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EXHIBIT 10.2
RECEIVABLES PURCHASE AGREEMENT
AGREEMENT dated as of January 1, 1966 by and among TEXTRON FINANCIAL
CORPORATION, a Delaware corporation ("TFC"), TEXTRON INC., a Delaware
corporation ("TXT"), ▇▇▇▇ HELICOPTER TEXTRON INC., a Delaware corporation
("BHT"), HR TEXTRON INC., a Delaware corporation ("HRT") and TEXTRON CANADA
LIMITED, a Canadian corporation ("TCL"). TXT and its Divisions, as well as TCL
and its Divisions, BHT and HRT are hereinafter collectively referred to as
"Textron".
TFC is a wholly-owned subsidiary of Textron Inc. which renders financial
services to Textron. Such services include, without limitation, financing of
sales and leases of Textron products by Textron and its dealers and
distributors, making unsecured loans to Textron and financing purchases or
leases by Textron. Textron, in turn, provides services and facilities to TFC
which include, without limitation, managerial and administrative assistance, a
line of credit, and undertakings to enable TFC to maintain a specified fixed
charges coverage and to take back from TFC certain overdue or uncollectible
accounts.
In consideration of the mutual covenants hereinafter set forth, TXT, TCL,
BHT, HRT and TFC agree as follows:
1. Definitions.
a. "Intercompany Account" means the account on the books of each of
Textron and TFC which shall reflect all debits and credits arising out
of transactions between Textron and TFC.
b. "Operating Memoranda" means agreements entered into by Textron and
TFC pursuant to Section 8 of this Agreement or pursuant to any Prior
Operating Agreements.
c. "Prior Operating Agreements" means the agreement originally entered
into by and between TFC, TXT, and TCL, dated as of February 17, 1977
and restated as of May 3, 1981 and subsequently restated as of January
3, 1982 and thereafter amended as of January 17, 1983, and thereafter
replaced by that certain Operating Agreement dated as of December 18,
1984.
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2. TFC Financing Services.
a. Installment Receivables.
TFC agrees to assist Textron in connection with installment sales of
Textron products in one of two ways:
(i) Installment Receivables Generated by Textron.
TFC may purchase from Textron installment receivables generated
directly by Textron in connection with sales of its products. The
terms and conditions upon which TFC purchases such installment
receivables from Textron shall be as agreed and as reflected in
Operating Memoranda which may be entered into from time to time.
(ii) Installment Receivables Generated by TFC.
Alternatively, TFC may purchase from Textron products for resale to
customers on an installment sale basis and issue its own installment
sales contracts to customers. Again, the terms and conditions upon
which TFC purchases such products and resells them to customers shall
be as agreed and as reflected in Operating Memoranda which may be
entered into from time to time.
b. Floor Planning.
TFC agrees, at the request of Textron, to enter into floor planning
agreements with Textron dealers and distributors. Such floor planning
agreements shall be on terms and conditions agreed upon between Textron
and TFC from time to time.
c. Loans to Textron.
TFC agrees to make unsecured loans to Textron from time to time as
follows:
(i) Receivables Loans.
TFC shall make loans to Textron evidenced by demand promissory notes
or appropriate entries on the Intercompany Accounts. Such loans are
to enable Textron to finance certain equipment or accounts receivable
arising in connection with the sale or lease of its products. Each
such loan shall be equal in amount to the amount of qualified
receivables financed by such loan, or in the case of certain leases.
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equal to the book value of the products leased. An account receivable
is "qualified" if it meets all criteria established by TFC from time to
time as reflected in appropriate Operating Memoranda.
(ii) Other Unsecured Loans.
TFC shall make such other unsecured loans to Textron as may be agreed
upon from time to time. Such loans shall be evidenced by entries in the
Intercompany Account. Each loan made under this Section 2(c) shall be
payable on demand. Each loan made under Section 2(c) shall bear
interest at the prime rate of Chase Manhattan Bank, N.A. in effect from
time to time plus a factor to be agreed upon by the parties from time
to time. Textron shall have the right to prepay all or part of any such
loans without premium or penalty.
4. Lease Financings.
TFC agrees to assist Textron in connection with the following leasing
programs.
(i) TFC Leases.
TFC may purchase Textron products and lease them to customers
identified by Textron or Textron's dealers and distributors. The terms
and conditions upon which such products shall be purchased and leased
by TFC shall be as agreed and as reflected in Operating Memoranda from
time to time.
(ii) Textron Leases.
TFC may purchase leases for Textron products which Textron or its
dealers and distributors have entered into with customers. The terms
and conditions upon which TFC will purchase such leases shall be as
agreed and as reflected in Operating Memoranda from time to time.
(iii) Miscellaneous Leases.
TFC may purchase real or personal property for lease to Textron from
time to time on such terms and conditions as may be agreed in each
case.
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e. Vendor Loans.
At the request of Textron, TFC may make loans from time to time to
vendors or lessors of property to Textron on such terms and conditions
as shall be agreed upon in each case.
f. Other Programs.
TFC may render such additional financing services to Textron as TFC
and Textron may mutually agree upon.
3. Recourse to Textron.
a. General.
In any financing program described in Section 2, the ultimate credit
risk shall be as the parties, from time to time may mutually agree
upon in appropriate Operating Memoranda. It is contemplated that in
some financing programs, the ultimate credit risk shall rest with
Textron, in some with TFC and in some the ultimate credit risk shall
be shared between Textron and TFC. Nevertheless, in the absence of a
written agreement to the contrary, the ultimate credit risk shall rest
with Textron.
b. Full Recourse to Textron.
In any program in which the ultimate credit risk shall rest with
Textron, TFC shall at all times have the right, exercisable at its
sole discretion, to sell to Textron for an amount equal to unpaid
principal, interest, penalties, charges and expenses any account
receivable, irrespective of its form which has become overdue or
uncollectible, in whole or in part, for any reason. Textron hereby
agrees unconditionally to purchase any account tendered by TFC
pursuant to this Section 3(b). Textron's obligations under this
Section 3(b) shall not be lessened by any extension, forbearance or
variation in terms that TFC may grant in connection with any account
receivable or by discharge or release of the obligations of the
primary obligor or any other person whether by operation of law or
otherwise, or for any other reason.
c. Other Programs.
In any financing program described in Section 2, which is not subject
to Section 3(b), Textron and TFC may agree to share the ultimate
credit risk or agree that such risk shall rest with TFC. Such programs
shall be upon such terms as the parties from time to time may agree in
appropriate Operating Memoranda.
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4. Textron Line of Credit.
Textron hereby confirms that it has made available to TFC a line of credit
pursuant to which TFC may borrow, prepay and reborrow such amounts as TFC may
advise Textron from time to time. The aggregate principal amount outstanding
under the line of credit shall not exceed $60,000,000 at any time. All
advances and repayments under the line of credit shall be evidenced by
entries in the Intercompany Account. All advances under the line of credit
shall bear interest at the prime rate of the Chase Manhattan Bank, N.A. in
effect from time to time. All amounts owed by TFC to Textron under the line
of credit shall be subordinated and junior to all indebtedness for money
borrowed which TFC owes to third parties from time to time.
5. Textron Services.
Textron agrees to make available to TFC such administrative, managerial and
support services and facilities as TFC may request from time to time on such
terms and conditions as shall be agreed upon. Such services and facilities
may include services of employees on Textron's payroll, employee benefits,
insurance, tax, legal and accounting services, office occupancy, supplies and
computer use.
6. No Guarantee of TFC's Obligations.
This Agreement is not intended to be and is not, and nothing contained herein
and nothing done by Textron pursuant hereto shall be deemed to constitute, a
guarantee by Textron of the payment of the interest or principal of any
obligation, indebtedness or liability of any kind or character and however
evidenced or arising of TFC to any person or persons.
7. No Lien.
In none of the financing programs contemplated by this Agreement do the
parties intend to create any mortgage, pledge or other lien or charge in
favor of TFC in any property or assets of Textron to secure any of Textron's
obligations to TFC.
8. Operating Memoranda.
a. Agreements between Textron and TFC as to specific terms and conditions of
any financing transaction or program may be embodied in Operating
Memoranda to be entered into, amended and terminated by the parties from
time to time.
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b. Nothing contained herein shall modify or amend in any way
Operating Memoranda entered into pursuant to Prior Operating
Agreements, and each such Operating Memoranda is hereby
adopted and made a part of this Agreement with the same force
and effect as if executed hereunder.
9. Reporting.
Textron shall provide to TFC no later than twenty (20) days after the
end of each of Textron's monthly accounting periods, a statement
reflecting the balance of the Intercompany account.
10. Books, Responsibilities.
Each of Textron and TFC shall make clear and suitable entries and
notations on its books and records, which shall reflect all
transactions arising under this Agreement. Employees of each party and
independent certified public accountants from time to time designated
by Textron or TFC shall have the right to examine the other party's
books, records, and files relating to transactions arising under this
Agreement.
11. Indemnity.
Textron agrees to indemnify and hold TFC harmless from and against any
and all claims, liabilities, costs or expenses of whatsoever nature
asserted against TFC by any third party arising out of or in connection
with financing services rendered by TFC hereunder, provided, however,
that:
a. TFC shall notify Textron promptly of any such claim made or
suit instituted against TFC and the details thereof;
b. TFC shall not pay or compromise any such claims or suits
without the approval of Textron;
c. TFC shall, at Textron's expense, render such assistance as
Textron may deem necessary; and
d. Textron shall have the right to assume and direct the defense
of any such suit by counsel of Textron's own choosing.
The foregoing indemnity shall not apply to any matter as to which a
court of competent jurisdiction shall have adjudged that TFC acted in
bad faith or was guilty of gross negligence.
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12. Default; Termination.
a. If at any time during the term of this Agreement, either party
shall default in fulfilling any of its covenants under this
Agreement, then upon the other party giving thirty (30) days'
written notice to the defaulting party specifying the nature
of said default and upon the expiration of said thirty (30)
day period, (i) if the defaulting party shall have failed to
cure or remedy such default, or (ii) in cases, other than
failure to make a payment when due, where the default is not
capable of being cured within the 30-day period if the
defaulting party shall not have in good faith commenced action
designed to cure such default within such period, the
non-defaulting party may, in addition to any other remedy
allowed hereunder or at law or in equity, terminate this
Agreement upon five (5) days' written notice given to the
defaulting party.
b. If at any time during the term of this Agreement there shall
be filed by or against either party a petition in bankruptcy
or insolvency or for the appointment of a receiver or trustee
of all or substantially all of its assets, and such petition
is not discharged within sixty (60) days, or if either party
makes an assignment for the benefit of creditors, this
Agreement may be terminated at the option of the other party
exercised within ten (10) days after receiving notice of the
happening of any such event.
c. If either party shall default in the payment of any portion of
principal of or interest on any loan extended to the other
hereunder when the same shall become due and payable, whether
at the due date thereof or upon demand, which default shall
continue unremedied for ten (10) days, then such party may, in
addition to any other remedy allowed hereunder or at law or in
equity, by written notice to the other declare the entire
principal amount of and accrued interest on such loan to be
forthwith due and payable, whereupon the same shall be
forthwith due and payable, without presentment, demand,
protest, or notice of any kind, all of which are hereby
expressly waived. Acceleration of any loan under this Section
12(c) may be rescinded at the option of the non-defaulting
party if the defaulting party effects a cure and pays all
amounts due with respect to such loan (other than accelerated
principal). If the non-defaulting party accepts such cure, the
default shall be deemed not to have occurred.
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d. Upon any default by any party hereunder and the expiration of all
applicable grace periods, whether or not the other party shall have
declared the entire principal amount of any loan due and payable, the
other party shall have all rights and remedies at law or in equity.
e. In addition to all other rights of termination hereunder, either
Textron or TFC shall have the right to terminate this Agreement upon
thirty (30) days' written notice to the other, except that the
Agreement shall not terminate pursuant to this Section 12(e) if TFC
has any indebtedness for money borrowed outstanding (other than to
Textron) under the terms of which such termination would constitute a
default, unless the holder of indebtedness has consented to the
termination of this Agreement.
f. This Agreement shall continue in effect unless and until terminated as
hereinabove provided. The termination of this Agreement shall not
affect the rights or obligations of either party arising out of any
financing transaction entered into prior to the effective date of such
termination.
13. Liability Among Textron.
With respect to all obligations of Textron arising under or pursuant to
this agreement, TXT shall be liable for all such obligations and BHT, HRT
and TCL shall each be liable to the extent but only to the extent such
obligations arise from financing services provided to such entity by TFC
pursuant to this Agreement.
14. No Waiver.
Except as specifically provided elsewhere in this Agreement or in
connection with any financing transaction entered into pursuant to this
Agreement, Textron and TFC hereby waive (a) any failure or delay on the
part of the other in asserting or enforcing any right which it may have at
any time under this Agreement or in connection with such financing
transaction and (b) any notice of presentment, demand for payment, notice
of nonpayment or default, protest and notice of protest and all other
notices to which it might be entitled by law in connection with any
instrument assigned, endorsed or otherwise transferred by one party to the
other.
15. Miscellaneous.
a. This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective successors and assigns.
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b. This Agreement and all rights and obligations hereunder shall be
governed by and construed and enforced in accordance with the laws of
the State of Rhode Island.
c. All headings herein are for convenience of reference only and shall
be disregarded in the interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed as of the day and year first above written.
TEXTRON FINANCIAL CORPORATION
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
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TEXTRON INC.
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇▇▇ ▇▇.
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TEXTRON CANADA LIMITED
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇▇▇ ▇▇.
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▇▇▇▇ HELICOPTER TEXTRON INC.
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇▇▇ ▇▇.
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HR TEXTRON INC.
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ illegible
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AMENDMENT NO. 1
TO
RECEIVABLES PURCHASE AGREEMENT
This Amendment No. 1 is dated as of June 30, 1998 and amends the
Receivables Purchase Agreement by and between Textron Financial Corporation
(together with its subsidiaries, "TFC") and Textron Inc. (together with its
subsidiaries, "TXT").
RECITALS
A. TFC and TXT are parties to that certain Receivables Purchase
Agreement dated as of January 1, 1986 (the "Receivables Agreement").
B. The parties have agreed to amend the Receivables Agreement to provide
for an increase in the line of credit described therein.
AGREEMENT
In consideration of the mutual covenants set forth herein and/or in the
Receivables Agreement, TFC and TXT agree as follows:
1. The line of credit amount referenced in Paragraph 4 of the
Receivables Agreement shall be, and hereby is, increased to the sum of One
Hundred Million Dollars ($100,000,000.00).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TEXTRON FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Title: (Illegible)
TEXTRON, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President and Treasurer
