EXHIBIT 10.01
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AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
dated as of June 3, 2008
Among
VOLT FUNDING CORP.,
as Seller
and
THE
VARIOUS BUYERS AND BUYER AGENTS FROM TIME TO TIME PARTY HERETO,
and
VOLT INFORMATION SCIENCES, INC.,
as Servicer
and
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
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TABLE OF CONTENTS
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AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01
Certain
Definitions...............................................................................3
1.02
Interpretation and
Construction..................................................................28
ARTICLE II
AGREEMENT TO PURCHASE AND SELL
2.01
Purchase
Limits..................................................................................29
2.02
Amount of
Purchases..............................................................................30
2.03
Reduction of the Aggregate Maximum Net Investment and
Net Investment; Termination of the
Agreement.....................................................30
2.04
Fees Payable to the
Buyer........................................................................32
2.05
Extension of the Liquidity Termination
Date......................................................32
2.06
Additional
Buyers................................................................................33
ARTICLE III
BUYER'S ALLOCATION
3.01
Buyer's
Allocation...............................................................................34
3.02
Frequency of Computation of the Buyer's
Allocation...............................................34
ARTICLE IV
CLOSING PROCEDURES
4.01
Purchase and Sale
Procedures.....................................................................35
4.02
Conditions Precedent to the First
Purchase.......................................................36
4.03
Conditions Precedent to Each Purchase, Reinvestment and Aggregate
Net Investment.................39
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(i)
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4.04
Purchase
Price...................................................................................40
4.05
Security
Interest................................................................................41
4.06
Non Assumption by the Buyer of
Obligations.......................................................43
4.07
Character of Receivables Added to Receivables
Pools..............................................43
4.08.
Fifth Third Liquidity
Agreement..................................................................43
ARTICLE V
SETTLEMENTS; ADJUSTMENTS
5.01
Settlement
Statements............................................................................43
5.02
Receivables
Status...............................................................................44
5.03
Non-Liquidation
Settlements......................................................................44
5.04
Liquidation
Settlements..........................................................................46
5.05
Allocation of
Collections........................................................................47
5.06
Deferred Purchase
Price..........................................................................47
5.07
Treatment of Collections and Deemed
Collections..................................................48
ARTICLE VI
PROTECTION OF THE BUYER;
ADMINISTRATION AND COLLECTIONS
6.01
Maintenance of Information and Computer
Records..................................................48
6.02
Protection of the Interests of the
Buyers........................................................48
6.03
Maintenance of the Location of Writings and
Records..............................................49
6.04
Information......................................................................................50
6.05
Performance of Undertakings Under the Purchased
Receivables;
Indemnification.....................................................................51
6.06
Administration and Collections;
Indemnification..................................................51
6.07
Complete Servicing
Transfer......................................................................53
6.08
Lockboxes........................................................................................56
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(ii)
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ARTICLE VII
REPURCHASES BY SELLER
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7.01
Repurchases......................................................................................56
7.02
Repurchase
Price.................................................................................56
7.03
Reassignment of Repurchased
Receivables..........................................................57
7.04.
Obligations Not
Affected.........................................................................57
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.01
General Representations and Warranties of the
Seller.............................................57
8.02
Representations and Warranties of the Seller with Respect to Each
Sale of Receivables............60
8.03
Representations and Warranties of the
Servicer...................................................62
ARTICLE IX
COVENANTS
9.01
Affirmative Covenants of the
Seller..............................................................64
9.02
Negative Covenants of the
Seller.................................................................72
9.03
Affirmative Covenants of the
Servicer............................................................75
9.04
Negative Covenants of the
Servicer...............................................................82
ARTICLE X
TERMINATION
10.01
Termination
Events...............................................................................82
10.02
Consequences of a Termination
Event..............................................................82
ARTICLE XI
MISCELLANEOUS
11.01
Expenses.........................................................................................87
11.02
Payments.........................................................................................87
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11.03
Indemnity for Taxes, Reserves and
Expenses.......................................................88
11.04
Indemnity........................................................................................89
11.05
Holidays.........................................................................................92
11.06
Records..........................................................................................93
11.07
Amendments and
Waivers...........................................................................93
11.08 No
Implied Waiver; Cumulative
Remedies...........................................................94
11.09 No
Discharge.....................................................................................94
11.10
Notices..........................................................................................94
11.11
Severability.....................................................................................95
11.12
Governing
Law....................................................................................95
11.13
Prior
Understandings.............................................................................95
11.14
Survival.........................................................................................96
11.15
Counterparts.....................................................................................96
11.16
Set-Off..........................................................................................96
11.17 Time
of
Essence..................................................................................97
11.18
Payments Set
Aside...............................................................................97
11.19 No
Petition......................................................................................98
11.20 No
Recourse......................................................................................98
11.21 Tax
Treatment....................................................................................99
11.22
Assignment.......................................................................................99
11.23
Limitation on Signing
Authority..................................................................99
ARTICLE XII
THE AGENTS
12.01
Appointment and
Authorization...................................................................100
12.02
Delegation of
Duties............................................................................101
12.03
Exculpatory
Provisions..........................................................................101
12.04
Reliance by
Agents..............................................................................102
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(iv)
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12.05
Notice of Termination Events and Servicer
Events................................................103
12.06
Non-Reliance on Administrator, Buyer Agents and Other
Buyers..........................................................................................103
12.07
Administrators and
Affiliates...................................................................104
12.08
Indemnification.................................................................................104
12.09
Successor
Administrator.........................................................................105
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EXHIBITS
A
Form of Certificate of Participation
B
Form of Settlement Statement
C
Form of Certificate of Responsible Officer
D
Information Regarding Affiliates
E
Accounting Period Report
F-1 Form of
Purchase Notice
F-2 Form of
Seller Assignment Confirmation Certificate
G
List of Permitted Lockbox Banks
H
Excluded Obligors
I
Banking Institution Closure Dates
J
Form of Paydown Notice
(v)
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AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT dated as
of June 3, 2008 among VOLT FUNDING CORP., a Delaware corporation
(the "Seller"),
THE VARIOUS BUYERS AND BUYER AGENTS FROM TIME TO TIME PARTY HERETO,
VOLT
INFORMATION SCIENCES, INC., a New York corporation (the "Company"),
and PNC
BANK, NATIONAL ASSOCIATION, as Administrator for each Buyer Group
(in such
capacity, the "Administrator").
WITNESSETH THAT:
WHEREAS, the Seller, Three Rivers Funding Corporation, a
Delaware corporation ("TRFCO"), and the Company, as Servicer, are
parties to
that certain Receivables Purchase Agreement, dated as of April 12,
2002, as
heretofore amended, supplemented or otherwise modified from time to
time (the
"Existing Agreement"); and
WHEREAS, the Company is engaged in part, and the Company's
Affiliates (as hereinafter defined), Volt Management Corp., a
Delaware
corporation ("Volt Management"), P/S Partner Solutions, Ltd., a
Delaware
corporation ("P/S") formerly known as PS Payrolling, Ltd., and Volt
Technical
Resources, LLC, a Delaware limited liability company ("Volt
Technical") formerly
a Delaware corporation known as Volt Human Resources, Inc.
(collectively, the
"Subsidiary Originators", and, collectively with the Company,
the
"Originators"), are engaged in full, in the business of providing
staffing
solutions to their customers (the "Staffing Solutions Business");
and
WHEREAS, the Originators, in the ordinary course of the
Staffing Solutions Business, generate trade receivables resulting
from their
sale of merchandise and the rendering of services to their
customers with regard
to such business (the "Staffing Solutions Receivables"); and
WHEREAS, the Subsidiary Originators heretofore have
transferred, and hereafter may from time to time transfer, their
respective
Staffing Solutions Receivables to the Company pursuant to: (i) in
the case of
Volt Management, that certain Receivables Purchase and Sale
Agreement dated as
of April 12, 2002 between Volt Management and the Company, as
heretofore
amended, supplemented or otherwise modified, as amended by the
Omnibus Amendment
Agreement dated as of the date hereof among the Seller, the
Company, Volt
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Management, Volt Technical, P/S, Market Street, Relationship
Funding, PNC Bank,
National Association ("PNC") and Fifth Third Bank ("Fifth Third")
(the "Omnibus
Amendment Agreement"), and as hereafter further amended,
supplemented or
otherwise modified from time to time (the "Volt Management Sale
Agreement");
(ii) in the case of Volt Technical, that certain Receivables
Purchase and Sale
Agreement dated as of April 12, 2002 between Volt Technical and the
Company, as
heretofore amended, supplemented or otherwise modified, as amended
by the
Omnibus Amendment Agreement, and as hereafter further amended,
supplemented or
otherwise modified from time to time (the "Volt Technical Sale
Agreement"); and
(iii) in the case of P/S, that certain Receivables Purchase and
Sale Agreement
dated as of May 23, 2006 between P/S and the Company, as heretofore
amended,
supplemented or otherwise modified, as amended by the Omnibus
Amendment
Agreement, and as hereafter further amended, supplemented or
otherwise modified
from time to time (the "P/S Sale Agreement"; and, together with the
Volt
Management Sale Agreement and the Volt Technical Sale Agreement,
the "Subsidiary
Sale Agreements"); and
WHEREAS, the Company heretofore has transferred, and hereafter
may from time to time transfer, to the Seller the Staffing
Solutions Receivables
generated by the Subsidiary Originators (and acquired by the
Company pursuant to
the Subsidiary Sale Agreements), as well as Staffing Solutions
Receivables
generated by the Company, pursuant to that certain Receivables Sale
and
Contribution Agreement dated as of April 12, 2002 between the
Company and the
Seller, as heretofore amended, supplemented or otherwise modified,
as amended by
the Omnibus Amendment Agreement, and hereafter further amended,
supplemented or
otherwise modified from time to time (the "Sale Agreement");
and
WHEREAS, the Seller heretofore has created, and hereafter may
continue, a pool of such Staffing Solutions Receivables; and
WHEREAS, TRFCO heretofore from time to time purchased from the
Seller undivided percentage ownership interests in the pool of
receivables
pursuant to and in accordance with the terms of the Existing
Agreement; and
WHEREAS, in connection with the execution of this Agreement
TRFCO assigned all of its right title, interest and obligations in
the
Participation Interest, the Existing Agreement and all other
Purchase Documents
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(as defined under the Existing Agreement) to Market Street Funding
LLC, a
Delaware limited liability company ("Market Street"), and
Relationship Funding
Company, LLC, a Delaware limited liability company ("Relationship
Funding"), the
sole Buyers as of the Closing Date, in the amounts set forth on the
Omnibus
Assignment and Assumption Agreement, dated as of the date hereof,
among the
Seller, Market Street, Relationship Funding, Fifth Third, PNC Bank,
the
Administrator, TRFCO, Mellon Bank, N.A., the Originators and the
Servicer (the
"Omnibus Assignment Agreement"); and
WHEREAS, the Buyers from time to time hereafter may purchase
from the Seller undivided percentage ownership interests in the
pool of
receivables pursuant to and in accordance with the terms hereof;
and
WHEREAS, the parties hereto wish to amend and restate the
Existing Agreement on the terms hereof;
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants hereinafter set forth and intending to be legally
bound, hereby
agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
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1.01. Certain Definitions. In addition to other words and
terms defined in the recitals hereof and elsewhere in this
Agreement, as used
herein, the following words and terms shall have the following
meanings
respectively, unless otherwise required by context:
"Account Balance" shall mean, in respect of a Receivable which
is included in the Receivables Pool, all amounts shown as owing by
the related
Obligor on the accounting records of the Company and the Seller,
and all other
amounts which are shown on the most recent Settlement Statement and
in respect
of which the related Obligor is obligated, excluding each Defaulted
Receivable.
"Accounting Period" shall mean, with respect to any Settlement
Date, the period beginning on the first Monday and ending on the
last Sunday of
the Fiscal Month of the Company or the Seller most recently ended
prior to such
Settlement Date.
3
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"Administrator" shall have the meaning assigned to such term
in the recitals hereof.
"Affected Party" shall mean each of the Buyers, the Buyer
Agents, and the Administrator, any permitted assignee of a Buyer, a
Buyer Agent,
and the Administrator, and each Person providing liquidity or
credit support to
a Buyer pursuant to a Liquidity Agreement or a Program Support
Agreement and
each of their respective Affiliates and assigns.
"Affiliate" shall mean, with respect to a Person, any other
Person which directly or indirectly controls, is controlled by or
is under
common control with such Person. The term "control" means the
possession,
directly or indirectly, of the power to direct or cause the
direction of the
management and policies of a Person, whether through the ownership
of voting
securities, by contract or otherwise.
"Agreement" shall mean this Amended and Restated Receivables
Purchase Agreement, as the same may from time to time be amended,
supplemented
or otherwise modified.
"Aggregate Buyers' Allocation" shall mean the sum of the
Buyer's Allocations for each Buyer.
"Aggregate Cost of Funds" at any time, shall mean the sum of
the aggregate for each Buyer of the accrued and unpaid Cost of
Funds with
respect to each such Buyer's Purchase Price.
"Aggregate Maximum Net
Investment" shall mean, at any time of
determination, the sum of the Maximum Net Investments of each
Buyer.
"Aggregate Net Investment" shall mean, for any given day, the
sum of the Net Investments of each Buyer, as calculated on such
day.
"Average Dilution Ratio" means, as of any date of calculation,
the average of the Dilution Ratios for the twelve most recent
Accounting
Periods.
"Business Day" shall mean any day other than a Saturday,
Sunday, or other day on which (a) banking institutions are
authorized or
obligated to close in the State of New York (which days are set
forth on Exhibit
I hereto as such Exhibit I may be amended from time to time by the
parties
hereto), (b) banking institutions are authorized or obligated to
close in the
4
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Commonwealth of Pennsylvania (which days are set forth on Exhibit I
hereto) (c)
there is a public holiday under the Laws of the Commonwealth of
Pennsylvania or
the State of New York (which days are set forth Exhibit I hereto as
such Exhibit
I may be amended from time to time by the parties hereto) or (d)
SIFMA
recommends as a closed day for the United States bond market.
"Buyer" means each Person listed as such as set forth on the
signature pages of this Agreement or in any assignment agreement by
which a
person becomes a Buyer.
"Buyer Agent" means each Person acting as an agent on behalf
of a Buyer Group and designated as a Buyer Agent for such Buyer
Group on the
signature pages to this Agreement or any other Person who becomes a
party to
this Agreement as a Buyer Agent pursuant to an assignment
agreement.
"Buyer's Allocation" shall have the meaning ascribed to such
term in Section 3.01 hereof.
"Buyer Group" means, for each Buyer (and/or any assignee of a
Buyer), such Buyer and its related Buyer Agent.
"Certificate of Participation" shall mean, for a Buyer, with
respect to such Buyer's Participation Interest, the written
evidence of such
Buyer's interest in the Receivables Pool related to such
Participation Interest,
in substantially the form attached as Exhibit A hereto.
"Chief Executive Office" shall mean, with respect to any
referenced Person, the place where such Person would be deemed to
be located
(within the meaning of Section 9-307(b) of Revised UCC Article 9 as
in effect in
New York) if not a registered organization (as defined in Revised
UCC Article 9
as in effect in New York).
"Closing Date" shall mean the date on which the Participation
Interest is initially purchased by Market Street and Relationship
Funding (as
the initial Buyers hereunder) in the Receivables Pool pursuant to
the terms of
this Agreement and the Omnibus Assignment Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
5
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"Collections" shall mean, for any Purchased Receivable as of
any date, (i) the sum of all amounts, whether in the form of cash,
checks,
drafts, or other instruments (excluding promissory notes), received
by any
Originator, the Seller or the Servicer or in a Permitted Lockbox or
in a Lockbox
Account in payment of, or applied to, any amount owed by an Obligor
on account
of such Purchased Receivable (including but not limited to all
amounts received
on account of any Defaulted Receivable), including, without
limitation, all
amounts received on account of such Purchased Receivable and other
fees and
charges, and (ii) all amounts deemed to have been received by the
Company, the
Seller or the Servicer as a Collection pursuant to Sections 5.03(c)
or 6.04
hereof.
"Company" shall have the meaning assigned to such term in the
recitals hereof.
"Company Entity" shall have the meaning assigned to such term
in Section 9.01(s) hereof.
"Complete Servicing Transfer" shall have the meaning ascribed
to such term in Section 6.07 hereof.
"Concentration Limit" shall mean, as of any date of
determination, with respect to all of the Eligible Receivables
owing from a
single Obligor (except for an Obligor listed on Exhibit H),
together with
Receivables owing from its subsidiaries and other Affiliates, an
amount equal to
three and one-half percent (3.5%) of the aggregate of the Account
Balances of
the Eligible Receivables in the Receivables Pool outstanding as of
the last day
of the most recently completed Accounting Period; provided that
such percentage
shall be increased for any applicable Obligor to the highest level
for which
such Obligor qualifies, as determined at the end of the Accounting
Period most
recently completed, in accordance with the following table:
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CONCENTRATION
LIMIT OF PARTICULAR
OBLIGOR
(AND SUBSIDIARIES AND
SHORT-TERM RATING
LONG-TERM SENIOR UNSECURED DEBT RATING
OTHER AFFILIATES)
FROM S&P/MOODY'S
FROM S&P/MOODY'S
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16%
Not Applicable
at least AA/
at least Aa2
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14%
A-1/P-1
at least A+ but less than AA/
at least A1 but less than Aa2
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8%
A-2/P-2
at least BBB+, but less than A+/
at least Baa1, but less than A1
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6%
A-3/P-3
at least BBB-, but less than BBB+/
at least Baa3, but less than Baa1
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3.5%
Not Applicable
Not Applicable
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If the Obligor's short-term debt obligations are rated by both
S&P and Moody's,
the applicable concentration level is the highest level in respect
of which the
short-term debt obligation rating in respect of the Obligor by each
agency is at
least equal to the rating set forth in the second column; provided,
however, if
rated by only one such agency, the concentration level is one level
lower than
the level satisfied for that agency (but not below 3.5%). If the
Obligor's
short-term debt obligations are unrated by either agency but its
long-term debt
obligations are rated by one or both agencies, then the applicable
concentration
level is the highest level in respect of which the long-term debt
obligation
rating in respect of the Obligor by each agency is at least equal
to the rating
set forth in the third column; provided, however, if rated by only
one such
agency, the concentration level is one level lower than the level
satisfied for
that agency (but not below 3.5%); provided further, that such
proviso should not
apply if the Obligor is rated by only one such agency and such
rating is at
least AA or Aa2. Notwithstanding the foregoing, (x) the applicable
percentage
shall be an amount equal to sixteen percent (16%) for all the
Eligible
Receivables owing from Microsoft Corporation (together with
Receivables owing
from its subsidiaries and other Affiliates) whether or not said
Obligor has
rated debt; and (y) the applicable Concentration Limit of any
particular Obligor
may be (a) increased in respect of such particular Obligor with the
prior
written consent of the Buyer Agents or (b) in the sole discretion
of the
Administrator upon five (5) Business Days prior notice to the
Seller decreased
in respect of such particular Obligor.
"Contract" shall mean a written or oral contract, which shall
be legally binding, between one or more Originators and an Obligor
which gives
rise to a Receivable arising from the sale by the Originators of
goods or
services in the ordinary course of the Staffing Solutions
Business.
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"Cost of Funds" shall mean, with respect to any Settlement
Period and a Buyer, an amount, as notified in writing by the
applicable Buyer
Agent to the Seller in respect of the related Settlement Date,
equal to the
interest or discount cost for funds borrowed or obtained during
such Settlement
Period, either from the issuance of commercial paper notes, the
taking of loans
or otherwise, by the applicable Buyer for the purpose of
maintaining or
acquiring its Participation Interest, including in the computation
of such cost
any dealer's discount or fees and any and all other fees which are
attributable
to such borrowing and are specified from time to time in writing by
the
applicable Buyer Agent to the Seller. The "Cost of Funds" for any
day while a
Termination Event or a Potential Termination Event exists shall be
an interest
rate equal to 2.0% per annum above the Reference Rate as in effect
on such day.
"Credit and Collection Policy" shall mean the objective
receivable credit and collection practices utilized in connection
with the
Staffing Solutions Business and Staffing Solutions Receivables by
the
Originators, the Seller and the Servicer as of the date hereof and
approved by
the Administrator and the Buyer Agents, as the same may be modified
in strict
compliance with this Agreement.
"Credit Dilution Reserve" means, on any date, the product,
expressed as a percentage, of (a) the Dilution Horizon multiplied
by (b) the sum
of (i) 2 times the Average Dilution Ratio and (ii) the Dilution
Spike Factor.
"Credit Dynamic Reserve" shall mean, with respect to any
Settlement Date, expressed as a percentage, the sum of (i) Credit
Loss Reserve
and (ii) Credit Dilution Reserve.
"Credit Enhancement Floor" shall mean, with respect to any
Settlement Date, fourteen percent (14%).
"Credit Enhancement Reserve" shall mean, with respect to any
Settlement Date, an amount equal to, the product of (A) the greater
of (1) the
Credit Dynamic Reserve as of such Settlement Date and (2) the
Credit Enhancement
Floor as of such Settlement Date, and (B) the positive result, if
any, of (1)
the aggregate outstanding Account Balance of Eligible Receivables
in the
Receivables Pool as of the last day of the Accounting Period
immediately
preceding such Settlement Date, minus (2) the Yield Reserve with
respect to the
related Settlement Period, minus (3) the aggregate amount by which
the Account
Balance of Eligible Receivables of each Obligor as of the last day
of the
Accounting Period immediately preceding such Settlement Date
exceeds the
Concentration Limit for such Obligor.
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"Credit Loss Reserve" shall mean, with respect to any
Settlement Date, the product, expressed as a percentage, of (i)
2.0, (ii) the
Loss Ratio as of such Settlement Date and (iii) the Loss Horizon
Ratio as of
such Settlement Date.
"Days Sales Outstanding" shall mean, as of any date of
calculation, the product of (A) the quotient of (x) the aggregate
Account
Balances of all Purchased Receivables outstanding as of the last
day of the most
recently ended Accounting Period divided by (y) the aggregate
amount of sales of
the Originators, attributable to the Staffing Solutions Business,
during that
Accounting Period and the two Accounting Periods immediately
preceding it
(collectively, the "Three Accounting Periods"); and (B) the number
of days in
the Three Accounting Periods.
"Default Ratio" shall mean, with respect to any Settlement
Date, a fraction, expressed as a percentage, the numerator of which
is the
aggregate outstanding balance of Eligible Receivables which were in
the
Receivables Pool as of the first day of the Accounting Period
immediately
preceding such Settlement Date and which became Defaulted
Receivables during
such Accounting Period and the denominator of which is the
aggregate amount of
sales of the Originators, attributable to the Staffing Solutions
Business,
during the fifth Accounting Period immediately preceding such
Settlement Date.
"Defaulted Receivable" shall mean a Purchased Receivable (a)
the Obligor of which is not entitled to purchase additional
merchandise or
services from the Company, by reason of any default or
nonperformance by such
Obligor, under the terms of the Credit and Collection Policy, (b)
which has
become uncollectible or has been written off the books of the
Company or the
Seller by reason of such Obligor's inability to pay, as determined
by the Buyer
or the Servicer, in either case in accordance with the Credit and
Collection
Policy, (c) in respect of which an Event of Bankruptcy has occurred
with respect
to the related Obligor or (d) in respect of which the Obligor is
more than 90
days past due.
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"Deferred Purchase Price" shall mean the amount calculated
pursuant to Section 5.06 hereof.
"Dilution" shall mean a reduction of the Account Balance of an
Eligible Receivable given to an Obligor as a result of credits,
cancellations,
cash discounts, warranties, allowances, disputes, rebates, charge
backs, billing
errors, returned or repossessed goods, or other allowances,
adjustments and
deductions (including, without limitation, any special or other
discounts or any
reconciliations) that are given to an Obligor.
"Dilution Horizon" shall mean, with respect to any Settlement
Date, a fraction, expressed as a percentage, the numerator of which
is the
aggregate amount of sales of the Originators, attributable to the
Staffing
Solutions Business during the Accounting Period to which such
Settlement Date
relates and the denominator of which is the aggregate outstanding
balance of
Eligible Receivables in the Receivables Pool as of the last day of
the
Accounting Period for such Settlement Date.
"Dilution Ratio" means, for any referenced Accounting Period,
the ratio (expressed as a percentage and rounded to the nearest
1/100th of 1%,
with 5/1000th of 1% rounded upward), computed as of the last day of
such
referenced Accounting Period of: (a) Dilution during the referenced
Accounting
Period; by (b) the aggregate credit sales made by all the
Originators during the
immediately preceding Accounting Period.
"Dilution Spike Factor" means, for any referenced Accounting
Period, the product of: (a) the positive difference, if any,
between (i) the
highest Dilution Ratio for any Accounting Period during the twelve
most recent
Accounting Periods (including the referenced Accounting Period) and
(ii) the
Average Dilution Ratio during those twelve most recent Accounting
Periods
(including the referenced Accounting Period); and (b) (i) the
highest Dilution
Ratio for any Accounting Period during the twelve most recent
Accounting Periods
(including the referenced Accounting Period), divided by (ii) the
Average
Dilution Ratio during those twelve most recent Accounting Periods
(including the
referenced Accounting Period).
"Dispute" shall mean any dispute, deduction, claim, offset,
defense, counterclaim, set-off or obligation of any kind,
contingent or
otherwise, relating to a Receivable, including, without limitation,
any dispute
relating to goods or services already paid for.
10
<PAGE>
"Dollar," "Dollars" and the symbol "$" shall mean lawful money
of the United States of America.
"Eligible Receivable" shall mean any Receivable which:
(a) duly complies with
all applicable Laws
and other legal
requirements,
whether Federal,
state
or local,
including, without
limitation, usury laws, the Federal
Consumer Credit Protection Act, the Fair Credit Billing
Act and the Federal Truth in Lending Act;
(b) constitutes
an "account" or a
"general intangible"
as
defined in Revised
UCC Article 9 as in effect in the
State of New York and, if different, the jurisdiction
whose Law governs the perfection of the Buyers'
Participation Interests in such Receivable;
(c) (i) was originated
by one or more of the Originators in
the ordinary course of the Staffing Solutions Business
in a transaction
which complied with the Credit and
Collection Policy, or (ii) was originated by a business
subsequently acquired
by or merged into one of the
Originators in a
transaction which
complied with the
policies and
procedures of such
business in effect at
the time such Receivable was originated, provided that
the eligibility of
such Receivable
under this clause
(ii) is approved in advance in writing by the
Administrator;
(d) arises
from a Contract (the form of which, if not
entered into in the
ordinary course of the Staffing
Solutions
Business, has
been
approved
by the
Administrator) and has
been billed, or will
be billed
to the related
Obligor, or in respect of which the
related Obligor is otherwise liable, in accordance with
the terms of such Contract;
(e) constitutes
a legal, valid, binding and irrevocable
payment obligation of the related Obligor, enforceable
in accordance with its
terms (subject to
contractual
discounts,
allowances, quality and quantity
adjustments);
11
<PAGE>
(f) provides for
payment in Dollars by the related Obligor;
(g) is payable by the
Obligor (or by a Paying Agent) into a
Permitted Lockbox or Lockbox Account;
(h) has not been repurchased by the Seller or deemed
collected pursuant to the provisions of this Agreement;
(i) if it were a Purchased Receivable, would not be a
Defaulted Receivable;
(j) has an Obligor who
is entitled to
purchase
additional
merchandise or receive
additional
services from the
Originators
under the terms of the Credit and
Collection Policy;
provided, that a Receivable which
has an Obligor who is not entitled to purchase
additional
merchandise or receive
additional
services
from the Originators
because such Obligor
has reached
the individual or aggregate credit limit established by
the Originators
shall
be deemed to satisfy this
paragraph (j);
(k) was not originated in or subject to the Laws of a
jurisdiction whose Laws would make such Receivable, the
related Contract, the
transfer of such Receivable by a
Subsidiary Originator
to the Company pursuant to a
Subsidiary Sale
Agreement,
the transfer of such
Receivable by the Company to the Seller pursuant to the
Sale Agreement
or the sale of the Participation
Interests in such
Receivable to the
Buyers hereunder
unlawful, invalid or unenforceable;
(l) is owned
solely by the Seller free and clear of all
Liens, except for the
Lien arising in connection with
this Agreement and any
Program Support
Agreement and
other Permitted Liens;
12
<PAGE>
(m) other than with respect to warranty claims being
handled in accordance
with the Credit and
Collection
Policy, no rejection or return of the goods or services
which give rise to such Receivable has occurred and all
goods and services in
connection therewith
have been
finally performed
or delivered to and
accepted by the
Obligor without Dispute;
(n) is not an
obligation of the United States, any state or
municipality or
any agency or instrumentality or
political subdivision thereof, unless otherwise agreed
to in writing by the Buyer Agents, the Seller and the
Affected Parties;
(o) is not subject to
any contractual right of setoff;
(p) is an obligation
representing part or
all of the sales
price of merchandise or services;
(q) such Receivable must, by its terms, require full
payment in respect
thereof to be paid no later than 60
days after the date the original invoice with respect
thereto was sent to the related Obligor;
(r) has an Obligor
who is located in the United States,
including Puerto Rico, or in Canada;
(s) has an Obligor who
is not an Affiliate
of the Company
or
the Seller;
(t) was acquired by
the Seller from the Company pursuant to
and in accordance with the terms of the Sale Agreement;
and
(u) the Obligor of which has not been deemed to be
ineligible by the
Administrator,
in its reasonable
discretion, upon ten
(10) Business Days' prior written
notice to the Seller.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
13
<PAGE>
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that is a member of a group of which the Seller
is a member
and which is treated as a single employer under Section 414 of the
Code.
"Event of Bankruptcy" shall mean, for any Person:
(a) if such
Person shall fail generally to, or admit in
writing its inability
to, pay its debts as they become
due; or
(b) a proceeding shall have been instituted in a court
having jurisdiction in
the premises seeking a decree or
order for relief in respect of such Person in an
involuntary case
under any applicable bankruptcy,
insolvency or other
similar law now or
hereafter in
effect, or
for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator,
conservator
(under the
Bank Conservation Act, as
amended, or otherwise)
or other similar official of
such Person
or for any substantial part of its
property, or for the
winding up or
liquidation of its
affairs; or
(c) the commencement by such Person of a voluntary case
under any applicable
bankruptcy,
insolvency or
other
similar Law
now or hereafter in effect, or such
Person's consent to the entry of an order for relief in
an involuntary
case under any such
Law, or consent to
the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator,
conservator
(under the
Bank Conservation Act, as
amended, or otherwise)
or other similar official of
such Person
or for any substantial part of its
property, or any
general assignment for the benefit of
creditors, or, if a
corporation or similar entity, any
corporate action
in furtherance of any of the
foregoing; or
(d) a decree or order
of a court or agency
or supervisory
authority having
jurisdiction in the
premises for the
appointment of
a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or conservator in any
insolvency, readjustment of debt, marshalling of assets
and liabilities,
or similar
proceedings,
shall have
been entered against such Person.
14
<PAGE>
"Existing Agreement" shall have the meaning set forth in the
recitals hereof.
"Exiting Buyer" shall have the meaning set forth in Section
2.05 hereof.
"Expiration Date" means the earliest of (i) June 3, 2013, (ii)
the date that the Administrator shall give notice of the
termination of all the
Buyers' obligations to purchase the Participation Interests or
make
Reinvestments hereunder pursuant to Section 10.02, (iii) with
respect to a
Buyer, the first date on which there shall no longer be any
Liquidity Agreement
or, solely with respect to Market Street any Program Support
Agreement, in
effect or the Liquidity Termination Date under a Liquidity
Agreement shall have
occurred in respect of such Buyer and its related Buyer Agent,
which date may be
extended from time to time for an additional period or periods in
accordance
with Section 2.05, and (iv) Seller shall fail to cause the
amendment or
modification of any Purchase Document as reasonably requested by
Moody's or S&P,
and such failure shall continue for 30 days after such amendment or
modification
is initially requested; provided, further, that if any Expiration
Date is not a
Business Day it shall occur on the next preceding Business Day.
"Facility Fee" shall mean, for a Buyer and for any Settlement
Period the facility fee set forth in separate letter agreement,
dated as of the
Closing Date, between the Seller and the applicable Buyer Agent
and/or Buyer, as
the same may be amended from time to time.
"Facility Fee Amount" shall mean, for any Settlement Period or
part thereof with respect to a Buyer, an amount equal to the
product of (i) the
Facility Fee of such Buyer; (ii) 102% of the average daily Maximum
Net
Investment of such Buyer during the days elapsed in such Settlement
Period and
(iii) the quotient of (a) the number of days elapsed during such
Settlement
Period, divided by (b) 360.
"Fifth Third" shall have the meaning set forth in the recitals
hereof.
"Financial Officer" of a referenced Person means the chief
financial officer, principal accounting officer, treasurer or
controller of such
Person, or such other officer of such Person as the Buyer may
permit in its
reasonable discretion.
15
<PAGE>
"Fiscal Month" shall mean, with respect to the Company or any
of its subsidiaries, including the Seller, each of the twelve (12)
monthly
accounting periods, each of which accounting periods contains
either four (4) or
five (5) weeks, into which the particular Fiscal Year of the
Company or such
subsidiary is divided.
"Fiscal Year" shall mean, with respect to the Company or any
of its subsidiaries, including the Seller, the 52-week or 53-week
period ending
on the Sunday nearest to October 31st of such year.
"GAAP" shall mean generally accepted accounting principles in
the United States of America, applied on a consistent basis and
applied to both
classification of items and amounts, and shall include, without
limitation, the
official interpretations thereof by the Financial Accounting
Standards Board,
its predecessors and successors.
"Income Taxes" shall mean any federal, state, local or foreign
taxes based upon, measured by, or imposed upon gross or net income,
gross or net
receipts, capital or net worth, in each case, attributable solely
to cash
received by the Affected Party that is not remitted or deemed
remitted to the
Company or the Seller (regardless of the name of the tax imposed),
including any
penalties, interest or additions to tax imposed with respect
thereto.
"Initial Closing Date" shall mean April 15, 2002.
"Investment" shall mean, on each date of determination, the
sum of (i) the Aggregate Net Investment and (ii) the Deferred
Purchase Price, if
any, as determined on the Closing Date or as set forth on the most
recently
delivered Settlement Statement.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction,
writ, decree or
award of any Official Body (including any law, rule, regulation or
governmental
order relating to the protection of the environment or to public or
employee
health or safety).
16
<PAGE>
"Lien", in respect of the property of any Person, shall mean
any ownership interest of any other Person, any mortgage, deed of
trust,
hypothecation, pledge, lien, security interest, grant of a power to
confess
judgment, preference, right to priority payment, filing of any
financing
statement, charge or other encumbrance or security arrangement of
any nature
whatsoever, including, without limitation, any conditional sale or
title
retention arrangement, any assignment, deposit arrangement,
consignment or lease
intended as, or having the effect of, security, or the filing of a
financing
statement in connection with any of the foregoing.
"Liquidation Day" shall mean each day which occurs on or after
(i) the date designated in a notice given by the Administrator to
the Seller
stating that the conditions contained in Section 4.03 hereof are
not satisfied,
(ii) the Expiration Date, (iii) the date on which a Termination
Event occurs and
is continuing and the Buyers have, pursuant to Section 10.02
hereof, by notice
to the Seller, terminated their obligation to purchase the
Participation
Interests or make Reinvestments hereunder or such obligation was
automatically
terminated pursuant to clause (i) of Section 10.01(j), or (iv) the
date on which
the Seller gives written notice to the Administrator, the Buyers
and the Buyer
Agents that it no longer wishes to sell interests in the
Receivables Pool to the
Buyers or permit Reinvestments to be made; provided, however, there
shall be no
Liquidation Day after the Aggregate Net Investment shall equal
zero.
"Liquidation Period" shall mean one or more consecutive
Liquidation Days.
"Liquidity Agreement" shall mean (i) with respect to Market
Street, the Liquidity Asset Purchase Agreement dated as of June 3,
2008 among
Market Street, PNC as Liquidity Agent and the Purchasers from time
to time party
thereto and (ii) with respect to Relationship Funding, the
Liquidity Agreement
dated as of June 3, 2008 among Relationship Funding, Fifth Third as
liquidity
agent and the liquidity providers from time to time party thereto,
as each may
from time to time be amended, supplemented, modified, replaced or
superseded.
"Liquidity Termination Date" shall mean for each Liquidity
Agreement or Program Support Agreement, the date on which such
Liquidity
Agreement or Program Support Agreement expires, and which date may
be extended
by the parties thereto in accordance with the terms thereof.
17
<PAGE>
"Lockbox Account" shall mean an account owned and maintained
by the Seller with a Permitted Lockbox Bank for the purpose of
depositing
payments made by Obligors.
"Lockbox Servicing Agreement" shall mean an agreement relating
to lockbox services in connection with a Permitted Lockbox which is
in form and
substance satisfactory to the Administrator and which has been
executed and
delivered to the Administrator by a Permitted Lockbox Bank.
"Loss Horizon Ratio" shall mean, with respect to any
Settlement Date, a fraction, expressed as a percentage, the
numerator of which
is the aggregate amount of sales of the Originators, attributable
to the
Staffing Solutions Business, during the four Accounting Periods
immediately
preceding such Settlement Date and the denominator of which is the
aggregate
outstanding balance of Eligible Receivables in the Receivables Pool
as of the
last day of the Accounting Period immediately preceding such
Settlement Date.
"Loss Ratio" shall mean, with respect to any Settlement Date,
the highest average Default Ratio for any three consecutive
Accounting Periods
during the period of twelve consecutive Accounting Periods
immediately preceding
such Settlement Date.
"Majority Buyers" shall mean, at any time, the Buyers whose
Maximum Net Investments aggregate more than 50% of the Aggregate
Maximum Net
Investment; provided, however, that so long as the Maximum Net
Investment of one
Buyer is greater than 50% of the Aggregate Net Investment and there
is more than
one Buyer, then "Majority Buyers" shall mean a minimum of two
Buyers.
"Market Street" shall have the meaning set forth in the
recitals hereof.
"Maximum Net Investment" shall mean, with respect to a Buyer,
the maximum amount which such Buyer is obligated to pay hereunder
on account of
any Purchase Obligation, as set forth below its signature to this
Agreement or
in any assignment agreement pursuant to which it became a Buyer, as
such amount
may be (a) modified in connection with any subsequent assignment,
(b) increased
with the consent of such Buyer or (c) decreased pursuant to Section
2.03 hereof.
"Moody's" shall mean Moody's Investors Service, Inc.
18
<PAGE>
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Seller or any
ERISA
Affiliate (other than one considered an ERISA Affiliate only
pursuant to
subsection (m) or (o) of Section 414 of the Code) is making or
accruing an
obligation to make contributions, or has within any of the
preceding five plan
years made or accrued an obligation to make contributions.
"Net Investment" shall mean with respect to a Buyer (a) for
the Closing Date, an amount equal to the Purchase Price (not
including the
Deferred Purchase Price, if any) paid by the applicable Buyer for
its
Participation Interest on the Closing Date, and (b) for any other
day, an amount
equal to the sum of (i) the Net Investment for such Buyer on the
Closing Date,
plus (ii) amounts paid to the Seller pursuant to Section 5.01
hereof since the
Closing Date as an increase in such Buyer's Net Investment, less
(iii) all
Collections and other amounts paid to such Buyer and not reinvested
(which shall
not include any amounts paid to such Buyer as Cost of Funds or
fees) pursuant to
Sections 2.03 (b), 5.03 (b), (d) and (e) and 5.04 hereof since the
Closing Date.
In the event that any amount received by such Buyer constituting
any portion of
Collections is rescinded or must otherwise be returned or restored
for any
reason to any Person, the Net Investment for such Buyer shall be
increased by
the amount of Collections so rescinded, returned or restored.
"Obligor" shall mean, with respect to any Receivable, the
Person who purchased goods or services under a Contract giving rise
to such
Receivable and who is obligated to make payments (either directly
or through a
Paying Agent) to an Originator or the Seller on such Contract in
respect of such
Receivable.
"Office" shall mean, when used in connection with the
Administrator, a Buyer or a Buyer Agent, its respective office
located at the
address set forth below its signature page hereto, or when used in
connection
with the Company or the Seller, its respective office located at
560 Lexington
Avenue, New York, New York 10022, or at such other office or
offices of the
Administrator, the Buyers, the Buyer Agents, the Company or the
Seller or
branch, subsidiary or Affiliate of any thereof as may be designated
in writing
from time to time by any party hereto to the other parties
hereto.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank,
commission,
department or instrumentality of either, or any court, tribunal,
grand jury or
arbitrator, in each case whether foreign or domestic.
19
<PAGE>
"Omnibus Amendment Agreement" shall have the meaning assigned
to such term in the recitals hereto.
"Omnibus Assignment Agreement" shall have the meaning assigned
to such term in the recitals hereof.
"Originators" shall have the meaning assigned to such term in
the recitals hereto.
"Participation Interest" shall mean, with respect to a Buyer,
at any time, an undivided percentage ownership interest equal to
such Buyer's
Allocation at such time in (a) all then outstanding Purchased
Receivables
included in the Receivables Pool, including, without limitation,
(i) all
Collections, and (ii) all collateral security, supporting
obligations, insurance
policies, letters of credit and surety bonds given on behalf of
Obligors to
secure or support payment of such Receivables, (b) all the Seller's
right, title
and interest in the Purchase Documents, and (c) any proceeds of any
of the
foregoing.
"Paydown Notice" shall have the meaning set forth in Section
2.03(b) hereof.
"Paying Agent" shall mean any subsidiary of the Company whose
principal business is acting as a paying agent intermediary between
an Obligor
and an Originator. (As of the Closing Date, ProcureStaff, Ltd., and
Information
Management Associates, Inc., both of which are Delaware
corporations, are the
only Paying Agents.)
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Permitted Lien" means any of the following:
(a) liens,
charges or other encumbrances for taxes and
assessments which are not yet due and payable;
(b) liens of or
resulting from any
judgment or award,
the
time for the appeal or petition for rehearing of which
shall not have
expired, or in respect of which the
20
<PAGE>
Seller and/or the Originator shall at any time in good
faith be prosecuting
an appeal or proceeding for a
review and in
respect of which a stay of execution
pending such appeal or proceeding for review shall have
been secured,
provided,
that
the interest sold
hereunder or any portion thereof sold or intended to be
sold hereunder
is not, in the opinion of the Buyer,
jeopardized thereby;
(c) liens, charges or
other encumbrances or priority claims
incidental to the
conduct of business or the ownership
of properties and assets (including warehousemen's and
attorneys' liens and
statutory landlords'
liens) and
deposits,
pledges or
liens to secure statutory
obligations, surety or
appeal bonds or other
liens of
like general nature
incurred in the ordinary course of
business and not in
connection with the
borrowing of
money, provided in each case, the obligation secured is
not overdue or, if overdue, is being contested in good
faith by appropriate actions or proceedings, and
provided, further,
that the interest sold hereunder or
any portion
thereof sold or intended to be sold
hereunder
is not, in the opinion
of the
Administrator
or any Buyer Agent, jeopardized thereby; and
(d) liens, charges or
encumbrances created pursuant to this
Agreement or a Program Support Agreement.
"Permitted Lockbox" shall mean a post office box owned and
maintained by the Seller for the purpose of receiving payments made
by Obligors.
"Permitted Lockbox Bank" shall mean any bank at which a
Lockbox Account is maintained, the short-term unsecured debt
obligations of
which are rated at least A-1 by S&P, and at least P-1 by
Moody's, appointed from
time to time by the Seller and approved by the Administrator.
"Person" shall mean an individual, corporation, partnership
(general or limited), trust, business trust, unincorporated
association, joint
venture, joint-stock company, Official Body, or any other entity of
whatever
nature.
21
<PAGE>
"Plan" shall mean any pension plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Code
that is maintained for employees of the Seller or any ERISA
Affiliate.
"PNC" shall have the meaning assigned to such term in the
recitals hereto.
"Potential Servicer Event" shall mean any event or condition
which, with the giving of notice, the passage of time or both,
would constitute
a Servicer Event.
"Potential Termination Event" shall mean any event or
condition which, with the giving of notice, the passage of time or
both, would
constitute a Termination Event.
"Program Fee" shall mean, for a Buyer and for any Settlement
Period, the rate per annum set forth in a separate letter
agreement, dated as of
the Closing Date, between the Seller and the applicable Buyer Agent
and/or
Buyer, as the same may be amended from time to time.
"Program Fee Amount" shall mean, for any Settlement Period or
part thereof with respect to a Buyer, an amount equal to the
product of (i) the
Program Fee of such Buyer and (ii) the average daily Net Investment
of such
Buyer during the days elapsed in such Settlement Period and (iii)
the quotient
of the number of days elapsed during such Settlement Period divided
by 360.
"Program Support Agreement" means, collectively, all liquidity
agreements, funding agreements (other than the Liquidity
Agreement), credit
agreements, letter of credit agreements, surety agreements,
security agreements,
letters of credit and all other agreements which may be in effect
from time to
time and which provide liquidity or credit support in respect of
the commercial
paper issued by the Buyer, and includes, without limitation, the
Bridge Loan
Agreement, dated June 3, 2008, between Relationship Funding and
Fifth Third.
"Pro Rata Portion" shall mean, with respect to a Buyer and its
related Buyer Agent, a fraction (expressed as a percentage), the
numerator of
which is the Maximum Net Investment of such Buyer, and the
denominator of which
is the Aggregate Maximum Net Investment.
22
<PAGE>
"P/S" shall have the meaning assigned to such term in the
recitals hereto.
"P/S Sale Agreement" shall have the meaning assigned to such
term in the recitals hereto.
"Purchase Availability Amount" shall mean, with respect to a
Buyer, as of any date, an amount equal to the excess, if any, of
(i) the Maximum
Net Investment of such Buyer as of such date over (ii) the Net
Investment of
such Buyer as of such date.
"Purchase Documents" shall mean this Agreement, each
Certificate of Participation, the Sale Agreement, each Subsidiary
Sale
Agreement, the Omnibus Assignment Agreement, the Omnibus Amendment
Agreement and
such other agreements, documents and instruments entered into and
delivered by
the Seller or the Company in connection with the transactions
contemplated by
this Agreement.
"Purchase Notice" shall mean each (i) notice delivered
pursuant to Section 4.02(e) of the Existing Agreement in the form
attached
thereto as Exhibit F and Section 4.02(e) hereof substantially in
the form
attached hereto as Exhibit F-1, and (ii) on the Closing Date, the
Seller
Assignment Confirmation Certificate substantially in the form
attached hereto as
Exhibit F-2, in such form and with such detail as the Buyer Agents
may require
from time to time.
"Purchase Obligation" shall have the meaning ascribed to such
term in Section 2.01 hereof.
"Purchase Price" shall mean, with respect to the purchase of a
Participation Interest by a Buyer, (a) with respect to Market
Street and
Relationship Funding, the amount of cash consideration set forth on
the Omnibus
Assignment Agreement as the cash amount to be paid by the
applicable Buyer to
TRFCO for such Participation Interest on the Closing Date and (b)
with respect
to any other Buyer, the amount of cash consideration set forth on
the Purchase
Notice or assignment agreement as the cash amount to be paid by the
applicable
Buyer to Seller or Buyer for such Participation Interest on the
applicable date
set forth on such Purchase Notice or assignment agreement.
"Purchased Receivable" shall mean a Receivable included in the
Receivables Pool in which the Buyers are maintaining their
Participation
Interests pursuant to the terms of this Agreement.
23
<PAGE>
"Rate of Collections" shall mean, for any Accounting Period, a
fraction, expressed as a percentage, the numerator of which is
equal to the
total Collections in respect of all Purchased Receivables in the
Receivables
Pool (including deemed Collections to the extent actually received
by the
Servicer pursuant to Section 5.07) during such Accounting Period
and the
denominator of which is equal to the aggregate Account Balances of
all Purchased
Receivables in the Receivables Pool as of the close of business on
the last day
of the immediately preceding Accounting Period.
"Rating Agency Condition" means, when applicable, with respect
to any material event or occurrence, receipt by the Administrator
(or the
applicable Buyer Agent) of written confirmation from each of
S&P's and Moody's
(and/or each other rating agency then rating the short term
promissory notes
issued or to be issued by any applicable Buyer) that such event or
occurrence
shall not cause the rating on the then outstanding short term
promissory notes
issued or to be issued by any applicable Buyer to be downgraded or
withdrawn.
"Receivable" shall mean, with respect to any Contract, all
receivables, contract rights, general intangibles, payment
intangibles,
accounts, chattel paper, documents, instruments (including, without
limitation,
promissory notes), amounts due and to become due to one or more of
the
Originators or the Seller arising under such Contract (including
but not limited
to finance charges accrued with respect to such amounts and fees),
and all other
rights, powers and privileges of the Originators or the Seller
arising
thereunder or related thereto and in the merchandise (including
returned goods)
and contracts relating thereto, assertable against any Person
whatsoever, all
supporting obligations, security interests, insurance policies,
letters of
credit, letter-of-credit rights, surety bonds, guaranties,
investment property
and property securing or supporting payment of such Receivable, all
Records
relating to such Receivable and all proceeds and products of any of
the
foregoing; provided, that the term shall not include any Receivable
the Obligor
of which is listed on Exhibit H hereto, as such exhibit may be
amended,
supplemented or modified from time to time.
"Receivables Pool" shall mean, at any time, the group of
Purchased Receivables then outstanding which have, on the Initial
Closing Date,
been identified by the Seller as constituting a pool and each
additional
Receivable thereafter added to such pool.
24
<PAGE>
"Records" shall mean correspondence, memoranda, computer
programs, tapes, discs, papers, books or other documents or
transcribed
information of any type whether expressed in ordinary or machine
readable
language.
"Reference Rate" shall mean, in respect of a Buyer, the rate
of interest established by the applicable Buyer Agent from time to
time as such
Buyer Agent's reference rate (if any); any change in the reference
rate shall
become effective as of the opening of business when such change
occurs. The
"Reference Rate" is not intended to be the lowest rate of interest
charged by
such Buyer Agent in connection with extensions of credit to
debtors.
"Reinvestment" shall mean the purchase by each Buyer and the
sale by the Seller of additional undivided percentage ownership
interests in
each and every Purchased Receivable utilizing the proceeds of
Collections that
were allocated to such Buyer for such purpose pursuant to Section
5.03(a).
"Relationship Funding" has the meaning set forth in the
recitals hereto.
"Remainder" shall have the meaning assigned to such term in
Section 5.03(a) hereof.
"Reportable Event" shall mean any reportable event as defined
in Section 4043(b) of ERISA or the regulations issued thereunder
with respect to
a Plan (other than a Plan maintained by an ERISA Affiliate that is
considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section
414 of the
Code).
"Responsible Officer" shall mean, as to any referenced Person,
the chief executive officer, chief financial officer, chief
accounting officer,
controller, or treasurer of such Person.
"Revised UCC Article 9" shall mean Uniform Commercial Code,
Article 9, 1999 Official Text, and the corresponding provisions as
revised and
in effect in connection therewith as amended, supplemented or
otherwise modified
from time to time.
"Sale Agreement" shall have the meaning assigned to such term
in the recitals hereto.
25
<PAGE>
"Seller" shall have the meaning assigned to such term in the
recitals hereto.
"Seller Assignment Confirmation Certificate" has the meaning
set forth in the definition of Purchase Notice.
"Servicer" shall mean the Company, or any Person other than
the Company or its Affiliates which, upon the termination of the
Company as
Servicer, succeeds to the functions performed by the Company as the
servicer of
the Purchased Receivables pursuant to a Complete Servicing Transfer
and a
Successor Servicing Agreement.
"Servicer Event" shall mean a Termination Event (other than
the Termination Event under Section 10.01(k) relating to the
Buyer).
"Servicer's Compensation" shall have the meaning ascribed to
such term in Section 6.06(e) hereof.
"Servicer's Compensation Rate" shall mean, as of any
Settlement Date, 0.50% per annum.
"Settlement Date" shall mean: (a) in the case of any
Settlement Period ended prior to the Closing Date, the "Settlement
Date" as
determined under (and defined in) the Existing Agreement; (b) in
the case of the
first Settlement Period ending after the Closing Date, June 18,
2008; and (c) in
the case of any subsequent Settlement Period, the eighteenth (18th)
calendar day
(or, if not a Business Day, the next succeeding Business Day) of
the calendar
month immediately following the calendar month in which the
immediately
preceding Settlement Date occurred.
"Settlement Period" shall mean (a) the period from and
including the Closing Date and ending on the day immediately
preceding the first
Settlement Date, and (b) thereafter, the period from and including
the
Settlement Date relating to the immediately preceding Settlement
Period and
ending on the day immediately preceding the next Settlement Date.
References in
this Agreement to the Settlement Date relating to a referenced
Settlement Period
shall mean the Settlement Date occurring one day after the close of
such
Settlement Period.
"Settlement Statement" shall mean a statement substantially in
the form of Exhibit B hereto, which, among other things, will
identify any and
26
<PAGE>
all Purchased Receivables included in the Receivables Pool as of
the last day of
the Accounting Period most recently completed, duly completed and
executed by a
Responsible Officer of the Company or, if the Company is no longer
the Servicer,
of the Seller and delivered to the Buyer pursuant to Section 5.01
hereof.
"Shaw Family" shall mean William Shaw and Jerome Shaw, and
their respective spouses and descendants and trusts established
principally for
the benefit of one or more of the foregoing, whether or not
constituting a
"group" within the meaning of the Securities Exchange Act of 1934,
as amended,
and the rules promulgated thereunder.
"S&P" shall mean Standard & Poor's Ratings Services.
"Subsidiary Originators" shall have the meaning assigned to
such term in the recitals hereto.
"Subsidiary Sale Agreement" shall have the meaning assigned to
such term in the recitals hereto.
"Successor Servicing Agreement" shall mean any agreement
between the Buyers, the Buyer Agents, the Administrator and any
Person, other
than the Company or its Affiliate, which contains provisions
concerning the
servicing of the Purchased Receivables substantially similar to the
provisions
contained herein, including Sections 5.03, 5.04, 5.06, 6.01, 6.02,
6.04, 6.06
and 6.07 hereof, pursuant to which such Person performs servicing
functions in
respect of the Purchased Receivables, and all agreements,
instruments and
documents attached thereto or delivered in connection therewith, as
any of the
same may from time to time be amended, supplemented or otherwise
modified and in
effect.
"Termination Event" shall have the meaning assigned to such
term in Section 10.01 hereof.
"Transaction Costs" shall have the meaning assigned to such
term in Section 11.01 hereof.
"TRFCO" shall have the meaning assigned to such term in the
recitals hereto.
"Volt Management" shall have the meaning assigned to such term
in the recitals hereto.
27
<PAGE>
"Volt Management Sale Agreement" shall have the meaning
assigned to such term in the recitals hereto.
"Volt Technical" shall have the meaning assigned to such term
in the recitals hereto.
"Volt Technical Sale Agreement" shall have the meaning
assigned to such term in the recitals hereto.
"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such
Multiemployer
Plan, as such terms are defined in Part I Subtitle E of Title IV of
ERISA.
"Yield Reserve" shall mean, with respect to any Settlement
Period, an amount equal to the following amount:
{(RR + SFR) x 1.5(DSO) x Eligible Receivables}
--------
360
where:
RR =
the Reference Rate in effect at such time,
DSO =
the Days' Sales Outstanding, and
SFR =
Servicer's Compensation Rate.
1.02. Interpretation and Construction. Unless the context of
this Agreement otherwise clearly requires, references to the plural
include the
singular, the singular the plural and the part the whole.
References in this
Agreement to "determination" by the Administrator, a Buyer or a
Buyer Agent
shall be conclusive absent manifest error and include good faith
estimates by
the Administrator, a Buyer or a Buyer Agent (in the case of
quantitative
determinations) and good faith beliefs by the Administrator, a
Buyer or a Buyer
Agent (in the case of qualitative determinations). The words
"hereof", "herein",
"hereunder" and similar terms in this Agreement refer to this
Agreement as a
whole and not to any particular provision of this Agreement. The
section and
other headings, and table of contents, contained in this Agreement
are for
reference purposes only and shall not control or affect the
construction of this
Agreement or the interpretation hereof in any respect. Section,
subsection and
appendix references are to this Agreement unless otherwise
specified. As used in
this Agreement, the masculine, feminine or neuter gender shall each
be deemed to
include the others whenever the context so indicates. Terms not
otherwise
defined herein which are defined in Revised UCC Article 9 as in
effect in New
York on the date hereof shall have the respective meanings ascribed
to such
terms therein unless the context otherwise clearly requires. This
Agreement
shall be construed as a whole and in accordance with its fair
meaning.
28
<PAGE>
ARTICLE II
AGREEMENT TO PURCHASE AND SELL
------------------------------
2.01. Purchase Limits. Subject to the terms and conditions
hereof, the Seller may at its option sell to the Buyers, and the
Buyers agree to
purchase from the Seller (such agreement being referred to herein
as the
"Purchase Obligation"), at any time and from time to time on and
after the date
hereof and to but excluding the Expiration Date, undivided
percentage ownership
interests in the Receivables Pool by the Seller selling and such
Buyer
purchasing the Participation Interest in such Receivables Pool.
Subject to the
terms and conditions hereof, such Buyer shall also (i) make
Reinvestments by
permitting the Servicer to cause Collections allocated to such
Buyer to be
applied to the purchase of additional undivided percentage
ownership interests
in the Receivables Pool, and (ii) increase its Net Investment in
its
Participation Interest on any Settlement Date at the request of the
Seller
(without regard to a minimum amount). No Buyer shall purchase a
Participation
Interest on the Closing Date, or permit a Reinvestment to be made
on any day, or
increase its Net Investment on any Settlement Date, to the extent
that the
amount of such purchase, Reinvestment or increase shall cause (i)
the Aggregate
Net Investment (after giving effect to such purchase, Reinvestment
or increase)
to exceed the Aggregate Maximum Net Investment then in effect, (ii)
the Net
Investment of a Buyer (after giving effect to such purchase,
Reinvestment or
increase) to exceed the Maximum Net Investment of such Buyer then
in effect or
(iii) the Aggregate Buyers' Allocation (after giving effect to such
purchase,
Reinvestment or increase) to exceed 100%. No Buyer shall be
obligated to
increase its Maximum Net Investment. No Buyer shall purchase a
Participation
Interest if the Buyer can neither issue its commercial paper notes
or short-term
promissory notes nor otherwise borrow in order to fund the Purchase
Price of
such Participation Interest, or to make any such purchase or any
Reinvestment or
increase its Net Investment on any Settlement Date at or after the
earlier to
occur of (i) the Expiration Date, and (ii) the reduction of the
Maximum Net
Investment to zero pursuant to Section 2.03 hereof. For the
avoidance of doubt,
each increase in a Buyer's Net Investment under this Agreement
shall be deemed
to be a purchase by such Buyer under this Agreement.
29
<PAGE>
2.02. Amount of Purchases. Market Street, as a Buyer and
Relationship Funding, as a Buyer shall pay to TRFCO on the Closing
Date in
immediately available funds, an amount equal to such Buyer's Pro
Rata Portion of
TRFCO's aggregate Net Investment under (and as defined in) the
Existing
Agreement at such time, whereupon, TRFCO shall be deemed to have
sold,
transferred and assigned to such Buyers without recourse,
representation or
warranty (except that TRFCO represents and warrants that, it is
sole owner and
it has good and marketable title to such interest and upon the
effectiveness of
such transfer, the undivided interest in the Net Investment of
TRFCO sold to
Market Street and Relationship Funding pursuant to the Omnibus
Assignment
Agreement will be free and clear of any Lien), and Market Street
and
Relationship Funding shall be deemed to have thereby irrevocably
taken, received
and assumed from TRFCO, an undivided interest in all of such Net
Investment of
TRFCO outstanding under the Existing Agreement, so that immediately
upon giving
effect to such payments, each of Market Street and Relationship
Funding will
have a Participation Interest hereunder based upon its Pro Rata
Portion of the
Aggregate Net Investment.
2.03. Reduction of the Aggregate Maximum Net Investment and
Net Investment; Termination of the Agreement.
(a) Reduction of Aggregate Maximum Net Investment. The Aggregate
Maximum
Net Investment shall be reduced to zero (i) on the Expiration Date,
or (ii) in
accordance with Section 10.02 hereof. In addition, upon written
notice from the
Seller to Administrator and the Buyer Agents, the Seller may reduce
in whole or
in part the Aggregate Maximum Net Investment, such reduction to be
applied as a
reduction of the Maximum Net Investment of each Buyer on a pro rata
basis based
on its respective Pro Rata Portion, effective as of the next
Settlement Date on
or after the thirtieth (30th) day following the date on which such
notice is
given; provided, however, that (i) any partial reduction must be in
an amount
equal to $5,000,000 or any greater amount which is an integral
multiple of
$5,000,000, and (ii) if the Aggregate Maximum Net Investment at the
time of such
notice is less than or equal to $20,000,000, the Seller may only
elect to reduce
the amount of the Aggregate Maximum Net Investment to zero.
Notwithstanding any
other provision of
30
<PAGE>
this Agreement, the Aggregate Maximum Net Investment may not at any
time be
reduced below the amount of the Aggregate Net Investment in effect
at such time.
(b) Reduction of the Aggregate Net Investment. If at any time the
Seller
shall wish to cause the reduction of the Aggregate Net Investment
on any date
other than a Settlement Date (but not to commence the permanent
liquidation of
the Participation Interest), the Seller may do so upon ten (10)
days prior
written notice thereof (the "Paydown Notice") in substantially the
form of
Exhibit J hereto to the Administrator and the Buyer Agents (such
notice to
include the amount of such proposed reduction which shall be
allocated to the
Net Investment of each Buyer in accordance with the Buyers
applicable Pro Rata
Portions and the proposed date on which such reduction will
commence, which date
shall be agreed to by the Administrator and the Buyer Agents). On
the proposed
date of commencement of such reduction and on each day thereafter,
the Servicer
shall refrain from making Reinvestments of Collections until the
amount of such
Collections not so reinvested shall equal the desired amount of
such aggregate
reduction. The Servicer shall pay to the Buyers Collections in
respect of the
Buyer's Allocation received on each day during the period in which
Reinvestment
of Collections has been suspended pursuant to this Section 2.03(b)
on the date
which is two (2) Business Days after the day on which such
Collections are
received by the Servicer. The Aggregate Net Investment shall be
deemed reduced
in the amount to be paid to the Buyers only when in fact so paid.
The Seller
shall use reasonable efforts to attempt to choose a reduction
amount, and the
date of the commencement thereof, so that such reduction shall
commence and
conclude in the same Settlement Period. The Seller shall pay to the
Buyers an
amount equal to any actual loss, cost or expense incurred by the
Buyers as the
result of the repayment of the Aggregate Net Investment prior to
the maturity
date of any (x) loans made to the Buyers by third parties or (y)
commercial
paper notes or short-term promissory notes issued by the Buyers, in
each case
for the purpose of maintaining the Participation Interests. Each
Buyer agrees to
give the Seller prompt written notice (in reasonable detail
consistent with its
customary practices) of any such loss, cost or expense.
(c) Termination of the Agreement. This Agreement shall terminate at
the
latest to occur of (i) the Expiration Date, (ii) the first day on
which the
Aggregate Net Investment equals zero, all other amounts accrued and
owing to the
31
<PAGE>
Administrator, the Buyers and the Buyer Agents under this Agreement
have been
paid in full and the Aggregate Maximum Net Investment has been
reduced to zero,
or (iii) the first day on which all Eligible Receivables in the
Receivables Pool
have been collected or written off by the Seller and the Aggregate
Maximum Net
Investment has been reduced to zero; provided, however, that the
covenants,
representations, warranties and indemnities of the Company, the
Servicer and the
Seller, as the case may be, to the Administrator, the Buyers and
the Buyer
Agents contained herein or made pursuant hereto shall survive such
termination
in accordance with Section 11.14. Upon such termination, the Buyers
shall convey
to the Seller, without recourse, their Participation Interests in
all Purchased
Receivables and shall deliver to the Seller all instruments and
documents
relating thereto. Upon such reconveyance, the Deferred Purchase
Price shall be
deemed to have been paid in full.
2.04. Fees Payable to the Buyer.
(a) Facility Fee and Program Fee. The Seller agrees to pay to
applicable
Buyer Agent, for the account of the applicable Buyer, as
applicable, in
consideration for the Purchase Obligation hereunder, from and
including the
Closing Date to but excluding the Expiration Date, the Facility Fee
Amount and
the Program Fee Amount. The accrued Facility Fee Amount and the
Program Fee
Amount shall be due and payable to each Buyer in accordance with
Sections 5.03
and 5.04 hereof until the date on which the Net Investment of such
Buyer shall
have the been finally paid in full and this Agreement is
terminated. To the
extent the Facility Fee Amount and the Program Fee Amount is not
paid from
Collections in accordance with Section 5.03 or 5.04 hereof, the
Facility Fee
Amount and the Program Fee Amount shall be absolute and
unconditional
obligations of the Seller.
(b) Fees Non-Refundable. The fees to be paid to the Buyers pursuant to
this Section 2.04 are non-refundable and shall not be refunded for any reason
whatsoever, including, without limitation, the later reduction or termination
of the Aggregate Maximum Net Investment in whole or in part in
accordance with
the provisions of this Agreement.
Section 2.05. Extension of the Liquidity Termination Date.
Provided that no Termination Event or Potential Termination exists
and is
continuing, Seller may request that Administrator seek from each
Buyer Agent an
extension of each Liquidity Termination Date under each applicable
Liquidity
32
<PAGE>
Agreement by submitting a request for an extension (each, an
"Extension
Request") to the Administrator and Buyer Agents no more than 210
days prior to
the applicable Liquidity Termination Date then in effect. Each
Extension Request
must specify the new Liquidity Termination Date requested by Seller
and the date
(which must be at least 30 days after the Extension Request is
delivered to the
Administrator and Buyer Agents) as of which the Buyer Agents must
respond to the
Extension Request (the "Response Date"). The requested new
Liquidity Termination
Dates shall be no more than 364 days after the Response Date,
including the
Response Date as one of the days in the calculation of the days
elapsed.
Promptly upon receipt of an Extension Request, the Administrator
shall notify
the Buyer Agents of the contents thereof and shall request each
Buyer Agent to
approve the Extension Request. Each Buyer Agent approving or
denying the
Extension Request shall deliver its written approval or denial to
the
Administrator no later than the Response Date (it being understood
that (i) the
Buyer Agents may accept or decline such Extension Request in their
sole
discretion and on such terms as they may elect and (ii) any Buyer
Agent that
does not respond to any Extension Request on or before the Response
Date shall
be deemed to have declined), whereupon the Administrator shall
notify Seller
within two (2) Business Days thereafter as to which Buyer Agents
have approved
and which Buyer Agents have declined the Extension Request. With
respect to any
Buyer Agents that approve such Extension Request, the Buyer Agents
shall enter
into such documents as the Buyer Agents may deem necessary or
appropriate to
reflect such extension, all reasonable costs and expenses incurred
by the
Buyers, the Buyer Agents and the Administrator in connection
therewith
(including reasonable attorneys' fees) shall be paid by the Seller
and the
Administrator shall promptly notify the Seller, the Buyers and
their respective
Buyer Agents of the new Liquidity Termination Date; provided,
however, that the
failure of the Administrator to so notify the Seller of any Buyer
Agent's
determination to decline any Extension Request shall not affect
the
understanding and agreement that such Buyer and its respective
Buyer Agent
(collectively, an "Exiting Buyer") shall be deemed to have declined
to grant
such Extension Request. Upon the occurrence of the current
scheduled Liquidity
Termination Date of an Exiting Buyer, the Aggregate Maximum Net
Investment shall
be reduced by an amount equal to the Maximum Net Investment of such
Exiting
Buyer.
Section 2.06. Additional Buyers. The Seller may, with the
written consent of the Administrator and each Buyer Agent, add
additional
Persons as Buyers. Each new Buyer shall become a party hereto, by
executing and
delivering to the Administrator and the Seller, an assignment
agreement in the
form and substance reasonably acceptable to the Administrator.
33
<PAGE>
ARTICLE III
BUYER'S ALLOCATION
------------------
3.01. Buyer's Allocation. The "Buyer's Allocation" for a Buyer
on any day of determination shall be a percentage, not in excess of
100%, equal
to the quotient of (i) such Buyer's Pro Rata Portion of the
Investment, divided
by (ii) the positive result of (a) the aggregate Account Balances
of all
Eligible Receivables included in the Receivables Pool on the date
of
determination before giving effect to Collections on such date,
less (b) the sum
(without duplication) of (i) the aggregate amount by which the
Account Balance
of Eligible Receivables of each Obligor exceeds the Concentration
Limit for such
Obligor, and (ii) the amount by which the aggregate Account
Balances of Eligible
Receivables payable to a Paying Agent exceeds 5% of the aggregate
Account
Balances of all Eligible Receivables.
3.02. Frequency of Computation of the Buyer's Allocation. The
Buyer's Allocation for a Buyer shall be initially computed as of
the opening of
business of the Servicer on the Closing Date. Thereafter, until the
Aggregate
Net Investment shall be reduced to zero, the Buyer's Allocation for
a Buyer
shall be automatically recomputed as of the close of business of
the Servicer on
each Business Day, and the Buyer's Allocation for such Buyer shall
constitute
the percentage ownership interest for such Buyer in the Receivables
Pool on such
date; provided, however, that on and after a Liquidation Day and
during the
continuance of a Liquidation Period, the Buyer's Allocation shall
be equal to
such Buyer's Allocation as computed on the Business Day immediately
preceding
the commencement of such Liquidation Period. The Buyer's Allocation
for a Buyer
shall be reduced to zero at such time as the related Net Investment
of such
Buyer shall be reduced to zero and the Maximum Net Investment of
such Buyer has
been reduced to zero, such Buyer shall have received all amounts in
respect of
accrued and unpaid Cost of Funds of such Buyer, the Program Fee,
the Facility
Fee and all other amounts payable to such Buyer, its related Buyer
Agent and the
Administrator pursuant to this Agreement, and the Servicer,
provided the Company
is not the Servicer, shall have received the accrued Servicer's
Compensation.
34
<PAGE>
ARTICLE IV
CLOSING PROCEDURES
------------------
4.01. Purchase and Sale Procedures.
(a) General. The sale of the Participation Interests hereunder
shall,
with respect to the Receivables Pool, transfer ownership to the
Buyers of an
undivided percentage ownership interest in each Receivable in such
Receivables
Pool, effective: (i) upon the Closing Date, in the case of
Receivables included
in the Receivables Pool on such date; and (ii) upon the creation of
such
Receivable and the simultaneous acquisition thereof by the Seller,
in the case
of each Receivable subsequently created.
(b) Indemnity for Failure to Close. If a sale of the
Participation
Interests fails to occur on the Closing Date as agreed to by the
Administrator,
the Buyers and the Buyer Agents pursuant to Section 4.04 hereof
(other than by
virtue of any breach by the Administrator, a Buyer or a Buyer
Agent), the Seller
shall reimburse the Administrator, the Buyers and the Buyer Agents
on demand for
any loss, cost or expense (including loss of margin) incurred by
such parties
with respect to this Agreement, its obligations hereunder or its
funding of the
proposed Purchase Price (including, without limitation, any loss,
cost or
expense in obtaining, liquidating or employing deposits as loans
from third
parties or the loss, cost or expense of issuing its commercial
paper notes or
short-term promissory notes in order to fund such Purchase Price)
until the
earlier of (A) the Closing Date as specified in a subsequent
Purchase Notice or
as agreed to by the Administrator, the Buyers and the Buyer Agents
pursuant to
Section 4.04 hereof or (B) the date on which (i) such Buyer
redeploys any funds
committed to fund such Purchase Price at a rate of return greater
than or equal
to the Cost of Funds of such Buyer, or (ii) such commercial paper
notes or
short-term promissory notes become due and payable, as the case may
be. Each
Buyer or its Buyer Agent shall notify the Seller (in reasonable
detail
consistent with its customary practices) of the amount determined
by such Buyer
or Buyer Agent to be necessary to compensate such Buyer for such
loss, cost or
expense. Such amount shall be due and payable by the Seller to the
applicable
Buyer ten (10) Business Days after such notice is given.
35
<PAGE>
4.02. Conditions Precedent to the First Purchase. The
obligation of each Buyer to purchase a Participation Interest from
TRFCO on the
Closing Date shall be subject to the satisfaction on or before June
3, 2008 of
the conditions set forth in Section 4.03 hereof and the following
further
conditions:
(a) Standing. The Administrator, each Buyer and each Buyer
Agent
shall have received (i) from each of the Seller and the Company, a
certificate,
dated a recent date relative to the Closing Date as determined by
the
Administrator, of the Secretary of State or other similar official
as to its
good standing under the Laws of its jurisdiction of organization,
and (ii) from
the Company, certificates, dated a recent date relative to the
Closing Date as
determined by the Administrator, of the Secretary of State or other
similar
official of each other state, if any, in which the Company
maintains its Chief
Executive Office or principal accounting office.
(b) Opinions of
Counsel. The Administrator, each Buyer and each
Buyer Agent shall have received favorable written opinions of
Howard Weinreich,
Esq., General Counsel of the Company, and of Troutman Sanders,
LLP, counsel
for the Subsidiary
Originators,
the Company
and the Seller,
each dated the
Closing Date, each in form and substance acceptable to the Administrator, the
Buyers and
the Buyer Agents. For the avoidance of doubt, the
Administrator, the
Buyers and the Buyer Agents shall have received
favorable
written opinions
regarding
certain
corporate
matters,
enforceability and perfection issues and the true sale and
nonconsolidation
nature of the
transactions each in
form and substance
acceptable to the
Administrator and the Buyer Agents.
(c) Financing
Statements, etc. The Administrator, each Buyer and each
Buyer Agent shall have received evidence satisfactory to it of the
completion of
all recordings, registrations and filings as may be necessary or,
in the opinion
of the Administrator and the Buyer Agents, desirable, to evidence
or perfect the
ownership interests to be acquired by the Buyers hereunder,
including, without
limitation:
(i)
acknowledgment copies of proper financing statements on
Form UCC-1 and/or Form UCC-3 filed on or prior to the Closing Date,
(A)
36
<PAGE>
naming the Subsidiary Originators as debtor and/or seller, the
Company
as buyer and/or assignor and the Administrator as secured
party/total
assignee (in respect of the transfer of Receivables contemplated by
the
Subsidiary Sale Agreements), (B) naming the Company as debtor
and/or
assignor, the Seller as buyer and/or assignor and the Administrator
as
secured party/total assignee (in respect of the transfer of
Receivables
contemplated by the Sale Agreement) and (C) naming the Seller as
debtor
and/or seller and Administrator as secured party and/or buyer
(in
respect of the transfer of the Participation Interests contemplated
by
this Agreement) or such other similar instruments or documents as
may be
necessary or, in the opinion of the Administrator or the Buyer
Agents,
advisable, under Revised UCC Article 9 or any comparable law of
all
appropriate jurisdictions to evidence or perfect the Buyers'
Participation Interests; and
(ii)
evidence of
searches satisfactory to the Administrator
and the Buyer Agents listing all effective financing statements
which
name the Subsidiary Originator (or any predecessor entity of
such
Subsidiary Originator), the Company (or any predecessor entity of
the
Company) or the Seller as debtor and/or assignor in the
jurisdictions in
which filings are made pursuant to subsection (i) above (or any
other
jurisdiction that would have been a necessary or an advisable
filing
jurisdiction prior to the adoption of Revised UCC Article 9 as in
effect
in New York), together with copies of such financing statements,
none of
which (other than the filings made pursuant to subsection (i)
above)
shall cover any Receivables or the related Contracts, and of tax
lien
searches satisfactory to the Administrator and the Buyer
Agents.
(d) Lockbox
Agreements. The Administrator, each Buyer and each Buyer
Agent shall have received duly executed copies of Lockbox Servicing
Agreements
with each of one or more Permitted Lockbox Banks and an assignment
of TRFCO's
rights under such Lockbox Servicing Agreements executed by the
applicable
Permitted Lockbox Bank.
(e) Seller Assignment Confirmation Certificate. The Administrator,
the
Buyer and the Buyer Agents shall have received from the Seller, no
less than two
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(2) Business Days prior to the Closing Date, a certificate (the
"Seller
Assignment Confirmation Certificate") in substantially the form of
Exhibit F-2
hereto, utilizing information as of the last day of the most
recently completed
Accounting Period for such Closing Date, together with such
written
documentation of the procedures utilized and calculations made in
connection
with the preparation of such Seller Assignment Confirmation
Certificate as the
Administrator, Buyer or Buyer Agents requested. The Administrator,
the Buyer and
the Buyer Agents shall have received a copy of such Seller
Assignment
Confirmation Certificate no later than 12:00 P.M. (New York time)
one Business
Day prior to the Closing Date.
(f) Responsible
Officer Certificate. The Administrator, each Buyer and
each Buyer Agent shall have received a certificate of a Responsible
Officer,
dated the Closing Date, from each of the Seller, the Company and
each
Originator, in substantially the form attached hereto as Exhibit C,
and as to
such other matters incident to the transactions contemplated by the
Purchase
Documents as the Administrator, the Buyers and the Buyer Agents may
reasonably
request, in form and substance satisfactory to the Administrator,
the Buyers and
the Buyer Agents. The Administrator, the Buyers and the Buyer
Agents may
conclusively rely on any such certificate unless and until a later
certificate
revising the prior certificate is received by the Administrator,
the Buyers and
the Buyer Agents.
(g) Certificate of
Participation. Each Buyer shall have received on the
Closing Date, a Certificate of Participation executed on behalf of the
Seller
by a Responsible Officer.
(h) Buyer's Review.
The Administrator, each Buyer and each Buyer Agent
shall have completed to its satisfaction a review of the Servicer's
billing and
collection operations and reporting systems.
(i) Regulatory Approvals. The Company, the Originators and the
Seller
shall have received all necessary and desirable regulatory
approvals, if any, of
the transactions under this Agreement, the Sale Agreement and the
Subsidiary
Sale Agreements.
(j) Creditors'
Consent. The Administrator, each Buyer and each Buyer
Agent shall have received evidence that the required lenders under
any existing
credit agreement to which the Company or any Subsidiary Originator
is party, and
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any other creditors whose consent is required, have granted their
consent to the
execution and delivery of the Purchase Documents and the
consummation of the
transactions contemplated hereby and thereby in form and substance
satisfactory
to the Administrator, the Buyers and the Buyer Agents.
(k) The Administrator,
each Buyer and each Buyer Agent shall have
received an executed Omnibus Assignment Agreement. (l) Each
Liquidity Agreement
shall have been duly executed by, and delivered to, the parties
thereto.
4.03. Conditions Precedent to Each Purchase, Reinvestment and
Increase of Aggregate Net Investment. The obligation of each Buyer
to purchase
its Participation Interest from TRFCO on the Closing Date, to make
a
Reinvestment on any date, or to increase the Aggregate Net
Investment in the
Receivables Pool on any Settlement Date, is subject to the
performance by each
of the Company, the Servicer and the Seller of its respective
obligations
hereunder on or before the Closing Date, such date on which a
Reinvestment will
be made or such Settlement Date, and to the satisfaction of the
following
further conditions:
(a) Details, Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by the
Purchase
Documents or the Receivables to be included in the Receivables Pool
on the
Closing Date, such Settlement Date or such date of such
Reinvestment shall be in
form and substance satisfactory to the Administrator and each Buyer
Agent, and
the Administrator and each Buyer Agent shall have received all such
originals or
certified copies or other copies of such documents and proceedings
in connection
with such transactions, in form and substance satisfactory to the
Administrator
and each Buyer Agent.
(b) Representations and Warranties. On and as of such date (i)
the
representations and warranties of the Seller contained in Article
VIII hereof,
of the Company contained in the Sale Agreement and of the
Subsidiary Originators
contained in the Subsidiary Sale Agreements shall be true and
correct in all
material respects with the same force and effect as though made on
and as of the
Closing Date, such Settlement Date or such date of Reinvestment
(except to the
extent that such representations and warranties relate solely to an
earlier
date), (ii) the Servicer and the Seller shall be in compliance with
the
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respective covenants contained in Article IX hereof, the Company
shall be in
compliance with its respective covenants contained in the Sale
Agreement and the
Subsidiary Originators shall be in compliance with their respective
covenants
contained in the Subsidiary Sale Agreements, and (iii) no
Termination Event or
Potential Termination Event shall occur as a result of the purchase
and sale of
the Participation Interests in the Receivables Pool on the Closing
Date, such
Settlement Date or such date of Reinvestment, or shall have
occurred and be
continuing or shall exist on the Closing Date, such Settlement Date
or such date
of Reinvestment.
(c) Sale Agreement. The Sale Agreement shall be in full force
and
effect.
(d)
Subsidiary Sale Agreements. The Subsidiary Sale Agreements shall
be
in full force and effect.
(e) Liquidity Agreements. Each Liquidity Agreement shall be in
full
force and effect and Relationship Funding shall have sufficient
unused liquidity
support (after giving effect to the purchase to occur on such date)
pursuant to
such Liquidity Agreement.
(f) Purchase Notice. Each Buyer and its respective Buyer Agent
shall
have received from the Seller or the Administrator a Purchase
Notice in
accordance with Section 4.02(e) of this Agreement notwithstanding
any reference
in Section 4.02(e) to the Closing Date.
(g) Receipt of Funds. Relationship Funding shall have received
from
sources available to it funds for such purpose in an amount
sufficient to make
such purchase.
(h) Buyers Allocation. After giving affect to such purchase,
Reinvestment or increase, each Buyer's Allocation shall not exceed
100% and the
Aggregate Buyers' Allocation shall not exceed 100%.
4.04. Purchase Price. Subject to the terms and conditions
hereof, and relying upon the representations and warranties set
forth herein, on
the Closing Date, each Buyer shall purchase its Participation
Interest in the
Receivables Pool from TRFCO in accordance with the Omnibus
Assignment Agreement.
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4.05. Security Interest. (a) The sale of the Participation
Interests hereunder shall, except to the extent specified in
Section 5.06
hereof, be made without recourse to the Seller with respect to any
loss arising
from Defaulted Receivables, provided, that nothing contained herein
shall limit
the rights of the Administrator, the Buyers and the Buyer Agents
provided in
Section 2.04, this Section, Article V, Section 6.04 and Articles
VII and XI
hereof.
(b) Notwithstanding that the other provisions of this Agreement
purport
to characterize the conveyance by the Seller to the Buyers as
effecting the sale
by the Seller, to the Buyers, of undivided percentage ownership
interests in and
to the Receivables Pool, Seller and the Buyers acknowledge and
agree that, under
applicable law, said conveyance may constitute a conveyance
intended as
security. Accordingly, to secure all of the Seller's obligations
(monetary or
otherwise) owing to the Buyers or the Administrator under this
Agreement and the
Purchase Documents to which Seller is a party, whether now or
hereafter arising,
due or to become due, direct or indirect, absolute or contingent,
the parties
hereto intend that the financing arrangements from the Buyers in
favor of the
Seller be secured by a Lien in favor of the Administrator (on
behalf of the
Buyers) against all Purchased Receivables and the other collateral
described
below (including proceeds). To that end, this Agreement is intended
to
constitute a security agreement under Revised UCC Article 9, as in
effect in New
York, for purposes of the attachment of such Lien. In furtherance
thereof, the
Seller granted to TRFCO pursuant to the Existing Agreement (and
does hereby
ratify and confirm its grant to TRFCO pursuant to the Existing
Agreement of) a
first priority security interest in and against all of the Seller's
right, title
and interest in and to the Purchased Receivables (including the
proceeds
thereof) and hereby grants to the Administrator, on behalf and for
the benefit
of the Buyers, on the terms and conditions of this Agreement a
first priority
security interest in and against all of the Seller's right, title
and interest
in and to the following:(A) Purchased Receivables (including the
proceeds
thereof): (B) all Collections with respect to such Purchased
Receivables (C) the
Permitted Lockboxes and Lockbox Accounts (including but not limited
to the
Lockbox Account referenced on Exhibit G hereto), whether
constituting deposit
accounts or otherwise, and all amounts on deposit therein, and all
certificates
and instruments, if any, from time to time evidencing such Lockbox
Accounts
(collectively, the "Lockbox and Lockbox Account Collateral"); (D)
the Purchase
Documents (but none of the obligations), including any and all
supporting
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<PAGE>
obligations, and any and all security interest or other liens in
and to any and
all personal property securing any right to payment or performance
under any
Purchase Document; (E) to the extent not otherwise included in the
foregoing,
all accounts, general intangibles (including but not limited to
payment
intangibles) and instruments (as such terms are defined in Revised
UCC Article
9, as in effect in New York); and (F) all proceeds of, and all
amounts received
or receivable under any or all of the foregoing for the purposes of
securing
such obligations of the Seller and the rights of the Administrator,
the Buyers
and the Buyer Agents under this Agreement.
(c) For avoidance of doubt, the following shall apply for purposes
of
subsection (b), above: (i) the Purchased Receivables, Lockbox and
Lockbox
Account Collateral, accounts, general intangibles and instruments,
and other
personal property, included as collateral covered under this
Agreement include
all such personal property in existence as of the Initial Closing
Date, and the
Closing Date as well as all such personal property thereafter
arising, created
or acquired, and that, insofar as this Agreement is held to secure
indebtedness,
the collateral also secures future advances; (ii) Seller
acknowledges and
consents to the assignment by TRFCO to the Administrator, on behalf
and for the
benefit of the Buyers, of all of TRFCO's right, title and interest
in the
security interest granted by the Seller to TRFCO pursuant to the
Existing
Agreement; (iii) references in this Agreement to "Purchased
Receivables", and
like references, are to be construed, mutatis mutandis, to reflect
a conveyance
intended as security rather than an outright conveyance; and (iv)
in the event
that the conveyance of the undivided percentage ownership interest
in and to the
Purchased Receivables in fact were held to be a true sale thereof
from Seller to
Buyers, then, notwithstanding such treatment, the security interest
grant under
subsection (b) nevertheless would remain valid and enforceable in
and to the
Lockbox and Lockbox Account
