(j) the Parent shall fail to own and control, directly or
indirectly, 100% of the outstanding voting stock of the Seller and each
Originator.
Notwithstanding the foregoing, a failure of a representation or warranty or
breach of any covenant described in clause (a), (c) or (d) above shall not
constitute a Termination Event if (i) the Seller has been deemed to have
collected the affected Receivable pursuant to Section 1.5(b) or (ii) such
failure or breach was by any Originator and the Parent shall have remedied such
failure or breach pursuant to the terms of the Limited Guaranty.
"Total Reserve" means an amount equal to the sum of (i) the Discount
Reserve, (ii) the Dilution Reserve, (iii) the Loss Reserve and (iv) the Servicer
Reserve.
"Tranche" means a portion of the Investment of a Conduit Purchaser or of
the Committed Purchasers allocated to a Tranche Period pursuant to Section 1.3.
A Tranche is a (i) CP Tranche, (ii) LIBOR Tranche or (iii) Prime Tranche
depending whether Discount accrues during its Tranche Period based on a (i) CP
Rate, (ii) Eurodollar Rate or (iii) Prime Rate.
"Tranche Period" means a period of days ending on a Business Day selected
pursuant to Section 1.3, which (i) for a CP Tranche shall not exceed 270 days,
(ii) for a LIBOR Tranche shall not exceed 180 days, and (iii) for a Prime
Tranche shall not be less than 2 days and shall not exceed 30 days.
"Transaction Documents" means this Agreement, the Fee Letter, the Limited
Guaranty, the Purchase Agreement, the Subordinated Note(s), the Transfer
Agreements, the Rate Supplements and all other documents, instruments and
agreements executed or furnished in connection herewith and therewith.
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"Transfer Agreement" means each transfer, liquidity or asset purchase
agreement entered into among a Conduit Purchaser, its Purchaser Agent and its
Related Committed Purchasers in connection with this Agreement.
"Transfer Supplement" is defined in Section 9.8.
"Turnover Ratio" means, with respect to any calendar month, an amount,
expressed in days, obtained by multiplying (a) a fraction, (i) the numerator of
which is equal to the aggregate outstanding balance of the Receivables on the
first day of such calendar month and (ii) the denominator of which is equal to
Collections on the Receivables during such calendar month multiplied by (b) 30.
"UCC" means, for any state, the Uniform Commercial Code as in effect in
such state.
"Unused Aggregate Commitment" means, at any time, the difference between
the Aggregate Commitment then in effect and the outstanding Matured Aggregate
Investment.
"Unused Commitment" means, for any Committed Purchaser at any time, the
difference between its Commitment and its Investment then outstanding.
"USA" means the United States of America (including all states and
political subdivisions thereof).
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Unless otherwise inconsistent with the
terms of this Agreement, all accounting terms used herein shall be interpreted,
and all accounting determinations hereunder shall be made, in accordance with
GAAP. Amounts to be calculated hereunder shall be continuously recalculated at
the time any information relevant to such calculation changes.
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Exhibit 10-k
SCHEDULE II
PURCHASERS
CONDUIT PURCHASER RELATED PURCHASER AGENT COMMITMENTS OF RELATED
AND RELATED COMMITTED COMMITTED PURCHASER
PURCHASER
Giro Balanced Funding Bayerische Landesbank, New
Corporation York Branch, as Purchaser
Agent
Bayerische Landesbank, $75,000,000
Cayman Islands Branch, as
Committed Purchaser
La Fayette Asset Credit Lyonnais, acting $100,000,000
Securitization LLC through its New York Branch
Amsterdam Funding ABN AMRO Bank N.V. $75,000,000
Corporation