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WESCO RECEIVABLES CORP.
AND
WESCO DISTRIBUTION - CANADA, INC.
AND
WESCO DISTRIBUTION, INC.
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CANADIAN RECEIVABLES SALE AGREEMENT
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Dated as of June 5, 1998
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS.............................. 1
Section 1.01. Certain Defined Terms....................................... 1
Section 1.02. Other Definitional Provisions............................... 5
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES.................... 6
Section 2.01. Purchase and Sale of Receivables............................ 6
Section 2.02. Purchase Price.............................................. 9
Section 2.03. Payment of Purchase Price................................... 9
Section 2.04. No Repurchase............................................... 11
Section 2.05. Rebates, Adjustments, Returns and Reductions; Modifications. 11
Section 2.06. Limited Repurchase Obligation............................... 11
Section 2.07. Obligations Unaffected...................................... 12
Section 2.08. Certain Charges............................................. 12
Section 2.09. Certain Allocations......................................... 12
Section 2.10. Further Assurances.......................................... 12
Section 2.11. Purchase of Sellers' Interest in Receivables and
Receivables Property ....................................... 13
ARTICLE III
CONDITIONS TO PURCHASES........................ 13
Section 3.01. Conditions Precedent to Company's Initial Purchase.......... 13
Section 3.02. Conditions Precedent to the Addition of a Seller............ 16
Section 3.03. Conditions Precedent to All the Company's Purchases of
Receivables ................................................ 18
Section 3.04. Condition Precedent to Each Seller's Obligations............ 19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..................... 19
Section 4.01. Representations and Warranties of the Sellers............... 19
Section 4.02. Representations and Warranties of the Sellers Relating
to the Receivables.......................................... 24
Section 4.03. Representations and Warranties of the Company............... 24
ARTICLE V
GENERAL COVENANTS........................... 26
Section 5.01. Affirmative Covenants of the Sellers........................ 26
Section 5.02. Reporting Requirements...................................... 31
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Section 5.03. Negative Covenants.......................................... 31
ARTICLE VI
PURCHASE TERMINATION EVENTS...................... 33
Section 6.01. Purchase Termination Events................................. 33
Section 6.02. Additional Remedies......................................... 36
ARTICLE VII
INDEMNIFICATION; EXPENSES; COSTS.................... 36
Section 7.01. Indemnities by the Sellers.................................. 36
Section 7.02. Indemnities by the Company.................................. 38
ARTICLE VIII
SELLER NOTE .............................. 38
Section 8.01. Seller Note................................................. 38
Section 8.02. Restrictions on Transfer of Seller Note..................... 39
Section 8.03. Aggregate Amount............................................ 39
ARTICLE IX
MISCELLANEOUS............................. 39
Section 9.01. Amendment................................................... 39
Section 9.02. Notices, Etc................................................ 39
Section 9.03. No Waiver; Remedies......................................... 40
Section 9.04. Successors and Assigns...................................... 40
Section 9.05. Governing Law............................................... 40
Section 9.06. Jurisdiction; Consent to Service of Process................. 41
Section 9.07. Integration................................................. 41
Section 9.08. Captions and Cross References............................... 41
Section 9.09. Execution in Counterparts................................... 41
Section 9.10. No Petition in Bankruptcy................................... 41
Section 9.11. Addition of Sellers......................................... 42
Section 9.12. Treatment of Sellers other than WESCO Canada; Termination
Thereof .................................................... 42
Section 9.13. Termination................................................. 42
EXHIBIT A Form of Seller Note
EXHIBIT B Form of Additional Seller Supplement
EXHIBIT C Form of PPSA Certificate
EXHIBIT D Form of Assignment
SCHEDULE 1 Sellers' Authorized Officers
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SCHEDULE 2 Location of Each Seller's Chief Executive Office
SCHEDULE 3 Lockbox Banks, the Lockbox Processors, and Eligible
Segregated Account Banks
SCHEDULE 4 Address for Notice to Servicer
SCHEDULE 5 Seller Trade Names
SCHEDULE 6 Definition of Discounted Percentage
SCHEDULE 7 Form of Financial Statement Note
SCHEDULE 8 Form of General Legend
SCHEDULE 9 Form of True Sale Opinion
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CANADIAN RECEIVABLES SALE AGREEMENT
This CANADIAN RECEIVABLES SALE AGREEMENT dated as of June 5, 1998
(this "Agreement"), is among WESCO DISTRIBUTION, INC., a Delaware corporation
("WESCO") in its capacity as servicer (the "Servicer"), WESCO
Distribution-Canada, Inc., an Ontario corporation ("WESCO Canada") in its
capacity as a seller (a "Seller") and WESCO RECEIVABLES CORP., a Delaware
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, WESCO Canada intends to sell Receivables and Receivables
Property (both as hereinafter defined) to the Company on the terms and subject
to the conditions set forth in this Agreement;
WHEREAS, the Company desires to purchase Receivables and Receivables
Property from the Sellers on the terms and subject to the conditions set forth
in this Agreement;
WHEREAS, the Sellers and the Company desire the transfer of
Receivables and Receivables Property from the Sellers to the Company to be a
true sale providing the Company with the full benefits of ownership of the
Receivables; and
WHEREAS, to obtain the necessary funds to purchase such Receivables
and Receivables Property, the Company has entered into the Pooling Agreement (as
hereinafter defined);
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. Unless otherwise defined
herein, capitalized terms which are used herein shall have the meanings assigned
to such terms in Section 1.1 of the Pooling Agreement, among the Company, the
Servicer and the Trustee. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Additional Seller Supplement" means an instrument substantially in
the form of Exhibit B hereto pursuant to which a Subsidiary of WESCO Canada
becomes a Seller party hereto.
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"Articles" has the meaning set out in Section 3.1(a).
"Assignment" has the meaning specified in Section 2.1(c).
"Authorized Officers" means those officers of the Sellers designated
in Schedule 1 hereto (or in such other Schedule as may be delivered by the
Sellers to the other parties hereto from time to time) as duly authorized to
execute and deliver this Agreement and any instruments or documents in
connection herewith on behalf of the Sellers and to take, from time to time, all
other actions on behalf of the Sellers in connection herewith.
"Canadian Dollars" means the lawful currency of Canada.
"Closing Date" means the date of the initial issuance of the
Investor Certificates.
"Collections" shall mean all collections, including the Aggregate
Uncleared Funds Amount, and all amounts received in respect of the Receivables,
including Recoveries, Seller Repurchase Payments, Seller Adjustment Payments,
Servicer Indemnification Amounts paid by the Servicer and any other payments
received in respect of Dilution Adjustments, together with all collections
received in respect of the Related Property in the form of cash, checks, wire
transfers or any other form of cash payment, and all proceeds of Receivables and
collections thereof (including, without limitation, collections constituting an
account or general intangible or evidenced by a note, instrument, letter of
credit, security, contract, security agreement, chattel paper or other evidence
of indebtedness or security, whatever is received upon the sale, exchange,
collection or other disposition of, or any indemnity, warranty or guaranty
payable in respect of, the foregoing and all "proceeds", as defined in the PPSA
as in effect in the Province of Ontario, of the foregoing), but in any event,
not including any collections of Excluded Receivables.
"Contract" means a contract between any Seller and any Person
pursuant to or under which such Person shall be obligated to make payments to
such Seller.
"Discounted Percentage" has the meaning specified in Schedule 6
hereto.
"Early Termination" shall have the meaning specified in Section
6.01.
"Effective Date" means (i) with respect to WESCO Canada on the date
hereof and (ii) with respect to each Subsidiary of WESCO Canada added as a
Seller pursuant to Section 9.12, the Seller Addition Date with respect to each
such Subsidiary.
"Excluded Receivables" means Receivables (without giving effect to
the exclusion of Excluded Receivables from the definition thereof) (i) owed by
Obligors not resident in Canada, or which are denominated in a currency other
than Canadian Dollars, (ii) owed to a Seller by a vendor of merchandise to such
Seller, which relates to the merchandise sold by such vendor or promotional
programs of such vendor.
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"Insolvency Event" with respect to the Seller, shall mean the
occurrence of any one or more of the Purchase Termination Events specified in
subsection 6.01(f).
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, deemed trust, pledge, hypothec, encumbrance, charge or security
interest in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement relating
to such asset and (c) in the case of securities, any purchase option, call or
other similar right of a third party with respect to such securities.
"Material Adverse Effect" shall mean, with respect to any Seller,
(a) a material impairment of the ability of such Seller to perform its
obligations under the Transaction Documents, (b) a material impairment of the
validity or enforceability of any of the Transaction Documents against such
Seller, (c) a material impairment of the collectibility of the Receivables
originated by such Seller taken as a whole or (d) a material impairment of the
interests, rights or remedies of the Company under the Transaction Documents or
the Receivables taken as a whole.
"Ontario PPSA" means the PPSA as in effect from time to time in the
Province of Ontario.
"Payment Date" has the meaning specified in subsection 2.03(a).
"Pooling Agreement" means the Pooling Agreement dated as of the date
hereof, among the Company, the Servicer and the Trustee on behalf of the
Certificateholders, as such agreement may be amended, supplemented, waived, or
otherwise modified from time to time, including, without limitation, the Series
1998-1 Supplement dated as of the date hereof among the Company, the Servicer
and the Trustee.
"Potential Purchase Termination Event" means any condition or act
specified in Section 6.01 that, with the giving of notice or the lapse of time
or both, would become a Purchase Termination Event.
"PPSA" means, in respect of each province or territory in Canada
(other than Quebec), the Personal Property Security Act as from time to time in
effect in such province or territory, and in respect of Quebec, the Civil Code
of Quebec as from time to time in effect in such province; provided, however,
that in the case of the Province of Newfoundland and the Northwest Territories,
until such time as a personal property security act or similar legislation comes
into force in such province or territory, the term "PPSA" in respect of such
province or territory means the assignment of book debts act as from time to
time in effect in such province or territory; provided, further, that if any
terms which are used herein are expressed to be defined in the PPSA of a
particular jurisdiction, and such particular jurisdiction's PPSA does not define
such term, then such term shall have the meaning ascribed to it in the Ontario
PPSA.
"Purchased Receivable" means, at any time, any Receivable sold to
the Company by any Seller pursuant to, and in accordance with the terms of, this
Agreement and not theretofore resold to such Seller pursuant to subsection
2.01(b) or Sections 2.06 or 2.11.
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"Purchased Receivables Percentage" means, with respect to any Seller
as to which WESCO Canada has submitted a Seller Termination Request, the
percentage equivalent of a fraction, the numerator of which is an amount equal
to the aggregate outstanding Principal Amount of Purchased Receivables sold by
such Seller as of the applicable Seller Termination Request Date, and the
denominator of which is an amount equal to the aggregate outstanding Principal
Amount of all Purchased Receivables as of such date.
"Purchase Price" has the meaning specified in Section 2.02.
"Purchase Termination Date" means, with respect to any Seller, the
date on which the Company's obligation to purchase Receivables from such Seller
shall terminate, which shall be the date on which an Early Termination occurs
with respect to such Seller.
"Purchase Termination Event" has the meaning specified in Section
6.01.
"Receivable" shall mean the indebtedness and payment obligations of
any Person to a Seller or acquired by a Seller (including, without limitation,
obligations constituting an account or general intangible or evidenced by a
note, instrument, contract, security agreement, chattel paper or other evidence
of indebtedness or security) arising from a sale of merchandise or the provision
of services by such Seller or the Person from whom such indebtedness and payment
obligation was acquired by a Seller, including, without limitation, any right to
payment for goods sold or for services rendered, and including the right to
payment of any transfer, sales or use taxes, goods and services taxes, returned
check charges and other obligations of such Person with respect thereto other
than Excluded Receivables; provided, however, that for purposes of Article II
hereof in the event that an Excluded Receivable is included on any Daily Report,
such Excluded Receivable shall be deemed to be a Receivable but not an Eligible
Receivable.
"Receivables Property" has the meaning specified in Section 2.01.
"Reference Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If The Chase Manhattan Bank shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the failure of the Federal Reserve Bank of New York to publish rates
or the inability of The Chase Manhattan Bank to obtain quotations in accordance
with the terms of the definition thereof, the Reference Rate shall be determined
without regard to clause (b) of the immediately preceding sentence, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Reference Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively. The
term "Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as being effective. The
term "Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members
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of the Federal Reserve System arranged by Federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day for such transactions received by The Chase Manhattan
Bank from three Federal funds brokers of recognized standing selected by it.
"Registrations" shall have the meaning specified in Section 2.1(d).
"Related Property" shall mean, with respect to each Receivable:
(a) all of the applicable Seller's interest in the goods, if
any, sold and delivered to an Obligor which gave rise to such Receivable;
(b) all other security interests or Liens purporting to secure
payment of such Receivable, together with all financing statements signed
by an Obligor describing any collateral securing such Receivable; and
(c) all guarantees, credit or similar types of insurance,
letters of credit and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such
Receivable;
in the case of clauses (b) and (c), whether pursuant to the contract related to
such Receivable or otherwise and including, without limitation, pursuant to any
obligations evidenced by a note, instrument, contract, security agreement,
chattel paper or other evidence of indebtedness or security and the proceeds
thereof.
"Seller Addition Date" has the meaning specified in Section 3.02.
"Seller Adjustment Payment" has the meaning specified in Section
2.05.
"Seller Note" has the meaning specified in Section 8.01.
"Seller Repurchase Payment" has the meaning specified in Section
2.06.
"Sellers" means WESCO Canada together with each Subsidiary of WESCO
Canada added as a Seller hereunder from time to time.
"Seller Termination Request" has the meaning specified in subsection
9.13(b).
"Seller Termination Request Date" has the meaning specified in
subsection 9.13(b).
"WESCO Persons" means each Seller and each of its Affiliates other
than the Company.
Section 1.02. Other Definitional Provisions. (a) All terms defined
herein or in the Pooling Agreement or any Supplement shall have their defined
meanings when used in
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any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1 of the Pooling Agreement or any Supplement, and accounting terms partly
defined in Section 1.1 of the Pooling Agreement or any Supplement to the extent
not defined, shall have the respective meanings given to them under GAAP. To the
extent that the definitions of accounting terms herein are inconsistent with the
meanings of such terms under GAAP, the definitions contained herein shall
control. All terms used in the Ontario PPSA that are used but not specifically
defined herein are used herein as defined therein.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Annex, Schedule and Exhibit references contained in this agreement
are references to Sections, subsections, Annex, Schedules and Exhibits in or to
this Agreement unless otherwise specified.
(d) The definitions contained in Section 1.01 of this Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine, the feminine and the neuter genders of such terms.
(e) All references herein to any agreement or instrument shall be
deemed references to such agreement or instrument as amended, supplemented or
otherwise modified from time to time, subject to compliance with any
restrictions herein on the amendment, supplementation or modification of such
agreement or instrument.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
Section 2.01. Purchase and Sale of Receivables. (a) Upon the terms
set forth herein, each of the Sellers hereby sells, assigns, transfers and
conveys to the Company, without recourse (except to the limited extent provided
herein), all its respective present and future right, title and interest in, to
and under:
(i) all Receivables now existing and hereafter arising from time to
time (until an Early Termination with respect to such Seller occurs);
(ii) all Related Property in respect of such Receivables;
(iii) all Collections;
(iv) all payment, enforcement and other rights (including
rescission, replevin or reclamation), but none of the obligations, relating to
any Receivable or arising therefrom; and
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(v) all monies due or to become due and all amounts received with
respect to the items listed in clauses (i), (ii), (iii) and (iv) and all
proceeds (including, without limitation, whatever is received upon the sale,
exchange, collection or other disposition of the foregoing and all "proceeds" as
defined in the Ontario PPSA, including all Recoveries relating thereto and all
amounts on deposit in the Lockbox Accounts or Eligible Segregated Accounts which
were not Available Funds on the date hereof) (the property described in the
foregoing clauses (ii) through (v) are hereinafter collectively referred to as
the "Receivables Property").
Subject to the terms and conditions set forth herein, the Company
hereby agrees to purchase the Receivables and Receivables Property of each
Seller.
(b) On each applicable Effective Date and on the date of creation of
each newly created Receivable, all of the applicable Seller's right, title and
interest in, to and under (i) in the case of each such Effective Date, all then
existing Receivables and all Receivables Property in respect of such Receivables
and (ii) in the case of each such date of creation (but only so long as no Early
Termination with respect to such Seller has occurred), all such newly created
Receivables and all Receivables Property in respect of such Receivables, shall
be immediately and automatically sold, assigned, transferred and conveyed to the
Company pursuant to paragraph (a) above without any further action by such
Seller or any other Person. If any Seller shall not have received payment
(including as a result of the failure to satisfy the conditions set forth in
Section 3.03 or the application of the final paragraph of Section 6.01) from the
Company of the Purchase Price for any newly created Receivable and the related
Receivables Property on the Payment Date therefor in accordance with the terms
of subsection 2.03(b), such newly created Receivable and the Receivables
Property with respect thereto shall, upon receipt of notice by the Company and
the Trustee from the applicable Seller of such failure to receive payment,
immediately and automatically be sold, assigned, transferred and reconveyed by
the Company to such Seller without any further action by the Company or any
other Person.
(c) To evidence and effect the sale, assignment, transfer and
conveyance of Purchased Receivables and the Receivables Property in respect
thereof, each Seller shall execute on the Effective Date with respect to such
Seller, a written assignment of the Purchased Receivables and the Receivables
Property in respect thereof in substantially the form of Exhibit D hereto (an
"Assignment"). The parties to this Agreement intend that the transactions
contemplated by subsections 2.01(a) and (b) hereby and each Assignment shall be,
and shall be treated as, a purchase and receipt by the Company and a sale by the
applicable Seller of the Purchased Receivables and the Receivables Property in
respect thereof and not a lending transaction. All transfers of Receivables and
Receivables Property by any Seller hereunder shall be without recourse to, or
representation or warranty of any kind (express or implied) by, any Seller,
except as otherwise specifically provided herein. The foregoing sale,
assignment, transfer and conveyance constituted hereby and under each Assignment
does not constitute and is not intended to result in a creation or assumption by
the Company of any obligation of any Seller or any other Person in connection
with the Receivables, the Receivables Property or any agreement or instrument
relating thereto, including any obligation to any Obligor. If, and to the
extent, this Agreement or any Assignment does not constitute a valid sale,
assignment, transfer and conveyance of all right, title and interest of each
Seller in, to and under the Purchased Receivables and the
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Receivables Property in respect thereof despite the intent of the parties hereto
and the express terms hereof, such Seller hereby grants a "security interest"
(as defined in the Ontario PPSA) in the Purchased Receivables, the Receivables
Property in respect thereof and all proceeds thereof to the Company, and the
parties agree that this Agreement shall constitute a security agreement under
the Ontario PPSA.
(d) In connection with the foregoing conveyances, each Seller agrees
to record, file or register, or cause to be recorded, filed or registered, at
its own expense, each Assignment or notice or application with respect thereto,
as applicable, or financing statements (or continuation or financing change
statements, as applicable) (collectively, "Registrations") with respect to such
conveyances meeting the requirements of applicable law, in such manner and in
such jurisdictions as are necessary to protect, perfect and maintain the
protection and perfection of the Company's purchase of ownership interests in
the Receivables and Receivables Property from the Sellers, and shall deliver a
file stamped copy of each such Registration or other satisfactory evidence
thereof to the Company and the Trustee no later than 10 days after the Effective
Date.
(e) In connection with the foregoing conveyances, each Seller agrees
at its own expense, as agent of the Company (i) no later than 30 days after the
Effective Date, to indicate or cause to be indicated on the computer files (but
not on individual invoices or individual collection files) relating to such
Receivables (by means of a general legend, substantially in the form described
on Schedule 8 hereto, that will automatically appear each time a Person enters
the Seller's Receivables program) that, unless otherwise specifically identified
as a receivable not so sold, transferred, assigned and conveyed, all Receivables
(and any such other receivables) included therein and all other Receivables
Property (and any other similar related property (but for greater certainty, not
any Excluded Receivables)) have been sold, transferred, assigned and conveyed to
the Company in accordance with this Agreement and (ii) on or prior to the
Effective Date to deliver, to the Company computer files, microfiche lists or
typed or printed lists (the "Receivables Lists") containing true and complete
lists of all such Receivables, identified by Obligor and setting forth the
Receivables balance for each Receivable as of the Cut-Off Date.
(f) As further confirmation of the sale of the Receivables but
subject to subsection 6.02(b), it is understood and agreed that the Company
shall have the following rights:
(A) the Company (and its assignees) shall have the right at
any time to (I) notify, or require that such Seller at its own
expense notify, the respective Obligors of the Company's ownership
of the Purchased Receivables and Receivables Property, (II) direct
that payment of all amounts due or to become due under the Purchased
Receivables be made directly to the Company or its designee, (III)
sue for collection on any Purchased Receivable or (IV) sell any
Purchased Receivables to any Person for a price that is acceptable
to the Company (or its assignee);
(B) such Seller shall, upon written request of the Company,
and at such Seller's expense (I) deliver to the Company or a party
designated by the
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Company all documents, instruments and other records (including
credit files) that evidence or record the Receivables sold by such
Seller and all licenses, rights, computer programs, related
material, computer tapes, disks, cassettes and data necessary to the
immediate collection of the Purchased Receivables by the Company,
with or without the participation of such Seller and (II) make such
arrangements with respect to the collection of the Purchased
Receivables as may be reasonably required by the Company. In
recognition of such Seller's need to have access to any Documents
which may be transferred to the Company hereunder, whether as a
result of its continuing business relationship with any Obligor for
Receivables purchased hereunder or as a result of its
responsibilities as a Sub-Servicer, the Company hereby grants to
such Seller an irrevocable license to access the Documents
transferred by such Seller to the Company and to access any such
transferred computer software in connection with any activity
arising in the ordinary course of such Seller's business or in
performance of such Seller's duties as a Servicing Party, provided,
however, that such Seller shall not disrupt or otherwise interfere
with the Company's use of and access to the Documents and its
computer software during such license period; and
(C) such Seller hereby grants to the Company an irrevocable
power of attorney with full power of substitution (including the
power to delegate to any Servicer or Sub-Servicer from time to time)
(coupled with an interest) to take any and all steps in such
Seller's name necessary or desirable, in the reasonable opinion of
the Company, to collect all amounts due under the Purchased
Receivables, including, without limitation, enforcing the Purchased
Receivables, exercising all rights and remedies in respect thereof
and, without regard to the limitation set forth in subsection
6.02(b), endorsing such Seller's name on checks and other
instruments representing Collections.
Section 2.02. Purchase Price. The amount payable by the Company to a
Seller (the "Purchase Price") for Receivables and Receivables Property on any
Payment Date under this Agreement shall be equal to the product of (a) the
aggregate outstanding Principal Amount of such Receivables as set forth in the
applicable Daily Report times (b) the Discounted Percentage with respect to such
Seller plus, on the Effective Date, the aggregate of all amounts on deposit in
Lockbox Accounts or Eligible Segregated Accounts which were not Available Funds
on such date. All interest rates and fees hereunder shall be computed on the
basis of the actual number of days elapsed divided 365. Any such applicable
interest rate, expressed as an annual rate of interest for the purpose of the
Interest Act (Canada) shall be equivalent to such applicable interest rate
multiplied by the actual number of days in the calendar year in which the same
is to be determined and divided by 365.
Section 2.03. Payment of Purchase Price. (a) Upon the fulfillment of
the conditions set forth in Article III, the Purchase Price for Receivables and
the Receivables Property shall be paid or provided for by the Company in the
manner provided below on each day for which a Daily Report is delivered to the
Company (each such day, a "Payment Date") in respect of a Reported Day (which
Daily Report shall specify, by Seller, the Principal
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Amount of Receivables being sold on such Payment Date, the aggregate Purchase
Price for such Receivables and the components of payment as provided in
paragraph (b) below).
(b) The Purchase Price for Receivables and Receivables Property
shall be paid by the Company on each Payment Date (including the initial Payment
Date) as follows:
(i) by netting the amount of any Seller Adjustment Payments or
Seller Repurchase Payments pursuant to Section 2.05 or 2.06 against such
Purchase Price;
(ii) to the extent available for such purpose, in cash from
Collections released to the Company pursuant to the Pooling Agreement;
(iii) to the extent available for such purpose, in cash from
the net proceeds of a transfer of interests in Purchased Receivables by
the Company to other Persons;
(iv) to the extent available for such purpose, in cash from
the proceeds of capital contributed by WESCO to the Company, if any, in
respect of its equity interest in the Company; and
(v) at the option of the Company (subject to the provisions of
Section 8.01), by means of an addition to the principal amount of the
Seller Note in an aggregate amount up to the remaining portion of the
Purchase Price. Any such addition to the principal amount of the Seller
Note shall be allocated among the Sellers (pro rata according to the
Principal Amount of Receivables sold by each Seller) by the Servicer in
accordance with the provisions of this subsection 2.03(b)(v) and Section
8.01. The Servicer may evidence such additional principal amounts by
recording the date and amount thereof on the grid attached to such Seller
Note; provided, however, that the failure to make any such recordation or
any error in such grid shall not adversely affect any Seller's rights.
(c) The Servicer shall be responsible, in its sole discretion but in
accordance with subsection 2.03(a), for allocating among the Sellers the payment
of the Purchase Price for Receivables and any amounts netted therefrom pursuant
to subsection 2.03(b)(i), either in the form of cash received from the Company
or as an addition to the principal amount of a Seller's interest in the Seller
Note. The Company shall be entitled to pay all amounts in respect of the
Purchase Price of Receivables and Receivables Property to an account of the
Servicer for allocation by the Servicer to the Sellers, and each of the Sellers
hereby appoint the Servicer as their agent for purposes of receiving such
payments and making such allocations and hereby authorizes the Company to make
all payments due to such Seller directly to, or as directed by, the Servicer.
The Servicer hereby accepts and agrees to such appointment. All payments under
this Agreement shall be made not later than 3:00 p.m (Toronto time) on the date
specified therefor in Canadian Dollars (or U.S. Dollars calculated using the
Canadian Exchange Percentage) in same day funds or by check, as the Servicer
shall elect and to the bank account designated in writing by the Servicer to the
Company.
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(d) Whenever any payment to be made under this Agreement shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day. Amounts not paid when due in accordance
with the terms of this Agreement shall bear interest at a rate equal at all
times to the Reference Rate, payable on demand.
Section 2.04. No Repurchase. Except to the extent expressly set
forth herein, no Seller shall have any right or obligation under this Agreement,
by implication or otherwise, to repurchase from the Company any Purchased
Receivables or Receivables Property or to rescind or otherwise retroactively
affect any purchase of any Purchased Receivables or Receivables Property after
the Payment Date relating thereto.
Section 2.05. Rebates, Adjustments, Returns and Reductions;
Modifications. From time to time, a Seller may make Dilution Adjustments to
Receivables in accordance with this subsection 2.05 and subsection 5.03(c). The
Sellers (other than those Sellers from which the Company has no Receivables
outstanding at such time), jointly and severally, agree to pay to the Company
the amount of any such Dilution Adjustment (a "Seller Adjustment Payment");
provided, however, that such payment shall be made no later than the Settlement
Report Date of the month following the grant of the Dilution Adjustment
(regardless of which Seller shall have granted such Dilution Adjustment);
provided, further, that, prior to the occurrence of any Early Termination with
respect to all Sellers, any such Seller Adjustment Payment known to be owing to
the Company on any Payment Date shall, on such Payment Date, be netted against
the Purchase Price of newly created Receivables in accordance with subsection
2.03(b)(i) to the extent of such Principal Amount and the remaining amount of
such Seller Adjustment Payment known to be owing to the Company after such
netting, if any, (or following an Early Termination with respect to all Sellers,
the full amount) shall be paid to the Company on such date in cash. The amount
of any Dilution Adjustment posted on any Reported Day shall be set forth on the
Daily Report prepared with respect to such Reported Day.
Section 2.06. Limited Repurchase Obligation. In the event that (i)
any representation or warranty contained in Section 4.02 in respect of any
Receivable transferred to the Company is not true and correct in any material
respect on the applicable Payment Date, or (ii) there is a breach of any
covenant contained in subsection 5.01(c), (f) or (n) or Section 5.03 with
respect to any Receivable in any material respect or (iii) the Company's
interest in any Receivable is not a first priority perfected ownership or
security interest at any time as a result of any action taken by, or any failure
to take action by, any Seller, then the Sellers (other than those Sellers from
which the Company has no Receivables outstanding at such time), jointly and
severally, agree to pay to the Company an amount equal to the Principal Amount
(determined as of the Payment Date for such Receivable) of such Receivable
(whether the Company paid such Purchase Price in cash or otherwise) less
Collections received by the Company in respect of such Receivable, regardless of
which Seller shall have been responsible for such incorrectness or breach, such
payment to occur no later than the Payment Date occurring on the 30th day (or,
if such 30th day is not a Payment Date, on the Payment Date immediately
succeeding such 30th day) after the day such breach or incorrectness becomes
known (or should have become known with due diligence) to any Seller (unless
such breach or incorrectness shall have been cured on or before such day);
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provided, however, that, prior to any Early Termination with respect to all
Sellers, any such payment due and owing to the Company on such Payment Date
shall be netted against the Purchase Price of newly created Receivables in
accordance with subsection 2.03(b)(i) to the extent of such Principal Amount and
the remaining amount of such payment due to the Company after such netting, if
any, (or following an Early Termination with respect to all Sellers, the full
amount) shall be paid to the Company in cash to the extent still unpaid on such
Payment Date. Any payment by any Seller pursuant to this Section 2.06 is
referred to as a "Seller Repurchase Payment". The obligation to reacquire any
Receivable shall, upon satisfaction thereof, constitute the sole remedy
respecting the event giving rise to such obligation available to the Company.
Simultaneously with any Seller Repurchase Payment with respect to any
Receivable, such Receivable and the Receivables Property with respect thereto
shall immediately and automatically be sold, assigned, transferred and conveyed
by the Company to the applicable Seller without any further action by the
Company or any other Person.
Section 2.07. Obligations Unaffected. The obligations of the Sellers
to the Company under this Agreement shall not be affected by reason of any
invalidity or illegality of any Receivable or any sale of a Receivable.
Section 2.08. Certain Charges. Each Seller and the Company agree
that late charge revenue, reversals of discounts, other fees and charges and
other similar items (not constituting Excluded Receivables), whenever created,
accrued in respect of Purchased Receivables shall be the property of the Company
notwithstanding the occurrence of an Early Termination and all Collections with
respect thereto shall continue to be allocated and treated as Collections in
respect of Purchased Receivables.
Section 2.09. Certain Allocations. Each Seller hereby agrees that,
following the occurrence of an Early Termination with respect to such Seller,
all Collections and other proceeds received in respect of Receivables generated
by such Seller shall be applied, first, to pay the outstanding Principal Amount
of Purchased Receivables (as of the date of such Early Termination) of the
Obligor to whom such Collections are attributable until such Purchased
Receivables are paid in full and, second, to the related Seller to pay
Receivables of such Obligor not sold to the Company; provided, however, that
notwithstanding the foregoing, if such Seller can attribute a Collection to a
specific Obligor and a specific Receivable, then such Collection shall be
applied to pay such Receivable of such Obligor. The Company and the Servicer
shall take such action as the Seller may reasonably request, at the expense of
such Seller, to assure that any Receivable not sold to the Company, the Related
Property and Collections with respect thereto and any Excluded Receivables do
not remain commingled with other Collections hereunder and are immediately paid
to the Seller.
Section 2.10. Further Assurances. From time to time at the request
of a Seller, the Company shall deliver to such Seller such documents,
assignments, releases and instruments of termination as such Seller may
reasonably request to evidence the reconveyance by the Company to such Seller of
a Receivable pursuant to the terms of Section 2.01(b), 2.06 or 2.11(b),
provided, however, that the Company shall have been paid all amounts due
thereunder; and the Company and the Servicer shall take such action as such
Seller may reasonably request, at the expense of such Seller, to assure that any
such
13
Receivable, the Related Property and Collections with respect thereto do not
remain commingled with other Collections hereunder.
Section 2.11. Purchase of Sellers' Interest in Receivables and
Receivables Property. (a) In the event of any breach of any of the
representations and warranties set forth in subsection 4.01(a), (b), (c), (e),
(f) or (g), as of the date made, which breach has a material adverse effect on
the interests of the Company in the Receivables or the Receivables Property,
then the Company, by notice then given in writing to the Sellers, may direct the
Sellers to purchase all Receivables and Receivables Property and the Sellers
(other than those Sellers from which the Company has no Receivables outstanding
at such time), jointly and severally, shall be obligated to make such purchase
30 days after receipt of such notice on the terms and conditions set forth in
subsection 2.11(b) below; provided, however, that no such purchase shall be
required to made if, by such date, the representations and warranties contained
in subsections 4.01(a), (b), (c), (e), (f) or (g) shall be satisfied in all
material respects, and any material adverse effect on the Company caused thereby
has been cured.
(b) The Sellers (other than those Sellers from which the Company has
no Receivables outstanding at such time), shall jointly and severally, shall, as
the purchase price for the Receivables and Receivables Property to be purchased
pursuant to subsection 2.11(a) above, pay to the Company, on the Business Day
preceding such Distribution Date, an amount equal to the Principal Amount of the
Purchased Receivables (determined as of the Payment Date or contribution date
for such Purchased Receivables), less Collections received by the Company in
respect of such Purchased Receivables, as of such Distribution Date. Upon
payment of such amount, in immediately available funds, to the Company, the
Company's rights with respect to the Purchased Receivables shall terminate and
such interest therein shall immediately and automatically be sold, assigned,
transferred and conveyed by the Company to the Sellers which originated such
Receivable without any further action by the Company or any other Person and the
Company shall have no further rights with respect thereto. If the Company gives
notice directing the Sellers to purchase the Purchased Receivables as provided
above, the obligation of the Sellers to purchase the Purchased Receivables
pursuant to this Section 2.11 shall, upon satisfaction thereof, constitute the
sole remedy respecting an event of the type specified in the first sentence of
this Section 2.11 available to the Company.
ARTICLE III
CONDITIONS TO PURCHASES
Section 3.01. Conditions Precedent to Company's Initial Purchase.
The obligation of the Company to purchase Receivables and Receivables Property
hereunder on the initial Effective Date from WESCO Canada is subject to the
conditions precedent that the Company shall have received on or before the date
of such purchase the following, each (unless otherwise indicated) dated the day
of such sale and in form and substance satisfactory to the Company:
(a) Secretary's Certificate. A certificate of the Secretary or an
Assistant Secretary of WESCO Canada, dated the Closing Date, and
certifying (i) that attached
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thereto is a true and complete copy of the articles and certificates of
incorporation (including all amendments thereto) (the "Articles") and
by-laws of such Seller, as in effect on the Effective Date and at all
times since a date prior to the date of the resolutions described in
clause (ii) below, (ii) that attached thereto is a true and complete copy
of the resolutions, in form and substance reasonably satisfactory to the
Company, of the Board of Directors of such Seller or committees thereof
authorizing the execution, delivery and performance of this Agreement and
the other Transaction Documents to which it is a party and the
transactions contemplated hereby and thereby, and that such resolutions
have not been amended, modified, revoked or rescinded and are in full
force and effect, (iii) that the Articles of such Person have not been
amended since the date of the last amendment thereto shown on the
certificate of good standing (or its equivalent) furnished pursuant to
clause (i) above and (iv) as to the incumbency and specimen signature of
each officer executing this Agreement and any other Transaction Documents
or any other document delivered in connection herewith or therewith on
behalf of such Seller (on which certificates the Company may conclusively
rely until such time as the Company shall receive from such Seller a
revised certificate with respect to such Seller meeting the requirements
of this subsection (a));
(b) Good Standing Certificates. Certificates of compliance, of
status or of good standing, dated as of a recent date, issued by its
jurisdiction of incorporation and by each other jurisdiction where the
ownership, lease or operation of property or the conduct of business
requires it to qualify as a foreign or extra-provincial corporation,
except where the failure to so qualify would not have a Material Adverse
Effect;
(c) Consents, Licenses, Approvals, Etc. A certificate dated the
Closing Date of a Responsible Officer of each Seller either (i) attaching
copies of all consents (including, without limitation, consents under loan
agreements and indentures to which any Seller or its Affiliates are
parties), licenses and approvals required in connection with the
execution, delivery and performance by such Seller of this Agreement and
the validity and enforceability of this Agreement against such Seller, and
such consents, licenses and approvals shall be in full force and effect or
(ii) stating that no such consents, licenses or approvals are so required;
(d) No Litigation. Confirmation that there is no pending or, to its
knowledge after due inquiry, threatened action or proceeding affecting
such Seller or any of its Subsidiaries before any Governmental Authority
that could reasonably be expected to have a Material Adverse Effect;
(e) PPSA Certificate; Registrations. (i) A PPSA Certificate,
substantially in the form of Exhibit C hereto, duly executed by a
Responsible Officer of the applicable Seller and dated such date of
purchase and (ii) executed copies of all Registrations contemplated by
Section 2.1(d), filed, recorded or registered at such Seller's expense
prior to the Closing Date, naming the applicable Seller as the seller and
the Company as the purchaser of the Receivables and the Receivables
Property, in proper form for filing in each jurisdiction in which the
Company (or any of its assignees) deems it necessary or desirable to
perfect or protect the Company's ownership interest in all
15
Receivables and Receivables Property under the PPSA or any comparable law
of such jurisdiction;
(f) Searches. Written search reports, listing all effective
financing statements or other registrations or filings that name the
applicable Seller as debtor or assignor and that are filed, recorded or
registered in the jurisdictions in which filings, recordings or
registrations were made pursuant to subsection (e) above or Section
2.01(d) and in any other jurisdictions that the Company determines are
necessary or appropriate, together with copies of such financing
statements or other registrations or filings (none of which, except for
those described in subsection (f) above, shall cover any Receivables or
Receivables Property), and, where available, tax and judgment lien
searches showing no such liens that are not permitted by the Transaction
Documents;
(g) Other Transaction Documents. Original copies, executed by each
of the parties thereto, of each of the other Transaction Documents to be
executed and delivered in connection herewith;
(h) Back-up Servicing Arrangements. Evidence that each Seller
maintains disaster recovery systems and back-up computer and other
information management systems that, in the Company's reasonable judgment
as of the date hereof, are sufficient to protect such Seller's business
against material interruption or loss or destruction of its primary
computer and information management systems;
(i) Legal Opinions. (i) One or more legal opinions from counsel to
the Sellers and counsel to the Company substantially to the effect set out
in Schedule 9 hereto.
(ii) To the extent not dealt with in the opinions referred to in
clause (i) above, one or more legal opinions from counsel to the Sellers
and counsel to the Company:
(A) to the effect that each Seller and the Company, as
applicable, has all approvals, judicial, regulatory, legal or
otherwise, needed to execute, deliver and perform each Transaction
Document to which it is a party and that no conflict or default will
occur as a result of the execution, delivery and performance
thereof;
(B) to the effect that the Company has a perfected security
interest in the Receivables; and
(C) addressing other customary matters.
(iii) Each such legal opinion shall also be addressed to the Rating
Agencies, the Initial Purchaser, and the Trustee;
(j) Policies. A copy of the Policies, which shall be satisfactory in
form and substance to the Company;
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(k) List of Obligors. The Receivables List of each Seller showing,
as of the Cut-Off Date, the Obligors whose Receivables exist on the
Cut-Off Date and the balance of the Receivables with respect to each such
Obligor as of such prior date; and
(l) Systems. Evidence, reasonably satisfactory to the Company, the
Trustee and the Agents that such Seller's systems, procedures and record
keeping relating to the Purchased Receivables is in all material respects
sufficient and satisfactory in order to permit the purchase and
administration of the Purchased Receivables in accordance with the terms
and intent of this Agreement.
Section 3.02. Conditions Precedent to the Addition of a Seller. The
obligation of the Company to purchase Receivables and Receivables Property
hereunder from a Subsidiary of WESCO Canada requested to be an additional Seller
pursuant to Section 9.12 is subject to the conditions precedent that the Company
shall have received on or before the date designated for the addition of such
Seller (the "Seller Addition Date") and in form and substance satisfactory to
the Company:
(a) Additional Seller Supplement. An Additional Seller Supplement
(with a copy for the Trustee and each Agent) duly executed and delivered
by such Seller.
(b) Secretary's Certificate. A certificate of the Secretary or an
Assistant Secretary of such Seller, dated the Effective Date, and
certifying (i) that attached thereto is a true and complete copy of the
Articles and by-laws of such Seller, as in effect on the Seller Addition
Date and at all times since a date prior to the date of the resolutions
described in clause (ii) below, (ii) that attached thereto is a true and
complete copy of the resolutions, in form and substance reasonably
satisfactory to the Company, of the Board of Directors of such Seller or
committees thereof authorizing the execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a party
and the transactions contemplated hereby and thereby, and that such
resolutions have not been amended, modified, revoked or rescinded and are
in full force and effect, (iii) that the Articles of such Seller have not
been amended since the date of the last amendment thereto shown on the
certificate of good standing (or its equivalent) furnished pursuant to
clause (i) above and (iv) as to the incumbency and specimen signature of
each officer executing the Additional Seller Supplement and any other
Transaction Documents or any other document delivered in connection
therewith on behalf of such Seller (on which certificates the Company may
conclusively rely until such time as the Company shall receive from such
Seller a revised certificate with respect to such Seller meeting the
requirements of this subsection (b));
(c) Officer's Certificate. A certificate of a Responsible Officer of
WESCO Canada, dated the Effective Date, and certifying such Seller is in
the same line of business as the existing Sellers as of the related Seller
Addition Date;
(d) Good Standing Certificates. Certificates of compliance, of
status or of good standing, dated as of a recent date with respect to such
Seller issued by its
17
jurisdiction of incorporation and by each other jurisdiction where the
ownership, lease or operation of property or the conduct of business
requires it to qualify as a foreign or extra-provincial corporation,
except where the failure to so qualify would not have a Material Adverse
Effect;
(e) Consents, Licenses, Approvals, Etc. A certificate dated the
related Seller Addition Date of a Responsible Officer of such Seller
either (i) attaching copies of all consents (including, without
limitation, consents under loan agreements and indentures to which any
Seller or its Affiliates are parties), licenses and approvals required in
connection with the execution, delivery and performance by such Seller of
the Additional Seller Supplement and the validity and enforceability of
the Additional Seller Supplement against such Seller, and such consents,
licenses and approvals shall be in full force and effect or (ii) stating
that no such consents, licenses or approvals are so required;
(f) No Litigation. Confirmation that there is no pending or, to its
knowledge after due inquiry, threatened action or proceeding affecting
such Seller or any of its Subsidiaries before any Governmental Authority
that could reasonably be expected to have a Material Adverse Effect;
(g) Lockboxes; Eligible Segregated Accounts. A Lockbox Account or an
Eligible Segregated Account with respect to Receivables to be sold by such
Seller shall have been established in the name of the Company, each
invoice issued to an Obligor on and after the Effective Date shall
indicate that payments in respect of its Receivable shall be made by such
Obligor to a Lockbox Account or Eligible Segregated Account or by wire
transfer or other electronic payment to a Lockbox Account, an Eligible
Segregated Account or the Collection Account or otherwise as provided in
Section 2.03 of the Servicing Agreement and the Servicer shall have
delivered (i) with respect to each such Lockbox Account a Lockbox
Agreement signed by it, the Company, the Trustee and applicable Lockbox
Processor and (ii) with respect to each such Eligible Segregated Account,
an Eligible Segregated Account Bank Acknowledgement, as the case may be,
or a commitment to transfer the same within 30 days of the applicable
Seller Addition Date.
(h) PPSA Certificate; Registrations. (i) A PPSA Certificate duly
executed by a Responsible Officer of such Seller and dated the related
Seller Addition Date and (ii) executed copies of all Registrations
contemplated by Section 2.01(d) filed, recorded or registered at such
Seller's expense prior to the related Seller Addition Date, naming such
Seller as the seller and the Company as the purchaser of the Receivables
and the Receivables Property, in proper form for filing in each
jurisdiction in which the Company (or any of its assignees) deems it
necessary or desirable to perfect or protect the Company's ownership
interest in all Receivables and Receivables Property under the PPSA or any
comparable law of such jurisdiction;
(i) Searches. Written search reports, listing all effective
financing statements or other registrations or filings that name such
Seller as debtor or assignor and that are filed, recorded or registered in
the jurisdictions in which filings,
18
recordings or registrations were made pursuant to subsection (h) above or
Section 2.1(d) and in any other jurisdictions that the Company determines
are necessary or appropriate, together with copies of such financing
statements or other registrations or filings (none of which, except for
those described in subsection (h) above, shall cover any Receivables or
Receivables Property), and, where available, tax and judgment lien
searches showing no such liens that are not permitted by the Transaction
Documents;
(j) List of Obligors. A microfiche, typed or printed list or other
tangible evidence reasonably acceptable to the Company showing as of a
date acceptable to the Company prior to the related Seller Addition Date
the Obligors whose Receivables are to be transferred to the Company and
the balance of the Receivables with respect to each such Obligor as of
such date;
(k) Opinions. Legal opinions with respect to such Seller conforming
to the requirements of Section 3.01(i).
(l) Back-up Servicing Arrangements. Evidence that such Seller
maintains disaster recovery systems and back-up computer and other
information management systems that, in the Company's reasonable judgment,
are sufficient to protect such Seller's business against material
interruption or loss or destruction of its primary computer and
information management systems.
(m) Party to Servicing Agreement. Evidence that such additional
Seller shall have become a party to the Servicing Agreement in its
capacity as a Sub-Servicer thereunder.
(n) Systems. Evidence, reasonably satisfactory to the Company, the
Trustee and the Agents, that such additional Seller's systems, procedures
and record keeping relating to the Purchased Receivables remain in all
material respects sufficient and satisfactory in order to permit the
purchase and administration of the Purchased Receivables in accordance
with the terms and intent of this Agreement.
Section 3.03. Conditions Precedent to All the Company's Purchases of
Receivables. The obligation of the Company to pay for any Receivable and the
Receivables Property with respect thereto on each Payment Date (including the
Effective Date) shall be subject to the further conditions precedent that, on
and as of such Payment Date:
(a) the following statements shall be true (and the acceptance by
the relevant Seller of the Purchase Price for such Receivable on such
Payment Date shall constitute a representation and warranty by such Seller
that on such Payment Date such statements are true):
(i) the representation and warranties of such Seller
contained in Sections 4.01 and 4.02 shall be true and correct in all
material respects on and as of such Payment Date as though made on
and as of such date except to the extent any such representation or
warranty is expressly made only as of another
19
date (in which case it shall be true and correct in all material
respects on and as of such other date);
(ii) after giving effect to such purchase, no (A) Early
Termination with respect to such Seller or (B) Potential Purchase
Termination Event with respect to a Purchase Termination Event set
forth in clause (f)(ii) of Section 6.01 shall have occurred and be
continuing; and
(iii) there has been no material adverse change since the
date of this Agreement in the collectibility of the Receivables
taken as a whole (other than due to a change in the creditworthiness
of the Obligors);
(b) the Company shall have received (after giving effect to
subsection 2.03(b)(i)) payment in full of all amounts for which payment is
due from such Seller pursuant to Sections 2.05, 2.06, 2.11 or 7.01;
(c) the Company shall have received such other approvals, opinions
or documents as the Company may reasonably request; and
(d) such Seller shall have complied with all of its covenants in all
material respects and satisfied all of its obligations in all material
respects under this Agreement required to be complied with or satisfied as
of such date;
provided, however, that the failure of such Seller to satisfy any of the
foregoing conditions shall not prevent such Seller from subsequently selling
Receivables upon satisfaction of all such conditions or exercising its rights
under subsection 2.01(b).
Section 3.04. Condition Precedent to Each Seller's Obligations. The
obligation of a Seller to sell any Receivable generated by it on any date
(including on the Effective Date) shall be subject to the condition precedent
that, on the related Payment Date, the following statement shall be true (and
the payment by the Company of the Purchase Price for such Receivable on such
date shall constitute a representation and warranty by the Company that on such
Payment Date the statements in clause (ii) are true): (i) no Purchase
Termination Event set forth in paragraph (f) (other than clause (v) thereof) of
Section 6.01 shall have occurred and be continuing and (ii) no Early
Amortization Event or Potential Early Amortization Event in each case of a type
set forth in paragraph (a) (other than clause (v) thereof) of Section 7.1 of the
Pooling Agreement (as in effect on the date hereof) shall have occurred and be
continuing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Sellers. WESCO
Canada hereby represents and warrants, as to itself only, for the benefit of the
Company and its assigns (including the Trustee) on the applicable Effective Date
and on each Payment Date as follows:
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(a) Corporate Existence. Such Seller (i) is a corporation duly
incorporated and validly existing under the laws of the jurisdiction of
its organization, (ii) has all requisite corporate power and authority,
and all legal right, to own and operate its properties, to lease the
properties it operates as lessee and to conduct its business as now
conducted and (iii) is duly qualified as a foreign or extra-provincial
corporation to do business (or is exempt from such requirements) under the
laws of each jurisdiction in which the ownership or lease of property or
the conduct of its business requires such qualification, except, in the
case of clauses (ii) and (iii), to the extent that a failure to have such
power, authority or right or to qualify, as the case may be, would not be
reasonably likely to have a Material Adverse Effect.
(b) Corporate Power; Authorization; Consents. Such Seller has the
corporate power and authority, and the legal right, to execute, deliver
and perform this Agreement and the other Transaction Documents to which it
is a party and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party. No consent or authorization
of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement and the other Transaction Documents to which it is a party by or
against such Seller other than (i) those consents which have duly been
obtained or made and are in full force and effect on the Effective Date or
the relevant Payment Date, as the case may be, (ii) the filing of the
Registrations referred to in Article III, all of which, at the time
required in Article III, shall have been duly made and shall be in full
force and effect and (iii) any such consent, authorization, filing, notice
or other act, the absence of which would not be reasonably likely to have
a Material Adverse Effect. This Agreement and each other Transaction
Document to which it is a party have been duly executed and delivered on
behalf of such Seller.
(c) No Default. (i) Such Seller is not in default under or with
respect to any of its Contractual Obligations in any respect which would
be reasonably likely to have a Material Adverse Effect. (ii) No (A) Early
Termination or (B) Potential Purchase Termination Event with respect to a
Purchase Termination Event set forth in clause (f)(ii) of Section 6.01, in
each case with respect to such Seller, has occurred and is continuing.
(d) Valid Sale; Binding Obligations. This Agreement constitutes, and
each other Transaction Document to be signed by a Responsible Officer of
such Seller when duly executed and delivered will constitute, an
enforceable obligation of such Seller in accordance with its terms, except
(A) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general, and (B) as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
(e) No Violation. The execution, delivery and performance of, and
the consummation of the transactions contemplated by, this Agreement and
the other
21
Transaction Documents and the fulfillment of the terms hereof and thereof
will not (i) conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a default under, (A) the certificate or articles of incorporation or
by-laws of such Seller or (B) any indenture, loan agreement, mortgage,
deed of trust, or other material contract, agreement or instrument to
which such Seller is a party or by which such Seller or any of its
properties is bound, (ii) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such contract,
indenture, loan agreement, mortgage, deed of trust, lease or other
agreement or instrument, other than this Agreement and the other
Transaction Documents or (iii) violate any other Requirement of Law,
except, in the case of clauses (i)(B), (ii) and (iii) to the extent that
such conflict, breach, default, Lien or violation, as the case may be,
would not be reasonably likely to have a Material Adverse Effect.
(f) No Proceedings. There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of such Seller, threatened against or affecting such Seller (i)
asserting the invalidity or unenforceability of this Agreement or any
other Transaction Document, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or any other
Transaction Document, or (iii) seeking any determination or ruling that
could reasonably be expected to result in a Material Adverse Effect (other
than the Disclosed Matters).
(g) Bulk Sales Act. No transaction contemplated by this Agreement or
any other Transaction Document with respect to such Seller requires
compliance with, or will be subject to avoidance under, any bulk sales act
or similar law, other than those consents or filings which have been
complied with or obtained.
(h) Location of Records; Chief Executive Office. The registered
office, chief place of business and chief executive office of such Seller
is as indicated on Schedule 2 hereto and is the place where such Seller is
"located" for the purposes of the PPSA in each of the provinces and
territories of Canada. The jurisdiction where the chief executive office
of such Seller is "located" for the purposes of each such PPSA has not
changed in the past four months. The offices where such Seller keeps its
records concerning the Receivables and related Contracts and all other
agreements related to the Receivables are as indicated for such Seller on
Schedule 2 hereto (or at such other) locations, notified to the Company
and the Trustee in accordance with Section 5.1(h), in jurisdictions where
all action required by Section 9.2 has been taken and completed).
(i) Proceeds Banks; Payment Instructions. The names and addresses of
all the Lockbox Banks, the Lockbox Processors, and Eligible Segregated
Account Banks, together with the account numbers of the Lockbox Accounts
and the Eligible Segregated Accounts into which Collections are deposited
at such institutions, are specified in Schedule 3. The Sellers will have
transferred all of their right, title and interest in each Lockbox Account
and Eligible Segregated Account to the Company. Each Lockbox Bank or
Lockbox Processor has executed and delivered to the Company
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and the Trustee a Lockbox Agreement. Each Eligible Segregated Account Bank
has executed and delivered to the Company and the Trustee an Eligible
Segregated Account Bank Agreement. With respect to any payments in respect
of Receivables and Related Property that are made directly to any Seller
(including, without limitation, any Collectors, other employees thereof or
independent contractors employed thereby), such Seller agrees to deposit
payments in the form received within one Business Day of receipt directly
to one of the Lockbox Accounts, or Eligible Segregated Accounts. Each
invoice issued to an Obligor on and after the Effective Date shall
indicate that payments in respect of its Receivable shall be made by such
Obligor to a Lockbox Account or Eligible Segregated Account or by wire
transfer or other electronic payment to a Lockbox Account, an Eligible
Segregated Account or the Collection Account or otherwise as provided in
Section 2.03 of the Servicing Agreement.
(j) No Fraudulent Transfers. The transfers of Receivables and
Receivables Property by such Seller to the Company pursuant to this
Agreement, and all other transactions between such Seller and the Company,
have been and will be made in good faith and without intent to hinder,
delay or defraud creditors of such Seller, and such Seller acknowledges
that it has received and will receive fair consideration and reasonably
equivalent value for the purchases by the Company of Receivables and
Receivables Property hereunder. The purchase of Receivables and
Receivables Property by the Company from such Seller constitutes a true
sale of such Receivables and Receivables Property under applicable state
law.
(k) Trade Names. Such Seller uses no trade name in the furnishing of
its products or services which generate Receivables other than its actual
corporate name and the trade names set forth for such Seller in Schedule
5. During the five years preceding the date hereof, except as set forth in
Schedule 5, (i) such Seller has not been known by any legal name or trade
name (including any name in the French language) other than its corporate
name, (ii) nor has such Seller been the subject of any merger,
amalgamation or other corporate reorganization within the last five years.
(l) Compliance with Applicable Laws. Such Seller is in compliance
with the requirements of all applicable laws, rules, regulations, and
orders of all governmental authorities (federal, provincial, local or
foreign, and including, without limitation, environmental laws), relating
to the Receivables a breach of any of which, individually or in the
aggregate, would be reasonably likely to have a Material Adverse Effect.
(m) Taxes. Such Seller has filed all tax returns (federal,
provincial and local) required by law to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges due from such Seller or is contesting any such tax,
assessment or other governmental charge in good faith through appropriate
proceedings. No tax Lien has been filed with respect to taxes which could
reasonably be expected to result in a Material Adverse Effect and, to the
best knowledge of such Seller, no claim is presently being asserted with
respect to taxes which could reasonably be expected to result in a
Material Adverse Effect.
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For purposes of this paragraph, "taxes" shall mean any present or future
tax, levy, impost, duty, charge, assessment or fee of any nature
(including interest, penalties and additions thereto) that is imposed by
any Governmental Authority. Such Seller knows of no basis for any material
additional tax assessment for any fiscal year for which adequate reserves
have not been established.
(n) Solvency. Both prior to and after giving effect to the
transactions occurring on the Effective Date, (i) the fair value of the
assets of such Seller at a fair valuation will exceed the debts and
liabilities, subordinated, contingent or otherwise, of such Seller; (ii)
the present fair salable value of the property of such Seller will be
greater than the amount that will be required to pay the probable
liability of such Seller on its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; (iii) such Seller will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (iv) such Seller will not have
unreasonably small capital with which to conduct the business in which it
is engaged as such business is now conducted and is proposed to be
conducted. For all purposes of clauses (i) through (iv) above, the amount
of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an
actual or matured liability. Such Seller does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such debts as
they mature, taking into account the timing of and amounts of cash to be
received by it and the timing of and amounts of cash to be payable in
respect of its debt.
(o) Investment Company Act. Neither such Seller nor any of such
Seller's Subsidiaries is (i) an "investment company" registered or
required to be registered under the 1940 Act, or (ii) a "holding company",
or a "subsidiary company" or an "affiliate" of a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
(p) Ownership. All of the issued and outstanding capital stock of
such Seller (other than WESCO Canada) is owned, directly or indirectly, by
WESCO Canada and all of the issued and outstanding capital stock of WESCO
Canada is owed, directly or indirectly, by WESCO.
(q) Indebtedness to Company. Such Seller had no outstanding
Indebtedness to the Company other than amounts permitted by this Agreement
or amounts outstanding under the Seller Note.
(r) Receivables Documents. Upon the delivery, if any, by such Seller
to the Company of licenses, rights, computer programs, related materials,
computer tapes, disks, cassettes and data relating to the administration
of the Purchased Receivables pursuant to subsection 5.01(o), the Company
shall have been furnished with all materials and data necessary to permit
orderly collection of the Purchased Receivables without the participation
of such Seller in such collection.
24
(s) Filings. On or prior to the date that is 10 days after the
Effective Date, all Registrations and other acts (including but not
limited to all filings and other acts necessary or advisable under the
PPSA) shall have been made or performed such that the Company has on such
date a first priority perfected ownership or security interest in respect
of all Receivables.
Section 4.02. Representations and Warranties of the Sellers Relating
to the Receivables. Each Seller hereby represents and warrants, as to itself
only, for the benefit of the Company and its assigns (including the Trustee) on
each Payment Date as follows:
(i) Receivables Description. As of the Effective Date, the
Receivables List delivered pursuant to Section 3.01(m) sets forth in all
material respects an accurate and complete listing of all its Receivables
as of the Effective Date and the information contained therein with
respect to the identity of such Receivables is true and correct in all
material respects as of such date. As of the Effective Date, the aggregate
amount of Receivables owned by such Seller is accurately set forth on the
Receivables List.
(ii) Quality of Title. Each Receivable existing on the Effective
Date or, in the case of Receivables sold to the Company after the
Effective Date, on the date that each such Receivable shall have been sold
to the Company, has been conveyed to the Company and the Company has
acquired a valid and perfected first priority ownership interest in each
such Receivable, in each case, free and clear of any Liens, except for
Permitted Liens specified in clauses (i) or (iv) of the definition
thereof.
(iii) Eligible Receivable. Each Receivable of such Seller is or will
be an account receivable arising out of such Seller's performance in
accordance with the terms of the Contract, if any, giving rise to such
Receivable. On the Effective Date, each Receivable other than Receivables
designated as Ineligible Receivables on a Daily Report, sold to the
Company on such date is an Eligible Receivable on the Effective Date and,
in the case of Receivables sold to the Company after the Effective Date,
each such Receivable, other than Receivables designated as Ineligible
Receivables on a Daily Report, sold to the Company on such later date is
an Eligible Receivable on such later date.
The representations and warranties set forth in this Section 4.02
shall survive the transfer and assignment of the respective Receivables to the
Company pursuant to this Agreement. Upon discovery by any Seller or the Company
of a breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other.
Section 4.03. Representations and Warranties of the Company. The
Company represents and warrants as to itself for the benefit of the Sellers as
follows:
(a) Corporate Existence. It (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its incorporation, and is duly qualified as a foreign corporation and
is in good standing in each jurisdiction in which the failure to so
qualify would have a Material Adverse Effect,
25
(ii) has all requisite corporate power and authority and the legal right
to own, pledge, mortgage and operate its properties, and to conduct its
business as now or currently proposed to be conducted and (iii) is in
compliance with all Requirements of Law.
(b) Corporate Power; Authorization; Consents. It has the corporate
power and authority, and the legal right, to execute, deliver and perform
this Agreement and the other Transaction Documents to which it is a party
and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and the other Transaction
Documents to which it is a party.
(c) No Violation. The execution, delivery and performance by it of
this Agreement and the other Transaction Documents to which it is a party
and all instruments and documents to be delivered hereunder by it, and the
transactions contemplated hereby and thereby, (i) do not (A) violate its
certificate or articles of incorporation and by-laws or other
organizational or governing documents or, in any material respect, any
other Requirement of Law, (B) conflict with or result in the breach of, or
constitute a default under, any indenture, mortgage or deed of trust or
any material lease, agreement or other instrument binding on or affecting
it or any of its respective subsidiaries or any of its properties in any
material respect or (C) result in or require the creation or imposition of
any Lien except as created or imposed hereunder or under the Pooling
Agreement, and no transaction contemplated hereby requires compliance on
its part with any bulk sales act or similar law, and (ii) do not require
the consent of, authorization by or approval of or notice to or filing or
registration with, any governmental body, agency, authority, regulatory
body or any other Person other than those which have been obtained or made
except for the filing of the Financing Statements referred to in Article
III hereof, which filings the Sellers hereby represent shall have been
duly made prior to or substantially contemporaneously with any purchases
of Receivables and other Receivables Property and shall at all times be in
full force and effect (except as they may be terminated by the Company).
(d) Binding Obligations. This Agreement has been duly executed and
delivered by the Company and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms except (A)
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general, and (B) as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
(e) Accounting Treatment. The Company will not prepare any financial
statements that shall account for the transactions contemplated hereby,
nor will it in any other respect (other than for tax purposes) account for
the transactions contemplated hereby, in a manner that is inconsistent
with the Company's ownership interest in the Receivables.
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ARTICLE V
GENERAL COVENANTS
Section 5.01. Affirmative Covenants of the Sellers. Each Seller
covenants that, until the Purchase Termination Date shall have occurred with
respect to such Seller and there are no amounts outstanding with respect to the
Purchased Receivables previously sold by such Seller to the Company (other than
Charged-off Receivables):
(a) Preservation of Corporate Existence and Name. Such Seller will
preserve and maintain in all material respects its corporate existence,
rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified as a foreign or
extraprovincial corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification could have a Material Adverse Effect.
(b) Maintenance of Property. Such Seller will keep all property and
assets useful and necessary to permit the origination, monitoring and
collection of Receivables.
(c) Compliance with Laws, Etc. Such Seller shall comply in all
material respects with all applicable laws, rules, regulations and orders
applicable to the Receivables and the Receivables Property, including,
without limitation, rules and regulations relating to truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity, fair
debt collection practices and privacy, where failure to so comply could
reasonably be expected to have a materially adverse impact on the amount
of Collections thereunder.
(d) Visitation Rights. At any reasonable time during normal business
hours and from time to time upon reasonable notice, according to such
Seller's normal security and confidentiality provisions with respect to
customer lists, such Seller shall permit (i) the Company, the Trustee or
any of its agents or representatives, (A) to examine and make copies of
and abstracts from the records, books of account and documents (including,
without limitation, computer tapes and disks) of such Seller relating to
Receivables and Related Property owned or to be purchased by the Company
hereunder, including, without limitation, the related Contracts and
purchase orders and other agreements and (B) following the termination of
the appointment of WESCO as Servicer or of such Seller as a Servicing
Party with respect to the Receivables, to be present at the offices and
properties of such Seller to administer and control the collection of
amounts owing on the Purchased Receivables and (ii) the Company, the
Trustee or any of its agents or representatives, or the Trustee (upon the
giving of appropriate notice to the Company) to visit the properties of
such Seller for the purpose of examining such records, books of account
and documents, and to discuss the affairs, finances and accounts of such
Seller relating to the Receivables or such Seller's performance hereunder
with any of its officers or directors and with its independent chartered
accountants; provided, however, that the Company, the Trustee or such
agents or representatives, as the case may be, shall notify such Seller
prior to
27
any contact with such accountants and permit representatives of such
Seller to participate in such discussions.
(e) Keeping of Records and Books of Account. Such Seller will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables
and the Receivables Property in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records
and other information which, in each case, in the reasonable discretion of
the Company, are necessary or advisable for the collection of all
Receivables and the Receivables Property (including, without limitation,
records adequate to permit the identification of each new Receivable and
all Collections of and adjustments to each existing Receivable). Upon the
request of the Company, such Seller will deliver copies of all books and
records maintained pursuant to this Section 5.01(e) to the Trustee.
(f) Performance and Compliance with Policies, Receivables and
Contracts. Such Seller will (i) perform its obligations in accordance with
and comply in all material respects with the Policies, as amended from
time to time in accordance with the Transaction Documents and (ii) at its
expense, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Receivables and the Contracts related to the Receivables and Related
Property and all purchase orders and other agreements related to such
Receivables and Related Property.
(g) Obligations. Such Seller shall pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the
case may be, all its other obligations of whatever nature, except where
(i) the amount of validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on its books, or (ii) the failure to so
pay, discharge or satisfy all such obligations would not, in the
aggregate, be reasonably likely to have a Material Adverse Effect and
would not subject any of its properties to any Lien prohibited by
subsection 5.03(b).
(h) Location of Records. Such Seller will keep its principal and
chief place of business, registered office and chief executive office, and
the offices where it keeps its records concerning the Receivables, all
Receivables Property, all Contracts and purchase orders and other
agreements related to such Receivables (and all original documents
relating thereto), at the address(es) of such Seller referred to in
Schedule 2 or, upon 30 days' prior written notice to the Company and the
Agents, at such other locations in jurisdictions where all action required
by Section 5.01(m) shall have been taken and completed.
(i) Obligation to Record and Report. Such Seller shall to the
fullest extent permitted by GAAP and by applicable law, record each
purchase of the Purchased Receivables as a sale on its books and records
and reflect each purchase of Purchased Receivables in its financial
statements as a sale.
28
(j) Collections. Such Seller shall cause each invoice issued to an
Obligor on and after the Effective Date shall indicate that payments in
respect of its Receivable shall be made by such Obligor to a Lockbox
Account or Eligible Segregated Account or by wire transfer or other
electronic payment to a Lockbox Account, an Eligible Segregated Account or
the Collection Account or otherwise as provided in Section 2.03 of the
Servicing Agreement and comply in all material respects with procedures
with respect to Collections reasonably specified from time to time by the
Company; including, without limitation, the procedures specified in the
Servicing Agreement. In the event that any payments in respect of any such
Receivables are made directly to such Seller (including, without
limitation, any Collector, any other employees thereof or independent
contractors employed thereby), such Seller shall, within one Business Day
(except as provided in the Servicing Agreement) of receipt thereof,
forward such amounts to a Lockbox, a Lockbox Account, an Eligible
Segregated Account or the Collection Account and, prior to forwarding such
amounts, the Seller shall hold such payments in trust as custodian for the
Company and the Trustee.
(k) Taxes. Such Seller will file all tax returns and reports
required by law to be filed by it and will pay all taxes and governmental
charges thereby shown to be owing, except any such taxes or charges which
are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP have been set
aside on its books.
(l) Separate Corporate Existence of the Company. Such Seller hereby
acknowledges that the Trustee and the Investor Certificateholders are
entering into the transactions contemplated by the Transaction Documents
in reliance upon the Company's identity as a legal entity separate from
the Sellers and all other WESCO Persons. Therefore, from and after the
date hereof, such Seller will take (or refrain from taking, as the case
may be) such actions and will cause each other WESCO Person to take (or
refrain from taking, as the case may be) such actions, as shall be
required in order that:
(i) Each WESCO Person maintain its deposit account or accounts
separate from those of the Company and ensure that its funds will
not be diverted to the Company, nor will such funds be commingled
with the funds of the Company;
(ii) To the extent that any WESCO Person shares any officers
or other employees with the Company, the salaries of and the
expenses related to providing benefits to such officers and other
employees shall be fairly allocated among such WESCO Person and the
Company, and such WESCO Person and the Company shall bear their fair
shares of the salary and benefit costs associated with all such
common officers and employees;
(iii) To the extent that any WESCO Person jointly contracts
with the Company to do business with vendors or service providers or
to share overhead expenses, the costs incurred in so doing shall be
allocated fairly between such
29
WESCO Person and the Company, and such WESCO Person and the Company
shall bear their fair shares of such costs. To the extent that any
WESCO Person contracts or does business with vendors or service
providers where the goods and services provided are partially for
the benefit of the Company, the costs incurred in so doing shall be
fairly allocated between such WESCO Person and the Company in
proportion to the benefit of the goods or services each is provided,
and such WESCO Person and the Company shall bear their fair shares
of such costs. All material transactions between any WESCO Person
and the Company, whether currently existing or hereafter entered
into, shall be only on an arm's length basis, it being understood
and agreed that the transactions contemplated in the Transaction
Documents meet the requirements of this clause (iii);
(iv) Each WESCO Person will maintain office space separate
from the office space of the Company (but which may be located at
the same address as the Company). To the extent that it and the
Company have offices in the same location, there shall be a fair and
appropriate allocation of overhead costs between them, and each
shall bear its fair share of such expenses;
(v) No WESCO Person will assume or guarantee any of the
liabilities of the Company;
(vi) Each WESCO Person will maintain corporate records and
books of account separate from those of the Company and telephone
numbers, mailing addresses, stationery and other business forms that
are separate and distinct from those of the Company.
(vii) Any financial statements of any WESCO Person which are
consolidated to include the Company will contain a detailed note
substantially in the form, and to the effect, of the note set forth
on Schedule 7.
(viii) No WESCO Person will hold itself out, or permit itself
to be held out, as having agreed to pay or be liable for the debts
of the Company.
(ix) Each WESCO Person will take, or refrain from taking, as
the case may be, all other actions that are necessary to be taken or
not to be taken in order (x) to ensure that the assumptions and
factual recitations set forth in the Specified Bankruptcy Opinion
Provisions remain true and correct with respect to such WESCO Person
(and, to the extent within its control, to ensure that the
assumptions and factual recitations set forth in the Specified
Bankruptcy Opinion Provisions remain true and correct with respect
to the Company) and (y) to comply with those procedures described in
such provisions that are applicable to such WESCO Person.
(m) Further Action Evidencing Purchases.
30
(i) Such Seller agrees that from time to time, at its
expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or desirable or that the Company may reasonably request,
to protect or more fully evidence the Company's ownership, right,
title and interest in the Receivables and Receivables Property sold
by such Seller and its rights under the Contracts with respect
thereto, or to enable the Company to exercise or enforce any of its
rights hereunder or under any other Transaction Document. Without
limiting the generality of the foregoing, such Seller will upon the
request of the Company (A) execute and file such Registrations, as
may be necessary or, in the reasonable opinion of the Company or the
Agents, desirable, (B) indicate on its books and records (including,
without limitation, master data processing records) that the
Receivables and Receivables Property have been sold and assigned to
the Company and, in turn, the Company has sold and assigned its
interest therein to the Trustee, and provide to the Company, upon
request, copies of any such records, (C) after the occurrence of a
Purchase Termination Event, contact customers to confirm and verify
Receivables and (D) obtain the agreement of any Person having a Lien
on any Receivables owned by such Seller (other than any Lien created
or imposed hereunder or under the Pooling Agreement or any Permitted
Lien) to release such Lien upon the purchase of any such Receivables
by the Company.
(ii) Such Seller hereby irrevocably authorizes the Company
and the Trustee to register, file or record one or more
Registrations substantially in the form of the originally agreed
upon Registrations, relative to all or any part of the Receivables
and Receivables Property sold or to be sold by such Seller, without
the signature of such Seller where permitted by law.
(iii) If such Seller fails to perform any of its agreements
or obligations under this Agreement, the Company or its assignees
may (but shall not be required to) perform, or cause performance of,
such agreements or obligations, and the expenses of the Company
incurred in connection therewith shall be payable by such Seller as
provided in Section 7.01.
(n) Legend Requirement For Chattel Paper. Such Seller agrees (i) at
all times to comply with the terms and provisions set forth in Schedule 3
to the Pooling Agreement and (ii) that any Receivable that constitutes or
is evidenced by "chattel paper" as defined in the Ontario PPSA shall bear
a legend stating that such Receivable has been conveyed to the Trust.
(o) Computer Files. At its own cost and expense, each Seller shall
retain the ledger used by such Seller as a master record of the Obligors
and retain copies of all documents relating to each Obligor as custodian
and agent for the Company and other Persons with interests in the
Purchased Receivables, and each Seller shall assure continued compliance
with Section 2.01(e).
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Section 5.02. Reporting Requirements. Each Seller shall furnish to
the Company and its assigns (including the Trustee) from the date hereof until
the Purchase Termination Date shall have occurred with respect to such Seller
and until there are no amounts outstanding with respect to Purchased Receivables
previously sold by such Seller to the Company:
(a) Compliance Certificate. Not later than 120 days after the end of
each fiscal year and not later than 60 days after the end of each of the
first three fiscal quarters of each fiscal year, a certificate of a
Responsible Officer of such Seller stating that, to the best of such
Responsible Officer's knowledge, such Seller during such period, has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in the Transaction Documents to which
it is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Purchase Termination
Event or Potential Purchase Termination Event except as specified in such
certificate;
(b) Termination Events: Other Material Events. (i) Upon the
Company's request, a certificate of a Responsible Officer of such Seller
certifying, as of the date thereof, that no Purchase Termination Event has
occurred and is continuing and setting forth the computations used by the
chief financial officer of such Seller in making such determination; (ii)
as soon as possible and in any event within two Business Days after a
Responsible Officer of such Seller obtains knowledge of the occurrence of
any Purchase Termination Event, Potential Purchase Termination Event,
Servicer Default or Potential Servicer Default, a written statement of a
Responsible Officer of such Seller setting forth details of such event and
the action that such Seller proposes to take or has taken with respect
thereto; (iii) promptly after obtaining knowledge of any threatened action
or proceeding affecting such Seller or its Subsidiaries before any court,
governmental agency or arbitrator that may reasonably be expected to
materially and adversely affect the enforceability of this Agreement and
the other Transaction Documents, notice of such action or proceeding; and
(iv) by June 15, 1999, a certificate of a Responsible Officer of such
Seller (with a copy to each Rating Agency) certifying, as of the date
thereof, that such Seller's computer systems shall be "year 2000
compliant" by June 30, 1999;
(c) Ineligible Receivables. Promptly upon determining that any
Purchased Receivable originated by it designated as an Eligible Receivable
on the applicable Daily Report was not an Eligible Receivable as of the
date provided therefor, written notice of such determination; and
(d) Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables of such Seller as
the Company or the Agents may from time to time reasonably request in
order to protect the interests of the Company and the Agents under or as
contemplated by the Transaction Documents.
Section 5.03. Negative Covenants. Each Seller covenants that, until
the Purchase Termination Date shall have occurred with respect to such Seller
and there are no
32
amounts outstanding with respect to Purchased Receivables previously sold by
such Seller to the Company.
(a) Receivables to be Accounts, General Intangibles or Chattel
Paper. Such Seller will take no action to cause any Receivable to be
evidenced by any "instrument" other than in compliance with Section 2.2(g)
of the Servicing Agreement or, provided that the procedures set forth in
Schedule 3 to the Pooling Agreement are fully implemented with respect
thereto, an instrument which together with a security agreement
constitutes "chattel paper" (each as defined in the Ontario PPSA). Such
Seller will take no action to cause any Receivable to be anything other
than an "account", "general intangible" or "chattel paper" (each as
defined in the Ontario PPSA).
(b) Security Interests; Sale of Receivables. Except for the
conveyances hereunder and as provided below, such Seller will not sell,
pledge, assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist any other Lien on any Receivable or Receivables
Property, whether now existing or hereafter created, or any interest
therein; such Seller will immediately notify the Company of the existence
of any other Lien on any Receivable or Receivables Property; and such
Seller shall defend the right, title and interest of the Company in, to
and under the Receivables or Receivables Property, whether now existing or
hereafter created, against all claims of third parties claiming through or
under such Seller; provided, however, that nothing in this subsection
5.03(b) shall prevent or be deemed to prohibit such Seller from suffering
to exist upon any of the Receivables any Permitted Lien.
(c) Extension or Amendment of Receivables. Such Seller will not
extend, rescind, cancel, make any Dilution Adjustment to, amend or
otherwise modify, or attempt or purport to extend, rescind, cancel, make
any Dilution Adjustment to, amend or otherwise modify, the terms of any
Purchased Receivables, except in any such case (i) in accordance with the
terms of the Policies, (ii) as required by any Requirement of Law or (iii)
in the case of Dilution Adjustments (whether or not permitted by any other
clause of this sentence), upon making a Seller Adjustment Payment pursuant
to Section 2.05.
(d) Change in Business. Such Seller will not make or permit to be
made any change in the character of its business in any material respect
if such change could reasonably be expected to have a Material Adverse
Effect.
(e) Change in Policies. Such Seller shall not make or permit to be
made any change in the Policies in any material respect, except (i) if
such changes or modifications are required under any Requirement of Law,
(ii) if such changes or modifications would not reasonably be expected to
have a Material Adverse Effect or (iii) if the Rating Agency Condition is
satisfied with respect thereto.
(f) Change in Name. Such Seller will not change its name, identity
or corporate structure in any manner including by way of any merger,
consolidation, amalgamation, liquidation, a winding up or dissolution
which would or might make
33
any Registration relating to this Agreement incorrect or require any
amendment or additional Registration with respect thereto, or otherwise
impair the perfection or protection of the Company's interest in any
Receivable under any other similar law, without having (i) delivered 30
days' prior written notice to the Company, the Servicer and the Trustee
and (ii) taken all action required by subsection 5.01(a).
(g) Change in Payment Instructions to Obligors. Such Seller shall
not instruct any Obligor of any Purchased Receivables to make any payments
with respect to any Receivables other than to a Lockbox, a Lockbox
Account, an Eligible Segregated Account or the Collection Account or
otherwise in accordance with the Servicing Agreement.
(h) Accounting Changes. Such Seller shall not prepare any financial
statements (other than consolidated financial statements) which shall
account for the transactions contemplated hereby in any manner other than
as a sale of the Purchased Receivables by such Seller to the Company nor,
except as required by law, in any other respect (other than for tax
purposes) account for or treat the transactions contemplated hereby
(including for financial accounting purposes) in any manner other than as
sales of the Purchased Receivables originated by such Seller to the
Company.
(i) Ineligible Receivables. Such Seller shall not take any action to
cause an Eligible Receivable to cease to be an Eligible Receivable, except
in any such case upon making a Seller Repurchase Payment pursuant to
Section 2.06; provided, however, that in no event shall an Eligible
Receivable becoming an Aged Receivable constitute a breach of this
paragraph (i).
ARTICLE VI
PURCHASE TERMINATION EVENTS
Section 6.01. Purchase Termination Events. If, with respect to any
Seller, any of the following events (each, a "Purchase Termination Event" with
respect to such Seller) shall have occurred and be continuing:
(a) Such Seller shall fail to make any payment or deposit to be made
by it hereunder when due and such failure shall remain unremedied for five
Business Days; or
(b) There shall have occurred (i) an Early Amortization Event set
forth in Section 7.01 of the Pooling Agreement or (ii) the Amortization
Period with respect to all Outstanding Series shall have occurred and be
continuing; or
(c) Any representation or warranty made or deemed to be made by such
Seller or any of its officers under or in connection with any Transaction
Document, Daily Report, Monthly Settlement Statement or other information,
statement, record, certificate, document or report delivered pursuant to a
Transaction Document shall prove to have been false or incorrect in any
material respect when made or deemed
34
made (including in each case by omission of material information necessary
to make such representation, warranty, certificate or statement not
misleading); provided, however, that no such event shall constitute a
Purchase Termination Event unless such event shall continue unremedied for
a period of 30 days from the earlier of (A) the date any Responsible
Officer of such Seller obtains knowledge thereof and (B) the date such
Seller receives notice of the incorrectness of such representation or
warranty from the Company or the Trustee; provided, further,that a
Purchase Termination Event shall not be deemed to have occurred under this
paragraph (c) based upon a breach of any representation or warranty set
forth in Section 4.02 with respect to any Receivable if the Sellers shall
have complied with the provisions of Sections 2.06 or 2.11, as the case
may be; or
(d) Such Seller shall fail to perform or observe any other term,
covenant or agreement contained herein; provided, however, that no failure
to perform or observe any other term, covenant or agreement contained
herein shall constitute a Purchase Termination Event unless such event
shall continue unremedied for a period of 30 days from the earlier of (A)
the date any Responsible Officer of such Seller obtains knowledge of such
failure and (B) the date such Seller receives notice of such failure from
the Company or the Trustee; provided, further, that a Purchase Termination
Event shall not be deemed to have occurred under this paragraph (d) based
upon a breach of any covenant set forth in subsection 5.01(c), (f) or (g)
or Section 5.03 with respect to any Receivable if the Sellers shall have
complied with the provisions of Sections 2.06 or 2.11, as the case may be;
or
(e) Any Transaction Document to which such Seller is a party shall
cease, for any reason, to be in full force and effect, or WESCO Canada or
such Seller shall so assert in writing, or the Company shall fail to have
a valid and perfected first priority ownership interest in substantially
all of the Receivables and the Receivables Property; or
(f) (i) such Seller shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors (including, without limitation, the Companies Creditor's
Arrangement Act (Canada)), seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, receiver manager, administrator, inspector, liquidator or other
similar official for it or for all or any substantial part of its assets
or any such person shall be privately appointed in respect of such Seller
or all or any substantial part of its assets and such appointment is not
set aside or stayed within 30 days after the date that such appointment
was made, provided that such 30 day period shall only apply if such
appointment was not consented to or acquiesced and is being actively and
diligently contested in good faith by appropriate proceedings, or such
Seller shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against such Seller any case, proceeding
or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for
35
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against such Seller or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof, or all or any
substantial part of the property of such Seller shall be seized or
repossessed by any creditor pursuant to applicable law, and such seizure
or repossession shall not be set aside or otherwise reversed within 60
days; or (iv) such Seller or any of its respective Subsidiaries shall take
any action in furtherance of any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) such Seller shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) WESCO has been terminated as Servicer following a Servicer
Default with respect to WESCO under the Servicing Agreement; or
(h) there shall be filed against such Seller a notice of any other
Lien, the existence of which could reasonably be expected to have a
Material Adverse Effect unless there has been delivered to the Trustee
proof of release of, or payment of amounts secured by, such Lien;
then, (x) in the case of any Purchase Termination Event described in
paragraph (b)(i) or (f) (other than clause (v) thereof), the obligation of
the Company to purchase Receivables shall thereupon automatically
terminate without further notice of any kind, which is hereby waived by
such Seller, (y) in the case of any Purchase Termination Event described
in paragraph (b)(ii) above, the obligation of the Company to purchase
Receivables shall thereupon terminate without notice of any kind, which is
hereby waived by such Seller, unless both the Company and such Seller
agree in writing that such event shall not trigger an Early Termination
hereunder and (z) in the case of any other Purchase Termination Event, so
long as such Purchase Termination Event shall be continuing, the Company
may terminate its obligation to purchase Receivables from such Seller by
written notice to such Seller (any termination with respect to any Seller
pursuant to clause (x), (y) or (z) of this Article VI is herein called an
"Early Termination" with respect to such Seller); provided, however, that
in the event of (A) the filing of any notice of Lien described in
paragraph (h) above or (B) an involuntary petition or proceeding as
described in paragraphs (f)(ii) and (f)(iii) above, the Company shall not
purchase Receivables from such Seller until such time, if any, as such
Lien is released or paid (and evidence of such release is received and
verified by S&P) as described above or such involuntary petition or
proceeding has been dismissed; provided, further, that in the case of
clause (B) such dismissal shall have occurred within 60 days of the filing
of such petition or the commencement of such proceeding; provided,
further, that upon the occurrence of an Early Termination of a Seller,
such Seller shall have no further obligation to sell any additional
Receivables to the Company. Notwithstanding anything to the contrary in
this Section 6.01, a delay in or failure of performance referred to under
clause (a) above for a period of 10 Business Days after the applicable
grace period shall not constitute a Purchase
36
Termination Event, if such delay or failure could not have been prevented
by the exercise of reasonable diligence by such Seller and such delay or
failure was caused by a Force Majeure Delay.
Section 6.02. Additional Remedies. (a) Upon the occurrence of any
Purchase Termination Event, the Company shall have, in addition to all other
rights and remedies under this Agreement or otherwise all other rights and
remedies provided under the PPSA of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative. Without limiting the
foregoing, the occurrence of a Purchase Termination Event shall not deny to the
Company any remedy (in addition to termination of the Company's obligation to
purchase Receivables from any relevant Seller or Sellers) to which the Company
may be otherwise appropriately entitled, whether by statute or other applicable
law, at law or in equity.
(b) In the absence of a Purchase Termination Event under Section
6.01(b)(i) or (f), it is understood and agreed that the Company will not
exercise the rights granted to it pursuant to Section 2.01(f).
ARTICLE VII
INDEMNIFICATION; EXPENSES; COSTS
Section 7.01. Indemnities by the Sellers. WESCO Canada and the other
Sellers (other than those Sellers from which the Company has no Receivables
outstanding at such time) agree (i) to pay or reimburse the Company for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights against any Seller under this Agreement, including, without
limitation, the reasonable fees and disbursements of counsel to the Company on a
solicitor-client basis, (ii) to pay, indemnify and hold the Company harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay caused by the Seller in paying, stamp,
excise and other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement and any such other documents, and (iii) without limiting any
other rights that the Company may have hereunder or under applicable law, to
indemnify the Company from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) (all the foregoing being
collectively referred to as "Indemnified Amounts") arising out of or resulting
from any of the following, excluding, however, Indemnified Amounts (a) to the
extent resulting from the gross negligence or willful misconduct of the Company,
(b) arising solely from a delay in payment, or default by, an Obligor with
respect to any Receivable (other than any delay of default arising out of any
discharge, claim, offset or defense (other than discharge in bankruptcy of the
Obligor or otherwise in respect of a Charged-Off Receivable) of the Obligor to
the payment of any Transferred Receivable arising from the actions of such
Seller (including, without limitation, a defense based on such Transferred
Receivable's not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms) or (c) attributable to any
income or franchise taxes imposed on (or measured by) the Company's net income:
37
(a) the transfer by such Seller of any interest in any Receivable or
Receivables Property or proceeds thereof to a Person other than the Company;
(b) reliance on any representation or warranty or statement made or
deemed made by such Seller (or any of its officers) under or in connection with
this Agreement or in any certificate or report delivered pursuant hereto that,
in either case, shall have been false or incorrect in any material respect when
made or deemed made;
(c) the failure by such Seller to comply with any applicable law,
rule or regulation of any governmental authority with respect to any Receivable
or Receivables Property, or the nonconformity of any Receivable or Receivables
Property with any such applicable law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an
ownership interest in any Receivable or Receivables Property, free and clear of
any Lien, other than a Lien arising under the Transaction Documents, whether
existing at the time of the purchase of such Receivable or Receivables Property
or at any time thereafter;
(e) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the PPSA of any
applicable jurisdiction or other applicable laws with respect to any Receivables
or Receivables Property of such Seller;
(f) any dispute, claim, offset or defense of the Obligor to the
payment of any Receivable (including, without limitation, a defense based on
such Receivable or the related Contract not being fully enforceable against the
Obligor in accordance with its terms), or any other claim resulting from the
sale of the merchandise or services related to any such Receivable or the
furnishing or failure to furnish such merchandise or services;
(g) any failure of such Seller to perform its duties or obligations
under this Agreement;
(h) any products liability claim arising out of or in connection
with merchandise, insurance or services that are the subject of any Receivable
or Receivables Property;
(i) the commingling of Collections at any time with other funds of
such Seller;
(j) any claim involving environmental liability that relates to any
property that has been, is now or hereafter will be owned, leased, operated or
otherwise used by such Seller;
(k) any tax or governmental fee or charge (but not including
franchise taxes and taxes upon or measured by net income of the Company), all
interest and penalties thereon or with respect thereto, and all out-of-pocket
costs and expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the purchase or
ownership of any Receivable or Receivables Property, or any interest therein or
in
38
any merchandise which secure any such Receivables, any Receivables Property or
any other rights or assets transferred hereunder; or
(l) any investigation, litigation or proceeding related to this
Agreement or in respect of any Receivable or Receivables Property of such
Seller.
The Sellers shall pay on demand to the Company any and all amounts
necessary to indemnify the Company from and against any and all Indemnified
Amounts. Notwithstanding the foregoing, such Sellers shall not under any
circumstances be required to indemnify the Company for any Indemnified Amounts
that result from any delay in the collection of any Receivables or any default
by an Obligor with respect to any Receivables.
Section 7.02. Indemnities by the Company. Without limiting any other
rights that the Sellers may have hereunder or under applicable law, the Company
hereby agrees to indemnify each Seller from and against any and all claims,
losses and liabilities (including reasonable legal fees and disbursements on a
solicitor-client basis) arising out of or resulting from such Seller's reliance
on any representation or warranty made by the Company in this Agreement or in
any certificate delivered pursuant hereto that, in either case, shall have been
false or incorrect in any material respect when made or deemed made; provided,
however, that any payments made by the Company in respect of any of the
foregoing items shall be made solely from funds available to the Company which
are not otherwise required to be applied to the payment of any amounts pursuant
to any Pooling and Servicing Agreements (other than to the Company), shall be
non-recourse other than with respect to such funds and shall not constitute a
claim against the Company to the extent that insufficient funds exist to make
such payment.
ARTICLE VIII
SELLER NOTE
Section 8.01. Seller Note. (a) On the initial Effective Date, the
Company shall issue to each Seller, or to such other personal affiliated with
the Seller as the Seller may direct in writing, a note substantially in the form
of Exhibit A (as amended, supplemented or otherwise modified from time to time,
the "Seller Note"). The aggregate principal amount of the Seller Note at any
time shall be equal to the difference between (a) the aggregate principal amount
on the issuance thereof and each addition to the principal amount of such Seller
Note with respect to each Seller pursuant to the terms of Section 2.03 as of
such time, minus (b) the aggregate amount of all payments made in respect of the
principal of such Seller Note as of such time. All payments made in respect of
the Seller Note shall be allocated among the Sellers by the Servicer. Each
Seller's interest in the Seller Note (or, if a Seller has directed issuance of
the note to another person, such person's interest in the Seller Note) shall
equal the sum of each addition thereto allocated to such Seller pursuant to
subsection 2.03(c) less the sum of each repayment thereof allocated to such
Seller. All payments made in respect of the Seller Note shall be allocated,
first, to pay accrued and unpaid interest thereon, and second, to pay the
outstanding principal amount thereof. Interest on the outstanding principal
amount of the Seller Note shall accrue on the last day of each
39
Settlement Period at a rate per annum equal to the Reference Rate in effect from
time to time plus 2% from and including the initial Effective Date to but
excluding the last day of each Settlement Period and shall be paid (x) on each
Distribution Date with respect to the principal amount of the Seller Note
outstanding from time to time during the Settlement Period immediately preceding
such Distribution Date and/or (y) on the maturity date thereof; provided,
however, that, to the maximum extent permitted by law, accrued interest on the
Seller Note which is not so paid shall be added, at the request of such Seller,
to the principal amount of the Seller Note. Principal hereunder not paid or
prepaid pursuant to the terms hereof shall be payable on the maturity date of
the Seller Note. Default in the payment of principal or interest under the
Seller Note shall not constitute a Purchase Termination Event under this
Agreement, a Servicer Default under any Servicing Agreement or an Early
Amortization Event under the Pooling Agreement or any Supplement thereto.
Section 8.02. Restrictions on Transfer of Seller Note. Neither the
Seller Note, nor any right of any Seller or other person to receive payments
thereunder, shall be assigned, transferred, exchanged, pledged, hypothecated,
participated or otherwise conveyed to Wesco Deistribution, Inc. and except as
provided in the Credit Agreement and the security documents related thereto.
Section 8.03. Aggregate Amount. Anything herein to the contrary
notwithstanding, the Company may not make any payment of any Purchase Price in
the form of Indebtedness of the Company under the Seller Note unless (i) at the
time of such payment and after giving effect thereto, the fair market value of
the Company's assets, including beneficial interests in, or indebtedness of, a
trust and all Receivables and Receivables Property the Company owns, is greater
than the amount of its liabilities, including its liabilities on the Seller Note
and all interest and other fees due and payable under any Pooling and Servicing
Agreements and the other Transaction Documents plus $45,000,000 and (ii) the
aggregate principal amount of Indebtedness evidenced by the Seller Note,
incurred on or before such Payment Date and outstanding on such Payment Date
(after giving effect to all repayments thereof on or before such Payment Date)
would not exceed 25% of the outstanding balance of the Receivables on such
Payment Date.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendment. Neither this Agreement nor any of the terms
hereof may be amended, supplemented or modified except in a writing signed by
the Company and the Sellers. Any amendment, supplement or modification shall not
be effective until the Rating Agency Condition, if applicable, has been
satisfied.
Section 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified or registered mail, postage-prepaid, by facsimile or by overnight
courier, to the intended party at the address or facsimile number of such party
set forth under its name on the signature pages hereof or at such other address
or facsimile number as shall be designated by such party in a written
40
notice to the other parties hereto given in accordance with this Section 9.02;
provided, however, that no notices or other communications may be sent by mail
during any actual or apprehended disruption of postal services in the
jurisdiction of the intended recipient of such notice or other communication.
Copies of all notices and other communications provided for hereunder shall be
delivered, if to the Trustee, at its address at 450 West 33rd Street, New York,
New York 10001, Attention: Structured Finance Services, and if to the Servicer,
at its address set forth on Schedule 4. All notices and communications provided
for hereunder shall be effective, (a) if personally delivered by express mail or
courier, when received, (b) if sent by certified or registered mail, five
Business Days after having been deposited in the mail, postage prepaid and (c)
if transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means.
Section 9.03. No Waiver; Remedies. No failure on the part of the
Company, the Sellers or the Agents to exercise, and no delay in exercising, any
right under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 9.04. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Sellers and the Company and their
respective successors (whether by merger, consolidation or otherwise) and
assigns. Each Seller agrees that it will not assign or transfer all or any
portion of its rights or obligations hereunder other than as permitted in
section 8.01 and section 8.02 hereof, without the prior written consent of the
Company and the Trustee. Each Seller hereby acknowledges and consents to the
assignment by the Company of the Receivables and Receivables Property and the
rights and remedies of the Company under this Agreement to the Trustee for the
benefit of the Certificateholders pursuant to the Pooling and Servicing
Agreements. Each Seller hereby acknowledges and consents that the Company will
grant a security interest in the Lockbox Accounts, the Collection Account and
the Eligible Segregated Accounts to the Trust and the Trustee for the benefit of
the Certificateholders. Each Seller agrees to take any action that the Company
or the Trust may reasonably request in connection with such assignment or
security interest. Each Seller agrees that the Trustee shall be entitled to
enforce the terms of this Agreement and the rights (including, without
limitation, the right to grant or withhold any consent or waiver or give any
notice) of the Company directly against such Seller, whether or not a Purchase
Termination Event or a Termination Event has occurred and that so long as any
Investor Certificates are outstanding no consent, waiver or notice given
hereunder by the Company shall be effective unless the Trustee has given its
written consent thereto. Each Seller further agrees that, in respect of its
obligations hereunder, it will act at the direction of, and in accordance with,
all requests and instructions from the Trustee until all amounts due to the
Investor Certificateholders are paid in full. The Parties acknowledge that the
Company holds all rights of the Trustee and the Investor Certificateholders
hereunder, in trust for the benefit thereof and accordingly, each of the Trustee
and the Investor Certificateholders shall have the rights of third-party
beneficiaries under this Agreement.
Section 9.05. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
41
PROVINCE OF ONTARIO, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT AS REQUIRED BY MANDATORY
PROVISIONS OF LAW.
Section 9.06. Jurisdiction; Consent to Service of Process. (a) Each
party hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Transaction Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Company may otherwise have to bring any action or proceeding
relating to this Agreement or the other Transaction Documents against any Seller
or its properties in the courts of any jurisdiction.
(b) Each party hereto hereby irrevocably and unconditionally waives,
to the fullest extent they may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Transaction
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.02. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
Section 9.07. Integration. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
Section 9.08. Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement.
Section 9.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
42
Section 9.10. No Petition in Bankruptcy. Each Seller covenants and
agrees that prior to the date which is one year and one day after the date of
termination of this Agreement pursuant to Section 9.13, it will not institute
against or join any other Person in instituting against the Company any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any State of
the United States.
Section 9.11. Addition of Sellers. Subject to the terms and
conditions hereof, from time to time one or more wholly-owned Subsidiaries of
WESCO Canada may become additional Sellers parties hereto. If any such
Subsidiary wishes to become an additional Seller, WESCO Canada shall submit a
request to such effect in writing to the Company. Such wholly-owned Subsidiary
shall become an additional Seller party hereto on the related Seller Addition
Date upon satisfaction of the conditions set forth in Section 3.02 and the
conditions, if any, set forth in the Pooling and Servicing Agreements.
Section 9.12. Treatment of Sellers other than WESCO Canada;
Termination Thereof. (a) WESCO Canada hereby covenants and agrees with the
Company that WESCO Canada shall not permit any Seller (other than WESCO Canada)
at any time to cease to be a wholly-owned Subsidiary of WESCO, except as
provided in the following paragraph (b).
(b) If WESCO Canada wishes to permit any Seller to cease to be a
wholly-owned Subsidiary of WESCO Canada, then WESCO Canada shall submit a
request (a "Seller Termination Request") to such effect in writing to the
Company, which request shall be accompanied by a certificate prepared by a
Responsible Officer of the Servicer indicating the Purchased Receivables
Percentage applicable to such Seller as of the date of submission of such
request (the "Seller Termination Request Date"). Subject to the terms and
provisions hereof and of the Pooling and Servicing Agreements, the relevant
Seller shall be terminated as a Seller hereunder immediately upon the
consummation of the transaction in connection with which such Seller ceases to
be a wholly-owned Subsidiary of WESCO Canada. From and after the date any such
Seller is terminated as a Seller pursuant to this subsection, the Seller shall
cease selling, and the Company shall cease buying, Receivables and Receivables
Property from such Seller and in the case of the termination of a Seller, an
"Early Termination" shall deemed to have occurred with respect to such Seller.
(c) A terminated Seller shall have no further obligation under any
Transaction Document, other than pursuant to Sections 2.05, 2.06 and 2.11, with
respect to Receivables previously sold by it to the Company.
Section 9.13. Termination. This Agreement will terminate at such
time as (a) an Early Termination shall have occurred with respect to all Sellers
herewith and (b) all Receivables purchased hereunder have been collected, and
the proceeds thereof turned over to the Company and all other amounts owing to
the Company hereunder shall have been paid in full or, if Receivables sold
hereunder have not been collected, such Receivables have become Charged-Off
Receivables and the Company shall have completed its collection efforts with
respect thereto; provided, however, that the indemnities of the Sellers to the
Company set forth in Article 7 of this Agreement shall survive such termination
and provided, further, that the Company shall remain entitled to receive any
Collections on Receivables sold hereunder which have become Charged-Off
Receivables.
43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE SELLERS:
WESCO Distribution-Canada, Inc.
By:/s/ [ILLEGIBLE]
-------------------------------
Name:
Title:
Address:
Commerce Court
4 Station Square, Suite 700
Pittsburgh, PA 15219
Telephone: (412) 454-2254
Facsimile: (412) 454-2555
THE COMPANY:
WESCO RECEIVABLES CORP.
By:/s/ [ILLEGIBLE]
-------------------------------
Name:
Title:
Address:
Commerce Court
4 Station Square
Pittsburgh, PA 15219
Telephone: (412) 454-2270
Facsimile: (412) 454-2555
44
THE SERVICER:
WESCO Distribution, Inc.
By:/s/ [ILLEGIBLE]
-------------------------------
Name:
Title:
Address:
Commerce Court
4 Station Square, Suite 700
Pittsburgh, PA 15219
Telephone: (412) 454-2283
Facsimile: (412) 454-2555