RECEIVABLE INTEREST PURCHASE AGREEMENT

Exhibit 10.11

Execution Version

RECEIVABLE INTEREST PURCHASE AGREEMENT

Dated as of March 31, 2009

Among

IR RECEIVABLES FUNDING TRUST

as the Seller

and

CAFCO, LLC

and

ENTERPRISE FUNDING COMPANY LLC

and

JS SILOED TRUST

as the Investors

and

CITIBANK, N.A.

and

BANK OF AMERICA, N.A.

and

JPMORGAN CHASE BANK, N.A.

as Banks

and

CITICORP NORTH AMERICA, INC.

as the Program Agent

and

CITICORP NORTH AMERICA, INC.

and

BANK OF AMERICA, N.A.

and

JPMORGAN CHASE BANK, N.A.

as Investor Agents

and

INGERSOLL-RAND COMPANY

as Collection Agent

and

THE ORIGINATORS, DESIGNATED ENTITIES

AND INTERMEDIATE SPVs NAMED HEREIN

TABLE OF CONTENTS

 

 

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RECEIVABLE INTEREST PURCHASE AGREEMENT

Dated as of March 31, 2009

IR RECEIVABLES FUNDING TRUST, a Delaware statutory trust (the “ Seller ”), CAFCO, LLC, a Delaware limited liability company, as an Investor (as defined herein), ENTERPRISE FUNDING COMPANY LLC, a Delaware limited liability company, as an Investor, JS SILOED TRUST, a Delaware statutory trust, as an Investor, CITIBANK, N.A., as a Bank (as defined herein), BANK OF AMERICA, N.A., as a Bank and an Investor Agent (as defined herein), JPMORGAN CHASE BANK, N.A., as a Bank and an Investor Agent, CITICORP NORTH AMERICA, INC., a Delaware corporation (“ CNAI ”), as an Investor Agent and as program agent (the “ Program Agent ”) for the Investors and the Banks, INGERSOLL-RAND COMPANY, a New Jersey corporation, as Collection Agent (as defined herein), each of the Originators named on Schedule III hereto and each of the Designated Entities and Intermediate SPVs named on Schedule V hereto, agree as follows:

PRELIMINARY STATEMENT . The Seller has acquired, and, subject to the provisions of the Purchase Agreements referred to below, will continue to acquire, Receivables originated by the Originators (as hereinafter defined). The Seller is prepared to sell undivided fractional interests (referred to herein as “ Receivable Interests ”) in the Receivables. The Investors may, in their respective sole discretion, purchase such Receivable Interests, and the Banks are prepared to purchase such Receivable Interests, in each case on the terms set forth herein. Accordingly, the parties agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms . As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ 2004 Credit Agreement ” means that certain Credit Agreement dated as of June 25, 2004 among Ingersoll-Rand Company Limited, IR Company, the lenders party thereto and the agents party thereto, as amended, supplemented or otherwise modified from time to time.

“ 2005 Credit Agreement ” means that certain Credit Agreement dated as of August 12, 2005 among Ingersoll-Rand Company Limited, IR Company, the lenders party thereto and the agents party thereto, as amended, supplemented or otherwise modified from time to time.

“ 2008 Credit Agreement ” means that certain Credit Agreement dated as of June 27, 2008 among Ingersoll-Rand Company Limited, Parent, the lenders party thereto and the agents party thereto, as amended, supplemented or otherwise modified from time to time.

“ Accounting-Based Consolidation Event ” means the consolidation, for financial and/or regulatory accounting purposes, of all or any portion of the assets and liabilities of any Investor that are the subject of this Agreement, the Asset Purchase Agreement of any Bank or

any other Transaction Document with all or any portion of the assets and liabilities of any Bank or the Investor Agent in such Investor’s Group (or, with respect to CAFCO, the Program Agent) or any of their respective affiliates as the result of the existence of, or occurrence of any change in, accounting standards or the issuance of any pronouncement, interpretation or release, by any accounting body or any other body charged with the promulgation or administration of accounting standards, including, without limitation, the Financial Accounting Standards Board, the International Accounting Standards Board, the American Institute of Certified Public Accountants, the Federal Reserve Board of Governors and the SEC, and shall occur as of the date that such consolidation (i) shall have occurred with respect to the financial statements of any such Bank, Investor Agent, the Program Agent or any of their respective affiliates or (ii) shall have been required to have occurred, regardless of whether such financial statements were prepared as of such date.

“ Adjusted Eurodollar Rate ” means, for any Fixed Period, an interest rate per annum equal to the rate per annum obtained by dividing (i) the Eurodollar Rate for such Fixed Period by (ii) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Fixed Period.

“ Adverse Claim ” means a lien, security interest or other charge or encumbrance, or any other type of preferential arrangement.

“ Affected Person ” has the meaning specified in Section 2.08(a).

“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person or is a director or officer of such Person.

“ Affiliated Obligor ” means any Obligor that is an Affiliate of another Obligor.

“ Agent ” means any of the Program Agent or any Investor Agent and “Agents” means, collectively, the Program Agent and the Investor Agents.

“ Aggregate Loss and Dilution Reserve ” means, on any date, an amount equal to the product of (a) the Aggregate Loss and Dilution Reserve Percentage on such date multiplied by (b) the Net Receivables Pool Balance on such date.

“ Aggregate Loss and Dilution Reserve Percentage ” means, as of any date, the greater of (a) the sum of (i) the Dynamic Loss Reserve Percentage as of such date plus (ii) the Dynamic Dilution Reserve Percentage as of such date and (b) the sum of (i) the Loss Reserve Floor Percentage as of such date plus (ii) the Dilution Reserve Floor Percentage as of such date.

“ Alternate Base Rate ” means a fluctuating interest rate per annum as shall be in effect from time to time, which rate shall be at all times equal to the highest of:

(a) the rate of interest announced publicly by Citibank in New York, New York, from time to time as Citibank’s base rate;

 

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(b) 1/2 of one percent above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from three New York certificate of deposit dealers of recognized standing selected by Citibank, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent;

(c) the Federal Funds Rate; and

(d) the Adjusted Eurodollar Rate for a deemed Fixed Period of one month plus 4.50%.

“ Applicable Margin ” means, at any time, a percentage equal to the sum of (i) the “Euro-Currency Margin” and (ii) the “Commitment Fee Rate” determined pursuant to the provisions of Section 2.7 of the 2008 Credit Agreement and based on the Ratings of IR Parent at such time. For the purposes of this definition, the term “Rating” shall have the meaning set forth in the 2008 Credit Agreement.

“ ASI Purchase Agreement ” means the Purchase Agreement identified as the “ASI Purchase Agreement” on Schedule IV hereto.

“ Asset Purchase Agreement ” means (a) in the case of any Bank other than Citibank, BofA and JPMC, the asset purchase agreement or other similar liquidity agreement entered into by such Bank concurrently with the Assignment and Acceptance pursuant to which it became party to this Agreement and (b) in the case of Citibank, BofA and JPMC, the secondary market agreement, asset purchase agreement or other similar liquidity agreement entered into by such Bank for the benefit of its respective Investor, to the extent relating to the sale or transfer of interests in Receivable Interests, in each case as amended, restated, supplemented or otherwise modified from time to time.

“ Assignee Rate ” for any Fixed Period for any Receivable Interest means an interest rate per annum equal to the Alternate Base Rate in effect from time to time during such Fixed Period, plus (at any time when an Event of Termination shall exist) 2.00%.

“ Assignment and Acceptance ” means an assignment and acceptance agreement entered into by a Bank, an Eligible Assignee, such Bank’s Investor Agent and the Program Agent, pursuant to which such Eligible Assignee may become a party to this Agreement, in substantially the form of Annex D hereto.

“ Bank Commitment ” of any Bank means (a) with respect to Citibank, $125,000,000 or such amount as reduced or increased by any Assignment and Acceptance entered into among Citibank, another Bank, the Investor Agent for Citibank and the Program

 

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Agent, (b) with respect to BofA, $100,000,000 or such amount as reduced or increased by any Assignment and Acceptance entered into among BofA, another Bank, the Investor Agent for BofA and the Program Agent, (c) with respect to JPMC, $100,000,000 or such amount as reduced or increased by any Assignment and Acceptance entered into among JPMC, another Bank, the Investor Agent for JPMC and the Program Agent, or (d) with respect to a Bank (other than Citibank, BofA or JPMC) that has entered into an Assignment and Acceptance, the amount set forth therein as such Bank’s Bank Commitment, in each case as such amount may be reduced or increased by an Assignment and Acceptance entered into among such Bank, an Eligible Assignee, the Investor Agent for such Bank and the Program Agent, and as may be further reduced (or terminated) pursuant to the next sentence. Any reduction (or termination) of the Purchase Limit pursuant to the terms of this Agreement shall reduce ratably (or terminate) each Bank’s Bank Commitment; provided that if the Investors and Banks in any Group (the “ Departing Group ”) shall determine not to extend the Commitment Termination Date or shall approve an extension of the Commitment Termination Date based on a reduced Investor Purchase Limit for their Group, then, if the Investors and the Banks in the other Groups shall nonetheless determine to extend the Commitment Termination Date, effective from such Commitment Termination Date, the Bank Commitment of each Bank in the Departing Group shall be reduced (ratably, or as otherwise mutually agreed by such Banks) or terminated.

“ Banks ” means Citibank, BofA, JPMC and each Eligible Assignee that shall become a party to this Agreement pursuant to Section 11.03.

“ Base Financial Statements ” means the consolidated balance sheet of Ingersoll-Rand Company Limited, and its Consolidated Subsidiaries as of December 31, 2008, and the related consolidated statements of income, shareowners’ equity and cash flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP and set forth in Ingersoll-Rand Company Limited’s 2008 Form 10-K.

“ BofA ” means Bank of America, N.A.

“ Business Day ” means any day on which (i) banks are not authorized or required to close in New York City or Charlotte, North Carolina, and (ii) if this definition of “Business Day” is utilized in connection with the Eurodollar Rate, dealings are carried out in the London interbank market.

“ CAFCO ” means CAFCO, LLC, a Delaware limited liability company, and any successor or assign of CAFCO that is a receivables investment company which in the ordinary course of its business issues commercial paper or other securities to fund its acquisition and maintenance of receivables.

“ Canadian Receivable ” means any Receivable originated by Trane U.S., the Obligor of which has a billing address in Canada.

“ Capital ” of any Receivable Interest means the original amount paid to the Seller for such Receivable Interest at the time of its purchase by an Investor or a Bank pursuant to this Agreement, or such amount divided or combined in accordance with Section 2.07, in each case reduced from time to time by Collections distributed on account of such Capital pursuant to

 

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Section 2.04(d); provided that if such Capital shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any reason, such Capital shall be increased by the amount of such rescinded or returned distribution, as though it had not been made.

“ Citibank ” means Citibank, N.A., a national banking association.

“ CNAI ” has the meaning specified in the introductory paragraph hereof.

“ Collection Agent ” means at any time the Person then authorized pursuant to Section 6.01 to administer and collect Pool Receivables.

“ Collection Agent Default ” means any Event of Termination relating to the Collection Agent set forth in Sections 7.01(a), (c), (g) or (j).

“ Collection Agent Fee ” has the meaning specified in Section 2.05(a).

“ Collection Agent Fee Reserve Percentage ” means, on any date, an amount equal to:

CAF x RTD

360

where:

 

“ Collection Delay Period ” means, on any date, a number of days equal to the product of (i) Receivable Turnover Days on such date and (ii) 0.25.

“ Collections ” means, with respect to any Receivable, all cash collections and other cash proceeds of such Receivable, including, without limitation, all cash proceeds of Related Security with respect to such Receivable, and any Collection of such Receivable deemed to have been received pursuant to Section 2.04.

“ Commitment Termination Date ” means the earliest of (a) March 30, 2010, unless , prior to such date (or the date so extended pursuant to this clause), upon the Seller’s request, made not more than 90 nor less than 45 days prior to the then Commitment Termination Date, one or more Banks in each Group which, immediately after giving effect to such extension would have Bank Commitments in an aggregate amount equal to the Investor Purchase Limit of such Group to be in effect immediately after giving effect to such extension, shall in their sole discretion consent, which consent shall be given not more than 30 days prior to the then Commitment Termination Date, to the extension of the Commitment Termination Date to the date occurring not more than 364 days after the then Commitment Termination Date; provided , however, that any failure of any Bank to respond to the Seller’s request for such extension shall

 

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be deemed a denial of such request by such Bank, (b) the Facility Termination Date, (c) the date determined pursuant to Section 7.01, and (d) the date the Purchase Limit reduces to zero pursuant to Section 2.01(b).

“ Concentration Limit ” for any Obligor means at any time 4.00% (“ Normal Concentration Limit ”), or such other higher percentage or dollar amount (“ Special Concentration Limit ”) for any Obligor set forth in Schedule VII hereto or otherwise designated by the Program Agent and each Investor Agent in a writing delivered to the Seller; provided that: (a) upon Seller’s request the Program Agent and each Investor Agent shall consider the application of Special Concentration Limits to additional Obligors but the approval of any such request shall be in the sole discretion of the Agents; (b) in the case of an Obligor with any Affiliated Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliated Obligor are one Obligor; (c) if the debt rating of an Obligor with respect to which a Special Concentration Limit is in effect is not at least BBB by S&P and Baa2 by Moody’s, the Special Concentration Limit applicable to such Obligor shall cease to be in effect and the Normal Concentration Limit shall thereafter apply with respect to such Obligor; and (d) if the Program Agent or any Investor Agent has reasonably determined that there has been a material change in the financial profile of an Obligor that is subject to a Special Concentration Limit, such Agent may cancel or reduce such Special Concentration Limit upon three Business Days’ notice to the Seller (with a copy to each of the other Agents).

“ Consolidated Debt ” means, at any date, without duplication, the sum of (i) all amounts which would be set forth opposite the captions “Loans payable” and “Long-term debt” on a balance sheet of IR Parent and its Consolidated Subsidiaries as of such date prepared in accordance with generally accepted accounting principles consistent with those utilized in preparing the Base Financial Statements, (ii) capitalized lease obligations of IR Parent and its Consolidated Subsidiaries and (iii) the higher of the voluntary or involuntary liquidation value of any preferred stock (other than auction-rate preferred stock the higher of the voluntary or involuntary liquidation value of which does not in the aggregate exceed $100,000,000) of a Consolidated Subsidiary held on such date by a Person other than IR Parent or a wholly-owned Consolidated Subsidiary, but in any event excluding subordinated debentures issued by IR Parent to one or more Delaware statutory business trusts and purchased by such trusts with the proceeds of the issuance of trust preferred securities (the “ Equity-Linked Subordinated Debentures ”). The foregoing definition is based on the understanding of the parties that the obligations covered by clauses (i) and (ii) above are co-extensive in all material respects with the obligations covered by the definition of Debt herein, and the reference to specific balance sheet captions is for the purpose of affording both greater simplicity and greater certainty in determining whether an Event of Termination has occurred and/or is continuing under Section 7.01(n). If the foregoing assumption is at some future time determined not to be correct, and if the Program Agent notifies the Seller and/or the Originators that the Program Agent wishes to amend the foregoing definition to include an obligation covered by the definition of Debt (or if the Seller and/or the Originators notify the Program Agent that the Seller and/or the Originators wish to amend the foregoing definition to exclude an obligation not covered by the definition of Debt), then whether an Event of Termination has occurred and/or is continuing under Section 7.01(n) shall be determined by including in (or excluding from, as the case may be) Consolidated Debt the consolidated amount, determined in accordance with generally accepted accounting principles, of the obligation in question until either such notice is withdrawn or this definition is amended in a manner satisfactory to the Program Agent.

 

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“ Consolidated Net Worth ” means, in accordance with Section 1.02, at any date, the consolidated stockholders’ equity of IR Parent and its Consolidated Subsidiaries, exclusive of adjustments resulting from any accumulated other comprehensive income, any impairment of tangible assets, or any non-cash charges, but including the amount shown on the balance sheet of IR Parent as of such date in respect of any Equity-Linked Subordinated Debentures (as such term is defined in the definition of Consolidated Debt).

“ Consolidated Subsidiary ” means at any date any Subsidiary or other entity the accounts of which would be consolidated with those of IR Parent in its consolidated financial statements if such statements were prepared as of such date.

“ Contract ” means an agreement between any Originator and an Obligor, in each case substantially in the form of one of the written contracts or (in the case of any open account agreement) one of the invoices approved by the Program Agent, pursuant to or under which such Obligor shall be obligated to pay (i) for merchandise, insurance or services from time to time or (ii) any principal, interest, fees, expenses or other amounts with respect to a Two-Step Dealer Receivable.

“ Core Liability ” means, on any date of determination in connection with an Eligible Receivable originated at any time by Thermal King Corporation, that amount, if any, of such Receivable which is allocable to the payment of a refundable fee or deposit on the compressor engine, starter, injection, water pump or alternator core; provided, however if on or prior to such date of determination, Thermo King Corporation has paid such refundable fee or deposit to the relevant Obligor or the time period during which Thermo King Corporation is contractually obligated to pay such refundable fee or deposit to the relevant Obligor has expired, the Core Liability of such Receivable shall be $0.

“ Credit and Collection Policy ” means those receivables credit and collection policies and practices of the Originators in effect on the date of this Agreement and described in Schedule II hereto, as modified in compliance with this Agreement.

“ Cure Account ” means a bank account maintained by the Seller at the Cure Account Bank, which shall be subject to a Cure Account Control Agreement.

“ Cure Account Bank ” means Citibank, N.A., ABA #021000089, or such other bank as the Seller may select to hold the Cure Account.

“ Cure Account Control Agreement ” means the certain Amended and Restated Cure Account Control Agreement dated as of the date hereof by and among the Collection Agent, the Seller, the Program Agent and the Cure Account Bank, as amended, restated, supplemented and/or otherwise modified from time to time.

“ Cure Amount ” means on any date the amount (if any) by which the outstanding Capital plus Total Reserves as of the most recent Report Date with respect to a Daily Report exceeds the Maximum Percentage Factor multiplied by the Net Receivables Pool Balance as of the most recent Report Date with respect to such Daily Report.

 

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“ Daily Report ” means a report in substantially the form of Annex A-3 hereto and containing such additional information as any Agent may reasonably request from time to time, furnished by the Collection Agent pursuant to Section 6.02(g)(iii).

“ Debt ” means (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services, (iv) obligations as lessee under leases which shall have been or should be, in accordance with generally accepted U.S. accounting principles, recorded as capital leases, and (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above.

“ Default Ratio ” means the ratio (expressed as a percentage) computed as of the last day of each calendar month by dividing (i) the aggregate Outstanding Balance of all Originator Receivables that were Defaulted Receivables on such day or that would have been Defaulted Receivables on such day had they not been written off the books of the applicable Originator or the Seller during such month by (ii) the aggregate Outstanding Balance of all Originator Receivables on such day.

“ Defaulted Receivable ” means an Originator Receivable:

(i) as to which any payment, or part thereof, remains unpaid for 61 or more days from the original due date for such payment;

(ii) as to which the Obligor thereof or any other Person obligated thereon or owning any Related Security in respect thereof has taken any action, or suffered any event to occur, of the type described in Section 7.01(g); or

(iii) which, consistent with the Credit and Collection Policy, would be written off the applicable Originator’s or the Seller’s books as uncollectible.

“ Delinquency Ratio ” means the ratio (expressed as a percentage) computed as of the last day of each calendar month by dividing (i) the aggregate Outstanding Balance of all Originator Receivables that were Delinquent Receivables on such day by (ii) the aggregate Outstanding Balance of all Originator Receivables on such day.

“ Delinquent Receivable ” means an Originator Receivable that is not a Defaulted Receivable and:

(i) as to which any payment, or part thereof, remains unpaid for 31 or more days from the original due date for such payment; or

(ii) which, consistent with the Credit and Collection Policy, would be classified as delinquent by the applicable Originator or the Seller.

 

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“ Departing Group ” has the meaning specified within the definition of “Bank Commitment” in this Section 1.01.

“ Designated Entity ” means an entity identified as a “Designated Entity” on Schedule V hereto.

“ Diluted Receivable ” means that portion (and only that portion) of any Originator Receivable which is either (a) reduced or canceled as a result of (i) any defective, rejected or returned merchandise or services or any failure by an Originator or the applicable Distributor (in the case of a Two-Step Dealer Receivable) to deliver any merchandise or provide any services or otherwise to perform under the underlying Contract, (ii) any change in the terms of or cancellation of, a Contract or any cash discount, discount for quick payment or other adjustment by an Originator which reduces the amount payable by the Obligor on the related Originator Receivable (except any such change or cancellation resulting from or relating to the financial inability to pay or insolvency of the Obligor of such Originator Receivables) or (iii) any set-off by an Obligor in respect of any claim by such Obligor as to amounts owed by it on the related Originator Receivable (whether such claim arises out of the same or a related transaction or an unrelated transaction) or (b) subject to any specific dispute, offset, counterclaim or defense whatsoever (except the discharge in bankruptcy of the Obligor thereof); provided that, notwithstanding any of the foregoing, no Originator Receivable or portion of an Originator Receivable shall be considered a Diluted Receivable because of the financial inability to pay or insolvency of the Obligor of such Originator Receivable.

“ Dilution Horizon Factor ” means, as of any date, a ratio computed by dividing (i) the sum of (x) the aggregate original Outstanding Balance of all Originator Receivables created by the Originators during the two most recently ended calendar months plus (y) 50% of the aggregate original Outstanding Balance of all Originator Receivables created by the Originators during the calendar month immediately preceding the two most recently ended months by (ii) the Net Receivables Pool Balance as at the last day of the most recently ended calendar month.

“ Dilution Ratio ” means, as of any date, the ratio (expressed as a percentage) computed for the most recently ended calendar month by dividing (a) the aggregate amount of Originator Receivables which became Diluted Receivables during such calendar month (but excluding, solely for the purpose of calculating the Dilution Reserve Floor Percentage and the Dynamic Dilution Reserve Percentage, any portion of such Diluted Receivables constituting amounts relating to accrual of (i) claims and claim-backs, (ii) co-op advertising and pricing, (iii) Off-Invoice Allowance Accruals and (iv) Core Liabilities by (b) the aggregate Outstanding Balance (in each case, at the time of creation) of all Originator Receivables created during the second calendar month immediately preceding such calendar month.

“ Dilution Reserve Floor Percentage ” means, as of any date, the greater of (a) the product of (i) the average of the Dilution Ratios for each of the twelve most recently ended calendar months and (ii) the Dilution Horizon Factor, and (b) 4.00%.

 

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“ Dilution Volatility Ratio ” means, as of any date, a ratio (expressed as a percentage) equal to the product of (a) the highest of the Two-Month Average Dilution Ratios calculated for each of the twelve most recently ended calendar months minus the average of the Dilution Ratios calculated for each of the twelve most recently ended calendar months, and (b) a ratio calculated by dividing the highest of the Two-Month Average Dilution Ratios calculated for each of the twelve most recently ended calendar months by the average of the Dilution Ratios calculated for each of the twelve most recently ended calendar months.

“ Distributor ” means a distributor of Trane U.S.

“ Division ” means a Division of an Originator’s business listed on Schedule III hereto, as such Schedule may be amended from time to time with the prior written consent of the Program Agent and the Investor Agents.

“ Dynamic Dilution Reserve Percentage ” means, as of any date, the product of (a) the sum of (i) the product of (x) the Stress Factor, multiplied by (y) the average of the Dilution Ratios for each of the twelve most recently ended calendar months, plus (ii) the Dilution Volatility Ratio as at the last day of the most recently ended calendar month, multiplied by (b) the Dilution Horizon Factor as of such date.

“ Dynamic Loss Reserve Percentage ” means, as of any date, the product of (i) the Stress Factor as of such date multiplied by (ii) the Loss Horizon Factor as of such date multiplied by (iii) the highest of the Loss Ratios calculated for each of the twelve most recently ended calendar months.

“ E-Mail Seller Report ” has the meaning specified in Section 6.02(g).

“ Eligible Assignee ” means:

(a) with respect to the Group which includes CAFCO, (i) CNAI or any of its Affiliates, (ii) any Person managed by Citibank, CNAI or any of their Affiliates or (iii) any financial or other institution acceptable to the Investor Agent for such Group and approved by the Seller (which approval by the Seller shall not be unreasonably withheld or delayed and shall not be required if an Event of Termination or an Incipient Event of Termination has occurred and is continuing);

(b) with respect to the Group which includes Enterprise, (i) BofA or any of its Affiliates, (ii) any Person managed by BofA or any of its Affiliates or (iii) any financial or other institution acceptable to the Investor Agent for such Group and approved by the Seller (which approval by the Seller shall not be unreasonably withheld or delayed and shall not be required if an Event of Termination or an Incipient Event of Termination has occurred and is continuing); and

(c) with respect to the Group which includes JSST, (i) JPMC or any of its Affiliates, (ii) any Person managed by JPMC or any of its Affiliates or (iii) any financial or other institution acceptable to the Investor Agent for such Group and approved by the Seller (which approval by the Seller shall not be unreasonably withheld or delayed and shall not be required if an Event of Termination or an Incipient Event of Termination has occurred and is continuing).

 

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“ Eligible Receivable ” means, at any time, a Receivable:

(i) the Obligor of which has a billing address in the United States (or, if such Receivable was originated by Trane U.S., in Canada), is not an Affiliate of any of the parties hereto, and is not a government or a governmental subdivision or agency, or, in the case of a Canadian Receivable, a federal or provincial Crown corporation;

(ii) which is not a Defaulted Receivable;

(iii) the Obligor of which is not the Obligor of any Defaulted Receivables which in the aggregate constitute 15.00% or more of the aggregate Outstanding Balance of all Receivables of such Obligor;

(iv) which, according to the Contract related thereto, is required to be paid in full (A) except in the case of a Seasonal Receivable, within 90 days of the original billing date therefor or, in the case of a Two-Step Dealer Receivable, of the date of creation thereof or (B) in the case of a Seasonal Receivable, within 120 days of the original billing date therefor or, in the case of a Seasonal Receivable constituting a Two-Step Dealer Receivable, of the date of creation thereof;

(v) which is an obligation representing all or part of the sales price of merchandise, insurance or services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended (except in the case of Two-Step Dealer Receivables constituting “payment intangibles”, as such term is defined in clause (vi) below), and the nature of which is such that its purchase with the proceeds of notes would constitute a “current transaction” within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;

(vi) which is an “account” or “chattel paper” (other than “electronic chattel paper”) or, in the case of a Two-Step Dealer Receivable, a “payment intangible” within the meaning of Article 9 of the UCC of the applicable jurisdictions governing the perfection of the interest created by a Receivable Interest;

(vii) which is denominated and payable only in United States dollars in the United States;

(viii) which arises under a Contract governed by the laws of the United States which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable and is not subject to any Adverse Claim or any dispute, offset, right of recission, counterclaim or defense whatsoever (except the potential discharge in bankruptcy of such Obligor);

(ix) which, together with the Contract related thereto, does not contravene in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and

 

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with respect to which none of the Seller, any Intermediate Seller, any Originator or the Obligor is in violation of any such law, rule or regulation in any material respect;

(x) which arises under a Contract which (A) does not require the Obligor thereunder to consent to the transfer, sale or assignment of the rights and duties of the Seller, any applicable Intermediate Seller or the applicable Originator thereunder and (B) does not contain a confidentiality provision that purports to restrict the ability of any Agent, the Investors or the Banks to exercise their rights under this Agreement, including, without limitation, their right to review the Contract;

(xi) which was generated by the sale of products or services of an Originator (or, in the case of a Two-Step Dealer Receivable, by a loan by Trane U.S. to the Obligor to finance the purchase by the Obligor from a Distributor of products of Trane U.S. and/or related products or services) in the ordinary course of such Originator’s business;

(xii) which has not been compromised, adjusted, extended, rewritten or otherwise modified from the original terms thereof (except as permitted by Section 6.02(c));

(xiii) the transfer, sale or assignment of which does not contravene any applicable law, rule or regulation;

(xiv) which (A) satisfies all applicable requirements of the Credit and Collection Policy and (B) complies with such other criteria and requirements as either (x) the Program Agent or (y) any Investor Agent of a Group with respect to which the Bank Commitments of the Bank or Banks in such Group exceed 30.00% of the Purchase Limit (or, if the Bank Commitments have been terminated, Banks either holding Receivable Interests (or interests therein) or obligated to purchase interests in Receivable Interests pursuant to their respective Asset Purchase Agreements which aggregate an amount in excess of 30.00% of all outstanding Receivable Interests, may from time to time specify to the Seller upon 30 days’ notice (with a copy of such notice to the other Agents);

(xv) as to which, at or prior to the later of the date of this Agreement and the date 30 days prior to the date such Receivable is created, an Investor Agent has not notified the Seller that such Receivable (or the Obligor of such Receivable) is no longer acceptable for purchase by the Investor or any Bank for which such Investor Agent is acting as Investor Agent due to either (A) criteria deemed necessary by such Investor for compliance with rating agency and third-party guaranty provider requirements, or (B) bona fide credit reasons as determined by such Investor Agent;

(xvi) which arises under a Contract which is not an executory contract;

 

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(xvii) as to which (A) the applicable Originator has satisfied and fully performed all obligations with respect to such Receivable required to be fulfilled by it other than customary warranty obligations, and (B) no further action is required to be performed by any Person other than the issuance of an invoice (except in the case of a Two-Step Dealer Receivable, for which no invoice need be issued) to, and payment thereon by, the applicable Obligor;

(xviii) as to which, in the case of a Two-Step Dealer Receivable, the proceeds of the related loan have been paid directly by Trane U.S. to the applicable Distributor (and not to the Obligor of such Receivable) in payment of the purchase price for the goods and/or services sold by such Distributor to such Obligor and/or credited against amounts owed by such Distributor to Trane U.S.;

(xix) as to which, if such Receivable is a Canadian Receivable, (1) the Originator of such Canadian Receivable is Trane U.S., (2) none of the services (if any) giving rise to such Receivable were rendered to the Obligor thereof in Canada, (3) if the Obligor has a billing address in the Province of Quebec, (A) the Contract with respect to such Canadian Receivable is governed by the laws of one of the States of the United States, (B) pursuant to the express terms of such Contract, all Collections with respect thereto are payable only to locations outside of Canada, and (C) the Originator of such Canadian Receivable has entered into and filed with the appropriate government authority in the Province of Quebec, an assignment, in form and substance satisfactory to the Program Agent, governed by the laws of the Province of Quebec, pursuant to which the Canadian Receivable is assigned from the Originator to the related purchaser under the related Purchase Agreement, and with respect to which evidence of the filing of such assignment has been delivered to the Program Agent, (4) such Canadian Receivable satisfies the requirements of Section 4.01(y), and (5) a UCC financing statement has been filed (and an acknowledgment copy of such financing statement has been delivered to the Program Agent) naming the Originator therefor as “debtor/seller” and naming, whether directly or by assignment, the Program Agent as “buyer/secured party” at the appropriate filing location within the State in which the chief executive office of the Originator for such Canadian Receivable is located, satisfactory in form and substance to the Program Agent; and

(xx) which is not a Hussmann Progress Receivable;

provided , that, from the occurrence of any Level 1 Downgrade Event, no Receivable which is (A) a Seasonal Receivable which, according to the Contract related thereto, is not required to be paid in full within 90 days of the original billing date therefor or (B) a Two-Step Dealer Receivable, shall be an Eligible Receivable.

“ Eligible Receivables Balance ” means at any time the Outstanding Balance of Eligible Receivables then in the Receivables Pool reduced by the sum of (without duplication) (i) the aggregate amount of unapplied cash on account of any Eligible Receivables at such time, (ii) the aggregate amount of unapplied credits on account of any Eligible Receivables at such

 

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time to the extent deemed Collections have not been paid pursuant to Section 2.04(e), (iii) the then aggregate outstanding balance of all accruals for dilution of Eligible Receivables due to claims and claim-backs and co-op advertising and pricing, (iv) the aggregate amount of payables then due from the Originators or the Seller to any Obligor of Eligible Receivables and deposits received by the Originators or the Seller from any Obligor with respect to Eligible Receivables (but not in excess of the Outstanding Balance of Eligible Receivables of such Obligor), (v) the then aggregate amount of the Core Liabilities, (vi) an amount equal to the then aggregate outstanding balance of all Off-Invoice Allowance Accruals, In-Transit Accruals and Home Depot ROG Accruals, and (vii) with respect to any Eligible Receivable originated by Thermo King SVC, Inc. the portion (if any) of the Outstanding Balance thereof which Thermo King SVC, Inc. is required to remit to any dealer which performed services for the applicable Obligor.

“ Enterprise ” means Enterprise Funding Company LLC and any successor or assign of Enterprise that is a receivables investment company which in the ordinary course of its business issues commercial paper or other securities to fund its acquisition and maintenance of receivables.

“ ERISA ” means the Employee Retirement Income Security Act of 1974 and any successor statute, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ ERISA Group ” means IR Parent and all trades or businesses (whether or not incorporated) that, together, are treated as a single employer under Section 414(b) or (c) of the Internal Revenue Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Internal Revenue Code, are treated as a single employer under Section 414 of the Internal Revenue Code.

“ Eurocurrency Liabilities ” has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“ Eurodollar Rate ” means, for any Fixed Period, the rate appearing on the relevant page of the Reuters screen (or on any successor or substitute page of such service, or any successor to or substitute for such service, as determined by the Program Agent from time to time for purposes of providing quotations of interest rates applicable to deposits in U.S. dollars in the London interbank market) at approximately 11:00 A.M., London time, two Business Days prior to the commencement of such Fixed Period, as the rate for such deposits with a maturity comparable to such Fixed Period (or, if an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, an interest rate per annum equal to the rate per annum at which deposits in U.S. dollars are offered by the principal office of Citibank in London, England to prime banks in the London interbank market at 11:00 A.M. (London Time) two Business Days before the first day of such Fixed Period in an amount substantially equal to the Capital associated with such Fixed Period on such first day and for a period equal to such Fixed Period).

“ Eurodollar Rate Reserve Percentage ” of any Investor or Bank for any Fixed Period in respect of which Yield is computed by reference to the Eurodollar Rate means the reserve percentage applicable two Business Days before the first day of such Fixed Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System

 

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(or any successor) (or if more than one such percentage shall be applicable, the daily average of such percentages for those days in such Fixed Period during which any such percentage shall be so applicable) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Investor or Bank with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurocurrency Liabilities is determined) having a term equal to such Fixed Period.

“ Event of Termination ” has the meaning specified in Section 7.01.

“ Facility Termination Date ” means the earliest of (a) March 30, 2010 or (b) the date determined pursuant to Section 7.01 or (c) the date the Purchase Limit reduces to zero pursuant to Section 2.01(b), or (d) the Commitment Termination Date.

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Program Agent from three Federal funds brokers of recognized standing selected by it.

“ Fee Agreement ” has the meaning specified in Section 2.05(b).

“ Fees ” has the meaning specified in Section 2.05(b).

“ Fixed Period ” means, with respect to any Receivable Interest:

(a) in the case of any Fixed Period in respect of which Yield is computed by reference to the Investor Rate, each successive period beginning on (and including) the 15 ^th day of each calendar month and ending on (and excluding) the 15 ^th day of the subsequent calendar month, except that the first Fixed Period for such Receivable Interest shall commence on the date of purchase of such Receivable Interest and end on the 15 ^th day of the calendar month in which such purchase occurs (or if such purchase occurs on or after the 15 ^th day of a calendar month, the 15 ^th day of the next calendar month); and

(b) in the case of any Fixed Period in respect of which Yield is computed by reference to the Assignee Rate, each successive period of one day;

provided , however , that:

(i) any Fixed Period (other than of one day) which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day;

 

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(ii) in the case of any Fixed Period of one day, (A) if such Fixed Period is the initial Fixed Period for a Receivable Interest, such Fixed Period shall be the day of the purchase of such Receivable Interest; (B) any subsequently occurring Fixed Period which is one day shall, if the immediately preceding Fixed Period is more than one day, be the last day of such immediately preceding Fixed Period and, if the immediately preceding Fixed Period is one day, be the day next following such immediately preceding Fixed Period; and (C) if such Fixed Period occurs on a day immediately preceding a day which is not a Business Day, such Fixed Period shall be extended to the next succeeding Business Day; and

(iii) in the case of any Fixed Period for any Receivable Interest which commences before the Termination Date for such Receivable Interest and would otherwise end on a date occurring after such Termination Date, such Fixed Period shall end on such Termination Date and the duration of each Fixed Period which commences on or after the Termination Date for such Receivable Interest shall be of such duration (including, without limitation, one day) as shall be selected by the Program Agent with the consent of the Investor Agents (or, if such Termination Date occurs solely as a result of the occurrence of a Facility Termination Date under clause (e) of the defined term Facility Termination Date for less than all the Groups, as shall be selected by the Investor Agent for the Investor and Banks for which such Facility Termination Date under clause (e) is applicable) or, in the absence of any such selection, each period of thirty days from the last day of the immediately preceding Fixed Period.

“ Funds Transfer Letter ” means a letter in substantially the form of Annex E hereto executed and delivered by the Seller to the Program Agent and the Investor Agents, as the same may be amended or restated in accordance with the terms thereof.

“ Group ” means (a) with respect to CAFCO, its Investor Agent, its Related Banks and CAFCO, (b) with respect to Enterprise, its Investor Agent, its Related Banks and Enterprise, and (c) with respect to JSST, its Investor Agent, its Related Banks and JSST.

“ Home Depot ROG Accruals ” means, at any time, with respect to a Receivable originated by Schlage Lock Company LLC or Von Duprin LLC, an accrual accounting for the period between the related invoice and the transfer of title to Home Depot, as Obligor, upon delivery.

“ Hussmann Progress Receivable ” means, at any time, to the extent not collected at such time, a Receivable which arises under a Contract for the sale and installation by Hussmann Corporation of equipment for the display of refrigerated goods pursuant to which Contract the applicable Obligor is obligated to make periodic payments during the term of the sale and installation, but for which Hussmann Corporation recognizes revenue only when Hussmann Corporation has fully performed all obligations under such Contract with respect to the subject equipment and the Obligor has accepted such equipment, it being understood that upon completion of performance and acceptance by the Obligor, the Receivable shall no longer constitute a “Hussmann Progress Receivable”.

 

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“ Impairment Amendment ” has the meaning specified in Section 6.06(b).

“ Incipient Event of Termination ” means an event that but for notice or lapse of time or both would constitute an Event of Termination.

“ Indemnified Party ” has the meaning specified in Section 10.01.

“ Ingersoll-Rand Agreement Financial Amendment ” has the meaning specified in Section 5.02(g).

“ Ingersoll-Rand Agreement Default Amendment ” has the meaning specified in Section 5.02(g).

“ Ingersoll-Rand Agreements ” means financing arrangements of Ingersoll-Rand Company Limited or any of its subsidiaries which are material to Ingersoll-Rand Company Limited and its subsidiaries taken as a whole, including without limitation the 2008 Credit Agreement and those certain other agreements listed as items 4.4 through 4.12 and 10.6 through 10.9 of Ingersoll-Rand Company Limited’s Form 10-K for the fiscal year ended December 31, 2008 filed with the SEC, as each such financing arrangement is amended, restated or otherwise modified from time to time.

“ Initial Purchase Agreements ” means each of the Purchase Agreements identified as “Initial Purchase Agreements” on Schedule IV hereto.

“ Intermediate Seller ” means any Designated Entity or Intermediate SPV.

“ Intermediate SPV ” means an entity identified as an “Intermediate SPV” on Schedule V hereto.

“ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended, or any successor statute.

“ In-Transit Accruals ” means, at any time, with respect to a Receivable originated by Club Car, Inc., an accrual accounting for the period between the related invoice and the transfer of title to the applicable Obligor upon delivery.

“ Investor ” means CAFCO, Enterprise and JSST, and all other owners by assignment or otherwise of a Receivable Interest originally purchased by CAFCO, Enterprise or JSST and, to the extent of the undivided interests so purchased, shall include any participants.

“ Investor Agent’s Account ” means (a) with respect to CAFCO and its Related Banks, the special account (account number 40636695) of their Investor Agent maintained at the office of Citibank at 399 Park Avenue, New York, New York, ABA #021-000-089, or such other account as such Investor Agent shall designate in writing to the Seller, the Collection Agent and the Program Agent, (b) with respect to Enterprise and its Related Banks, the special account

 

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(account number 01 476 289) of their Investor Agent maintained at the office of Deutsche Bank (New York, NY) for the benefit of “DBTCA as Agent for Enterprise Funding”, at 60 Wall Street, 26th Floor, New York, NY 10005, ABA #021-001-033, or such other account as such Investor Agent shall designate in writing to the Seller, the Collection Agent and the Program Agent, and (c) with respect to JSST and its Related Banks, the special account (account number 758660542) of their Investor Agent maintained at the office of JPMC at 10 South Dearborn, 13th Floor, Chicago, IL 60603, Suite IL1-0079, ABA #021-000-021, SWIFT CHASUS33XXX, or such other account as such Investor Agent shall designate in writing to the Seller, the Collection Agent and the Program Agent.

“ Investor Agent ” means (a) with respect to CAFCO and its Related Banks, CNAI or any successor investor agent designated by such parties, (b) with respect to Enterprise and its Related Banks, BofA or any successor investor agent designated by such parties, and (c) with respect to JSST and its Related Banks, JPMC or any successor investor agent designated by such parties.

“ Investor Purchase Limit ” means (a) with respect to the Group consisting of CAFCO and its Related Banks, $125,000,000, (b) with respect to the Group consisting of Enterprise and its Related Banks, $100,000,000 and (c) with respect to the Group consisting of JSST and its Related Banks, $100,000,000. Any reduction (or termination) of the Purchase Limit pursuant to the terms of this Agreement shall reduce ratably (or terminate) each Group’s Investor Purchase Limit; provided, that if any Departing Group shall determine not to extend the Commitment Termination Date or shall approve an extension of the Commitment Termination Date based on a reduced Investor Purchase Limit for their Group, then, if the Investors and Banks in the other Groups shall nonetheless determine to extend the Commitment Termination Date, effective from such Commitment Termination Date, the Investor Purchase Limit of the Departing Group shall be so reduced or terminated.

“ Investor Rate ” means for any Fixed Period for any Receivable Interest:

(a) with respect to CAFCO, the per annum rate equivalent to the weighted average of the per annum rates paid or payable by such Investor from time to time as interest on or otherwise (by means of interest rate hedges or otherwise) in respect of those promissory or commercial paper notes issued by such Investor that are allocated, in whole or in part, by such Investor’s Investor Agent (on behalf of such Investor) to fund the purchase or maintenance of such Receivable Interest during such Fixed Period as determined by such Investor Agent (on behalf of such Investor) and reported to the Seller, the Program Agent and, if the Collection Agent is not the Seller, the Collection Agent, which rates shall reflect and give effect to the commissions of placement agents and dealers in respect of such promissory or commercial paper notes, to the extent such commissions are allocated, in whole or in part, to such promissory or commercial paper notes by such Investor Agent (on behalf of such Investor); provided, however, that (a) if any component of such rate is a discount rate, in calculating the “Investor Rate” for such Fixed Period such Investor Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum; and (b) the per annum rate determined pursuant hereto shall be increased by 2.00% at any time when an Event of Termination shall exist; and

 

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(b) with respect to JSST or Enterprise, the per annum rate equivalent to the weighted average of the per annum rates paid or payable by such Investor from time to time as interest on or otherwise (by means of interest rate hedges or otherwise) in respect of those promissory or commercial paper notes issued by such Investor (or its related commercial paper issuer) that are allocated, in whole or in part, by such Investor’s Investor Agent (on behalf of such Investor) to fund the purchase or maintenance of such Receivable Interest during such Fixed Period as determined by such Investor Agent (on behalf of such Investor) and reported to the Seller, the Program Agent and, if the Collection Agent is not the Seller, the Collection Agent, which rates shall reflect and give effect to the commissions of placement agents and dealers in respect of such promissory or commercial paper notes, to the extent such commissions are allocated, in whole or in part, to such promissory or commercial paper notes by such Investor Agent (on behalf of such Investor); provided, however, that (a) if any component of such rate is a discount rate, in calculating the “Investor Rate” for such Fixed Period such Investor Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum; and (b) the per annum rate determined pursuant hereto shall be increased by 2.00% at any time when an Event of Termination shall exist.

“ IR Company ” means Ingersoll-Rand Company, a New Jersey corporation.

“ IR Parent ” shall mean , (x) until such time as a Subsequent Parent Company qualifies as such under the definition thereof, Ingersoll-Rand Company Limited, a Bermuda company, or (y) the Subsequent Parent Company. For purposes of this Agreement, the “ Subsequent Parent Company ” shall be the Person that becomes the owner, directly or indirectly, of 100% of the outstanding shares of common stock of, or otherwise merges, amalgamates or consolidates with, Ingersoll-Rand Company Limited (or, if applicable, the existing Subsequent Parent Company) in a transaction where the direct or indirect holders of the capital stock of Ingersoll-Rand Company Limited (or, if applicable, the existing Subsequent Parent Company) that are entitled to vote generally in the election of the board of directors of such company immediately following such transaction are substantially the same as the holders of such capital stock immediately prior to the consummation of such transaction, so long as such Person (1) is organized under the laws of Bermuda, Ireland, the United States of America (or any State thereof or the District of Columbia) or any other jurisdiction that is, after consultation with the Agents, reasonably satisfactory to the Agents (it being understood that, upon the consummation of such transaction and compliance with the requirements set forth in the immediately preceding clause (1), Ingersoll-Rand Company Limited or the existing Subsequent Parent Company, as applicable, shall no longer be “IR Parent” for purposes of this Agreement).

“ IR Parties ” has the meaning specified in Section 2.10(g), and “ IR Party ” has the corresponding meaning.

“ JPMC ” means JPMorgan Chase Bank, N.A.

“ JSST ” means JS Siloed Trust and any successor or assign of JSST that is a receivables investment company which in the ordinary course of its business issues commercial

 

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paper or other securities (or such commercial paper or other securities is issued by its related commercial paper issuer) to fund its acquisition and maintenance of receivables.

“ Level 1 Downgrade Event ” means, at any time, the long term public senior unsecured non-credit-enhanced debt securities of the Undertaking Party are rated below BBB- by S&P or below Baa3 by Moody’s or both S&P and Moody’s shall not have in effect such a debt rating.

“ Level 2 Downgrade Event ” means, at any time, the long term public senior unsecured non-credit-enhanced debt securities of the Undertaking Party are rated below BB by S&P or below Ba2 by Moody’s or both S&P and Moody’s shall not have in effect such a debt rating.

“ Liquidation Day ” means, for any Receivable Interest, (i) each day during a Fixed Period for such Receivable Interest on which the conditions set forth in Section 3.02 are not satisfied or on which a Pool Non-compliance Date exists, and (ii) each day which occurs on or after the Termination Date for such Receivable Interest.

“ Liquidation Fee ” means, for (i) any Fixed Period for which Yield is computed by reference to the Investor Rate and a reduction of Capital is made for any reason on any day or (ii) any Fixed Period for which Yield is computed by reference to the Eurodollar Rate and a reduction of Capital is made for any reason on any day other than the last day of such Fixed Period, the amount, if any, by which (A) the additional Yield (calculated without taking into account any Liquidation Fee or any shortened duration of such Fixed Period pursuant to clause (iii) of the definition thereof) which would have accrued from the date of such repayment to the last day of such Fixed Period (or, in the case of clause (i) above, the maturity of the underlying commercial paper tranches) on the reductions of Capital of the Receivable Interest relating to such Fixed Period had such reductions remained as Capital, exceeds (B) the income, if any, received by the Investors or the Banks which hold such Receivable Interest from the investment of the proceeds of such reductions of Capital.

“ Lock-Box Account ” means a post office box administered by a Lock-Box Bank or an account maintained at a Lock-Box Bank, in each case for the purpose of receiving Collections and shall include accounts maintained at a Lock-Box Bank into which (i) Collections in the form of checks and other items are deposited that have been sent to one or more post office boxes by Obligors and/or (ii) Collections in the form of electronic funds transfers and other items are paid directly by Obligors.

“ Lock-Box Agreement ” means an agreement, in substantially the form of Annex B.

“ Lock-Box Bank ” means any of the banks holding one or more Lock-Box Accounts.

“ Long-Term Debt Rating ” for any Person means the rating by S&P or Moody’s of such Person’s long-term public senior unsecured non-credit enhanced debt.

 

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“ Loss Horizon Factor ” means, as of any date, a ratio computed by dividing (i) the aggregate Outstanding Balance (in each case, at the time of creation) of all Originator Receivables created by the Originators during the four most recently ended calendar months by (ii) the Net Receivables Pool Balance as at the last day of the most recently ended calendar month.

“ Loss Ratio ” means, as of any date, the average of the ratios (each expressed as a percentage) for each of the three most recently ended calendar months computed for each such month by dividing (a) the sum of the aggregate Outstanding Balance of Originator Receivables which were 61-90 days past due (or otherwise would have been classified during such month as Defaulted Receivables in accordance with clauses (ii) or (iii) of the definition of “Defaulted Receivables”) as at the last day of such month plus (without duplication) write-offs of Receivables during such month which were less than 61 days past due, by (b) the aggregate Outstanding Balance (in each case, at the time of creation) of Originator Receivables created during the third preceding month.

“ Loss Reserve Floor Percentage ” means, as of any date:

(i) before the occurrence of a Level 1 Downgrade Event, (A) four times the Normal Concentration Limit, multiplied by (B) the Eligible Receivables Balance, divided by (C) the Net Receivables Pool Balance; and

(ii) on or after the occurrence of a Level 1 Downgrade Event, (A) five times the Normal Concentration Limit, multiplied by (B) the Eligible Receivables Balance, divided by (C) the Net Receivables Pool Balance.

“ Loss-to-Liquidation Ratio ” means the ratio (expressed as a percentage) computed as of the last day of each calendar month by dividing (i) the aggregate Outstanding Balance of all Originator Receivables written off by the Originators or the Seller, or which should have been written off by the Originators or the Seller in accordance with the Credit and Collection Policy, during such calendar month by (ii) the aggregate amount of Collections of Originator Receivables actually received during such calendar month.

“ Majority Banks ” shall mean (i) at any time when there are only two Banks party hereto, both such Banks, and (ii) at all other times, Banks having Bank Commitments that aggregate an amount greater than 50% of the Purchase Limit or, if the Bank Commitments have been terminated, Banks either holding Receivable Interests (or interests therein) or obligated to purchase interests in Receivable Interests pursuant to their respective Asset Purchase Agreements which aggregate an amount greater than 50% of all outstanding Receivable Interests.

“ Material Adverse Effect ” means, with respect to any Person, any event or circumstance that has a material adverse effect on (i) the ability of such Person to perform its obligations under this Agreement or any other Transaction Document, (ii) the legality, validity or enforceability of this Agreement or any other Transaction Document or (iii) the collectibility of the Receivables taken as a whole.

 

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“ Material Debt ” means, with respect to each of IR Parent, Parent, the Originators and the Designated Entities, (i) any Public Debt and (ii) any Debt of any of IR Parent, Parent, the Originators or the Designated Entities and their respective Subsidiaries, arising in one or more related or unrelated transactions in an aggregate principal amount exceeding (x) $50,000,000, until such time as each of the 2004 Credit Agreement and the 2005 Credit Agreement are either terminated or amended to increase the dollar amount set forth in the definition of “Material Debt” therein above $50,000,000 and (y) thereafter, the lesser of (1) $100,000,000 and (2) if either or both of the 2004 Credit Agreement and 2005 Credit Agreement have been amended to increase the dollar amount set forth in the definition of “Material Debt” therein above $50,000,000, such amended dollar amount (and if both of such credit agreements have been so amended, the lesser of such amended dollar amounts).

“ Material Plan ” means at any time a Plan or Plans having aggregate Unfunded Liabilities in an amount which, if the Plan then terminated, would have a Material Adverse Effect or a material adverse effect on the business, financial position or results of operations or property of IR Parent and its Consolidated Subsidiaries, taken as a whole.

“ Maximum Percentage Factor ” means, at any time, 100% minus the Minimum Required Seller Interest Percentage.

“ Minimum Required Seller Interest Percentage ” means, at any time, 7.00%; provided that, for any period (x) during which the Collection Agent is required to deliver a Weekly Report pursuant to Section 6.02(g)(ii), the Minimum Required Seller Interest Percentage shall be determined by the Program Agent (with the approval of the Investor Agents) but shall not be greater than 7.00% nor less than 0.00%, (y) during which the Collection Agent is required to deliver a Daily Report pursuant to Section 6.02(g)(iii), the Minimum Required Seller Interest Percentage shall be 0.00%, or (z) from February 1 to June 30 of any calendar year, the Minimum Required Seller Interest Percentage shall be 0.00%; provided further , however, that upon the occurrence and during the continuance of any failure by the Collection Agent to deliver any Seller Report when due or to make any payment or deposit to be made by it under this Agreement when due, the Minimum Required Seller Interest Percentage shall be 7.00%.

“ Monthly Report ” means a report in substantially the form of Annex A-1 hereto and containing such additional information as any Agent may reasonably request from time to time, furnished by the Collection Agent pursuant to Section 6.02(g)(i).

“ Monthly Settlement Date ” means the Business Day immediately following the due date of each Monthly Report.

“ Moody’s ” means Moody’s Investors Service, Inc.

“ Multiemployer Plan ” means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions.

“ Net Receivables Pool Balance ” means at any time the Eligible Receivables Balance reduced by the sum of (without duplication): (i) the aggregate amount by which the Outstanding Balance of Eligible Receivables of each Obligor then in the Receivables Pool

 

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exceeds the product of (A) the Concentration Limit for such Obligor multiplied by (B) the Eligible Receivables Balance (or, if the Concentration Limit for such Obligor is a dollar amount and not a percentage, exceeds the Concentration Limit for such Obligor); (ii) the aggregate amount by which the then Outstanding Balance of all Eligible Receivables that are Two-Step Dealer Receivables exceeds 2.00% of the Eligible Receivables Balance; (iii) the aggregate amount by which the then Outstanding Balance of the portion of all Eligible Receivables which, according to the respective Contract related thereto, are required to be paid within more than 60 days but no more than 90 days of the original billing date therefor (or of the date of creation thereof, in the case of a Receivable constituting a Two-Step Dealer Receivable) exceeds 2.50% of the Eligible Receivables Balance, (iv) the aggregate amount by which the then Outstanding Balance of the portion of all Eligible Receivables that are Seasonal Receivables which, according to the respective Contract related thereto, are required to be paid within more than 90 days but no more than 120 days of the original billing date therefor (or of the date of creation thereof, in the case of a Seasonal Receivable constituting a Two-Step Dealer Receivable), exceeds 2.50% of the Eligible Receivables Balance, and (v) the aggregate amount by which the then Outstanding Balance of all Eligible Receivables that are Canadian Receivables exceeds 2.50% of the Eligible Receivables Balance.

“ Normal Concentration Limit ” has the meaning specified in the definition of “Concentration Limit”.

“ Obligor ” means a Person obligated to make payments pursuant to a Contract.

“ Off-Invoice Allowance Accruals ” means, at any time, with respect to a Receivable, a rebate, volume discount, competitive allowance, incentive payment or similar allowance that does not appear on the face of the related invoice.

“ Original PCA ” means that certain Purchase and Contribution Agreement dated as of September 11, 2002 (as amended prior to the date hereof) between Trane U.S., as seller, and ASI Receivables Funding LLC, as purchaser.

“ Original RIPA ” means that certain Receivable Interest Purchase Agreement dated as of September 11, 2002 (as amended prior to the date hereof) among ASI Receivables Funding LLC, as seller, CAFCO, LLC, Citibank, N.A., CNAI, as agent and Trane U.S., as originator and collection agent.

“ Originator ” means each of the “Originators” named on Schedule III hereto.

“ Originator Receivable ” means (a) the indebtedness of any Obligor that has a billing address in the United States (or, if such Originator Receivable was originated by Trane U.S., in Canada) resulting from the provision or sale of merchandise, insurance or services by any Originator (in the case of Trane U.S., only to the extent such provision or sale is consummated in connection with its activities conducted through any of its Divisions) under a Contract (whether constituting an account, instrument, chattel paper or general intangible) or (b) a Two-Step Dealer Receivable, and in each case includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto; provided that if the Two-Step Dealer Receivable Transfer Termination Date shall occur as provided in Section 2.13, then no Two-Step Dealer Receivables created by Trane U.S. on or after such date shall constitute Originator Receivables hereunder.

 

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“ Other Companies ” means the Originators, the Intermediate SPVs, the Designated Entities and all of their respective Subsidiaries except the Seller.

“ Outstanding Balance ” of any Receivable (or portion thereof) at any time means the then outstanding principal balance thereof.

“ Parent ” means Ingersoll-Rand Global Holding Company Limited, a Bermuda company.

“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“ Percentage ” of any Bank means, (a) with respect to Citibank, the percentage set forth on its signature page to this Agreement, or such amount as reduced or increased by any Assignment and Acceptance entered into with an Eligible Assignee, (b) with respect to BofA, the percentage set forth on its signature page to this Agreement, or such amount as reduced or increased by any Assignment and Acceptance entered into with an Eligible Assignee, (c) with respect to JPMC, the percentage set forth on its signature page to this Agreement, or such amount as reduced or increased by any Assignment and Acceptance entered into with an Eligible Assignee, or (d) with respect to a Bank that has entered into an Assignment and Acceptance, the amount set forth therein as such Bank’s Percentage, or such amount as reduced or increased by an Assignment and Acceptance entered into between such Bank and an Eligible Assignee, adjusted as applicable in each case in the event that any Departing Group shall determine not to extend the Commitment Termination Date or shall approve an extension of the Commitment Termination Date based on a reduced Investor Purchase Limit for their Group.

“ Person ” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“ Plan ” means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group.

“ Pool Non-compliance Date ” means any day on which the Net Receivables Pool Balance as shown in the most recent Seller Report is less than the Required Net Receivables Pool Balance.

“ Pool Receivable ” means a Receivable in the Receivables Pool.

“ Program Agent ” has the meaning specified in the introductory paragraph hereof.

“ Program Agent’s Account ” means the special account (account number 40636695) of the Program Agent (as program agent for the Investors and the Banks) maintained

 

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at the office of Citibank at 399 Park Avenue, New York, New York, ABA #021-000-089, or such replacement account as the Program Agent shall designate from time to time in writing to the Investor Agents, the Seller and the Collection Agent.

“ Public Debt ” means any publicly traded notes, bonds, debentures or similar indebtedness set forth in (a) IR Parent’s Form 10-K for the most recently ended fiscal year or (b) any filings by IR Parent on Form 10-Q or Form 8-K made after the end of the most recently ended fiscal year.

“ Purchase Agreements ” means each of the Initial Purchase Agreements, the Secondary Purchase Agreements and the Tertiary Purchase Agreements.

“ Purchase Limit ” means $325,000,000, as such amount may be reduced pursuant to the immediately succeeding sentence or Section 2.01(b). In the event that the Facility Termination Date shall occur solely under clause (e) of such defined term, then on such Facility Termination Date the Purchase Limit shall be reduced by the aggregate Bank Commitments of the Banks in the Group for which such Facility Termination Date has occurred (as such Bank Commitments were in effect immediately prior to such Facility Termination Date). References to the unused portion of the Purchase Limit shall mean, at any time, the Purchase Limit, as then reduced pursuant to Section 2.01(b), minus the then outstanding Capital of Receivable Interests under this Agreement.

“ Receivable ” means any Originator Receivable which has been acquired by the Seller from the Intermediate SPVs by purchase pursuant to the Purchase Agreements.

“ Receivable Interest ” means, at any time, an undivided percentage interest in (i) all then outstanding Pool Receivables arising prior to the time of the most recent computation or recomputation of such undivided percentage interest pursuant to Section 2.03, (ii) all Related Security with respect to such Pool Receivables, and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables. Such undivided percentage interest shall be computed as

C + YFR + [ALDR × (C/AC)]

NRPB

where:

 

 

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Each Receivable Interest shall be determined from time to time pursuant to the provisions of Section 2.03.

“ Receivable Turnover Days ” means, on any date, an amount equal to

 

where:

 

“ Receivables Pool ” means at any time the aggregation of each then outstanding Receivable.

“ Related Bank ” means (a) with respect to CAFCO, Citibank, each Bank which has entered into an Assignment and Acceptance with Citibank, and each assignee (directly or indirectly) of any such Bank, which assignee has entered into an Assignment and Acceptance, (b) with respect to Enterprise, BofA, each Bank which has entered into an Assignment and Acceptance with BofA, and each assignee (directly or indirectly) of any such Bank, which assignee has entered into an Assignment and Acceptance, and (c) with respect to JSST, JPMC, each Bank which has entered into an Assignment and Acceptance with JPMC, and each assignee (directly or indirectly) of any such Bank, which assignee has entered into an Assignment and Acceptance.

“ Related Security ” means with respect to any Receivable

(i) all of the Seller’s interest in any merchandise (including returned merchandise) relating to any sale giving rise to such Receivable;

(ii) all security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements or other registrations filed against an Obligor describing any collateral securing such Receivable;

(iii) all guaranties, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise; and

 

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(iv) the Contract and all other books, records and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) relating to such Receivable and the related Obligor.

“ Report Date ” means the date as of which information is presented in any Seller Report.

“ Required Net Receivables Pool Balance ” means, as of any day, the sum of (i) Total Reserves calculated as of such day plus (ii) the aggregate outstanding Capital for all Receivable Interests as of such day plus (iii) the Minimum Required Seller Interest Percentage then in effect of the Net Receivables Pool Balance as of such day.

“ S&P ” means Standard and Poors, a division of the McGraw-Hill Companies, Inc.

“ Seasonal Receivables ” means Receivables created by Club Car, Inc., Thermo King de Puerto Rico, Inc., Thermo King Corporation, and Trane U.S. in any of January, February, March or April of any calendar year.

“ SEC ” means the Securities and Exchange Commission.

“ Secondary Purchase Agreements ” means each of the Purchase Agreements identified as “Secondary Purchase Agreements” on Schedule IV hereto.

“ Seller ” has the meaning specified in the introductory paragraph hereof.

“ Seller Report ” means a Monthly Report, a Weekly Report or a Daily Report.

“ Settlement Date (Capital) ” for any Receivable Interest means, (i) each day on which funds from the Cure Account are remitted to the Investor Agents’ Accounts pursuant to the last paragraph of Section 2.04(b) and (ii) (x) if the Termination Date for such Receivable Interest has not occurred, (A) the Business Day immediately following the due date of each Monthly Report or Weekly Report or (B) at any time that the Collection Agent is required to deliver Daily Reports in accordance with Section 6.02(g)(iii), the due date of each Daily Report, or (y) if the Termination Date for such Receivable Interest has occurred, the last day of each Fixed Period for such Receivable Interest.

“ Settlement Date (Yield and Fees) ” for any Receivable Interest means the Monthly Settlement Date (and if Yield with respect to such Receivable Interest is computed by reference to the Assignee Rate, Yield and Fees accrued to such date shall be payable on such date and if Yield with respect to such Receivable Interest is computed by reference to the Investor Rate, Yield and Fees accrued to the end of the most recent Fixed Period shall be payable on such date); provided , however , that if the Termination Date for such Receivable Interest has occurred, the Settlement Date (Yield and Fees) for such Receivable interest may be such more frequent dates as selected by the Program Agent.

 

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“ Short-Term Debt Rating ” for any Person means the rating by S&P or Moody’s of such Person’s short-term public unsecured non-credit enhanced debt.

“ Stress Factor ” means, (i) at any time that a Level 1 Downgrade Event has occurred but a Level 2 Downgrade Event has not occurred, 2.25, (ii) at any time that a Level 2 Downgrade Event has occurred, 2.50, and (iii) at any other time, 2.0.

“ Subject Credit Agreement Parties ” has the meaning specified in Section 5.02(g).

“ Subservicer ” means an entity identified as a “Subservicer” on Schedule V hereto.

“ Subsidiary ” means any corporation or other entity of which securities having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Seller, an Intermediate SPV, an Originator, Parent or IR Parent, as the case may be, or by one or more Subsidiaries, or by the Seller, an Intermediate SPV, an Originator, Parent, or IR Parent, as the case may be, and one or more Subsidiaries.

“ Tax Act ” means the Income Tax Act (Canada) and the Regulations thereunder, as amended, modified or replaced from time to time.

“ Tax Convention ” means a convention for the avoidance of double income taxation between Canada and another country.

“ Termination and Release Agreement ” means that certain Termination and Release Agreement relating to the Original RIPA and dated as of the date hereof among ASI Receivables Funding LLC, CAFCO, LLC, Citibank, CNAI, as agent and Trane U.S.

“ Termination Date ” for any Receivable Interest means (i) in the case of a Receivable Interest owned by an Investor, the earlier of (a) the Business Day which the Seller or the Investor Agent for such Investor so designates by notice to the other (with a copy to the Program Agent and the other Investor Agents) at least one Business Day in advance for such Receivable Interest and (b) the Facility Termination Date and (ii) in the case of a Receivable Interest owned by a Bank, the earlier of (a) the Business Day which the Seller so designates by notice to the Program Agent and the Investor Agents at least one Business Day in advance for such Receivable Interest and (b) the Commitment Termination Date.

“ Tertiary Purchase Agreements ” means each of the Purchase Agreements identified as “Tertiary Purchase Agreements” on Schedule IV hereto.

“ Total Reserves ” means at any time the sum of (i) the Aggregate Loss and Dilution Reserve, and (ii) the aggregate Yield and Fee Reserves for all Receivable Interests.

“ Trane U.S. ” means Trane U.S. Inc., a Delaware corporation.

“ Transaction Document ” means any of this Agreement, the Purchase Agreements, the Lock-Box Agreements, the Cure Account Control Agreement, the Fee Agreement, the Undertakings and all other agreements and documents delivered and/or related hereto or thereto.

 

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“ Trigger Event ” means the occurrence of an Event of Termination or the occurrence of the Termination Date for all outstanding Receivable Interests.

“ Two-Month Average Dilution Ratio ” means, for any calendar month, the average of the Dilution Ratios for such month and the immediately preceding calendar month.

“ Two-Step Dealer Receivable ” means the indebtedness of any Obligor under a Contract (whether constituting an account, instrument, chattel paper, payment intangible or general intangible) resulting from a loan by Trane U.S. to such Obligor to finance the purchase by such Obligor from a Distributor of (i) merchandise sold by the Trane Residential Systems Division of Trane U.S. to such Distributor or (ii) other merchandise or services incidental to the sale of Trane Residential Systems merchandise to such Obligor, provided that the Obligor, at the time of creation of such indebtedness, is a dealer of such Distributor.

“ Two-Step Dealer Receivable Transfer Termination Date ” has the meaning specified in Section 2.13.

“ UCC ” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

“ Unfunded Liabilities ” means, with respect to any Plan during the term of this Agreement, the amount (if any) by which (i) the present value of all accrued benefits under such Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits (excluding any accrued but unpaid contributions), all determined on the basis of a Plan termination as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.

“ Underlying Inventory Security Interest ” means, with respect to a Receivable, any security interest in inventory granted by the Obligor of such Receivable to secure the repayment of such Receivable.

“ Undertakings (Originators) ” means either (i) the agreements dated as of the date hereof executed by Parent substantially in the form of Annexes G-1 through G-4 hereto or (ii) if IR Parent has delivered such agreements to the Program Agent pursuant to Section 7.01(p) hereof, the agreements executed by IR Parent substantially in the form of Annexes G-1 through G-4 hereto, in each case as the same may be amended, modified or restated from time to time.

“ Undertaking Party ” means Parent, or, if IR Parent has delivered replacement Undertakings pursuant to Section 7.01(p) hereof, IR Parent.

“ Undertakings ” means, collectively, either (i) the agreements dated as of the date hereof executed by Parent substantially in the form of Annexes G-1 through G-5 hereto or (ii) if IR Parent has delivered such agreements to the Program Agent pursuant to Section 7.01(p) hereof, the agreements executed by IR Parent substantially in the form of Annexes G-1 through G-5 hereto, in each case as the same may be amended, modified or restated from time to time.

 

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“ Week ” means each calendar week beginning on Saturday and ending on (and including) the following Friday.

“ Weekly Report ” means a report in substantially the form of Annex A-2 hereto and containing such additional information as any Agent may reasonably request from time to time, furnished by the Collection Agent pursuant to Section 6.02(g)(ii).

“ Yield ” means for each Receivable Interest for each Fixed Period:

(i) for each day during such Fixed Period to the extent an Investor will be funding its portion of such Receivable Interest through the issuance of commercial paper or other promissory notes, as the case may be,

 

(ii) for each day during such Fixed Period to the extent (x) an Investor will not be funding its portion of such Receivable Interest through the issuance of commercial paper or other promissory notes, as the case may be, or (y) a Bank will be funding its portion of such Receivable Interest,

 

where:

 

provided that no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by applicable law; and provided further that Yield for any Receivable Interest shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason.

“ Yield and Fee Reserve ” means, for any Receivable Interest on any date, an amount equal to:

(C x YFRP) + (CAFP x OB) + AUYF

 

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where:

 

“ Yield and Fee Reserve Percentage ” means, on any date, the greater of (a) 2.00% and (b) a percentage equal to:

[(AER × 1.50) + AM + PF] × (RTD + CDP)

360

where:

 

SECTION 1.02. Other Terms; GAAP . (a) Subject to clause (b) of this Section 1.02, all accounting terms not specifically defined herein shall be construed in accordance with generally accepted U.S. accounting principles.

(b) All calculations determining compliance with Section 7.01(n) (including with respect to the definitions used therein) shall be made for the relevant Person and its Consolidated Subsidiaries on a consolidated basis in accordance with, and all financial statements required to be delivered hereunder shall be prepared in accordance with, generally accepted U.S. accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by IR Parent’s independent public accountants) with the most recent audited consolidated financial statements of IR Parent and its Consolidated Subsidiaries

 

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delivered to the Program Agent and the Investor Agents; provided that, (x) if the Seller and/or the Originators notify the Program Agent and each Investor Agent that the Seller and/or the Originators wish to amend such Section 7.01(n) to eliminate the effect of any change in generally accepted accounting principles on the operation of such Event of Termination (or if the Program Agent or any Investor Agent notifies the Seller and/or the Originators that such Agent wishes to amend Section 7.01(n) for such purpose), then compliance with tests set forth in the applicable section shall be determined on the basis of generally accepted accounting principles in effect immediately before the relevant change in generally accepted accounting principles became effective, until either such notice is withdrawn or such section is amended in accordance with the terms of Section 11.01 hereof, and (y) for purposes of determining Consolidated Net Worth, generally accepted accounting principles as in effect at the time of and as used to prepare the Base Financial Statements shall be used for such determination, notwithstanding any change in such generally accepted accounting principles after the date of such financial statements, provided that Consolidated Net Worth shall be determined excluding the effect of goodwill impairment charges, net of taxes, to the extent that such effect would not otherwise have been included in such determination but for the application of FAS 142.

(c) All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.

(d) Notwithstanding any termination of the 2008 Credit Agreement, the provisions of this Agreement and each of the other Transaction Documents, and references to the 2008 Credit Agreement herein and therein, will be interpreted as if the 2008 Credit Agreement was still in effect.

ARTICLE II

AMOUNTS AND TERMS OF THE PURCHASES

SECTION 2.01. Purchase Facility . (a) On the terms and conditions hereinafter set forth, each of the Investors may, in its sole discretion, ratably in accordance with the Investor Purchase Limit of its Group, and, if and to the extent such Investor does not make a purchase, the Related Banks for such Investor shall, ratably in accordance with their respective Bank Commitments, purchase Receivable Interests from the Seller from time to time during the period from the date hereof to the Facility Termination Date (in the case of the Investors) and to the Commitment Termination Date (in the case of the Banks). Under no circumstances shall any Investor make any such purchase, or the Banks be obligated to make any such purchase, if after giving effect to such purchase the aggregate outstanding Capital of Receivable Interests would exceed the Purchase Limit.

(b) The Seller may at any time, upon at least five Business Days’ notice to the Program Agent and the Investor Agents, terminate the facility provided for in this Agreement in whole or, from time to time, reduce in part the unused portion of the Purchase Limit; provided that each partial reduction shall be in the amount of at least $3,000,000 or an integral multiple thereof.

 

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(c) Until the Program Agent (or any Investor Agent with respect to its Investor) gives the Seller the notice provided in Section 3.02(c)(iii), the Program Agent, on behalf of the Investors which own Receivable Interests, may have the Collections attributable to such Receivable Interests automatically reinvested pursuant to Section 2.04 in additional undivided percentage interests in the Pool Receivables by making an appropriate readjustment of such Receivable Interests. The Program Agent, on behalf of the Banks which own Receivable Interests, shall have the Collections attributable to such Receivable Interests automatically reinvested pursuant to Section 2.04 in additional undivided percentage interests in the Pool Receivables by making an appropriate readjustment of such Receivable Interests.

(d) The Seller, Investors, Banks, Investor Agents and Program Agent intend that sales of Receivables Interests made pursuant to this Agreement will constitute a sale, transfer, and assignment of the Receivable Interests, for all purposes other than tax, to the Investors or the Banks, as applicable.

SECTION 2.02. Making Purchases . (a) Each purchase by any of the Investors or the Banks shall be made on at least two Business Days’ notice from the Seller to the Program Agent and each Investor Agent; provided that no more than 2 purchases shall be made in any one calendar month (and during such period that the Collection Agent is required to deliver a Weekly Report pursuant to Section 6.02(g)(ii) or a Daily Report pursuant to Section 6.02(g)(iii) an additional 2 purchases may be made in any one calendar month). Each such notice of a purchase shall specify (i) the amount requested to be paid to the Seller (such amount, which shall not be less than $5,000,000, being referred to herein as the initial “Capital” of the Receivable Interest then being purchased), (ii) the allocation of such amount among each of the Groups (which shall be proportional to the Investor Purchase Limit of each Group), and (iii) the date of such purchase (which shall be a Business Day). Each Investor shall promptly notify the Program Agent whether such Investor has determined to make the requested purchase on the terms specified by the Seller. The Program Agent shall promptly thereafter notify the Seller whether the Investors have determined to make the requested purchase and, if so, whether all of the terms specified by the Seller are acceptable to the Investors. If, on the date any Investor Agent receives any notice of purchase (and provided that such notice is received by 2:00 p.m. (New York City time) on a Business Day), such Investor Agent is aware that the Investor for which such Investor Agent is acting as Investor Agent will not make such purchase, such Investor Agent will notify the Seller, the Program Agent and each other Investor Agent thereof by the end of such day (which notice may be by telephone).

If any Investor has determined not to make the entire amount of a purchase requested to be made by it, the Investor Agent for such Investor shall promptly send notice of the proposed purchase to all of the Related Banks for such Investor concurrently by telecopier or e-mail, specifying the date of such purchase, the aggregate amount of Capital of Receivable Interest being purchased by such Related Banks (which amount shall be equal to the portion of the initial Capital not funded by such Investor), and each such Related Bank’s portion thereof (determined ratably in accordance with its respective Bank Commitment).

(b) On the date of each such purchase of a Receivable Interest, the applicable Investors and/or Banks, as the case may be, shall, upon satisfaction of the applicable conditions set forth in this Article II and Article III, make available to the Program Agent, in same day

 

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funds at the Program Agent’s Account, and Program Agent shall, on such date and upon receipt of such amounts from the Investors and/or Banks, as the case may be, make available to the Seller in same day funds, at the account set forth in the Funds Transfer Letter, an aggregate amount equal to the initial Capital of such Receivable Interest; provided , however , if such purchase is being made by the applicable Banks following the designation by the Investor Agent for an Investor of a Termination Date for a Receivable Interest owned by such Investor pursuant to clause (i)(a) of the definition of Termination Date and any Capital of such Receivable Interest is outstanding on such date of purchase, the Seller hereby directs the applicable Banks to pay the proceeds of such purchase (to the extent of the outstanding Capital and accrued Yield on such Receivable Interest of such Investor) to the relevant Investor Agent’s Account, for application to the reduction of the outstanding Capital and accrued Yield on such Receivable Interest of such Investor.

(c) Effective on the date of each purchase pursuant to this Section 2.02 and each reinvestment pursuant to Section 2.04, the Seller hereby sells and assigns to the Program Agent, for the benefit of the parties making such purchase, an undivided percentage interest, to the extent of the Receivable Interest then being purchased, in each Pool Receivable then existing and in the Related Security and Collections with respect thereto.

(d) Notwithstanding the foregoing, (i) none of CAFCO, Enterprise or JSST shall make purchases under this Section 2.02 at any time in an amount which would exceed the Investor Purchase Limit of such Investor’s Group and (ii) a Bank shall not be obligated to make purchases under this Section 2.02 at any time in an amount which would exceed such Bank’s Bank Commitment less the sum of (A) the aggregate outstanding and unpaid amount of any purchases made by such Bank under such Bank’s Asset Purchase Agreement plus (B) such Bank’s ratable share of the aggregate outstanding portion of Capital held by the Investor in such Bank’s Group (whether or not any portion thereof has been assigned under an Asset Purchase Agreement), after giving effect to reductions of the Capital held by the Investor in such Bank’s Group to be made on the date of such purchase (whether from the distribution of Collections or from the proceeds of purchases by such Bank). Each Bank’s obligation shall be several, such that the failure of any Bank to make available to the Seller any funds in connection with any purchase shall not relieve any other Bank of its obligation, if any, hereunder to make funds available on the date of such purchase, but no Bank shall be responsible for the failure of any other Bank to make funds available in connection with any purchase.

(e) Interests in all of the Originator Receivables originated by the Trane Residential Systems Division of Trane U.S. in existence immediately prior to the effectiveness of this Agreement (and all Related Security with respect to such Originator Receivables) have heretofore been sold by Trane U.S. to ASI Receivables Funding LLC pursuant to the Original PCA and by ASI Receivables Funding LLC to CAFCO pursuant to the Original RIPA. The Seller hereby agrees that it will cause any Adverse Claim or other interests granted in favor of ASI Receivables Funding LLC, CAFCO, or CNAI, as agent under the Original RIPA, to be released on the date hereof.

(f) The failure of any Group to deposit its ratable portion of any purchase pursuant to this Section 2.01 in accordance with the Investor Purchase Limit of its Group into the Program Agent’s account on the date of such purchase shall not relieve any other Group of its

 

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obligations hereunder to fund its ratable portion of any purchase pursuant to this Section 2.01 in accordance with the Investor Purchase Limit of its Group on such date. Unless Program Agent shall have been notified in writing by any Investor Agent at least two Business Days preceding the purchase date for any purchase pursuant to this Section 2.01 that the Investors and Banks in such Investor Agent’s Group do not intend to fund such Group’s ratable portion of any purchase pursuant to this Section 2.01 in accordance with the Investor Purchase Limit of such Group, the Program Agent may assume that the Investors and/or Banks in such Group have funded their ratable portion of any purchase pursuant to this Section 2.01 in accordance with the Investor Purchase Limit of such Group and are depositing such sums into the Program Agent’s Account on the purchase date. The Program Agent in its discretion may, but shall not be obligated to, disburse a corresponding amount to the Seller on such date together with the proceeds funded by the other Groups. If the Program Agent disburses the amounts for any purchase but any Group fails to fund its ratable portion of any purchase pursuant to this Section 2.01 in accordance with the Investor Purchase Limit of its Group on or prior to the purchase date therefor, the Investor Agent for such Group shall pay to the Program Agent on demand such corresponding amount, together with interest thereon, for each day from the date such amount is disbursed to the Seller until the date such amount is paid or repaid to the Program Agent, at the Eurodollar Rate. If the Program Agent so requests, the Seller shall return to the Program Agent such corresponding amount pursuant to documentation reasonably acceptable to the Seller and the Program Agent.

SECTION 2.03. Receivable Interest Computation . Each Receivable Interest shall be initially computed on its date of purchase. Thereafter until the Termination Date for such Receivable Interest, such Receivable Interest shall be automatically recomputed (or deemed to be recomputed) on each day other than a Liquidation Day. Any Receivable Interest, as computed (or deemed recomputed) as of the day immediately preceding the Termination Date for such Receivable Interest, shall thereafter remain constant; provided , however , that from and after the date on which the Termination Date shall have occurred for all Receivable Interests and until each Receivable Interest becomes zero in accordance with the next sentence, each Receivable Interest shall be calculated as the percentage equivalent of a fraction the numerator of which is the percentage representing such Receivable Interest immediately prior to such date and the denominator of which is the sum of the percentages representing all Receivable Interests which were outstanding immediately prior to such date. Each Receivable Interest shall become zero when Capital thereof and Yield thereon shall have been paid in full, and all Fees and other amounts owed by the Seller hereunder to the Investors, the Banks, the Investor Agents or the Program Agent are paid and the Collection Agent shall have received the accrued Collection Agent Fee thereon.

SECTION 2.04. Settlement Procedures . (a) Collection of the Pool Receivables shall be administered by a Collection Agent, in accordance with the terms of Article VI of this Agreement. The Seller shall provide to the Collection Agent (if other than the Seller) on a timely basis all information needed for such administration, including notice of the occurrence of any Liquidation Day and current computations of each Receivable Interest.

 

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(b) The Collection Agent shall, on each day on which Collections of Pool Receivables are received by it:

(i) with respect to each Receivable Interest, set aside on its books and hold for the benefit of (and, at the request of the Program Agent following the taking of any action permitted by the first sentence of Section 6.03(a), segregate for) the Investors or the Banks that hold such Receivable Interest and for the Investor Agents, out of the percentage of such Collections represented by such Receivable Interest, an amount equal to the Yield, Fees and Collection Agent Fee accrued through such day for such Receivable Interest and not previously set aside;

(ii) on each such date which is a day following a Report Date on which a Daily Report was delivered showing that (x) outstanding Capital plus Total Reserves exceeded (y) the sum of the Maximum Percentage Factor multiplied by the Net Receivables Pool Balance (as of the related Report Date) plus the amount (if any) on deposit in the Cure Account as of the related Report Date, the Collection Agent shall remit to the Cure Account the remaining Collections in the Lock-Box Accounts and Collections received by the Collection Agent on such date, provided that the Collection Agent shall not be obligated to remit Collections to the Cure Account pursuant to this clause (ii) to the extent that after giving effect thereto the amount on deposit in the Cure Account would exceed the Cure Amount;

(iii) with respect to each Receivable Interest, if such day is not a Liquidation Day for such Receivable Interest, reinvest with the Seller on behalf of the Investors or the Banks that hold such Receivable Interest the percentage of such Collections represented by such Receivable Interest, to the extent representing a return of Capital, by recomputation of such Receivable Interest pursuant to Section 2.03;

(iv) if such day is a Liquidation Day for any one or more Receivable Interests, set aside on its books and hold for the benefit of (and, at the request of the Program Agent, segregate for) the Investors and/or the Banks that hold such Receivable Interests and for the Investor Agents (x) if such day is a Liquidation Day for less than all of the Receivable Interests, the percentage of such Collections represented by such Receivable Interests, and (y) if such day is a Liquidation Day for all of the Receivable Interests, all of the remaining Collections (but not in excess of the Capital of such Receivable Interests and any other amounts payable by the Seller hereunder); provided that if amounts are set aside and held for the benefit of any Investors or Banks on any Liquidation Day occurring prior to the Termination Date, and thereafter prior to the next Settlement Date (Capital) the conditions set forth in Section 3.02 are satisfied or waived by the Agents, such previously set aside amounts shall, to the extent they represent a return of Capital and have not been deposited to the Investor Agent’s Accounts pursuant to Section 2.04(c), be reinvested in accordance with the preceding subsection (iii) on the day of such subsequent satisfaction or waiver of conditions; and

 

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(v) during such times as amounts are required to be reinvested in accordance with the foregoing subsection (iii) or the proviso to subsection (iv), release to the Seller for its own account any Collections in excess both of such amounts and of the amounts that are required to be set aside pursuant to subsections (i) and (ii) above.

On any Business Day on which funds are on deposit in the Cure Account, the Collection Agent (i) shall, upon the occurrence and continuance of a Trigger Event or upon the written request of Investor Agents representing the Majority Banks, and may (if the funds in the Cure Account exceed $2,500,000), upon written notice to the Program Agent and each of the Investor Agents, remit such funds from the Cure Account to the Program Agent’s Account, and the Program Agent shall thereafter deposit each Investor Agent’s allocable portion thereof to the Investor Agent’s Accounts for the ratable payment of Capital and any other amounts owed by the Seller hereunder to the relevant Investors and Banks pursuant to Section 2.04(d), or (ii) may, following delivery of a Seller Report to the Program Agent and each of the Investor Agents, withdraw from the Cure Account and remit to the Seller all or a portion of the funds in the Cure Account; provided that (x) no Trigger Event shall have occurred and be continuing and (y) such Seller Report shall state that, as of the related Report Date after taking account of the proposed withdrawal, (A) the sum of the Maximum Percentage Factor multiplied by the Net Receivables Pool Balance and the remaining amount on deposit in the Cure Account will be equal to or greater than (B) outstanding Capital plus Total Reserves, and such Seller Report shall set forth the calculation supporting such statement.

(c) The Collection Agent shall deposit into the Program Agent’s Account, and the Program Agent shall thereafter, after taking into account any deductions that the Program Agent may make in accordance with clause “ first ” of Section 2.04(d)(ii), deposit in the applicable Investor Agent’s Account of each Investor Agent, (i) on the Settlement Date (Yield and Fees) for each Receivable Interest, Collections held for the Investors or the Banks in each Investor Agent’s Group with respect to Yield, Fees and other amounts (other than Capital) that relate to such Receivable Interest pursuant to Section 2.04(b); provided that , if such Settlement Date (Yield and Fees) is not a Liquidation Day or a Pool Non-compliance Date, the Collection Agent may withhold from each such deposit an amount equal to all accrued Collection Agent Fee payable by the Investors and Banks in each Group, and (ii) on the Settlement Date (Capital) for each Receivable Interest, all other Collections held for the Investors or the Banks in each Investor Agent’s Group that relate to such Receivable Interest pursuant to Section 2.04(b). On the Business Day immediately following the delivery of any Monthly Report or Weekly Report which sets forth a Pool Non-compliance Date as of the close of business on the last Business Day of the preceding calendar month or Week, as applicable, and on each Business Day thereafter until a Pool Non-compliance Date no longer exists, the Collection Agent shall deposit into the Program Agent’s Account, and the Program Agent shall thereafter deposit each Investor Agent’s allocable portion thereof to the Investor Agent’s Accounts, Collections set aside pursuant to subsection (iv) of Section 2.04(b); provided that the aggregate amount deposited pursuant to this sentence with respect to any Monthly Report or Weekly Report shall not exceed an amount such that, after giving effect to the application of such amount to the reduction of Capital, the Net Receivables Pool Balance is equal to the Required Net Receivables Pool Balance.

 

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(d) Upon receipt of funds deposited into an Investor Agent’s Account, the relevant Investor Agent shall distribute them as follows:

(i) if such distribution occurs on a day that is not a Liquidation Day, first to the Investors or the Banks in its Group that hold the relevant Receivable Interest and to such Investor Agent in payment in full of all accrued Yield and Fees, second to the Collection Agent in payment in full of all accrued Collection Agent Fee payable by the Investors and Banks in its Group, except to the extent such Collection Agent Fee has been withheld by the Collection Agent pursuant to Section 2.04(c) above, and third to such Investor Agent and/or the Investors and Banks in its Group in payment of any other amounts (other than Capital) owed by the Seller hereunder; provided , however , that the portion (if any) of such deposit withdrawn from the Cure Account pursuant to the last paragraph of Section 2.04(b) shall be first paid ratably to the Investors or Banks in such Group holding any portion of the relevant Receivable Interests in reduction of Capital.

(ii) if such distribution occurs on a Liquidation Day, first to the Program Agent (if such Investor Agent is CNAI) in payment of any amounts owed by the Seller to the Program Agent and/or CNAI pursuant to Section 11.04(a) in connection with out-of-pocket costs and expenses incurred by the Program Agent and to such Investor Agent in payment of any amounts owed by the Seller to such Investor Agent pursuant to Section 11.04(a) in connection with out-of pocket costs and expenses incurred by such Investor Agent (it being understood and agreed that the amounts payable under this clause “ first ” may, if the Program Agent so elects, be deducted by the Program Agent from the amounts deposited by the Program Agent into the applicable Investor Agent’s Account), second to the Collection Agent (if the Collection Agent is not IR Company or an Affiliate of IR Company) in payment in full of all accrued Collection Agent Fee payable by the Investors and Banks in such Investor Agent’s Group, third to the Investors or the Banks in such Investor Agent’s Group that hold the relevant Receivable Interest and to such Investor Agent in payment in full of all accrued Yield, Fees and Liquidation Fee, fourth to such Investors and/or Banks in reduction to zero of all Capital, fifth to such Investors, Banks or such Investor Agent in payment of any other amounts owed by the Seller hereunder, and sixth to the Collection Agent (if the Collection Agent is IR Company or an Affiliate of IR Company); provided , however , that if such funds were deposited into such Investor Agent’s Account pursuant to the second sentence of Section 2.04(c) as the result of the occurrence of a Pool Non-compliance Date, such funds shall instead be distributed ratably to the Investors or the Banks in such Group that hold the relevant Receivable Interest in reduction of the Capital thereof.

After the Capital, Yield, Fees and Collection Agent Fee with respect to all Receivable Interests, and any other amounts payable by the Seller to the Investors, the Banks, the Investor Agents or the Program Agent hereunder, have been paid in full and any contingent obligations of the Program Agent under any Lock-Box Agreement or the Cure Account Agreement have been released, all additional Collections with respect to such Receivable Interest shall be paid to the Seller for its own account.

 

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(e) For the purposes of this Section 2.04:

(i) if on any day any Pool Receivable becomes (in whole or in part) a Diluted Receivable, the Seller shall be deemed to have received on such day a Collection of such Pool Receivable in the amount of such Diluted Receivable;

(ii) if on any day any of the representations or warranties contained in Section 4.01(i) is no longer true with respect to any Pool Receivable, the Seller shall be deemed to have received on such day a Collection of such Pool Receivable in full;

(iii) except as provided in subsection (i) or (ii) of this Section 2.04(e), or as otherwise required by applicable law or the relevant Contract, all Collections received from an Obligor of any Receivables shall be applied to the Receivables of such Obligor in the order of the age of such Receivables, starting with the oldest such Receivable, unless such Obligor designates its payment for application to specific Receivables; and

(iv) if and to the extent the Program Agent or any of the Investor Agents, the Investors or the Banks shall be required for any reason to pay over to an Obligor any amount received on its behalf hereunder, such amount shall be deemed not to have been so received but rather to have been retained by the Seller and, accordingly, the Program Agent or such Investor Agent, the Investors or the Banks, as the case may be, shall have a claim against the Seller for such amount, payable when and to the extent that any distribution from or on behalf of such Obligor is made in respect thereof.

(f) Within one Business Day after the end of each Fixed Period in respect of which Yield is computed by reference to the Investor Rate, each Investor Agent shall furnish the Program Agent with, and the Program Agent shall forward to the Seller, an invoice setting forth the amount of the accrued and unpaid Yield and Fees for such Fixed Period with respect to the Receivable Interests held by the Investors and the Banks in such Investor Agent’s Group.

(g) For the avoidance of doubt, to the extent that cash is released to the Seller pursuant to and in accordance with Section 2.04(b) and is subsequently applied by the Seller to purchase Receivables under a Purchase Agreement, such cash shall, upon the completion of such purchase of Receivables, be automatically released from any security interest granted in such cash pursuant to Section 2.11.

SECTION 2.05. Fees . (a) Each Investor and Bank shall pay (which payment may be satisfied by a withholding by the Collection Agent pursuant to Section 2.04(c) above) to the Program Agent, and the Program Agent shall pay to the Collection Agent upon receipt thereof, a fee (the “ Collection Agent Fee ”) of 0.75% per annum on an amount equal to the Receivable Interest of such Investor or Bank (expressed as a percentage) multiplied by the average daily Outstanding Balance of all Receivables, from the date of purchase of such Receivable Interest until the later of the Termination Date for such Receivable Interest or the date on which the Capital of such Receivable Interest is reduced to zero, payable on each

 

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Settlement Date (Yield and Fees) for such Receivable Interest. Upon three Business Days’ notice to the Program Agent and each Investor Agent, and the prior written consent of Investor Agents representing the Majority Banks, the Collection Agent (if not an Originator, the Seller or its designee or an Affiliate of the Seller) may elect to be paid, as such fee, another percentage per annum on the average daily Outstanding Balance of all Receivables, but in no event in excess for all Receivable Interests of 110% of the reasonable costs and expenses of the Collection Agent in administering and collecting the Receivables in the Receivables Pool. The Collection Agent Fee shall be payable only from Collections pursuant to, and subject to the priority of payment set forth in, Section 2.04. So long as an Originator is acting as the Collection Agent hereunder, amounts paid as the Collection Agent Fee pursuant to this Section 2.05(a) shall reduce, on a dollar-for-dollar basis, the obligations of the Seller, the Intermediate SPVs and the Designated Entities to pay the “Collection Agent Fee” pursuant to Section 6.03 of the any Purchase Agreement, provided that such obligation of the Seller, any Intermediate SPV, or any Designated Entity shall in no event be reduced below zero.

(b) The Seller shall pay to the Program Agent and the Investor Agents, as applicable, certain fees (collectively, the “ Fees ”) in the amounts and on the dates set forth in a separate fee agreement of even date among the Seller, the Program Agent and the Investor Agents, as the same may be amended or restated from time to time (the “ Fee Agreement ”).

SECTION 2.06. Payments and Computations, Etc .(a) All amounts to be paid or deposited by (i) the Seller or the Collection Agent to the Program Agent hereunder shall be paid or deposited no later than 11:00 A.M. (New York City time) on the day when due in same day funds to the Program Agent’s Account, and (ii) any Investor Agent hereunder to the Program Agent shall be paid or deposited no later than 1:00 P.M. (New York City time) on the day when due in same day funds to the Program Agent’s Account.

(b) All computations of Yield, fees, and other amounts hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit.

(c) The Seller shall provide the Agents with prior written notice of any proposed voluntary repayment of Capital no later than 11:00 A.M. (New York City time) on the Business Day immediately preceding such voluntary repayment, provided that the delivery of such notice will not affect any Liquidation Fees, breakage or other expenses payable to the Program Agent, the Investor Agents, the Investors and the Banks in relation to such voluntary repayment.

SECTION 2.07. Dividing or Combining Receivable Interests . Either the Seller or any Investor Agent may, upon notice to the other party (with a copy of such notice to the Program Agent) received at least three Business Days prior to the last day of any Fixed Period in the case of the Seller giving notice, or up to the last day of such Fixed Period in the case of an Investor Agent giving notice, either (i) divide any Receivable Interest held by one or more Investors and/or Banks in its Group into two or more Receivable Interests of such Investors

 

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and/or Banks having aggregate Capital equal to the Capital of such divided Receivable Interest, or (ii) combine any two or more Receivable Interests held by one or more Investors and/or Banks in its Group originating on such last day or having Fixed Periods ending on such last day into a single Receivable Interest having Capital equal to the aggregate of the Capital of such Receivable Interests; provided , however , that no Receivable Interest owned by an Investor may be combined with a Receivable Interest owned by any Bank.

SECTION 2.08. Increased Costs . (a) If CNAI, any Investor, any Investor Agent, any Bank, any entity (including any bank or other financial institution providing liquidity and/or credit support to any Investor in connection with such Investor’s commercial paper program) which purchases or enters into a commitment to purchase Receivable Interests or interests therein, any related commercial paper issuer of an Investor, or any of their respective Affiliates (each an “ Affected Person ”) determines that (i) compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of the capital required or expected to be maintained by such Affected Person and such Affected Person determines that the amount of such capital is increased by or based upon the existence of any commitment to make purchases of or otherwise to maintain the investment in Pool Receivables or interests therein related to this Agreement or to the funding thereof and other commitments of the same type, or (ii) an Accounting-Based Consolidation Event has occurred with respect to any Investor and such Affected Person, then, upon demand by such Affected Person (with a copy to the Program Agent and the Investor Agent for such Affected Person’s Group), the Seller shall pay to the Investor Agent for such Affected Person’s Group for the account of such Affected Person (as a third-party beneficiary), from time to time as specified by such Affected Person, additional amounts sufficient to compensate such Affected Person in th