<PAGE>
EXHIBIT 10.2
RECEIVABLES PURCHASE AGREEMENT
***Indicates that a portion of the exhibit
has been omitted based on a request
for confidential treatment submitted to the
Securities and Exchange Commission.
The omitted portions have been filed
separately with the Commission.
dated as of April 1, 2005
among
COTT USA RECEIVABLES CORPORATION,
as Seller,
COTT BEVERAGES INC.,
as Servicer,
PARK AVENUE RECEIVABLES COMPANY, LLC,
as Company,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO
as Financial Institutions,
and
JPMORGAN CHASE BANK, N.A.,
as a Financial Institution and as Agent
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Table of Contents
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ARTICLE I PURCHASE
ARRANGEMENTS......................................................
1
Section 1.1 Purchase
Facility.......................................... 1
Section 1.2
Increases..................................................
2
Section 1.3 Decreases
................................................. 2
Section 1.4 Payment
Requirements....................................... 2
ARTICLE II PAYMENTS AND
COLLECTIONS...................................................
3
Section 2.1 Payments
.................................................. 3
Section 2.2 Collections
Prior to Amortization.......................... 3
Section 2.3 Collections
Following Amortization......................... 4
Section 2.4 Application of
Collections................................. 4
Section 2.5 Payment
Recission.......................................... 5
Section 2.6 Maximum
Purchaser Interests................................ 5
Section 2.7 Clean Up
Call.............................................. 5
ARTICLE III COMPANY FUNDING
...........................................................
5
Section 3.1 CP Costs
.................................................. 5
Section 3.2 CP Costs
Payments.......................................... 5
Section 3.3 Calculation of
CP Costs.................................... 6
ARTICLE IV FINANCIAL
INSTITUTION FUNDING..............................................
6
Section 4.1 Financial
Institution Funding.............................. 6
Section 4.2 Yield
Payments............................................. 6
Section 4.3 Selection and
Continuation of Tranche Periods.............. 6
Section 4.4 Financial
Institution Discount Rates....................... 6
Section 4.5 Suspension of
the LIBO Rate................................ 7
ARTICLE V
REPRESENTATIONS AND
WARRANTIES.............................................
7
Section 5.1 Representations
and Warranties of the Seller............... 7
Section 5.2 Representations
and Warranties of the Servicer............. 11
Section 5.3 Financial
Institution Representations and Warranties....... 12
ARTICLE VI CONDITIONS OF
PURCHASES....................................................
13
Section 6.1 Conditions
Precedent to Initial Incremental Purchase....... 13
Section 6.2 Conditions
Precedent to All Purchases and Reinvestments.... 14
ARTICLE VII COVENANTS
.................................................................
14
Section 7.1 Affirmative
Covenants of the Seller and the Servicer....... 14
Section 7.2 Negative
Covenants of the Seller and the Servicer.......... 22
ARTICLE VIII ADMINISTRATION AND
COLLECTION..............................................
24
Section 8.1 Designation of
Servicer.................................... 24
Section 8.2 Duties of
Servicer......................................... 24
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Section 8.3 Collection
Notices......................................... 26
Section 8.4 Responsibilities
of Seller................................. 26
Section 8.5
Reports....................................................
26
Section 8.6 Servicing
Fees............................................. 26
ARTICLE IX AMORTIZATION
EVENTS........................................................
27
Section 9.1 Amortization
Events........................................ 27
Section 9.2
Actions....................................................
29
ARTICLE X
INDEMNIFICATION............................................................
30
Section 10.1 Indemnities by the
Seller and the Servicer................. 30
Section 10.2 Increased Cost and
Reduced Return.......................... 33
Section 10.3 Other Costs and
Expenses................................... 34
ARTICLE XI THE
AGENT..................................................................
34
Section 11.1 Authorization and
Action................................... 34
Section 11.2 Delegation of
Duties....................................... 35
Section 11.3 Exculpatory
Provisions..................................... 35
Section 11.4 Reliance by
Agent.......................................... 35
Section 11.5 Non-Reliance on Agent
and Other Purchasers................. 36
Section 11.6 Reimbursement and
Indemnification.......................... 36
Section 11.7 Agent in its
Individual Capacity........................... 36
Section 11.8 Successor
Agent............................................ 36
ARTICLE XII ASSIGNMENTS;
PARTICIPATIONS................................................
37
Section 12.1
Assignments................................................
37
Section 12.2
Participations.............................................
38
Section 12.3 Terminating Financial
Institutions......................... 38
ARTICLE XIII
MISCELLANEOUS..............................................................
39
Section 13.1 Waivers and
Amendments..................................... 39
Section 13.2
Notices....................................................
40
Section 13.3 Ratable
Payments........................................... 41
Section 13.4 Protection of
Ownership Interests of the Purchasers........ 41
Section 13.5
Confidentiality............................................
42
Section 13.6 Bankruptcy
Petition........................................ 43
Section 13.7 Limitation of
Liability.................................... 43
Section 13.8 CHOICE OF
LAW.............................................. 43
Section 13.9 CONSENT TO
JURISDICTION.................................... 43
Section 13.10
WAIVER OF JURY TRIAL.......................................
44
Section 13.11
Integration; Binding Effect; Survival of Terms.............
44
Section 13.12
Counterparts; Severability; Section References.............
44
Section 13.13
JPMorgan Roles.............................................
44
Section 13.14
Characterization...........................................
45
Section 13.15
Limited Recourse...........................................
45
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Exhibits and Schedules
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Exhibit I
Definitions
Exhibit II Form of Purchase
Notice
Exhibit III Principal Places of
Business of the Seller and the Servicer;
Location(s) of Records; Federal Employer Identification
Number(s)
Exhibit IV Names of
Collection Banks; Collection Accounts
Exhibit V Form of
Compliance Certificate
Exhibit VI Forms of
Collection Account Agreements
Exhibit VII Form of Assignment
Agreement
Exhibit VIII Credit and Collection
Policy
Exhibit IX Form of Monthly
Report
Exhibit X Form of
Performance Undertaking
Exhibit XI Form of
Reduction Notice
Exhibit XII Monthly Accounting
Periods
Schedule A List of
Financial Institutions
Schedule B List of Closing
Documents
Schedule C Financial
Tests
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<PAGE>
COTT USA
RECEIVABLES CORPORATION
RECEIVABLES PURCHASE AGREEMENT
This Receivables
Purchase Agreement dated as of April 1, 2005 is among COTT
USA RECEIVABLES CORPORATION, a Delaware
corporation ("Seller"), COTT BEVERAGES
INC. ("Cott"), a Georgia corporation, as
initial Servicer (together with its
permitted successors, the "Servicer"), the
entities listed on Schedule A to this
Agreement (together with any of their
respective successors and assigns
hereunder, the "Financial Institutions"),
PARK AVENUE RECEIVABLES COMPANY, LLC
("Company") and JPMORGAN CHASE BANK, N.A.,
as agent for the Purchasers hereunder
or any successor agent hereunder (together
with its successors and assigns
hereunder, the "Agent"). Unless defined
elsewhere herein, capitalized terms used
in this Agreement shall have the meanings
assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires
to transfer and assign Purchaser Interests to the Purchasers
from time to time.
Company may, in
its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to
time.
In the event
that Company declines to make any purchase, the Financial
Institutions shall, at the request of
Seller, purchase Purchaser Interests from
time to time.
JPMorgan Chase
Bank, N.A. has been requested and is willing to act as Agent
on behalf of Company and the Financial
Institutions in accordance with the terms
hereof.
Cott has been
requested and is willing to act as Servicer on behalf of
Seller, the Agent and the Purchasers in
accordance with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon
the terms and subject to the conditions hereof, Seller
may, at its option, sell and assign
Purchaser Interests to the Agent for the
benefit of one or more of the Purchasers.
In accordance with the terms and
conditions set forth herein, Company may,
at its option, instruct the Agent to
purchase on behalf of Company, or if
Company shall decline to purchase, the
Agent shall purchase on behalf of the
Financial Institutions, Purchaser
Interests from time to time in an aggregate
amount not to exceed at such time of
purchase the lesser of (i) the Purchase
Limit and (ii) the aggregate amount of
the Commitments, during the period from the
date hereof to but not including the
Facility Termination Date.
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(b) Seller may, upon at least ten (10) Business Days' notice to
the Agent, terminate in whole or reduce in
part, ratably among the Financial
Institutions, the unused portion of the
Purchase Limit; provided that each
partial reduction of the Purchase Limit
shall be in an amount equal to
$5,000,000 or an integral multiple
thereof.
Section 1.2 Increases.
Seller shall provide the Agent with at least two Business Days'
prior
notice substantially in the form set forth
as Exhibit II hereto of each
Incremental Purchase (a "Purchase Notice").
Each Purchase Notice shall be
subject to Section 6.2 hereof and, except
as set forth below, shall be
irrevocable and shall specify the requested
Purchase Price (which shall be equal
to $1,000,000 or an integral multiple of
$100,000 in excess thereof) and date of
purchase and, in the case of an Incremental
Purchase to be funded by the
Financial Institutions, the requested
Discount Rate and Tranche Period. Seller
may request no more than six (6)
Incremental Purchases during any Accrual
Period. Following receipt of a Purchase
Notice, the Agent will determine whether
Company agrees to make the purchase. If
Company declines to make a proposed
purchase, the Incremental Purchase of the
Purchaser Interest will be made by the
Financial Institutions. On the date of each
Incremental Purchase, upon
satisfaction of the applicable conditions
precedent set forth in Article VI,
Company or the Financial Institutions, as
applicable, shall initiate a wire
transfer to an account designated by Seller
of immediately available funds, no
later than 12:00 noon (Chicago time), an
amount equal to (i) in the case of
Company, the aggregate Purchase Price of
the Purchaser Interests Company is then
purchasing or (ii) in the case of a
Financial Institution, such Financial
Institution's Pro Rata Share of the
aggregate Purchase Price of the Purchaser
Interests the Financial Institutions are
purchasing.
Section 1.3 Decreases. Seller shall provide the Agent with
prior
notice in substantially the form set forth
as Exhibit XI hereto in conformity
with the Required Notice Period (a
"Reduction Notice") of any proposed reduction
of Aggregate Capital from Collections. Such
Reduction Notice shall designate (i)
the date (the "Proposed Reduction Date")
upon which any such reduction of
Aggregate Capital shall occur (which date
shall give effect to the applicable
Required Notice Period), and (ii) the
amount of Aggregate Capital to be reduced
which shall be applied ratably to the
Purchaser Interests of Company and the
Financial Institutions in accordance with
the amount of Capital (if any) owing
to Company, on the one hand, and the amount
of Capital (if any) owing to the
Financial Institutions (ratably, based on
their respective Pro Rata Shares), on
the other hand (the "Aggregate Reduction").
Only one (1) Reduction Notice shall
be outstanding at any time.
Section 1.4 Payment Requirements. All amounts to be paid or
deposited
by Seller or Servicer pursuant to any
provision of this Agreement shall be paid
or deposited in accordance with the terms
hereof no later than 11:00 a.m.
(Chicago time) on the day when due in
immediately available funds, and if not
received before 11:00 a.m. (Chicago time)
shall be deemed to be received on the
next succeeding Business Day. If such
amounts are payable to a Purchaser they
shall be paid to the Agent, for the account
of such Purchaser, at 1 Bank One
Plaza, Chicago, Illinois 60670 until
otherwise notified by the Agent. All
computations of Yield, per annum fees
calculated as part of any CP Costs, per
annum fees hereunder and per annum fees
under the Fee Letter shall be made on
the basis of a year of 360 days for the
actual number of
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days elapsed. If any amount hereunder shall
be payable on a day which is not a
Business Day, such amount shall be payable
on the next succeeding Business Day.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments.
Seller shall immediately pay to the Agent when
due, for the account of the relevant
Purchaser or Purchasers, (i) such fees as
are set forth in the Fee Letter, (ii) all
CP Costs, (iii) all amounts payable as
Yield, (iv) all amounts payable as Deemed
Collections (which shall be due and
payable by Seller within two Business Days
and applied to reduce outstanding
Aggregate Capital hereunder in accordance
with Sections 2.2 and 2.3 hereof), (v)
all amounts required pursuant to Section
2.6, (vi) all amounts payable pursuant
to Article X, if any, (vii) all Servicer
costs and expenses, including the
Servicing Fee, in connection with
servicing, administering and collecting the
Receivables and (viii) all Broken Funding
Costs (collectively, the
"Obligations"). If Seller fails to pay any
of the Obligations when due, Seller
agrees to pay, on demand, interest on any
such unpaid Obligations at the Default
Rate until such Obligations are paid in
full. Notwithstanding the foregoing, no
provision of this Agreement or the Fee
Letter shall require the payment or
permit the collection of any amounts
hereunder in excess of the maximum
permitted by applicable law. If at any time
Seller receives any Collections or
is deemed to receive any Deemed
Collections, Seller shall immediately pay such
Collections or Deemed Collections to the
Servicer for application in accordance
with the terms and conditions hereof and,
at all times prior to such payment,
such Collections or Deemed Collections
shall be held in trust by Seller for the
exclusive benefit of the Purchasers and the
Agent.
Section 2.2 Collections Prior to Amortization. Prior to the
Amortization Date, any Collections received
by the Servicer (including any
Deemed Collections paid by Seller to
Servicer) shall be set aside and held in
trust by the Servicer for the payment of
any accrued and unpaid Aggregate
Unpaids or for a Reinvestment as provided
in this Section 2.2. If at any time
any Collections are received by the
Servicer prior to the Amortization Date, (i)
the Servicer shall set aside the
Termination Percentage (hereinafter defined) of
Collections evidenced by the Purchaser
Interests of each Terminating Financial
Institution and (ii) Seller hereby requests
and the Purchasers (other than any
Terminating Financial Institutions) hereby
agree to make, simultaneously with
such receipt, a reinvestment (each a
"Reinvestment") with that portion of the
balance of each and every Collection
received by the Servicer that is part of
any Purchaser Interest (other than any
Purchaser Interests of Terminating
Financial Institutions), such that after
giving effect to such Reinvestment, the
amount of Capital of such Purchaser
Interest immediately after such receipt and
corresponding Reinvestment shall be equal
to the amount of Capital immediately
prior to such receipt. On each Settlement
Date prior to the occurrence of the
Amortization Date, the Servicer shall remit
to the Agent's account the
Collections (including any Deemed
Collections) received by the Servicer which
have been set aside during the preceding
Settlement Period and have not been
subject to a Reinvestment and apply such
amounts (if not previously paid in
accordance with Section 2.1) first, to
reduce unpaid Obligations and second, to
reduce the Capital of all Purchaser
Interests of Terminating Financial
Institutions, applied ratably to each
Terminating Financial Institution
according to its Termination Percentage.
If
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such Obligations shall be reduced to zero,
any additional Collections received
by the Servicer (i) if applicable, shall be
remitted to the Agent's account no
later than 11:00 a.m. (Chicago time) to the
extent required to fund any
Aggregate Reduction on such Settlement Date
and (ii) any balance remaining
thereafter shall be remitted from the
Servicer to Seller on such Settlement
Date. Each Terminating Financial
Institution shall be allocated a ratable
portion of Collections from the date of any
assignment by Company pursuant to
Section 13.6 (the "Termination Date") until
such Terminating Financing
Institution's Capital shall be paid in
full. This ratable portion shall be
calculated on the Termination Date of each
Terminating Financial Institution as
a percentage equal to (i) Capital of such
Terminating Financial Institution
outstanding on its Termination Date,
divided by (ii) the Aggregate Capital
outstanding on such Termination Date (the
"Termination Percentage"). Each
Terminating Financial Institution's
Termination Percentage shall remain constant
prior to the Amortization Date. On and
after the Amortization Date, each
Termination Percentage shall be
disregarded, and each Terminating Financial
Institution's Capital shall be reduced
ratably with all Financial Institutions
in accordance with Section 2.3.
Section 2.3 Collections Following Amortization. On the
Amortization
Date and on each day thereafter until the
Aggregate Unpaids shall have been
indefeasibly reduced to zero, the Servicer
shall set aside and hold in trust,
for the holder of each Purchaser Interest,
all Collections received on such day
and an additional amount for the payment of
any accrued and unpaid Obligations
owed by Seller and not previously paid by
Seller in accordance with Section 2.1.
On and after the Amortization Date, the
Servicer shall, at any time upon the
request from time to time by (or pursuant
to standing instructions from) the
Agent (i) remit to the Agent's account the
amounts set aside pursuant to the
preceding sentence, and (ii) apply such
amounts to reduce the Capital associated
with each such Purchaser Interest and any
other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall be
insufficient
funds on deposit for the Servicer to
distribute funds in payment in full of the
aforementioned amounts pursuant to Section
2.2 or 2.3 (as applicable), the
Servicer shall distribute funds:
first, to the payment of the Servicer's reasonable out-of-pocket
costs
and expenses in
connection with servicing, administering and collecting the
Receivables,
including the Servicing Fee,
second, to the reimbursement of the Agent's costs of collection
and
enforcement of
this Agreement,
third, (to the extent applicable) to the ratable reduction of
the
Aggregate
Capital (without regard to any Termination Percentage),
fourth, for the ratable payment of all other unpaid Obligations,
and
fifth, after the Aggregate Unpaids have been indefeasibly reduced
to
zero, to
Seller.
Collections applied to
the payment of Aggregate Unpaids shall be
distributed in accordance with the
aforementioned provisions, and, giving
effect to each of the priorities set
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forth in Section 2.4 above, shall be shared
ratably (within each priority) among
the Agent and the Purchasers in accordance
with the amount of such Aggregate
Unpaids owing to each of them in respect of
each such priority.
Section 2.5 Payment Recission. No payment of any of the
Aggregate
Unpaids shall be considered paid or applied
hereunder to the extent that, at any
time, all or any portion of such payment or
application is rescinded by
application of law or judicial authority,
or must otherwise be returned or
refunded for any reason. Seller shall
remain obligated for the amount of any
payment or application so rescinded,
returned or refunded, and shall promptly
pay to the Agent (for application to the
Person or Persons who suffered such
recission, return or refund) the full
amount thereof plus interest on any such
unpaid Aggregate Unpaids at the Default
Rate from the date of any such
recission, return or refunding.
Section 2.6 Maximum Purchaser Interests. Seller shall ensure that
the
Purchaser Interests of the Purchasers shall
at no time exceed in the aggregate
100%. If the aggregate of the Purchaser
Interests of the Purchasers exceeds
100%, Seller shall pay to the Agent within
one (1) Business Day an amount to be
applied to reduce the Aggregate Capital (as
allocated by the Agent), such that
after giving effect to such payment the
aggregate of the Purchaser Interests
equals or is less than 100%.
Section 2.7 Clean Up Call. In addition to Seller's rights pursuant
to
Section 1.3, Seller shall have the right
(after providing written notice to the
Agent in accordance with the Required
Notice Period), at any time following the
reduction of the Aggregate Capital to a
level that is less than 10.0% of the
original Purchase Limit, to repurchase from
the Purchasers all, but not less
than all, of the then outstanding Purchaser
Interests. The purchase price in
respect thereof shall be an amount equal to
the Aggregate Unpaids through the
date of such repurchase, payable in
immediately available funds. Such repurchase
shall be without representation, warranty
or recourse of any kind by, on the
part of, or against any Purchaser or the
Agent, other than as to the
non-creation of any Adverse Claim on such
Purchaser Interests by the Purchasers
and the Agent.
ARTICLE III
COMPANY FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to
the
Capital associated with each Purchaser
Interest of Company for each day that any
Capital in respect of such Purchaser
Interest is outstanding. Each Purchaser
Interest funded by Company substantially
with Pooled Commercial Paper will
accrue CP Costs each day on a pro rata
basis, based upon the percentage share
the Capital in respect of such Purchaser
Interest represents in relation to all
assets held by Company and funded
substantially with Pooled Commercial Paper.
Section 3.2 CP Costs Payments. On each Settlement Date, Seller
shall
pay to the Agent (for the benefit of
Company) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of
the Capital associated with all
Purchaser Interests of Company for the
immediately preceding Accrual Period in
accordance with Article II.
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Section 3.3 Calculation of CP Costs. On the fifth Business Day of
each
calendar month, Company shall calculate the
aggregate amount of CP Costs for the
applicable Accrual Period ending on the
last day of the immediately preceding
calendar month and shall notify Seller of
such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Purchaser Interest
of
the Financial Institutions shall accrue
Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime
Rate in accordance with the terms
and conditions hereof. Until Seller gives
notice to the Agent of another
Discount Rate in accordance with Section
4.4, the initial Discount Rate for any
Purchaser Interest transferred to the
Financial Institutions pursuant to the
terms and conditions hereof shall be the
Prime Rate. If the Financial
Institutions acquire by assignment from
Company any Purchaser Interest pursuant
to a Liquidity Agreement, each Purchaser
Interest so assigned shall each be
deemed to have a new Tranche Period
commencing on the date of any such
assignment.
Section 4.2 Yield Payments. On the Settlement Date for each
Purchaser
Interest of the Financial Institutions,
Seller shall pay to the Agent (for the
benefit of the Financial Institutions) an
aggregate amount equal to the accrued
and unpaid Yield for the entire Tranche
Period of each such Purchaser Interest
in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
(a) With consultation from (and approval by) the Agent, Seller
shall from time to time request Tranche
Periods for the Purchaser Interests of
the Financial Institutions, provided that,
if at any time the Financial
Institutions shall have a Purchaser
Interest, Seller shall always request
Tranche Periods such that at least one
Tranche Period shall end on the date
specified in clause (A) of the definition
of Settlement Date. Without limiting
the foregoing, in no event may the Seller
request a Tranche Period for a
Purchaser Interest of Company.
(b) Seller or the Agent, upon notice to and consent by the
other
received at least three (3) Business Days
prior to the end of a Tranche Period
(the "Terminating Tranche") for any
Purchaser Interest, may, effective on the
last day of the Terminating Tranche: (i)
divide any such Purchaser Interest into
multiple Purchaser Interests, (ii) combine
any such Purchaser Interest with one
or more other Purchaser Interests that have
a Terminating Tranche ending on the
same day as such Terminating Tranche or
(iii) combine any such Purchaser
Interest with a new Purchaser Interests to
be purchased on the day such
Terminating Tranche ends. Notwithstanding
the foregoing, in no event may a
Purchaser Interest of Company be combined
with a Purchaser Interest of the
Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller may
select
the LIBO Rate or the Prime Rate for each
Purchaser Interest of the Financial
Institutions. Seller shall by 11:00 a.m.
(Chicago time): (i) at least three (3)
Business Days prior to the expiration of
any Terminating Tranche with respect to
which the LIBO Rate is being requested as a
new Discount
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Rate and (ii) at least one (1) Business Day
prior to the expiration of any
Terminating Tranche with respect to which
the Prime Rate is being requested as a
new Discount Rate, give the Agent
irrevocable notice of the new Discount Rate
for the Purchaser Interest associated with
such Terminating Tranche. Unless and
until Seller gives notice to the Agent of
another Discount Rate, the initial
Discount Rate for any Purchaser Interest
transferred to the Financial
Institutions pursuant to the terms and
conditions hereof or any Liquidity
Agreement shall be the Prime Rate.
Section 4.5 Suspension of the LIBO Rate. If any Financial
Institution
notifies the Agent that it has determined
that funding its Pro Rata Share of the
Purchaser Interests of the Financial
Institutions at a LIBO Rate would violate
any applicable law, rule, regulation, or
directive of any governmental or
regulatory authority, whether or not having
the force of law, or that (i)
deposits of a type and maturity appropriate
to match fund its Purchaser
Interests at such LIBO Rate are not
available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or
maintaining a Purchaser Interest at
such LIBO Rate, then the Agent shall
suspend the availability of such LIBO Rate
for such Financial Institution and require
Seller to select the Prime Rate for
any Purchaser Interest accruing Yield at
such LIBO Rate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Seller. Seller
hereby
represents and warrants to the Agent and
the Purchasers as of the date hereof
and as of the date of each Incremental
Purchase and the date of each
Reinvestment that:
(a) Corporate Existence and Power. Seller is a corporation duly
organized, validly existing and in good
standing under the laws of its state of
incorporation identified in the preamble of
this Agreement. Seller is organized
solely under the law of the state
identified in the preamble of this Agreement.
Seller is duly qualified to do business and
is in good standing as a foreign
corporation, and has and holds all
corporate power and all governmental
licenses, authorizations, consents and
approvals required to carry on its
business in each jurisdiction in which its
business is conducted.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by
Seller of this Agreement and each other
Transaction Document to which it is a
party, the performance of its obligations
hereunder and thereunder and Seller's use
of the proceeds of purchases made
hereunder, are within its corporate powers
and authority and have been duly
authorized by all necessary corporate
action on its part. This Agreement and
each other Transaction Document to which
Seller is a party has been duly
executed and delivered by Seller.
(c) No Conflict. The execution and delivery by Seller of this
Agreement and each other Transaction
Document to which it is a party and the
performance of its obligations hereunder
and thereunder do not contravene or
violate (i) its certificate or articles of
incorporation or by-laws, (ii) any
law, rule or regulation applicable to it,
(iii) any restrictions under any
agreement, contract or instrument to which
it is a party or by which it or any
of its property is bound, or (iv) any
order, writ, judgment, award, injunction
or decree binding on or
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affecting it or its property, and do not
result in the creation or imposition of
any Adverse Claim on assets of Seller
(except as created hereunder); and no
transaction contemplated hereby requires
compliance with any bulk sales act or
similar law.
(d) Governmental Authorization. Other than the filing of the
financing statements contemplated
hereunder, no authorization or approval or
other action by, and no notice to or filing
with, any governmental authority or
regulatory body is required for the due
execution and delivery by Seller of this
Agreement and each other Transaction
Document to which it is a party and the
performance of its obligations hereunder
and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of Seller's
Knowledge, threatened, against or affecting
Seller, or any of its properties, in or
before any court, arbitrator or other
body. Seller is not in default with respect
to any order of any court,
arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which Seller is a party
constitute the legal, valid and binding
obligations of Seller enforceable against
Seller in accordance with their
respective terms, except as such
enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or
other similar laws relating to or
limiting creditors' rights generally and by
general principles of equity
(regardless of whether enforcement is
sought in a proceeding in equity or at
law).
(g) Accuracy of Information. All information heretofore
furnished
by Seller or any of its Affiliates to the
Agent or the Purchasers for purposes
of or in connection with this Agreement,
any of the other Transaction Documents
or any transaction contemplated hereby or
thereby is, and all such information
hereafter furnished by Seller or any of its
Affiliates to the Agent or the
Purchasers will be, true and accurate in
every material respect on the date such
information is stated or certified and does
not and will not contain any
material misstatement of fact or omit to
state a material fact or any fact
necessary to make the statements contained
therein not misleading.
(h)
Places of Business and Locations of Records. The principal
places of business and chief executive
office of Seller and the offices where it
keeps all of its Records are located at the
address(es) listed on Exhibit III.
Seller has taken all actions required to be
taken by it under Sections 7.2(a)
and 13.4(a).
(i) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all
times been satisfied and duly
performed.
(j) Material Adverse Effect. Seller represents and warrants
that
since the date of this Agreement, no event
has occurred that would have a
material adverse effect on (i) the
financial condition or operations of Seller,
(ii) the ability of Seller to perform its
obligations under the Transaction
Documents, or (iii) the collectibility of
the Receivables generally or any
material portion of the Receivables (other
than any portion of the Receivables
that are not Eligible Receivables and that
have been identified in writing to
the Agent for purposes of this Section by
the Seller or the Servicer).
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(k) Compliance with Law. Seller has complied in all respects
with
all applicable laws, rules, regulations,
orders, writs, judgments, injunctions,
decrees or awards to which it may be
subject, except, with respect to the
Servicer, where the failure to so comply
could not reasonably be expected to
have a Material Adverse Effect. Each
Receivable, together with the Contract
related thereto, does not contravene any
laws, rules or regulations applicable
thereto (including, without limitation,
laws, rules and regulations relating to
truth in lending, fair credit billing, fair
credit reporting, equal credit
opportunity, fair debt collection practices
and privacy), and no part of such
Contract is in violation of any such law,
rule or regulation.
(l) Compliance with Credit and Collection Policy. Seller has
complied in all material respects with the
Credit and Collection Policy with
regard to each Receivable (other than New
Division Receivables and Receivables
that are not Eligible Receivables and that
have been identified in writing to
the Agent for purposes of this Section by
the Seller or the Servicer) and the
related Contract, and has not made any
material change to such Credit and
Collection Policy, except such material
change as to which the Agent has been
notified in accordance with Section
7.1(a)(vii) and which, if applicable, has
been approved by the Agent.
(m) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible
Receivable was on the date of its purchase
under the applicable Receivables Sale
Agreement, an Eligible Receivable on such
purchase date.
(n) Use of Proceeds. No proceeds of any purchase hereunder will
be used by Seller (i) for a purpose that
violates, or would be inconsistent
with, Regulation T, U or X promulgated by
the Board of Governors of the Federal
Reserve System from time to time or (ii) to
acquire any security in any
transaction which is subject to Section 12,
13 or 14 of the Securities Exchange
Act of 1934, as amended.
(o) Good Title. Immediately prior to each purchase hereunder,
Seller shall be the legal and beneficial
owner of the Receivables and Related
Assets with respect thereto, free and clear
of any Adverse Claim, except as
created by the Transaction Documents. There
have been duly filed all financing
statements or other similar instruments or
documents necessary under the UCC (or
any comparable law) of all appropriate
jurisdictions to perfect Seller's
ownership interest in each Receivable, its
Collections and the Related Assets.
(p) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby,
is effective to, and shall, upon each
purchase hereunder, transfer to the Agent
for the benefit of the relevant
Purchaser or Purchasers (and the Agent for
the benefit of such Purchaser or
Purchasers shall acquire from Seller) a
valid and perfected first priority
undivided percentage ownership interest or
a valid and perfected first priority
security interest in each Receivable
existing or hereafter arising and in the
Related Assets and Collections with respect
thereto, free and clear of any
Adverse Claim, except as created by the
Transactions Documents. There have been
duly filed all financing statements or
other similar instruments or documents
necessary under the UCC (or any comparable
law) of all appropriate jurisdictions
to perfect the Agent's (on behalf of the
Purchasers) ownership or security
interest in the Receivables, the Related
Assets and the Collections.
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(q) Names. Seller has not used any corporate names, trade names
or assumed names other than the name in
which it has executed this Agreement.
(r) Payments to Originators. With respect to each Receivable
transferred to Seller under the Receivables
Sale Agreements, Seller has given
reasonably equivalent value to each
Originator in consideration therefor and
such transfer was not made for or on
account of an antecedent debt. No transfer
by any Originator of any Receivable to
Seller under any Receivables Sale
Agreement is or may be voidable under any
section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. Sections 101 et seq.),
as amended.
(s) Ownership of Seller. Provider indirectly owns 100% of the
issued and outstanding capital stock of
Seller, free and clear of any Adverse
Claim. Such capital stock is validly
issued, fully paid and nonassessable, and
there are no outstanding options, warrants
or other rights to acquire securities
of Seller.
(t) Not a Holding Company or an Investment Company. Seller is
not
a "holding company" or a "subsidiary
holding company" of a "holding company"
within the meaning of the Public Utility
Holding Company Act of 1935, as
amended, or any successor statute. Seller
is not an "investment company" within
the meaning of the Investment Company Act
of 1940, as amended, or any successor
statute.
(u) Net Receivables Balance. Seller has determined that,
immediately after giving effect to each
purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i)
the Aggregate Capital, plus (ii) the
Aggregate Reserves.
(v) Federal Employee Identification Number. Seller's Federal
Employer Identification Number is correctly
set forth on Exhibit III.
(w) Lock-Boxes and Collection Accounts. The names and addresses
of all Collection Banks, together with the
account numbers of the Collection
Accounts of Seller at each Collection Bank
and the post office box number of
each Lock-Box, are listed on Exhibit IV.
Seller has not granted any Person,
other than the Agent as contemplated by
this Agreement, dominion or control of
any Lock-Box or Collection Account, or the
right to take dominion and control of
any such Lock-Box or Collection Account at
any time.
(x) Enforceability of Contracts. Each Contract with respect to
each Receivable (other than Receivables
that are not Eligible Receivables and
that have been identified in writing to the
Agent for purposes of this Section
by the Seller or the Servicer) is effective
to create, and has created, a legal,
valid and binding obligation of the related
Obligor to pay the Outstanding
Balance of the Receivable created
thereunder (net of any related amount then
reflected in the Promotional Accrual
Account for purposes of calculating Net
Eligible Receivables Balance at such time)
and any accrued interest thereon,
enforceable against the Obligor in
accordance with its terms, except as such
enforcement may be limited by applicable
bankruptcy, insolvency, reorganization
or other similar laws relating to or
limiting creditors' rights generally and by
general principles of equity (regardless of
whether enforcement is sought in a
proceeding in equity or at law).
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Section 5.2 Representations and Warranties of the Servicer.
Servicer
hereby represents and warrants to the Agent
and the Purchasers as of the date
hereof and as of the date of each
Incremental Purchase and the date of each
Reinvestment that:
(a) Corporate Existence and Power. Servicer is a corporation
duly
organized, validly existing and in good
standing under the laws of its state of
incorporation identified in the preamble of
this Agreement. Servicer is
organized solely under the law of the state
identified in the preamble of this
Agreement. Servicer is duly qualified to do
business and is in good standing as
a foreign corporation, and has and holds
all corporate power and all
governmental licenses, authorizations,
consents and approvals required to carry
on its business in each jurisdiction in
which its business is conducted, except
where the failure to qualify to do business
or obtain such corporate power and
all governmental licenses, authorizations,
consents and approvals could not
reasonably be expected to have a Material
Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by
Servicer of this Agreement and each
other Transaction Document to which it is a
party, and the performance of its
obligations hereunder and thereunder are
within its corporate powers and have
been duly authorized by all necessary
corporate action on its part. This
Agreement and each other Transaction
Document to which Servicer is a party has
been duly executed and delivered by
Servicer.
(c) No Conflict. The execution and delivery by Servicer of this
Agreement and each other Transaction
Document to which it is a party, and the
performance of its obligations hereunder
and thereunder do not contravene or
violate (i) its certificate or articles of
incorporation or by-laws, (ii) any
law, rule or regulation applicable to it,
(iii) any restrictions under any
indenture, credit agreement or financing
agreement or any other material
agreement, contract or instrument to which
it is a party or by which it or any
of its property is bound, or (iv) any
order, writ, judgment, award, injunction
or decree binding on or affecting it or its
property, and do not result in the
creation or imposition of any Adverse Claim
on assets of Servicer or its
Subsidiaries; and no transaction
contemplated hereby requires compliance with
any bulk sales act or similar law.
(d) Governmental Authorization. No authorization or approval or
other action by, and no notice to or filing
with, any governmental authority or
regulatory body is required for the due
execution and delivery by Servicer of
this Agreement and each other Transaction
Document to which it is a party and
the performance of its obligations
hereunder and thereunder.
(e) Actions, Suits. Other than as disclosed in the Provider's
January 1, 2005 10-K filed with the
Securities and Exchange Commission, there
are no actions, suits or proceedings
pending, or to the best of Servicer's
Knowledge, threatened, against or affecting
Servicer, or any of its properties,
in or before any court, arbitrator or other
body, that could reasonably be
expected to have a Material Adverse Effect.
Servicer is not in default with
respect to any order of any court,
arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which Servicer is a party
constitute the legal, valid and binding
obligations of
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Servicer enforceable against Servicer in
accordance with their respective terms,
except as such enforcement may be limited
by applicable bankruptcy, insolvency,
reorganization or other similar laws
relating to or limiting creditors' rights
generally and by general principles of
equity (regardless of whether enforcement
is sought in a proceeding in equity or at
law).
(g) Accuracy of Information. All information heretofore
furnished
by Servicer or any of its Subsidiaries to
the Agent or the Purchasers for
purposes of or in connection with this
Agreement, any of the other Transaction
Documents or any transaction contemplated
hereby or thereby is, and all such
information hereafter furnished by Servicer
or any of its Subsidiaries to the
Agent or the Purchasers will be, true and
accurate in every material respect on
the date such information is stated or
certified and does not and will not
contain any material misstatement of fact
or omit to state a material fact or
any fact necessary to make the statements
contained therein not misleading.
(h) Places of Business and Locations of Records. The principal
places of business and chief executive
office of Servicer and the offices where
it keeps all of its Records are located at
the address(es) listed on Exhibit
III.
(i) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all
times been satisfied and duly
performed.
(j) Material Adverse Effect. Since January 1, 2005, no event
has
occurred that would have a material adverse
effect on the financial condition or
operations of the Servicer or any of its
Subsidiaries or the ability of the
Servicer to perform its obligations under
this Agreement.
(k) Compliance with Law. Servicer has complied in all respects
with all applicable laws, rules,
regulations, orders, writs, judgments,
injunctions, decrees or awards to which it
may be subject, except, where the
failure to so comply could not reasonably
be expected to have a Material Adverse
Effect.
(l) Compliance with Credit and Collection Policy. Servicer has
complied in all material respects with the
Credit and Collection Policy with
regard to each Receivable (other than New
Division Receivables and Receivables
that are not Eligible Receivables and that
have been identified in writing to
the Agent for purposes of this Section by
the Seller or the Servicer) and the
related Contract, and has not made any
material change to such Credit and
Collection Policy, except such material
change as to which the Agent has been
notified in accordance with Section
7.1(a)(vii) and which, if applicable, has
been approved by the Agent.
(m) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible
Receivable was on the date of its purchase
under the applicable Receivables Sale
Agreement, an Eligible Receivable on such
purchase date.
Section 5.3 Financial Institution Representations and Warranties.
Each
Financial Institution hereby represents and
warrants to the Seller, the Agent
and Company that:
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<PAGE>
(a) Existence and Power. Such Financial Institution is a
corporation or a banking association duly
organized, validly existing and in
good standing under the laws of its
jurisdiction of incorporation or
organization, and has all corporate or
banking association power to perform its
obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the
performance of its obligations hereunder
are within its corporate or banking
association powers, have been duly
authorized by all necessary corporate or
banking association action, do not
contravene or violate (i) its certificate
or articles of incorporation or
association or by-laws (or equivalent
thereof), (ii) any law, rule or regulation
applicable to it, (iii) any restrictions
under any agreement, contract or
instrument to which it is a party or any of
its property is bound, or (iv) any
order, writ, judgment, award, injunction or
decree binding on or affecting it or
its property, and do not result in the
creation or imposition of any Adverse
Claim on its assets. This Agreement has
been duly authorized, executed and
delivered by such Financial
Institution.
(c) Governmental Authorization. No authorization or approval or
other action by, and no notice to or filing
with, any governmental authority or
regulatory body is required for the due
execution and delivery by such Financial
Institution of this Agreement and the
performance of its obligations hereunder.
(d) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of such Financial
Institution enforceable against such
Financial Institution in accordance with
its terms, except as such enforcement
may be limited by applicable bankruptcy,
insolvency, reorganization or other
similar laws relating to or limiting
creditors' rights generally and by general
principles of equity (regardless of whether
such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Effectiveness/Initial
Incremental
Purchase.
(a) The effectiveness of this Agreement is subject to the
conditions precedent that (i) the Agent
shall have received those documents
listed on Schedule B (excluding the opinion
letters described on Schedule B) and
(ii) the Agent shall have received all fees
and expenses required to be paid on
such date pursuant to the terms of this
Agreement and the Fee Letter.
(b) The initial Incremental Purchase of a Purchaser Interest
under this Agreement is subject to the
conditions precedent that (i) each of the
conditions precedent to the effectiveness
of this Agreement set forth in
paragraph (a) above shall have been
satisfied and (ii) the Agent shall have
received each of the opinion letters listed
on Schedule B hereto in form and
substance reasonably acceptable to the
Agent and its counsel.
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<PAGE>
Section 6.2 Conditions Precedent to All Purchases and
Reinvestments.
Each purchase of a Purchaser Interest
(other than pursuant to a Liquidity
Agreement) and each Reinvestment shall be
subject to the further conditions
precedent that (a) in the case of each such
purchase or Reinvestment: (i) the
Servicer shall have delivered to the Agent
on or prior to the date of such
purchase, in form and substance reasonably
satisfactory to the Agent, all
Monthly Reports as and when due under
Section 8.5 and (ii) upon the Agent's
request, the Servicer shall have delivered
to the Agent at least two (2) days
prior to such purchase or Reinvestment an
interim Monthly Report showing the
amount of Eligible Receivables; (b) the
Facility Termination Date shall not have
occurred; (c) the Agent shall have received
such other approvals, opinions or
documents as it may reasonably request and
(d) on the date of each such
Incremental Purchase or Reinvestment, the
following statements shall be true
(and acceptance of the proceeds of such
Incremental Purchase or Reinvestment
shall be deemed a representation and
warranty by Seller that such statements are
then true):
(i) the representations and warranties set forth in Sections
5.1
and 5.2 are true and correct on and as of
the date of such Incremental Purchase
or Reinvestment as though made on and as of
such date;
(ii) no event has occurred and is continuing, or would result
from such Incremental Purchase or
Reinvestment, that will constitute an
Amortization Event, and no event has
occurred and is continuing, or would result
from such Incremental Purchase or
Reinvestment, that would constitute a
Potential Amortization Event;
(iii) the Aggregate Capital does not exceed the Purchase Limit
and the aggregate Purchaser Interests do
not exceed 100%; and
(iv) if such Incremental Purchase or Reinvestment is funded by
the Company, the Company shall be party to
unexpired Liquidity Agreements with
an aggregate commitment limit equal to at
least 102% of the Purchase Limit.
It is expressly understood that each
Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser,
occur automatically on each day that the
Servicer shall receive any Collections
without the requirement that any further
action be taken on the part of any Person
and notwithstanding the failure of
Seller to satisfy any of the foregoing
conditions precedent in respect of such
Reinvestment. The failure of Seller to
satisfy any of the foregoing conditions
precedent in respect of any Reinvestment
shall give rise to a right of the
Agent, which right may be exercised at any
time on demand of the Agent, to
rescind the related purchase and direct
Seller to pay to the Agent for the
benefit of the Purchasers an amount equal
to the Collections prior to the
Amortization Date that shall have been
applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of the Seller and the
Servicer.
Until the date on which the Aggregate
Unpaids have been indefeasibly paid in
full and this Agreement
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<PAGE>
terminates in accordance with its terms,
each of Seller and the Servicer
severally, and not jointly, hereby
covenants, as to itself, as set forth below:
(a) Financial Reporting. Each of Seller and Servicer will
maintain, for itself and each of its
consolidated Subsidiaries, a system of
accounting established and administered in
accordance with GAAP, and furnish or
cause to be furnished to the Agent:
(i) Annual Reporting. Within 90 days after the close of each
of such Person's fiscal years, financial
statements (which shall include a
balance sheet, a statement of income and a
statement of cash flows) for such
Person for such fiscal year certified in a
manner reasonably acceptable to the
Agent by an Authorized Officer of such
Person.
(ii) Quarterly Reporting. Within 45 days after the close of
the first three (3) quarterly periods of
each of its respective fiscal years,
balance sheets of each Person as at the
close of each such period and statements
of income and retained earnings and a
statement of cash flows (in each case, on
a consolidated and consolidating basis) for
each such Person for the period from
the beginning of such fiscal year to the
end of such quarter, all certified by
an Authorized Officer of such Person.
(iii) Compliance Certificates. At the time of delivery of
any financial statements required
hereunder, a compliance certificate in
substantially the form of Exhibit V signed
by an Authorized Officer of the
Person delivering such financial statements
and dated the date of such annual
financial statement or such quarterly
financial statement, as the case may be.
(iv) Copies of Notices. Promptly upon its receipt of any
written notice, request for consent,
financial statements, certification, report
or other similar communication under or in
connection with any Transaction
Document from any Person other than the
Agent or any Purchaser, copies of the
same.
(v) Change in Credit and Collection Policy. At least twenty
(20) days prior to the effectiveness of any
material change in or material
amendment to the Credit and Collection
Policy, a copy of the Credit and
Collection Policy then in effect and a
notice (A) indicating such proposed
change or amendment, and (B) if such
proposed change or amendment would be
reasonably likely to adversely affect the
collectibility of the Receivables,
requesting the Agent's consent thereto.
(vi) Other Information.
(A) Promptly, from time to time, such other information,
documents, records or reports relating to
the Receivables or Related Assets or
the condition or operations, financial or
otherwise, of Seller or Servicer as
the Agent may from time to time reasonably
request in order to protect the
interests of the Agent and the Purchasers
under or as contemplated by the
Transaction Documents.
(B)
In the case of the Seller, promptly, from time to time,
procure from any Originator under the
applicable Receivables Sale Agreement or
the Provider under the Performance
Undertaking such other information,
documents, records or
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<PAGE>
reports relating to (1) Receivables or the
Related Assets, (2) or the condition
or operations, financial or otherwise, of
the Originators and the Provider or
(3) any other contractual rights or
obligations of the Originators and the
Provider, in each case, as the Agent may
from time to time reasonably request in
order to protect the interests of the Agent
and the Purchasers under or as
contemplated by the Transaction Documents;
provided, that, with respect to the
information, documents, records or reports
required to be delivered under clause
(B)(3) of this Section 7.1(a)(vi), if the
Seller is required to provide the
Agent and the Purchasers with any
information for which the applicable
Originator or the Provider owes a third
party a duty of confidentiality, the
Agent and the Purchasers will cooperate
with the Seller, the Originators and the
Provider (as applicable) to obtain such
third party's consent to disclose such
information to the Agent and the Purchasers
and will agree to any reasonable
confidentiality undertakings required by
such third party to obtain such
consent.
(b) Notices. Seller and the Servicer will notify the Agent in
writing of any of the following promptly
upon learning of the occurrence
thereof, describing the same and, if
applicable, the steps being taken with
respect thereto:
(i) Amortization Events or Potential Amortization Events.
The occurrence of any Amortization Event
and each Potential Amortization Event,
by a statement of an Authorized Officer of
such Person.
(ii) Judgment and Proceedings.
(A) The entry of any judgment or decree against the
Provider, Servicer, any Originator or any
of their respective Subsidiaries not
satisfied or dismissed if the aggregate
amount of all judgments and decrees then
outstanding against Provider, the
Originators, Servicer and their Subsidiaries
exceeds $15,000,000,
(B) The institution of any litigation, arbitration
proceeding or governmental proceeding
against the Servicer or any of its
Subsidiaries which, individually or in the
aggregate, could reasonably be
expected to have a Material Adverse Effect,
or
(C) The entry of any judgment or decree or the institution
of any litigation, arbitration proceeding
or governmental proceeding against
Seller.
(iii) Material Adverse Effect. The occurrence of any event
or condition that has had, or could
reasonably be expected to have, a Material
Adverse Effect.
(iv) Termination Date. The occurrence of the "Termination
Date" under and as defined in any
Receivables Sale Agreement.
(v) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any
other financing arrangement pursuant to
which the Servicer is a debtor or an
obligor and/or the occurrence of any "Event
of Default" or "Default" under the Credit
Agreement.
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<PAGE>
(c)
Compliance with Laws and Preservation of Corporate Existence.
Each of Seller and the Servicer will comply
in all respects with all applicable
laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or
awards to which it may be subject; except,
in the case of the Servicer, where
such non-compliance could not reasonably be
expected to have a Material Adverse
Effect. Each of Seller and the Servicer
will preserve and maintain its corporate
existence, rights, franchises and
privileges in the jurisdiction of its
incorporation, and qualify and remain
qualified in good standing as a foreign
corporation in each jurisdiction where its
business is conducted, except, in the
case of the Servicer, where failure to do
so could not reasonably be expected to
have a Material Adverse Effect.
(d) Audits. Each of Seller and the Servicer will furnish to the
Agent from time to time such information
with respect to it and the Receivables
as the Agent may reasonably request. Each
of Seller and the Servicer will, from
time to time during regular business hours
as requested by the Agent upon
reasonable notice and at the sole
reasonable cost of Seller or the Servicer (as
applicable and, in the case of the
Servicer, subject to the Servicer's
reimbursesment for such costs pursuant to
Section 2.1(vii) of this Agreement),
permit the Agent, or its agents or
representatives, (i) to examine and make
copies of and abstracts from all Records in
the possession or under the control
of such Person relating to the Receivables
and the Related Assets, including,
without limitation, the related Contracts,
and (ii) to visit the offices and
properties of such Person for the purpose
of examining such materials described
in clause (i) above, and to discuss matters
relating to such Person's financial
condition or the Receivables and the
Related Assets or any Person's performance
under any of the Transaction Documents or
any Person's performance under the
Contracts and, in each case, with (A) after
the occurrence and during the
continuance of an Amortization Event, any
officer, director or employee of the
Seller or the Servicer the Agent deems
reasonably necessary or desirable to
evaluate the Receivables and the Related
Assets and (B) prior to the occurrence
and continuation of an Amortization Event,
any officer or director of the Seller
or any Authorized Officer of the Servicer,
and upon the request of the Agent,
the Servicer will make available such other
officers, directors and employees of
the Servicer that the Agent deems
reasonably necessary or desirable to
supplement the Agent's evaluation of the
Receivables and the Related Assets;
provided, that, unless an Amortization
Event shall have occurred and be
continuing at the time any such audit is
requested by the Agent, neither Seller
nor Servicer shall be required to reimburse
the Agent or any of the Purchasers
for the costs or expenses in respect of
more than one audit during any calendar
year unless all of the audits previously
conducted at the expense of the Seller
and the Servicer during such calendar year
have not produced audit results
reasonably satisfactory to the Agent.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will maintain and implement administrative
and operating procedures (including,
without limitation, an ability to recreate
records evidencing Receivables in the event
of the destruction of the originals
thereof), and keep and maintain all
documents, books, records and other
information reasonably necessary or
advisable for the collection of all
Receivables (including, without limitation,
records adequate to permit the
immediate identification of each new
Receivable and all Collections of and
adjustments to each existing Receivable).
The Servicer will give the Agent
notice of any material change in the
administrative and operating procedures
referred to in the previous sentence.
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(ii) Each of Seller and the Servicer will (A) on or prior to
the date hereof, mark its master data
processing records and other books and
records relating to the Purchaser Interests
with a legend, acceptable to the
Agent, describing the Purchaser Interests
and (B) upon the request of the Agent
after an Amortization Event (x) mark each
Contract with a legend describing the
Purchaser Interests and (y) deliver to the
Agent complete copies of all
Contracts relating to the Receivables;
provided, that to the extent that any
Contracts constitute "chattel paper" or
"instruments" (in each case, as defined
in Section 9-102 of the UCC) or the
possession of which is otherwise deemed
necessary or desirable to the Agent, in the
Agent's sole discretion, to protect
the interests of the Agent and the
Purchasers hereunder, Seller and Servicer
shall deliver to the Agent originals of
such Contracts.
(f) Compliance with Contracts and Credit and Collection Policy.
Each of Seller and Servicer (but solely in
its capacity as Servicer) will timely
and fully (i) perform and comply with all
provisions, covenants and other
promises required to be observed by it
under the Contracts to the extent that
such provisions, covenants and other
promises are related to the Receivables
(other than New Division Receivables and
Receivables that are not Eligible
Receivables and that have been identified
in writing to the Agent for purposes
of this Section by the Seller or the
Servicer), and (ii) comply in all material
respects with the Credit and Collection
Policy in regard to each Receivable and
the related Contract.
(g) Performance and Enforcement of Transaction Documents.
(i) Seller will perform its obligations and undertakings
under and pursuant to the applicable
Receivables Sale Agreement, will purchase
Receivables thereunder in strict compliance
with the terms thereof and will
vigorously enforce the rights and remedies
accorded to Seller under each
Receivables Sale Agreement. Seller will
take all actions to exercise, perfect
and enforce its rights and interests (and
the rights and interests of the Agent
and the Purchasers as assignees of Seller)
under the Receivables Sale Agreements
as the Agent may from time to time
reasonably request, including, without
limitation, (A) facilitating access by the
Agent to copies of the Records
maintained at and the offices of each
Originator and (B) making claims to which
it may be entitled under any indemnity,
reimbursement or similar provision
contained in any Receivables Sale
Agreement. Without limiting the generality of
Section 7.1(a)(iv), Seller will promptly
deliver to the Agent a copy of all
notices, certificates or other information
delivered to Seller pursuant to or in
connection with any Receivables Sale
Agreement.
(ii) Seller will require the Provider to perform its
obligations and undertakings under and
pursuant to the Performance Undertaking
and will vigorously enforce the rights
accorded to Seller under the Performance
Undertaking. Seller will take all actions
to perfect and enforce its rights and
interests (and the rights and interests of
the Agent and the Purchasers as
assignees of Seller) under the Performance
Undertaking as the Agent may from
time to time reasonably request. Without
limiting the generality of Section 7.
1(a)(iv), Seller will promptly deliver to
the Agent a copy of all notices,
certificates or other information delivered
to Seller pursuant to or in
connection with the Performance
Undertaking.
(h) Ownership. Seller will take all necessary action to (i)
vest
legal and equitable title to the
Receivables, the Related Assets and the
Collections purchased under the
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Receivables Sale Agreements irrevocably in
Seller, free and clear of any Adverse
Claims other than Adverse Claims in favor
of the Agent and the Purchasers
(including, without limitation, the filing
of all financing statements or other
similar instruments or documents necessary
under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect
Seller's interest in such
Receivables, Related Assets and Collections
and such other action to perfect,
protect or more fully evidence the interest
of Seller therein as the Agent may
reasonably request), and (ii) establish and
maintain, in favor of the Agent, for
the benefit of the Purchasers, a valid and
perfected first priority undivided
percentage ownership interest (and/or a
valid and perfected first priority
security interest) in all Receivables,
Related Assets and Collections to the
full extent contemplated herein, free and
clear of any Adverse Claims
(including, without limitation, the filing
of all financing statements or other
similar instruments or documents necessary
under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect
the Agent's (for the benefit of the
Purchasers) interest in such Receivables,
Related Assets and Collections and
such other action to perfect, protect or
more fully evidence the interest of the
Agent for the benefit of the Purchasers as
the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the
Purchasers
are entering into the transactions
contemplated by this Agreement in reliance
upon Seller's identity as a legal entity
that is separate from the Provider, the
Servicer and each Originator. Therefore,
from and after the date of execution
and delivery of this Agreement, Seller
shall take all reasonable steps,
including, without limitation, all steps
that the Agent or any Purchaser may
from time to time reasonably request, to
maintain Seller's identity as a
separate legal entity and to make it
manifest to third parties that Seller is an
entity with assets and liabilities distinct
from those of the Originators, the
Servicer, the Provider and any Affiliates
thereof and not just a division of the
Provider, the Servicer, any Originator or
any such Affiliate. Without limiting
the generality of the foregoing and in
addition to the other covenants set forth
herein, Seller will:
(A) conduct its own business in its own name and require
that all full time employees of Seller, if
any, identify themselves as such and
not as employees of any Originator, the
Servicer or the Provider (including,
without limitation, by means of providing
appropriate employees with business or
identification cards identifying such
employees as Seller's employees);
(B) compensate all employees, consultants and agents
directly, from Seller's own funds, for
services provided to Seller by such
employees, consultants and agents and, to
the extent any employee, consultant or
agent of Seller is also an employee,
consultant or agent of any Originator, the
Servicer, the Provider or any Affiliate
thereof, allocate the compensation of
such employee, consultant or agent between
Seller and such Originator, the
Servicer, the Provider or such Affiliate,
as applicable, on a basis that
reflects the services rendered to Seller
and such Originator, the Servicer, the
Provider or such Affiliate, as
applicable;
(C) clearly identify its offices (by signage or otherwise)
as its offices and, if any such office is
located in the offices of any
Originator, the Servicer, the Provider or
any Affiliate thereof, Seller shall
lease such office at a fair market
rent;
(D) have a separate telephone number, which will be answered
only in its name and separate stationery,
invoices and checks in its own name;
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<PAGE>
(E) conduct all transactions with the Provider, the
Originators and the Servicer (including,
without limitation, any delegation of
its obligations hereunder as Servicer)
strictly on an arm's length basis,
allocate all overhead expenses (including,
without limitation, telephone and
other utility charges) for items shared
between Seller, the Servicer, the
Provider or any Originator on the basis of
actual use to the extent practicable
and, to the extent such allocation is not
practicable, on a basis reasonably
related to actual use;
(F) at all times have a Board of Directors consisting of
three members, at least one member of which
is an Independent Director;
(G) observe all corporate formalities as a distinct entity,
and ensure that all corporate actions
relating to (A) the selection, maintenance
or replacement of the Independent Director,
(B) the dissolution or liquidation
of Seller or (C) the initiation of,
participation in, acquiescence in or consent
to any bankruptcy, insolvency,
reorganization or similar proceeding involving
Seller, are duly authorized by unanimous
vote of its Board of Directors
(including the Independent Director);
(H) maintain Seller's books and records separate from those
of the Originators, the Servicer, the
Provider and any Affiliate thereof and
otherwise readily identifiable as its own
assets rather than assets of the
Originators, the Servicer, the Provider and
any Affiliate thereof;
(I) prepare its financial statements separately from those
of the Originators, the Servicer, the
Provider or any Affiliate thereof and
insure that any consolidated financial
statements of the Originators, the
Servicer, the Provider or any Affiliate
thereof that include Seller and that are
filed with the Securities and Exchange
Commission or any other governmental
agency have notes clearly stating that
Seller is a separate corporate entity and
that its assets will be available first and
foremost to satisfy the claims of
the creditors of Seller;
(J) except as herein specifically otherwise provided,
maintain the funds or other assets of
Seller separate from, and not commingled
with, those of any Originator, the
Servicer, the Provider or any Affiliate
thereof and only maintain bank accounts or
other depository accounts to which
Seller alone is the account party, into
which Seller alone makes deposits and
from which Seller alone (or the Agent
hereunder) has the power to make
withdrawals;
(K) pay all of Seller's operating expenses from Seller's own
assets (except for certain payments by the
Originators, the Servicer, the
Provider or other Persons pursuant to
allocation arrangements that comply with
the requirements of this Section
7.1(i));
(L) operate its
business and activities such that: it does
not engage in any business or activity of
any kind, or enter into any
transaction or indenture, mortgage,
instrument, agreement, contract, lease or
other undertaking, other than the
transactions contemplated and authorized by
this Agreement and the Receivables Sale
Agreements; and does
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<PAGE>
not create, incur, guarantee, assume or
suffer to exist any indebtedness or
other liabilities, whether direct or
contingent, other than (1) as a result of
the endorsement of negotiable instruments
for deposit or collection or similar
transactions in the ordinary course of
business, (2) the incurrence of
obligations under this Agreement, (3) the
incurrence of obligations, as
expressly contemplated in the Receivables
Sale Agreements, to make payment to
the Originators thereunder for the purchase
of Receivables from the Originators
under the Receivables Sale Agreements, and
(4) the incurrence of operating
expenses in the ordinary course of business
of the type otherwise contemplated
by this Agreement;
(M) maintain its corporate charter in conformity with this
Agreement, such that it does not amend,
restate, supplement or otherwise modify
its articles of incorporation or by-laws
(or equivalent thereof) in any respect
that would impair its ability to comply
with the terms or provisions of any of
the Transaction Documents, including,
without limitation, Section 7.1(i) of this
Agreement;
(N)
maintain the effectiveness of, and continue to perform
under each Receivables Sale Agreement and
the Performance Undertaking, such that
it does not amend, restate, supplement,
cancel, terminate or otherwise modify
any Receivables Sale Agreement or the
Performance Undertaking, or give any
consent, waiver, directive or approval
thereunder or waive any default, action,
omission or breach under any Receivables
Sale Agreement or the Performance
Undertaking or otherwise grant any
indulgence thereunder, without (in each case)
the prior written consent of the Agent;
(O) maintain its corporate separateness such that it does
not merge or consolidate with or into, or
convey, transfer, lease or otherwise
dispose of (whether in one transaction or
in a series of transactions, and
except as otherwise contemplated herein)
all or substantially all of its assets
(whether now owned or hereafter acquired)
to, or acquire all or substantially
all of the assets of, any Person, nor at
any time create, have, acquire,
maintain or hold any interest in any
Subsidiary.
(P) maintain at all times the Required Capital Amount (as
defined in each Receivables Sale Agreement)
and refrain from making any
dividend, distribution, redemption of
capital stock or payment of any
subordinated indebtedness which would cause
the Required Capital Amount to cease
to be so maintained; and
(Q) take such other actions as are necessary on its part to
ensure that the facts and assumptions set
forth in the opinion letter issued by
Drinker Biddle & Reath LLP, as counsel
for Seller, in connection with the
closing or initial Incremental Purchase
under this Agreement and relating to
substantive consolidation issues, and in
the certificates accompanying such
opinion, remain true and correct in all
material respects at all times.
(j) Collections. Each of Seller and the Servicer will cause (1)
all proceeds from all Lock-Boxes to be
directly deposited by a Collection Bank
into a Collection Account and (2) each
Lock-Box and Collection Account to be
subject at all times to a Collection
Account Agreement that is in full force and
effect. In the event any payments relating
to Receivables are remitted directly
to Seller or any Affiliate of Seller,
Seller will remit (or will use its best
efforts to cause all such payments to be
remitted) directly to a Collection Bank
and
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<PAGE>
deposited into a Collection Account within
two (2) Business Days following
receipt thereof, and, at all times prior to
such remittance, Seller will itself
hold or, if applicable, will cause such
payments to be held in trust for the
exclusive benefit of the Agent and the
Purchasers. Seller will maintain
exclusive ownership, dominion and control
(subject to the terms of this
Agreement) of each Lock-Box and Collection
Account and shall not grant the right
to take dominion and control of any
Lock-Box or Collection Account at any time,
except to the Agent as contemplated by this
Agreement. Until the Agent delivers
a Collection Notice to the applicable
Collection Bank, the Agent shall permit
Seller and the Servicer to provide
instructions to such Collection Bank with
respect to the Collection Accounts and
Lock-Boxes maintained by such Collection
Bank.
(k) Taxes. Each of Seller and the Servicer will file all tax
returns and reports required by law to be
filed by it and will promptly pay all
taxes and governmental charges at any time
owing, except in the case of the
Servicer where such taxes are being
contested in good faith and in respect of
which Servicer shall have established
adequate reserves and no enforcement
proceeding has been commenced. Seller will
pay when due any taxes payable in
connection with the Receivables, exclusive
of taxes on or measured by income or
gross receipts of Company, the Agent or any
Financial Institution.
(l) Payment to Originators. With respect to any Receivable
purchased by Seller from any Originator,
such sale shall be effected under, and
in strict compliance with the terms of, the
applicable Receivables Sale
Agreement, including, without limitation,
the terms relating to the amount and
timing of payments to be made to such
Originator in respect of the purchase
price for such Receivable.
Section 7.2 Negative Covenants of Seller and the Servicer. Until
the
date on which the Aggregate Unpaids have
been indefeasibly paid in full and this
Agreement terminates in accordance with its
terms, each of Seller and the
Servicer hereby severally, and not jointly,
covenants, as to itself, that:
(a) Name Change, Offices and Records. Seller will not make any
change to its name (within the meaning of
Section 9-507(c) of any applicable
enactment of the UCC), identity, or
jurisdiction of organization, unless (i) at
least forty-five (45) days prior to the
effective date of any such change,
Seller provides written notice thereof to
the Agent, (ii) at least ten (10) days
prior to such effective date, Seller
delivers to the Agent such financing
statements (Forms UCC-1 and UCC-3),
executed by Seller (if required under
applicable law) which the Agent or any
Purchaser may reasonably request to
reflect such change, together with such
other documents and instruments that the
Agent or any Purchaser may reasonably
request in connection therewith, (iii) at
least ten (10) days prior to such effective
date, Seller has taken all other
steps to ensure that the Agent, for the
benefit of itself and the Purchasers,
continues to have a first priority
perfected ownership in the Receivables, the
Related Assets related thereto and any
Collections thereon and (iv) in the case
of any change in its jurisdiction of
organization, if requested by the Agent or
any Purchaser, the Agent and such Purchaser
shall have received, prior to such
change, an opinion of counsel, in form and
substance reasonably satisfactory to
the Agent and such Purchaser, as to such
incorporation and Seller's valid
existence and good standing and the
perfection and preservation of priority of
the Agent's ownership or security interest
in, the Receivables, the Related
Assets and Collections.
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<PAGE>
(b) Change in Payment Instructions to Obligors. Except as may
be
required by the Agent pursuant to Section
8.2(b), neither Seller nor Servicer
will add or terminate any bank as a
Collection Bank, or make any change in the
instructions to Obligors regarding payments
to be made to any Lock-Box or
Collection Account, unless the Agent shall
have received, at least ten (10) days
before the proposed effective date
therefor, (i) written notice of such
addition, termination or change and (ii)
with respect to the addition of a
Collection Bank or a Collection Account or
Lock-Box, an executed Collection
Account Agreement with respect to the new
Collection Account or Lock-Box;
provided, however, that the Servicer may
make changes in instructions to
Obligors regarding payments if such new
instructions require such Obligor to
make payments to another existing
Collection Account.
(c) Modifications to Contracts and Credit and Collection
Policy.
Without the Agent's prior written consent,
Seller will not agree to make any
change to the Credit and Collection Policy
that could reasonably be expected to
adversely affect the collectibility of the
Receivables. Except as provided in
Section 8.2(d), the Servicer will not and
will not agree to, extend, amend or
otherwise modify the terms of any
outstanding Receivable or the terms of any
Contract related thereto to the extent that
such terms relate to such Receivable
other than in accordance with the Credit
and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of
law or otherwise) or otherwise dispose of,
or grant any option with respect to,
or create or suffer to exist any Adverse
Claim upon (including, without
limitation, the filing of any financing
statement) or with respect to, any
Receivable, Related Assets or Collections,
or upon or with respect to any
Contract under which any Receivable arises,
or any Lock-Box or Collection
Account, or assign any right to receive
income with respect thereto (other than,
in each case, the creation of the interests
therein in favor of the Agent and
the Purchasers provided for herein), and
Seller will defend the right, title and
interest of the Agent and the Purchasers
in, to and under any of the foregoing
property, against all claims of third
parties claiming through or under Seller
or any Originator. Seller will not create
or suffer to exist any mortgage,
pledge, security interest, encumbrance,
lien, charge or other similar
arrangement on any of its inventory, except
in favor of the Agent and the
Purchasers as provided hereunder.
(e) Net Receivables Balance. At no time prior to the
Amortization
Date shall Seller permit the Net
Receivables Balance to be less than an amount
equal to the sum of (i) the Aggregate
Capital plus (ii) the Aggregate Reserves.
(f) Termination Date Determination. Seller will not designate
the
Termination Date (as defined in any
Receivables Sale Agreement), or send any
written notice to any Originator in respect
thereof, without the prior written
consent of the Agent, except with respect
to the occurrence of such Termination
Date arising pursuant to Section 5.1(d) of
a Receivables Sale Agreement.
(g) Restricted Junior Payments. From and after the continuance
of
any Amortization Event, Seller will not
make any Restricted Junior Payment if,
after giving effect thereto, Seller would
fail to meet its obligations set forth
in Section 7.2(e).
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ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer. (a) The servicing,
administration
and collection of the Receivables shall be
conducted by the Servicer so
designated from time to time in accordance
with this Section 8.1. The Agent and
the Purchasers hereby appoint Seller to
perform all such servicing,
administration and collection tasks. Seller
hereby delegates such servicing,
administration and collection tasks to Cott
and the Agent and the Purchasers
consent to such delegation. Cott hereby
accepts such delegation from Seller and
agrees to perform the duties and
obligations of the Servicer pursuant to the
terms of this Agreement. The Agent may, or
upon the direction of the Required
Financial Institutions, the Agent shall, at
any time after the occurrence and
during the continuance of an Amortization
Event, designate any Person to succeed
Cott as Servicer. From and after the
designation of any Person as the successor
Servicer to Cott, the Agent may, or upon
the direction of the Required Financial
Institutions, the Agent shall designate any
Person as a subsequent successor
Servicer at any time.
(b) Without the prior written consent of the Agent and the
Required Financial Institutions, Seller,
Cott and any other Person subsequently
designated as Servicer by the Agent in
accordance with Section 8.1(a)) shall not
be permitted to delegate any of its duties
or responsibilities as Servicer to
any Person other than (i) Seller, (ii) Cott
and (iii) with respect to certain
Charged-Off Receivables, outside collection
agencies and attorneys in accordance
with its customary practices. If at any
time the Agent shall designate any
successor Servicer, all duties and
responsibilities theretofore delegated to the
Servicer being replaced may, at the
discretion of the Agent, be terminated
forthwith on notice given by the Agent to
the Servicer being replaced and to
Seller.
(c) Notwithstanding the foregoing subsection (b), for so long
as
Cott shall serve as the Servicer (i) Cott
shall be and remain primarily liable
to the Agent and the Purchasers for the
full and prompt performance of all
duties and responsibilities of the Servicer
hereunder and (ii) the Agent and the
Purchasers shall be entitled to deal
exclusiv
