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EXHIBIT 10.68
CREDIT AND SECURITY AGREEMENT
DATED AS OF MARCH 7, 2003
AMONG
ALLIED RECEIVABLES FUNDING INCORPORATED,
as Borrower,
ALLIED WASTE NORTH AMERICA, INC.,
as Servicer,
BLUE RIDGE ASSET FUNDING CORPORATION,
as a Lender
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender Group Agent
THE CONDUIT LENDERS FROM TIME TO TIME PARTY HERETO,
THE LIQUIDITY BANKS FROM TIME TO TIME PARTY HERETO,
THE LENDER GROUP AGENTS FROM TIME TO TIME PARTY HERETO,
AND
WACHOVIA BANK, NATIONAL ASSOCIATION, AS AGENT
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TABLE OF CONTENTS
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Page
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Article I The
Advances..........................................................
2
Section 1.1 Credit
Facility............................................ 2
Section 1.2
Increases.................................................. 2
Section 1.3
Decreases.................................................. 3
Section 1.4 Deemed Collections; Borrowing
Limit........................ 3
Section 1.5 Payment
Requirements....................................... 4
Section 1.6 Ratable Loans; Funding Mechanics; Liquidity
Fundings....... 5
Article II Payments and
Collections............................................. 5
Section 2.1 Payment
Obligations........................................ 5
Section 2.2 Collections Prior to
Amortization.......................... 6
Section 2.3 Collections Following
Amortization......................... 7
Section 2.4 Payment
Rescission......................................... 8
Section 2.5 Calculation of CP Costs, Interest,
Etc..................... 8
Article III Conduit
Funding..................................................... 8
Section 3.1 CP
Costs................................................... 8
Section 3.2
[Reserved]................................................. 8
Section 3.3 CP Costs
Payments.......................................... 8
Section 3.4 Default
Rate............................................... 8
Article IV Liquidity Bank
Funding............................................... 9
Section 4.1 Liquidity Bank
Funding..................................... 9
Section 4.2 Interest
Payments.......................................... 9
Section 4.3 Selection and Continuation of Interest
Periods............. 9
Section 4.4 Liquidity Bank Interest
Rates.............................. 10
Section 4.5 Suspension of the LIBO
Rate................................ 10
Section 4.6 Default
Rate............................................... 10
Article V Representations and
Warranties........................................ 11
Section 5.1 Representations and Warranties of the Loan
Parties......... 11
Article VI Conditions of
Advances............................................... 15
Section 6.1 Conditions Precedent to Effectiveness of
Agreement......... 15
Section 6.2 Conditions Precedent to All Advances and
Reinvestments..... 15
Article VII
Covenants...........................................................
16
Section 7.1 Affirmative Covenants of the Loan
Parties.................. 16
Section 7.2 Negative Covenants of the Loan
Parties..................... 24
Article VIII Administration and
Collection...................................... 25
Section 8.1 Designation of
Servicer.................................... 25
Section 8.2 Duties of
Servicer......................................... 26
Section 8.3 Collection
Notices......................................... 27
Section 8.4 Responsibilities of
Borrower............................... 28
Section 8.5 Monthly
Reports............................................ 28
Section 8.6 Servicing
Fee.............................................. 28
Section 8.7 Servicer
Indemnities....................................... 28
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Section 8.8 Servicer
Covenants......................................... 30
Article IX Amortization
Events.................................................. 30
Section 9.1 Amortization
Events........................................ 30
Section 9.2
Remedies................................................... 33
Article X
Indemnification.......................................................
33
Section 10.1 Indemnities by the Loan
Parties......................... 33
Section 10.2 Increased Cost and Reduced
Return....................... 36
Section 10.3 Other Costs and
Expenses................................ 37
Section 10.4
Taxes................................................... 37
Article XI The
Agents...........................................................
41
Section 11.1 Authorization and
Action................................ 41
Section 11.2 Delegation of
Duties.................................... 41
Section 11.3 Exculpatory
Provisions.................................. 42
Section 11.4
Reliance................................................ 42
Section 11.5 Non-Reliance on Agent and Other
Lenders................. 43
Section 11.6 Reimbursement and
Indemnification....................... 43
Section 11.7 Individual
Capacity..................................... 43
Section 11.8
Successors.............................................. 44
Article XII Assignments;
Participations......................................... 44
Section 12.1
Assignments............................................. 44
Section 12.2
Participations.......................................... 46
Article XIII Security
Interest.................................................. 46
Section 13.1 Grant of Security
Interest.............................. 46
Section 13.2 Termination after Final Payout
Date..................... 46
Article XIV
Miscellaneous.......................................................
47
Section 14.1 Waivers and
Amendments.................................. 47
Section 14.2
Notices................................................. 47
Section 14.3 Ratable
Payments........................................ 48
Section 14.4 Protection of Agent's Security
Interest................. 48
Section 14.5
Confidentiality......................................... 49
Section 14.6 Bankruptcy
Petition..................................... 49
Section 14.7 Limitation of
Liability................................. 50
Section 14.8 CHOICE OF
LAW........................................... 50
Section 14.9 CONSENT TO
JURISDICTION................................. 50
Section 14.10 WAIVER OF JURY
TRIAL.................................... 50
Section 14.11 Integration; Binding Effect; Survival of
Terms.......... 51
Section 14.12 Counterparts; Severability; Section
References.......... 51
Section 14.13 Wachovia
Roles.......................................... 51
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EXHIBITS
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Exhibit I Definitions
Exhibit II Form of Borrowing Notice
Exhibit III Places of Business of the Loan Parties; Locations of
Records; Federal Employer
Identification Number(s)
Exhibit IV Names of Collection Banks; Lock-Boxes &
Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX Form of Monthly Report
Exhibit X [RESERVED]
Exhibit XI Form of Performance Undertaking
Exhibit XII [RESERVED]
Exhibit XIII Form of Reduction Notice
SCHEDULES
Schedule A Lender Groups, Lender Group Agents, Conduit Lenders
and Liquidity Banks and
Commitments of Liquidity Banks
Schedule B Documents to be Delivered to the Agent on or Prior to
the Initial Purchase
Schedule C Originators
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CREDIT AND SECURITY AGREEMENT
This Credit and Security Agreement, dated as of March 7, 2003 is
entered
into by and among:
(a) Allied Receivables Funding Incorporated, a Delaware
corporation
("Borrower"),
(b) Allied Waste North America, Inc., a Delaware corporation
("Allied"),
as initial Servicer (the Servicer together with Borrower, the
"Loan Parties" and
each, a "Loan Party"),
(c) Each of the entities identified on Schedule A to this
Agreement as a
Conduit (together with any of their respective successors and
assigns hereunder,
the "Conduit Lenders"),
(d) Each of the entities identified on Schedule A to this
Agreement as a
Liquidity Bank (together with any of their respective successors
and assigns
hereunder, the "Liquidity Banks"),
(e) Each of the entities identified on Schedule A to this
Agreement as a
Lender Group Agent (together with any of their respective
successor and assigns
hereunder, (the "Lender Group Agents"),
(f) Blue Ridge Asset Funding Corporation, a Delaware corporation
("Blue
Ridge"), and
(g) Wachovia Bank, National Association, as agent for the Lender
Group (as
defined herein) of which Blue Ridge is a party (in such
capacity, the "Blue
Ridge Agent"), as a Lender that is a member of the Blue Ridge
Group (as defined
below) and as agent for the Lenders hereunder or any successor
agent hereunder
(in such capacity, 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
Borrower desires to borrow from the Lenders from time to
time.
Each Conduit may, in its absolute and sole discretion, make
Advances to
Borrower from time to time.
In the event that a Conduit declines to make any Advance, the
Liquidity
Banks that are members of the related Lender Group shall, at the
request of
Borrower, make Advances from time to time.
Wachovia Bank, National Association has been requested and is
willing to
act as Agent on behalf of the Lenders in accordance with the
terms hereof.
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ARTICLE I
THE ADVANCES
SECTION 1.1 CREDIT FACILITY.
(a) Upon the terms and subject to the conditions hereof, from
time to time
on and after the Initial Funding Date and prior to the Facility
Termination
Date:
(i) Borrower may, at its option, request Advances from the
Lenders
in an aggregate principal amount at any one time outstanding not
to exceed
the lesser of the Aggregate Commitment and the Borrowing Base
(such lesser
amount, the "Borrowing Limit");
(ii) subject to the terms and conditions of this Agreement,
each
Lender Group shall make available Loans in an amount equal to
the lesser
of such Lender Group's Lender Group Limit and its Lender Group
Share of
the Advance requested, as provided for herein; and
(iii) any Conduit may, at its option, make available its
Lender
Group Share of the requested Advance, or if any Conduit shall
decline to
make available its Lender Group Share of any Advance requested
prior to
the Commitment Termination Date, except as otherwise provided in
Section
1.2, the Liquidity Banks that are members of the related Lender
Group
severally agree to make Loans in an amount equal to the lesser
of such
Lender Group's Lender Group Limit and the related Lender Group
Share of
the requested Advance, it being understood that no Liquidity
Bank shall
have any obligation to make any Loan after the Commitment
Termination
Date.
Each of the Advances, and all other Obligations, shall be
secured by the
Collateral as provided in Article XIII. It is the intent of each
Conduit to fund
its Lender Group Share of all Advances by the issuance of
Commercial Paper.
(b) Borrower may, upon at least 30 days' notice to the Agent,
terminate in
whole or reduce in part, ratably among the Lender Groups, the
unused portion of
the Aggregate Commitment of the Liquidity Banks; provided that
each partial
reduction of the Aggregate Commitment shall be in an amount
equal to at least
$10,000,000 (or a larger integral multiple of $1,000,000 if in
excess thereof).
Each such reduction shall reduce the Commitments of the
Liquidity Banks of each
Lender Group ratably among such Liquidity Banks in such Lender
Group.
SECTION 1.2 INCREASES.
Borrower shall provide the Agent and each Lender Group Agent
with at least
two (2) Business Days' prior notice in a form set forth as
Exhibit II hereto of
each Advance (each, a "Borrowing Notice"). Each Borrowing Notice
shall be
subject to Section 6.2 hereof and shall be irrevocable and shall
specify the
requested increase in Aggregate Principal (which shall not be
less than
$1,000,000 or a larger integral multiple of $100,000) and the
Borrowing Date
(which, in the case of any Advance after the initial Advance
hereunder, shall
only be on a Settlement
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Date) and, in the case of an Advance requested on or before the
Commitment
Termination Date and to be funded by the Liquidity Banks, the
requested Interest
Rate and Interest Period. Following receipt of a Borrowing
Notice, each Lender
Group Agent will determine whether related Conduit will make
available such
Lender Group's Lender Group Share of the requested Advance. If
any Conduit or
the related Lender Group Agent determines that such Conduit will
not make
available the related Lender Group's Lender Group Share of a
proposed Advance,
then such Lender Group's Lender Group Share of a proposed
Advance will be made
by the related Liquidity Banks and such Loan will accrue CP
Costs for the period
from the date such Loan is made to the end to the then current
Settlement
Period. On the date of each Advance, upon satisfaction of the
applicable
conditions precedent set forth in Article VI, each Conduit or
the related
Liquidity Banks (with respect to Advances requested on or before
the Commitment
Termination Date), as applicable, shall wire transfer, or cause
to be wire
transferred, immediately available funds to the Facility Account
in an amount
equal to (a) in the case of a Conduit, its Lender Group Share of
the principal
amount of the requested Advance or (b) in the case of a
Liquidity Bank, such
Liquidity Bank's Pro Rata Share of its Lender Group Share of the
principal
amount of the requested Advance.
SECTION 1.3 DECREASES.
Except as provided in Section 1.4, Borrower shall provide the
Agent with
prior written notice in conformity with the Required Notice
Period and in a form
set forth as Exhibit XIII hereto (a "Reduction Notice") of any
proposed
reduction of Aggregate Principal. Such Reduction Notice shall
designate (a) the
date (the "Proposed Reduction Date") upon which any such
reduction of Aggregate
Principal shall occur (which date shall give effect to the
applicable Required
Notice Period) and (b) the amount of Aggregate Principal to be
reduced (the
"Aggregate Reduction"), which shall be applied ratably among all
Lender Groups
and, within each Lender Group, to the Loans specified by
Borrower in the
Reduction Notice, or if no Loans are so specified, ratably to
the Loans of the
related Conduit and the Liquidity Banks. Only one (1) Reduction
Notice shall be
outstanding at any time.
SECTION 1.4 DEEMED COLLECTIONS; BORROWING LIMIT.
(a) If on any day on or after the Initial Funding Date:
(i) the Outstanding Balance of any Receivable is reduced as a
result
of any defective or rejected goods or services, any cash
discount or any
other adjustment by any Originator or any Affiliate thereof, or
as a
result of any tariff or other governmental or regulatory action,
or
(ii) the Outstanding Balance of any Receivable is reduced or
canceled as a result of a setoff in respect of any claim by the
Obligor
thereof (whether such claim arises out of the same or a related
or an
unrelated transaction), or
(iii) the Outstanding Balance of any Receivable is reduced
on
account of the obligation of any Originator or any Affiliate
thereof to
pay to the related Obligor any rebate or refund, or
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(iv) the Outstanding Balance of any Receivable is less than
the
amount included in calculating the Net Pool Balance for purposes
of any
Monthly Report (for any reason other than such Receivable
becoming a
Defaulted Receivable), or
(v) any of the representations or warranties of Borrower set
forth
in Section 5.1(i), (j), (r), (s), (t) or (u) were not true when
made with
respect to any Receivable,
then, on such day, Borrower shall be deemed to have received a
Collection of
such Receivable (A) in the case of clauses (i) - (iv) above, in
the amount of
such reduction or cancellation or the difference between the
actual Outstanding
Balance and the amount included in calculating such Net Pool
Balance, as
applicable; and (B) in the case of clause (v) above, in the
amount of the
Outstanding Balance of such Receivable; provided, however, that
in any such
case, (1) provided that no Amortization Event has occurred, if
after giving
effect to a reduction in the Outstanding Balances of all
affected Receivables in
the amounts described in clauses (A) and (B) of this Section
1.4(a), a Borrowing
Base Deficiency exists, Borrower shall immediately pay to each
Lender Group
Agent, in accordance with Section 1.4(b), an amount necessary to
cure such
Borrowing Base Deficiency or (2) if an Amortization Event has
occurred, Borrower
shall pay to the Collection Account, in immediately available
funds, the amounts
specified in clauses (A) or (B) of this Section 1.4(a), as
applicable on the
Business Day that Borrower or the Servicer becomes aware such
breach exists.
If, in accordance with clause (B) of Section 1.4(a), Borrower
deposits or
caused to be deposited in a Collection Account the Outstanding
Balance of a
Receivable, then, on the next Settlement Date, upon receipt by
the Agent and
each Lender Group Agent of a Monthly Report identifying such
Receivable and the
Outstanding Balance thereof, the Agent on behalf of the Secured
Parties shall
release its security interest in such Receivable and the Related
Security and
Collections (other than the related Deemed Collection) with
respect thereto
without any further action required on the part of Borrower, the
Agent or the
Secured Parties.
(b) Borrower shall ensure that the Aggregate Principal at no
time exceeds
the Borrowing Limit. If at any time a Borrowing Base Deficiency
exists, then
Borrower shall immediately pay to each Lender Group Agent, in
immediately
available funds, an amount equal to such Lender Group Share of
the amount
necessary to reduce the Aggregate Principal, such that after
giving effect to
such payment the Aggregate Principal is less than or equal to
the Borrowing
Limit. Upon receipt of such funds, each Lender Group Agent shall
apply such
funds to the Loans specified by Borrower in writing to each
Lender Group Agent,
or if no Loans are so specified, ratably to the Loans of the
related Conduit and
the Liquidity Banks, such that after giving effect to such
payment the related
Lender Group Principal is less than or equal to the Lender Group
Limit.
SECTION 1.5 PAYMENT REQUIREMENTS.
All amounts to be paid or deposited by any Loan Party pursuant
to any
provision of this Agreement shall be paid or deposited in
accordance with the
terms hereof no later than 1:30 p.m. (New York City time) on the
day when due in
immediately available funds, and if not received by 1:30 p.m.
(New York City
time) shall be deemed to be received on the next succeeding
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Business Day. If such amounts are payable to a Lender Group they
shall be paid
to the related Lender Group Agent's Account, for the account of
such Lender
Group, until otherwise notified by the applicable Lender Group
Agent. Upon
notice to Borrower, the Agent may debit the Facility Account for
all amounts due
and payable hereunder. All computations of CP Costs, Interest,
per annum fees
calculated as part of any CP Costs, per annum fees hereunder and
per annum fees
under each Fee Letter shall be made on the basis of a year of
360 days for the
actual number of days elapsed. Unless otherwise provided for
herein, if any
amount hereunder shall be payable on a day which is not a
Business Day, such
amount shall be payable on the next succeeding Business Day.
SECTION 1.6 RATABLE LOANS; FUNDING MECHANICS; LIQUIDITY
FUNDINGS.
(a) Each Advance hereunder shall consist of one or more Loans
made by each
Lender Group and, within each Lender Group, by the related
Conduit and/or the
related Liquidity Banks.
(b) Each Lender funding any Loan shall transfer the principal
amount of
its Loan to its Lender Group Agent on the applicable Borrowing
Date and each
Lender Group Agent, subject to its receipt of such Loan
proceeds, shall transfer
such funds to the Facility Account on such Borrowing Date.
(c) While it is the intent of each Conduit to fund the related
Lender
Group Share of each requested Advance through the issuance of
its Commercial
Paper, the parties acknowledge that if any Conduit is unable, or
such Conduit or
the related Lender Group Agent determines that it is
undesirable, to issue
Commercial Paper to fund all or any portion of its Lender Group
Share of Loans,
or is unable to repay such Commercial Paper upon the maturity
thereof, such
Conduit may put all or any portion of its Loans (including any
requested
Advance) to the Liquidity Banks for the related Lender Group at
any time
pursuant to the Liquidity Agreement for such Lender Group to
finance or
refinance any portion or all of its Lender Group Share of Loans
through a
Liquidity Funding to the extent available. The Liquidity
Fundings may be
Alternate Base Rate Loans or LIBO Rate Loans, or a combination
thereof, selected
by Borrower in accordance with Article IV, provided, however,
that if a Conduit
puts all or any portion of its Loans to the related Liquidity
Banks for the
purpose of funding a Borrowing Request, then such Loan will
accrue CP Costs for
the period from the date such Liquidity Funding is made to the
end to the then
current Settlement Period. Regardless of whether a Liquidity
Funding constitutes
the direct funding of a Loan, an assignment of a Loan made by
the related
Conduit or the sale of one or more participations in a Loan made
by the related
Conduit, each Liquidity Bank participating in a Liquidity
Funding shall have the
rights of a "Lender" hereunder with the same force and effect as
if it had
directly made a Loan to Borrower in the amount of its Liquidity
Funding.
(d) Nothing herein shall be deemed to commit any Conduit to make
Loans.
ARTICLE II
PAYMENTS AND COLLECTIONS
SECTION 2.1 PAYMENT OBLIGATIONS.
Borrower hereby promises to pay the following (collectively,
the
"Obligations"):
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(a) the Aggregate Principal on and after the Facility
Termination Date as
and when Collections are received;
(b) the fees set forth in each Fee Letter on the dates specified
therein;
(c) all accrued and unpaid Interest on the Alternate Base Rate
Loans on
each Settlement Date applicable thereto;
(d) all accrued and unpaid Interest on the LIBO Rate Loans on
the last day
of each Interest Period applicable thereto;
(e) all accrued and unpaid CP Costs on the CP Rate Loans on
each
Settlement Date; and
(f) all Broken Funding Costs and Indemnified Amounts upon
demand.
SECTION 2.2 COLLECTIONS PRIOR TO AMORTIZATION.
(a) On and after the Initial Funding Date and prior to the
Facility
Termination Date, any Deemed Collections received by the
Servicer and any other
Collections received by the Servicer shall be held in trust by
the Servicer for
the payment of any accrued and unpaid Obligations or for a
Reinvestment as
provided in this Section 2.2. If at any time any Collections are
received by the
Servicer on and after the Initial Funding Date and prior to the
Facility
Termination Date, Borrower hereby requests, and each Lender,
each Lender Group
Agent and the Agent hereby agrees, that simultaneously with such
receipt, such
funds shall be reinvested by Borrower in the purchase of
additional Eligible
Receivables (each, a "Reinvestment") such that after giving
effect to such
Reinvestment, the Aggregate Principal is less than or equal to
the Borrowing
Limit.
(b) On each Settlement Date prior to the Facility Termination
Date, the
Servicer shall remit to each Lender Group Agent's Account, for
distribution to
the Persons specified below, from Collections received during
the related
Settlement Period, the following amounts in the order
specified:
first, ratably among each Lender Group in accordance with the
Lender
Group Shares, to the payment of all accrued and unpaid CP Costs,
Interest
and Broken Funding Costs (if any) of each Lender Group that are
then due
and owing,
second, ratably among each Lender Group in accordance with
the
Lender Group Shares, to the payment of all accrued and unpaid
fees under
each Fee Letter that are then due and owing,
third, to the accrued and unpaid Servicing Fee,
fourth, if required under Section 1.3 or 1.4, to the ratable
reduction, among each Lender Group in accordance with the Lender
Group
Shares, of the Aggregate Principal,
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fifth, for the ratable payment, among each Lender Group in
accordance with the Lender Group Shares, of all other unpaid
Obligations,
if any, that are then due and owing, and
sixth, the balance, if any, to Borrower or otherwise in
accordance
with Borrower's instructions.
Collections applied to the payment of Obligations shall be
distributed to each
Lender Group Agent in accordance with the aforementioned
provisions and in
accordance with each of the priorities set forth above in this
Section 2.2(a).
Upon receipt of any such funds, each Lender Group Agent shall
distribute such
funds to the appropriate members of its Lender Group.
SECTION 2.3 COLLECTIONS FOLLOWING AMORTIZATION.
On (a) each day on which any of the conditions precedent set
forth in
Section 6.2 are not satisfied, (b) the Facility Termination Date
and (c) each
day thereafter, the Servicer shall set aside and hold in trust,
for the Secured
Parties, all Collections received on such day. On and after the
Facility
Termination Date, the Servicer shall, on each Settlement Date
and on each other
Business Day specified by the Agent (after deduction of any
accrued and unpaid
Servicing Fee as of such date): (i) remit to the Agent the
amount due pursuant
to clause first below and (ii) then, to each Lender Group
Agent's Account such
Lender Group's Lender Group Share of the remaining amounts set
aside pursuant to
the preceding sentence, and each Lender Group Agent shall apply
such amounts as
follows:
first, to the reimbursement of the Agent's out-of-pocket costs
of
collection and enforcement of this Agreement,
second, ratably among each Lender Group in accordance with
the
Lender Group Shares, to the payment of all accrued and unpaid CP
Costs,
Interest and Broken Funding Costs of such Lender Group,
third, ratably among each Lender Group in accordance with the
Lender
Group Shares, to the payment of all accrued and unpaid fees
under the Fee
Letter for such Lender Group,
fourth, ratably among each Lender Group in accordance with
the
Lender Group Shares, to the reduction of Aggregate
Principal,
fifth, ratably among each Lender Group in accordance with the
Lender
Group Shares, for the payment of all other unpaid Obligations,
and
sixth, after the Obligations have been indefeasibly reduced to
zero,
to Borrower.
Collections applied to the payment of Obligations shall be
distributed in
accordance with the aforementioned provisions, and, giving
effect to each of the
priorities set forth above in this Section 2.3(b), shall be
shared ratably
(within each priority) among the members of each Lender Group in
accordance with
the amount of such Obligations owing to each of them in respect
of each such
priority.
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SECTION 2.4 PAYMENT RESCISSION.
No payment of any of the Obligations 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. Borrower shall
remain
obligated for the amount of any payment or application so
rescinded, returned or
refunded, and shall promptly pay to the applicable Lender Group
Agent (for
application to the Person or Persons with the related Lender
Group who suffered
such rescission, return or refund) the full amount thereof, plus
Interest on
such amount at the Default Rate from the date of any such
rescission, return or
refunding.
SECTION 2.5 CALCULATION OF CP COSTS, INTEREST, ETC.
Not later than the 3rd Business Day immediately preceding each
Monthly
Reporting Date, the Lender Group Agent on behalf of each Lender
Group shall (a)
calculate, for the Calculation Period then most recently ended,
the following
amounts for the related Lender Group: (i) the CP Costs
applicable to all CP Rate
Loans for the related Conduit for such Calculation Period, (ii)
the aggregate
amount of Interest applicable to all Liquidity Fundings for such
Lender Group
for such Calculation Period, (iii) the fees payable to such
Lender Group for
such Calculation Period, (iv) any Broken Funding Costs for such
Lender Group for
such Calculation Period, and (v) any other amounts payable to
such Lender Group
hereunder for such Calculation Period and (b) notify Borrower in
writing of each
such amount (and how such amount was calculated) on such
day.
ARTICLE III
CONDUIT FUNDING
SECTION 3.1 CP COSTS.
Borrower shall pay CP Costs with respect to the principal
balance of each
Conduit's Loans from time to time outstanding. Each Conduit Loan
that is funded
with Commercial Paper will accrue CP Costs each day.
SECTION 3.2 [RESERVED].
SECTION 3.3 CP COSTS PAYMENTS.
On each Settlement Date, Borrower shall pay to each Lender Group
Agent
(for the benefit of the related Conduit) an amount equal to all
accrued and
unpaid CP Costs for such Lender Group in respect of the
principal associated
with all CP Rate Loans of such Conduit for the Calculation
Period then most
recently ended in accordance with Article II.
SECTION 3.4 DEFAULT RATE.
From and after the occurrence of an Amortization Event, all
Conduit Loans
shall accrue Interest at the Default Rate and shall cease to be
CP Rate Loans.
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ARTICLE IV
LIQUIDITY BANK FUNDING
SECTION 4.1 LIQUIDITY BANK FUNDING.
Prior to the occurrence of an Amortization Event, the
outstanding
principal balance of each Liquidity Funding shall, subject to
the provisions of
Section 1.2 and 1.6(c) relating to Loans made by any Lender,
accrue interest for
each day during its Interest Period at either the LIBO Rate or
the Alternate
Base Rate in accordance with the terms and conditions hereof.
Subject to the
provisions of Section 1.2 and 1.6(c) relating to Loans made by
any Lender, until
Borrower gives notice to the Lender Group Agent for each Lender
Group of another
Interest Rate in accordance with Section 4.4, the initial
Interest Rate for any
Loan made by any Conduit that is transferred to the Liquidity
Banks for such
Conduit's Lender Group pursuant to the related Liquidity
Agreement shall be the
Alternate Base Rate (unless the Default Rate is then
applicable). If the
Liquidity Banks of a Lender Group acquire by assignment from the
related Conduit
any Loan pursuant to the Liquidity Agreement for such Lender
Group, each such
Loan so assigned shall be deemed to have an Interest Period
commencing on the
date of any such assignment.
SECTION 4.2 INTEREST PAYMENTS.
On the last day of each Interest Period for each Liquidity
Funding,
Borrower shall pay to the applicable Lender Group Agent (for the
benefit of the
related Liquidity Banks) the accrued and unpaid Interest for the
entire Interest
Period of each such Liquidity Funding of such Lender Group.
SECTION 4.3 SELECTION AND CONTINUATION OF INTEREST PERIODS.
(a) Subject to the provisions of Section 1.2 and 1.6(c) relating
to Loans
made by any Lender, Borrower shall from time to time request
Interest Periods
for the Liquidity Fundings of a Lender Group by providing notice
to the related
Lender Group Agent in accordance with the provisions of Section
4.4, provided
that if at any time any Liquidity Funding is outstanding for a
Lender Group,
Borrower shall always request Interest Periods for such Lender
Group such that
at least one Interest Period for such Lender Group shall end on
the next
succeeding Settlement Date; provided, further, that if no
Interest Period is so
selected, the Interest Period shall be one month.
(b) Borrower or a Lender Group Agent, upon notice to and consent
by the
other received at least three (3) Business Days prior to the end
of an Interest
Period (the "Terminating Tranche") for any Liquidity Funding of
the related
Lender Group, may, effective on the last day of the Terminating
Tranche: (i)
divide any such Liquidity Funding into multiple Liquidity
Fundings, (ii) combine
any such Liquidity Funding with one or more other Liquidity
Fundings of such
Lender Group that have a Terminating Tranche ending on the same
day as such
Terminating Tranche or (iii) combine any such Liquidity Funding
with a new
Liquidity Funding to be made by the Liquidity Banks of such
Lender Group on the
day such Terminating Tranche ends.
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SECTION 4.4 LIQUIDITY BANK INTEREST RATES.
Subject to the provisions of Section 1.2 and 1.6(c) relating to
Loans made
by any Lender, Borrower may select the LIBO Rate or the
Alternate Base Rate for
each Liquidity Funding. Borrower shall by 1:30 pm (New York City
time): (a) 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
Interest Rate
and (b) at least one (1) Business Day prior to the expiration of
any Terminating
Tranche with respect to which the Alternate Base Rate is being
requested as a
new Interest Rate, give the applicable Lender Group Agent
irrevocable notice of
the new Interest Rate for the Liquidity Funding associated with
such Terminating
Tranche. Subject to the provisions of Section 1.2 and 1.6(c)
relating to Loans
made by any Lender, until Borrower gives notice to the
applicable Lender Group
Agent of another Interest Rate, the initial Interest Rate for
any Loan
transferred to the Liquidity Banks of a Lender Group pursuant to
the Liquidity
Agreement for such Lender Group shall be the Alternate Base Rate
(unless the
Default Rate is then applicable).
SECTION 4.5 SUSPENSION OF THE LIBO RATE.
(a) If any Liquidity Bank notifies the applicable Lender Group
Agent that
it has determined that funding its Pro Rata Share of the
Liquidity Fundings for
such Lender Group 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 such LIBO Rate does not
accurately reflect
the cost of acquiring or maintaining a Liquidity Funding at such
LIBO Rate by
such Liquidity Bank, then such Lender Group Agent shall suspend
the availability
of such LIBO Rate and require Borrower to select the Alternate
Base Rate for any
Liquidity Funding of such Lender Group accruing Interest at such
LIBO Rate.
(b) If less than all of the Liquidity Banks of a Lender Group
give a
notice to the applicable Lender Group Agent pursuant to Section
4.5(a), then
each Liquidity Bank which gave such a notice or requested such
reimbursement or
indemnity shall be obligated, at the request of Borrower to
assign all of its
rights and obligations hereunder to (A) another Liquidity Bank
that is a member
of the related Lender Group Agent, if such Liquidity Bank
accepts such
assignment or (B) another entity nominated by Borrower or the
related Lender
Group Agent that is an Eligible Assignee willing to participate
in this
Agreement through the Liquidity Termination Date in the place of
such notifying
Liquidity Bank; provided that (1) the notifying Liquidity Bank
receives payment
in full, pursuant to an Assignment Agreement, of all Obligations
owing to it
(whether due or accrued), (2) the replacement Liquidity Bank
otherwise satisfies
the requirements of Section 12.1(b) and (3) such replacement
Liquidity Bank
shall be satisfactory to the Agent and the related Lender Group
Agent.
SECTION 4.6 DEFAULT RATE.
From and after the occurrence of an Amortization Event, all
Liquidity
Fundings shall accrue Interest at the Default Rate.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 REPRESENTATIONS AND WARRANTIES OF THE LOAN
PARTIES.
Each Loan Party hereby represents and warrants to the Agent,
each Lender
Group Agent and the Lenders, as to itself, as of the date
hereof, as of the date
of each Advance, of each Reinvestment and of each Settlement
Date that:
(a) Existence and Power. Such Loan Party's jurisdiction of
organization is
correctly set forth in the preamble to this Agreement. Such Loan
Party is duly
organized under the laws of that jurisdiction and no other state
or
jurisdiction, and such jurisdiction must maintain a public
record showing the
organization to have been organized. Such Loan Party is validly
existing and in
good standing under the laws of its state of organization. Such
Loan Party is
duly qualified to do business and is in good standing as a
foreign entity, and
has and holds all organizational 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 so
qualify or so hold 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 such Loan Party of this Agreement and
each other
Transaction Document to which it is a party, and the performance
of its
obligations hereunder and thereunder and, in the case of
Borrower, Borrower's
use of the proceeds of Advances made hereunder, are within its
corporate powers
and authority and have been duly authorized by all necessary
corporate action on
its part. This Agreement and each other Transaction Document to
which such Loan
Party is a party has been duly executed and delivered by such
Loan Party.
(c) No Conflict. The execution and delivery by such Loan Party
of this
Agreement and each other Transaction Document to which it is a
party, and the
performance of its obligations hereunder and thereunder do not
contravene or
violate (i) its certificate or articles of incorporation or
by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions
under any
agreement, contract or instrument to which it is a party or by
which it or any
of its property is bound, or (iv) any order, writ, judgment,
award, injunction
or decree binding on or affecting it or its property, and do not
result in the
creation or imposition of any Adverse Claim on assets of such
Loan Party or its
Subsidiaries (except as created hereunder) except, in any case,
where such
contravention or violation could not reasonably be expected to
have a Material
Adverse Effect; and no transaction contemplated hereby requires
compliance with
any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the
financing
statements required hereunder, no authorization or approval or
other action by,
and no notice to or filing with, any governmental authority or
regulatory body
is required for the due execution and delivery by such Loan
Party of this
Agreement and each other Transaction Document to which it is a
party and the
performance of its obligations hereunder and thereunder.
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(e) Actions, Suits. There are no actions, suits or proceedings
pending, or
to the best of such Loan Party's knowledge, threatened, against
or affecting
such Loan Party, or any of its properties, in or before any
court, arbitrator or
other body, that could reasonably be expected to have a Material
Adverse Effect.
Such Loan Party 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 such Loan Party is a party constitute the legal, valid and
binding
obligations of such Loan Party enforceable against such Loan
Party in accordance
with their respective terms, except as such enforcement may be
limited by
applicable bankruptcy, insolvency, reorganization or other
similar laws relating
to or limiting creditors' rights generally and by general
principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at
law).
(g) Accuracy of Information. All information heretofore
furnished by such
Loan Party or any of its Affiliates to the Agent, any Lender
Group Agent or the
Lenders for purposes of or in connection with this Agreement,
any of the other
Transaction Documents or any transaction contemplated hereby or
thereby is true
and accurate in every material respect on the date such
information is stated or
certified and does not and will not contain any material
misstatement of fact or
omit to state a material fact or any fact necessary to make the
statements
contained therein not misleading.
(h) Use of Proceeds. No proceeds of any Advance hereunder will
be used (i)
for a purpose that violates, or would be inconsistent with, (A)
Section 7.2(e)
of this Agreement or (B) Regulation T, U or X promulgated by the
Board of
Governors of the Federal Reserve System from time to time or
(ii) to acquire any
security in any transaction which is subject to Section 12, 13
or 14 of the
Securities Exchange Act of 1934, as amended.
(i) Good Title. Borrower is the legal and beneficial owner of
the
Receivables, Related Security and Collections with respect
thereto, free and
clear of any Adverse Claim, except as created by the Transaction
Documents.
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 Borrower's ownership interest in each
Receivable, its
Collections and the Related Security.
(j) Perfection. This Agreement is effective to create a valid
security
interest in favor of the Agent for the benefit of the Secured
Parties in the
Collateral to secure payment of the Obligations, free and clear
of any Adverse
Claim except as created by the Transactions Documents. As of the
Initial Funding
Date, 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 Secured
Parties) security interest in the Collateral. Such Loan Party's
jurisdiction of
organization is a jurisdiction whose law generally requires
information
concerning the existence of a nonpossessory security interest to
be made
generally available in a filing, record or registration system
as a condition or
result of such a security interest's obtaining priority over the
rights of a
lien creditor which respect to collateral.
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<PAGE>
(k) Places of Business and Locations of Records. The principal
places of
business and chief executive office of such Loan Party and the
offices where it
keeps all of its Records are located at the address(es) listed
on Exhibit III or
such other locations of which the Agent has been notified in
accordance with
Section 7.2(a) in jurisdictions where all action required by
Section 14.4(a) has
been taken and completed. Borrower's Federal Employer
Identification Number is
correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in
Section
7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The
names and addresses of all Collection Banks, together with the
account numbers
of the Collection Accounts of Borrower at each Collection Bank
and the post
office box number of each Lock-Box, are listed on Exhibit IV.
Borrower has not
granted any Person, other than the Agent as contemplated by this
Agreement,
dominion and 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 a future time
or upon the occurrence of a future event.
(m) Material Adverse Effect. (i) The initial Servicer represents
and
warrants that since December 31, 2002, no event has occurred
that would have a
material adverse effect on the financial condition or operations
of the initial
Servicer and its Subsidiaries or the ability of the initial
Servicer to perform
its obligations under this Agreement, and (ii) Borrower
represents and warrants
that since the date of this Agreement, no event has occurred
that would have a
material adverse effect on (A) the financial condition or
operations of
Borrower, (B) the ability of Borrower to perform its obligations
under the
Transaction Documents, or (C) the collectibility of the
Receivables generally or
any material portion of the Receivables.
(n) Names. The name in which Borrower has executed this
Agreement is
identical to the name of Borrower as indicated on the public
record of its state
of organization which shows Borrower to have been organized. In
the past five
(5) years, Borrower has not used any corporate names, trade
names or assumed
names other than the name in which it has executed this
Agreement.
(o) Ownership of Borrower. Allied owns, directly or indirectly,
100% of
the issued and outstanding capital stock of Borrower, free and
clear of any
Adverse Claim, other than any Adverse Claim subject to a written
agreement
between the Agent and Person holding such Adverse Claim, which
agreement shall
be in the form and substance of Section 9.16 of the Senior
Credit Agreement
(notwithstanding the definition of Senior Credit Agreement, as
such Senior
Credit Agreement exists on the Closing Date without giving
effect to any
amendment, modification, waiver, restatement, replacement or
supplement thereof
or thereto) and shall apply equally to any capital stock, notes
or other
interests in or obligations of Borrower, with the Agent
expressly noted as a
third party beneficiary of such agreement (the "Standstill
Agreement") and the
Standstill Agreement shall be executed by, and enforceable (as
evidenced by a
representation to such effect by the Performance Guarantor)
against, each party
thereto (except as such enforceability 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) on or before
June 5, 2003. Such capital stock is validly issued, fully paid
and
nonassessable, and there are no options, warrants or other
rights to acquire
securities of Borrower.
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(p) Not a Holding Company or an Investment Company. Such Loan
Party is not
a "holding company" or a "subsidiary holding company" of a
"holding company"
within the meaning of the Public Utility Holding Company Act of
1935, as
amended, or any successor statute. Such Loan Party is not an
"investment
company" within the meaning of the Investment Company Act of
1940, as amended,
or any successor statute.
(q) Compliance with Law. Such Loan Party has complied in all
respects with
all applicable laws, rules, regulations, orders, writs,
judgments, injunctions,
decrees or awards to which it may be subject, except 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, except where such contravention or violation
could not reasonably
be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Loan
Party has
complied in all material respects with the Credit and Collection
Policy with
regard to each Receivable and the related Contract, and has not
made any
material change to such Credit and Collection Policy, except in
accordance with
Section 7.1(a)(vii).
(s) Payments to Applicable Originator. With respect to each
Receivable
transferred to Borrower under the Receivables Sale Agreement,
Borrower has given
reasonably equivalent value (determined as of the date such
Receivable was
acquired by Borrower) to the applicable 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 under the Receivables Sale
Agreement is or
may be voidable under any section of the Federal Bankruptcy
Code.
(t) Enforceability of Contracts. Each Contract with respect to
each
Receivable is effective to create, and has created, a legal,
valid and binding
obligation of the related Obligor to pay the Outstanding Balance
of the
Receivable created thereunder and any accrued interest thereon,
enforceable
against the Obligor in accordance with its terms, except as such
enforcement may
be limited by applicable bankruptcy, insolvency, reorganization
or other similar
laws relating to or limiting creditors' rights generally and by
general
principles of equity (regardless of whether enforcement is
sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable included in the Net
Pool Balance
as an Eligible Receivable on any date was an Eligible Receivable
on such date.
(v) Borrowing Limit. Immediately after giving effect to each
Advance, each
Reinvestment and each settlement on any Settlement Date
hereunder, the Aggregate
Principal is less than or equal to the Borrowing Limit.
(w) Accounting. Each Loan Party accounts for the transactions
contemplated
by the Receivables Sale Agreement as a sale of the Receivables,
Related Security
and Collections.
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ARTICLE VI
CONDITIONS OF ADVANCES
SECTION 6.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF
AGREEMENT.
The effectiveness of this Agreement is subject to the conditions
precedent
that (a) the Agent and each Lender Group Agent shall have
received each of those
documents listed on Schedule A to the Receivables Sale Agreement
and identified
therein as to be received on or before the Closing Date and each
of those
documents listed on Schedule B to this Agreement and identified
therein as to be
received on or before the Closing Date, and (b) the Agent and
each Lender Group
Agent shall have received all fees and expenses required to be
paid on such date
pursuant to the terms of this Agreement and the related Fee
Letters.
SECTION 6.2 CONDITIONS PRECEDENT TO ALL ADVANCES AND
REINVESTMENTS.
Each Advance, each Reinvestment and each rollover or
continuation of any
Advance shall be subject to the further conditions precedent
that (a) the
Servicer shall have delivered to the Agent and each Lender Group
Agent on or
prior to the date thereof, in form and substance satisfactory to
the Agent, all
Monthly Reports as and when due under Section 8.5; (b) the
Facility Termination
Date shall not have occurred; (c) the Agent and each Lender
Group Agent shall
have received such other approvals, opinions or documents as it
may reasonably
request, provided, however, no Advance, Reinvestment, or
rollover or
continuation of any Advance shall be subject to receipt by the
Agent or any
Lender Group Agent of any approval, opinion or document
requested pursuant to
this clause (c) unless reasonable prior notice has been given by
the Agent or
such Lender Group Agent requesting such approval, opinion or
document and such
approval, opinion or document has not been received on or before
the second
Settlement Date occurring after the date of such request; (d) on
the date
thereof, the following statements shall be true (and acceptance
of the proceeds
of such Advance or Reinvestment shall be deemed a representation
and warranty by
Borrower that such statements are then true):
(i) the representations and warranties set forth in Section 5.1
are
true and correct on and as of the date of such Advance (or such
Settlement
Date, as the case may be) such Reinvestment or rollover or
continuation of
any Advance as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from
such Advance (or the continuation thereof), that will constitute
an
Amortization Event, and no event has occurred and is continuing,
or would
result from such Advance (or the continuation thereof) such
Reinvestment
or rollover or continuation of any Advance, that would
constitute an
Unmatured Amortization Event; and
(iii) after giving effect to such Advance such Reinvestment
or
rollover or continuation of any Advance, the Aggregate Principal
will not
exceed the Borrowing Limit; and
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(e) the Agent and each Lender Group Agent shall have received on
or before the
Initial Funding Date those documents listed on Schedule B hereto
and identified
therein as to be received on or before the Initial Funding
Date.
ARTICLE VII
COVENANTS
SECTION 7.1 AFFIRMATIVE COVENANTS OF THE LOAN PARTIES.
Until the Final Payout Date, each Loan Party hereby covenants,
as to itself,
as set forth below:
(a) Financial Reporting. It will maintain, for itself and each
of its
Subsidiaries, a system of accounting established and
administered in accordance
with GAAP, and furnish or cause to be furnished to the Agent and
each Lender
Group Agent:
(i) Annual Reporting. Within 90 days after the close of each
of
its respective fiscal years, audited, unqualified financial
statements
(which shall include balance sheets, statements of income and
retained
earnings and a statement of cash flows) for itself and its
consolidated
subsidiaries for such fiscal year certified by independent
public
accountants reasonably acceptable to the Agent and each Lender
Group
Agent.
(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 for itself and its consolidated subsidiaries as
at the
close of each such period and statements of income and retained
earnings
and a statement of cash flows for such Person for the period
from the
beginning of such fiscal year to the end of such quarter, all
certified by
its chief financial officer.
(iii) Compliance Certificate. Together with the financial
statements
required hereunder, a compliance certificate in substantially
the form of
Exhibit V signed by one of its Authorized Officers and dated the
date of
such annual financial statement or such quarterly financial
statement, as
the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to its shareholders, copies of all
financial
statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies
of
all of its registration statements and annual, quarterly,
monthly or other
regular reports filed with the Securities and Exchange
Commission.
(vi) Copies of Notices. Promptly upon its receipt of any
notice,
request for consent, financial statements, certification, report
or other
communication under or in connection with any Transaction
Document from
any Person other than the Agent copies of the same.
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(vii) Change in Credit and Collection Policy. Promptly after
the
effectiveness of any material change in or amendment to the
Credit and
Collection Policy, a copy of the Credit and Collection Policy
then in
effect and a notice indicating such change or amendment;
provided, that if
any proposed change or amendment would be reasonably likely to
adversely
affect the collectibility of the Receivables or decrease the
credit
quality of any newly created Receivables, the Agent's and each
Lender
Group Agent's prior written consent thereto shall be required.
The Agent
and each Lender Group Agent agrees that it will respond to any
request
referred to in this Section 7.1(a)(vii) within five (5) Business
Days
after receipt by the Agent of written request therefor.
(viii) Other Information. Promptly, from time to time, such
other
information, documents, records or reports relating to the
Receivables or
the condition or operations, financial or otherwise, of such
Loan Party as
the Agent or a Lender Group Agent may from time to time
reasonably request
in order to protect the interests of the Agent and the Secured
Parties
under or as contemplated by this Agreement.
Notwithstanding the foregoing, the Servicer's obligations
pursuant to
clauses (i), (ii), (iii), (iv) and (v) of Section 7.1(a) may be
satisfied by
delivery of the required financial statements, compliance
certificates,
shareholder statements and Securities and Exchange Commission
filings of,
relating to, or signed by an Authorized Officer of, as
appropriate, the
Performance Guarantor.
(b) Notices. Such Loan Party will notify the Agent in writing of
any of
the following promptly upon learning of the occurrence thereof,
describing the
same and, if applicable, the steps being taken with respect
thereto:
(i) Amortization Events or Unmatured Amortization Events.
The
occurrence of each Amortization Event and each Unmatured
Amortization
Event, by a statement of an Authorized Officer of such Loan
Party.
(ii) Judgments and Proceedings. (A) (1) The entry of any
judgment
or decree against Performance Guarantor, the Servicer or any of
their
respective Subsidiaries if the aggregate amount of all judgments
and
decrees then outstanding against Performance Guarantor, the
Servicer and
their respective Subsidiaries exceeds $50,000,000 after
deducting (I) the
amount with respect to which Performance Guarantor, the Servicer
or any
such Subsidiary, as the case may be, is insured and with respect
to which
the insurer has assumed responsibility in writing, and (II) the
amount for
which Performance Guarantor, the Servicer or any such Subsidiary
is
otherwise indemnified if the terms of such indemnification
are
satisfactory to the Agent and each Lender Group Agent, and (2)
the filing
or commencement of, or of any threat or notice of intention of
any Person
to file or commence, any action, suit or proceeding, whether at
law or in
equity or by or before any governmental authority, against the
Performance
Guarantor or the Servicer that could, individually or in the
aggregate,
reasonably be expected to have a Material Adverse Effect,
provided,
however, that any notice required by this subclause (A)(2) shall
be
provided as soon as possible and in any event within five (5)
Business
Days after any Authorized Officer of such Loan Party has
knowledge of such
filing, commencement, threat or notice of intention; and (B) the
entry of
any judgment or decree
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or the institution of any litigation, arbitration proceeding
or
governmental proceeding against Borrower.
(iii) Material Adverse Effect. Any development known to any
Authorized Officer that has had, or could, individually or in
the
aggregate, reasonably be expected to have, a Material Adverse
Effect.
(iv) Termination Date. The occurrence of the "Termination
Date"
under and as defined in the Receivables Sale Agreement.
(v) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any other financing
arrangement (in
the case of the Servicer, any financing arrangement or
arrangements that,
individually or in the aggregate, equal or exceed $50,000,000 or
in the
case of Borrower, any financing arrangement or arrangements
that
individually or in the aggregate, equal or exceed $5,000)
pursuant to
which such Loan Party is a debtor or an obligor.
(vi) Notices under Receivables Sale Agreement. Copies of all
notices delivered under the Receivables Sale Agreement.
(vii) Downgrade of Servicer or Performance Guarantor. Any
downgrade
in the rating of any Indebtedness of the Servicer or of the
Performance
Guarantor by S&P or Moody's, setting forth the Indebtedness
affected and
the nature of such change.
(c) Compliance with Laws and Preservation of Corporate
Existence. Such
Loan Party will comply in all respects with all applicable laws,
rules,
regulations, orders, writs, judgments, injunctions, decrees or
awards to which
it may be subject, except where the failure to so comply could
not reasonably be
expected to have a Material Adverse Effect. Such Loan Party will
preserve and
maintain its corporate existence, rights, franchises and
privileges in the
jurisdiction of its incorporation, and qualify and remain
qualified in good
standing as a foreign corporation in each jurisdiction where its
business is
conducted, except where the failure to so preserve and maintain
or qualify could
not reasonably be expected to have a Material Adverse
Effect.
(d) Audits. Such Loan Party will furnish to the Agent and each
Lender
Group Agent from time to time such information with respect to
it and the
Receivables as the Agent or any Lender Group Agent may
reasonably request. Such
Loan Party will, from time to time during regular business hours
as requested by
the Agent or a Lender Group Agent upon reasonable notice and at
the sole cost of
such Loan Party, permit the Agent and each Lender Group Agent,
or its agents or
representatives (and shall cause each Originator to permit the
Agent and each
Lender Group 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 Collateral, 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
Collateral or any Person's performance under any of the
Transaction Documents or
any Person's performance under the Contracts and, in each case,
with any of the
officers or employees of Borrower or the
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Servicer having knowledge of such matters (each of the foregoing
examinations
and visits, a "Review"); provided, however, that, so long as no
Amortization
Event has occurred and is continuing, (A) excluding the first
Review after the
Closing Date and any Reviews to ascertain compliance by the
Servicer (and its
Affiliates who are sub-servicers) with the requirements of
Section 8.8, the Loan
Parties shall only be responsible for the costs and expenses of
two (2) Reviews
in any one calendar year and (B) the Agent and the Lender Group
Agents will not
request more than four (4) Reviews in any one calendar year.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause each Originator to)
maintain
and implement administrative and operating procedures
(including, without
limitation, an ability to recreate records evidencing
Receivables in the
event of the destruction of the originals thereof), and keep and
maintain
all documents, books, records and other information reasonably
necessary
or advisable for the collection of all Receivables (including,
without
limitation, records adequate to permit the immediate
identification of
each new Receivable and all Collections of and adjustments to
each
existing Receivable). The Servicer will (and will cause each
Originator
to) give the Agent and each Lender Group Agent notice of any
material
change in the administrative and operating procedures referred
to in the
previous sentence.
(ii) Such Loan Party will (and will cause each Originator to):
(A)
on or prior to the date hereof, mark its master data processing
records
and other books and records relating to the Loans with a
legend,
acceptable to the Agent, describing the Agent's security
interest in the
Collateral and (B) upon the request of the Agent or any Lender
Group Agent
after an Amortization Event, deliver to the Agent all
Contracts
(including, without limitation, all multiple originals of any
such
Contract constituting an instrument, a certificated security or
chattel
paper) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy.
Such
Loan Party will (and will cause each Originator to) timely and
fully (i) perform
and comply with all provisions, covenants and other promises
required to be
observed by it under the Contracts related to the Receivables,
and (ii) comply
in all respects with the Credit and Collection Policy in regard
to each
Receivable and the related Contract; provided, however, any
failure to so
perform or comply shall not constitute a breach hereof except to
the extent such
failure or non-compliance could be reasonably expected to have a
Material
Adverse Effect.
(g) Performance and Enforcement of Receivables Sale Agreement
and other
Transaction Documents. Borrower (i) will perform each of its
obligations and
undertakings under and pursuant to the Receivables Sale
Agreement and the other
Transaction Documents to which it is a party, (ii) will purchase
Receivables
thereunder in strict compliance with the terms of the
Receivables Sale
Agreement, (iii) will promptly enforce the rights and remedies
accorded to
Borrower under the Receivables Sale Agreement and (iv) will
maintain the
effectiveness of, and continue to perform under the Receivables
Sale Agreement
and the other Transaction Documents to which it is a party, such
that it does
not amend, restate, supplement, cancel, terminate or otherwise
modify the
Receivables Sale Agreement or any other Transaction Document to
which it is a
party, or give any consent, waiver, directive or approval
thereunder or
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<PAGE>
waive any default, action, omission or breach under the
Receivables Sale
Agreement or any Transaction Document or otherwise grant any
indulgence
thereunder, without (in each case) the prior written consent of
the Agent or
otherwise as permitted by this Agreement. Borrower will take all
actions
necessary to perfect and enforce its rights and interests (and
the rights and
interests of the Agent, the Lender Group Agents and the Lenders
as assignees of
Borrower) under the Receivables Sale Agreement and as the Agent
or any Lender
Group Agent may from time to time reasonably request, including,
without
limitation, making claims to which it may be entitled under any
indemnity,
reimbursement or similar provision contained in the Receivables
Sale Agreement.
(h) Ownership. Borrower will take all necessary action to (i)
vest
legal and equitable title to the Collateral purchased under the
Receivables Sale
Agreement irrevocably in Borrower, free and clear of any Adverse
Claims (other
than Adverse Claims in favor of the Agent, for the benefit of
the Secured
Parties) 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
Borrower's interest
in such Collateral and such other action to perfect, protect or
more fully
evidence the interest of Borrower therein as the Agent or any
Lender Group Agent
may reasonably request), and (ii) establish and maintain, in
favor of the Agent,
for the benefit of the Secured Parties, a valid and perfected
first priority
security interest in all Collateral, 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
Secured Parties) security interest in the Collateral and such
other action to
perfect, protect or more fully evidence the interest of the
Agent for the
benefit of the Secured Parties as the Agent or any Lender Group
Agent may
reasonably request.
(i) Lenders' Reliance. Borrower acknowledges that the Lenders
are
entering into the transactions contemplated by this Agreement in
reliance upon
Borrower's identity as a legal entity that is separate from each
Originator.
Therefore, from and after the date of execution and delivery of
this Agreement,
Borrower shall take all reasonable steps, including, without
limitation, all
steps that the Agent, any Lender Group Agent or any Lender may
from time to time
reasonably request, to maintain Borrower's identity as a
separate legal entity
and to make it manifest to third parties that Borrower is an
entity with assets
and liabilities distinct from those of each Originator and any
Affiliates
thereof (other than Borrower) and not just a division of any
Originator or any
such Affiliate. Without limiting the generality of the foregoing
and in addition
to the other covenants set forth herein, Borrower will:
(i) conduct its own business in its own name and require that
all
full-time employees of Borrower, if any, identify themselves as
such and
not as employees of any Originator (including, without
limitation, by
means of providing appropriate employees with business or
identification
cards identifying such employees as Borrower's employees);
(ii) compensate all employees, consultants and agents
directly,
from Borrower's own funds, for services provided to Borrower by
such
employees, consultants and agents and, to the extent any
employee,
consultant or agent of Borrower is also an employee, consultant
or agent
of any Originator or any Affiliate thereof, allocate the
20
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compensation of such employee, consultant or agent between
Borrower and
such Originator or such Affiliate, as applicable, on a basis
that reflects
the services rendered to Borrower and such Originator or such
Affiliate,
as applicable;
(iii) clearly identify its offices (by signage or otherwise) as
its
offices and, if such office is located in the offices of any
Originator,
Borrower shall lease such office at a fair market rent;
(iv) have a separate telephone number, which will be answered
only
in its name and separate stationery and checks in its own
name;
(v) conduct all transactions with each Originator and the
Servicer (including, without limitation, any delegation of its
obligations
hereunder as Servicer) on an arm's-length basis, allocate all
overhead
expenses (including, without limitation, telephone and other
utility
charges) for items shared between Borrower and such 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;
(vi) at all times have a Board of Directors consisting of at
least
three members, at least one member of which is an Independent
Director;
(vii) 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 Borrower or (C) the initiation
of,
participation in, acquiescence in or consent to any
bankruptcy,
insolvency, reorganization or similar proceeding involving
Borrower, are
duly authorized by unanimous vote of its Board of Directors
(including the
Independent Director);
(viii) maintain Borrower's books and records separate from those
of
each Originator and any Affiliate thereof and otherwise
readily
identifiable as its own assets rather than assets of any
Originator or any
Affiliate thereof;
(ix) prepare its financial statements separately from those of
each
Originator and insure that any consolidated financial statements
of any
Originator or any Affiliate thereof that include Borrower and
that are
filed with the Securities and Exchange Commission or any
other
governmental agency have notes clearly stating that Borrower is
a separate
corporate entity and that its assets will be available first and
foremost
to satisfy the claims of the creditors of Borrower;
(x) except as herein specifically otherwise provided, maintain
the
funds or other assets of Borrower separate from, and not
commingled with,
those of any Originator or any Affiliate thereof and only
maintain bank
accounts or other depository accounts to which Borrower alone is
the
account party, into which Borrower alone makes deposits and from
which
Borrower alone (or the Agent hereunder) has the power to make
withdrawals;
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<PAGE>
(xi) pay all of Borrower's operating expenses from Borrower's
own
assets (except for certain payments by any Originator or other
Persons
pursuant to allocation arrangements that comply with the
requirements of
this Section 7.1(i));
(xii) 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 as
contemplated and
authorized by this Agreement and the Receivables Sale Agreement
and its
Certificate of Incorporation and By-Laws; and does not create,
incur,
guarantee, assume or suffer to exist any indebtedness or
other
liabilities, whether direct or contingent, other than (A) as a
result of
the endorsement of negotiable instruments for deposit or
collection or
similar transactions in the ordinary course of business, (B)
the
incurrence of obligations under this Agreement, (C) the
incurrence of
obligations, as expressly contemplated in the Receivables Sale
Agreement,
to make payment to the applicable Originator thereunder for the
purchase
of Receivables from such Originator under the Receivables Sale
Agreement,
and (D) the incurrence of operating expenses in the ordinary
course of
business of the type otherwise contemplated by this
Agreement;
(xiii) maintain its corporate charter in conformity with
this
Agreement, such that it does not amend, restate, supplement or
otherwise
modify its Certificate of Incorporation or By-Laws in any
respect that
would impair its ability to comply with the terms or provisions
of any of
the Transaction Documents, including, without limitation,
Section 7.1(i)
of this Agreement;
(xiv) [RESERVED];
(xv) 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.
(xvi) maintain at all times the Required Capital Amount 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
(xvii) take such other actions as are necessary on its part
to
ensure that the facts and assumptions set forth in the opinion
issued by
Latham & Watkins, counsel for Borrower, in connection with
the closing or
initial Advance 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.
(i) Such Loan Party will cause (A) all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a
Collection
Account and (B) each Lock-
22
<PAGE>
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 the Collateral are remitted directly to
Borrower or
any Affiliate of Borrower, Borrower will remit (or will cause
all such
payments to be remitted) directly to a Collection Bank and
deposited into
a Collection Account within two (2) Business Days following
receipt
thereof, and, at all times prior to such remittance, Borrower
will itself
hold or, if applicable, will cause such payments to be held in
trust for
the exclusive benefit of the Agent and the Lenders. Borrower
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 a future time or upon the occurrence of a future event to any
Person,
except to the Agent as contemplated by this Agreement.
(ii) Borrower, or Servicer on behalf of Borrower, shall
cause
evidence to be delivered to Agent showing that each Lock-Box and
each
Collection Account is maintained in the name of Borrower.
(k) Taxes. Such Loan Party will file all tax returns and reports
required
by law to be filed by it and will promptly pay all taxes and
governmental
charges at any time owing, except any such taxes which are not
yet delinquent or
are being diligently contested in good faith by appropriate
proceedings and for
which adequate reserves in accordance with GAAP shall have been
set aside on its
books. Borrower will pay when due any taxes payable in
connection with the
Receivables, exclusive of taxes on or measured by income or
gross receipts of
the Agent, any Lender Group Agent or any Lender.
(l) Payment to Applicable Originator. With respect to any
Receivable
purchased by Borrower from any Originator, such sale shall be
effected under,
and in strict compliance with the terms of, the Receivables Sale
Agreement,
including, without limitation, the terms relating to the amount
and timing of
payments to be made to such Originator in respect of the
purchase price for such
Receivable.
(m) Accuracy of Information. Each Loan Party will cause all
information
furnished by such Loan Party or any of its Affiliates to the
Agent, any Lender
Group Agent or the Lenders for purposes of or in connection with
this Agreement,
any of the other Transaction Documents or any transaction
contemplated hereby or
thereby to be true and accurate in all material respects on the
date such
information is stated or certified and to 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.
(n) Standstill Agreement. Allied will, if the Agent is not a
signatory of
the Standstill Agreement, deliver, or cause to be delivered, to
the Agent, prior
to the execution of the Standstill Agreement, a final draft of
the Standstill
Agreement at least three (3) Business Days prior to the
execution of the
Standstill Agreement and the Agent shall have the right to
request modifications
and other changes to the final execution copy of the Standstill
Agreement for
the purpose of conforming such copy to the substance of Section
9.16 of the
Senior Credit Agreement (notwithstanding the definition of
Senior Credit
Agreement, as such Senior Credit Agreement
23
<PAGE>
exists on the Closing Date without giving effect to any
amendment, modification,
waiver, restatement or supplement thereof or thereto).
SECTION 7.2 NEGATIVE COVENANTS OF THE LOAN PARTIES.
Until the Final Payout Date, each Loan Party hereby covenants,
as to
itself, that:
(a) Name Change, Offices and Records. Such Loan Party will not
change
(i) its name as it appears in official filings in the
jurisdiction of its
organization, (ii) its status as a "registered organization"
(within the meaning
of Article 9 of any applicable enactment of the UCC), (iii) its
organizational
identification number, if any, issued by its jurisdiction of
organization, or
(iv) its jurisdiction of organization unless it shall have: (A)
given the Agent
and each Lender Group Agent at least forty-five (45) days' prior
written notice
thereof; (B) at least ten (10) days prior to such change,
delivered to the Agent
all financing statements, instruments and other documents
requested by the Agent
or any Lender Group Agent in connection with such change or
relocation and (C)
caused an opinion of counsel acceptable to Agent and its assigns
to be delivered
to the Agent, each Lender Group Agent and their respective
assigns that the
Agent's security interest (for the benefit of the Secured
Parties) is perfected
and of first priority, such opinion to be in form and substance
acceptable to
the Agent and its assigns in their sole discretion.
(b) Change in Payment Instructions to Obligors. Except as may
be
required by the Agent pursuant to Section 8.2(b), such Loan
Party will not add
or terminate any bank as a Collection Bank, or make any change
in the
instructions to Obligors regarding payments to be made to any
Lock-Box or
Collection Account, unless the Agent shall have received, at
least ten (10) days
before the proposed effective date therefor, (i) written notice
of such
addition, termination or change and (ii) with respect to the
addition of a
Collection Bank or a Collection Account or Lock-Box, an executed
Collection
Account Agreement with respect to the new Collection Account or
Lock-Box;
provided, however, that the Servicer may make changes in
instructions to
Obligors regarding payments if such new instructions require
such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy.
Except
in compliance with the provisions of Section 7.1(a)(viii), such
Loan Party will
not make any change to the Credit and Collection Policy that
could adversely
affect the collectibility of the Receivables or decrease the
credit quality of
any newly created Receivables. Except as provided in Section
8.2(d), the
Servicer will not, and will not permit any Originator to,
extend, amend or
otherwise modify the terms of any Contract (in any manner that
could adversely
affect any outstanding Receivable) or any Receivable other than
in accordance
with the Credit and Collection Policy.
(d) Sales, Liens. Borrower 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
of the
Collateral, or assign any right to receive income with respect
thereto (other
than, in each case, the creation of a security interest therein
in favor of the
Agent as provided for herein), and Borrower will defend the
right, title and
interest of the Secured Parties in, to and under any of the
foregoing property,
against all claims of third parties claiming through or under
Borrower
24
<PAGE>
or any Originator. Borrower will not create or suffer to exist
any mortgage,
pledge, security interest, encumbrance, lien, charge or other
similar
arrangement on any of its assets, except as contemplated by the
Transaction
Documents.
(e) Use of Proceeds. Borrower will not use the proceeds of the
Advances
for any purpose other than (i) paying for Receivables, Related
Security and
Collections under and in accordance with the Receivables Sale
Agreement,
including without limitation, making payments on the
Subordinated Notes to the
extent permitted thereunder and under the Receivables Sale
Agreement, (ii)
paying its ordinary and necessary operating expenses when and as
due, and (iii)
making Restricted Junior Payments to the extent permitted under
this Agreement.
(f) Termination Date Determination. Borrower will not designate
the
Termination Date, 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
the Receivables Sale Agreement and for terminations of
Immaterial Originators.
(g) Restricted Junior Payments. Borrower will not make any
Restricted
Junior Payment either (i) after the occurrence of any Unmatured
Amortization
Event or Amortization Event or (ii) if after giving effect
thereto, Borrower's
Net Worth would be less than the Required Capital Amount.
(h) Borrower Indebtedness. Borrower will not incur or permit to
exist
any Indebtedness or liability on account of deposits except: (i)
the Obligations
and (ii) other current accounts payable arising in the ordinary
course of
business and not overdue.
(i) Prohibition on Additional Negative Pledges. Borrower will
not enter
into or assume any agreement (other than this Agreement and the
other
Transaction Documents) prohibiting the creation or assumption of
any Adverse
Claim upon the Collateral except as contemplated by the
Transaction Documents,
or otherwise prohibiting or restricting any transaction
contemplated hereby or
by the other Transaction Documents.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.1 DESIGNATION OF SERVICER.
(a) The servicing, administration and collection of the
Receivables
shall be conducted by such Person (the "Servicer") so designated
from time to
time in accordance with this Section 8.1. Allied is hereby
designated as, and
hereby agrees to perform the duties and obligations of, the
Servicer pursuant to
the terms of this Agreement. The Agent may, at any time from and
after the
occurrence of an Amortization Event, designate as Servicer any
Person to succeed
Allied or any successor Servicer provided that the Rating Agency
Condition is
satisfied.
(b) Allied may delegate to the Originators, as sub-servicers of
the
Servicer, certain of its duties and responsibilities as Servicer
hereunder in
respect of the Receivables originated by
25
<PAGE>
such Originator. Without the prior written consent of the Agent
and the Required
Liquidity Banks, Allied shall not be permitted to delegate any
of its duties or
responsibilities as Servicer to any Person other than (i)
Borrower, (ii) the
Originators, and (iii) with respect to certain Defaulted
Receivables, outside
collection agencies in accordance with its customary practices.
Neither Borrower
nor any Originator shall be permitted to further delegate to any
other Person
any of the duties or responsibilities of the Servicer delegated
to it by Allied.
If at any time the Agent shall designate as Servicer any Person
other than
Allied, all duties and responsibilities theretofore delegated by
Allied to
Borrower or the Originators may, at the discretion of the Agent,
be terminated
forthwith on notice given by the Agent to Allied and to Borrower
and the
Originators.
(c) Notwithstanding the foregoing subsection (b), for so long as
Allied
is the Servicer: (i) Allied shall be and remain primarily liable
to the parties
hereto for the full and prompt performance of all duties and
responsibilities of
the Servicer hereunder and (ii) each of the parties hereto shall
be entitled to
deal exclusively with Allied in matters relating to the
discharge by the
Servicer of its duties and responsibilities hereunder. For so
long as Allied is
the Servicer, no party hereto shall be required to give notice,
demand or other
communication to any Person other than Allied in order for
communication to the
Servicer and its sub-servicer or other delegate with respect
thereto to be
accomplished. Allied, at all times that it is the Servicer,
shall be responsible
for providing any sub-servicer or other delegate of the Servicer
with any notice
given to the Servicer under this Agreement.
SECTION 8.2 DUTIES OF SERVICER.
(a) The Servicer shall take or cause to be taken all such
actions as may
be necessary or advisable to collect each Receivable from time
to time, all in
accordance with applicable laws, rules and regulations, with
reasonable care and
diligence, and in accordance with the Credit and Collection
Policy.
(b) The Servicer will instruct all Obligors to pay all
Collections
directly to a Lock-Box or Collection Account. The Servicer shall
effect a
Collection Account Agreement substantially in the form of
Exhibit VI with each
bank party to a Collection Account at any time. In the case of
any remittances
received in any Lock-Box or Collection Account that shall have
been identified,
to the satisfaction of the Servicer, to not constitute
Collections or other
proceeds of the Receivables or the Related Security, the
Servicer shall promptly
remit such items to the Person identified to it as being the
owner of such
remittances. From and after the date the Agent delivers to any
Collection Bank a
Collection Notice pursuant to Section 8.3, the Agent may request
that the
Servicer, and the Servicer thereupon promptly shall instruct all
Obligors with
respect to the Receivables, to remit all payments thereon to a
new depositary
account specified by the Agent and, at all times thereafter,
Borrower and the
Servicer shall not deposit or otherwise credit, and shall not
permit any other
Person to deposit or otherwise credit to such new depositary
account any cash or
payment item other than Collections.
(c) The Servicer shall administer the Collections in accordance
with the
procedures described herein and in Article II. The Servicer
shall, upon the
request of the Agent, segregate, in a manner acceptable to the
Agent, all cash,
checks and other instruments received by it from time to time
constituting
Collections from the general funds of the Servicer or Borrower
prior to the
remittance thereof in accordance with Article II. If the
Servicer shall be
required to segregate
26
<PAGE>
Collections pursuant to the preceding sentence, the Servicer
shall segregate and
deposit with a bank designated by the Agent such allocable share
of Collections
of Receivables set aside for the Lenders on the first Business
Day following
receipt by the Servicer of such Collections, duly endorsed or
with duly executed
instruments of transfer.
(d) Notwithstanding anything herein to the contrary, the
Servicer may
extend the maturity of any Receivable or adjust the Outstanding
Balance of any
Receivable or otherwise modify the terms of any Receivable as
the Servicer
determines to be appropriate to maximize Collections thereof or
minimize losses
thereon; provided, however, that such extension or adjustment
shall not alter
the status of such Receivable as a Delinquent Receivable or
Defaulted
Receivable, otherwise make such Receivable an Eligible
Receivable or limit the
rights of the Agent or any Secured Party under this
Agreement.
(e) The Servicer shall hold in trust for Borrower and the
Secured
Parties all Records that (i) evidence or relate to the
Receivables, the related
Contracts, Related Security and Collections or (ii) are
otherwise necessary or
desirable to collect the Receivables and shall, as soon as
practicable upon
demand of the Agent, deliver or make available to the Agent all
such Records, at
a place selected by the Agent. The Servicer shall, as soon as
practicable
following receipt thereof turn over to Borrower any cash
collections or other
cash proceeds in accordance with Article II. The Servicer shall,
from time to
time at the request of any Lender Group Agent, furnish to such
Lender Group
Agent (promptly after any such request) a calculation of the
amounts set aside
for the Lenders pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness
owed by it
to Originator or Borrower shall, except as otherwise specified
by such Obligor
or otherwise required by contract or law and unless otherwise
instructed by the
Agent, be applied as a Collection of any Receivable of such
Obligor (starting
with the oldest such Receivable) to the extent of any amounts
then due and
payable thereunder before being applied to any other receivable
or other
obligation of such Obligor.
SECTION 8.3 COLLECTION NOTICES.
The Agent is authorized at any time to date and to deliver to
the
Collection Banks the Collection Notices. Borrower hereby
transfers to the Agent
for the benefit of the Secured Parties, effective when the Agent
delivers such
notice, the exclusive ownership and control of each Lock-Box and
the Collection
Accounts. In case any authorized signatory of Borrower whose
signature appears
on a Collection Account Agreement shall cease to have such
authority before the
delivery of such notice, such Collection Notice shall
nevertheless be valid as
if such authority had remained in force. Borrower hereby
authorizes the Agent,
and agrees that the Agent shall be entitled (a) at any time
after delivery of
the Collection Notices, to endorse Borrower's name on checks and
other
instruments representing Collections, (b) at any time after the
occurrence of an
Amortization Event, to enforce the Receivables, the related
Contracts and the
Related Security, and (c) at any time after the occurrence of an
Amortization
Event, to take such action as shall be necessary or desirable to
cause all cash,
checks and other instruments constituting Collections of
Receivables to come
into the possession of the Agent rather than Borrower.
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SECTION 8.4 RESPONSIBILITIES OF BORROWER.
Anything herein to the contrary notwithstanding, the exercise by
the Agent
and the Secured Parties of their rights hereunder shall not
release the
Servicer, any Originator or Borrower from any of their duties or
obligations
with respect to any Receivables or under the related Contracts.
Neither the
Agent nor any of the Secured Parties shall have any obligation
or liability with
respect to any Receivables or related Contracts, nor shall any
of them be
obligated to perform the obligations of Borrower.
SECTION 8.5 MONTHLY REPORTS.
The Servicer shall prepare and forward to the Agent and each
Lender Group
Agent (a) on each Monthly Reporting Date, a Monthly Report and
an electronic
file of the data contained therein and (b) at such times as the
Agent or a
Lender Group Agent shall reasonably request, (i) a listing by
Obligor of all
Receivables together with an aging of such Receivables and (ii)
other interim
reporting as may from time to time be reasonably requested by
the Agent or a
Lender Group Agent.
SECTION 8.6 SERVICING FEE.
As compensation for the Servicer's servicing activities on their
behalf,
the Lenders hereby agree to pay the Servicer the Servicing Fee,
which fee shall
be paid in arrears on each Settlement Date.
SECTION 8.7 SERVICER INDEMNITIES.
(a) Without limiting any other rights that the Agent or any
Secured
Party may have hereunder or under applicable law, the Servicer
hereby agrees to
indemnify (and pay upon demand to) each Indemnified Party for
Indemnified
Amounts actually awarded against or incurred by any of them
arising out of or as
a result of any Covered Servicing Matters (as defined below),
excluding,
however:
(i) Indemnified Amounts to the extent a final judgment of a
court
of competent jurisdiction holds that such Indemnified Amounts
resulted
from gross negligence or willful misconduct on the part of the
Indemnified
Party seeking indemnification;
(ii) taxes imposed by the jurisdiction in which such
Indemnified
Party's principal executive office is located, on or measured by
the
overall net income of such Indemnified Party to the extent that
the
computation of such taxes is consistent with the
characterization for
income tax purposes of the acquisition by the Lenders of Loans
as a loan
or loans by the Lenders to Borrower secured by the Receivables,
the
Related Security, the Collection Accounts and the
Collections;
(iii) Indemnified Amounts to the extent the same includes losses
in
respect of Receivables that are late, delinquent or
uncollectible on
account of the insolvency, bankruptcy, payment history or lack
of
creditworthiness of the related Obligor; or
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(iv) Indemnified Amounts to the extent the same arise as a
result
of the performance by the Servicer of its duties and obligations
in
accordance with the terms of this Agreement;
provided, however, that nothing contained in this sentence shall
limit the
liability of the Servicer for amounts otherwise specifically
provided to be paid
by the Servicer under the terms of this Agreement.
(b) Subject in each case to clause (a)(i), (ii), (iii) and (iv)
above,
each of the following shall be a "Covered Servicing Matter":
(i) any representation or warranty made by any Servicer
Party
under or in connection with any Monthly Report, this Agreement,
any other
Transaction Document to which it is a party or that is delivered
by it or
any other information or report delivered by any Servicer Party
pursuant
hereto or thereto that shall have been false or incorrect when
made or
deemed made;
(ii) the failure by any Servicer Party to service, collect
or
administer any Receivables Related Security or Contract related
thereto in
accordance with this Agreement, the related Contract, the Credit
and
Collection Policy (but subject to the provisions of this
Agreement),
applicable laws, rules and/or regulations (including, without
limitation
any failure by any Servicer Party to have or maintain any
license or other
government authorization, to be qualified to do business in
any
jurisdiction or to file any notice of business activities or
similar
report in such jurisdiction);
(iii) any failure of any Servicer Party to perform its
duties,
covenants or other obligations in accordance with the provisions
of this
Agreement or any other Transaction Document;
(iv) any suit or other claim arising out of or in connection
with
the servicing, administration or collection of any Contract or
any
Receivable or Related Security;
(v) any dispute, claim, offset or defense (other than discharge
in
bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable
resulting from the servicing, administration or collection of
such
Receivable;
(vi) the commingling of Collections of Receivables at any time
with
other funds of any Servicer Party or any failure of Collections
to be
deposited into a Lock-Box or a Collection Account as required by
Section
8.2(b) hereof;
(vii) any Amortization Event described in Section 9.1(g);
(viii) any breach by any Servicer Party of any term of this
Agreement or any other Transaction Document applicable to it
which reduces
or impairs the rights of the Agent or any other Person with
respect to any
Receivable or the value of any Receivable;
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(ix) any failure by the Servicer to maintain or to cause any
Originator or Servicer Party to maintain, all indebtedness and
other
obligations owed to Borrower or any Originator that, on the date
such
indebtedness or other obligation arises (the "Creation Date") on
the
"Commercial Management System" (excluding Districts 338, 418,
777, 1251,
1625, 1626, 1639, 1726 and 1793) of any Originator or any
Servicer Party,
on such "Commercial Management System" (excluding Districts 338,
418, 777,
1251, 1625, 1626, 1639, 1726 and 1793) at all times from and
after such
Creation Date until such time as such indebtedness or other
obligations
are no longer subject to the terms of this Agreement.
SECTION 8.8 SERVICER COVENANTS.
(a) On or before July 31, 2003 the Servicer shall, and shall
cause each
of its Affiliates that acts as a sub-servicer to, install, test
and fully
implement, to the reasonable satisfaction of the Agent, any and
all system
modifications, upgrades or additions that may be necessary to
permit the
Servicer and each sub-servicer to track and report (in a manner
acceptable to
the Agent) on a Receivable-by-Receivable basis all short
payments by Obligors of
Receivables.
(b) The Servicer shall maintain, and shall cause each Originator
and
Servicer Party to maintain, all indebtedness and other
obligations owed to
Borrower or any Originator that, on the Creation Date, are
reported on the
"Commercial Management System" (excluding Districts 338, 418,
777, 1251, 1625,
1626, 1639, 1726 and 1793) of any Originator or any Servicer
Party, on such
"Commercial Management System" (excluding Districts 338, 418,
777, 1251, 1625,
1626, 1639, 1726 and 1793) at all times from and after such
Creation Date until
such time as such indebtedness or other obligations are no
longer subject to the
terms of this Agreement.
(c) At any time that any Receivables becomes subject to any
dispute by
the Obligor thereof, such Receivable shall be removed from the
Borrowing Base
and the Borrowing Base recalculated immediately upon a Servicer
Party becoming
aware of such dispute and the Servicer agrees to maintain such
internal
processes as are commercially reasonable to enable it to provide
itself with
such awareness.
(d) The Servicer agrees to calculate and report to the
Originators,
Borrower and the Agent, the Discount Factor (as defined in the
Receivables Sale
Agreement) as required by the definition thereof in the
Receivable Sale
Agreement.
ARTICLE IX
AMORTIZATION EVENTS
SECTION 9.1 AMORTIZATION EVENTS.
The occurrence of any one or more of the following events shall
constitute
an Amortization Event:
(a) Any Loan Party or Performance Guarantor shall fail to make
any
payment or deposit required to be made by it under the
Transaction Documents
when due and, for any such
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payment or deposit which is not in respect of principal, such
failure continues
for three (3) consecutive Business Days.
(b) Any representation, warranty, certification or statement
made by
Performance Guarantor or any Loan Party in any Transaction
Document to which it
is a party or in any other document delivered pursuant thereto
shall prove to
have been incorrect in any material respect when made or deemed
made and, with
respect to any such representation, warranty, certification or
statement that
was so incorrect and which can be cured, is not cured within ten
(10) days after
the earlier of (I) the date the Performance Guarantor or such
Loan Party
receives notice of such breach from the Agent or any Lender
Group Agent and (II)
the date an Authorized Officer of the Performance Guarantor or
any Loan Party
knows or should have known of such breach; provided, however,
that the
materiality threshold in the preceding clause shall not be
applicable with
respect to any representation, warranty, certification or
statement that itself
contains any materiality threshold, including Material Adverse
Effect.
(c) Any Loan Party shall fail to perform or observe any
covenant
contained in Section 7.2 (other than Section 7.2(a) or 7.2(c))
or in Section 8.5
and such failure continues for one (1) Business Day.
(d) Any Loan Party or Performance Guarantor shall fail to
perform or
observe any other covenant or agreement under any Transaction
Documents and such
failure shall continue for fifteen (15) consecutive days, other
than for Section
7.2(c) hereof, which shall be seven (7) consecutive days, after
the earlier of
(I) the date the Performance Guarantor or such Loan Party
receives notice of
such breach from the Agent or any Lender Group Agent and (II)
the date an
Authorized Officer of the Performance Guarantor or any Loan
Party knows or
should have known of such breach.
(e) Failure of Borrower to pay any Indebtedness (other than
the
Obligations) when due or the default by Borrower in the
performance of any term,
provision or condition contained in any agreement under which
any such
Indebtedness was created or is governed, the effect of which is
to cause, or to
permit the holder or holders of such Indebtedness to cause, such
Indebtedness to
become due prior to its stated maturity; or any such
Indebtedness of Borrower
shall be declared to be due and payable or required to be
prepaid (other than by
a regularly scheduled payment) prior to the date of maturity
thereof.
(f) Failure of Performance Guarantor or any of its Subsidiaries
other
than Borrower to pay Indebtedness in excess of $50,000,000 in
aggregate
principal amount (hereinafter, "Material Indebtedness") when
due; or the default
by Performance Guarantor or any of its Subsidiaries other than
Borrower in the
performance of any term, provision or condition contained in
Sections 6.01A,
6.05A, 6.06A, 6.08A, 6.11A, 6.13A, 6.14A, 6.15A or 6.16A of the
Senior Credit
Agreement; or any Material Indebtedness of Performance Guarantor
or any of its
Subsidiaries other than Borrower shall be declared to be due and
payable or
required to be prepaid (other than by a regularly scheduled
payment) prior to
the date of maturity thereof.
(g) An Event of Bankruptcy shall occur with respect to
Performance
Guarantor, any Loan Party or any of their respective
Subsidiaries.
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(h) As at the end of any Calculation Period:
(i) the three-month rolling average Delinquency Ratio shall
exceed
2.3%,
(ii) the three-month rolling average Default Ratio shall
exceed
1.7%, or
(iii) the three-month rolling average Dilution Ratio shall
exceed
1.4%.
(i) A Change of Control shall occur.
(j) (i) One or more final judgments for the payment of money in
an
aggregate amount of $11,625 or more shall be entered against
Borrower or (ii)
one or more final judgments for the payment of money in an
amount in excess of
$50,000,000, individually or in the aggregate, shall be entered
against
Performance Guarantor or any of its Subsidiaries (other than
Borrower) on claims
not covered by insurance or as to which the insurance carrier
has denied its
responsibility, and, in each case, such judgment shall continue
unsatisfied and
in effect for sixty (60) consecutive days without a stay of
execution.
(k) The "Termination Date" under and as defined in the
Receivables Sale
Agreement shall occur under the Receivables Sale Agreement
(other than as a
result of clauses (i) or (iii) of the definition of Facility
Termination Date or
clauses (i) or (iv) of the definition of Amortization Date) or
any Originator,
other than an Immaterial Originator (as defined in the
Receivables Sale
Agreement), shall for any reason cease to transfer, or any
Originator cease to
have the legal capacity to transfer, or otherwise be incapable
of transferring
Receivables to Borrower under the Receivables Sale
Agreement.
(l) This Agreement shall terminate in whole or in part (except
in
accordance with its terms), or shall cease to be effective or to
be the legally
valid, binding and enforceable obligation of Borrower, or any
Obligor shall
directly or indirectly contest in any manner such effectiveness,
validity,
binding nature or enforceability, or the Agent for the benefit
of the Lenders
shall cease to have a valid and perfected first priority
security interest in
the Collateral.
(m) On any Settlement Date, after giving effect to the turnover
of
Collections by the Servicer on such date and payment of amounts
by Borrower and,
in each case, the application thereof to the Obligations in
accordance with this
Agreement, the Aggregate Principal shall exceed the Borrowing
Limit.
(n) The Performance Undertaking shall cease to be effective or
to be the
legally valid, binding and enforceable obligation of Performance
Guarantor, or
Performance Guarantor shall directly or indirectly contest in
any manner such
effectiveness, validity, binding nature or enforceability of its
obligations
thereunder.
(o) The Internal Revenue Service shall file notice of a lien
pursuant to
Section 6323 of the Tax Code with regard to any of the
Collateral and such lien
shall not have been released within seven (7) days, or the PBGC
shall impose a
lien pursuant to Section 4068 of ERISA with regard to any of the
Collateral.
(p) Any Plan of Performance Guarantor or any of its ERISA
Affiliates:
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(i) shall fail to be funded in accordance with the minimum
funding
standard required by Section 412 of the Tax Code or Section 302
of ERISA
for any plan year or a waiver of such standard is sought or
granted with
respect to such Plan under Section 412 of the Tax Code or
Section 303 of
ERISA; or
(ii) is being, or within the five years preceding the Closing
Date,
has been, terminated or the subject of termination proceedings
under
Section 4041(c) of ERISA; or
(iii) shall require Performance Guarantor or any of its
ERISA
Affiliates to provide security under Section 401(a)(29) or 412
of the Tax
Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to Performance Guarantor or any of
its
ERISA Affiliates under applicable law, or Title IV ERISA, other
than a
liability for PBGC premiums due but not delinquent under Section
4007 of
ERISA,
and there shall result from any such failure, waiver,
termination or other event
a liability to the PBGC or a Plan that would have a Material
Adverse Effect.
(q) Any event shall occur which has, or could be reasonably
expected to
have a Material Adverse Effect.
SECTION 9.2 REMEDIES.
Upon the occurrence and during the continuation of an
Amortization Event,
the Agent may, or upon the direction of the Required Liquidity
Banks shall, take
any of the following actions: (a) declare the Amortization Date
to have
occurred, whereupon the Aggregate Commitment shall immediately
terminate and the
Amortization Date shall forthwith occur, all without demand,
protest or further
notice of any kind, all of which are hereby expressly waived by
each Loan Party;
provided, however, that upon the occurrence of an Event of
Bankruptcy with
respect to any Loan Party, the Amortization Date shall
automatically occur,
without demand, protest or any notice of any kind, all of which
are hereby
expressly waived by each Loan Party and (b) exercise all rights
and remedies of
a secured party upon default under the UCC and other applicable
laws. The
aforementioned rights and remedies shall be without limitation,
and shall be in
addition to all other rights and remedies of the Agent and the
Lenders otherwise
available under any other provision of this Agreement, by
operation of law, at
equity or otherwise, all of which are hereby expressly
preserved, including,
without limitation, all rights and remedies provided under the
UCC, all of which
rights shall be cumulative.
ARTICLE X
INDEMNIFICATION
SECTION 10.1 INDEMNITIES BY THE LOAN PARTIES.
Without limiting any other rights that the Agent or any Secured
Party may
have hereunder or under applicable law, Borrower hereby agrees
to indemnify (and
pay upon demand to) the Agent, each of the Secured Parties and
each of the
respective assigns, officers, directors,
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agents and employees of the foregoing (each, an "Indemnified
Party") from and
against any and all actual damages, losses, claims, liabilities,
costs, expenses
and for all other amounts payable (except any amounts payable
with respect to
taxes, which shall be governed exclusively by Section 10.4),
including
reasonable attorneys' fees (which attorneys may be employees of
the Agent, any
Lender Group Agent or any Lender) and disbursements (all of the
foregoing being
collectively referred to as "Indemnified Amounts") awarded
against or incurred
by any of them arising out of or as a result of this Agreement
or the grant to,
or acquisition by, the Agent for the benefit of the Secured
Parties of a
security interest in the Receivables, Related Security and
Collections,
excluding, however, Indemnified Amounts to the extent a final
judgment of a
court of competent jurisdiction holds that such Indemnified
Amounts resulted
from gross negligence or willful misconduct on the part of the
Indemnified Party
seeking indemnification; provided, however, that nothing
contained in this
sentence shall limit the liability of Borrower or limit the
recourse of the
Lenders to Borrower for amounts otherwise specifically provided
to be paid by
Borrower under the terms of this Agreement. Without limiting the
generality of
the foregoing indemnification (but subject to the foregoing and
except to the
extent the Secured Parties have received payments or Borrower
has adjusted the
Borrowing Base as contemplated by Section 1.4(a)), Borrower
shall indemnify the
Indemnified Parties for Indemnified Amounts (including, without
limitation,
losses in respect of uncollectible receivables, regardless of
whether
reimbursement therefor would constitute recourse to Borrower)
relating to or
resulting from:
(A) any representation or warranty made by any Loan Party or
any Originator (or any officers of any such Person) under or
in
connection with this Agreement, any other Transaction Document
or
any other information or report delivered by any such Person
pursuant hereto or thereto, which shall have been false or
incorrect
when made or deemed made;
(B) the failure by Borrower to comply with any applicable
law, rule or regulation with respect to any Receivable or
Contract
related thereto, or the nonconformity of any Receivable or
Contract
included therein with any such applicable law, rule or
regulation or
any failure of any Originator to keep or perform any of its
obligations, express or implied, with respect to any
Contract;
(C) any failure of Borrower to perform its duties, covenants
or other obligations in accordance with the provisions of
this
Agreement or any other Transaction Document;
(D) any products liability, personal injury or damage suit,
or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of
any
Contract or any Receivable;
(E) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to
the
payment of any Receivable (including, without limitation, a
defense
based on such Receivable or the related Contract not being a
legal,
valid and binding obligation of such Obligor enforceable against
it
in accordance with its terms), or any other claim resulting
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from the sale of the merchandise or service related to such
Receivable or the furnishing or failure to furnish such
merchandise
or services;
(F) the commingling of Collections of Receivables at
any time with other funds;
(G) any investigation, litigation or proceeding
related to or arising from this Agreement or any other
Transaction
Document, the transactions contemplated hereby, the use of
the
proceeds of any Advance, the Collateral or any other
investigation,
litigation or proceeding relating to Borrower in which any
Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby;
(H) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such
Obligor
being immune from civil and commercial law and suit on the
grounds
of sovereignty or otherwise from any legal action, suit or
proceeding;
(I) any Amortization Event described in Section
9.1(g);
(J) any failure of Borrower to acquire and maintain
legal and equitable title to, and ownership of any of the
Collateral
from the applicable Originator, free and clear of any Adverse
Claim
(other than as created hereunder); or any failure of Borrower
to
give reasonably equivalent value to any Originator under the
Receivables Sale Agreement in consideration of the transfer by
such
Originator of any Receivable, or any attempt by any Person to
void
such transfer under statutory provisions or common law or
equitable
action;
(K) any failure to vest and maintain vested in the
Agent for the benefit of the Secured Parties, or to transfer to
the
Agent for the benefit of the Secured Parties, a valid first
priority
perfected security interests in the Collateral, free and clear
of
any Adverse Claim (except as created by the Transaction
Documents);
(L) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents
under
the UCC of any applicable jurisdiction or other applicable laws
with
respect to any Collateral, and the proceeds thereof, whether at
the
time of any Advance or at any subsequent time;
(M) any action or omission by any Loan Party which
reduces or impairs the rights of the Agent or the Lenders
with
respect to any Collateral or the value of any Collateral;
(N) any attempt by any Person to void any Advance or
the Agent's security interest in the Collateral under
statutory
provisions or common law or equitable action;
(O) the failure of any Receivable included in the
calculation of the Net Pool Balance as an Eligible Receivable to
be
an Eligible Receivable; and
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(P) any Receivable arising under any Temporarily
Eligible Municipal Contract.
SECTION 10.2 INCREASED COST AND REDUCED RETURN.
(a) If after the date hereof, any Funding Source shall be
charged any
fee, expense or increased cost on account of the adoption of any
applicable law,
rule or regulation (including any applicable law, rule or
regulation regarding
capital adequacy) or any change therein, or any change in the
interpretation or
administration thereof by any governmental authority, central
bank or comparable
agency charged with the interpretation or administration
thereof, or any
accounting board or authority (whether or not part of
government) which is
responsible for the establishment or interpretation of national
or international
accounting principles, in each case whether foreign or domestic
or compliance
with any request or directive (whether or not having the force
of law) of any
such authority, central bank or comparable agency (a "Regulatory
Change"): (i)
that imposes, modifies or deems applicable any reserve,
assessment, insurance
charge, special deposit or similar requirement against assets
of, deposits with
or for the account of a Funding Source, or credit extended by a
Funding Source
pursuant to a Funding Agreement or (ii) that imposes any other
condition the
result of which is to increase the cost to a Funding Source of
performing its
obligations under a Funding Agreement, or to reduce the rate of
return on a
Funding Source's capital as a consequence of its obligations
under a Funding
Agreement, or to reduce the amount of any sum received or
receivable by a
Funding Source under a Funding Agreement or to require any
payment calculated by
reference to the amount of interests or loans held or interest
received by it,
then, upon demand by the related Lender Group Agent, Borrower
shall pay to such
Lender Group Agent, for the benefit of the relevant Funding
Source, such amounts
charged to such Funding Source or such amounts to otherwise
compensate such
Funding Source for such increased cost or such reduction. For
avoidance of
doubt, any interpretation of Accounting Research Bulletin No. 51
by the
Financial Accounting Standards Board shall constitute an
adoption, change,
request or directive subject to this Section 10.2. Borrower's
obligation to pay
any amounts with respect to taxes shall be governed exclusively
by Section 10.4.
(b) If Borrower is obligated to pay any Funding Source under
this
Section 10.2 then such Funding Source shall use reasonable
efforts to designate
a different lending office for funding or booking its Loans
hereunder or to
assign its rights and obligations hereunder to another of its
offices, branches
or affiliates, if, in the judgment of such Funding Source, such
designation or
assignment (i) would eliminate or reduce the total amounts
payable pursuant to
this Section 10.2 and Section 10.4, if any, in the future and
(ii) would not
subject such Funding Source to any unreimbursed cost or expense
and would not
otherwise be disadvantageous to such Funding Source. Borrower
hereby agrees to
pay all reasonable costs and expenses incurred by any Funding
Source in
connection with any such designation or assignment.
(c) If Borrower is obligated to pay any Funding Source under
this
Section 10.2 or if any Funding Source defaults in its obligation
to fund Loans
hereunder, then Borrower may (provided no Amortization Event or
Unmatured
Amortization Event has occurred), at its sole expense and
effort, upon notice to
such Funding Source and the Agent and the related Funding Source
Group Agent
require such Funding Source to assign and delegate, without
recourse (in
accordance with and subject to the restrictions contained in
Article XII), all
its interests, rights
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and obligations under this Agreement to an Eligible Assignee
acceptable to the
Lender Group Agent of the affected Funding Source Group that
shall assume such
obligations (which assignee may be another Funding Source, if a
Funding Source
accepts such assignment); provided that (i) Borrower shall have
received the
prior written consents of the Agent and the related Lender Group
Agent, which
consents shall not unreasonably be withheld, (ii) such Funding
Source shall have
received payment of an amount equal to the outstanding principal
of its Loans
and participations, accrued interest thereon, accrued fees and
all other amounts
payable to it hereunder, from the assignee (to the extent of
such outstanding
principal and accrued interest and fees) or Borrower (in the
case of all other
amounts) and (iii) in the case of any such assignment resulting
from a payment
under this Section 10.2, such assignment will result in a
material reduction in
such payments. A Funding Source shall not be required to make
any such
assignment and delegation if, prior thereto, as a result of a
waiver by such
Funding Source or otherwise, the circumstances entitling
Borrower to require
such assignment and delegation cease to apply.
SECTION 10.3 OTHER COSTS AND EXPENSES.
Borrower shall pay to the Agent and each Lender Group Agent on
demand
all reasonable costs and out-of-pocket expenses in connection
with the
preparation, execution, delivery and administration of this
Agreement, the
transactions contemplated hereby and the other documents to be
delivered
hereunder, including without limitation, the reasonable cost of
any auditors
auditing the books, records and procedures of Borrower,
reasonable fees and
out-of-pocket expenses of legal counsel for the Agent and for
each Lender Group
Agent with respect thereto and with respect to advising the
Agent and each
Lender Group Agent as to their respective rights and remedies
under this
Agreement. Borrower shall pay to the Agent and each Lender Group
Agent on demand
any and all costs and expenses of the Agent, such Lender Group
Agent and the
Lenders, if any, including reasonable fees and expenses for one
counsel in
connection with the enforcement of this Agreement against any of
the Loan
Parties and the other documents delivered hereunder and in
connection with any
restructuring or workout of this Agreement or such documents, or
the
administration of this Agreement following an Amortization
Event.
SECTION 10.4 TAXES.
(a) Any and all payments by the Borrower hereunder or under any
other
Transaction Document shall be made free and clear of and without
deduction or
withholding for or on account of any and all present or future
taxes, levies,
imposts, deductions, charges or withholdings, additions to tax,
interest,
penalties and all other liabilities with respect thereto imposed
by the U.S.,
excluding (i) net income, franchise or similar taxes (including
branch profits
taxes or alternative minimum tax) based on or measured by net
income that are
imposed or levied on the Agent, any Conduit Lender, any Lender
Group Agent, or
any Funding Source (each, a "Tax Indemnitee") as a result of a
connection
between the Tax Indemnitee and the jurisdiction of the
governmental authority
imposing such tax or any political subdivision or taxing
authority thereof or
therein (other than any such connection a
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