EXHIBIT 10.1
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
dated as of December 30, 2005
among
TIMKEN RECEIVABLES CORPORATION,
as Seller,
THE TIMKEN CORPORATION,
as Servicer,
JUPITER SECURITIZATION CORPORATION,
as Company,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO
as Financial Institutions,
and
JPMORGAN CHASE BANK, N.A.
(successor by merger to Bank One, NA (Main Office Chicago)),
as Agent and as L/C Issuer
Table of Contents
Page
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ARTICLE I PURCHASE ARRANGEMENTS AND LETTER OF CREDIT ARRANGEMENTS............ 1
Section 1.1 Purchase Facility......................................... 1
Section 1.2 Increases................................................. 2
Section 1.3 Decreases................................................. 3
Section 1.4 Issuance of Letters of Credit............................. 3
Section 1.5 Payment Requirements...................................... 3
Section 1.6 Letters of Credit......................................... 3
ARTICLE II PAYMENTS AND COLLECTIONS.......................................... 6
Section 2.1 Payments.................................................. 6
Section 2.2 Collections Prior to Amortization......................... 6
Section 2.3 Collections Following Amortization........................ 7
Section 2.4 Application of Collections................................ 7
Section 2.5 Payment Rescission........................................ 8
Section 2.6 Maximum Purchaser Interests............................... 8
Section 2.7 Clean Up Call............................................. 9
Section 2.8 Release of Excess Cash Collateral......................... 9
ARTICLE III COMPANY FUNDING.................................................. 9
Section 3.1 CP Costs.................................................. 9
Section 3.2 CP Costs Payments......................................... 9
Section 3.3 Calculation of CP Costs................................... 9
ARTICLE IV FINANCIAL INSTITUTION FUNDING..................................... 9
Section 4.1 Financial Institution Funding............................. 9
Section 4.2 Yield Payments............................................ 10
Section 4.3 Selection and Continuation of Tranche Periods............. 10
Section 4.4 Financial Institution Discount Rates...................... 10
Section 4.5 Suspension of the LIBO Rate............................... 10
ARTICLE V REPRESENTATIONS AND WARRANTIES..................................... 11
Section 5.1 Representations and Warranties of The Seller Parties...... 11
Section 5.2 Financial Institution Representations and Warranties...... 14
ARTICLE VI CONDITIONS OF PURCHASES........................................... 15
Section 6.1 Conditions Precedent to the Initial Credit Event.......... 15
Section 6.2 Conditions Precedent to All Credit Events................. 15
ARTICLE VII COVENANTS........................................................ 16
Section 7.1 Affirmative Covenants of the Seller Parties............... 16
Section 7.2 Negative Covenants of the Seller Parties.................. 23
ARTICLE VIII ADMINISTRATION AND COLLECTION................................... 25
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Section 8.1 Designation of Servicer................................... 25
Section 8.2 Duties of Servicer........................................ 25
Section 8.3 Collection Notices........................................ 27
Section 8.4 Responsibilities of Seller................................ 27
Section 8.5 Reports................................................... 27
Section 8.6 Servicing Fees............................................ 27
ARTICLE IX AMORTIZATION EVENTS............................................... 27
Section 9.1 Amortization Events....................................... 27
Section 9.2 Remedies.................................................. 30
Section 9.3 Servicer Defaults......................................... 30
ARTICLE X INDEMNIFICATION.................................................... 30
Section 10.1 Indemnities by the Seller Parties......................... 30
Section 10.2 Increased Cost and Reduced Return......................... 33
Section 10.3 Expenses.................................................. 33
ARTICLE XI THE AGENT......................................................... 34
Section 11.1 Authorization and Action.................................. 34
Section 11.2 Delegation of Duties...................................... 34
Section 11.3 Exculpatory Provisions.................................... 34
Section 11.4 Reliance by Agent......................................... 35
Section 11.5 Non-Reliance on Agent and Other Purchasers................ 35
Section 11.6 Reimbursement and Indemnification......................... 35
Section 11.7 Agent in its Individual Capacity.......................... 36
Section 11.8 Successor Agent........................................... 36
ARTICLE XII ASSIGNMENTS; PARTICIPATIONS...................................... 36
Section 12.1 Assignments............................................... 36
Section 12.2 Participations............................................ 37
Section 12.3 Terminating Financial Institutions........................ 37
ARTICLE XIII Reserved........................................................ 38
ARTICLE XIV MISCELLANEOUS.................................................... 38
Section 14.1 Waivers and Amendments.................................... 38
Section 14.2 Notices................................................... 39
Section 14.3 Ratable Payments.......................................... 40
Section 14.4 Protection of Interests of the Agent, the Purchasers
and the L/C Issuer........................................ 40
Section 14.5 Confidentiality........................................... 41
Section 14.6 Bankruptcy Petition....................................... 42
Section 14.7 Limitation of Liability................................... 42
Section 14.8 CHOICE OF LAW............................................. 42
Section 14.9 CONSENT TO JURISDICTION................................... 42
Section 14.10 WAIVER OF JURY TRIAL...................................... 42
Section 14.11 Integration; Binding Effect; Survival of Terms............ 43
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Section 14.12 Counterparts; Severability; Section References............ 43
Section 14.13 JPMorgan Roles............................................ 43
Section 14.14 Characterization.......................................... 43
Section 14.15 Amendment and Restatement................................. 44
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Exhibits and Schedules
Exhibit I Definitions
Exhibit II-A Form of Purchase Notice
Exhibit II-B Form of Letter of Credit Request
Exhibit III Principal Places of Business of the Seller Parties; Location(s)
of Records; Federal Employer Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V-1 Form of Seller Compliance Certificate
Exhibit V-2 Form of Performance Guarantor Compliance Certificate
Exhibit VI Forms of Collection Account Agreements
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX Form of Contract(s)
Exhibit X-1 Form of Monthly Report
Exhibit X-2 Form of Weekly Report
Exhibit XI Form of Performance Undertaking
Schedule A List of Financial Institutions
Schedule B List of Documents to be Delivered to the Administrative Agent
Schedule C Financial Covenants Relating to the Performance Guarantor
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TIMKEN RECEIVABLES CORPORATION
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
This Amended and Restated Receivables Purchase Agreement dated as of
December 30, 2005 is among Timken Receivables Corporation a Delaware corporation
("Seller"), The Timken Corporation, an Ohio corporation, as initial Servicer
(the Servicer together with the Seller the "Seller Parties" and each a "Seller
Party"), the entities listed on Schedule A to this Agreement (together with any
of their respective successors and assigns hereunder, the "Financial
Institutions"), Jupiter Securitization Corporation ("Company") and JPMorgan
Chase Bank, N.A. (successor by merger to JPMorgan Chase Bank, N.A. (successor by
merger to Bank One, NA (Main Office Chicago)), as agent for the Purchasers
hereunder or any successor agent hereunder (together with its successors and
assigns hereunder, the "Agent") and as letter of credit issuer (in such
capacity, the "L/C Issuer"). Unless defined elsewhere herein, capitalized terms
used in this Agreement shall have the meanings assigned to such terms in Exhibit
I.
PRELIMINARY STATEMENTS
The Seller Parties, the Purchasers and the Agent are parties to that
certain Receivables Purchase Agreement dated as of December 18, 2002 (as amended
prior to the date hereof, the "Earlier Purchase Agreement").
The Parties hereto have, on the terms and conditions set forth herein,
agreed to amend and restate the Earlier Purchase Agreement in its entirety.
Seller desires (i) to transfer and assign Purchaser Interests to the
Purchasers from time to time and (ii) for the L/C Issuer to issue Letters of
Credit for which the Seller's Letter of Credit Obligations will be secured by a
pledge of the Seller Interest.
Company may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.
In the event that Company declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time. In addition, the Financial Institutions have agreed to provide a
liquidity facility to Company in accordance with the terms of one or more
Liquidity Agreements.
JPMorgan has been requested and is willing to act as Agent on behalf of
Company, the Financial Institutions and the L/C Issuer in accordance with the
terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS AND LETTER OF CREDIT ARRANGEMENTS
Section 1.1 Purchase Facility.
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(a) Upon the terms and subject to the conditions hereof, Seller
may, at its option, sell and assign Purchaser Interests to the Agent for the
benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, Company may, at its option, instruct the Agent to
purchase on behalf of Company, or if Company shall decline to purchase, the
Agent shall (subject to the other terms and conditions of this Agreement,
including, without limitation, Section 6.2 hereof) purchase, on behalf of the
Financial Institutions, Purchaser Interests from time to time during the period
from the date hereof to but not including the Facility Termination Date in an
aggregate amount not to exceed at such time the Purchase Limit minus the then
outstanding Letter of Credit Obligations; provided, that, at no time may the
aggregate Exposure exceed the Net Receivables Balance minus the Aggregate
Reserves.
(b) Seller may, upon at least ten (10) Business Days' notice to
the Agent, terminate in whole or reduce in part, ratably among the Financial
Institutions, the unused portion of the Purchase Limit; provided that each
partial reduction of the Purchase Limit shall be in an amount equal to
$5,000,000 or an integral multiple thereof.
Section 1.2 Increases.
Seller shall provide the Agent with at least one Business Day's prior
notice in a form set forth as Exhibit II-A hereto of each Incremental Purchase
(a "Purchase Notice"); provided, that, with respect to any Incremental Purchase
to refinance any outstanding Reimbursement Obligations, the Seller may provide
notice of such Incremental Purchase on the day of such Incremental Purchase if
such notice is provided before 12:00 noon (Chicago time); provided, further
that, in the case of any such Incremental Purchase to refinance any outstanding
Reimbursement Obligations where the Seller provides notice of such Incremental
Purchase on the day of such Incremental Purchase, the Capital in respect of such
Incremental Purchase shall accrue Discount at the Prime Rate on the day of such
Incremental Purchase and thereafter, subject to the other terms and conditions
of this Agreement, (i) if funded by the Company, will accrue CP Costs and (ii)
if funded by the Financial Institutions, will accrue Discount at the Discount
Rate requested by the Seller. Each Purchase Notice shall be subject to Section
6.2 hereof and, except as set forth below, shall be irrevocable and shall
specify the requested Purchase Price (which shall not be less than $1,000,000)
and date of purchase (which, in the case of any Incremental Purchase (after the
initial Incremental Purchase hereunder), shall only be on a Settlement Date)
and, in the case of an Incremental Purchase to be funded by the Financial
Institutions, the requested Discount Rate and Tranche Period. Following receipt
of a Purchase Notice, the Agent will determine whether Company agrees to make
the purchase. If Company declines to make a proposed purchase, Seller may cancel
the Purchase Notice or, in the absence of such a cancellation, the Incremental
Purchase of the Purchaser Interest will be made by the Financial Institutions.
On the date of each Incremental Purchase and other than to the extent that the
proceeds of such Incremental Purchase are being used to refinance outstanding
Reimbursement Obligations, upon satisfaction of the applicable conditions
precedent set forth in Article VI, Company or the Financial Institutions, as
applicable, shall deposit to the Facility Account, in immediately available
funds, no later than 12:00 noon (Chicago time), an amount equal to (i) in the
case of Company, the aggregate Purchase Price of the Purchaser Interests Company
is then purchasing or (ii) in the case of a Financial Institution, such
Financial
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Institution's Pro Rata Share of the aggregate Purchase Price of the Purchaser
Interests the Financial Institutions are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent with prior
written notice in conformity with the Required Notice Period (a "Reduction
Notice") of any proposed reduction of Aggregate Capital from Collections. Such
Reduction Notice shall designate (i) the date (the "Proposed Reduction Date")
upon which any such reduction of Aggregate Capital shall occur (which date shall
give effect to the applicable Required Notice Period), and (ii) the amount of
Aggregate Capital to be reduced which shall be applied ratably to the Purchaser
Interests of Company and the Financial Institutions in accordance with the
amount of Capital (if any) owing to Company, on the one hand, and the amount of
Capital (if any) owing to the Financial Institutions (ratably, based on their
respective Pro Rata Shares), on the other hand (the "Aggregate Reduction"). Only
one (1) Reduction Notice shall be outstanding at any time. No Aggregate
Reduction will be made following the occurrence of the Amortization Date without
the consent of the Agent.
Section 1.4 Issuance of Letters of Credit. The Seller may request that
the L/C Issuer issue Letters of Credit, and the L/C Issuer hereby agrees to
issue such Letters of Credit and to renew, extend, increase, decrease or
otherwise modify each Letter of Credit ("Modify," and each such action a
"Modification"), from time to time upon the request of the Seller; provided,
that no Letter of Credit shall be issued or Modified by the L/C Issuer if, after
giving effect thereto, (i) the aggregate Exposure would exceed the Purchase
Limit, (ii) the Letter of Credit Obligations would exceed the L/C Sublimit, or
(iii) the aggregate Exposure would exceed the Net Receivables Balance minus the
Aggregate Reserves provided, further, that each Letter of Credit issued pursuant
to this Section 1.4 shall have a face amount of not less than $100,000 in the
case of documentary Letters of Credit or $500,000 in the case of standby Letters
of Credit. No Letter of Credit shall have an original expiry date later than 364
days from the date of issuance or Modification.
Section 1.5 Payment Requirements. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (Chicago
time) on the day when due in immediately available funds, and if not received
before 11:00 a.m. (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Agent, for the account of such Purchaser, at ▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ until otherwise notified by the Agent. Upon notice to
Seller, the Agent may debit the Facility Account for all amounts due and payable
hereunder. All computations of Yield, per annum fees calculated as part of any
CP Costs, per annum fees hereunder and per annum fees under the Fee Letter shall
be made on the basis of a year of 360 days for the actual number of days elapsed
(other than computations of Yield at the Prime Rate, which shall be made on the
basis of a year of 365/6 days for the actual number of days elapsed). If any
amount hereunder shall be payable on a day which is not a Business Day, such
amount shall be payable on the next succeeding Business Day.
Section 1.6 Letters of Credit.
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(a) Letter of Credit Requests. The Seller shall give the L/C
Issuer and the Agent reasonable prior notice of the proposed date of issuance or
Modification of each Letter of Credit (and in no event shall such notice be
given later than 12:00 noon (Chicago time) one Business Day prior to such
issuance or Modification), by delivering to the Agent and the L/C Issuer a copy
of a Letter of Credit Request in substantially the form of Exhibit II-B hereto,
duly completed by Seller (each a "Letter of Credit Request"). The issuance or
Modification by the L/C Issuer of any Letter of Credit shall, in addition to the
conditions precedent set forth in Article VI, be subject to the conditions
precedent that such Letter of Credit shall be reasonably satisfactory to the L/C
Issuer and that Seller shall have executed and delivered such application
agreement and/or such other instruments and agreements relating to such Letter
of Credit as the L/C Issuer shall have reasonably requested. In no event shall
the L/C Issuer be obligated to issue a Modification if, on the proposed date of
such Modification, the L/C Issuer would not be obligated to issue new Letters of
Credit if requested or if the beneficiary does not consent to the proposed terms
of the Modification.
(b) Reimbursement by Seller. Upon receipt from the beneficiary of
any Letter of Credit of any demand for payment under such Letter of Credit, the
L/C Issuer shall notify the Agent, the Purchasers and Seller as to the amount to
be paid by the LC Issuer as a result of such demand and the proposed payment
date (the "L/C Payment Date" ). The responsibility of the L/C Issuer to Seller
shall be only to determine that the documents (including each demand for
payment) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit. Seller shall be irrevocably and unconditionally obligated to reimburse
the L/C Issuer with cash on hand or, subject to the terms and conditions hereof,
the proceeds of an Incremental Purchase on or before the applicable L/C Payment
Date for any amounts to be paid by the L/C Issuer upon any drawing under any
Letter of Credit, without presentment, demand, protest or other formalities of
any kind. All such amounts paid by the L/C Issuer and remaining unpaid by Seller
(whether from cash on hand or with the proceeds of a Purchase made in accordance
with this Agreement) shall bear interest, payable on each Settlement Date in
arrears out of Collections, for each day until paid at a rate per annum equal to
the Default Rate. Regardless of whether the applicable L/C Payment Date has
occurred, the Agent is hereby irrevocably directed to pay the proceeds of each
Purchase made while any Reimbursement Obligations remain outstanding directly to
the L/C Issuer until all such Reimbursement Obligations, together with all
accrued and unpaid interest, are paid in full. Seller's Letter of Credit
Obligations and obligation to pay interest pursuant to this Section 1.6(b) shall
be secured by the Seller's grant of a security interest in the Seller Interest
pursuant to Section 14.14(b).
(c) Obligations Absolute. Seller's obligations under this Section
1.6 shall be absolute and unconditional under any and all circumstances and
irrespective of (i) any lack of validity or enforceability of such Letter of
Credit, any Letter or Credit Request, this Agreement, the Receivables Sale
Agreement, or any other agreement or instrument relating thereto; (ii) the
existence of any claim, counterclaim, set-off, defense or other right that
Seller or the Originator may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the L/C Issuer or any other person,
whether in connection with this Agreement, the transactions contemplated hereby
or by such Letter of Credit or any agreement or instrument relating thereto, or
any unrelated transaction; (iii) any draft, demand, certificate or other
document
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presented under such Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect (provided that such draft, demand, certificate or
other document presented pursuant to such Letter of Credit appears on its face
to comply with the terms thereof) or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit (provided that such draft, demand, certificate or
other document presented pursuant to such Letter of Credit appears on its face
to comply with the terms thereof); or any payment made by the L/C Issuer under
such Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under the Bankruptcy Code of the United States, or any other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally; (v) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to the departure from any
guarantee, for all or any of the obligations of Seller or the Originator in
respect of any Letter of Credit; or (vi) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, Seller or the applicable beneficiary; provided, that Seller shall
not hereby be precluded from asserting any claim for direct (but not
consequential) damages suffered by Seller to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the L/C Issuer or
(ii) the L/C Issuer's failure to pay under any Letter of Credit issued by it
after the presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit. Seller shall promptly examine a copy of
each Letter of Credit and each amendment thereto that is delivered to it, and,
in the event of any claim of noncompliance with Seller's instructions or other
irregularity, Seller will immediately (and in any event within 5 Business Days)
notify the L/C Issuer. Seller shall be conclusively deemed to have waived any
such claim against the L/C Issuer and its correspondents unless such notice is
given as aforesaid.
(d) Actions of L/C Issuer. With respect to any actions taken or
omitted in the absence of gross negligence, bad faith or willful misconduct, the
L/C Issuer shall be entitled to rely, and shall be fully protected in relying,
upon any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the L/C Issuer.
(e) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the L/C Issuer or the Financial Institutions, the
L/C Issuer hereby grants to each Financial Institution, and each Financial
Institution hereby acquires from the L/C Issuer, a participation in such Letter
of Credit equal to such Financial Institution's Pro Rata Share of the
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aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Financial Institution
hereby absolutely and unconditionally agrees to pay to the L/C Issuer, such
Financial Institution's Pro Rata Share of each draw honored by the L/C Issuer
pursuant to a Letter of Credit and not reimbursed by the Seller with the
proceeds of an Incremental Purchase or other available funds on the date due as
provided in this Section 1.6. Each Financial Institution acknowledges and agrees
that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of an
Amortization Event or reduction or termination of the Commitments, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on recourse
contained in this Agreement, Seller shall immediately pay to the Agent when due,
for the account of the L/C Issuer or the relevant Purchaser or Purchasers, as
applicable, on a full recourse basis, (i) such fees as set forth in the Fee
Letter (which fees shall be sufficient to pay all fees owing to the Financial
Institutions), (ii) all CP Costs, (iii) all amounts payable as Yield, (iv) all
amounts payable as Deemed Collections (which shall be immediately due and
payable by Seller and applied to reduce outstanding Aggregate Capital hereunder
in accordance with Sections 2.2 and 2.3 hereof), (v) all amounts required
pursuant to Section 2.6, (vi) all amounts payable pursuant to Article X, if any,
(vii) all unreimbursed Reimbursement Obligations, (viii) all Servicer costs and
expenses, including the Servicing Fee, in connection with servicing,
administering and collecting the Receivables and (ix) all Broken Funding Costs
(collectively, the "Obligations"). If any Person fails to pay any of the
Obligations when due, such Person agrees to pay, on demand, interest on any such
unpaid Obligations at the Default Rate until such Obligations are paid.
Notwithstanding the foregoing, no provision of this Agreement or the Fee Letter
shall require the payment or permit the collection of any amounts hereunder in
excess of the maximum permitted by applicable law. If at any ▇▇▇▇ ▇▇▇▇▇▇
receives any Collections or is deemed to receive any Collections, Seller shall
immediately pay such Collections or Deemed Collections to the Servicer for
application in accordance with the terms and conditions hereof and, at all times
prior to such payment, such Collections or Deemed Collections shall be held in
trust by Seller for the exclusive benefit of the Purchasers, the L/C Issuer and
the Agent.
Section 2.2 Collections Prior to Amortization. On each day prior to
the Amortization Date, any Collections and/or Deemed Collections received by the
Servicer shall be set aside and held in trust by the Servicer for the payment of
any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in
this Section 2.2. If at any time any Collections are received by the Servicer
prior to the Amortization Date, (i) the Servicer shall set aside the Termination
Percentage (hereinafter defined) of Collections evidenced by the Purchaser
Interests of each Terminating Financial Institution and (ii) Seller hereby
requests and the Purchasers (other than any Terminating Financial Institutions)
hereby agree to make, simultaneously with such receipt, a reinvestment (each a
"Reinvestment") with that portion of the balance of each and every Collection
received by the Servicer that is part of any Purchaser Interest (other than any
Purchaser Interests of Terminating Financial Institutions), such that after
giving effect to such
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Reinvestment, the amount of Capital of such Purchaser Interest immediately after
such receipt and corresponding Reinvestment shall be equal to the amount of
Capital immediately prior to such receipt. On each Settlement Date prior to the
occurrence of the Amortization Date, the Servicer shall remit to the Agent's
account the amounts set aside during the preceding Settlement Period that have
not been subject to a Reinvestment and apply such amounts (if not previously
paid in accordance with Section 2.1) first, to reduce unpaid Obligations and
second, to reduce the Capital of all Purchaser Interests of Terminating
Financial Institutions, applied ratably to each Terminating Financial
Institution according to its Termination Percentage. If such unpaid Obligations
and Capital shall be reduced to zero, any additional Collections received by the
Servicer (i) if applicable, shall be remitted to the Agent's account no later
than 11:00 a.m. (Chicago time) to the extent required to fund any Aggregate
Reduction on such Settlement Date and (ii) any balance remaining thereafter
shall be remitted from the Servicer to Seller on such Settlement Date. Each
Terminating Financial Institution shall be allocated a ratable portion of
Collections from the date of any assignment by Company pursuant to Section 12.3
(the "Termination Date") until such Terminating Financing Institution's Capital
shall be paid in full. This ratable portion shall be calculated on the
Termination Date of each Terminating Financial Institution as a percentage equal
to (i) Capital of such Terminating Financial Institution outstanding on its
Termination Date, divided by (ii) the Aggregate Capital outstanding on such
Termination Date (the "Termination Percentage"). Each Terminating Financial
Institution's Termination Percentage shall remain constant prior to the
Amortization Date. On and after the Amortization Date, each Termination
Percentage shall be disregarded, and each Terminating Financial Institution's
Capital shall be reduced ratably with all Financial Institutions in accordance
with Section 2.3.
Section 2.3 Collections Following Amortization. On the Amortization
Date and on each day thereafter until the Aggregate Unpaids shall have been
indefeasibly reduced to zero, the Servicer shall set aside and hold in trust,
for the holder of each Purchaser Interest, all Collections received on such day
and an additional amount for the payment of any accrued and unpaid Obligations
owed by Seller and not previously paid by Seller in accordance with Section 2.1.
On and after the Amortization Date, the Servicer shall, at any time upon the
request from time to time by (or pursuant to standing instructions from) the
Agent (i) remit to the Agent's account the amounts set aside pursuant to the
preceding sentence, and (ii) apply such amounts to (A) reduce the Capital
associated with each such Purchaser Interest, (B) reduce any outstanding
Reimbursement Obligations, (C) Cash-Collateralize all outstanding Letters of
Credit and (D) reduce any other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall be insufficient
funds on deposit for the Servicer to distribute funds in payment in full of the
aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the
Servicer shall distribute funds:
first, to the payment of the Servicer's reasonable out-of-pocket costs
and expenses in connection with servicing, administering and collecting the
Receivables, including the Servicing Fee, if Seller or one of its
Affiliates is not then acting as the Servicer,
second, to the reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
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third, (to the extent applicable) to the ratable reduction of the
Aggregate Capital (without regard to any Termination Percentage),
fourth, ratably to the payment of all accrued and unpaid fees under
the Fee Letter, CP Costs and Yield,
fifth, ratably to the payment of all outstanding Capital and
Reimbursement Obligations,
sixth, to Cash-Collateralize Letter of Credit Obligations in respect
of the undrawn portion of Letters of Credit then outstanding;
seventh, for the ratable payment of all other unpaid Obligations,
provided that to the extent such Obligations relate to the payment of
Servicer costs and expenses, including the Servicing Fee, when Seller or
one of its Affiliates is acting as the Servicer, such costs and expenses
will not be paid until after the payment in full of all other Obligations,
and
eighth, after the Aggregate Unpaids have been indefeasibly reduced to
zero, to Seller.
Collections applied to the payment of Aggregate Unpaids shall be
distributed in accordance with the aforementioned provisions, and, giving effect
to each of the priorities set forth in Section 2.4 above, shall be shared
ratably (within each priority) among the Agent, the L/C Issuer and the
Purchasers in accordance with the amount of such Aggregate Unpaids owing to each
of them in respect of each such priority.
Section 2.5 Payment Rescission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Agent (for application to the Person or Persons who suffered such
rescission, return or refund) the full amount thereof plus interest on any such
unpaid Aggregate Unpaids at the Default Rate from the date of any such
rescission, return or refunding.
Section 2.6 Maximum Effective Receivables Interests. Seller shall
ensure that (i) the Effective Receivables Interests shall at no time exceed
100%, (ii) the aggregate Letter of Credit Obligations does not exceed the L/C
Sublimit and (iii) the aggregate Exposure does not exceed the Purchase Limit.
If, on any date of determination, (i) the Effective Receivables Interests
exceeds 100%, (ii) the Letter of Credit Obligations exceeds the Letter of Credit
Sublimit or (iii) the Exposure exceeds the Purchase Limit, then, Seller shall
pay to the Agent within one (1) Business Day an amount necessary to reduce the
Exposure to the Purchase Limit (and/or, if directed by Seller, held to
Cash-Collateralize the Letter of Credit Obligations in an amount necessary to
eliminate any excess Exposure) or reduce the Effective Receivable Interest to
100% or the Letter of Credit Obligations to the LC Sublimit, as applicable.
Notwithstanding payment to the Agent in accordance with this Section 2.6,
Discount and CP Costs shall continue
8
to accrue on the full amount of Capital outstanding, and interest shall continue
to accrue on outstanding Reimbursement Obligations, until such payment is
applied on the next succeeding Settlement Date.
Section 2.7 Clean Up Call. In addition to Seller's rights pursuant to
Section 1.3, Seller shall have the right (after providing written notice to the
Agent in accordance with the Required Notice Period), at any time, to repurchase
from the Purchasers all, but not less than all, of the then outstanding
Purchaser Interests. The purchase price in respect thereof shall be an amount
equal to (i) the Aggregate Unpaids minus (ii) the Letter of Credit Obligations,
in each case, through the date of such repurchase, payable in immediately
available funds. Upon the exercise of such repurchase, the Seller shall
Cash-Collateralize all of the outstanding Letter of Credit Obligations. Such
repurchase shall be without representation, warranty or recourse of any kind by,
on the part of, or against any Purchaser or the Agent.
Section 2.8 Release of Excess Cash Collateral. If on any Settlement
Date, the balance in the Letter of Credit Collateral Account exceeds the amount
required, unless an Amortization Event or Potential Amortization Event shall
exist and be continuing, the L/C Issuer shall release the excess cash collateral
to Seller.
ARTICLE III
COMPANY FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
Capital associated with each Purchaser Interest of Company for each day that any
Capital in respect of such Purchaser Interest is outstanding. Each Purchaser
Interest funded substantially with Pooled Commercial Paper will accrue CP Costs
each day on a pro rata basis, based upon the percentage share the Capital in
respect of such Purchaser Interest represents in relation to all assets held by
Company and funded substantially with Pooled Commercial Paper.
Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall
pay to the Agent (for the benefit of Company) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Company for the immediately preceding Accrual Period in
accordance with Article II.
Section 3.3 Calculation of CP Costs. On the third Business Day
immediately preceding each Settlement Date, Company shall calculate the
aggregate amount of CP Costs for the applicable Accrual Period and shall notify
Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Purchaser Interest of
the Financial Institutions shall accrue Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. Until Seller gives notice to the Agent of another
Discount Rate in accordance with Section 4.4, the initial Discount Rate for any
Purchaser Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Prime Rate. If the Financial
Institutions acquire by assignment from Company any Purchaser Interest pursuant
to a Liquidity Agreement, each
9
Purchaser Interest so assigned shall each be deemed to have a new Tranche Period
commencing on the date of any such assignment.
Section 4.2 Yield Payments. On the Settlement Date for each Purchaser
Interest of the Financial Institutions, Seller shall pay to the Agent (for the
benefit of the Financial Institutions) an aggregate amount equal to the accrued
and unpaid Yield for the entire Tranche Period of each such Purchaser Interest
in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
(a) With consultation from (and approval by) the Agent, Seller
shall from time to time request Tranche Periods for the Purchaser Interests of
the Financial Institutions, provided that, if at any time the Financial
Institutions shall have a Purchaser Interest, Seller shall always request
Tranche Periods such that at least one Tranche Period shall end on the date
specified in clause (A) of the definition of Settlement Date.
(b) Seller or the Agent, upon notice to and consent by the other
received at least three (3) Business Days prior to the end of a Tranche Period
(the "Terminating Tranche") for any Purchaser Interest, may, effective on the
last day of the Terminating Tranche: (i) divide any such Purchaser Interest into
multiple Purchaser Interests, (ii) combine any such Purchaser Interest with one
or more other Purchaser Interests that have a Terminating Tranche ending on the
same day as such Terminating Tranche or (iii) combine any such Purchaser
Interest with a new Purchaser Interests to be purchased on the day such
Terminating Tranche ends, provided, that in no event may a Purchaser Interest of
Company be combined with a Purchaser Interest of the Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller may select
the LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being requested as a new Discount Rate and (ii) at least
one (1) Business Day prior to the expiration of any Terminating Tranche with
respect to which the Prime Rate is being requested as a new Discount Rate, give
the Agent irrevocable notice of the new Discount Rate for the Purchaser Interest
associated with such Terminating Tranche. Until Seller gives notice to the Agent
of another Discount Rate, the initial Discount Rate for any Purchaser Interest
transferred to the Financial Institutions pursuant to the terms and conditions
hereof or any Liquidity Agreement shall be the Prime Rate.
Section 4.5 Suspension of the LIBO Rate. If any Financial Institution
notifies the Agent that it has determined that funding its Pro Rata Share of the
Purchaser Interests of the Financial Institutions at a LIBO Rate would violate
any applicable law, rule, regulation, or directive of any governmental or
regulatory authority, whether or not having the force of law, or that (i)
deposits of a type and maturity appropriate to match fund its Purchaser
Interests at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Purchaser Interest at
such LIBO Rate, then the Agent shall suspend the availability of such LIBO Rate
and require Seller to select the Prime Rate for any Purchaser Interest accruing
Yield at such LIBO Rate.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of The Seller Parties. Each
Seller Party hereby represents and warrants to the Agent and the Purchasers, as
to itself, as of the date hereof and as of the date of each Credit Event that:
(a) Corporate Existence and Power. Such Seller Party is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation, identified in the preamble of this Agreement.
Such Seller Party is organized solely under the law of a single state. Such
Seller Party is duly qualified to do business and is in good standing as a
foreign corporation, and has and holds all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Seller Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, in the case of Seller, Seller's
use of the proceeds of purchases made hereunder, are within its corporate powers
and authority and have been duly authorized by all necessary corporate action on
its part. This Agreement and each other Transaction Document to which such
Seller Party is a party has been duly executed and delivered by such Seller
Party.
(c) No Conflict. The execution and delivery by such Seller Party
of this Agreement and each other Transaction Document to which it is a party,
and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on assets of such Seller Party or its Subsidiaries (except as created
hereunder); and no transaction contemplated hereby requires compliance with any
bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Seller Party's knowledge, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Seller Party is not in default with respect to any order of
any court, arbitrator or governmental body.
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(f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the legal, valid and
binding obligations of such Seller Party enforceable against such Seller Party
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished
by such Seller Party or any of its Affiliates to the Agent or the Purchasers for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by such Seller Party or any of its Affiliates to
the Agent or the Purchasers will be, true and accurate in every material respect
on the date such information is stated or certified and does not and will not
contain any material misstatement of fact or omit to state a material fact or
any fact necessary to make the statements contained therein not misleading.
(h) Use of Proceeds. No proceeds of any Credit Event will be used
(i) for a purpose that violates, or would be inconsistent with, Regulation T, U
or X promulgated by the Board of Governors of the Federal Reserve System from
time to time or (ii) to acquire any security in any transaction which is subject
to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to each Credit Event hereunder,
Seller shall be the legal and beneficial owner of the Receivables, Related
Security and Collections with respect thereto, free and clear of any Adverse
Claim, except as created by the Transaction Documents and Permitted Adverse
Claims. There have been duly filed all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect Seller's ownership interest in each
Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the
financing statements and execution of Collection Account Agreements contemplated
hereby, is effective to, and shall, upon each purchase hereunder, transfer to
the Agent for the benefit of the L/C Issuer and the relevant Purchaser or
Purchasers (and the Agent for the benefit of the L/C Issuer and such Purchaser
or Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership and security interest in each Receivable existing
or hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transactions Documents and Permitted Adverse Claims. There have been duly filed
all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect the Agent's (on behalf of the Purchasers and the L/C Issuer) ownership
and security interest in the Receivables, the Related Security and the
Collections.
(k) Places of Business and Locations of Records. The principal
places of business and chief executive office of such Seller Party and the
offices where it keeps all of its Records are located at the addresses listed on
Exhibit III or such other locations of which the
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Agent has been notified in accordance with Section 7.2(a) in jurisdictions where
all action required by Section 14.4(a) has been taken and completed. Seller's
Federal Employer Identification Number is correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The names and addresses of all Collection Banks, together with the
account numbers of the Collection Accounts of Seller at each Collection Bank and
the post office box number of each Lock-Box, are listed on Exhibit IV. Seller
has not granted any Person, other than the Agent as contemplated by this
Agreement, dominion or control of any Lock-Box or Collection Account, or the
right to take dominion and control of any such Lock-Box or Collection Account at
any time.
(m) Material Adverse Effect. (i) The initial Servicer represents
and warrants that since December 31, 2004 no event has occurred that would have
a material adverse effect on the financial condition or operations of the
initial Servicer, Originator, or the Performance Guarantor or any of their
Subsidiaries or the ability of the initial Servicer, Originator, or the
Performance Guarantor to perform its obligations under this Agreement, and (ii)
Seller represents and warrants that since the date of this Agreement, no event
has occurred that would have a material adverse effect on (A) the financial
condition or operations of Seller, (B) the ability of Seller to perform its
obligations under the Transaction Documents, or (C) the collectibility of the
Receivables generally or any material portion of the Receivables.
(n) Names. In the past five (5) years, Seller has not used any
corporate names, trade names or assumed names other than the name in which it
has executed this Agreement.
(o) Ownership of Seller. Originator owns, directly or indirectly,
100% of the issued and outstanding capital stock of Seller, free and clear of
any Adverse Claim other than Permitted Adverse Claims. Such capital stock is
validly issued, fully paid and nonassessable, and there are no options, warrants
or other rights to acquire securities of Seller.
(p) Not a Holding Company or an Investment Company. Such Seller
Party is not a "holding company" or a "subsidiary holding company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or any successor statute. Such Seller Party is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except, with respect
to the Servicer, where the failure to so comply could not reasonably be expected
to have a Material Adverse Effect. Each Receivable, together with the Contract
related thereto, does not contravene any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy), and no part of such
Contract is in violation of any such law, rule or regulation.
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(r) Compliance with Credit and Collection Policy. Such Seller
Party has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not made
any material change to such Credit and Collection Policy, except such material
change as to which the Agent has been notified in accordance with Section
7.1(a)(vii).
(s) Payments to Originator. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreement, Seller has given
reasonably equivalent value to Originator in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
Originator of any Receivable under the Receivables Sale Agreement is or may be
voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.
Sections 101 et seq.), as amended.
(t) Enforceability of Contracts. Each Contract with respect to
each Receivable is effective to create, and has created, a legal, valid and
binding obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable on the date of its purchase under
the Receivables Sale Agreement was an Eligible Receivable on such purchase date.
(v) Net Receivables Balance. Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i) the Exposure, plus (ii) the
Aggregate Reserves.
(w) Accounting. The manner in which such Seller Party accounts
for the transactions contemplated by this Agreement and the Receivables Sale
Agreement is consistent with the treatment of transfers under the Receivables
Sale Agreement as true sales.
Section 5.2 Financial Institution Representations and Warranties. Each
Financial Institution hereby represents and warrants to the Agent and Company
that:
(a) Existence and Power. Such Financial Institution is a
corporation or a banking association duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, and has all corporate power to perform its obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not
14
result in the creation or imposition of any Adverse Claim on its assets. This
Agreement has been duly authorized, executed and delivered by such Financial
Institution.
(c) Governmental Authorization. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder.
(d) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of such Financial Institution enforceable against such
Financial Institution in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to the Initial Credit Event. The
initial Credit Event under this Agreement is subject to the conditions precedent
that (a) the Agent shall have received on or before the date of such purchase
those documents listed on Schedule B and (b) the Agent, the Purchasers and the
L/C Issuer shall have received all fees and expenses required to be paid on such
date pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Credit Events. Each Credit
Event shall be subject to the further conditions precedent that (a) in the case
of each such Credit Event: (i) the Servicer shall have delivered to the Agent on
or prior to the date of such purchase, in form and substance satisfactory to the
Agent, all Monthly Reports as and when due under Section 8.5 and (ii) upon the
Agent's request, the Servicer shall have delivered to the Agent at least three
(3) days prior to such Credit Event an interim Monthly Report showing the amount
of Eligible Receivables, provided that the Agent may not require that such
interim Monthly Reports be delivered more frequently than once each week unless
an Amortization Event (or a Potential Amortization Event of the type
contemplated in Section 9.1(f)(x)) has occurred; (b) the Facility Termination
Date shall not have occurred; (c) the Agent shall have received such other
approvals, opinions or documents as it may reasonably request and (d) on the
date of each such Credit Event, the following statements shall be true (and
acceptance of the proceeds of, or the delivery of a Letter of Credit related to,
such Credit Event shall be deemed a representation and warranty by Seller that
such statements are then true):
(i) the representations and warranties set forth in Section
5.1 are true and correct on and as of the date of such Credit Event as though
made on and as of such date;
(ii) no event has occurred and is continuing, or would
result from such Credit Event, that will constitute an Amortization Event, and
no event has occurred and is continuing, or would result from such Credit Event,
that would constitute a Potential Amortization Event;
(iii) the Effective Receivables Interests do not exceed
100%;
15
(iv) the aggregate Exposure does not exceed the Purchase
Limit or the aggregate Commitments; and
(v) if (A) such Credit Event is an Incremental Purchase or a
Reinvestment and (B) such Incremental Purchase or Reinvestment is funded by the
Company, the Company shall be party to unexpired Liquidity Agreements with an
aggregate commitment limit equal to at least 102% of the Commitments.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of the Seller Parties. Until the
date on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:
(i) Annual Reporting. Within 90 days after the close of each
of its fiscal years, (A) in the case of the Servicer, audited, unqualified
financial statements (which shall include balance sheets, statements of income
and retained earnings and a statement of cash flows, each on a consolidated
basis) for the Performance Guarantor for such fiscal year certified in a manner
acceptable to the Agent by independent public accountants acceptable to the
Agent and (B) in the case of the Seller unaudited financial statements (which
shall include balance sheets, statements of income and retained earnings and a
statement of cash flows) for the Seller for such fiscal year certified in a
manner acceptable to the Agent by the chief financial officer of Seller.
(ii) Quarterly Reporting. Within 45 days after the close of
the first three (3) quarterly periods of each of its fiscal years, the Servicer
shall furnish with respect to the Performance Guarantor, on a consolidated
basis, and the Seller shall furnish with respect to itself, balance sheets of
such Person as at the close of each such period and statements of income and
retained earnings and a statement of cash flows for such Person for the period
from the beginning of such fiscal year to the end of such quarter, all certified
by the chief financial officer of such Person.
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(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in substantially the
form of Exhibit V signed by the Performance Guarantor's or the Seller's, as
applicable, Authorized Officer and dated the date of such annual financial
statement or such quarterly financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of the Performance Guarantor thereof
copies of all financial statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies
of all registration statements and annual, quarterly, monthly or other regular
reports which the Servicer, the Performance Guarantor or any Subsidiary thereof
files with the Securities and Exchange Commission.
(vi) Copies of Notices. Promptly upon its receipt of any
notice, request for consent, financial statements, certification, report or
other communication under or in connection with any Transaction Document from
any Person other than the Agent or Company, copies of the same.
(vii) Credit and Collection Policy. At least thirty (30)
days prior to the effectiveness of any material change in or material amendment
to the Credit and Collection Policy, a description, or if available, a copy of
the Credit and Collection Policy then in effect and a notice (A) indicating such
change or amendment, and (B) if such proposed change or amendment would be
reasonably likely to adversely affect the collectibility of the Receivables or
decrease the credit quality of any newly created Receivables, requesting the
Agent's consent thereto.
(viii) Other Information. Promptly, from time to time, such
other information, documents, records or reports relating to the Receivables or
the condition or operations, financial or otherwise, of such Seller Party or the
Performance Guarantor as the Agent may from time to time reasonably request in
order to protect the interests of the Agent and the Purchasers under or as
contemplated by this Agreement.
(ix) Avoidance of Duplication. To the extent compliance with
clause (v) above provides the information required under clause (i), (ii) or
(iv) above on a timely and complete basis, such that the requirement for
separate deliveries under clause (i), (ii) or (iv) above would merely duplicate
the materials theretofore provided under clause (v) above, separate reports for
purposes of clause (i), (ii) or (iv), as applicable, shall not be required.
Documents required to be delivered pursuant to clauses (i), (ii), (iv) or (v)
(to the extent any such documents are included in materials otherwise filed with
the Securities and Exchange Commission) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which
the Performance Guarantor posts such documents, or provides a link thereto on
the Performance Guarantor's website on the Internet at ▇▇▇.▇▇▇▇▇▇.▇▇▇; or (ii)
on which such documents are delivered to the Agent; provided, that (i) upon the
request of the
17
Agent, the Seller shall deliver paper copies of any such documents requested by
the Agent and (ii) the Seller shall notify (which may be by facsimile or
electronic mail) the Agent of the posting of any such documents.
(b) Notices. Such Seller Party will notify the Agent in writing
of any of the following promptly upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:
(i) Amortization Events or Potential Amortization Events.
The occurrence of each Amortization Event and each Potential Amortization Event,
by a statement of an Authorized Officer of such Seller Party.
(ii) Judgment and Proceedings. (A) (1) The entry of any
judgment or decree against the Servicer or any of its Subsidiaries if the
aggregate amount of all judgments and decrees then outstanding against the
Servicer, the Performance Guarantor and their Subsidiaries exceeds the Material
Judgment Level and (2) the institution of any litigation, arbitration proceeding
or governmental proceeding against the Servicer asserting a claim in excess of
the Material Judgment Level; and (B) the entry of any judgment or decree or the
institution of any litigation, arbitration proceeding or governmental proceeding
against Seller.
(iii) Material Adverse Effect. The occurrence of any event
or condition that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(iv) Termination Date. The occurrence of the "Termination
Date" under and as defined in the Receivables Sale Agreement.
(v) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any other financing arrangement pursuant to
which the Servicer or the Performance Guarantor is a debtor or an obligor.
(vi) Downgrade of the Performance Guarantor. Any downgrade
of the Debt Rating, setting forth the nature of such change.
(c) Compliance with Laws and Preservation of Corporate Existence.
Such Seller Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except, with respect to the Servicer, where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. Such
Seller Party will preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and qualify
and remain qualified in good standing as a foreign corporation in each
jurisdiction where its business is conducted.
(d) Audits. Such Seller Party will furnish to the Agent from time
to time such information with respect to it and the Receivables as the Agent may
reasonably request. Such Seller Party will, from time to time during regular
business hours as requested by the Agent upon reasonable prior notice and at the
sole cost of such Seller Party, permit the Agent, or its agents or
representatives (and shall cause Originator to permit the Agent or its
18
agents or representatives), (i) to examine and make copies of and abstracts from
all Records in the possession or under the control of such Person relating to
the Receivables and the Related Security, including, without limitation, the
related Contracts, and (ii) to visit the offices and properties of such Person
for the purpose of examining such materials described in clause (i) above, and
to discuss matters relating to such Person's financial condition or the
Receivables and the Related Security or any Person's performance under any of
the Transaction Documents or any Person's performance under the Contracts and,
in each case, with any of the officers or employees of Seller or the Servicer
having knowledge of such matters. Any such audit of the Records shall be at the
sole cost of the applicable Seller Party; provided that, unless an Amortization
Event shall have occurred and be continuing at the time any such audit is
requested by the Agent, no Seller Party shall be required to reimburse the Agent
or any of the Purchasers for the costs or expenses in respect of more than two
such audits during any calendar year.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause Originator to)
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
records adequate to permit the immediate identification of each new Receivable
and all Collections of and adjustments to each existing Receivable). The
Servicer will (and will cause Originator to) give the Agent notice of any
material change in the administrative and operating procedures referred to in
the previous sentence.
(ii) Such Seller Party will (and will cause Originator to)
(A) on or prior to the date hereof, ▇▇▇▇ its master data processing records and
other books and records relating to the Purchaser Interests with a legend,
acceptable to the Agent, describing the Purchaser Interests and (B) upon the
request of the Agent after an Amortization Event has occurred and is continuing
(x) ▇▇▇▇ each Contract with a legend describing the Purchaser Interests and (y)
deliver to the Agent all Contracts (including, without limitation, all multiple
originals of any such Contract) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy.
On the date hereof, the Credit and Collection Policy exists in the form of
procedures and protocols that have been consistently observed by the Originator
over a period of years in the origination and servicing of the Receivables and
have been set forth in writing in the form of general procedures attached hereto
as Exhibit VIII. Each Seller Party will (and will cause Originator to) timely
and fully (i) perform and comply with all provisions, covenants and other
promises required to be observed by it under the Contracts related to the
Receivables, and (ii) comply in all respects with the Credit and Collection
Policy in regard to each Receivable and the related Contract.
(g) Performance and Enforcement of Receivables Sale Agreement.
Seller will, and will require Originator to, perform each of their respective
obligations and undertakings under and pursuant to the Receivables Sale
Agreement, will purchase Receivables
19
thereunder in strict compliance with the terms thereof and will vigorously
enforce the rights and remedies accorded to Seller under the Receivables Sale
Agreement. Seller will take all actions to perfect and enforce its rights and
interests (and the rights and interests of the Agent and the Purchasers as
assignees of Seller) under the Receivables Sale Agreement as the Agent may from
time to time reasonably request, including, without limitation, making claims to
which it may be entitled under any indemnity, reimbursement or similar provision
contained in the Receivables Sale Agreement.
(h) Ownership. Seller will (or will cause Originator to) take all
necessary action to (i) vest legal and equitable title to the Receivables, the
Related Security and the Collections purchased under the Receivables Sale
Agreement irrevocably in Seller, free and clear of any Adverse Claims other than
Permitted Adverse Claims (including, without limitation, the filing of all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect
Seller's interest in such Receivables, Related Security and Collections and such
other action to perfect, protect or more fully evidence the interest of Seller
therein as the Agent may reasonably request), and (ii) establish and maintain,
in favor of the Agent, for the benefit of the Purchasers and the L/C Issuer, a
valid and perfected first priority security interest or ownership interest in
all Receivables, Related Security and Collections to the full extent
contemplated herein, free and clear of any Adverse Claims other than Permitted
Adverse Claims (including, without limitation, in each case, the filing of all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect the
Agent's (for the benefit of the Purchasers and the L/C Issuer) interests in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interests of the Agent for the benefit of the
Purchasers and the L/C Issuer as the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the Agent, the
Purchasers and the L/C Issuer are entering into the transactions contemplated by
this Agreement in reliance upon Seller's identity as a legal entity that is
separate from Performance Guarantor or Originator. Therefore, from and after the
date of execution and delivery of this Agreement, Seller shall take all
reasonable steps, including, without limitation, all steps that the Agent, the
L/C Issuer or any Purchaser may from time to time reasonably request, to
maintain Seller's identity as a separate legal entity and to make it manifest to
third parties that Seller is an entity with assets and liabilities distinct from
those of Originator and any Affiliates thereof and not just a division of the
Performance Guarantor, Originator or any such Affiliate. Without limiting the
generality of the foregoing and in addition to the other covenants set forth
herein, Seller will:
(A) conduct its own business in its own name and
require that all full-time employees of Seller, if any, identify themselves as
such and not as employees of Originator (including, without limitation, by means
of providing appropriate employees with business or identification cards
identifying such employees as Seller's employees);
(B) compensate all employees, consultants and agents
directly, from Seller's own funds, for services provided to Seller by such
employees, consultants
20
and agents and, to the extent any employee, consultant or agent of Seller is
also an employee, consultant or agent of Originator or any Affiliate thereof,
allocate the compensation of such employee, consultant or agent between Seller
and Originator or such Affiliate, as applicable, on a basis that reflects the
services rendered to Seller and Originator or such Affiliate, as applicable;
(C) clearly identify its offices (by signage or
otherwise) as its offices and, if such office is located in the offices of
Originator, Seller shall lease such office at a fair market rent;
(D) have a separate telephone number, which will be
answered only in its name and separate stationery, invoices and checks in its
own name;
(E) conduct all transactions with Originator and the
Servicer (including, without limitation, any delegation of its obligations
hereunder as Servicer) strictly on an arm's-length basis, allocate all overhead
expenses (including, without limitation, telephone and other utility charges)
for items shared between Seller and Originator on the basis of actual use to the
extent practicable and, to the extent such allocation is not practicable, on a
basis reasonably related to actual use;
(F) at all times have a Board of Directors consisting
of three members, at least one member of which is an Independent Director;
(G) observe all corporate formalities as a distinct
entity, and ensure that all corporate actions relating to (A) the selection,
maintenance or replacement of the Independent Director, (B) the dissolution or
liquidation of Seller or (C) the initiation of, participation in, acquiescence
in or consent to any bankruptcy, insolvency, reorganization or similar
proceeding involving Seller, are duly authorized by unanimous vote of its Board
of Directors (including the Independent Director);
(H) maintain Seller's books and records separate from
those of Originator and any Affiliate thereof and otherwise readily identifiable
as its own assets rather than assets of Originator and any Affiliate thereof;
(I) prepare its financial statements separately from
those of Originator and insure that any consolidated financial statements of
Originator or any Affiliate thereof that include Seller and that are filed with
the Securities and Exchange Commission or any other governmental agency have
notes clearly stating that Seller is a separate corporate entity and that its
assets will be available first and foremost to satisfy the claims of the
creditors of Seller;
(J) except as herein specifically otherwise provided,
maintain the funds or other assets of Seller separate from, and not commingled
with, those of Originator or any Affiliate thereof and only maintain bank
accounts or other depository accounts to which Seller alone is the account
party, into which Seller alone makes deposits and from which Seller alone (or
the Agent hereunder) has the power to make withdrawals;
21
(K) pay all of Seller's operating expenses from
Seller's own assets (except for certain payments by Originator or other Persons
pursuant to allocation arrangements that comply with the requirements of this
Section 7.1(i));
(L) operate its business and activities such that: it
does not engage in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement, contract, lease or
other undertaking, other than the transactions contemplated and authorized by
this Agreement and the Receivables Sale Agreement; and does not create, incur,
guarantee, assume or suffer to exist any indebtedness or other liabilities,
whether direct or contingent, other than (1) as a result of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (2) the incurrence of obligations under this
Agreement, (3) the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to Originator thereunder for the
purchase of Receivables from Originator under the Receivables Sale Agreement,
and (4) the incurrence of operating expenses in the ordinary course of business
of the type otherwise contemplated by this Agreement;
(M) maintain its corporate charter in conformity with
this Agreement, such that it does not amend, restate, supplement or otherwise
modify its Certificate of Incorporation or By-Laws in any respect that would
impair its ability to comply with the terms or provisions of any of the
Transaction Documents, including, without limitation, Section 7.1(i) of this
Agreement;
(N) maintain the effectiveness of, and continue to
perform under the Receivables Sale Agreement and the Performance Undertaking,
such that it does not amend, restate, supplement, cancel, terminate or otherwise
modify the Receivables Sale Agreement or the Performance Undertaking, or give
any consent, waiver, directive or approval thereunder or waive any default,
action, omission or breach under the Receivables Sale Agreement or the
Performance Undertaking or otherwise grant any indulgence thereunder, without
(in each case) the prior written consent of the Agent;
(O) maintain its corporate separateness such that it
does not merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions,
and except as otherwise contemplated herein) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, nor at any time create, have,
acquire, maintain or hold any interest in any Subsidiary.
(P) maintain at all times the Required Capital Amount
(as defined in the Receivables Sale Agreement) and refrain from making any
dividend, distribution, redemption of capital stock or payment of any
subordinated indebtedness or under the L/C Note (as defined in the Receivables
Sale Agreement) which would cause the Required Capital Amount to cease to be so
maintained; and
(Q) take such other actions as are necessary on its
part to ensure that the facts and assumptions set forth in the opinion issued by
▇▇▇▇▇ Day, as counsel for Seller, in connection with the closing or initial
Credit Event under this Agreement and
22
relating to substantive consolidation issues, and in the certificates
accompanying such opinion, remain true and correct in all material respects at
all times.
(j) Collections. Such Seller Party will cause (1) all proceeds
from all Lock-Boxes to be directly deposited by a Collection Bank into a
Collection Account and (2) each Lock-Box and Collection Account to be subject at
all times to a Collection Account Agreement that is in full force and effect. In
the event any payments relating to Receivables are remitted directly to Seller
or any Affiliate of Seller, Seller will remit (or will cause all such payments
to be remitted) directly to a Collection Bank and deposited into a Collection
Account within two (2) Business Days following receipt thereof, and, at all
times prior to such remittance, Seller will itself hold or, if applicable, will
cause such payments to be held in trust for the exclusive benefit of the Agent
and the Purchasers. Seller will maintain exclusive ownership, dominion and
control (subject to the terms of this Agreement) of each Lock-Box and Collection
Account and shall not grant the right to take dominion and control of any
Lock-Box or Collection Account at any time, except to the Agent as contemplated
by this Agreement.
(k) Taxes. Such Seller Party will file all tax returns and
reports required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing. Seller will pay when due any taxes
payable in connection with the Receivables, exclusive of taxes on or measured by
income or gross receipts of Company, the Agent or any Financial Institution.
(l) Payment to Originator. With respect to any Receivable
purchased by Seller from Originator, such sale shall be effected under, and in
strict compliance with the terms of, the Receivables Sale Agreement, including,
without limitation, the terms relating to the amount and timing of payments to
be made to Originator in respect of the purchase price for such Receivable.
Section 7.2 Negative Covenants of the Seller Parties. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Seller Party will not
make any change to its name (within the meaning of Section 9-507(c) of any
applicable enactment of the UCC), identity, or jurisdiction of organization,
unless (i) at least forty-five (45) days prior to the effective date of any such
change, such Seller Party provides written notice thereof to Buyer and the
Agent, (ii) at least ten (10) days prior to such effective date, such Seller
Party delivers to Buyer and the Agent such financing statements (Forms UCC-1 and
UCC-3), executed by such Seller Party (if required under applicable law) which
the Agent, the L/C Issuer or any Purchaser may reasonably request to reflect
such change, together with such other documents and instruments that the Agent,
the L/C Issuer or any Purchaser may reasonably request in connection therewith,
(iii) at least ten (10) days prior to such effective date, such Seller Party has
taken all other steps to ensure that the Agent, for the benefit of itself and
the Purchasers, continues to have a first priority perfected security interest
in the Receivables, the Related Security related thereto and any Collections
thereon and (iv) in the case of any change in its jurisdiction of organization,
if requested by the Agent, the L/C Issuer or any Purchaser, the Agent, the L/C
Issuer and such Purchaser shall have received, prior to
23
such change, an opinion of counsel, in form and substance reasonably
satisfactory to the Agent, the L/C Issuer and such Purchaser, as to such
incorporation and such Seller Party's valid existence and good standing and the
perfection and preservation of priority of the Agent's ownership or security
interest in, the Receivables, the Related Security and Collections.
(b) Change in Payment Instructions to Obligors. Except as may be
required by the Agent pursuant to Section 8.2(b), such Seller Party will not add
or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that the Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy.
Such Seller Party will not, and will not permit Originator to, make any change
to the Credit and Collection Policy that could reasonably be expected to
adversely affect the collectibility of the Receivables or decrease the credit
quality of any newly created Receivables. Except as provided in Section 8.2(d),
the Servicer will not, and will not permit Originator to, extend, amend or
otherwise modify the terms of any Receivable or any Contract related thereto
other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of
law or otherwise) or otherwise dispose of, or grant any option with respect to,
or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of the Agent, L/C
Issuer and the Purchasers provided for herein), and Seller will defend the
right, title and interest of the Agent, the L/C Issuer and the Purchasers in, to
and under any of the foregoing property, against all claims of third parties
claiming through or under Seller or Originator. Seller will not create or suffer
to exist any mortgage, pledge, security interest, encumbrance, lien, charge or
other similar arrangement on any of its inventory.
(e) Net Receivables Balance. At no time prior to the Amortization
Date shall Seller permit the Net Receivables Balance to be less than an amount
equal to the sum of (i) the Exposure plus (ii) the Aggregate Reserves.
(f) Termination Date Determination. Seller will not designate the
Termination Date (as defined in the Receivables Sale Agreement), or send any
written notice to Originator in respect thereof, without the prior written
consent of the Agent, except with respect to the occurrence of such Termination
Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
24
(g) Restricted Junior Payments. During the continuance of any
Amortization Event, Seller will not make any Restricted Junior Payment if, after
giving effect thereto, Seller would fail to meet its obligations set forth in
Section 7.2(e).
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer. (a) The servicing, administration
and collection of the Receivables shall be conducted by such Person (the
"Servicer") so designated from time to time in accordance with this Section 8.1.
The Timken Corporation is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms of this Agreement.
The Agent may, at any time after the occurrence and during the continuation of
an Amortization Event, designate as Servicer any Person to succeed The Timken
Corporation or any successor Servicer.
(b) Without the prior written consent of the Agent and the
Required Financial Institutions, The Timken Corporation shall not be permitted
to delegate any of its duties or responsibilities as Servicer to any Person
other than (i) Seller and (ii) with respect to certain Charged-Off Receivables,
outside collection agencies in accordance with its customary practices. Seller
shall not be permitted to further delegate to any other Person any of the duties
or responsibilities of the Servicer delegated to it by The Timken Corporation.
If at any time the Agent shall designate as Servicer any Person other than The
Timken Corporation, all duties and responsibilities theretofore delegated by The
Timken Corporation to Seller may, at the discretion of the Agent, be terminated
forthwith on notice given by the Agent to The Timken Corporation and to Seller.
(c) Notwithstanding the foregoing subsection (b), (i) The Timken
Corporation shall be and remain primarily liable to the Agent and the Purchasers
for the full and prompt performance of all duties and responsibilities of the
Servicer hereunder and (ii) the Agent and the Purchasers shall be entitled to
deal exclusively with The Timken Corporation in matters relating to the
discharge by the Servicer of its duties and responsibilities hereunder. The
Agent and the Purchasers shall not be required to give notice, demand or other
communication to any Person other than The Timken Corporation in order for
communication to the Servicer and its sub-servicer or other delegate with
respect thereto to be accomplished. The Timken Corporation, at all times that it
is the Servicer, shall be responsible for providing any sub-servicer or other
delegate of the Servicer with any notice given to the Servicer under this
Agreement.
Section 8.2 Duties of Servicer. (a) The Servicer shall take or cause
to be taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
(b) The Servicer will instruct all Obligors to pay all
Collections directly to a Lock-Box or Collection Account. The Servicer shall
effect a Collection Account Agreement substantially in the form of Exhibit VI
with each bank party to a Collection Account at any time. In the case of any
remittances received in any Lock-Box or Collection Account
25
that shall have been identified, to the satisfaction of the Servicer, to not
constitute Collections or other proceeds of the Receivables or the Related
Security, the Servicer shall promptly remit such items to the Person identified
to it as being the owner of such remittances. From and after the date the Agent
delivers to any Collection Bank a Collection Notice pursuant to Section 8.3, the
Agent may request that the Servicer, and the Servicer thereupon promptly shall
instruct all Obligors with respect to the Receivables, to remit all payments
thereon to a new depositary account specified by the Agent and, at all times
thereafter, Seller and the Servicer shall not deposit or otherwise credit, and
shall not permit any other Person to deposit or otherwise credit to such new
depositary account any cash or payment item other than Collections.
(c) The Servicer shall administer the Collections in accordance
with the procedures described herein and in Article II. The Servicer shall set
aside and hold in trust for the account of Seller and the Purchasers their
respective shares of the Collections in accordance with Article II. The Servicer
shall, upon the request of the Agent, segregate, in a manner acceptable to the
Agent, all cash, checks and other instruments received by it from time to time
constituting Collections from the general funds of the Servicer or Seller prior
to the remittance thereof in accordance with Article II. If the Servicer shall
be required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the Agent such
allocable share of Collections of Receivables set aside for the Purchasers on
the first Business Day following receipt by the Servicer of such Collections,
duly endorsed or with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Defaulted Receivable, Delinquent Receivable or Charged-Off Receivable or limit
the rights of the Agent or the Purchasers under this Agreement. Notwithstanding
anything to the contrary contained herein, the Agent shall have the absolute and
unlimited right to direct the Servicer to commence or settle any legal action
with respect to any Receivable or to foreclose upon or repossess any Related
Security.
(e) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such Records, at
a place selected by the Agent. The Servicer shall, as soon as practicable
following receipt thereof turn over to Seller any cash collections or other cash
proceeds received with respect to Indebtedness not constituting Receivables. The
Servicer shall, from time to time at the request of any Purchaser, furnish to
the Purchasers (promptly after any such request) a calculation of the amounts
set aside for the Purchasers pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed
by it to Originator or Seller shall, except as otherwise specified by such
Obligor or otherwise required by contract or law and unless otherwise instructed
by the Agent, be applied as a Collection of any Receivable of such Obligor
(starting with the oldest such Receivable) to the
26
extent of any amounts then due and payable thereunder before being applied to
any other receivable or other obligation of such Obligor.
Section 8.3 Collection Notices. The Agent is authorized at any time to
date and to deliver to the Collection Banks the Collection Notices. Seller
hereby transfers to the Agent for the benefit of the Purchasers, exclusive
dominion and control of each Lock-Box and Collection Account and, effective when
the Agent delivers any Collection Notice, the exclusive ownership of each
Lock-Box and the Collection Accounts. In case any authorized signatory of Seller
whose signature appears on a Collection Account Agreement shall cease to have
such authority before the delivery of such notice, such Collection Notice shall
nevertheless be valid as if such authority had remained in force. Seller hereby
authorizes the Agent, and agrees that the Agent shall be entitled to (i) endorse
Seller's name on checks and other instruments representing Collections, (ii)
enforce the Receivables, the related Contracts and the Related Security and
(iii) take such action as shall be necessary or desirable to cause all cash,
checks and other instruments constituting Collections of Receivables to come
into the possession of the Agent rather than Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not release the Servicer, Originator or Seller from any
of their duties or obligations with respect to any Receivables or under the
related Contracts. The Purchasers shall have no obligation or liability with
respect to any Receivables or related Contracts, nor shall any of them be
obligated to perform the obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and forward to the
Agent (i) on the fifteenth (15th) day of each month and at such times as the
Agent shall request, a Monthly Report and (ii) at such times as the Agent shall
request, a listing by Obligor of all Receivables together with an aging of such
Receivables. In the event of a downgrade in the Debt Rating of the Performance
Guarantor to below BB+ by Standard & Poor's Ratings Services, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or below Ba1 by ▇▇▇▇▇'▇ Investors Service, Inc.,
the Servicer shall prepare and forward a Weekly Report to the Agent on the last
Business Day of each week, beginning within thirty (30) days of the public
announcement such downgrade.
Section 8.6 Servicing Fees. In consideration of The Timken
Corporation's agreement to act as Servicer hereunder, the Purchasers hereby
agree that, so long as The Timken Corporation shall continue to perform as
Servicer hereunder, Seller shall pay over to The Timken Corporation a fee (the
"Servicing Fee") on the first calendar day of each month, in arrears for the
immediately preceding month, equal to 1% per annum of the average Net
Receivables Balance outstanding during the preceding month, as compensation for
its servicing activities.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of
the following events shall constitute an Amortization Event:
27
(a) Any Seller Party shall fail (i) to make any payment of any
Obligations other than Capital when due and such failure shall continue for more
than one (1) Business Day, or (ii) to make any payment or deposit required
hereunder in respect of Capital when due or (iii) to perform or observe any
term, covenant or agreement hereunder (other than as referred to in clause (i)
or (ii) of this paragraph (a) and paragraph 9.1(e)) and such failure shall
continue for five (5) consecutive Business Days.
(b) Any representation, warranty, certification or statement made
by any Seller Party in this Agreement, any other Transaction Document or in any
other document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made.
(c) Failure of Seller to pay any Indebtedness when due; or the
default by Seller in the performance of any term, provision or condition
contained in any agreement under which any such Indebtedness was created or is
governed, the effect of which is to cause, or to permit the holder or holders of
such Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of Seller shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled payment)
prior to the date of maturity thereof.
(d) (i) Any of Originator, Servicer (if Servicer shall then be
The Timken Corporation or an Affiliate thereof), Seller, or Performance
Guarantor or any of their Subsidiaries shall generally not pay its debts as such
debts become due or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors; or
(ii) any proceeding shall be instituted by or against any such Person or any of
its Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property; provided that, in the
case of any proceeding instituted against any such Person (other than Seller),
such event shall not constitute an Amortization Event until either (A) such
proceeding shall have remained undismissed or unstayed for a period of sixty
(60) days, (B) an order for relief shall have been entered against such Person
under the Federal bankruptcy laws or (C) such Person shall have taken corporate
action consenting to, approving or acquiescing in the commencement or
maintenance of such proceeding; or (iii) any such Person or any of its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth in clauses (i) or (ii) above in this subsection (d).
(e) Seller shall fail to comply with the terms of Section 2.6
hereof.
(f) As at the end of any calendar month, (i) the average
Delinquency Ratio, with respect to the three months then most recently ended,
shall exceed 9.25% or (ii) the average Default Trigger, with respect to the
three months then most recently ended, shall exceed 4.0% or (iii) the average
Dilution Ratio, with respect to the three months then most recently ended, shall
exceed 5.00%.
(g) A Change of Control shall occur.
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(h) One or more final judgments for the payment of money shall be
entered against Seller or (ii) one or more final judgments for the payment of
money in an amount in excess of the Material Judgment Level, individually or in
the aggregate, shall be entered against the Servicer or the Performance
Guarantor, and such judgment shall continue unsatisfied and in effect for thirty
(30) consecutive days without a stay of execution.
(i) Originator shall fail to perform or observe any term,
covenant or agreement required to be performed by it under the Receivables Sale
Agreement or under any other Transaction Document to which it is a party; or any
representation, warranty, certification or statement made by Originator in this
Agreement, any other Transaction Document or in any other document delivered
pursuant hereto or thereto shall prove to have been incorrect when made or
deemed made (excluding any representation, warranty, certification or statement
made by Originator relating to the eligibility or characteristics of any
Receivable, a Deemed Collection hereunder, and a "Purchase Price Credit
Adjustment" under the Receivables Sale Agreement, is duly, timely and fully
effected in accordance with the terms hereof and the Receivables Sale Agreement
with respect to such Receivable); or the "Termination Date" under and as defined
in the Receivables Sale Agreement shall occur under the Receivables Sale
Agreement; or any notice of termination shall be given under the Inventory
Agreement or the Inventory Agreement or any material part thereof shall be
terminated or cease to be in effect; or Originator shall for any reason cease to
purchase, or cease to have the legal capacity to purchase, or otherwise be
incapable of purchasing inventory from the Performance Guarantor under the
Inventory Agreement; or Originator shall for any reason cease to transfer, or
cease to have the legal capacity to transfer, or otherwise be incapable of
transferring Receivables to Seller under the Receivables Sale Agreement.
(j) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Seller, or any Obligor shall
directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Security and the Collections with respect thereto
and the Collection Accounts.
(k) Performance Guarantor shall fail to perform or observe any
term, covenant or agreement required to be performed by it under the Performance
Undertaking or the Inventory Agreement; any representation, warranty,
certification or statement made by the Performance Guarantor in this Agreement,
any other Transaction Document or in any other document delivered pursuant
hereto or thereto shall prove to have been incorrect when made or deemed made in
any material respect; or the Performance Undertaking or any other Transaction
Document to which it is party; shall cease to be effective or to be the legally
valid, binding and enforceable obligation of the Performance Guarantor, or the
Performance Guarantor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability.
(l) Any Servicer Default shall occur.
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Section 9.2 Remedies. Upon the occurrence and during the continuation
of an Amortization Event, the Agent may, or upon the direction of the Required
Financial Institutions shall, take any of the following actions: (i) replace the
Person then acting as Servicer, (ii) declare the Amortization Date to have
occurred, whereupon the Amortization Date shall forthwith occur, without demand,
protest or further notice of any kind, all of which are hereby expressly waived
by each Seller Party; provided, however, that upon the occurrence of an
Amortization Event described in Section 9.1(d)(ii), the Amortization Date shall
automatically occur, without demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Seller Party, (iii) to the fullest
extent permitted by applicable law, declare that the Default Rate shall accrue
with respect to any of the Aggregate Unpaids outstanding at such time, (iv)
deliver the Collection Notices to the Collection Banks, and (v) notify Obligors
of the Purchasers' interest in the Receivables. The aforementioned rights and
remedies shall be without limitation, and shall be in addition to all other
rights and remedies of the Agent and the Purchasers otherwise available under
any other provision of this Agreement, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC, all of which rights
shall be cumulative.
Section 9.3 Servicer Defaults. The occurrence of any one or more of
the following events shall constitute a Servicer Default:
(a) Failure of Originator, Servicer or the Performance Guarantor
to pay any Indebtedness in excess of the Material Indebtedness Level when due;
or the default by Originator, Servicer or the Performance Guarantor in the
performance of any term, provision or condition contained in any agreement under
which any such Indebtedness was created or is governed, the effect of which is
to cause, or to permit the holder or holders of such Indebtedness to cause, such
Indebtedness to become due prior to its stated maturity; or any such
Indebtedness of Originator, Servicer or the Performance Guarantor shall be
declared to be due and payable or required to be prepaid (other than by a
regularly scheduled payment) prior to the date of maturity thereof.
(b) A Financial Covenant Default shall occur.
(c) Any ERISA Event shall occur.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by the Seller Parties. Without limiting any
other rights that the Agent or any Purchaser may have hereunder or under
applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to)
the Agent, the L/C Issuer and each Purchaser and their respective assigns,
officers, directors, agents and employees (each an "Indemnified Party") from and
against any and all damages, losses, claims, taxes, liabilities, costs, expenses
and for all other amounts payable, including reasonable attorneys' fees (which
attorneys may be employees of the Agent or such Purchaser) and disbursements
(all of the foregoing being collectively referred to as "Indemnified Amounts")
awarded against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by a Purchaser or
the L/C Issuer of an interest in the Receivables, and (B) the Servicer hereby
agrees to indemnify
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(and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded
against or incurred by any of them arising out of the Servicer's activities as
Servicer hereunder (or under any Transaction Documents) excluding, however, in
all of the foregoing instances under the preceding clauses (A) and (B):
(i) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts resulted
from gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(ii) Indemnified Amounts to the extent the same includes
losses in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or
(iii) Excluded Taxes;
provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Agent, the Purchasers
or the L/C Issuer to any Seller Party in respect of any representations or
warranties made under or in connection with this Agreement by any Seller Party.
Without limiting the generality of the foregoing indemnification, Seller shall
indemnify each Indemnified Party for Indemnified Amounts (including, without
limitation, losses in respect of uncollectible receivables, regardless of
whether reimbursement therefor would constitute recourse to Seller or the
Servicer) relating to or resulting from:
(i) any representation or warranty made by any Seller Party,
Performance Guarantor, or Originator (or any officers of any such Person) under
or in connection with this Agreement, any other Transaction Document or any
other information or report delivered by any such Person pursuant hereto or
thereto, which shall have been false or incorrect when made or deemed made;
(ii) the failure by Seller, the Servicer or Originator to
comply with any applicable law, rule or regulation with respect to any
Receivable or Contract related thereto, or the nonconformity of any Receivable
or Contract included therein with any such applicable law, rule or regulation or
any failure of Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer, Performance
Guarantor, or Originator to perform its duties, covenants or other obligations
in accordance with the provisions of this Agreement or any other Transaction
Document;
(iv) any products liability, personal injury or damage suit,
or other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms),
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or any other claim resulting from the sale of the merchandise or service related
to such Receivable or the furnishing or failure to furnish such merchandise or
services;
(vi) the commingling of Collections of Receivables at any
time with other funds;
(vii) any investigation, litigation or proceeding related to
or arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of an Incremental
Purchase or a Reinvestment, the ownership of the Purchaser Interests or any
other investigation, litigation or proceeding relating to Seller, the Servicer,
Performance Guarantor, or Originator in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such Obligor being immune
from civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
(x) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of any Receivable and the Related Security and
Collections with respect thereto from Originator, free and clear of any Adverse
Claim (other than as created under the Transaction Documents); or any failure of
Seller to give reasonably equivalent value to Originator under the Receivables
Sale Agreement in consideration of the transfer by Originator of any Receivable,
or any attempt by any Person to void such transfer under statutory provisions or
common law or equitable action;
(xi) any failure to vest and maintain vested in the Agent
for the benefit of the Purchasers and the L/C Issuer, or to transfer to the
Agent for the benefit of the Purchasers and the L/C Issuer, legal and equitable
title to, and ownership of, a first priority perfected undivided percentage
ownership interest (to the extent of the Purchaser Interests contemplated
hereunder) or security interest in the Receivables, the Related Security and the
Collections, free and clear of any Adverse Claim (except as created by the
Transaction Documents);
(xii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivable, the Related Security and Collections with respect thereto, and the
proceeds of any thereof, whether at the time of any Credit Event or at any
subsequent time;
(xiii) any action or omission by any Seller Party which
reduces or impairs the rights of the Agent, the L/C Issuer or the Purchasers
with respect to any Receivable or the value of any such Receivable;
(xiv) any attempt by any Person to void any Credit Event
hereunder under statutory provisions or common law or equitable action;
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(xv) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to be an
Eligible Receivable at the time so included.
Section 10.2 Increased Cost and Reduced Return.
If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency (a "Regulatory Change"): (i)
that subjects any Funding Source to any charge or withholding on or with respect
to any Funding Agreement or a Funding Source's obligations under a Funding
Agreement, or on or with respect to the Receivables, or changes the basis of
taxation of payments to any Funding Source of any amounts payable under any
Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source or Excluded Taxes) or (ii) that imposes, modifies or
deems applicable any reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for the account of a
Funding Source, or credit extended by a Funding Source pursuant to a Funding
Agreement or (iii) that imposes any other condition the result of which is to
increase the cost to a Funding Source of performing its obligations under a
Funding Agreement, or to reduce the rate of return on a Funding Source's capital
as a consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent, Seller shall pay to the Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to otherwise
compensate such Funding Source for such increased cost or such reduction.
Section 10.3 Expenses.
Seller shall pay to the Agent, Purchasers, the L/C Issuer and Company
on demand all reasonable costs and out-of-pocket expenses in connection with the
preparation, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered
hereunder, including without limitation, the cost of Company's auditors auditing
the books, records and procedures of Seller, reasonable fees and out-of-pocket
expenses of legal counsel for Company, the L/C Issuer and the Agent (which such
counsel may be employees of Company or the Agent) with respect thereto and with
respect to advising Company and the Agent as to their respective rights and
remedies under this Agreement. Seller shall pay to the Agent on demand any and
all reasonable costs and expenses of the Agent, the L/C Issuer and the
Purchasers, if any, including reasonable counsel fees and expenses in connection
with the enforcement of this Agreement and the other documents delivered
hereunder and in connection with any restructuring or workout of this Agreement
or such documents, or the administration of this Agreement following an
Amortization Event.
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ARTICLE XI
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser and the L/C
Issuer hereby designates and appoints JPMorgan to act as its agent hereunder and
under each other Transaction Document, and authorizes the Agent to take such
actions as agent on its behalf and to exercise such powers as are delegated to
the Agent by the terms of this Agreement and the other Transaction Documents
together with such powers as are reasonably incidental thereto. The Agent shall
not have any duties or responsibilities, except those expressly set forth herein
or in any other Transaction Document, or any fiduciary relationship with any
Purchaser or the L/C Issuer, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Agent
shall be read into this Agreement or any other Transaction Document or otherwise
exist for the Agent. In performing its functions and duties hereunder and under
the other Transaction Documents, the Agent shall act solely as agent for the
Purchasers and the L/C Issuer and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for any Seller
Party or any of such Seller Party's successors or assigns. The Agent shall not
be required to take any action that exposes the Agent to personal liability or
that is contrary to this Agreement, any other Transaction Document or applicable
law. The appointment and authority of the Agent hereunder shall terminate upon
the indefeasible payment in full of all Aggregate Unpaids. Each Purchaser and
the L/C Issuer each hereby authorizes the Agent to execute each of the Uniform
Commercial Code financing statements, on behalf of such Purchaser and the L/C
Issuer (the terms of which shall be binding on such Purchaser or the L/C Issuer,
as applicable).
Section 11.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys in fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser or the L/C Issuer to ascertain or
to inquire as to the observance or performance of any of the agreements or
covenants contained in, or conditions of, this Agreement or any other
Transaction Document, or to inspect the properties, books or records of the
Seller Parties. The Agent shall not be deemed
34
to have knowledge of any Amortization Event or Potential Amortization Event
unless the Agent has received notice from Seller or a Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of Company or the Required Financial Institutions or all
of the Purchasers and the L/C Issuers, as applicable, as it deems appropriate
and it shall first be indemnified to its satisfaction by the Purchasers,
provided that unless and until the Agent shall have received such advice, the
Agent may take or refrain from taking any action, as the Agent shall deem
advisable and in the best interests of the Purchasers and the L/C Issuers. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, in accordance with a request of Company, the L/C Issuer or the Required
Financial Institutions or all of the Purchasers, as applicable, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Purchasers and the L/C Issuer.
Section 11.5 Non-Reliance on Agent and Other Purchasers. Each
Purchaser and the L/C Issuer expressly acknowledges that neither the Agent, nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
the Agent hereafter taken, including, without limitation, any review of the
affairs of any Seller Party, shall be deemed to constitute any representation or
warranty by the Agent. Each Purchaser and the L/C Issuer represents and warrants
to the Agent that it has and will, independently and without reliance upon the
Agent or any other Purchaser or the L/C Issuer, as applicable, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of Seller and made its own
decision to enter into this Agreement, the other Transaction Documents and all
other documents related hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent, the L/C Issuer and
their respective officers, directors, employees, representatives and agents
ratably according to their Pro Rata Shares, to the extent not paid or reimbursed
by the Seller Parties (i) to the Agent, for any amounts for which the Agent,
acting in its capacity as Agent, is entitled to reimbursement by the Seller
Parties hereunder, (ii) to the Agent, for any other expenses incurred by the
Agent, in its capacity as Agent and acting on behalf of the Purchasers, in
connection with the administration and enforcement of this Agreement and the
other Transaction Documents, (iii) to the L/C Issuer, for any amounts for which
the L/C Issuer, acting in its capacity as L/C Issuer, is entitled to
reimbursement by the Seller Parties hereunder and (iv) to the L/C Issuer, for
any other expenses incurred by the L/C Issuer, in its capacity as L/C Issuer, in
connection with the administration and enforcement of this Agreement and the
other Transaction Documents
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Section 11.7 Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Seller or any Affiliate of Seller as though the Agent were
not the Agent hereunder. With respect to the acquisition of Purchaser Interests
pursuant to this Agreement, the Agent shall have the same rights and powers
under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "Financial
Institution," "Purchaser," "Financial Institutions," "L/C Issuer" and
"Purchasers" shall include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon five days' notice to
Seller and the Purchasers, and the Agent will, upon the direction of the L/C
Issuer (if the Agent is not the same Person as the L/C Issuer) and all of the
Purchasers (other than the Agent, in its individual capacity) resign as Agent.
If the Agent shall resign, then the Required Financial Institutions and the L/C
Issuer (if the Agent is not the same Person as the L/C Issuer) during such
five-day period shall appoint from among the Purchasers a successor agent. If
for any reason no successor Agent is appointed by the Required Financial
Institutions and the L/C Issuer (if the Agent is not the same Person as the L/C
Issuer) during such five-day period, then effective upon the termination of such
five day period, the Purchasers shall perform all of the duties of the Agent
hereunder and under the other Transaction Documents and Seller and the Servicer
(as applicable) shall make all payments in respect of the Aggregate Unpaids
directly to the applicable Purchasers and for all purposes shall deal directly
with the Purchasers. After the effectiveness of any retiring Agent's resignation
hereunder as Agent, the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Transaction Documents and the
provisions of this Article XI and Article X shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while it
was Agent under this Agreement and under the other Transaction Documents.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments. (a) Seller and each Financial Institution
hereby agree and consent to the complete or partial assignment by Company of all
or any portion of its rights under, interest in, title to and obligations under
this Agreement to the Financial Institutions pursuant to a Liquidity Agreement
or to any other Person, and upon such assignment, Company shall be released from
its obligations so assigned. Further, Seller and each Financial Institution
hereby agree that any assignee of Company of this Agreement or all or any of the
Purchaser Interests of Company shall have all of the rights and benefits under
this Agreement as if the term "Company" explicitly referred to such party, and
no such assignment shall in any way impair the rights and benefits of Company
hereunder. Neither Seller nor the Servicer shall have the right to assign its
rights or obligations under this Agreement.
(b) Any Financial Institution may at any time and from time to
time assign to one or more Persons ("Purchasing Financial Institutions") all or
any part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the "Assignment Agreement") executed by such Purchasing Financial Institution
and such selling Financial Institution. The consent of the Agent, the Company
and the L/C Issuer shall be required prior to the effectiveness of any such
36
assignment. Each assignee of a Financial Institution must (i) have a short-term
debt rating of A-1 or better by Standard & Poor's Ratings Group, a division of
the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and P-1 by ▇▇▇▇▇'▇ Investor Service, Inc. and
(ii) agree to deliver to the Agent, promptly following any request therefor by
the Agent or Company, an enforceability opinion in form and substance
satisfactory to the Agent and Company. Upon delivery of the executed Assignment
Agreement to the Agent, such selling Financial Institution shall be released
from its obligations hereunder to the extent of such assignment. Thereafter the
Purchasing Financial Institution shall for all purposes be a Financial
Institution party to this Agreement and shall have all the rights and
obligations of a Financial Institution under this Agreement to the same extent
as if it were an original party hereto and no further consent or action by
Seller, the Purchasers or the Agent shall be required.
(c) Each of the Financial Institutions agrees that in the event
that it shall cease to have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Group and P-1 by ▇▇▇▇▇'▇ Investor Service, Inc. (an
"Affected Financial Institution"), such Affected Financial Institution shall be
obliged, at the request of Company or the Agent, to assign all of its rights and
obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Company and the L/C
Issuer, and willing to participate in this Agreement and the related Liquidity
Agreement through the Liquidity Termination Date in the place of such Affected
Financial Institution; provided that the Affected Financial Institution receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to such
Financial Institution's Pro Rata Share of the Aggregate Capital and Yield owing
to the Financial Institutions and all accrued but unpaid fees and other costs
and expenses payable in respect of its Pro Rata Share of the Purchaser Interests
of the Financial Institutions.
Section 12.2 Participations. Any Financial Institution may, in the
ordinary course of its business at any time sell to one or more Persons (each a
"Participant") participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, its obligation to the Company pursuant
to a Liquidity Agreement or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Company, the L/C Issuer and the Agent shall
continue to deal solely and directly with such Financial Institution in
connection with such Financial Institution's rights and obligations under this
Agreement. Each Financial Institution agrees that any agreement between such
Financial Institution and any such Participant in respect of such participating
interest shall not restrict such Financial Institution's right to agree to any
amendment, supplement, waiver or modification to this Agreement, except for any
amendment, supplement, waiver or modification described in Section 14.1(b)(i).
Section 12.3 Terminating Financial Institutions.
(a) Each Financial Institution hereby agrees to deliver written
notice to the Agent not more than 30 days and not less than 5 days prior to the
Liquidity Termination Date indicating whether such Financial Institution intends
to renew its Commitment hereunder. If any Financial Institution fails to deliver
such notice on or prior to the date that is 5 Business
37
Days prior to the Liquidity Termination Date, such Financial Institution will be
deemed to have declined to renew its Commitment (each Financial Institution
which has declined or has been deemed to have declined to renew its Commitment
hereunder, a "Non-Renewing Financial Institution"). The Agent shall promptly
notify Company and the L/C Issuer of each Non-Renewing Financial Institution and
Company, in its sole discretion, may (A) to the extent of Commitment
Availability, declare that such Non-Renewing Financial Institution's Commitment
shall, to such extent, automatically terminate on a date specified by Company on
or before the Liquidity Termination Date or (B) upon one (1) Business Days'
notice to such Non-Renewing Financial Institution assign to such Non-Renewing
Financial Institution on a date specified by Company its Pro Rata Share of the
aggregate Purchaser Interests then held by Company, subject to, and in
accordance with the applicable Liquidity Agreement. In addition, Company may, in
its sole discretion, at any time (x) to the extent of Commitment Availability,
declare that any Affected Financial Institution's Commitment shall automatically
terminate on a date specified by Company or (y) assign to any Affected Financial
Institution on a date specified by Company its Pro Rata Share of the aggregate
Purchaser Interests then held by Company, subject to, and in accordance with the
applicable Liquidity Agreement (each Affected Financial Institution or each
Non-Renewing Financial Institution is hereinafter referred to as a "Terminating
Financial Institution"). The parties hereto expressly acknowledge that any
declaration of the termination of any Commitment, any assignment pursuant to
this Section 12.3 and the order of priority of any such termination or
assignment among Terminating Financial Institutions shall be made by Company in
its sole and absolute discretion.
(b) Upon any assignment to a Terminating Financial Institution as
provided in this Section 12.3, any remaining Commitment of such Terminating
Financial Institution shall automatically terminate. Upon reduction to zero of
the Capital of all of the Purchaser Interests of a Terminating Financial
Institution (after application of Collections thereto pursuant to Sections 2.2
and 2.3) all rights and obligations of such Terminating Financial Institution
hereunder shall be terminated and such Terminating Financial Institution shall
no longer be a "Financial Institution" hereunder; provided, however, that the
provisions of Article X shall continue in effect for its benefit with respect to
Purchaser Interests held by such Terminating Financial Institution prior to its
termination as a Financial Institution.
ARTICLE XIII
Reserved.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Waivers and Amendments. (a) No failure or delay on the
part of the Agent, the L/C Issuer or any Purchaser in exercising any power,
right or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or remedy preclude
any other further exercise thereof or the exercise of any other power, right or
remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given.
38
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 14.1(b). Company, Seller and the Agent, at the direction of the Required
Financial Institutions, may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or
waiver shall:
(i) without the consent of each affected Purchaser, (A)
extend the Liquidity Termination Date or the date of any payment or deposit of
Collections by Seller or the Servicer, (B) reduce the rate or extend the time of
payment of Yield or any CP Costs (or any component of Yield or CP Costs), (C)
reduce any fee payable to the Agent for the benefit of the Purchasers, (D)
except pursuant to Article XII hereof, change the amount of the Capital of any
Purchaser, any Financial Institution's Pro Rata Share (except as may be required
pursuant to a Liquidity Agreement) or any Financial Institution's Commitment,
(E) amend, modify or waive any provision of the definition of Required Financial
Institutions or this Section 14.1(b), (F) consent to or permit the assignment or
transfer by Seller of any of its rights and obligations under this Agreement,
(G) change the definition of "Eligible Receivable," "Loss Reserve," "Dilution
Reserve," "Yield and Servicer Reserve" or (H) amend or modify any defined term
(or any defined term used directly or indirectly in such defined term) used in
clauses (A) through (G) above in a manner that would circumvent the intention of
the restrictions set forth in such clauses;
(ii) without the written consent of the then Agent, amend,
modify or waive any provision of this Agreement if the effect thereof is to
affect the rights or duties of such Agent, or
(iii) without the written consent of the L/C Issuer, amend,
modify or waive any provision of this Agreement if the effect thereof is to
affect the rights or duties of the L/C Issuer.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller and the L/C Issuer, the Agent may
amend this Agreement solely to add additional Persons as Financial Institutions
hereunder and (ii) the Agent, the L/C Issuer, the Required Financial
Institutions and Company may enter into amendments to modify any of the terms or
provisions of Article XI, Article XII, Section 14.13 or any other provision of
this Agreement without the consent of Seller, provided that such amendment has
no negative impact upon Seller. Any modification or waiver made in accordance
with this Section 14.1 shall apply to each of the Purchasers equally and shall
be binding upon Seller, the Purchasers, the L/C Issuer and the Agent.
Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage
39
prepaid or (iii) if given by any other means, when received at the address
specified in this Section 14.2. Seller hereby authorizes the Agent to effect
purchases and Tranche Period and Discount Rate selections based on telephonic
notices made by any Person whom the Agent in good faith believes to be acting on
behalf of Seller. Seller agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by an Authorized Officer of
Seller; provided, however, the absence of such confirmation shall not affect the
validity of such notice. If the written confirmation differs from the action
taken by the Agent, the records of the Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 14.4 Protection of Interests of the Agent, the Purchasers and
the L/C Issuer.
(a) Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may request, to
perfect, protect or more fully evidence the Purchaser Interests, the security
interest granted hereunder, or to enable the Agent, the L/C Issuer or the
Purchasers to exercise and enforce their rights and remedies hereunder. At any
time, the Agent may, or the Agent may direct Seller or the Servicer to, notify
the Obligors of Receivables, at Seller's expense, of the ownership or security
interests of the Purchasers under this Agreement and the security interests
granted under this Agreement and may also direct that payments of all amounts
due or that become due under any or all Receivables be made directly to the
Agent or its designee. Seller or the Servicer (as applicable) shall, at any
Purchaser's request, withhold the identity of such Purchaser in any such
notification.
(b) If any Seller Party fails to perform any of its obligations
hereunder, the Agent, the L/C Issuer or any Purchaser may (but shall not be
required to) perform, or cause performance of, such obligations, and the
Agent's, the L/C Issuer's or such Purchaser's costs and expenses incurred in
connection therewith shall be payable by Seller as provided in Section 10.3.
Each Seller Party irrevocably authorizes the Agent at any time and from time to
time in the sole discretion of the Agent, and appoints the Agent as its
attorney-in-fact, to act on behalf of such Seller Party (i) within the meaning
of Section 9-509 of any applicable enactment of the UCC, as secured party for
the benefit of itself and of the Purchasers and the L/C Issuer, to file, without
the signature of the Seller or Originator, as debtors, the UCC financing
statements contemplated herein and under the Receivables Sale Agreement (ii) to
execute (if necessary) on behalf of Seller as debtor and to file financing
statements necessary or desirable in the Agent's sole discretion to perfect and
to maintain the perfection and priority of the interest of the
40
Purchasers and the L/C Issuer in the Receivables and (iii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables as a financing statement in such offices as the
Agent in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority of the interests of the Purchasers in the
Receivables. This appointment is coupled with an interest and is irrevocable.
Section 14.5 Confidentiality. (a) Each Seller Party shall maintain and
shall cause each of its employees and officers to maintain the confidentiality
of this Agreement and other nonpublic proprietary information with respect to
the Agent, the L/C Issuer and each Purchaser and their respective businesses
obtained by it or them in connection with the structuring, negotiating and
execution of the transactions contemplated herein, except that such Seller Party
may disclose such information (i) to any Seller Party, (ii) to its officers,
directors, employees, agents, counsel, accountants, auditors, advisors or
representatives, (iii) to the extent such information has become available to
the public other than as a result of a disclosure by or through any Seller
Party, (iv) to the extent such information was available to such Seller Party on
a nonconfidential basis prior to its disclosure to such Seller Party hereunder,
(v) with the consent of the Agent, the L/C Issuer or such Purchaser, as
applicable, (vi) to the extent otherwise permitted by this Agreement, (vii) to
the extent that such Seller Party should be (A) required in connection with any
legal or regulatory proceeding or (B) requested by any governmental authority to
disclose such information; provided, that, in the case of clause (vii) above,
such Seller Party, will use all reasonable efforts to maintain confidentiality
and, in the case of clause (vii)(A) above, will (unless advised by counsel that
such action would be prohibited by law or adversely affect any rights or
interests of the Seller Party hereunder) notify the Agent, the L/C Issuer or
such Purchaser, as applicable, of its intention to make any such disclosure
prior to making any such disclosure or (viii) in the protection or enforcement
of any of its rights hereunder.
(b) The Agent, the L/C Issuer and each Purchaser covenants and
agrees that any information obtained by the Agent, the L/C Issuer or such
Purchaser with respect to Seller, Servicer, Originator or the Performance
Guarantor pursuant to this Agreement shall be held in confidence except that the
Agent, the L/C Issuer or such Purchaser may disclose such information (i) to the
Agent, the L/C Issuer or any Purchaser, (ii) to its officers, directors,
employees, agents, counsel, accountants, auditors, advisors or representatives,
(iii) to the extent such information has become available to the public other
than as a result of a disclosure by or through the Agent, the L/C Issuer or such
Purchaser, (iv) to the extent such information was available to the Agent, the
L/C Issuer or such Purchaser on a nonconfidential basis prior to its disclosure
to the Agent, the L/C Issuer or such Purchaser hereunder, (v) with the consent
of the Seller, Servicer, Originator or the Performance Guarantor, as applicable,
(vi) to the extent otherwise permitted by this Agreement, (vii) to the extent
that Agent, the L/C Issuer or such Purchaser should be (A) required in
connection with any legal or regulatory proceeding or (B) requested by any
governmental authority to disclose such information; provided, that, in the case
of clause (vii) above, the Agent, the L/C Issuer or such Purchaser, as
applicable, will use all reasonable efforts to maintain confidentiality and, in
the case of clause (vii)(A) above, will (unless advised by counsel that such
action would be prohibited by law or adversely affect any rights or interests of
the Agent, the L/C Issuer or such Purchaser hereunder) notify the Servicer,
Originator or the Performance Guarantor, as applicable, of its intention to make
any such
41
disclosure prior to making any such disclosure or (viii) in the protection or
enforcement of any of its rights hereunder.
Section 14.6 Bankruptcy Petition. Seller, the Servicer, the Agent, the
L/C Issuer and each Financial Institution hereby covenants and agrees that,
prior to the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of Company, it will not institute against, or
join any other Person in instituting against, Company or any such entity 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 14.7 Limitation of Liability. No claim may be made by any
Seller Party or any other Person against Company, the Agent, the L/C Issuer or
any Financial Institution or their respective Affiliates, directors, officers,
employees, attorneys or agents for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and each Seller Party hereby waives, releases, and agrees not to ▇▇▇
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE L/C ISSUER OR ANY
PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE
AGENT, THE L/C ISSUER OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY
PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY
SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
42
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS AGREEMENT
OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns
(including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any
termination of this Agreement.
Section 14.12 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
Section 14.13 JPMorgan Roles. Each of the Financial Institutions and
the L/C Issuer acknowledges that JPMorgan acts, or may in the future act, (i) as
administrative agent for Company, the L/C Issuer or any Financial Institution,
(ii) as issuing and paying agent for the Commercial Paper, (iii) to provide
credit or liquidity enhancement for the timely payment for the Commercial Paper
and (iv) to provide other services from time to time for Company or any
Financial Institution (collectively, the "JPMorgan Roles"). Without limiting the
generality of this Section 14.13, each Financial Institution and the L/C Issuer
hereby acknowledges and consents to any and all JPMorgan Roles and agrees that
in connection with any JPMorgan Role, JPMorgan may take, or refrain from taking,
any action that it, in its discretion, deems appropriate, including, without
limitation, in its role as administrative agent for Company, and the giving of
notice to the Agent of a mandatory purchase pursuant to a Liquidity Agreement.
Section 14.14 Characterization. (a) Except for the limited purpose
provided in Section 14.14(d), it is the intention of the parties hereto that
each purchase of Purchaser Interests by the Purchasers hereunder shall
constitute and be treated as an absolute and irrevocable sale,
43
which purchase shall provide the applicable Purchaser with the full benefits of
ownership of the applicable Purchaser Interest. Except as specifically provided
in this Agreement, each sale of a Purchaser Interest hereunder is made without
recourse to Seller; provided, however, that (i) Seller shall be liable to each
Purchaser and the Agent for all representations, warranties, covenants and
indemnities made by Seller pursuant to the terms of this Agreement, and (ii)
such sale does not constitute and is not intended to result in an assumption by
any Purchaser or the Agent or any assignee thereof of any obligation of Seller
or Originator or any other Person arising in connection with the Receivables,
the Related Security, or the related Contracts, or any other obligations of
Seller or Originator.
(b) In addition to any ownership interest which the Agent, on
behalf of the Purchasers, may from time to time acquire in the Purchaser
Interests pursuant hereto, Seller hereby grants to the Agent for the ratable
benefit of the Purchasers and the L/C Issuer a valid and perfected security
interest in all of Seller's (whether an undivided percentage interest or
otherwise) right, title and interest in, to and under, all Receivables now
existing or hereafter arising (including, without limitation, the Seller
Interest), all Related Security with respect to such Receivables, all
Collections with respect to such Receivables, all amounts paid to
Cash-Collateralize the Letter of Credit Obligations and all proceeds of any
thereof, prior to all other liens on and security interests therein, to secure
the prompt and complete payment of the Aggregate Unpaids (including, without
limitation, all Letter of Credit Obligations). The Agent, the L/C Issuer and the
Purchasers shall have, in addition to the rights and remedies that they may have
under this Agreement, all other rights and remedies provided to a secured
creditor under the UCC and other applicable law, which rights and remedies shall
be cumulative.
(c) If, notwithstanding the intent of the parties expressed in
paragraph (a) above, the purchases hereunder are not treated as sales, the sale,
assignment, and transfer of each Purchaser Interest shall be treated as the
grant of a valid and perfected security interest in all of Seller's right, title
and interest in, to and under, all Receivables now existing or hereafter
arising, all Related Security with respect to such Receivables, all Collections
with respect to such Receivables and all proceeds of any thereof prior to all
other liens on and security interests therein to secure the prompt and complete
payment of the Aggregate Unpaids. Seller shall, to the extent consistent with
this Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in, and not to constitute a
sale of, such Purchaser Interests, such security interest will be a perfected
security interest in favor of the Agent under the UCC and other applicable law
and will be maintained as such throughout the term of this Agreement. In respect
of such security interest with respect to the Purchaser Interests, the Agent and
the Purchasers shall have, in addition to the rights and remedies that they may
have under this Agreement, all other rights and remedies provided to a secured
creditor under the UCC and other applicable law, which rights and remedies shall
be cumulative.
(d) Solely for income tax purposes, the acquisition by the
Purchasers of Purchaser Interests shall be characterized as a loan or loans by
the Purchasers to Seller secured by the Receivables, the Related Security and
the Collections.
Section 14.15 Amendment and Restatement.
44
(a) This Agreement amends and restates in its entirety the
Earlier Purchase Agreement. Upon the effectiveness of this Agreement, the terms
and provisions of the Earlier Purchase Agreement shall, subject to this Section
14.15, be superseded hereby.
(b) Notwithstanding the amendment and restatement of the Earlier
Purchase Agreement by this Agreement:
(i) each Purchaser Interest existing on the date hereof
under the Earlier Purchase Agreement shall continue in effect as a Purchaser
Interest hereunder, without any transfer, conveyance, diminution or other
modification thereto or effect thereon occurring or being deemed to occur by
reason of the amendment and restatement of the Earlier Purchase Agreement
hereby; and
(ii) Seller shall continue to be liable to the Purchasers
and the Agent with respect to (A) all "Obligations" accrued to the date hereof
under the Earlier Purchase Agreement and (B) all agreements on the part of the
Seller under the Earlier Purchase Agreement to indemnify any of the Purchasers
or the Agent in connection with events or conditions arising or existing prior
to the effective date of this Agreement, including, but not limited to, those
events and conditions set forth in Article X thereof.
(c) This Agreement is given in substitution for the Earlier
Purchase Agreement and not as payment of any of the obligations of Seller
thereunder, and is in no way intended to constitute a novation of the Earlier
Purchase Agreement. Nothing contained herein is intended to amend, modify or
otherwise affect any obligation of Seller, Servicer, the Originator or the
Performance Guarantor (in respect of its obligations under any Performance
Undertaking) existing prior to the date hereof.
(d) Upon the effectiveness of this Agreement, each reference to
the Earlier Purchase Agreement in any other document, instrument or agreement
executed and/or delivered in connection therewith shall mean and be a reference
to this Agreement unless the context otherwise requires.
(e) Upon the effectiveness of this Agreement, the terms of this
Agreement shall govern all aspects of the facility contemplated herein,
including, without limitation, the eligibility of Receivables purchased under
the Earlier Purchase Agreement and any settlements to be made with respect
thereto.
[SIGNATURE PAGES FOLLOW]
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly Authorized Officers as of the date
hereof.
TIMKEN RECEIVABLES CORPORATION
as Seller
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Title: President
---------------------------------
Address:
-------------------------------
-------------------------------
THE TIMKEN CORPORATION
as Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Title: Executive Vice President, Finance
and Administration
---------------------------------
Address:
-------------------------------
-------------------------------
Signature Page to Amended and Restated Receivables Purchase Agreement
JUPITER SECURITIZATION CORPORATION, as
Company
By: JPMorgan Chase Bank, N.A., its
attorney in fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Address:
-------------------------------
-------------------------------
JPMORGAN CHASE BANK, N.A., as a
Financial Institution, as L/C Issuer and
as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Address:
-------------------------------
-------------------------------
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