UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For Quarter Ended March 31, 1995
Commission File Number 0-23876
JEFFERSON SMURFIT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 43-1531401
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
8182 Maryland, St. Louis, Missouri 63105
(Address of principal executive offices) (Zip Code)
(314) 746-1100
Registrant's telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of April 21, 1995, the registrant had outstanding
110,988,931 shares of common stock, $.01 par value per share.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
JEFFERSON SMURFIT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
<CAPTION>
Three months ended March 31,
1995 1994
<S> <C> <C>
Net sales $1,001.1 $ 727.7
Costs and expenses
Cost of goods sold 813.8 627.6
Selling and administrative expenses 61.3 53.3
Income from operations 126.0 46.8
Other income (expense)
Interest expense (62.8) (64.8)
Other, net 1.8 1.4
Income (loss) before income taxes
and extraordinary item 65.0 (16.6)
Provision for (benefit from) income taxes 25.7 (4.8)
Income (loss) before extraordinary item 39.3 (11.8)
Extraordinary item
Loss from early extinguishment of debt, net
of income tax benefit of $.1 in 1995 (.4)
Net income (loss) $ 38.9 $ (11.8)
Per share of common stock:
Income (loss) before extraordinary item $ .35 $ (.15)
Extraordinary item -
Net income (loss) $ .35 $ (.15)
Weighted average shares outstanding 110.989 80.200
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
JEFFERSON SMURFIT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
<CAPTION>
March 31, December 31,
1995 1994
ASSETS (unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 14.6 $ 61.8
Receivables, less allowances of
$9.0 in 1995 and $8.6 in 1994 379.8 316.3
Inventories
Work-in-process and finished goods 96.7 86.9
Materials and supplies 161.0 136.8
257.7 223.7
Deferred income taxes 38.9 38.1
Prepaid expenses and other current assets 11.8 6.6
Total current assets 702.8 646.5
Net property, plant and equipment 1,438.5 1,427.1
Timberland, less timber depletion 259.4 259.0
Goodwill, less accumulated amortization of
$36.9 in 1995 and $35.0 in 1994 257.1 257.1
Other assets 171.9 169.3
$2,829.7 $2,759.0
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current maturities of long-term debt $ 48.9 $ 50.2
Accounts payable 370.1 348.8
Accrued compensation and payroll taxes 107.7 114.3
Interest payable 67.9 48.3
Other accrued liabilities 86.4 74.4
Total current liabilities 681.0 636.0
Long-term debt, less current maturities 2,355.3 2,391.7
Other long-term liabilities 231.4 237.5
Deferred income taxes 236.5 207.7
Minority interest 16.9 16.4
Stockholders' deficit
Common stock, par value $.01 per share;
250,000,000 shares authorized; 110,988,931
issued and outstanding 1.1 1.1
Additional paid-in capital 1,168.3 1,168.3
Retained earnings (deficit) (1,860.8) (1,899.7)
Total stockholders' deficit (691.4) (730.3)
$2,829.7 $2,759.0
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
JEFFERSON SMURFIT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
<CAPTION>
Three months ended March 31,
1995 1994
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ 38.9 $(11.8)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Extraordinary loss from early
extinguishment of debt .5
Depreciation, depletion and amortization 33.7 33.4
Amortization of deferred debt issuance costs 2.6 1.9
Deferred income taxes 28.0 (5.8)
Non-cash interest 4.9
Non-cash employee benefit expense (1.6) (1.9)
Change in current assets and liabilities,
net of effects from acquisitions
Receivables (63.6) (15.1)
Inventories (33.7) 7.9
Prepaid expenses and other current assets (2.1) (.8)
Accounts payable and accrued liabilities 23.1 (14.6)
Interest payable 22.7 28.0
Income taxes payable (3.1) .4
Other, net (3.5) ( 2.3)
Net cash provided by operating activities 41.9 24.2
Cash flows from investing activities
Property additions (33.1) (24.5)
Timberland additions (6.2) (6.9)
Acquisitions (4.3)
Proceeds from property and timberland disposals 2.0 .4
Net cash used for investing activities (41.6) (31.0)
Cash flows from financing activities
Proceeds from long-term borrowings 213.1 12.3
Repayment of long-term debt (258.1) (4.6)
Deferred debt issuance costs (2.5) (1.1)
Net cash provided by (used for) financing activities (47.5) 6.6
Decrease in cash and cash equivalents (47.2) (.2)
Cash and cash equivalents
Beginning of period 61.8 44.2
End of period $ 14.6 $ 44.0
</TABLE>
See notes to consolidated financial statements.
<PAGE>
JEFFERSON SMURFIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except share data)
(Unaudited)
1. -- Basis of Presentation
The accompanying consolidated financial statements of Jefferson
Smurfit Corporation ("JSC" or the "Company") have been prepared in
accordance with the instructions to Form 10-Q and reflect all
adjustments which management believes necessary (which include only
normal recurring accruals) to present fairly the financial position
and results of operations. These statements, however, do not
include all information and footnotes necessary for a complete
presentation of financial position, results of operations and cash
flows in conformity with generally accepted accounting principles.
Interim results may not necessarily be indicative of results which
may be expected for any other interim period or for the year as a
whole. For further information refer to the consolidated financial
statements and footnotes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, filed on March 7,
1995 with the Securities and Exchange Commission (the "JSC 1994 10-
K").
JSC is the parent of JSCE, Inc. JSC has no operations other than
its investment in JSCE, Inc. On December 31, 1994 Jefferson
Smurfit Corporation (U.S.), a wholly-owned subsidiary of JSC ("Old
JSC (U.S.)"), merged (the "Merger") into its wholly-owned
subsidiary, Container Corporation of America ("CCA"), with CCA
surviving and changing its name to Jefferson Smurfit Corporation
(U.S.) ("JSC (U.S.)"). In addition, on December 31, 1994, JSC
contributed 100% of the common stock of JSC (U.S.) to JSCE, Inc.
JSCE, Inc. has no operations other than its investment in JSC
(U.S.).
Prior to May 4, 1994, JSC had been named "SIBV/MS Holdings, Inc."
and Old JSC (U.S.) had been named "Jefferson Smurfit Corporation".
Prior to May 4, 1994, 50% of the voting stock of JSC was owned by
Smurfit Packaging Corporation and Smurfit Holdings B.V., indirect
wholly-owned subsidiaries of Jefferson Smurfit Group plc, a public
corporation organized under the laws of the Republic of Ireland.
The remaining 50% was owned by The Morgan Stanley Leveraged Equity
Fund II, L.P. and certain other investors.
2. -- Long-Term Debt
On February 23, 1995, JSC (U.S.) entered into a $315.0 million
accounts receivable securitization program (the "1995
Securitization"). The 1995 Securitization provides for the sale of
certain of JSC (U.S.)'s trade receivables to a wholly-owned,
bankruptcy remote, limited purpose subsidiary, Jefferson Smurfit
Finance Corporation ("JS Finance"), which finances its purchases of
eligible JSC (U.S.) receivables through the issuance of commercial
paper or the proceeds of borrowings under a revolving liquidity
facility and a term loan. JS Finance borrowed $15.0 million under
the term loan, and may issue up to $300.0 million trade
receivables-backed commercial paper or borrow up to $300.0 million
under a revolving liquidity facility. At March 31, 1995, $100.8
million was available for additional borrowing under the 1995
Securitization based on JSC (U.S.)'s level of eligible accounts
receivable. The 1995 Securitization matures in December 1999.
Interest rates on borrowings under the 1995 Securitization are at
a variable rate. Proceeds of the 1995 Securitization were used to
extinguish JSC (U.S.)'s borrowings under the pre-existing accounts
receivable securitization program.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
<TABLE>
<CAPTION>
Three months ended March 31,
(In millions) 1995 1994
Operating
Net Operating Net Profit
Sales Profit Sales (loss)
<S> <C> <C> <C> <C>
Paperboard/Packaging Products $ 921.3 $124.9 $666.5 $ 52.3
Newsprint 79.8 2.9 61.2 (4.1)
Total net sales $1,001.1 $127.8 $727.7 $ 48.2
</TABLE>
The Company had record net sales of $1,001.1 million for the three
months ended March 31, 1995, up 37.6% compared to the same period
in 1994. The increase is due primarily to higher sales prices for
many of the Company's major products. Increases in sales for each
of the Company's segments are shown in the chart below. Compared
to the same period in 1994, net sales for the three months ended
March 31, 1995 increased 38.2% in the Paperboard/Packaging Products
segment and increased 30.4% in the Newsprint segment.
<TABLE>
<CAPTION>
(In millions) Net sales increase
Paperboard/
Packaging
Products Newsprint Total
<S> <C> <C> <C>
Sales price and product mix $226.9 $17.1 $244.0
Sales volume 26.0 1.5 27.5
Acquisitions and new facilities 1.9 1.9
Total net sales increase $254.8 $18.6 $273.4
</TABLE>
Cost of goods sold as a percent of net sales for the three months
ended March 31, 1995 declined compared to the same period in 1994
in each of the Company's segments, primarily as a result of the
higher sales prices. The percentages for the three months ended
March 31, 1995 for the Paperboard/Packaging Products and Newsprint
segments were 80.3% and 92.4%, respectively, compared to 85.0% and
101.8%, respectively, for the same period in 1994. The cost of
recycled fibre, a key raw material used by the Company's paper
mills, was sharply higher in the three month period ended March 31,
1995 compared to the same period in 1994, due to unprecedented
demand which began in the second quarter of 1994.
Selling and administrative expenses for the three months ended
March 31, 1995 rose 15.0% compared to the same period in 1994 due
primarily to higher provisions for management incentive plans,
selling commissions, employee benefits and inflationary increases
in other costs.
Interest expense for the three months ended March 31, 1995 was
lower compared to the same period in 1994 due to lower average debt
levels outstanding. Effective interest rates for the 1995 period
were higher than the comparable period in 1994.
The tax provision for the three months ended March 31, 1995 was
$25.7 million compared to a tax benefit of $4.8 million for the
same period in 1994. The effective tax rate for the 1995 period
was higher than the Federal statutory tax rate due to several
factors, the most significant of which was the effect of permanent
differences between book and tax accounting.
<PAGE>
The Company recorded an extraordinary loss from early
extinguishment of debt (net of income tax benefits) amounting to
$.4 million for the three months ended March 31, 1995, as a result
of optional payments on the Tranche A and Tranche B Term Loans (as
discussed in "Liquidity and Capital Resources").
Liquidity and Capital Resources
On February 23, 1995, JSC (U.S.) entered into the 1995
Securitization consisting of a $300.0 million trade receivables-
backed commercial paper program and a $15.0 million term loan,
which matures in December 1999. Proceeds of the 1995
Securitization were used to extinguish JSC (U.S.)'s borrowings
under its pre-existing accounts receivable securitization program.
Interest rates on borrowings under the 1995 Securitization are at
a variable rate.
In conjunction with the Company's recapitalization in 1994, the
Company entered into a new bank credit facility (the "1994 Credit
Agreement") consisting of a $450.0 million revolving credit
facility, a $900.0 million Tranche A Term Loan and a $300.0 million
Tranche B Term Loan. The 1994 Credit Agreement contains various
business and financial covenants including, among other things, (i)
limitations on dividends, redemptions and repurchases of capital
stock, (ii) limitations on the incurrence of indebtedness, liens,
leases and sale-leaseback transactions, (iii) limitations on
capital expenditures, (iv) maintenance of minimum levels of
consolidated earnings before depreciation, interest, taxes and
amortization and (v) maintenance of minimum interest coverage
ratios. Such restrictions, together with the highly leveraged
position of the Company, could restrict corporate activities,
including the Company's ability to respond to market conditions, to
provide for unanticipated capital expenditures or to take advantage
of business opportunities.
The 1994 Credit Agreement imposes an annual limit on future capital
expenditures of $150.0 million. The capital spending limit is
subject to increase by an amount up to $75.0 million in any year if
the prior year's spending was less than the maximum amount allowed.
The Company has a carryover of $62.4 million for 1995. Because the
Company has invested heavily in its core businesses in prior years,
management believes the annual limitation for capital expenditures
does not impair its plans for maintenance, expansion and continued
modernization of its facilities.
During the three months ended March 31, 1995, the Company made net
long-term debt repayments of $45.0 million, including $35.0 million
of mandatory and optional payments in respect of the Tranche A and
Tranche B Term Loans under the 1994 Credit Agreement.
In the third quarter of 1993, the Company recognized charges of
$96.0 million for a restructuring program (the "Restructuring
Program") to improve its long-term competitive position and $54.0
million for environmental and other charges. The Restructuring
Program provided for plant closures, asset write-downs, reductions
in workforce, relocation of employees and consolidation of certain
plant operations, which are expected to be completed over an
approximate two to three year period. In accordance with the
Restructuring Program, the Company closed certain high cost
operating facilities, including a coated recycled boxboard mill,
five converting plants and two reclamation plants in 1993 and 1994.
Approximately $28.5 million (54%) of the $53.0 million of cash
expenditures anticipated under the Restructuring Program was paid
during the period October 1, 1993 to March 31, 1995 as planned.
The Company believes that a substantial portion of the remaining
cash expenditures related to the Restructuring Program will
continue to be funded through operations in 1995 and 1996, as
originally planned.
<PAGE>
Operating activities have historically been the major source of
cash for the Company's capital expenditures and debt payments. Net
cash provided by operating activities for the three months ended
March 31, 1995 was $41.9 million compared to $24.2 million for the
same period in 1994.
At March 31, 1995, the Company had $302.7 million in unused
borrowing capacity under the 1994 Credit Agreement and $100.8
million of borrowing capacity under the 1995 Securitization based
on JSC (U.S.)'s level of eligible accounts receivable. The Company
believes that cash provided by operating activities and available
financing sources will be sufficient for the next several years to
pay interest on the Company's obligations, amortize its term loans
and fund anticipated capital expenditures.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
During the quarter ended March 31, 1995, there were no
material developments in Legal Proceedings previously
reported in the JSC 1994 10-K.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) The following exhibits are included in this Form 10-Q.
10.1 Term Loan Agreement dated as of February 23, 1995 among
JS Finance and Bank Brussels Lambert, New York Branch.
10.2 Depositary and Issuing and Paying Agent Agreement (Series
A Commercial Paper) as of February 23, 1995.
10.3 Depositary and Issuing and Paying Agent Agreement (Series
B Commercial Paper) as of February 23, 1995.
10.4 Receivables Purchase and Sale Agreement dated as of
February 23, 1995 among JSC (U.S.), as the Initial
Servicer and JS Finance, as the Purchaser.
10.5 Termination and Reassignment Agreement dated as of March
3, 1995 among JS Finance, JSC (U.S.), Emerald Funding
Corporation and Bankers Trust Company.
10.6 Liquidity Agreement dated as of February 23, 1995 among
JS Finance, the Financial Institutions parties hereto as
Banks, Bankers Trust Company, as Facility Agent and
Bankers Trust Company as Collateral Agent.
10.7 Commercial Paper Dealer Agreement dated as of February 23,
1995 among BT Securities Corporation, Morgan Stanley & Co.
Incorporated, JSC (U.S.) and JS Finance.
10.8 Addendum dated March 6, 1995 to Commercial Paper Dealer
Agreement.
11.1 Calculation of Per Share Earnings
27.1 Financial Data Schedule
b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during
the three months ended March 31, 1995.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
JEFFERSON SMURFIT CORPORATION
(Registrant)
Date May 3, 1995 /s/ John R. Funke
John R. Funke
Vice President
and Chief Financial Officer
(Principal Accounting Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<CIK> 0000919226
<NAME> JEFFERSON SMURFIT CORPORATION
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 14600
<SECURITIES> 0
<RECEIVABLES> 388800
<ALLOWANCES> 9000
<INVENTORY> 257700
<CURRENT-ASSETS> 702800
<PP&E> 2118900
<DEPRECIATION> 680400
<TOTAL-ASSETS> 2829700
<CURRENT-LIABILITIES> 681000
<BONDS> 2355300
<COMMON> 1100
0
0
<OTHER-SE> (692500)
<TOTAL-LIABILITY-AND-EQUITY> 2829700
<SALES> 1001100
<TOTAL-REVENUES> 1001100
<CGS> 813800
<TOTAL-COSTS> 813800
<OTHER-EXPENSES> 61300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 62800
<INCOME-PRETAX> 65000
<INCOME-TAX> 25700
<INCOME-CONTINUING> 39300
<DISCONTINUED> 0
<EXTRAORDINARY> (400)
<CHANGES> 0
<NET-INCOME> 38900
<EPS-PRIMARY> .35
<EPS-DILUTED> .35
</TABLE>
TERM LOAN AGREEMENT
Dated as of February 23, 1995
among
JEFFERSON SMURFIT FINANCE CORPORATION
and
BANK BRUSSELS LAMBERT, NEW YORK BRANCH
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Certain Definitions. . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms . . . . . . . . . . . . . 1
SECTION 1.03. Other Terms. . . . . . . . . . . . . . . . 1
SECTION 1.04. Computation of Time Periods. . . . . . . . 2
ARTICLE II THE TERM LOAN FACILITY . . . . . . . . . . . . . . 2
SECTION 2.01. Term Loan. . . . . . . . . . . . . . . . . 2
SECTION 2.02. Interest . . . . . . . . . . . . . . . . . 3
SECTION 2.03. Term Note. . . . . . . . . . . . . . . . . 3
SECTION 2.04. Notice of Borrowings; Notice of
Conversion/Continuation. . . . . . . . . . 4
SECTION 2.05. Disbursement of Funds. . . . . . . . . . . 5
SECTION 2.06. Extension of Scheduled Term Loan Payout
Commencement Date. . . . . . . . . . . . . 5
SECTION 2.07. Mandatory and Voluntary Prepayments and
Mandatory Reductions in Aggregate Net
Outstandings . . . . . . . . . . . . . . . 6
SECTION 2.08. Replacement of Term Bank . . . . . . . . . 7
ARTICLE III PAYMENT TERMS . . . . . . . . . . . . . . . . . . 8
SECTION 3.01. Payments and Computations. . . . . . . . . 8
SECTION 3.02. Yield Protection . . . . . . . . . . . . . 9
SECTION 3.03. Illegality; Unavailability . . . . . . . . 11
SECTION 3.04. Indemnity. . . . . . . . . . . . . . . . . 11
SECTION 3.05. Taxes. . . . . . . . . . . . . . . . . . . 12
ARTICLE IV CONDITIONS OF TERM LOAN . . . . . . . . . . . . 14
SECTION 4.01. Conditions Precedent to Term Loan. . . . . 14
SECTION 4.02. Conditions Precedent to Term Loan. . . . . 17
ARTICLE V REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 17
SECTION 5.01. Representations and Warranties of Finco. . 17
ARTICLE VI AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . 22
SECTION 6.01. Reports; Certificates; Other Informa-
tion . . . . . . . . . . . . . . . . . . . 22
SECTION 6.02. Inspection . . . . . . . . . . . . . . . . 25
SECTION 6.03. Books and Records of Finco . . . . . . . . 25
SECTION 6.04. Corporate Existence. . . . . . . . . . . . 26
SECTION 6.05. Compliance with Laws . . . . . . . . . . . 26
SECTION 6.06. Obligations and Taxes. . . . . . . . . . . 26
SECTION 6.07. Facility Documents . . . . . . . . . . . . 26
SECTION 6.08. Location of Records. . . . . . . . . . . . 26
SECTION 6.09. Separate Corporate Existence . . . . . . . 27
ARTICLE VII NEGATIVE COVENANTS. . . . . . . . . . . . . . . . 29
SECTION 7.01. Liens; Sales of Collateral . . . . . . . . 29
SECTION 7.02. Indebtedness . . . . . . . . . . . . . . . 29
SECTION 7.03. Net Worth. . . . . . . . . . . . . . . . . 30
SECTION 7.04. Contingent Obligations . . . . . . . . . . 30
SECTION 7.05. Investments; Joint Ventures. . . . . . . . 31
SECTION 7.06. Bankruptcy . . . . . . . . . . . . . . . . 31
SECTION 7.07. Facility Documents . . . . . . . . . . . . 31
SECTION 7.08. Charter and By-Laws. . . . . . . . . . . . 31
SECTION 7.09. [Reserved] . . . . . . . . . . . . . . . . 31
SECTION 7.10. Bank Accounts. . . . . . . . . . . . . . . 32
SECTION 7.11. Lock-Box Banks; Change in Payment
Instructions to Obligors . . . . . . . . . 32
SECTION 7.12. Accounting Treatment . . . . . . . . . . . 32
SECTION 7.13. Merger, Consolidation, Etc . . . . . . . . 32
SECTION 7.14. Capital Expenditures . . . . . . . . . . . 33
SECTION 7.15. Restriction on Leases. . . . . . . . . . . 33
SECTION 7.16. Conduct of Business. . . . . . . . . . . . 33
ARTICLE VIII TERMINATION; REMEDIES. . . . . . . . . . . . . . 33
SECTION 8.01. Termination; Remedies. . . . . . . . . . . 33
SECTION 8.02. Binding Effect . . . . . . . . . . . . . . 34
SECTION 8.03. Indemnities by Finco . . . . . . . . . . . 34
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 36
SECTION 9.01. Amendments, Etc. . . . . . . . . . . . . . 36
SECTION 9.02. No Waiver; Remedies. . . . . . . . . . . . 36
SECTION 9.03. Successors and Assigns; Assignment . . . . 36
SECTION 9.04. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE;
WAIVER OF JURY TRIAL . . . . . . . . . . . 37
SECTION 9.05. Notices. . . . . . . . . . . . . . . . . . 37
SECTION 9.06. Survival of Agreement. . . . . . . . . . . 38
SECTION 9.07. Expenses; Indemnification. . . . . . . . . 38
SECTION 9.08. Confidentiality. . . . . . . . . . . . . . 38
SECTION 9.09. No Recourse. . . . . . . . . . . . . . . . 39
SECTION 9.10. No Proceedings . . . . . . . . . . . . . . 40
SECTION 9.11. Execution in Counterparts; Severability. . 40
SECTION 9.12. Entire Agreement . . . . . . . . . . . . . 40
ANNEXES AND EXHIBITS
Annex I - Defined Terms
Exhibit 2.03 - Form of Term Note
Exhibit 2.04(b) - Form of Notice of Conversion/Continuation
Exhibit 5.01(p) - Names and Addresses of Lock-Box Banks
Exhibit 6.08 - Location of Records, Chief Executive Offices
and Principal Place of Business
Exhibit 9.03 - Form of Assignment and Acceptance
THIS TERM LOAN AGREEMENT (this "Agreement"), dated as of
February 23, 1995, is entered into by and among Jefferson Smurfit
Finance Corporation, a Delaware corporation (hereinafter "Finco")
and Bank Brussels Lambert, New York Branch.
W I T N E S S E T H:
WHEREAS, Jefferson Smurfit Corporation (U.S.), a Delaware
corporation ("JSC"), owns all of the issued and outstanding
capital stock of Finco;
WHEREAS, the regular business activities of Finco consist of
(i) the purchase of accounts receivable and certain related
assets from JSC (the "Seller"), (ii) the sale of commercial paper
to fund such purchases, and (iii) other activities incidental
thereto; and
WHEREAS, Finco, in order to finance its purchases of
receivables and other assets from the Seller, has entered into
this Agreement whereby the Term Bank will, subject to the terms
and conditions set forth herein, agree to make the Term Loan to
Finco;
NOW THEREFORE, in consideration of the foregoing premises
and for other good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Definitions. For all purposes of
this Agreement, except as otherwise specifically provided herein,
capitalized terms used in this Agreement without definition
(including its preamble and recitals) shall have the meanings
ascribed to such terms in Annex I.
SECTION 1.02. Accounting Terms. Under this Agreement, all
accounting terms not specifically defined herein shall be
interpreted, all accounting determinations made and all financial
statements prepared in accordance with GAAP.
SECTION 1.03. Other Terms. Unless the context indicates
otherwise: (a) otherwise undefined terms used in this Agreement
have the meanings provided for by the UCC to the extent the same
are used or defined therein; (b) the words "herein," "hereof,"
and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the exhibits and schedules
hereto, as the same may from time to time be amended or
supplemented and not to any particular section, subsection, or
clause contained in this Agreement; (c) all references to
Sections, Annexes, Exhibits and Schedules shall mean, unless the
context clearly indicates otherwise, the Sections hereof and the
Exhibits, Annexes and Schedules attached hereto, the terms of
which Exhibits, Annexes and Schedules are hereby incorporated
into this Agreement; (d) the word "including" means "including
without limitation," and other forms of the verb "to include"
have correlative meanings; (e) any reference to a Person includes
reference to that Person's successors and assigns; and (f)
whenever appropriate, in the context, terms used herein in the
singular also include the plural, and vice versa.
SECTION 1.04. Computation of Time Periods. In this
Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to
but excluding."
ARTICLE II THE TERM LOAN FACILITY
SECTION 2.01. Term Loan.
(a) Term Loan Commitments. Subject to the terms and
conditions and in reliance upon the representations and
warranties hereinafter set forth (including without limitation
the conditions precedent set forth in Article IV), the Term Bank
agrees on or prior to March 17, 1995, (the "Term Commitment
Termination Date"), to make a single term loan to Finco in an
amount not to exceed $15,000,000 (the "Term Loan").
(b) Types of Term Loan; Term Loan Commitments. The Term
Loan made pursuant hereto by the Term Bank at the option of
Finco, shall be a Eurodollar Loan or a Base Rate Loan; provided
that the amount of the Term Loan shall not exceed the Term Loan
Commitment. Within the foregoing limits and subject to the
conditions set out in Article IV, Finco may borrow under this
Section 2.01, shall repay under Section 2.07 and may prepay, to
the extent permitted, the Term Loan made hereunder. The Term
Loan, to the extent repaid, may not be reborrowed.
(c) Conversion or Continuation of Loan Pricing Options.
Subject to the provisions of Sections 2.02 and 2.04, Finco shall
have the option (i) to convert at any time all (but not a portion
of) the Term Loan from a Base Rate Loan to a Eurodollar Loan or
from a Eurodollar Loan to a Base Rate Loan or (ii) upon the
expiration of any Interest Period applicable to a Eurodollar
Loan, to continue all (but not a portion of) a Eurodollar Loan as
a Eurodollar Loan and the succeeding Interest Period of such
continued Eurodollar Loan shall commence on the first day of such
Interest Period; provided, however, a Eurodollar Loan may only be
converted into a Base Rate Loan on the expiration date of an
Interest Period applicable thereto; provided, further, that
unless the Term Bank shall otherwise consent in writing, no
outstanding Loan may be continued as, or be converted into, a
Eurodollar Loan after the occurrence and during the continuance
of a Liquidation Event or Unmatured Liquidation Event.
(d) Repayment of the Term Loan; Termination of Commitments.
The Term Loan shall be due and payable in its entirety on the
Stated Term Loan Maturity Date.
SECTION 2.02. Interest.
(a) Subject to the provisions of Section 2.02(d), interest
shall accrue on the outstanding amount of the Term Loan, if a
Base Rate Loan, at a rate per annum equal to the Alternate Base
Rate. Such rate shall be computed on the basis of the actual
number of days elapsed (including the first but excluding the day
of payment) over a year of 365 or 366 days, as the case may be.
(b) Subject to the provisions of Section 2.02(d), interest
shall accrue on the outstanding amount of the Term Loan, if a
Eurodollar Loan, at a rate per annum equal to the Eurodollar Rate
for the Interest Period relating to such Eurodollar Loans plus
the Applicable Margin (as defined below). The "Applicable
Margin" shall be 0.9%, provided, that (i) at any time when any
Refunding Advances are outstanding and, with respect to which
interest thereon is accruing and is paid at a rate greater than
the rate applicable to Revolving Advances, the Applicable Margin
shall be 2.0%, and (ii) during the Liquidation Period, the
Applicable Margin shall be 2.5%. Such rate shall be computed on
the basis of the actual number of days elapsed (including the
first but excluding the day of payment) over a year of 360 days.
(c) Accrued and unpaid interest with respect to the Term
Loan shall be payable in arrears on the last day of the Interest
Period relating thereto except (i) that if the Term Loan is a
Eurodollar Loan as to which a 6-month Interest Period is in
effect, accrued and unpaid interest with respect thereto shall
also be paid on the date corresponding to the first day of that
Interest Period in the third calendar month thereafter (or, if
there is no such corresponding date, on the last day of that
third calendar month) and (ii) as otherwise provided in this
Agreement.
(d) From and after the Business Day following the Business
Day upon which written notice of the occurrence of a Liquidation
Event from the Facility Agent or the Term Bank is received by
Finco and so long as such Liquidation Event continues, or at any
time after the sixth Settlement Date falling after the
Termination Date, interest will accrue on the Term Loan until
paid at a per annum rate equal to two percent (2.0%) above the
otherwise applicable rate described in Section 2.01(a) or (b)
above (such additional interest being payable subject to the
terms of Sections 9.07 and 9.08 of the Liquidity Agreement).
SECTION 2.03. Term Note. Finco's obligations to pay the
principal of and interest on the Term Loan shall be evidenced by
a promissory note substantially in the form of Exhibit 2.03
annexed hereto and made a part hereof (the "Term Note"), with
appropriate insertions, dated the Effective Date, payable to the
order of the Term Bank, and representing the obligation of Finco
to pay the outstanding principal amount of the Term Loan and to
pay interest with respect thereto as set forth in Section 2.02.
SECTION 2.04. Notice of Borrowings; Notice of
Conversion/Continuation.
(a) Notice of Borrowing. When Finco desires to Borrow
hereunder, it shall give the Term Bank (A) at least three (3)
Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) if, on the Funding Date, the Term
Loan is to be a Eurodollar Loan, such notice to be given prior to
11:00 A.M. (New York City time) on the date specified or (B) if,
on the Funding Date, the Term Loan is to be a Base Rate Loan,
written notice (or telephonic notice promptly confirmed in
writing) on or prior to the date such Borrowing is to be made
hereunder, such notice to be given prior to 12:00 noon (New York
City time) on the date of such Borrowing. The Notice of
Borrowing shall be irrevocable and shall specify the principal
amount of the Term Loan to be made on the Funding Date (which
shall be a Business Day) and whether such Loan is to be made as a
Base Rate Loan or a Eurodollar Loan and in the case of Eurodollar
Loan, the Interest Period to be applicable thereto in accordance
with Section 2.01(c). If no election as to the Type of Term Loan
is specified in such notice, then the requested Term Loan shall
be a Base Rate Loan. If no Interest Period with respect to the
Term Loan, if a Eurodollar Loan, is specified in any such notice,
then Finco shall be deemed to have selected an Interest Period of
one month's duration.
(b) Notice of Conversion/Continuation. Finco shall deliver
a Notice of Conversion/Continuation in the form of Exhibit
2.04(b) to the Term Bank no later than 11:00 A.M. (New York time)
at least one Business Day in advance of the proposed
conversion/continuation date (in the case of a conversion to, or
a continuation of, a Base Rate Loan) or three Business Days in
advance of the proposed conversion/ continuation date (in the
case of a conversion to, or a continuation of, a Eurodollar
Loan). A Notice of Conversion/Continuation shall specify (i) the
proposed conversion/continuation date (which shall be a Business
Day), (ii) the nature of the proposed conversion/continuation and
(iii) in the case of a conversion to, or continuation of, a
Eurodollar Loan, the requested Interest Period. In lieu of
delivering the above-described Notice of Conversion/Continuation,
Finco may give the Term Bank telephonic notice by the required
time of any proposed conversion/continuation under this Section
2.04(b); provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to the
Term Bank on or before the proposed conversion/continuation date.
Except as otherwise provided herein, a Notice of
Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Loan (or telephonic notice in lieu thereof) shall be
irrevocable, and Finco shall be bound to convert or continue in
accordance therewith. Any Eurodollar Loan not continued as such
in accordance with the terms of this Section 2.04(b) shall be
continued as a Base Rate Loan unless paid in full pursuant to the
terms hereof.
SECTION 2.05. Disbursement of Funds. No later than 3:00
P.M. (New York City time) on the Funding Date, the Term Bank
shall make proceeds of the Term Loan available to Finco by wire
transfer of immediately available funds to the Collection
Account.
SECTION 2.06. Extension of Scheduled Term Loan Payout
Commencement Date.
(a) No more than ninety days and no less than sixty days
prior to the second anniversary of the Effective Date, and (if
and when applicable) no more than ninety days and no less than
sixty days prior to any successive anniversary of the Effective
Date, Finco may notify the Term Bank in writing of its request
(each such request an "Extension Request") to extend the then
effective Scheduled Term Loan Payout Commencement Date by one
additional year, and the Term Bank shall notify Finco in writing
whether it agrees to such extension not later than thirty days
after the receipt of such Extension Request. If the Term Bank
fails to respond to an Extension Request, it shall be deemed to
constitute a denial of such Extension Request and the Scheduled
Term Loan Payout Commencement Date shall not be extended.
(b) Finco shall have the right, at any time, to replace the
Term Bank in accordance with the provisions of this Section
2.06(b) and Section 2.08 if the Term Bank fails to respond to an
Extension Request or if the Term Bank denies an Extension
Request.
In the event that the Term Loan is not purchased by a
Replacement Term Bank prior to expiration, then as of the
Scheduled Term Loan Payout Commencement Date, but only if and so
long as the Liquidation Period has not commenced in accordance
with the terms of this Agreement, Finco shall exercise its option
to direct that, (i) under Section 2.07(b)(vii) of the Liquidity
Agreement, all amounts on deposit in the Series A Proceeds
Account and credited to the Series A Equalization Sub-account
(after giving effect to any application on such day under
Sections 2.07(b)(i), (ii), (iii), (iv), (v) or (vi) of the
Liquidity Agreement), (ii) under Section 2.07(d)(vii) of the
Liquidity Agreement, all amounts on deposit in the Series B
Proceeds Account and credited to the Series B Equalization Sub-
account (after giving effect to any application on such day under
Sections 2.07(d)(i), (ii), (iii), (iv), (v) or (vi) of the
Liquidity Agreement), and (iii) under Section 9.07(g)(vii) of the
Liquidity Agreement shall be paid on such day and each Business
Day thereafter to the Term Bank (subject to the provisos
contained in Section 2.07(b)(vii) and Section 2.07(d)(vii),
respectively, of the Liquidity Agreement) until the then
outstanding Term Loan, all accrued interest thereon and all
amounts due and owing to the Term Bank hereunder have been paid
in full.
Upon the replacement of the Term Bank or upon the Scheduled
Term Loan Payout Commencement Date and payment in full of the
amounts described above, this Agreement shall terminate (subject
to any rights of indemnification and payment that survive
termination of this Agreement). In the event that the
Liquidation Period commences prior to payment in full of the
amounts described above to the Term Bank, then all amounts on
deposit in the Series A Proceeds Account, the Series B Proceeds
Account and the Collection Account shall thereafter be paid in
accordance with the terms of Section 9.08 of the Liquidity
Agreement.
(c) In addition to the foregoing, if, as a result of any
Liquidation Event (other than an Insolvency Event involving JSC
or Finco), the Term Bank votes to commence the Liquidation Period
and the Majority Banks have agreed to waive the applicable
Liquidation Event, Finco shall have the right to obtain a
successor financial institution (in accordance with the
procedures set forth in Section 2.08) to purchase the Term Loan
from the Term Bank. Any such purchase shall be at a price equal
to the Term Loan Amount plus all accrued and unpaid Carrying
Costs owed to the Term Bank, together with any unpaid attorneys'
fees and expenses owed to the Term Bank under Section 9.07. Upon
such purchase, the successor financial institution shall become
the Term Bank hereunder for all purposes of this Agreement and
the Facility Documents. If such a successor financial
institution is obtained and such purchase is consummated within
the ten-day period after the Term Bank has voted to commence the
Liquidation Period, then the Liquidation Period shall not
commence as a result of such direction.
SECTION 2.07. Mandatory and Voluntary Prepayments and
Mandatory Reductions in Aggregate Net Outstandings.
(a) Amounts credited to the Series A Equalization Sub-
account pursuant to Section 2.07(a) of the Liquidity Agreement
and available for distribution from the Series A Proceeds Account
at Finco's option pursuant to Section 2.07(b)(vii) of the
Liquidity Agreement, and amounts credited to the Series B
Equalization Sub-account pursuant to Section 2.07(c) of the
Liquidity Agreement and available for distribution from the
Series B Proceeds Account at Finco's option pursuant to Section
2.07(d)(vii) of the Liquidity Agreement, shall be used to repay
the Term Loan.
Amounts credited to the General Series A Sub-account, the
General Series B Sub-account and the General Collection Sub-
account and available for distribution pursuant to Section
9.07(g)(xiv) of the Liquidity Agreement, may be used to
voluntarily prepay the Term Loan.
During the Liquidation Period, amounts credited to the
General Collection Sub-account, the General Series A Sub-account
and the General Series B Sub-account and available for
distribution pursuant to Section 9.08(b)(vi) and Section
9.08(b)(vii) of the Liquidity Agreement, shall be used to repay
the Term Loan.
(b) Finco may from time to time, on three Business Days'
notice to the Term Bank (delivered by telephone with telecopy
confirmation prior to 12:00 noon New York City time), request a
voluntary prepayment of the Term Loan by directing the Collateral
Agent to remit to the Term Bank funds of Finco available for
application against the Term Loan in accordance with Section 2.07
of the Liquidity Agreement. Each such notice of voluntary
prepayment shall be binding and irrevocable on Finco. To the
extent permitted by Section 2.07 of the Liquidity Agreement, the
Collateral Agent shall apply such funds as are so requested by
Finco to reduce the Term Loan Amount.
(c) All prepayments under this Section 2.07 shall be
without premium or penalty of any kind except for any
indemnification which may be owed in connection with the
prepayment of Eurodollar Loans pursuant to Section 3.04.
(d) In addition to the foregoing, if, after the occurrence
and during the continuance of any Liquidation Event other than
those Liquidation Events referred to in clauses (iv), (v), (vi)
and (viii) of the definition of Liquidation Period (provided that
the Term Bank has not consented to a waiver of such Liquidation
Event), the Liquidation Period has not commenced within five (5)
Business Days, the Term Bank may, upon three (3) Business Days
prior notice to Finco, the Facility Agent, the Collateral Agent
and the Rating Agencies (a "Term-Only Liquidation Period Notice")
commence the Term-Only Liquidation Period; provided, however,
that if a Replacement Term Bank has been appointed pursuant to
Section 2.08 hereof prior to the commencement of the Term-Only
Liquidation Period, then the Term-Only Liquidation Period Notice
shall not commence. During the Term-Only Liquidation Period,
Finco shall direct the Collateral Agent to prepay the Term Loan
out of funds available therefor pursuant to Section 9.07(g)(xiv)
of the Liquidity Agreement.
SECTION 2.08. Replacement of Term Bank. In the event the
Term Bank has denied its consent to an Extension Request pursuant
to Section 2.06(a) hereof, has voted to commence the Liquidation
Period as contemplated by Section 2.06(c) hereof, or has given
notice of commencement of the Term-Only Liquidation Period
pursuant to Section 2.07(d), then, in any such case, Finco shall
have the right, at any time, to select a Person which satisfies
the requirements of clause (i) of the definition of "Eligible
Assignee" (such new financial institution, a "Replacement Term
Bank") to purchase the Term Loan of the Term Bank (in such case,
a "Departing Bank").
Each such assignment shall be executed pursuant to one or
more duly executed Assignments and Acceptances in the form of
Exhibit 9.03, shall be consummated within 60 Business Days after
the date the Replacement Term Bank agrees to purchase the
Departing Bank's rights and obligations as described above at an
aggregate purchase price equal to the principal amount of the
outstanding Term Loan, all accrued interest thereon and all other
amounts accrued for the account of the Departing Bank hereunder
or under any other Facility Document (which purchase price shall
be payable at such times as the parties shall agree). Upon the
replacement of a Departing Bank as described above, such
Departing Bank shall cease to be a party hereto (subject to any
rights of indemnification and payment which survive the
termination of this Agreement). The Collateral Agent is hereby
authorized to execute one or more Assignment and Acceptances as
attorney-in-fact for any Departing Bank failing to execute and
deliver the same within 10 Business Days after the date on which
the Departing Bank was tendered the purchase price and was
required to execute such Assignment and Acceptance in accordance
with the foregoing provisions of this Section 2.08.
ARTICLE III PAYMENT TERMS
SECTION 3.01. Payments and Computations. (a) All payments
and prepayments on the Term Note and all other amounts to be paid
or deposited by Finco hereunder shall be paid to the Term Bank no
later than 2:00 p.m. (New York City time) on the day when due in
lawful money of the United States of America in same day funds,
and any payments received after such time shall be deemed to have
been made on the next Business Day. Whenever any payments to be
made hereunder shall be stated to be due on a day other than a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day (and such extension of time shall in such
case be included in the computation of interest or fees as
applicable).
(b) Finco will, to the extent permitted by law (and without
duplication to any interest payable pursuant to the provisions of
Section 2.02(d)), pay to the Term Bank interest on all amounts
not paid or deposited when due hereunder, from and after the
Business Day immediately following the Business Day Finco
receives notice thereof from the Term Bank until such amounts are
paid in full, at 2% per annum above the Alternate Base Rate.
Such interest shall, subject to Sections 9.07 and 9.08 of the
Liquidity Agreement, be payable on demand and shall be for the
account of the Term Bank.
SECTION 3.02. Yield Protection.
(a) Notwithstanding any other provision herein, if, after
the Effective Date, either (i) the adoption of any law, rule or
regulation (including any imposition or increase of reserve
requirements) or any change after the Effective Date in the
interpretation or administration of any such law, rule or
regulation by any governmental authority, central bank or
comparable agency charged with the interpretation or
administration thereof, or (ii) the compliance by the Term Bank
with any guideline or request from any central bank or other
governmental authority or quasi-governmental authority exercising
control over banks or financial institutions generally (whether
or not having the force of law), shall subject the Term Bank to
any reserve (including any imposed by the Board), special
deposit, assessment or similar requirement (including a reserve,
special deposit, assessment or similar requirement that takes the
form of a tax) against assets of, deposits with or for the
account of, or credit extended by, the Term Bank's Eurodollar
Lending Office or impose any other condition on the Term Bank
affecting the Term Loan or its obligation to make the Term Loan,
and as a result of either of the foregoing there shall be any
increase in the cost to the Term Bank of agreeing to make or
making, funding or maintaining the Term Loan, or there shall be a
reduction in the amount received or receivable by the Term Bank
or its Eurodollar Lending Office, then Finco shall from time to
time, in accordance with the provisions of Section 3.02(c), upon
written notice from and demand by the Term Bank, pay to the Term
Bank additional amounts sufficient to indemnify that Bank, on an
after tax basis, against such increased cost or reduction in
amount received or receivable; provided, however, that this
Section 3.02 shall not apply to any additional cost or reduction
in amounts received or receivable that is attributable to taxes,
except as specified above in this Section 3.02.
(b) If the Term Bank shall reasonably determine that the
adoption after the Effective Date of any law, rule or regulation
regarding capital adequacy or capital maintenance, or any change
after the Effective Date in any of the foregoing or in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the
Term Bank (or any lending office of the Term Bank) or the Term
Bank's holding company with any request or directive regarding
capital adequacy or capital maintenance (whether or not having
the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the
rate of return on the Term Bank's or the Term Bank's holding
company's capital as a consequence of this Agreement or the Term
Loan made by the Term Bank pursuant hereto to a level below that
which the Term Bank or the Term Bank's holding company could have
achieved but for such adoption, change or compliance (taking into
consideration the Term Bank's policies with respect to capital
adequacy), then from time to time in accordance with the
provisions of Section 3.02(c), Finco shall pay to the Term Bank
such additional amount or amounts as will compensate the Term
Bank or the Term Bank's holding company, on an after tax basis,
for such reduction.
(c) The Term Bank shall promptly notify Finco of any event
of which it has knowledge occurring after the Effective Date
which will entitle the Term Bank to compensation pursuant to this
Section 3.02. A certificate of the Term Bank setting forth such
amount or amounts as shall be necessary to compensate the Term
Bank as specified in clause (a) or (b) above, as the case may be
(including calculations thereof in reasonable detail), and the
adoption, change or compliance giving rise to such compensation
shall be delivered to Finco and shall be conclusive absent
demonstrable error. Finco shall pay to the Term Bank the amount
shown as due on any such certificate delivered by it within 15
days after its receipt of the same. The Term Bank shall promptly
make a refund thereof to Finco if the law, regulation, guideline
or change in circumstances giving rise to such payment is
subsequently deemed or held to be invalid or inapplicable by a
final nonappealable order or decision and as a result thereof,
the Term Bank shall not have incurred any increased costs or
suffered any reduction in the amounts received or receivable or
the rate of return on capital under this Agreement.
(d) If the Term Bank claims any additional amounts payable
pursuant to this Section 3.02, it shall use reasonable efforts
(consistent with legal and regulatory restrictions) to take any
action to avoid or minimize any amounts that otherwise may be
payable by Finco pursuant to this Section 3.02, provided that
such action would not, in the good faith determination of the
Term Bank, be otherwise disadvantageous to it.
(e) Notwithstanding the foregoing, Finco shall not be
required to make any payments nor indemnify the Term Bank under
this Section 3.02 with respect to any increased costs or reduced
returns incurred by the Term Bank more than (i) ninety (90) days
(in the case of amounts described in Section 3.02(a)) and (ii)
six (6) months (in the case of amounts described in Section
3.02(b)) before the date a request for payment or indemnification
is delivered to Finco, provided that (x) the foregoing limitation
shall not apply to any amounts payable on account of changes
having retroactive effect and (y) to receive any such payment or
indemnity with respect to amounts described in Section 3.02(b),
the Term Bank need not give notice of the amount of such payment
or indemnity until eighteen months after the incurrence of the
related costs or the related reduction in returns so long as it
has given notice within six (6) months of incurring those costs
or reduction that it intends to make a claim hereunder.
(f) All payments owing by Finco under this Section 3.02
shall be made subject to the terms of Sections 9.07 and 9.08 of
the Liquidity Agreement.
SECTION 3.03. Illegality; Unavailability. (a) In the event
that, on any date, the Term Bank shall have reasonably determined
(which determination shall be final and conclusive and binding
upon all parties) that the making or continuation of its
Eurodollar Loans has become unlawful by compliance in good faith
with any law, governmental rule, regulation or order, then, and
in any such event, the Term Bank (in such case, an "Affected
Bank") shall promptly give notice (by telephone confirmed in
writing) to Finco of that determination. The obligation of the
Affected Bank to make or maintain its Eurodollar Loans during any
such period shall be terminated at the earlier of the termination
of the Interest Period then in effect for each Eurodollar Loan or
when required by law and Finco shall, no later than the
termination of the Interest Period in effect at the time any such
determination pursuant to this Section 3.03 is made or earlier,
when required by law, convert the Eurodollar Loans of the
Affected Bank into Base Rate Loans.
(b) If, prior to the beginning of any Interest Period,
either (1) the Term Bank shall have given notice to Finco as set
forth in subsection (a) above, or (2) the Term Bank shall have
reasonably determined (which determination shall be final and
conclusive and binding upon all parties) that: (i) Dollar
deposits in the relevant amount and for such Interest Period are
not available in the interbank eurodollar market or (ii) by
reason of circumstances affecting the interbank eurodollar market
for the Term Bank's Eurodollar Lending Office, that adequate and
fair means do not exist for ascertaining the applicable
Eurodollar Rate applicable to a Eurodollar Borrowing, then, and
in any such event, the Term Bank shall promptly give notice of
such determination to Finco indicating the facts and
circumstances giving rise to such determination. Thereafter and
continuing until the Term Bank shall notify Finco that the
circumstances giving rise to such determination no longer exist,
the Eurodollar Borrowing, will, on the last day of the applicable
Interest Period, automatically convert into a Base Rate
Borrowing, the obligation of the Term Bank to make a Eurodollar
Loan shall be suspended and any Eurodollar Borrowing requested to
be made at such time shall be made as a Base Rate Borrowing.
(c) For purposes of this Section 3.03, a notice to Finco by
the Term Bank shall be effective as to the outstanding Eurodollar
Loan, if lawful, on the last day of the Interest Period currently
applicable to the Eurodollar Loan; in all other cases, such
notice shall be effective on the date of receipt by Finco.
SECTION 3.04. Indemnity. Finco shall compensate the Term
Bank, upon written request by the Term Bank (which request shall
set forth in reasonable detail the basis for requesting such
amounts) for all reasonable losses, expenses and liabilities
(including any interest paid by the Term Bank to lenders of funds
borrowed by it to make a Eurodollar Loan and any loss sustained
by the Term Bank in connection with the re-employment of such
funds but excluding taxes, which are not covered by this Section
3.04), which the Term Bank may sustain with respect to a
Eurodollar Loan: (a) if for any reason (other than a default or
error by the Term Bank) a Eurodollar Loan does not occur on the
date specified therefor in the related Notice of Borrowing or (b)
if any payment or conversion of a Eurodollar Loan occurs on a
date which is not the last day of the Interest Period applicable
to the Eurodollar Loan or on any date specified in a notice of
payment given by Finco. All payments owing by Finco under this
Section 3.04 shall be made subject to the terms of Sections 9.07
and 9.08 of the Liquidity Agreement.
SECTION 3.05. Taxes. Finco agrees that:
(a) Any and all payments by Finco under this Agreement
shall be made free and clear of and without deduction for any and
all taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding (i) taxes
(other than withholding taxes) imposed on the net income of the
Term Bank by any jurisdiction under whose laws the Term Bank is
organized or in which the office through which it makes the Term
Loan is located or any political subdivision of any such
jurisdiction or (ii) taxes (other than withholding taxes) imposed
on the gross receipts or gross income of, or franchise taxes
imposed on, the Term Bank by any state jurisdiction under whose
laws the Term Bank is organized or in which the office through
which it makes the Term Loan is located or any political
subdivision of any such jurisdiction (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If Finco
shall be required by law to withhold or deduct any Taxes from or
in respect of any sum payable hereunder to the Term Bank, then
(i) the sum payable shall be increased by the amount necessary to
yield to the Term Bank (after payment of all Taxes) an amount
equal to the sum it would have received had no such deductions
been made; (ii) Finco shall make such withholding or deductions,
and (iii) Finco shall pay the full amount withheld or deducted to
the relevant taxing authority or other authority in accordance
with applicable law.
(b) If Finco fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Term Bank
the required receipts or other required documentary evidence, (i)
the Term Bank may (but shall not be required to) pay such Taxes
on behalf of Finco, and (ii) Finco shall promptly indemnify the
Term Bank for such Taxes, for any incremental taxes, interest or
penalties that may become payable by such party as a result of
any such failure, and as a result of any accrual or receipt of
any indemnity payment under this subsection (b) and for
reasonable counsel fees and out-of-pocket expenses arising from
any such failure.
(c) On or before the date it becomes a party to this
Agreement and on any extension of its Commitment, if the Term
Bank is organized under the laws of a jurisdiction outside the
United States, it shall deliver to Finco such certificates,
documents or other evidence, as required by the Internal Revenue
Code or Treasury Regulations issued pursuant thereto, including
(i) two original copies of Internal Revenue Service Form 1001 or
Form 4224 or successor applicable form, properly completed and
duly executed by the Term Bank certifying in each case that such
party is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal
income taxes, and (ii) an original copy of Internal Revenue
Service Form W-8 or W-9 (or applicable successor form) properly
completed and duly executed by such party.
(d) Any obligation of Finco to pay any additional amounts
to the Term Bank in respect of United States Federal withholding
tax pursuant to this Section 3.05 (other than pursuant to Section
3.05(b)), shall be net of any credits in respect of other tax
liabilities of the Term Bank which credits relate to or result
from such withholding tax (as determined by the Term Bank in its
reasonable discretion, it being understood that nothing in this
Agreement shall impose any duty on the Term Bank to disclose its
internal tax records as a condition to reimbursement under this
Section).
(e) The Term Bank, to the extent it is claiming any
additional amounts payable pursuant to this Section 3.05, shall
use reasonable efforts (consistent with legal and regulatory
restrictions) to take any action to avoid or minimize any amounts
that otherwise may be payable by Finco pursuant to this Section
3.05, including filing any certificate or document or changing
the jurisdiction of its applicable office from which it funds the
Term Loan, provided that such action would not, in the good faith
determination of the Term Bank, be otherwise disadvantageous to
it.
(f) Notwithstanding the foregoing, Finco shall not be
required to make any payments nor indemnify the Term Bank under
this Section 3.05 with respect to any Taxes paid directly (and
not by withholding) by the Term Bank more than ninety (90) days
before the date a request for payment or indemnification is
delivered to Finco (it being understood that the date of payment
of such Taxes and not the time period to which such Taxes relate
shall begin the running of the ninety (90) day period described
above). In addition, if the Term Bank is entitled to an
exemption from withholding with respect to payments to be made to
the Term Bank under this Agreement and does not provide the
applicable certificate demonstrating its right to such exemption
to Finco as required by Section 3.05(c) (unless such failure is
due to a change in treaty, law or regulation occurring subsequent
to the date on which a form originally was required to be
provided), Finco shall withhold taxes from payments to the Term
Bank at the applicable statutory rates and Finco shall not be
required to pay any additional amounts as a result of such
withholding as provided in this Section 3.05; provided, however,
that all such withholding and associated limitations in payment
shall cease upon delivery by the Term Bank of such certificate to
Finco.
(g) All payments owing by Finco under this Section 3.05
shall be made subject to the terms of Sections 9.07 and 9.08 of
the Liquidity Agreement.
ARTICLE IV CONDITIONS OF TERM LOAN
SECTION 4.01. Conditions Precedent to Term Loan. The
effectiveness of this Agreement and the borrowing of the Term
Loan shall be subject to satisfaction of the conditions precedent
that the Term Bank shall have received, on or before the
Effective Date, all of the following, each fully executed by all
signatories thereto (where applicable) and in form and substance
satisfactory to the Term Bank:
(a) this Agreement;
(b) the Term Note;
(c) the other Facility Documents;
(d) certificates of the Secretaries or Assistant
Secretaries of the Servicer, Finco and the Seller, cer-
tifying in each case (i) the names and true signatures of
the officers authorized to sign the Facility Documents to be
delivered by such party pursuant hereto or thereto (on which
certificate the Term Bank may conclusively rely until such
time as the Term Bank shall receive a revised certificate
meeting the requirements of this clause (d)(i)), (ii) that
attached thereto is a true and complete copy of the
certificate or articles of incorporation and by-laws of such
corporation as in effect on the date of such certification
and (iii) that attached thereto are true and complete copies
of resolutions by such corporation's Board of Directors
approving the execution, delivery and performance of this
Agreement and all other Facility Documents to which such
corporation is a party;
(e) if the Effective Date is different from the date
of this Agreement, a certificate executed by an officer of
Finco certifying that as of the Effective Date, all of the
representations and warranties contained in Article V hereof
are true and accurate in all respects with the same force
and effect as though such representations and warranties had
been made as of such time;
(f) if the Effective Date is different from the date
of this Agreement, a certificate executed by an officer of
the Servicer and the Seller certifying that as of the
Effective Date, all of the representations and warranties
contained in Article III of the Receivables Sale Agreement
by such party are true and accurate in all respects with the
same force and effect as though such representations and
warranties had been made as of such time;
(g) a copy of Finco's Certificate of Incorporation,
certified by the Secretary of State of Delaware;
(h) a copy of the Certificate of Incorporation for the
Servicer and the Seller, certified by the appropriate
Secretary of State or Commonwealth;
(i) certificates relating to the good standing of
Finco, the Servicer and the Seller from the Secretaries of
State of the States in which each such Person has its chief
executive office and in which such Person is incorporated;
(j) copies of UCC lien search reports with respect to
Finco and the Seller, dated a date reasonably close to the
Effective Date, disclosing no effective financing statements
or other instruments on file with respect to the Collateral
(in the case of Finco) or the Purchased Assets sold or to be
sold by the Seller and the Contributed Assets contributed or
to be contributed by the Seller except for (i) those in
favor of the Collateral Agent and (ii) financing statements
which will be terminated as of the Effective Date;
(k) copies of UCC financing statements, in form and
substance satisfactory to the Term Bank, as filed with the
appropriate offices deemed necessary by the Term Bank to
perfect (i) the transfers of interests in Purchased Assets
and Contributed Assets by the Seller to Finco under the
Receivables Sale Agreement and (ii) the grant of security in
the Collateral by Finco under the Liquidity Agreement;
(l) (i) evidence that any financing statements
described in clause (j) above filed in favor of any Person
other than the Collateral Agent or Finco have been, or will
be as soon as practicable after the Effective Date,
terminated, (ii) evidence that any Lien granted by Finco
pursuant to the Existing Receivables Purchase Documents
shall have been released, and (iii) including pay-off
letters in form and substance satisfactory to the Term Bank,
relating to the Existing Receivables Purchase Documents;
(m) favorable opinions of (1) Winston & Strawn,
counsel for the Servicer, the Seller and Finco, (2) Michael
E. Tierney, Esq., general counsel for JSC, and (3)
Armstrong, Teasdale, Schlafly & Davis, Missouri counsel for
the Seller and Finco, each in form and substance
satisfactory to the Term Bank, including, in the aggregate,
opinions as to:
(i) corporate organization, authority, execution,
the absence of conflicts with respect to Finco, the
Servicer and the Seller, perfection under the UCC of
the sale of the Purchased Assets by the Seller to
Finco, and enforceability and perfection under the UCC
of the security interest granted by Finco to the
Collateral Agent under the Liquidity Agreement;
(ii) true sale issues relating to the transfer of
the Purchased Assets by the Seller to Finco and such
property being treated as property of Finco in the
event of a bankruptcy of the Seller; and
(iii) non-consolidation of JSC and Finco in the
event of the bankruptcy of JSC;
(n) a rating letter from each Rating Agency indicating
a rating of not less than A-1/D-1 with respect to the
Commercial Paper, and a rating letter from S&P indicating a
rating of not less than AAA with respect to the Liquidity
Loans, and a rating letter from S&P indicating a rating of
BBB with respect to the Term Loan;
(o) a letter from Ernst & Young, satisfactory in form
and substance to the Facility Agent and the Dealers, with
respect to the information contained in the Information
Memorandum relating to the Receivables;
(p) Lock-Box Agreements executed by the Seller, Finco
and each Lock-Box Bank;
(q) a balance sheet of Finco as of September 30, 1994;
(r) evidence of the payment in full of all fees owing
to the Term Bank as of the Effective Date;
(s) evidence that any governmental or third-party
consent required by Finco, the Servicer or the Seller in
connection with the execution and delivery of any Facility
Document has been obtained and is in full force and effect;
(t) such other documents and instruments as the Term
Bank may reasonably request relating to the Facility
Documents and the transactions contemplated thereby; and
(u) the Liquidity Agreement shall have become
effective in accordance with its terms.
SECTION 4.02. Conditions Precedent to Term Loan. The
Borrowing of the Term Loan shall be subject to the satisfaction
of the conditions precedent that, on the Effective Date, and, if
different from the Funding Date, the Funding Date, after giving
effect thereto and to the application of any proceeds therefrom,
the following statements shall be true:
(a) the representations and warranties contained in
Article V hereof and all representations and warranties of
the Seller and the Servicer in the Receivables Sale
Agreement, are true and accurate as of such date in all
respects with the same force and effect as though such
representations and warranties had been made as of such
time;
(b) no event has occurred and is continuing, or
would result from such New Credit Event, which
constitutes a Liquidation Event or an Unmatured
Liquidation Event;
(c) there shall not exist a Modified Base Amount
Shortfall; and
(d) the Termination Date shall not have occurred.
The giving of the Notice of Borrowing and the acceptance by Finco
of the proceeds of such Borrowing shall constitute a
representation and warranty by Finco that, as of the Effective
Date or the Funding Date, as the case may be, before and after
giving effect to such Borrowing and to the application of any
proceeds therefrom, the foregoing statements are true.
ARTICLE V REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of Finco.
Finco represents and warrants that:
(a) Organization; Qualification. Finco is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware. Finco has all governmental
licenses, authorizations, consents and approvals required to
carry on its business, is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction
in which its business is now conducted except where the absence
of such licenses, authorizations, consents, approvals or good
standing could not reasonably be expected to have a Material
Adverse Effect.
(b) Corporate Authority. Finco has corporate power and
authority to execute and deliver this Agreement, to borrow money
and to grant a security interest hereunder, to execute and
deliver the Facility Documents to which it is a party and to
perform its obligations hereunder and thereunder and all such
action has been duly and validly authorized by all necessary
corporate proceedings on its part.
(c) Execution; Binding Effect. This Agreement and each of
the other Facility Documents to which Finco is a party have been
duly and validly executed and delivered by Finco and constitute
the legal, valid and binding obligations of Finco enforceable
against Finco in accordance with their respective terms except to
the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought
in equity or at law).
(d) Authorizations. No authorization or approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body, agency, official or other Person is
required for the due execution, delivery and performance by Finco
of this Agreement, any other Facility Document or any other
agreement, document or instrument delivered hereunder or
thereunder, except for (i) the filing of financing statements
pursuant to the UCC required (A) to perfect the security
interests granted by Finco hereunder (all of which filings have
been duly made and are, and on or prior to each Purchase, will
be, in full force and effect) or (B) to terminate the security
interests or amend the financing statements filed pursuant to the
Existing Receivables Purchase Documents (which terminations or
amendments will be filed as of, or as soon as practicable after,
the Effective Date), and (ii) for consents which have been duly
obtained or will have been obtained as of the Effective Date. No
transaction contemplated hereby requires compliance with any bulk
sales act or similar law. There are no injunctions, orders,
suits or proceedings of any nature that adversely affect Finco's
performance of its agreements or transactions.
(e) Absence of Conflicts. Neither the execution and
delivery of this Agreement or any other Facility Document to
which Finco is a party, nor consummation of the transactions
herein or therein contemplated nor performance of or compliance
with the terms and conditions hereof or thereof will (i) violate
or conflict with any law, rule or regulation applicable to Finco
or any of its properties; (ii) violate, conflict with or result
in a breach of or a default under (A) the certificate of
incorporation or by-laws of Finco, (B) any agreement (other than
the Existing Receivables Purchase Documents) or instrument to
which Finco is a party or by which it or any of its properties
(now owned or hereafter acquired) may be subject or bound, which
violation, conflict, breach or default could reasonably be
expected to have a Material Adverse Effect, or (C) any order,
writ, judgment, award, injunction or decree binding on or
affecting Finco or its property (now owned or hereafter
acquired); or (iii) except for Liens created pursuant to the
Facility Documents, result in the creation or imposition of any
Lien in favor of any other party upon any property (now owned or
hereafter acquired) of Finco. Any such violation, conflict,
breach or default, or potential breach or default referred to in
clause (ii)(B) of the preceding sentence under any Existing
Receivables Purchase Document shall have been consented to and
waived as of the Effective Date.
(f) Perfected Security Interest. Upon the making of the
initial Liquidity Loan and/or the issuance of the initial
Commercial Paper hereunder, and at all times thereafter, the
Collateral Agent, for the benefit of the Secured Parties will
have a legal, valid, perfected and enforceable security interest
upon the Collateral, which security interest is prior in right to
all other Liens thereon (except Permitted Liens), and such
Collateral shall not be subject to any other Liens (except for
Permitted Liens).
(g) Consideration for Purchases by Finco. Finco shall have
given reasonably equivalent value to the Seller in consideration
for the transfer, sale or conveyance to Finco of the Receivables
and Related Security by the Seller to Finco under the Receivables
Sale Agreement, and no such transfer shall have been made for or
on account of an antecedent debt owed by the Seller to Finco.
(h) Accuracy of Written Information. All written
information, exhibits, documents, records, Daily Reports,
Settlement Statements, certificates, reports, financial
statements and similar writings (including, without limitation,
the Information Memorandum) (collectively, the "Written
Information") furnished by Finco to the Term Bank at any time
pursuant to any requirement of, or in response to any request of
any such party under, this Agreement or any other Facility
Document or any transaction contemplated hereby or thereby, have
been, and all such Written Information hereafter furnished by
Finco to the Term Bank will be, true and accurate in all material
respects on the date as of which any such Written Information was
or will be delivered, and shall not omit to state any material
facts or any facts necessary to make the statements contained
therein, taken as a whole, not materially misleading in light of
the circumstances under which they were made, in each case, as of
the date it is or shall be dated or (except as otherwise
disclosed to Finco or the Term Bank, as the case may be, at such
time) as of the date so furnished.
(i) Litigation. There are no actions, suits or proceedings
at law or in equity or by or before any governmental authority
pending or, to the knowledge of Finco, threatened against or
affecting Finco or any property or rights of Finco, which could
be reasonably expected to: (i) adversely affect the legality,
validity or enforceability of this Agreement or any other
Facility Document or (ii) materially impair the ability of Finco
to carry on business substantially as now being conducted, or
(iii) materially adversely affect the condition (financial or
otherwise), operations or properties of Finco.
(j) Governmental Regulations. Finco is not an "investment
company" registered or required to be registered under the
Investment Company Act of 1940, as amended.
(k) Margin Regulations. Finco is not engaged, principally
or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" (as each of the quoted terms is defined or
used in Regulation G, T, U or X). No part of the proceeds of the
Term Loan has been used for so purchasing or carrying margin
stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation G, T, U or X.
(l) Separate Corporate Existence. Finco is operated as an
entity with assets and liabilities distinct from those of the
Seller and any other Affiliates of Finco, and Finco hereby
acknowledges that the Term Bank is entering into the transactions
contemplated by this Agreement in reliance upon Finco's identity
as a separate legal entity from the Seller and each such
Affiliate. Finco has no Subsidiaries.
(m) Investments. As of the Effective Date, Finco has no
Investments other than Permitted Investments. Finco does not own
or hold, directly or indirectly, any capital stock or equity
security of, or any equity interest in, any Person.
(n) Facility Documents. As of the Effective Date, the
Receivables Sale Agreement will be the only agreement pursuant to
which Finco purchases Receivables or any other accounts
receivable, and the Facility Documents delivered to the Term Bank
represent all agreements between the Seller, on the one hand, and
Finco on the other. Finco has furnished to the Term Bank true,
correct and complete copies of each Facility Document to which
Finco is a party, each of which is in full force and effect.
Neither Finco nor any of its Affiliates party thereto is in
default of any of their respective obligations thereunder in any
material respect. Upon the Purchase or Contribution of each
Receivable pursuant to the Receivables Sale Agreement, Finco
shall be the lawful owner of, and have good title to, such
Receivable and all Purchased Assets or Contributed Assets
relating thereto, free and clear of any Liens (except for Liens
created hereunder and Permitted Liens). All such Purchased
Assets are purchased, and all such Contributed Assets are
contributed, without recourse to the Seller except as described
in the Receivables Sale Agreement. The Purchases of the
Purchased Assets by Finco constitute valid and true sales and
transfers for consideration (and not merely a pledge of such
Purchased Assets for security purposes), enforceable against
creditors of the Seller, and no Purchased Assets or Contributed
Assets shall constitute property of the Seller.
(o) Business; Balance Sheet. Since its incorporation,
Finco has conducted no business other than the purchase of
Receivables and related assets from the Seller under the
Receivables Sale Agreement and other similar agreements, the
incurrence of Indebtedness under this Agreement, the Existing
Receivables Purchase Documents and such other agreements to
finance such Purchases, and such other activities as are
incidental to the foregoing. The balance sheet of Finco
delivered pursuant to Section 4.01(p) has been prepared in
accordance with GAAP and fairly presents the financial condition
of Finco as of September 30, 1994. From and after the Effective
Date (after giving effect to the transactions occurring on such
date), no liabilities shall continue to exist in connection with
any of the Existing Receivables Purchase Documents to which Finco
is a party which could reasonably be likely to have a material
adverse effect on the financial condition or assets of Finco
(p) Lock-Box Accounts. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the Lock-Box
Accounts, are set forth on Exhibit 5.01(p) (or as hereafter
notified to the Term Bank in accordance with Section 7.11), and
each Lock-Box Bank has executed a Lock-Box Agreement. All
Obligors have been instructed to remit payment on the Receivables
to a Lock-Box Account or, via wire transfer, directly to the
Collection Account.
(q) Treatment of Purchased Receivables. Finco is treating
and has treated its Purchase of Receivables from the Seller as a
sale by the Seller and a purchase by Finco for federal income
tax, reporting and accounting purposes.
(r) Ownership of Finco. One hundred percent (100%) of the
outstanding capital stock of Finco is directly owned (both
beneficially and of record) by JSC or an Affiliate thereof. Such
stock is validly issued, fully paid and nonassessable and there
are no options, warrants or other rights to acquire capital stock
from Finco.
(s) Taxes. Finco has filed or caused to be filed all
Federal, state, local and foreign tax returns which are required
to be filed by it, and has paid or caused to be paid all taxes
shown to be due and payable on such returns or on any assessments
received by it, other than any taxes or assessments, the validity
of which are being contested in good faith by appropriate
proceedings and with respect to which Finco has set aside
adequate reserves on its books in accordance with GAAP and which
proceedings are not reasonably likely to have a Material Adverse
Effect.
(t) Locations. As of the Effective Date, the principal
place of business and chief executive office of Finco is located
at its address set forth in Exhibit 6.08 and there were no other
such locations during the four months preceding the Effective
Date. As of the Effective Date, the locations of the offices
where the Records and computer software are kept are listed on
such exhibit (or, as of any date after the Effective Date, at
such other locations, notified to the Term Bank in accordance
with Section 6.08, with respect to which all action required by
such Section 6.08 has been taken and completed).
(u) Other Names. Since its inception, Finco has had no
trade names, fictitious names, assumed names, "doing business as"
names or other names under which it has done or is doing
business.
(v) Use of Proceeds. Any proceeds from the sale of
Commercial Paper in connection herewith shall be used solely for
current expenditures of Finco which qualify as current
transactions, or arise out of current transactions, within the
meaning of Section 3(a)(3) of the Securities Act.
(w) Compliance with Law. Finco is in compliance with all
applicable laws, rules, regulations, and orders with respect to
it, its business and properties, except where failure to so
comply would not have a Material Adverse Effect.
ARTICLE VI AFFIRMATIVE COVENANTS
Finco covenants and agrees that, from the date hereof (or,
if stated otherwise in any covenants contained in this Article
VI, from the date stated therein) until the Collection Date,
unless the Term Bank shall otherwise consent in writing, it will:
SECTION 6.01. Reports; Certificates; Other Information.
Furnish or cause to be furnished to the Term Bank (and, with
respect to the reports described in Sections 6.01(a), 6.01(b),
6.01(c), 6.01(f)(i) and 6.01(g), with a copy thereof to each
Rating Agency):
(a) Annual Reports. As soon as available and in
any event within one-hundred five (105) days after the
end of each fiscal year of Finco, a copy of the annual
statements of income and cash flows of Finco for such
fiscal year and the related balance sheet as at the end
of such fiscal year, setting forth in each case in
comparative form the corresponding figures for the
preceding fiscal year and prepared in accordance with
GAAP consistently applied (except for such changes in
application which are approved by Finco's independent
public accountants and disclosed therein), accompanied
by an opinion of Ernst & Young or other Independent
Public Accountants selected by Finco and reasonably
acceptable to the Majority Banks and the Term Bank
(which accountants may also provide services to JSC and
JSC's other Subsidiaries), together with a certificate
from Finco's independent public accountants confirming
that, in conducting such audit, nothing came to their
attention which caused them to believe that Finco was
not in compliance with this Agreement insofar as it
relates to accounting matters, with the understanding
that such audit was not directed primarily toward
obtaining knowledge of such noncompliance;
(b) Quarterly Reports. As soon as available and
in any event within sixty (60) days after the end of
the first three fiscal quarters of each fiscal year of
Finco, a copy of (A) the unaudited statement of income
and cash flows of Finco for such fiscal quarter and for
the period from the beginning of the respective fiscal
year to the end of such fiscal quarter; and (B) an
unaudited balance sheet of Finco as at the end of such
fiscal quarter; setting forth in each case in
comparative form the corresponding figures for the
preceding fiscal year and all of the foregoing to be
prepared in accordance with GAAP consistently applied
(except for such changes in application which are
approved by Finco's financial officer preparing such
statements and disclosed therein);
(c) Annual Accountants' Report. Within one-
hundred five (105) days after the end of each fiscal
year of Finco, a report with respect to the Facility
Documents by Ernst & Young or any other firm of
Independent Public Accountants reasonably acceptable to
the Term Bank (who may also render other services to
Finco, JSC or their Affiliates); provided, however,
that if the Liquidation Period shall have occurred by
reason of the occurrence of a Liquidation Event, then
the Majority Banks and the Term Bank may direct Finco
to replace such accountants with another firm of
Independent Public Accountants selected by the Majority
Banks and the Term Bank and reasonably acceptable to
Finco. Each such report shall state that the
accountants have compared the amounts contained in a
sample of Daily Reports and Settlement Statements
randomly selected from all Daily Reports and Settlement
Statements delivered to the Term Bank during the period
covered by such report with the records (including
computer records) from which such amounts were derived
and that, on the basis of such comparison, such
accountants are of the opinion that the amounts are in
agreement with such documents and records, except for
such exceptions as they believe to be immaterial and
such other exceptions as shall be set forth in such
report;
(d) Certificates. Contemporaneously with the
furnishing of a copy of each annual and quarterly
report provided for in subsections 6.01(a) and (b),
respectively, a certificate dated the date of delivery
and signed by a Responsible Officer of Finco, which
certificate shall state that said financial statements
fairly present the financial position and results of
operations of Finco in accordance with GAAP
consistently applied (except for such changes in
application identified in such certificate which are
approved by Finco's independent public accountants or,
in the case of the quarterly reports, by such officer
and further subject to normal year-end adjustments) and
that such Responsible Officer has reviewed the relevant
terms of this Agreement and has made, or caused to be
made under such Responsible Officer's supervision, a
review of Finco's activities during the period covered
by the statements then being furnished, and that the
review has not disclosed the existence of a Liquidation
Event or Unmatured Liquidation Event, or if there is
such an event, describing it and the steps, if any,
taken or being taken to cure it;
(e) Notice of Liquidation Event and Litigation.
As soon as possible and in any event within two
Business Days upon learning of the occurrence of any of
the following, written notice thereof (with a copy
concurrently sent to each Rating Agency), describing
the same and the steps being taken by Finco with
respect thereto: (a) a Liquidation Event or Unmatured
Liquidation Event, or (b) the institution against Finco
of, or any adverse determination in, any litigation,
arbitration proceeding or governmental proceeding;
(f) Reports under Receivables Sale Agreement.
Promptly upon receipt thereof, copies of (i) all annual
and quarterly financial statements and monthly
Settlement Statements delivered to Finco by the Seller
or by the Servicer pursuant to the Receivables Sale
Agreement (each such Settlement Statement to be
delivered no later than the Business Day of Finco's
receipt but in no event later than the applicable
Reporting Date) and (ii) all Daily Reports (to be
delivered no later than the Business Day of Finco's
receipt) and all other reports and other written
information not specified above which are required to
be delivered by the Seller or the Servicer to Finco
pursuant to the terms of the Receivables Sale
Agreement; and
(g) Other Information. Promptly, from time to time,
such other information, documents, records or reports
respecting the Purchased Assets or the Contributed Assets,
including the Receivables, or the condition or operations,
financial or otherwise, of Finco as the Term Bank or its
respective agents or representatives may from time to time
reasonably request.
SECTION 6.02. Inspection. (a) At any time and from time to
time during Finco's normal business hours, with reasonable
notice, permit the Term Bank, or its agents or representatives,
(i) to examine and make copies of and abstracts from all books,
records and documents (including computer tapes and disks) in the
possession or under the control of Finco relating to the
Receivables, the other Purchased Assets or the other Contributed
Assets, and (ii) to visit the offices and properties of Finco for
the purpose of examining such materials described in clause
(i) above, and to discuss matters relating to the Receivables,
the other Purchased Assets or the other Contributed Assets, or
Finco's performance hereunder with any of the officers or
employees of Finco having knowledge of such matters. Finco
agrees to instruct its independent accountants to cooperate with
any reasonable request of the Term Bank, its permitted assigns,
or their respective agents or representatives, in connection with
the performance of such accountants' routine verification
procedures with respect to the Receivables or the other
Collateral. If a Liquidation Event shall have occurred and be
continuing, and the Aggregate Net Outstandings (calculated
without giving effect to any amount then on deposit and credited
to the Downgraded Series A Bank Sub-account or the Downgraded
Series B Bank Sub-account) are greater than zero at such time,
the Term Bank or its assigns, agents or representatives, shall
also be permitted to verify the validity, amount or any other
matter relating to any Receivable, and may notify any or all of
the Obligors of the security interests granted hereunder or
direct such Obligors to make payments under any Receivables
directly to the Term Bank or its designees.
(b) Without limiting the foregoing, the Term Bank (or its
respective agents or representatives) may instruct the Facility
Agent to request Finco to perform or have performed the
inspection contemplated by Section 7.02 of the Liquidity
Agreement; provided, that if such inspection has already been
performed, the Term Bank may request from the Facility Agent such
reports or other results of such inspection.
SECTION 6.03. Books and Records of Finco. Maintain and
implement administrative and operating procedures reasonably
necessary in the performance of its obligations hereunder
(including an ability to recreate records evidencing the
Receivables in the event of the destruction of the originals
thereof), and keep and maintain at all times, or cause to be kept
and maintained at all times, all documents, books, records,
accounts and other information relating to the Receivables, the
Purchased Assets and the Contributed Assets reasonably necessary
or advisable for the collection of all Receivables (including
records adequate to permit the daily identification of each
Receivable and all collections of and reductions or adjustments
to each Receivable).
SECTION 6.04. Corporate Existence. Observe all corporate
procedures required by its certificate of incorporation and by-
laws and do or cause to be done all things necessary to preserve
and maintain its corporate existence and good standing (except
where the failure to be in good standing would not have a
Material Adverse Effect), material rights, licenses, permits and
franchises.
SECTION 6.05. Compliance with Laws. From and after the
Effective Date, comply in all respects with all applicable laws,
rules, regulations, writs, judgments, injunctions, decrees,
awards and orders with respect to it, its business and
properties, except where the failure to so comply would not have
a Material Adverse Effect.
SECTION 6.06. Obligations and Taxes. Pay all its
indebtedness and obligations promptly and in accordance with
their terms and pay and discharge promptly all taxes, assessments
and governmental charges or levies imposed upon it or in respect
of its property, before the same shall become in default, as well
as all lawful claims for labor, materials and supplies or other-
wise which, if unpaid, might become a Lien or charge upon such
properties or any part thereof (except such indebtedness,
obligations, taxes, assessments, governmental charges and levies
and claims being contested in good faith by appropriate
proceedings and for which Finco has set aside adequate reserves
therefor).
SECTION 6.07. Facility Documents. Comply in all material
respects with the terms of and employ the procedures outlined in
and enforce the obligations of the Seller and the Servicer under
the Receivables Sale Agreement, and all of the other Facility
Documents to which it is a party.
SECTION 6.08. Location of Records. Keep its principal
place of business and chief executive office, and the offices
where it keeps its books, records and documents concerning the
Receivables (including all original documents relating thereto)
at the addresses specified in Exhibit 6.08, or, upon thirty days'
prior written notice to the Term Bank, at such other locations in
the United States where all action required to maintain the
perfection of Finco's ownership interest in the Purchased Assets
and the Contributed Assets and the Collateral Agent's security
interest in the Collateral shall have been taken and completed.
Finco shall also provide a Perfection Opinion prior to such
change.
SECTION 6.09. Separate Corporate Existence. Finco shall
take all reasonable steps to maintain Finco's identity as a
separate legal entity from JSC and to make it manifest to third
parties that Finco is an entity with assets and liabilities
distinct from those of JSC and each other Affiliate thereof.
Without limiting the generality of the foregoing and in addition
to and consistent with the covenants set forth in Sections 6.04
and 6.07, Finco shall:
(i) conduct all of its business, and make all
communications to third parties (including all invoices (if
any), letters and other instruments) solely in its own name
(and not as a division of any other Person), and identify
employees of Finco (if any) as such (including by means of
providing appropriate employees with business or
identification cards identifying such employees as Finco's
employees);
(ii) compensate all consultants and agents of Finco
that are not employees, consultants or agents of any
Affiliate of Finco directly, from Finco's bank accounts, for
services provided to Finco by such employees, consultants
and agents and, in the case of any employee, consultant or
agent of Finco that is also an employee, consultant or agent
of any Affiliate of Finco, allocate the compensation of such
employee, consultant or agent between Finco and such
Affiliate on a basis which reflects the services rendered to
Finco and such Affiliate (it being understood that such
allocation may be made on the basis of estimates of such
services and accomplished through the payment of an
administrative fee by Finco to one or more of its Affiliates
and that ministerial services of negligible value will not
be compensated);
(iii) allocate all overhead expenses (including
telephone and other utility charges) for items shared
between Finco and any Affiliate 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;
(iv) at all times have at least one "Independent
Director" as defined in and as required under Finco's
Certificate of Incorporation; and each "Independent
Director" shall not be, and shall never have been, a
director, officer, employee or stockholder of the Seller;
(v) maintain Finco's books and records separate from
those of any Affiliate;
(vi) prepare its financial statements separately from
those of its other Affiliates and use its best efforts to
insure that any future consolidated financial statements of
JSC that include Finco (excluding such financial statements
that are provided only to JSC and its Affiliates or their
independent public accountants) have a footnote to the
effect that Finco is a wholly-owned, bankruptcy remote,
limited purpose subsidiary of JSC, which finances its
purchases of receivables through the issuance of commercial
paper;
(vii) (a) use its best efforts not to commingle funds or
other assets of Finco with those of any other Affiliate, (b)
not hold its assets in any manner that would create an
appearance that such assets belong to any other Affiliate,
and (c) not maintain bank accounts or other depository
accounts to which any Affiliate is an account party, or from
which any Affiliate (except in its capacity as Servicer or
as otherwise permitted under the Facility Documents) has the
power to make withdrawals;
(viii) not permit any Affiliate to pay any of Finco's
operating expenses (except pursuant to allocation
arrangements that comply with the requirements of subsection
(iii) of this Section 6.09, pursuant to the terms of the
Receivables Sale Agreement or any Dealer Agreement or
pursuant to any arrangements by which any operating expense
of Finco is paid by an Affiliate and is promptly reimbursed
by Finco);
(ix) not guarantee any obligation of any Affiliate nor
(to the extent that Finco has the legal power to prevent
such) have any of its obligations guaranteed by any such
Affiliate (either directly or by seeking credit based on the
assets of such Affiliate) or otherwise hold itself out as
responsible for the debts of any Affiliate; provided,
however, that for the purposes of this clause (ix), no
arrangement or transaction permitted by the Facility
Documents shall be deemed to constitute such a guarantee;
(x) maintain at all times a separate stationery from
that of any Affiliate, and have all its officers conduct all
of its business solely in its own name and strictly observe
all corporate formalities;
(xi) (x) not, to the extent within its power, permit
Finco to be named as a direct or contingent beneficiary or
loss payee on any insurance policy covering the property of
any Affiliate, and (y) not name other Affiliates as a direct
or contingent beneficiary or loss payee on its own insurance
policies, in either case such that (A) in the event of a
loss in connection with such property, payments on account
thereof would be made to Finco or would be jointly made to
Finco and such Affiliate, or (B) payments on account of
losses to Finco's property would be made to any Affiliates
or would be jointly made to Finco and any Affiliates;
(xii) not permit the Seller, in its capacity as such, to
be involved in the day-to-day management of Finco, and other
than with respect to the purchase and sale and contribution
and transfer of Receivables pursuant to the Facility
Documents (including, without limitation, transactions
contemplated by the Short-Term Note and adjustments for
Dilution, Breached Receivables or Noncomplying Receivables)
and the performance of its obligations under the Facility
Documents and the Existing Receivables Purchase Documents,
Finco shall not engage in any intercorporate transaction
with the Seller;
(xiii) hold regular meetings of its board of directors in
accordance with the provisions of Finco's Certificate of
Incorporation; and
(xiv) take such other actions as are necessary on its
part to ensure that the facts and assumptions set forth in
the opinion described in Section 4.01(m)(iii) are true and
correct as of the date of such opinion and remain true and
correct at all times; provided, however, that after the date
of such opinion, Finco shall not be required pursuant to
this clause (xiv) to take any such actions as are not within
its power.
ARTICLE VII NEGATIVE COVENANTS
Finco covenants and agrees that, from the date hereof (or,
if stated otherwise in any covenants contained in this Article
VII, from the date stated therein) until the Collection Date,
unless the Term Bank shall otherwise consent in writing, it will
not, directly or indirectly:
SECTION 7.01. Liens; Sales of Collateral. From the
Effective Date, create, incur, assume or permit to exist any Lien
(other than Permitted Liens or any Lien pursuant to the Existing
Receivables Purchase Documents which shall terminate on the
Effective Date) on or with respect to any property or asset of
any kind (including any document or instrument in respect of
goods or accounts receivable) of Finco whether now owned or
hereafter acquired, or any income or profits therefrom, or file
or permit the filing of any financing statement or other similar
notice of any Lien with respect to any such property, asset,
income or profits under the UCC of any state or under any similar
recording or notice statute, except Permitted Liens; or (except
as expressly contemplated pursuant to the Facility Documents)
sell, convey, assign (by operation of law or otherwise), transfer
or otherwise dispose of any of the Collateral or Finco's right to
receive income in respect thereof.
SECTION 7.02. Indebtedness. From the Effective Date,
create, incur, assume, permit to exist or guaranty, or otherwise
become or remain directly or indirectly liable with respect to,
any Indebtedness, except:
(a) Finco may become and remain liable with respect to
(i) the Indebtedness to the Term Bank hereunder, (ii) the
Indebtedness to the Agents and the Banks expressly
contemplated by the Liquidity Agreement and (iii) the
Indebtedness evidenced by the Commercial Paper;
(b) Finco may become and remain liable with respect to
Contingent Obligations permitted by Section 7.04 and, upon
any matured obligations actually arising pursuant thereto,
the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(c) Finco may become and remain liable with respect to
the Ordinary Course Expenses (to the extent, if any, that
such items constitute Indebtedness) and Indebtedness to the
Seller pursuant to the Receivables Sale Agreement and the
Short-Term Note; and
(d) Finco may be liable with respect to (i)
Indebtedness, pursuant to its Purchaser Note (as defined in
the Master Agreement) payable to Emerald Funding
Corporation; provided that such Indebtedness is paid in full
on the Effective Date, and (ii) certain other expenses or
obligations incurred in connection with the Existing
Receivables Purchase Documents, which expenses or
obligations shall be paid in full on or before June 30,
1995.
SECTION 7.03. Net Worth. Permit its net worth (defined as
the sum of (i) the amount of its capital stock plus (ii) the
amount of surplus and retained earnings (or, in the case of a
surplus or retained earnings deficit, minus the amount of such
deficit), in each case determined in accordance with GAAP) to be
less than 6.75% of the Outstanding Balance of the Eligible
Receivables.
SECTION 7.04. Contingent Obligations. From the Effective
Date, create or become or remain liable with respect to any
Contingent Obligation, except endorsements of negotiable
instruments for collection in the ordinary course of business and
reimbursement or indemnification obligations (i) in favor of the
Term Bank as provided for under this Agreement, (ii) in favor of
the Agents or the Banks as provided for in the Liquidity
Agreement, (iii) in favor of the Depositary as provided in the
Series A Depositary Agreement or the Series B Depositary
Agreement, (iv) in favor of any Dealer or any "Indemnitee" (as
defined in the Dealer Agreement), pursuant to such Dealer
Agreement and (v) pursuant to the Master Agreement.
SECTION 7.05. Investments; Joint Ventures. Make or own any
Investment in any Person, including any joint venture, except
Purchased Assets, Contributed Assets, Receivable Notes and
Permitted Investments.
SECTION 7.06. Bankruptcy. Without the consent of the
"Independent Director" (as defined in Finco's certificate of
incorporation), file or cause to be filed any voluntary
proceeding of the type referred to in the definition of
"Insolvency Event" so long as this Agreement remains in full
force and effect and for at least one year and one day following
the latest to occur of: (i) the payment in full of all Liquidity
Loans; (ii) the payment in full of the Term Loan; or (iii) the
payment in full of the latest maturing Commercial Paper Note.
SECTION 7.07. Facility Documents. Except as otherwise
permitted under Section 9.01, (a) amend any Facility Document to
which it is a party, or give or withhold any consent or waiver
thereunder, (b) designate a Termination Date if, at the time of
such designation, the Aggregate Net Outstandings exceeds the
Modified Base Amount, or (c) without the prior written consent of
the Majority Banks and the Term Bank, consent to any amendment or
modification to the Credit and Collection Policy that is
reasonably likely to have a Material Adverse Effect; except that
Finco may, with prior written notice to the Facility Agent and
the Term Bank, but without any prior written consent, amend the
Allocation Agreement, provided that any such amendment shall be
on fair and reasonable terms materially no less favorable to
Finco than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate and such amendment
shall not be prohibited by, or otherwise adversely affect Finco's
ability to comply with, Section 6.09.
SECTION 7.08. Charter and By-Laws. Amend or otherwise
modify its certificate of incorporation or by-laws in any manner
which requires the consent of the "Independent Director" (as
defined in Finco's certificate of incorporation), without (x)
obtaining the prior written consent of the Majority Banks and the
Term Bank, (y) satisfying the Rating Agency Condition and (z)
delivering a favorable update of the opinion of counsel referred
to in Section 4.01(m)(iii). In addition, Finco shall not make
any change to its corporate name unless (i) the Facility Agent,
the Term Bank and each Rating Agency shall have received twenty
(20) Business Days' prior written notice of such name change and
(ii) at least ten (10) Business Days prior to the effective date
of any such name change, Finco shall have executed and delivered
to the Collateral Agent such Financing Statements (Form UCC-1 and
UCC-3) which the Term Bank may request to reflect such name
change, together with such other documents and instruments that
the Term Bank may request in connection therewith and a
Perfection Opinion.
SECTION 7.09. [Reserved]
SECTION 7.10. Bank Accounts. From the Effective Date,
maintain any bank accounts other than the Collection Account
(including the sub-accounts thereof), the Series A Proceeds
Account (including any sub-accounts thereof), the Series B
Proceeds Account (including any sub-accounts thereof), the Lock-
Box Accounts, checking accounts for payments of Ordinary Course
Expenses and such other accounts which Finco with the approval of
the Collateral Agent (which approval shall not be unreasonably
withheld), shall consider to be advisable for the administration
of this Agreement and the other Facility Documents; provided,
however, that Finco shall have given notice of the existence and
location of any such account to each of the Agents at or before
the time such accounts are opened; and further provided, however,
that Finco may maintain, until June 30, 1995, any bank account
required or permitted to be maintained under the Existing
Receivables Purchase Documents, so long as Finco shall have given
notice of the existence and location of any such account to each
of the Agents at or before the Effective Date (such bank
accounts, the "Existing Receivables Purchase Accounts").
SECTION 7.11. Lock-Box Banks; Change in Payment
Instructions to Obligors. From the Effective Date, make any
changes in instructions to Obligors directing payments other than
to a Lock-Box Bank or, via wire transfer, to the Collection
Account, or voluntarily add or terminate any bank as a Lock-Box
Bank from those listed in Exhibit 5.01(p) unless, with respect to
the addition of any Lock-Box Bank, the Term Bank shall have first
received and approved, which approval shall not be unreasonably
withheld, (x) copies of Lock-Box Agreements executed by each new
Lock-Box Bank and Finco and (y) copies of all agreements and
documents signed by Finco (and, if applicable, by the Seller) and
the respective Lock-Box Bank with respect to any new Lock-Box
Account.
SECTION 7.12. Accounting Treatment. Prepare any financial
statements or other statements (including any tax filings which
are not consolidated with those of JSC) which shall account for
the transactions contemplated by the Receivables Sale Agreement
in any manner other than as the sale of the Purchased Assets, and
the contribution of the Contributed Assets, by the Seller to
Finco.
SECTION 7.13. Merger, Consolidation, Etc. Alter its
corporate, capital or legal structure, or enter into any
transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, sub-lease, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part
of its business, property or fixed assets, whether now owned or
hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person,
except to the extent provided in the Facility Documents.
SECTION 7.14. Capital Expenditures. Make or incur any
capital expenditures except as necessary to conduct its business
in accordance with the terms of the Facility Documents.
SECTION 7.15. Restriction on Leases. Become liable in any
way, whether directly or by assignment or as a guarantor or other
surety, for the obligations of the lessee under any lease, except
as necessary to conduct its business in accordance with the terms
of this Agreement and except pursuant to the Allocation
Agreement.
SECTION 7.16. Conduct of Business. From the Effective
Date, engage in any business other than (a) the businesses
engaged in by Finco on the Effective Date, (b) those businesses
described in Section 7.01(o), and (c) such other lines of
business as may be consented in writing to by the Majority Banks
and the Term Bank. Notwithstanding anything to the contrary in
this Agreement or any other Facility Document: (i) Finco shall
not engage in any business or activities other than in connection
with, or relating to, (A) the holding, acquisition, ownership,
management, control, use, sale and disposition of the Purchased
Assets and the Contributed Assets, (B) the execution, delivery
and performance of this Agreement and the other Facility
Documents to which it is a party, (C) any and all business or
activities that are required by or authorized by the terms of
this Agreement, the other Facility Documents to which it is a
party and the Existing Receivables Purchase Documents to which it
is a party, (D) the winding up of Emerald Funding Corporation's
trade receivables securitization program, and (E) any and all
business or activities that are incidental to or necessary to
accomplish any of the foregoing, (ii) Finco shall not enter into
any transaction with any Person which is not contemplated by or
incidental to the performance of its obligations under the
Facility Documents and the Existing Receivables Purchase
Documents, and (iii) Finco shall not create, acquire or otherwise
hold any interest in any Subsidiary or other Person, other than
the Permitted Investments.
ARTICLE VIII TERMINATION; REMEDIES
SECTION 8.01. Termination; Remedies. The obligation of the
Term Bank to make the Term Loan shall terminate on the Term
Commitment Termination Date. In addition, (i) the Term Bank
shall be entitled to the benefits of the security interest in the
Collateral granted by Finco to the Collateral Agent, as set forth
in Section 9.01 of the Liquidity Agreement, and (ii) the Term
Bank shall be entitled to pursue any other right or remedy under
this Agreement. In addition to the foregoing, if Finco becomes
the subject of a Liquidation Event described in clause (g) of the
definition of Liquidation Event, then, in addition to the
foregoing, the principal and interest on the Term Note shall
become immediately due and payable, without presentment, demand,
protest or other notice of any kind whatsoever. Absent the
occurrence of such a Liquidation Event with respect to Finco, the
principal and interest on the Term Note shall become immediately
due and payable upon the Stated Term Loan Maturity Date.
SECTION 8.02. Binding Effect. Notwithstanding the Stated
Term Loan Maturity Date, the obligations of Finco under this
Agreement shall be absolute and unconditional and shall remain in
full force and effect until the Term Loan and the other
Obligations owed to the Term Bank have been fully paid and
satisfied.
SECTION 8.03. Indemnities by Finco. Without limiting any
other rights which the Term Bank may have hereunder or under
applicable law, but without duplication, Finco hereby agrees to
indemnify the Term Bank, its successors and permitted assignees,
and its and such assignees' respective officers, directors,
agents and employees (all of the foregoing collectively referred
to herein as "Indemnitees") from and against any and all damages,
losses, claims, liabilities, reasonable costs and reasonable
expenses, including reasonable attorneys' fees, and disbursements
(all of the foregoing collectively referred to herein as the
"Indemnified Amounts") awarded against or incurred by any
Indemnitee relating to or resulting from:
(i) any representation or warranty made by Finco (or any of
its officers) under or in connection with this Agreement or any
Facility Document or in connection with the preparation or
delivery of any Daily Report, any Settlement Statement, or any
other information or report delivered pursuant hereto or thereto,
which shall have been false, incomplete or incorrect in any
material respect when made;
(ii) the failure by Finco to comply with any applicable law,
rule or regulation with respect to any Receivable, the related
Invoice (or contract) or the Related Security, or the
nonconformity of any Receivable, the related Invoice (or
contract) or the Related Security with any such applicable law,
rule or regulation;
(iii) the failure by Finco to file, 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 Receivables and other Purchased Assets
which are, or are purported to be, the subject of a security
interest granted under this Agreement, whether at the time of any
Purchase or at any subsequent time;
(iv) the failure by Finco to comply with any term, provision
or covenant contained in this Agreement, any other Facility
Document or any agreement executed in connection with this
Agreement or any other Facility Document (in each case, where
Finco is a party thereto);
(v) the failure by Finco to pay when due any tax or
governmental fee or charge (other than taxes on or measured by
the net income), all interest and penalties thereon or with
respect thereto, and all out-of-pocket costs and expenses,
including the reasonable fees and expenses of counsel in
defending the same, which may arise by reason of (a) the Purchase
or ownership of all or any portion of, or any other interest in,
the Purchased Assets or (b) the Contribution or ownership of all
or any portion of, or any other interest in, the Contributed
Assets.
It is expressly agreed and understood by the parties (i) that
such indemnification is not intended to constitute a guarantee of
the collectibility or payment of the Receivables sold hereunder
and the other Purchased Assets and (ii) that nothing in this
Section 8.03 shall require Finco to indemnify any Indemnitee (A)
for damages, losses, claims or liabilities or related costs or
expenses resulting from such Indemnitee's gross negligence or
willful misconduct or (B) for lost profits, consequential,
special or punitive damages. Notwithstanding anything in this
Agreement to the contrary, the gross negligence or willful
misconduct of any one Indemnitee shall not be a defense to, or in
any other way adversely affect, mitigate or diminish any other
Indemnitee's right or claim to indemnification under this Section
8.03. Finco shall direct the Collateral Agent to pay any amounts
subject to the indemnification provisions of this Section 8.03
from the Collection Account for distribution, subject to Sections
9.07 and 9.08 of the Liquidity Agreement, to the Indemnitee
within five (5) Business Days following such Indemnitees' written
demand therefor, setting forth in reasonable detail the basis for
such demand, in each case out of Available Cash (including any
proceeds received by Finco pursuant to the indemnifications made
in its favor under the Receivables Sales Agreement).
Notwithstanding anything to the contrary in this Agreement, for
purposes of this Section 8.03, any representations, warranties
and covenants contained in this Agreement shall not be deemed to
be limited to failures to perform or comply or to events,
circumstances, conditions or changes that did give rise to a
Material Adverse Effect. The indemnity obligations set forth in
this Section 8.03 shall be continuing and shall survive any
termination of this Agreement.
Any Indemnitee wishing to be indemnified under this Section
8.03 shall give prompt notice to Finco upon becoming aware of any
event or circumstance which such Indemnitee expects to give rise
to a claim for indemnification under this Section 8.03 and shall
permit (to the extent not disadvantageous or prejudicial to it)
such provider to participate in the defense, settlement or
resolution thereof; provided that the failure by any Indemnitee
to so act shall not deprive it of its rights to indemnification
under this Section 8.03 unless such failure shall result in
material damage, liability or costs (including costs of
indemnification hereunder) to Finco.
ARTICLE IX MISCELLANEOUS
SECTION 9.01. Amendments, Etc. Notwithstanding anything
else to the contrary contained herein, the parties hereto
acknowledge and agree that any amendment, waiver or modification
of this Agreement or any other Facility Document shall be
governed by and subject to the provisions and procedures set
forth in Section 12.01 of the Liquidity Agreement, the terms of
which are herein incorporated by this reference.
SECTION 9.02. No Waiver; Remedies. No waiver by the Term
Bank of any breach or default of or by Finco under this Agreement
shall be deemed a waiver of any other previous breach or default
or any thereafter occurring. No failure on the part of the Term
Bank or the Collateral Agent to exercise, and no delay in
exercising, any right hereunder or under the Liquidity Agreement
shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder, or any abandonment or
discontinuation of steps to enforce such right, power or
privilege, preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided and
provided in the Liquidity Agreement are cumulative and not
exclusive of any remedies provided by law.
SECTION 9.03. Successors and Assigns; Assignment.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the
successors and permitted assigns of such party; all covenants,
promises and agreements by or on behalf of any parties hereto
that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and permitted assigns.
Finco may not assign or transfer any of its rights or obligations
hereunder or under any of the other Facility Documents without
the written consent of the Term Bank. With the prior written
consent of Finco (such consent not to be unreasonably withheld),
the Term Bank may assign all, but not less than all, of its
interests, rights and obligations hereunder to a Person which
satisfies the requirements of clause (i) of the definition of
"Eligible Assignee"; provided, that (i) prior to the effective
date of any such assignment, the assignee and assignor shall have
executed and delivered to Finco an Assignment and Acceptance
substantially in the form of Exhibit 9.03, and (ii) Finco's
consent shall not be necessary with respect to any assignment by
the Term Bank to an Affiliate of the Term Bank. Upon the
effectiveness of any such permitted assignment, (i) the assignee
thereunder shall be entitled to the interests, rights and
obligations of the Term Bank under this Agreement and the
Liquidity Agreement and (ii) the assigning Term Bank shall be
released from its obligations under this Agreement and the
Liquidity Agreement.
(b) Notwithstanding anything contained in paragraph (a) of
this Section 9.03, the Term Bank may at any time pledge or assign
all or any portions of its interests and rights under this
Agreement and the Liquidity Agreement to a Federal Reserve Bank.
SECTION 9.04. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES. EACH OF THE PARTIES HERETO HEREBY
AGREES TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE CITY OF NEW YORK, NEW YORK (AND ANY
COURTS HEARING APPEALS FROM SUCH STATE OR FEDERAL COURT) OVER ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO SUCH PARTY AT ITS ADDRESS SPECIFIED
IN SECTION 9.05 OR PROVIDED THEREIN. EACH OF THE PARTIES HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO
VENUE OF ANY ACTION INSTITUTED HEREUNDER WITHIN THE STATE OF NEW
YORK AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY ANY COURT IN SUCH STATE.
NOTHING IN THIS SECTION 9.04 SHALL AFFECT THE RIGHT OF ANY PARTY
HEREUNDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER OR
REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR UNDER OR IN
CONNECTION HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY
SUCH ACTION SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
THE TERMS AND PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.
SECTION 9.05. Notices. Except as otherwise expressly
provided in this Agreement, any notice shall be conclusively
deemed to have been received by a party hereto and to be
effective (i) if sent by regular mail or commercial delivery
service, on the day on which delivered to such party at its
address set forth below its name on the signature pages hereto
(or at such other address as such party shall specify to the
other parties hereto in writing), (ii) if sent by telex, graphic
scanning or other telecopy communications of the sending party,
when delivered by such equipment to the number set forth below
its name on the signature pages hereto and confirmed by
electronic receipt or similar means or (iii) if sent by
registered or certified mail, on the day on which delivered to
such party (or delivery is refused), addressed to such party at
such address. Any notices required to be delivered to either
Rating Agency under this Agreement or any of the other Facility
Documents shall be addressed to such Rating Agency at the
following address (or to such other address as such Rating Agency
may hereafter specify to the other parties hereto in writing):
Standard & Poor's Corporation, 25 Broadway, Attn: Asset-Backed
Surveillance Group, New York, NY 10004, Telephone: (212) 208-
8000; Telecopy: (212) 412-0225; and Duff & Phelps Credit Rating
Co., Attn: Asset-Backed Research and Monitoring Group, 55 East
Monroe Street, Chicago, Illinois 60603, Telephone: (312) 263-
2610, Telecopy: (312) 263-2852.
SECTION 9.06. Survival of Agreement. All covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making
of the Term Loan and the execution and delivery of this Agreement
and shall continue in full force and effect until the Collection
Date has occurred; provided, however, that the indemnities
contained in Sections 3.02, 3.04, 3.05, 8.03 and 9.07 of this
Agreement and the obligations of the parties hereto under Section
9.08 and 9.10, shall be continuing and shall survive any
termination of this Agreement.
SECTION 9.07. Expenses; Indemnification. Finco shall pay
on demand (i) all reasonable out-of-pocket fees and expenses
(including reasonable attorneys fees and expenses) of the Agents
incurred in connection with the negotiation, preparation,
execution or delivery of this Agreement and the making and
repayment of the Term Loan, (ii) all reasonable out-of-pocket
fees and expenses (including reasonable fees and expenses of a
single law firm representing the Collateral Agent and the
reasonable fees and expenses of a single law firm representing
the Term Bank) of the Collateral Agent and the Term Bank incurred
in connection with the administration, amendment, modification or
waiver of this Agreement or any other Facility Document, and
(iii) all reasonable out-of-pocket fees and expenses of the
Collateral Agent and the Term Bank (including reasonable
attorneys' fees and expenses of counsel), incurred from and after
a Liquidation Event in connection with the enforcement of this
Agreement and the other Facility Documents against Finco, the
Servicer and the Seller. In addition, Finco will pay any and all
stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing,
recording or enforcement of this Agreement or the other Facility
Documents, and hereby indemnifies and saves the Term Bank
harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such
taxes and fees. All payments owing by Finco under this Section
9.07 shall be made subject to the terms of Sections 9.07 and 9.08
of the Liquidity Agreement.
SECTION 9.08. Confidentiality. The Term Bank hereby
acknowledges that the Records and other information which it or
Finco receives from the Seller may contain information in which
Finco or the Seller has a proprietary interest and which may not,
at the time of assignment and/or delivery, be generally available
to and known by the public (including information relating to
Finco or the Seller contained in the Information Memorandum).
The Term Bank hereby agrees, for the benefit of Finco and the
Seller, to maintain as confidential all such information obtained
from the Seller or Finco and not to disclose such information to
any other Person; provided, however, that nothing in this Section
9.08 shall (A) impose any liability on the Term Bank if it has
acted in accordance with reasonable and customary standards for
maintaining the confidentiality of information relating to its
corporate customers or (B) prevent any Person from disclosing
such information (i) to any permitted assignee of Finco, or
permitted assignee or participant of the Term Bank (or their
permitted prospective participants and assignees), provided that
each such party agrees in writing, for the benefit of Finco and
the Seller, (x) to use such information and keep such information
confidential in accordance with the same terms set forth herein
and (y) that it will not disclose such information to any of its
Affiliates, (ii) to its employees, agents, attorneys, auditors
and accountants, (iii) subject to the further requirements set
forth in this Section 9.08, upon the order of any court or
administrative agency or upon the request or demand of any
regulatory agency, authority or official having jurisdiction over
the Term Bank, (iv) which has (other than through a breach of
this Section 9.08) been obtained from any Person other than
Finco, the Seller or any other party hereto, or (v) to the extent
such information (other than through a breach of this Section
9.08) has become generally available to and known by the public
subsequent to the time of delivery hereunder. The Term Bank (a)
will provide Finco with prompt written notice of any subpoena or
any request or requirement by any governmental authority (other
than any such request or requirement in connection with an audit
or other regulatory review of a financial institution) for dis-
closure of any confidential information so that Finco and/or the
Seller may seek a protective order or other appropriate remedy
prior to such disclosure and (b) shall consult with Finco to a
reasonable extent on the advisability of taking legally available
steps to resist or narrow such request or requirement (it being
understood that, after such notice and consultation, such party
shall be under no further obligations to Finco under this Section
9.08 to refrain from disclosure in connection with such
proceeding during the pendency thereof as provided under clause
(iii) of the immediately preceding sentence). In the event a
protective order or other remedy is not obtained, the Term Bank
will exercise reasonable efforts (x) to limit the information
disclosed to such information which it is legally required to
disclose and (y) to obtain assurance that confidential treatment
will be accorded any such information so disclosed, in each case
only to the extent efforts would not cause the Term Bank to
incur costs which it deems to be material.
SECTION 9.09. No Recourse. The obligations of Finco
hereunder shall be solely its obligations and shall in all
respects be non-recourse to all of its officers, directors,
controlling persons or stockholders (including the Seller), and
the Term Bank acknowledges the same with respect to Finco and, to
the fullest extent permitted by law, waives any such recourse and
any claim against any of such parties arising hereunder.
SECTION 9.10. No Proceedings. The Term Bank hereby agrees
that it will not institute against Finco any involuntary
proceeding of the type referred to in the definition of
"Insolvency Event" so long as this Agreement remains in full
force and effect and for at least one year and one day following
the latest to occur of: (i) the payment in full of all Liquidity
Loans; (ii) the payment in full of the Term Loan; or (iii) the
payment in full of the latest maturing Commercial Paper Note.
SECTION 9.11. Execution in Counterparts; Severability.
This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 9.12. Entire Agreement. This Agreement, together
with the other Facility Documents, including the exhibits and
schedules hereto and thereto, contains a final and complete
integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the
entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all previous oral statements
and other writings with respect thereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers
and delivered as of the day and year first above written.
JEFFERSON SMURFIT FINANCE CORPORATION
By:
Name:
Title:
Address:
Jefferson Smurfit Finance Corporation
8182 Maryland Avenue
St. Louis, Missouri
Attn: Treasurer
Tel. No.:________________
Telecopier No.:__________
BANK BRUSSELS LAMBERT, NEW YORK
BRANCH, AS TERM BANK
By:
Name:
Title:
Address:
_________________________
_________________________
_________________________
_________________________
Attn:____________________
Tel. No.:________________
Telex No.:_______________
(Answerback:_____________)
Telecopier No.:__________
ACKNOWLEDGED AND CONSENTED TO
FOR PURPOSES OF SECTION 6.02(B)
BANKERS TRUST COMPANY, as Facility Agent
By:
Name:
Title:
DEPOSITARY AND ISSUING AND PAYING AGENT AGREEMENT
(SERIES A COMMERCIAL PAPER)
As of February 23, 1995
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group
Re: Jefferson Smurfit Finance Corporation Series A
Commercial Paper
Ladies and Gentlemen:
This will confirm the arrangements made with you (the
"Depositary") by the undersigned, Jefferson Smurfit Finance
Corporation (the "Company"), whereby you have agreed to act as
depositary for safekeeping of certain short-term promissory notes
of the Company which will be sold in the commercial paper market
and designated Series A Commercial Paper (the "Series A
Commercial Paper Notes") and as issuing and paying agent on
behalf of the Company in connection with the issuance and payment
of the Series A Commercial Paper Notes, and to undertake certain
obligations as described below on behalf of holders of the Series
A Commercial Paper Notes.
The Series A Commercial Paper Notes to be issued will be
entitled to the benefits of this Depositary and Issuing and
Paying Agent Agreement (this "Agreement"), and will be issued on
the terms and subject to the conditions set forth herein and
pursuant to the Liquidity Agreement (the "Liquidity Agreement")
dated as of February 23, 1995, among the Company, the various
financial institutions party thereto as "Banks" and Bankers Trust
Company, as Facility Agent and Collateral Agent. All capitalized
terms used herein and not otherwise defined herein shall have the
meanings set forth for such terms in Annex I to the Liquidity
Agreement.
The Series A Commercial Paper Notes will be entitled to the
benefits of this Agreement and the Liquidity Agreement.
This Agreement will govern your rights, powers and duties as
such depositary, issuing and paying agent and, in certain
circumstances, as fiduciary or agent with respect to the Series A
Commercial Paper Notes issued pursuant to this Agreement. No
implied covenants shall be read into this Agreement against you.
SECTION 1. Establishment of Accounts; Proceeds of Series A
Commercial Paper Notes. For the purposes of this Agreement and
the Liquidity Agreement, you have established, in the name of the
Company for the exclusive benefit of the holders, from time to
time, of the outstanding Series A Commercial Paper Notes, a
segregated noninterest bearing trust account in the corporate
trust office of Bankers Trust Company, account no. 14313 (being
referred to herein and in the Liquidity Agreement as the "Series
A Commercial Paper Account") over which you shall have exclusive
dominion and control and the sole right of withdrawal. All
proceeds of the sale on any day of Series A Commercial Paper
Notes issued hereunder shall be deposited by you in the Series A
Commercial Paper Account to the extent necessary to provide for
the payment of unpaid matured or concurrently maturing Series A
Commercial Paper Notes, whether or not presented to the
Depositary for payment; the proceeds in excess of the amount
required to pay unpaid matured or concurrently maturing Series A
Commercial Paper Notes, whether or not presented to the
Depositary for payment, shall be remitted to the Collateral Agent
on such day for deposit to the Series A Proceeds Account and
credited to the General Series A Sub-account. All funds at any
time on deposit in the Series A Commercial Paper Account shall be
held in trust by you for the exclusive benefit of the holders,
from time to time, of the outstanding Series A Commercial Paper
Notes in accordance with the terms of this Agreement; and no
application shall be made of such funds except to repay advances
made by you pursuant to Section 5 hereof or to pay matured Series
A Commercial Paper Notes in accordance with the terms hereof.
The Company shall have no legal, equitable or beneficial interest
in the Series A Commercial Paper Account. You agree to give the
Company, the Facility Agent and the Series A Dealers immediate
notice if you receive written notice that the Series A Commercial
Paper Account or any funds on deposit in the Series A Commercial
Paper Account have become subject to any stay, writ, judgment,
warrant or attachment, execution or similar process.
SECTION 2. Series A Commercial Paper Notes Delivered for
Safekeeping. At any time and from time to time during the term
of this Agreement the Company may deliver to your Commercial
Paper Department, 123 Washington Street, New York, NY 10006,
Attn: Commercial Paper Issuance, Series A Commercial Paper Notes
in substantially the form of Exhibit A to this Agreement
("Certificated Notes") which shall be consecutively numbered and
bear such other identification as the Company may deem
appropriate and shall be manually signed or signed in facsimile
in such manner as is acceptable to you on behalf of the Company
by an Authorized Signatory (as defined below) of the Company
(notwithstanding whether such person shall thereafter cease to be
an Authorized Representative), but shall otherwise be incomplete.
Each Series A Commercial Paper Note (including any Master Note
(as defined below)), or group of Series A Commercial Paper Notes
at one time, delivered to you shall be accompanied by a letter
from the Company identifying the Series A Commercial Paper Note
or Series A Commercial Paper Notes transmitted therewith, and you
shall acknowledge receipt of such Series A Commercial Paper Note
or Series A Commercial Paper Notes on the copy of such letter or
some other form of written receipt deemed appropriate by you and
the Company at the time of delivery to you of such Series A
Commercial Paper Note or Series A Commercial Paper Notes.
Pending the issuance of Series A Commercial Paper Notes as
provided in Section 3 hereof, all Series A Commercial Paper Notes
delivered to you shall be held by you for the account of the
Company for safekeeping in accordance with the Depositary's
customary practices.
Prior to the issuance of any Series A Commercial Paper
Notes, the Company will furnish to you, and from time to time
hereafter may furnish to you, a Certificate (substantially in the
form of Exhibit C hereto) (hereinafter called an "Incumbency
Certificate") of the Secretary or an Assistant Secretary of the
Company, identifying and certifying the incumbency and specimen
signatures of (i) officers or agents ("Authorized Signatories")
of the Company authorized to execute Series A Commercial Paper
Notes (including the Master Note) on behalf of the Company, and
(ii) officers or agents ("Authorized Representatives") of the
Company who are otherwise authorized to act and give instructions
and notices on behalf of the Company hereunder. Until you
receive a subsequent Incumbency Certificate, or unless a
Designated Person (as defined below) shall have actual knowledge
of the lack of authority of any individual, you shall be entitled
to rely on the last such Incumbency Certificate delivered to you
for purposes of determining Authorized Signatories and Authorized
Representatives.
Prior to the issuance of any Series A Commercial Paper
Notes, and from time to time thereafter as you choose, you shall
deliver to the Company a certificate, substantially in the form
of Exhibit D hereto (a "Depositary Authorization Letter"), of one
of your officers, identifying and certifying the incumbency and
specimen signatures of (i) persons ("Authenticating
Representatives") who are authorized to give receipt for and, in
the case of Certificated Notes, complete, authenticate and
deliver Series A Commercial Paper Notes and (ii) persons
("Designated Persons") who are otherwise authorized to act on
your behalf hereunder and to give and receive notices and
instructions on your behalf hereunder. Until the Company
receives a subsequent Depositary Authorization Letter or written
notice from you to the contrary, the Company shall be entitled to
rely on the last such Depositary Authorization Letter delivered
to the Company for purposes of determining Authenticating
Representatives and Designated Persons.
SECTION 3. Issuance of Series A Commercial Paper Notes.
(a) From time to time during the term of this Agreement, and
upon your timely receipt of written (including electronically
transmitted writings) or telephonic instructions (subject to
written confirmation, in the case of telephonic instructions, as
provided in paragraph (b) of this Section 3) in respect of any
Series A Commercial Paper Note, not later than 12:15 p.m., New
York City time, on the date of issuance thereof from an
Authorized Representative, you shall: (i) in the case of
Certificated Notes, withdraw designated Series A Commercial Paper
Notes from safekeeping and, in accordance with the instructions
received, take the following action with respect to each such
Certificated Note:
(A) date each such Certificated Note the date of
issuance thereof (which shall be a Business Day) and insert
(x) the maturity date thereof (which shall be a Business Day
and which shall not be later than the earlier to occur of
(1) the 180th day following issuance thereof, and (2) the
date fifteen days prior to the Scheduled Liquidation
Commencement Date in effect on the date of issuance thereof,
which, until you are advised in writing to the contrary by
the Facility Agent, shall be December 22, 1999), and (y) the
face amount (which shall be at least $100,000 or an integral
multiple of $1,000 in excess thereof) in figures and, if so
directed by an Authorized Representative, strike the word
"Bearer" (if applicable) and insert the name, address and
taxpayer identification number of the payee thereof;
(B) authenticate each such Certificated Note by
countersigning it for authentication in the space provided
thereon;
(C) deliver each such Certificated Note to the Series
A Dealer specified in such instructions, or to the
consignee, if any, designated by such Series A Dealer for
the account of such Series A Dealer against receipt of
payment of the amount set forth in the instructions of the
Company delivered in respect thereof as provided in Section
4 hereof; and
(D) send a copy of each such Certificated Note to the
Company and the Facility Agent on or promptly following the
date of issuance thereof; and
(ii) in the case of Book Entry CP Notes (as defined below), enter
an issuance instruction (a "Book Entry Issuance Instruction") in
the Book Entry System of the Depository Trust Company ("DTC") in
accordance with the Book Entry Procedures (as defined below),
which instruction shall provide the issuance information set
forth in clause (i) above with respect to such Book Entry CP
Notes and specify the party to whom such Book Entry CP Notes
shall be issued.
Notwithstanding the foregoing, no Series A Commercial Paper
Note shall be issued hereunder if, (x) after giving effect to the
issuance of such Series A Commercial Paper Note and the
application of the proceeds thereof, either
(i) a Base Amount Shortfall exists;
(ii) if the Term Loan is outstanding, a Modified Base
Amount Shortfall exists;
(iii) the sum of the Aggregate Series A Loan Amount and
the aggregate outstanding face amount of the Series A
Commercial Paper would be greater than the Series A Facility
Amount;
(iv) the sum of the Aggregate Series A Loan Amount and
the aggregate face amount of outstanding Series A Commercial
Paper, minus the aggregate amount on deposit and credited to
the Downgraded Series A Bank Sub-account, would exceed the
Adjusted Series A Base Amount;
(v) the sum of the Aggregate Loan Amount and the
aggregate outstanding face amount of the Commercial
Paper would exceed the Facility Amount;
(vi) the sum of the Aggregate Loan Amount and the
aggregate face amount of outstanding Commercial Paper, minus
the aggregate amount on deposit and credited to the
Downgraded Series A Bank Sub-account and the Downgraded
Series B Bank Sub-account, would exceed the Adjusted Base
Amount; or
(vii) the aggregate outstanding amount of all
Commercial Paper which shall mature on any day would exceed
20% of the Facility Amount;
or (y) you shall have received notice that any condition
precedent specified in Article V of the Liquidity Agreement with
respect to such issuance has not been satisfied. In this
connection, the Company will provide you on each such day of
issuance with a copy of the Daily Report as to the Base Amount,
the Adjusted Base Amount, the Modified Base Amount, the Aggregate
CP Amount, the Aggregate Series A Loan Amount, the Aggregate
Series A CP Amount, the Aggregate Series A Facility Amount and
the Aggregate Net Outstandings (in each case before giving effect
to the issuance of Commercial Paper Notes on such day), the
Aggregate Loan Amount, the Term Loan Amount, and the Facility
Amount or any change in any of such amounts, and the satisfaction
of the conditions precedent referred to in the preceding
sentence, and at the time of delivering or issuing Series A
Commercial Paper Notes you may rely on the last such Daily Report
so received in determining the amount of Series A Commercial
Paper Notes that may then be issued. In addition, you shall
notify the Facility Agent, the Collateral Agent, the Servicer and
the Company on any day on which your records reflect an Aggregate
CP Amount different than the Aggregate CP Amount set forth in the
Daily Report prepared on the preceding Business Day.
You shall be completely protected in relying on the Daily
Report and on all instructions with respect to the issuance of
Series A Commercial Paper Notes given to you by an Authorized
Representative or the Facility Agent (with respect to
instructions not to issue Series A Commercial Paper Notes)
pursuant to this Section 3 provided, however, that if, after
receipt of such instructions, you receive a contrary or
supervening instruction, you shall use your best efforts to
comply with such contrary or supervening instruction.
(b) No Series A Commercial Paper Notes will be
authenticated and delivered, and no Book Entry Issuance
Instruction shall be given, by you unless you shall have
received, in your reasonable judgment, complete instructions from
an Authorized Representative as to the matters specified above in
clauses (i)(A) and, in the case of Certificated Notes, (i)(C) of
paragraph (a) of this Section 3. Any instructions given to you
by an Authorized Representative to authenticate and deliver
Certificated Notes or to enter a Book Entry Issuance Instruction
hereunder shall constitute a representation and warranty on the
part of the Company that the issuance of such Series A Commercial
Paper Notes will not violate or contravene any applicable law,
rule, regulation, order or contractual agreement binding upon the
Company (including, as appropriate and without limitation, any
securities law or law pertaining to investment companies or any
order of any court, governmental agency or regulatory authority)
and will be in conformity with the terms of the Liquidity
Agreement.
Notwithstanding any instructions received by you from an
Authorized Representative, you shall not deliver Series A
Commercial Paper Notes or enter any Book Entry Issuance
Instruction on any date pursuant to such instructions if a
Designated Person shall receive by 9:00 a.m. (New York City time)
on such date instructions from the Facility Agent pursuant to
Section 3.01(a) of the Liquidity Agreement instructing you not to
deliver Series A Commercial Paper Notes or to enter Book Entry
Issuance Instructions, which instructions may be specific with
respect to a particular issue of Series A Commercial Paper Notes
or may be general and applicable to all Series A Commercial Paper
Notes issued after receipt of such instructions, until such
instructions from the Facility Agent are revoked or superseded by
further instructions therefrom.
Any telephonic instructions given to you by an Authorized
Representative shall be confirmed in writing by such Authorized
Representative within twenty-four hours after the same are
received by you (according to your written records), and you
shall incur no liability for acting in accordance with any such
telephonic instructions reasonably believed by you in good faith
to have been given by an Authorized Representative. Should the
Company use your instruction and communication service Noteline
Direct ("Noteline Direct") to transmit to you the Company's
instructions for the issuance of Series A Commercial Paper Notes,
the Company understands that the transmission of an instruction
through Noteline Direct shall be equivalent to the giving of a
duly authorized written and signed instruction which you may act
upon without liability. Use of Noteline Direct by the Company
shall be subject to the terms and conditions set forth in
Exhibit B hereto.
It is the express intent of the parties hereto and the
parties to the Liquidity Agreement that the commercial paper
program contemplated hereby and thereby shall be operated in a
manner designed to ensure compliance by BT Securities Corporation
and its affiliates with law, including without limitation the
federal laws of the United States. In implementation of such
intent and in any event, the Depositary will (so long as Bankers
Trust Company is a "Bank" under the Liquidity Agreement):
(i) prior to the issuance of any Commercial Paper
hereunder, establish such procedures (and maintain such
books and records) as shall be necessary to distinguish the
Series A Commercial Paper (including Series A Commercial
Paper issued through DTC and Series A Commercial Paper
evidenced by Commercial Paper Notes) in respect of which the
Series A Commitment is applicable and the Series B
Commercial Paper (including Series B Commercial Paper issued
through DTC and Series B Commercial Paper evidenced by
definitive Commercial Paper Notes) in respect of which the
Series B Commitment is applicable;
(ii) issue Commercial Paper sold or placed by BT
Securities Corporation only as Series B Commercial Paper;
(iii) not issue any Series A Commercial Paper to BT
Securities Corporation;
(iv) not deliver to BT Securities Corporation any
Series A Commercial Paper Note;
(v) not issue as Series A Commercial Paper any
Commercial Paper placed by BT Securities Corporation;
(vi) not transfer any funds on deposit in the Series B
Commercial Paper Account to the Series A Commercial Paper
Account; and
(vii) not transfer any funds on deposit in the Series A
Commercial Paper Account to the Series B Commercial Paper
Account.
It is expressly understood that Series A Commercial Paper and
Series B Commercial Paper need not be issued on a pro rata basis.
The Company and the Depositary acknowledge that it is the
intention of the parties hereto and the parties to the Liquidity
Agreement that:
(A) the proceeds of any Series B Liquidity Loan or a
Borrowing comprised of a Series B Liquidity Loan shall not
be used, directly or indirectly, to pay any Series A
Commercial Paper or to pay any Commercial Paper designated
as "Series A Commercial Paper" pursuant to the Facility
Documents;
(B) the proceeds of any Series A Liquidity Loan or a
Borrowing comprised of a Series A Liquidity Loan shall not
be used, directly or indirectly, to pay any Series B
Commercial Paper or to pay any Commercial Paper designated
as "Series B Commercial Paper" pursuant to the Facility
Documents;
(C) the proceeds of the sale of any Series B Commercial
Paper shall not be used, directly or indirectly, to pay any
Series A Commercial Paper or to pay any Commercial Paper
designated as "Series A Commercial Paper" pursuant to the
Facility Documents; and
(D) the proceeds of the sale of any Series A Commercial
Paper shall not be used, directly or indirectly, to pay any
Series B Commercial Paper or to pay any Commercial Paper
designated as "Series B Commercial Paper" pursuant to the
Facility Documents.
SECTION 4. Delivery of Series A Commercial Paper Notes. No
Certificated Note shall be delivered by you to any Series A
Dealer or any Series A Dealer's consignee except against payment
therefor. A Certificated Note shall be deemed delivered against
payment for purposes of this Section 4 if the net proceeds of
such Certificated Note are received by you in immediately
available funds at the time of your delivery of such Certificated
Note to any Series A Dealer or any Series A Dealer's consignee or
if, at the time you deliver such Certificated Note to such Series
A Dealer or such Series A Dealer's consignee, you receive such
Series A Dealer's receipt for the delivery in customary form. In
accordance with the custom in the commercial paper market,
delivery of such receipt shall obligate such Series A Dealer to
deliver or cause to be delivered to you the purchase price of
such Certificated Notes in immediately available funds prior to
your close of business on such day. Should you deliver any
Certificated Notes against receipt as provided in the second
sentence of this Section 4 you shall have no responsibility or
liability for the credit risks involved in your delivery of such
Certificated Notes to those Persons who shall be designated by an
Authorized Representative or for the failure of such Persons to
effectuate payment therefor as herein contemplated.
At the close of business on each Business Day on which
Series A Commercial Paper Notes are issued or mature, if Noteline
Direct is not operational, you shall prepare a written statement
showing (i) the aggregate face amount of all Series A Commercial
Paper Notes issued on that Business Day, which statement shall
include the serial number, in the case of Certificated Notes, or
the CUSIP number, in the case of Book Entry CP Notes, issue date,
maturity date and face amount thereof, and (ii) the aggregate
face amount of all Series A Commercial Paper Notes outstanding at
the close of business on such day. You shall furnish such
information to the Company, the Facility Agent and the Collateral
Agent on that day and at such other times as the Company, the
Facility Agent or the Collateral Agent may from time to time
reasonably request. A copy of each statement referred to above
shall be sent by you by either telecopy or overnight delivery
service to the Company, the Facility Agent and the Collateral
Agent at their addresses specified herein, no later than the
following Business Day.
SECTION 5. Payment of Series A Commercial Paper Notes at
Maturity. (a) Each matured Series A Commercial Paper Note
presented to you for payment on any Business Day prior to the
standard window closing time (as established by the rules of the
New York Clearing House Association in effect from time to time)
on such Business Day, shall be paid the same day in accordance
with the provisions of paragraph (b) of this Section 5. Each
matured Series A Commercial Paper Note presented to you for
payment on any Business Day after such time shall be paid on the
next succeeding Business Day in accordance with the provisions of
paragraph (b) of this Section 5.
(b) You shall pay each matured Series A Commercial Paper
Note presented to you for payment prior to the close of business
on any Business Day from funds available for such payment in the
Series A Commercial Paper Account (including funds from Series A
Commercial Paper Notes issued or to be issued on that day). If,
on any given day on which a Series A Commercial Paper Note is
scheduled to mature by its terms, the funds on deposit in the
Series A Commercial Paper Account are insufficient to pay such
Series A Commercial Paper Note in full after giving effect to the
anticipated proceeds of Series A Commercial Paper Notes issued on
such day and after giving effect to the transfers by the
Collateral Agent from the Series A Proceeds Account from the
General Series A Sub-account and the Collection Account that are
to be made on such day as set forth in the Daily Report delivered
on such day, you may, and the Company hereby irrevocably
authorizes you to, as attorney-in-fact of the Company, request a
Refunding Advance comprised of Series A Liquidity Loans in an
amount equal to such insufficiency by delivering a Notice of
Borrowing to the Facility Agent not later than 11:15 a.m., New
York City time, on the date of the proposed Borrowing. In
accordance with and subject to the terms of the Liquidity
Agreement, the proceeds of any such Refunding Advance shall be
remitted to the Series A Commercial Paper Account not later than
3:30 p.m. (New York City time) on the date of the requested
Borrowing. You shall apply the proceeds of any Refunding Advance
obtained by you first to reimburse yourself for any advances made
by you to pay any matured Series A Commercial Paper Note and
second to the payment of the Series A Commercial Paper Notes in
respect of which the Refunding Advances were obtained.
If, at the time any Series A Commercial Paper Note is
presented to you for payment, there are insufficient funds on
deposit and available in the Series A Commercial Paper Account
(after giving effect to transfers thereto, if any, from the
Series A Proceeds Account and the Collection Account and from the
Banks in the form of Refunding Advances comprised of Series A
Liquidity Loans in accordance with this paragraph (b) of this
Section 5) to pay such Series A Commercial Paper Note in full,
you shall be entitled, but not required, to pay such Series A
Commercial Paper Note out of your personal assets before your
close of business that day and you shall thereupon be deemed and
treated as the holder of such Series A Commercial Paper Note and
shall be entitled to receive payment for such Series A Commercial
Paper Note (from the proceeds of Refunding Advances comprised of
Series A Liquidity Loans or from any other source available in
accordance with the Liquidity Agreement for the payment of Series
A Commercial Paper Notes). Any such advance made by you out of
personal assets to pay maturing Series A Commercial Paper, if not
repaid by the close of business on the date when made, shall bear
interest from such date until repayment at a rate equal to 2% per
annum above the Alternate Base Rate.
(c) Certificated Notes paid in full by you shall be
canceled and held by you in safekeeping for disposition in
accordance with written instructions to you by the Company.
Unless the Company instructs you otherwise, you shall return to
the Company all Certificated Notes paid by you within sixty (60)
days after such payment.
SECTION 6. Book Entry Series A Commercial Paper Notes. (a)
The Company may elect to make the Series A Commercial Paper Notes
eligible for the book entry commercial paper program of The
Depository Trust Company ("DTC"), in which case (i) the Company
will instruct you in writing to issue book entry Series A
Commercial Paper Notes ("Book Entry Series A CP Notes") through
DTC instead of, or in addition to, issuing certificated Series A
Commercial Paper Notes as hereinbefore provided, (ii) you will
prepare for execution by the Company and you DTC's current form
Letter of Representations (with such changes as DTC may
reasonably request, the "Letter"), a copy of which is attached
hereto as Exhibit E, (iii) the Company will provide to you for
submission with the Letter a copy of the information memorandum
for the Company's commercial paper program under which the Series
A Commercial Paper Notes are issued by you pursuant to this
Agreement and (iv) you will deliver the Letter to DTC's Legal
Department and will return to the Company a copy of the Letter
after it has been received and accepted by DTC. You are
authorized and directed to issue and settle through DTC Book
Entry Series A CP Notes in accordance with the applicable rules
and procedures established by DTC for the issuance and settlement
of book entry notes upon receipt by you of written instructions
pursuant to clause (i) of the immediately preceding sentence.
DTC's procedures with respect to the issuance of book entry notes
(the "Book Entry Procedures"), among other things, currently
provide that issuance of Book Entry Series A CP Notes with a
maturity date on a holiday on which DTC is scheduled to be closed
for settlement services are not acceptable for deposit into DTC's
commercial paper program. In the event there is any delay in the
issuance of Book Entry Series A CP Notes resulting from the
Company's instructions to you providing for the issuance of Book
Entry Series A CP Notes to mature on DTC holidays, you shall not
be liable to the Company or any beneficial owner of a Book Entry
CP Note. Each Book Entry CP Note issued and distributed through
DTC upon the instruction of a Designated Person from an
Authorized Representative shall constitute the Company's
representation and warranty that such Book Entry CP Note is a
legal, valid and binding obligation of the Company.
(b) Once the Series A Commercial Paper Notes have been
accepted by DTC for DTC's commercial paper program and prior to
the issuance and distribution of any Book Entry Series A CP
Notes, the Company will deliver (i) to you, as custodian for DTC,
a Master Note Certificate (the "Master Note") with respect to
Book Entry Series A CP Notes issued at a discount from face value
to be paid at maturity (in the form of Exhibit F hereto), duly
executed on behalf of the Company by the manual or facsimile
signature of an Authorized Signatory to evidence Book Entry
Series A CP Notes to be issued and distributed through DTC by you
on behalf of the Company (and the obligation of the Company to
provide for payment of such Book Entry Series A CP Notes at their
respective maturities) and (ii) to you, copies of the Letter,
duly executed by the Company. You shall record on the schedule
attached to the Master Note each change in the face amount of
outstanding Book Entry Series A CP Notes represented thereby and
the maturity dates thereof.
(c) In accordance with DTC's book entry commercial paper
program, you shall obtain from the CUSIP Service Bureau a written
list of CUSIP numbers for the Book Entry Series A CP Notes that
will be issued through DTC as provided in the Letter, and you
shall deliver such list to DTC. You shall instruct the CUSIP
Service Bureau to bill you for the fee or fees payable to the
CUSIP Service Bureau for such list of CUSIP numbers for Book
Entry Series A CP Notes, and you will include such fees in your
billing to the Company pursuant to Section 8 of this Agreement.
The CUSIP numbers, as required by DTC's commercial paper program,
will be assigned to the Company's Book Entry Series A CP Notes
upon issuance and used to identify the Company's outstanding Book
Entry Series A CP Notes in DTC's book entry system.
(d) On and after the date when the Series A Commercial
Paper Notes become eligible for DTC's book entry commercial paper
program, you shall execute all instructions from the Company to
issue Series A Commercial Paper Notes by, subject to the
provisions of Section 3 of this Agreement, issuing and delivering
only Book Entry Series A CP Notes through DTC, except where you
have been specifically instructed in writing by the Company to
complete and deliver one or more Certificated Notes.
(e) In the event, and on each occasion, that the Company
agrees with a holder of Book Entry Series A CP Notes (a "Book
Entry CP Holder") to prepay such Book Entry CP Holder's Book
Entry Series A CP Notes on deposit with DTC prior to the
scheduled maturity of such Book Entry Series A CP Notes, the
Company shall make arrangements with such Book Entry CP Holder
and you for the delivery through the DTC system by the DTC
participant holding such Series A Commercial Paper Notes to your
designated account at DTC for payment.
(f) The Company may for any reason discontinue its
participation in DTC's book entry commercial paper program with
respect to the Series A Commercial Paper Notes at any time upon
not less than ten days prior written notice to you (with copies
of such notice to the Series A Dealers). In the event the
Company shall discontinue its participation in DTC's book entry
commercial paper program, or DTC shall discontinue its services
with respect to the Book Entry Series A CP Notes, the Company and
you shall cooperate in taking appropriate action, including
without limitation, if necessary, delivery of one or more
Certificated Notes to any DTC participant having Book Entry
Series A CP Notes credited to its DTC account. In the event of
such discontinuance of the Company's participation in DTC's
commercial paper program as herein described, and upon delivery
of Certificated Notes in respect of all Book Entry Series A CP
Notes represented by the Master Note, you shall destroy such
Master Note and provide the Company with a duly executed
certificate of destruction with respect to such Master Note.
Notice by the Company to you of the discontinuance of the
Company's participation in DTC's book entry commercial paper
program with respect to the Series A Commercial Paper Notes shall
not constitute notice of termination of your duties as issuing
and paying agent for Certificated Notes under this Agreement.
(g) All references in this Agreement to "Series A
Commercial Paper Notes" shall apply to and shall include any Book
Entry Series A CP Notes issued hereunder by the Company. Any
reference in this Agreement to authentication, completion and
delivery of the Series A Commercial Paper Notes shall, in the
context of Book Entry Series A CP Notes, be deemed to mean
issuance of Series A Commercial Paper Notes in accordance with
DTC's rules and procedures with respect to the Book Entry Series
A CP Notes and any reference to presentation of Series A
Commercial Paper Notes for payment shall, in the context of Book
Entry Series A CP Notes, be deemed to mean the procedure
undertaken by DTC to make a demand for payment from the Company
(through you) of matured Book Entry Series A CP Notes.
References in this Agreement to "holders" of the Series A
Commercial Paper Notes shall, in the context of Book Entry Series
A CP Notes, refer to the beneficial owners of such Book Entry
Series A CP Notes, except that in the case of payment of Book
Entry Series A CP Notes by you, the term "holder" shall be deemed
to refer to Cede & Co. Upon payment of all outstanding Book
Entry Series A CP Notes represented by the Master Note following
termination of this Agreement pursuant to Section 10 hereof, you
shall destroy the Master Note and provide the Company with a duly
executed certificate of destruction with respect to such Master
Note.
SECTION 7. Inspection of Documents by Series A Commercial
Paper Note Holders. You shall keep a fully executed, or
conformed, copy of the Liquidity Agreement and this Agreement
(together with all amendments, modifications, supplements,
waivers and consents made or given with respect thereto) on file
at the office of your Corporate Trust and Agency Group. The
Company agrees to provide to you a copy of all such documents
promptly following their execution. You shall permit reasonable
inspection to be made of such documents during normal business
hours by the holder of any Series A Commercial Paper Note or by
any officer, employee or agent of such holder, provided that the
Person purporting to be such holder establishes to your
satisfaction that he is in fact such holder of such Series A
Commercial Paper Note and, in cases where inspection is sought to
be made by a Person purporting to be an officer, employee or
agent of such holder, that such Person submits evidence
satisfactory to you of his authority to make such inspection on
behalf of the holder of such Series A Commercial Paper Note.
SECTION 8. Expenses and Indemnity. Subject to and in
accordance with the Facility Agreement, the Company agrees:
(a) to pay to you from time to time reasonable
compensation for all services rendered by you hereunder,
including for the issuance of Book Entry Series A CP Notes
through DTC, and to reimburse you for expenses,
disbursements and advances, in each case as mutually agreed
upon;
(b) to indemnify you for, and hold you harmless from
and against, any and all losses (except your loss of
profit), liabilities (including liabilities for penalties),
actions, suits, judgments, demands, damages, out-of-pocket
costs and expenses (including, without limitation, interest
and attorneys' fees and expenses, but excluding costs and
expenses attributable solely to administrative overhead)
arising out of, in connection with, or resulting from, the
exercise of your rights and/or the performance of your
duties, by you or by your agents and employees, hereunder;
provided, however, that the Company shall not be liable to
indemnify you for, or hold you harmless from, damage, cost
and expense resulting from or attributable to your gross
negligence or wilful misconduct or that of your officers,
employees or agents. The foregoing indemnity includes, but
is not limited to, any action taken or omitted to be taken
by you upon telephonic instructions (authorized herein)
received by you from, or believed by you in good faith to
have been given by, the proper person or persons; and
provided further that any claims arising hereunder shall be
limited by the provisions of Section 20 hereof. The
provisions of this section shall survive the termination of
this agreement and the resignation or removal of you as
Depositary.
SECTION 9. Representations and Warranties. In addition to
any other representations and warranties on the part of the
Company contained herein, the Company hereby represents and
warrants to you that its entry into this Agreement, and your
appointment by the Company as depositary and issuing and paying
agent and, in certain circumstances, as fiduciary or agent, have
been duly authorized by all necessary corporate action on the
part of the Company and will not violate, breach or contravene
any law, rule, regulation, order, contract or agreement binding
upon the Company. In addition, the Company represents and
warrants that the issuance of the Series A Commercial Paper
Notes, including, if the Series A Commercial Paper Notes become
eligible for deposit as book entry only in DTC's commercial paper
program, the issuance of Book Entry Series A CP Notes and the
execution of any instruments or documents required by DTC in
connection therewith, has been duly and validly authorized by all
necessary corporate action, and that the Series A Commercial
Paper Notes, when completed, countersigned and delivered pursuant
hereto, will constitute the Company's legal, valid and binding
obligation and will be in conformity with the terms of the
Liquidity Agreement. You hereby represent and warrant that your
acceptance of your appointment as issuing and paying agent and
depositary have been duly authorized by all necessary action on
your part.
SECTION 10. Term and Termination. (a) The term of this
Agreement (except for the provisions of Sections 8 and 20, which
shall survive indefinitely, and the provisions of Section 17,
which shall survive for the period set forth therein) shall
extend from the date hereof and shall end on the earliest of:
(i) the Termination Date; and
(ii) the date of termination specified in any
termination notice given pursuant to paragraph (b) of this
Section 10.
Any Series A Commercial Paper Notes outstanding on the date
of any termination of this Agreement pursuant to paragraph (a) or
paragraph (b) of this Section 10 shall nevertheless remain valid
obligations of the Company, and the provisions of this Agreement
shall continue to be applicable with respect to the payment of
such Series A Commercial Paper Notes to the same extent as if
this Agreement had not terminated.
(b) Either you or the Company may terminate this Agreement
and the authority granted to you herein, at any time upon not
less than thirty Business Days' prior written notice given to the
other parties hereto specifying the termination date hereof
(which shall not occur on the date of maturity of any Series A
Commercial Paper Notes nor the Business Day next preceding any
such date). Notwithstanding the preceding sentence, no
termination of this Agreement shall take effect until a
successor, issuing and paying agent has been duly appointed,
unless all outstanding Series A Commercial Paper Notes have been
paid in full and no amounts are due to Series A Commercial Paper
Note holders. No successor depositary, issuing and paying agent
may be appointed, however, if such appointment shall result in
the withdrawal or reduction of any rating assigned to the Series
A Commercial Paper Notes. Upon the termination of this Agreement
under paragraph (a) of this Section or this paragraph (b), you
shall promptly deliver to your successor, if one is appointed,
all Series A Commercial Paper Notes (including the Master Note)
then held by you hereunder for the Company's account for
safekeeping, against receipt by such successor, and shall cause
to be deposited in a segregated trust account maintained by your
successor for the exclusive benefit of the holders of outstanding
Series A Commercial Paper Notes, upon advice to the Company, the
Facility Agent and the Collateral Agent, all funds, if any, then
on deposit in, or otherwise to the credit of, the Series A
Commercial Paper Account; provided, however, if all outstanding
Series A Commercial Paper Notes have been paid in full and no
amounts are due to Series A Commercial Paper Note holders at the
time of such termination, you shall transfer such funds to the
Collateral Agent for deposit into the Series A Proceeds Account.
(c) No Series A Commercial Paper Notes shall be delivered
to you by the Company for safekeeping or issuance hereunder nor
shall any Certificated Notes be authenticated or delivered to any
Series A Dealer or any consignee of any Series A Dealer or any
Book Entry Issuance Instruction be issued by you upon the
termination of this Agreement and the authority granted to you
herein.
SECTION 11. Amendments and Modifications. (a) This
Agreement may be amended, modified or waived from time to time by
the parties hereto by a written instrument signed by each of the
parties hereto. No such amendment, modification or waiver shall
adversely affect the rights of the holder or holders of any
Series A Commercial Paper Notes outstanding at the time of such
amendment, modification, termination or waiver unless consented
to in writing by such holder or holders.
(b) Notwithstanding anything else (other than the proviso
hereof) to the contrary contained herein, the parties hereto
acknowledge and agree that any amendment, waiver, modification or
consent of this Agreement, the Liquidity Agreement or any other
Facility Document shall be governed by and subject to the
provisions and procedures set forth in Section 12.01 of the
Liquidity Agreement, the terms of which are herein incorporated
by this reference; provided, however, the final two paragraphs of
Section 3 hereof cannot be amended without the prior written
consent of the Company, Bankers Trust Company, and BT Securities
Corporation. No amendment of any of the foregoing agreements
which could reasonably be expected to materially adversely affect
your rights, duties or powers hereunder shall be effective
against you without your prior consent. Promptly after the
execution of any amendment, modification, consent or waiver, the
Company shall furnish you with a fully executed and conformed
copy of such amendment, modification, consent, or waiver.
SECTION 12. Notices. Except where telephonic instructions
or notices are authorized herein to be given, all notices,
demands, instructions and other communications required or
permitted to be given to any party hereunder shall be in writing
and addressed, delivered or transmitted to such party at its
address or facsimile number set forth below, or at any other
address or facsimile number, as the case may be, as such party
may notify to the other parties hereto in accordance with the
provisions of this Section 12. Any notice, if mailed and
properly addressed with postage prepaid or if properly addressed
and sent by prepaid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be
deemed given when transmitted upon receipt of electronic
confirmation of transmission.
If to the Depositary:
Bankers Trust Company
Four Albany Street
10th Floor
New York, New York 10006
Attention: Manager, Commercial Paper Group
Tel. No. (212) 250-6513
Facsimile No. (212) 250-6439
If to the Company:
JEFFERSON SMURFIT FINANCE CORPORATION
8182 Maryland Avenue
St. Louis, Missouri 63105
Attention: _______________
Tel. No. __________________
Facsimile No. _____________
If to the Collateral Agent:
Bankers Trust Company
Four Albany Street
10th Floor
New York, New York 10006
Attention: Corporate Trust and Agency Group
Tel. No. (212) 250-6513
Facsimile No. (212) 250-6439
If to the Facility Agent:
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Tel. No. (212) 250-2500
Facsimile No. (212) 250-7200
If to the Series A Dealers:
Morgan Stanley & Co. Incorporated
1221 6th Avenue
5th Floor
New York, New York 10020
Attn: Sanjeev Khanna
If to S&P:
STANDARD & POOR'S RATINGS GROUP
Asset Backed Surveillance Department
26 Broadway, 15th Floor
New York, New York 10004
Tel. No. (212) 208-8000
Facsimile No. (212) 412-0225
If to Duff & Phelps:
DUFF & PHELPS CREDIT RATING COMPANY
Structured Finance Group
55 East Monroe Street
Chicago, Illinois 60603
Tel. No. (312) 263-2610
Facsimile No. (312) 263-2852
Attn: Asset - Backed Research and
Monitoring Group
SECTION 13. Binding Effect; Assignment. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. No
party hereto may assign any of its rights or obligations
hereunder (other than in connection with the appointment of a
successor Depositary under Section 10) except with (i) the prior
written consent of all parties hereto and (ii) the prior written
confirmation of each Rating Agency that its rating on the Series
A Commercial Paper Notes will not be lowered or withdrawn as a
result thereof.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
SECTION 15. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together,
shall constitute one and the same Agreement. Delivery of an
executed counterpart of a signature page to this Agreement by
facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 16. Headings. Section headings used in this
Agreement are for convenience only and shall not affect the
construction of this Agreement.
SECTION 17. No Petition. You, in your capacity as
depositary, issuing and paying agent hereby covenant and agree
that you will not institute against, or join any person in
instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other
proceedings under any Federal or state bankruptcy or similar law,
at any time other than on a date which is at least one year and
one day after the payment in full of the last Commercial Paper
Note, Liquidity Loan and Term Loan to mature. The foregoing
shall not limit your right to file any claim in or otherwise take
any action with respect to any such insolvency proceeding that
was instituted against the Company by any Person other than the
you.
SECTION 18. Duties and Responsibilities. It is understood
that you are acting as fiduciary solely to the extent that you
are holding and applying funds in the Series A Commercial Paper
Account, as provided in this Agreement on behalf of the holders
from time to time of the Series A Commercial Paper Notes.
Neither you nor any of your officers, directors, employees or
agents shall be liable for any action taken or omitted to be
taken by you or them hereunder except for acts of gross
negligence or wilful misconduct by you or your officers,
employees or agents. You undertake to perform such duties and
only such duties as are set forth in this Agreement and no
implied covenants shall be read into this Agreement against you.
You shall incur no liability in acting within the scope of
this Agreement on any notice or instruction, telephonic or
written, given hereunder which a Designated Person believes in
good faith to have been given by an Authorized Representative,
the Facility Agent or the Collateral Agent; nor shall you in so
acting assume or be deemed to have assumed any responsibility for
the propriety of any such transaction effected by you under, or
the compliance of any such transaction with, the Liquidity
Agreement or any other Facility Document. Your countersignature
of any Series A Commercial Paper Note shall be for authentication
purposes only and neither you nor any person countersigning on
your behalf shall have any liability on any Series A Commercial
Paper Note.
You may rely and shall be protected in acting or refraining
from acting upon any communication authorized by this Agreement
and upon any written instruction, notice, request, direction,
consent, report, certificate, Series A Commercial Paper Note or
other instrument, paper or document believed by you to be
genuine.
You may consult with counsel and the advice of such counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by you hereunder
in good faith and in reliance thereon.
You shall not be required to advance, expend or risk your
own funds or otherwise incur or become exposed to financial
liability in the performance of your duties hereunder,
notwithstanding any course of conduct or practice that you may
have engaged in, and no party or any holder of Series A
Commercial Paper Notes may rely on the continued existence of
such course of conduct or practice.
You, in your individual or any other capacity, may become
the owner or pledgee of Series A Commercial Paper Notes or a
participant in the credit provided under the Liquidity Agreement
with the same rights as you would have if you were not acting
hereunder.
Except as otherwise expressly provided herein, whenever, in
the administration of this Agreement, you shall deem it necessary
that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate of an Authorized Representative, and such certificate
shall be full warranty to you for any action taken, suffered or
omitted under the provisions of this Agreement upon the faith
thereof.
SECTION 19. No Recourse. The obligations of the Company
under this Agreement are solely the corporate obligations of the
Company. No recourse shall be had for the payment of any amount
owing in respect to Section 8 hereof or for the payment of any
fee hereunder or any other obligation or claim arising out of or
based upon this Agreement against any Series A Dealer or against
any shareholder, employee, officer, director or incorporator of
the Company. For purposes of this Section 19, the term "Series A
Dealer" shall mean and include all Affiliates thereof and any
employee, officer, director, incorporator, shareholder or
beneficial owner of any of them; provided, however, that neither
you nor the Company shall be considered to be an Affiliate of any
Series A Dealer for purposes of this Section 19.
SECTION 20. Limited Recourse to Company. You agree that
(i) the obligations of the Company to you hereunder, including,
without limitation, the obligation of the Company in respect of
fees and indemnity pursuant to Section 8, shall be payable solely
from the Collateral in accordance with the priorities of payment
contained in the Liquidity Agreement, (ii) you shall not look to
any other property or assets of the Company in respect of such
obligations, (iii) such obligations shall not constitute a claim
against the Company in the event that the Company's assets are
insufficient to pay in full such obligations, and (iv) such
obligations, other than such fees and the obligations to repay
advances made under Section 5, are fully subordinated to the
Company's obligations under the Commercial Paper Notes.
SECTION 21. Merger or Consolidation. Any corporation or
other entity into which you may be merged or consolidated, or any
corporation or other entity resulting from any merger, conversion
or consolidation to which you shall be a party, or any Person or
entity succeeding to your corporate trust or agency business,
shall be successor hereunder (without relieving you of your
responsibilities hereunder if you survive such merger,
conversion, consolidation or succession) without the execution or
filing of any paper or any further act on the part of any party
hereto, anything to the contrary notwithstanding; provided,
however, that upon the request of the Company, the Collateral
Agent or the Facility Agent, such corporation, entity or
successor shall execute an assumption agreement providing for the
assumption by such corporation, entity or successor of your
rights and obligations in a form reasonably satisfactory to the
Company, the Collateral Agent and the Facility Agent.
SECTION 22. Liquidation Event. If you shall have been
notified that a Liquidation Event or the Termination Date shall
have occurred, you shall notify the Facility Agent and the
Collateral Agent in writing as soon as possible upon payment in
full of all outstanding Series A Commercial Paper Notes or the
receipt of funds in the amount required to pay all outstanding
Series A Commercial Paper Notes upon maturity.
SECTION 23. Entire Agreement. This Agreement constitutes
the entire understanding among the parties hereto with respect to
your role as depositary, issuing and paying agent.
If the foregoing is acceptable to you, please indicate your
agreement therewith by signing this or a duplicate counterpart of
this Agreement in the space provided below, and returning this or
such duplicate signed counterpart to the Company, whereupon this
letter will become a binding agreement between us and you.
JEFFERSON SMURFIT FINANCE
CORPORATION
By:________________________
Authorized Signatory
ACCEPTED AND AGREED:
BANKERS TRUST COMPANY, as Depositary and Issuing
and Paying Agent,
By:_____________________________________
Authorized Officer
EXHIBIT A
to the Depositary and Issuing
and Paying Agent Agreement
JEFFERSON SMURFIT FINANCE CORPORATION
SERIES A COMMERCIAL PAPER NOTE
No.______
$_________ Issuing Date: _____, 199_
On _________________, for value received, JEFFERSON SMURFIT
FINANCE CORPORATION (the "Company") promises to pay to the order
of BEARER, _________ _____________________________ DOLLARS
($___________).
Payment of this Note shall be made at the office of Bankers
Trust Company (the "Depositary"), Corporate Trust and Agency
Group, 4 Albany Street, New York, New York 10006, the Depositary
pursuant to a certain Depositary and Issuing and Paying Agent
Agreement (the "Depositary Agreement"), by 3:00 p.m. New York
time on any Business Day, provided that this Note is presented
for payment not later than 3:00 p.m. New York time on such
Business Day. If this commercial paper note is presented for
payment after 3:00 p.m. New York time on a Business Day, payment
will be made on the next succeeding Business Day. "Business Day"
means a day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close in New York City.
The holder of this Note is entitled to the benefits of a
security interest provided by the Company in favor of Bankers
Trust Company, as Collateral Agent under a certain Liquidity
Agreement. By accepting the benefits of the security interest
granted therein, the holder of this Note hereby irrevocably
authorizes the Collateral Agent to take such action on behalf of
such holder under the provisions of the Liquidity Agreement and
the related documents to exercise such powers and perform such
duties as are expressly delegated to it by the terms thereof,
together with such other powers as are reasonably incidental
thereto.
The Liquidity Agreement, the Depositary Agreement and
related documents are on file with the Depositary at its
aforesaid office, and reference is made to such documents for the
terms upon which this Note has been issued, the collateral
security for this Note, the rights and duties of the Collateral
Agent and the terms of the Liquidity Agreement.
THIS SERIES A COMMERCIAL PAPER NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
This commercial paper note is not valid for any purpose
unless countersigned by Bankers Trust Company, as Depositary.
Countersigned for authentication only:
BANKERS TRUST COMPANY, JEFFERSON SMURFIT FINANCE
as Depositary, CORPORATION
By:_________________________ By:__________________________
Authorized Signature Authorized Signature
EXHIBIT A
to the Depositary and Issuing
and Paying Agent Agreement
JEFFERSON SMURFIT FINANCE CORPORATION
SERIES A COMMERCIAL PAPER NOTE
No.______
$_________ Issuing Date: _____, 199_
On _________________, for value received, JEFFERSON SMURFIT
FINANCE CORPORATION (the "Company") promises to pay to the order
of BEARER, _________ _____________________________ DOLLARS
($___________).
Payment of this Note shall be made at the office of Bankers
Trust Company (the "Depositary"), Corporate Trust and Agency
Group, 4 Albany Street, New York, New York 10006, the Depositary
pursuant to a certain Depositary and Issuing and Paying Agent
Agreement (the "Depositary Agreement"), by 3:00 p.m. New York
time on any Business Day, provided that this Note is presented
for payment not later than 3:00 p.m. New York time on such
Business Day. If this commercial paper note is presented for
payment after 3:00 p.m. New York time on a Business Day, payment
will be made on the next succeeding Business Day. "Business Day"
means a day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close in New York City.
The holder of this Note is entitled to the benefits of a
security interest provided by the Company in favor of Bankers
Trust Company, as Collateral Agent under a certain Liquidity
Agreement. By accepting the benefits of the security interest
granted therein, the holder of this Note hereby irrevocably
authorizes the Collateral Agent to take such action on behalf of
such holder under the provisions of the Liquidity Agreement and
the related documents to exercise such powers and perform such
duties as are expressly delegated to it by the terms thereof,
together with such other powers as are reasonably incidental
thereto.
The Liquidity Agreement, the Depositary Agreement and
related documents are on file with the Depositary at its
aforesaid office, and reference is made to such documents for the
terms upon which this Note has been issued, the collateral
security for this Note, the rights and duties of the Collateral
Agent and the terms of the Liquidity Agreement.
THIS SERIES A COMMERCIAL PAPER NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
This commercial paper note is not valid for any purpose
unless countersigned by Bankers Trust Company, as Depositary.
Countersigned for authentication only:
BANKERS TRUST COMPANY, JEFFERSON SMURFIT FINANCE
as Depositary, CORPORATION
By:_________________________ By:__________________________
Authorized Signature Authorized Signature
EXHIBIT B
to the Depositary and Issuing
and Paying Agent Agreement
BANKERS TRUST COMPANY
NOTELINE DIRECT
TERMS AND CONDITIONS
(a) The Company will use Noteline Direct in accordance
with the conditions, rules and regulations established or
specified by Bankers Trust Company from time to time and set
forth in manuals, material, documents, or instructions
furnished by Bankers Trust Company to the Company.
(b) Transmission of an instruction for the issuance of
Series A Commercial Paper Notes through Noteline Direct
shall be equivalent to the giving of a duly authorized
written and signed instruction in accordance with the
Depositary Agreement which Bankers Trust Company may act
upon without liability. Use of Noteline Direct by the
Company shall be subject to the terms and conditions herein.
(c) The Company will use Noteline Direct (i) to
initiate instructions for the issuance of Series A
Commercial Paper Notes, (ii) to receive reports concerning
issuances of Series A Commercial Paper Notes, (iii) to
receive electronic messages from Bankers Trust Company and
(iv) for other incidental services Bankers Trust Company may
make available from time to time through Noteline Direct.
(d) Bankers Trust Company will deliver or disclose
confidential security procedures materials for accessing
Noteline Direct to an Authorized Representative or to any
employee or agent designated as authorized by an Authorized
Representative of the Company. The Company shall be
responsible for any unauthorized use or disclosure of the
security materials delivered to it hereunder. All access
through Noteline Direct is subject to verification by
Bankers Trust Company pursuant to the security procedures.
Bankers Trust Company will allow access to Noteline Direct
reports and act upon instructions received through Noteline
Direct if verified pursuant to the security procedures.
(e) If Noteline Direct is unavailable for any reason
the Bankers Trust Company customer service representative
should be notified, and until Noteline Direct is made
available for use, the Company should follow the alternate
procedures for issuance of Commercial Paper Notes as
provided for herein and in Noteline Direct service
materials. The Company should not issue, and Bankers Trust
Company will not act upon, cancellation or override
instructions transmitted through Noteline Direct.
(f) The liability of the Company and Bankers Trust
Company for any act or omission in connection with Noteline
Direct shall be determined or limited in accordance with the
terms of the Depositary Agreement.
(g) The Company is granted a personal, non-
transferable and non-exclusive right to use Noteline Direct
to transmit through Noteline Direct instructions made
pursuant to Section 3 hereof. The Company may, by separate
agreement between the Company and one or more of its Series
A Dealers authorize the Series A Dealer to have access to
Noteline Direct for the purposes of transmitting
instructions to Bankers Trust Company or obtaining reports
with respect to the Series A Commercial Paper.
(h) The Company acknowledges that (a) some or all of
the services utilized in connection with Noteline Direct are
furnished by Digital Transactions Inc. ("DTI"), Dynamic
Microprocessor Associates Inc. ("DMS") and Bankers Trust
Company, (b) Noteline Direct is provided to the Issuer "AS
IS" without warranties or representations of any kind
whatsoever by DTI, DMA or Bankers Trust Company, and (c)
Noteline Direct propriety and confidential property
disclosed to the Company in confidence and only on the terms
and conditions and for the purposes set forth in this
Agreement.
(i) By this Agreement, the Company acquires no title,
ownership or sublicensing rights whatsoever in Noteline
Direct or in any trade secret, trademark, copyright or
patent of Bankers Trust Company, DTI, or DMA now or to
become applicable to Noteline Direct. The Company may not
transfer, sublicense, assign, rent, lease, convey, modify,
translate, convert to a programming language, decompile,
disassemble, recirculate, republish or redistribute Noteline
Direct for any purpose without the prior written consent of
Bankers Trust Company and, where necessary, DTI and DMA
(except for the access to Noteline Direct by the Series A
Dealers as provided in Paragraph (g) of this Exhibit B).
(j) In the event (a) any action is taken or threatened
which may result in a disclosure or transfer of Noteline
Direct or any part thereof, other than as authorized by this
Agreement, or (b) the use of any trademark, trade name,
service mark, service name, copyright or patent of Bankers
Trust Company, DTI or DMA by the Company amounts to unfair
competition, or otherwise constitutes a possible violation
of any kind, then Bankers Trust Company, DTI and DMA shall
each have the right to take any and all action deemed
necessary to protect their rights in Noteline Direct, and to
avoid the substantial and irreparable damage which would
result from such disclosure, transfer or use, including the
immediate termination of the Company's right to use Noteline
Direct.
(k) To permit the use of Noteline Direct to issue
instructions or obtain reports with respect to the Series A
Commercial Paper, Bankers Trust Company will supply the
Company with an identification number and initial passwords.
From time to time thereafter, the Company will keep all
information relating to its identification number and
passwords strictly confidential and will be responsible for
the maintenance of adequate security over its customer
identification number and passwords. For security purposes,
the Company should change its passwords frequently (at least
once a year).
(l) Instructions transmitted over Noteline Direct and
received by Bankers Trust Company pursuant to Section 5
hereof accompanied by the Company's identification number
and the passwords, shall be deemed conclusive evidence that
such instructions are correct and complete and that the
issuance or redemption of the Note(s) directed thereby has
been duly authorized by the Company.
EXHIBIT C
to the Depositary and Issuing
and Paying Agent Agreement
INCUMBENCY CERTIFICATE
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group
Ladies and Gentlemen:
This is to certify that, until such time as you shall have
received from Jefferson Smurfit Finance Corporation (the
"Company") a subsequent Incumbency Certificate or written notice
to the contrary (i) each of the persons listed on Appendix C-1
hereto is an "Authorized Signatory" and is authorized to execute
Series A Commercial Paper Notes and Series B Commercial Paper
Notes and (ii) each of the persons listed on Appendix C-2 hereto
is an "Authorized Representative" and is authorized to act and to
give instructions and notices on behalf of the Company under
Section 2 of the Depositary and Issuing and Paying Agent
Agreement (Series A Commercial Paper) dated as of February 23,
1995, entered into between Bankers Trust Company and the Company,
as it may from time to time be amended or modified and in effect,
and under Section 2 of the Depository and Issuing and Paying
Agency Agreement (Series B Commercial Paper) dated as of February
23, 1995, entered into between Bankers Trust Company and the
Company, as it may from time to time be amended or modified and
in effect.
Date:___________, 199_ JEFFERSON SMURFIT FINANCE CORPORATION
By:_________________________
Title:______________________
APPENDIX C-1
Authorized Signatories
NAME TITLE SIGNATURE
(please type or print)
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
Mailing Address:
Facsimile No.:
APPENDIX C-2
Authorized Representatives
NAME TITLE SIGNATURE
(please type or print)
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
Mailing Address:
Facsimile No.: EXHIBIT D
to the Depositary and Issuing
and Paying Agent Agreement
DEPOSITARY AUTHORIZATION LETTER
Jefferson Smurfit Finance Corporation
8182 Maryland Avenue
St. Louis, Missouri 63105
Attention: ____________
Ladies and Gentlemen:
This is to certify that, until such time as you shall have
received from Bankers Trust Company (the "Depositary") a
subsequent Depositary Authorization Letter or written notice to
the contrary (i) each of the persons listed on Appendix X hereto
is an "Authenticating Representative" and is authorized to give
receipt for, complete, authenticate and deliver Series A
Commercial Paper Notes pursuant to the terms of the Depositary
and Issuing and Paying Agent Agreement (Series A Commercial
Paper), dated as of February 23, 1995, entered into between
Bankers Trust Company and Jefferson Smurfit Finance Corporation,
as it may from time to time be amended or modified and in effect
(the "Series A Depositary Agreement"), and Series B Commercial
Paper Notes pursuant to the terms of the Depositary and Issuing
and Paying Agent Agreement (Series B Commercial Paper), dated as
of February 23, 1995, entered into between Bankers Trust Company
and Jefferson Smurfit Finance Corporation, as it may from time to
time be amended or modified and in effect (the "Series B
Depositary Agreement") and (ii) each of the persons listed on
Appendix Y hereto is a "Designated Person" and is authorized to
act on behalf of the Depositary under the Series A Depositary
Agreement and the Series B Depositary Agreement and to give and
receive notices and instructions on behalf of the Depositary
thereunder.
Date: ______________, 199_ Bankers Trust Company,
as Depositary,
By:________________________
Title:_____________________
APPENDIX X
Authenticating Representatives
NAME TITLE SIGNATURE
(please type or print)
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
Mailing Address:
Facsimile No.: APPENDIX Y
Designated Persons
NAME TITLE SIGNATURE
(please type or print)
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
Mailing Address:
Facsimile No.: _____________________________
to the Depositary and Issuing
and Paying Agent Agreement
LETTER OF REPRESENTATIONS
TO BE COMPLETED BY ISSUER, ISSUING AGENT AND PAYING AGENT
_____________________________________________________
NAME OF ISSUER
____________________________________________________
NAME AND DTC PARTICIPANT NUMBER OF ISSUING AGENT
_____________________________________________________
NAME AND DTC PARTICIPANT NUMBER OF PAYING AGENT
___________________
DATE
The Depository Trust Company
55 Water Street
New York, New York 10041
Attention: General Counsel's Office
Re:_________________________________________________
_________________________________________________
_________________________________________________
DESCRIPTION OF PROGRAM INCLUDING REFERENCE TO THE PROVISION OF THE SECURITIES
ACT OF 1933, AS AMENDED, PURSUANT TO WHICH PROGRAM IS EXEMPT FROM REGISTRATION
Gentlemen:
The purpose of this letter is to set out certain matters relating
to the issuance by the __________________________" from time to
THE "ISSUER"
time of notes under its commercial paper program described above
(the "Notes"). _______________________ will act as the Issuer's
THE "ISSUING AGENT"
issuing agent. ____________________________ will act as the
THE "PAYING AGENT"
Issuer's paying agent. Descriptions of the Notes and the program
are contained in an information memorandum dated _______________,
a copy of which is attached.
<PAGE>
The Paying Agent has entered into a Commercial Paper Certificate
Agreement with DTC dated as of _____________________ pursuant to
which the Paying Agent will act as custodian of a Master Note
Certificate evidencing the Notes, when issued.
To induce The Depositary Trust Company ("DTC") to accept the
Notes as eligible for deposit at DTC and to act in accordance
with its Rules with respect to the Notes, the Issuer, the Issuing
Agent and the Paying Agent make the following representations to
DTC:
1. For Notes to be issued at face value with interest to
be added at maturity ("IAM Notes"), the Issuer or the
Issuing Agent has obtained from the CUSIP Service Bureau a
written list of approximately 900 nine-position CUSIP
numbers (the basic first six positions of which are the
same and uniquely identify the Issuer and the IAM Notes to
be issued under its commercial paper program described
above), and the Issuing Agent has delivered such list to
DTC. The CUSIP numbers on such list have been reserved for
assignment to issues of the IAM Notes. It is understood
that a number on such list can be re-assigned to an issue
of the IAM Notes but not sooner than 39 months after the
maturity of a prior issue of the IAM Notes to which the
number was assigned. At any time when only 100 of the
CUSIP numbers on such list remain, the Issuer or the
Issuing Agent shall obtain from the CUSIP Service Bureau an
additional written list, and the Issuing Agent shall
deliver such list to DTC.
For Notes to be issued at a discount from the face value to
be paid at maturity ("Discount Notes"), the Issuer or the
Issuing Agent has obtained from the CUSIP Service Bureau a
written list of two basic six-position CUSIP numbers (each
of which uniquely identifies the Issuer and two years of
maturity dates for the Discount Notes to be issued under
its commercial paper program described above), and the
Issuing Agent has delivered such list to DTC. The CUSIP
numbers on such list have been reserved for assignment to
issues of the Discount Notes based on the maturity year of
the Discount Notes and will be perpetually re-assignable in
accordance with DTC's Procedures, including the Final Plan
for a Commercial Paper Program (the "Procedures"), a copy
of which previously has been furnished to the Issuing Agent
and the Paying Agent.
2. The IAM Notes shall be evidenced by an IAM Master Note
Certificate in registered form registered in the name of
DTC's nominee, CEDE & CO., and such Note Certificate shall
represent 100% of the principal amount of the IAM Notes.
The Discount Notes shall be evidenced by a Discount Master
Note Certificate in registered form registered in the name
of DTC's nominee, CEDE & CO., and such Note Certificate
shall represent 100% of the principal amount of the
Discount Notes. The forms of Master Note Certificates to
be used for the Discount Notes and the IAM Notes are
attached hereto as exhibits.
3. When Notes are to be deposited with and distributed
through DTC, the Issuing Agent shall give notice to the
Paying Agent and delivery instructions to DTC in accordance
with the Procedures. The giving of such delivery
instructions to DTC shall constitute (a) a representation
that the Notes are delivered, in connection with their
issuance, upon payment or the promise to pay by the
receivers of such deliveries and (b) a confirmation that a
Master Note Certificate evidencing such Notes, in the form
described in Paragraph 2 above, has been issued and
authenticated.
4. At any time that the Paying Agent has Notes in its DTC
account, it may request withdrawal of such Notes from DTC
by giving a withdrawal instruction to DTC in accordance
with the Procedures. Upon DTC's acceptance of such
withdrawal instruction, the Paying Agent shall reduce the
principal amount of the Notes evidenced by the Master Note
Certificate accordingly.
5. The Paying Agent shall confirm with DTC daily the
aggregate principal amount of the Notes outstanding and the
corresponding maturity proceeds by CUSIP number, in
accordance with the Procedures.
6. Maturity payments on the Notes shall be made by the
Paying Agent to DTC in accordance with the Procedures. In
the event the Paying Agent does not make maturity payments
on the Notes to DTC in accordance with the Procedures, the
Issuer shall promptly make such payments to DTC.
7. In the event the Issuer determines that beneficial
owners of the Notes shall be able to obtain certificates
evidencing the Notes ("Note Certificates"), the Issuer or
the Paying Agent shall notify DTC of the availability of
Note Certificates, and shall issue, transfer and exchange
Note Certificates as required by DTC and others in
appropriate amounts.
8. DTC may determine to discontinue providing its services
as securities depository with respect to the Notes at any
time by giving reasonable notice to the Issuer or the
Paying Agent (at which time DTC shall confirm with the
Paying Agent the aggregate principal amount of the Notes
outstanding by CUSIP number). Under such circumstances, at
DTC's request the Issuer or the Paying Agent shall
cooperate with DTC in taking appropriate action to make
available one or more separate Note Certificates to any DTC
Participant having Notes credited to its DTC account.
9. The Issuer authorizes DTC to provide to the Issuing
Agent or the Paying Agent listings of DTC Participants'
holdings with respect to the Notes from time to time at the
request of the Issuing Agent or the Paying Agent. The
Issuer authorizes the Issuing Agent and the Paying Agent to
provide DTC with such signatures, exemplars of signatures
and authorizations to act as may be deemed necessary by DTC
to permit DTC to discharge its obligations to DTC
Participants and appropriate regulatory authorities.
10. Nothing herein shall be deemed to require the Issuing
Agent or Paying Agent to advance funds on behalf of the
Issuer.
Very truly yours,
______________________________
AS ISSUER
By:___________________________
AUTHORIZED OFFICER
______________________________
AS ISSUING AGENT
By:___________________________
AUTHORIZED OFFICER RECRUITER
______________________________
AS PAYING AGENT
By:___________________________
AUTHORIZED OFFICER RECRUITER
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:_______________________________
AUTHORIZED OFFICER
EXHIBIT F
to the Depositary and Issuing
and Paying Agent Agreement
COMMERCIAL PAPER MASTER NOTE
(SERIES A)
_________________, 199_
Date of Issuance
JEFFERSON SMURFIT FINANCE CORPORATION (the "Company"), a
corporation organized and existing under the laws of the State of
Delaware, for value received, hereby promises to pay to Cede &
Co. or registered assigns on the maturity date of each obligation
identified on the records of the Company (which records are
maintained by Bankers Trust Company (the "Depositary")) the
principal amount for each obligation. Payment shall be made by
wire transfer to the registered owner from the Depositary without
the necessity of presentation and surrender of this Master Note.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS
OF THIS MASTER NOTE SET FORTH ON THE REVERSE HEREOF.
This Master Note is a valid and binding obligation of the
Company.
JEFFERSON SMURFIT FINANCE
CORPORATION
By:___________________________
(Authorized Officer)
Name:
Title:
Countersigned for authentication
only:
BANKERS TRUST COMPANY,
as Depositary,
By:______________________________
(Authorized Officer)
Name:
Title:
At the request of the registered owner, the Company shall
promptly issue and deliver one or more separate note certificates
evidencing each obligation evidenced by this Master Note. As of
the date any such note certificate or certificates are issued,
the obligations which are evidenced thereby shall no longer be
evidenced by this Master Note.
_________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto
_________________________________________________________________
(Name, Address and Taxpayer Identification Number of Assignee)
the Master Note and all rights thereunder, hereby irrevocably
constituting and appointing ___________________________________
Attorney to transfer said Master Note on the books of the Issuer
with full power or substitution in the premises.
Dated: __________, 199_ _____________________________
(Signature)
Signature(s) Guaranteed:
NOTICE: The signature on this
assignment must correspond
with the name as written upon
the face of this Master Note,
in every particular, without
alteration or enlargement or
any change whatsoever.
UNLESS THIS MASTER NOTE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK,
NEW YORK) TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY MASTER NOTE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
DEPOSITARY AND ISSUING AND PAYING AGENT AGREEMENT
(SERIES B COMMERCIAL PAPER)
As of February 23, 1995
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group
Re: Jefferson Smurfit Finance Corporation Series B
Commercial Paper
Ladies and Gentlemen:
This will confirm the arrangements made with you (the
"Depositary") by the undersigned, Jefferson Smurfit Finance
Corporation (the "Company"), whereby you have agreed to act as
depositary for safekeeping of certain short-term promissory notes
of the Company which will be sold in the commercial paper market
and designated Series B Commercial Paper (the "Series B
Commercial Paper Notes") and as issuing and paying agent on
behalf of the Company in connection with the issuance and payment
of the Series B Commercial Paper Notes, and to undertake certain
obligations as described below on behalf of holders of the Series
B Commercial Paper Notes.
The Series B Commercial Paper Notes to be issued will be
entitled to the benefits of this Depositary and Issuing and
Paying Agent Agreement (this "Agreement"), and will be issued on
the terms and subject to the conditions set forth herein and
pursuant to the Liquidity Agreement (the "Liquidity Agreement")
dated as of February 23, 1995, among the Company, the various
financial institutions party thereto as "Banks" and Bankers Trust
Company, as Facility Agent and Collateral Agent. All capitalized
terms used herein and not otherwise defined herein shall have the
meanings set forth for such terms in Annex I to the Liquidity
Agreement.
The Series B Commercial Paper Notes will be entitled to the
benefits of this Agreement and the Liquidity Agreement.
This Agreement will govern your rights, powers and duties as
such depositary, issuing and paying agent and, in certain
circumstances, as fiduciary or agent with respect to the Series B
Commercial Paper Notes issued pursuant to this Agreement. No
implied covenants shall be read into this Agreement against you.
SECTION 1. Establishment of Accounts; Proceeds of Series B
Commercial Paper Notes. For the purposes of this Agreement and
the Liquidity Agreement, you have established, in the name of the
Company for the exclusive benefit of the holders, from time to
time, of the outstanding Series B Commercial Paper Notes, a
segregated noninterest bearing trust account in the corporate
trust office of Bankers Trust Company, account no. 14312 (being
referred to herein and in the Liquidity Agreement as the "Series
B Commercial Paper Account") over which you shall have exclusive
dominion and control and the sole right of withdrawal. All
proceeds of the sale on any day of Series B Commercial Paper
Notes issued hereunder shall be deposited by you in the Series B
Commercial Paper Account to the extent necessary to provide for
the payment of unpaid matured or concurrently maturing Series B
Commercial Paper Notes, whether or not presented to the
Depositary for payment; the proceeds in excess of the amount
required to pay unpaid matured or concurrently maturing Series B
Commercial Paper Notes, whether or not presented to the
Depositary for payment, shall be remitted to the Collateral Agent
on such day for deposit to the Series B Proceeds Account and
credited to the General Series B Sub-account. All funds at any
time on deposit in the Series B Commercial Paper Account shall be
held in trust by you for the exclusive benefit of the holders,
from time to time, of the outstanding Series B Commercial Paper
Notes in accordance with the terms of this Agreement; and no
application shall be made of such funds except to repay advances
made by you pursuant to Section 5 hereof or to pay matured Series
B Commercial Paper Notes in accordance with the terms hereof.
The Company shall have no legal, equitable or beneficial interest
in the Series B Commercial Paper Account. You agree to give the
Company, the Facility Agent and the Series B Dealers immediate
notice if you receive written notice that the Series B Commercial
Paper Account or any funds on deposit in the Series B Commercial
Paper Account have become subject to any stay, writ, judgment,
warrant or attachment, execution or similar process.
SECTION 2. Series B Commercial Paper Notes Delivered for
Safekeeping. At any time and from time to time during the term
of this Agreement the Company may deliver to your Commercial
Paper Department, 123 Washington Street, New York, NY 10006,
Attn: Commercial Paper Issuance, Series B Commercial Paper Notes
in substantially the form of Exhibit A to this Agreement
("Certificated Notes") which shall be consecutively numbered and
bear such other identification as the Company may deem
appropriate and shall be manually signed or signed in facsimile
in such manner as is acceptable to you on behalf of the Company
by an Authorized Signatory (as defined below) of the Company
(notwithstanding whether such person shall thereafter cease to be
an Authorized Representative), but shall otherwise be incomplete.
Each Series B Commercial Paper Note (including any Master Note
(as defined below)), or group of Series B Commercial Paper Notes
at one time, delivered to you shall be accompanied by a letter
from the Company identifying the Series B Commercial Paper Note
or Series B Commercial Paper Notes transmitted therewith, and you
shall acknowledge receipt of such Series B Commercial Paper Note
or Series B Commercial Paper Notes on the copy of such letter or
some other form of written receipt deemed appropriate by you and
the Company at the time of delivery to you of such Series B
Commercial Paper Note or Series B Commercial Paper Notes.
Pending the issuance of Series B Commercial Paper Notes as
provided in Section 3 hereof, all Series B Commercial Paper Notes
delivered to you shall be held by you for the account of the
Company for safekeeping in accordance with the Depositary's
customary practices.
Prior to the issuance of any Series B Commercial Paper
Notes, the Company will furnish to you, and from time to time
hereafter may furnish to you, a Certificate (substantially in the
form of Exhibit C hereto) (hereinafter called an "Incumbency
Certificate") of the Secretary or an Assistant Secretary of the
Company, identifying and certifying the incumbency and specimen
signatures of (i) officers or agents ("Authorized Signatories")
of the Company authorized to execute Series B Commercial Paper
Notes (including the Master Note) on behalf of the Company, and
(ii) officers or agents ("Authorized Representatives") of the
Company who are otherwise authorized to act and give instructions
and notices on behalf of the Company hereunder. Until you
receive a subsequent Incumbency Certificate, or unless a
Designated Person (as defined below) shall have actual knowledge
of the lack of authority of any individual, you shall be entitled
to rely on the last such Incumbency Certificate delivered to you
for purposes of determining Authorized Signatories and Authorized
Representatives.
Prior to the issuance of any Series B Commercial Paper
Notes, and from time to time thereafter as you choose, you shall
deliver to the Company a certificate, substantially in the form
of Exhibit D hereto (a "Depositary Authorization Letter"), of one
of your officers, identifying and certifying the incumbency and
specimen signatures of (i) persons ("Authenticating
Representatives") who are authorized to give receipt for and, in
the case of Certificated Notes, complete, authenticate and
deliver Series B Commercial Paper Notes and (ii) persons
("Designated Persons") who are otherwise authorized to act on
your behalf hereunder and to give and receive notices and
instructions on your behalf hereunder. Until the Company
receives a subsequent Depositary Authorization Letter or written
notice from you to the contrary, the Company shall be entitled to
rely on the last such Depositary Authorization Letter delivered
to the Company for purposes of determining Authenticating
Representatives and Designated Persons.
SECTION 3. Issuance of Series B Commercial Paper Notes.
(a) From time to time during the term of this Agreement, and
upon your timely receipt of written (including electronically
transmitted writings) or telephonic instructions (subject to
written confirmation, in the case of telephonic instructions, as
provided in paragraph (b) of this Section 3) in respect of any
Series B Commercial Paper Note, not later than 12:15 p.m., New
York City time, on the date of issuance thereof from an
Authorized Representative, you shall: (i) in the case of
Certificated Notes, withdraw designated Series B Commercial Paper
Notes from safekeeping and, in accordance with the instructions
received, take the following action with respect to each such
Certificated Note:
(A) date each such Certificated Note the date of
issuance thereof (which shall be a Business Day) and insert
(x) the maturity date thereof (which shall be a Business Day
and which shall not be later than the earlier to occur of
(1) the 180th day following issuance thereof, and (2) the
date fifteen days prior to the Scheduled Liquidation
Commencement Date in effect on the date of issuance thereof,
which, until you are advised in writing to the contrary by
the Facility Agent, shall be December 22, 1999), and (y) the
face amount (which shall be at least $100,000 or an integral
multiple of $1,000 in excess thereof) in figures and, if so
directed by an Authorized Representative, strike the word
"Bearer" (if applicable) and insert the name, address and
taxpayer identification number of the payee thereof;
(B) authenticate each such Certificated Note by
countersigning it for authentication in the space provided
thereon;
(C) deliver each such Certificated Note to the Series
B Dealer specified in such instructions, or to the
consignee, if any, designated by such Series B Dealer for
the account of such Series B Dealer against receipt of
payment of the amount set forth in the instructions of the
Company delivered in respect thereof as provided in Section
4 hereof; and
(D) send a copy of each such Certificated Note to the
Company and the Facility Agent on or promptly following the
date of issuance thereof; and
(ii) in the case of Book Entry CP Notes (as defined below), enter
an issuance instruction (a "Book Entry Issuance Instruction") in
the Book Entry System of the Depository Trust Company ("DTC") in
accordance with the Book Entry Procedures (as defined below),
which instruction shall provide the issuance information set
forth in clause (i) above with respect to such Book Entry CP
Notes and specify the party to whom such Book Entry CP Notes
shall be issued.
Notwithstanding the foregoing, no Series B Commercial Paper
Note shall be issued hereunder if, (x) after giving effect to the
issuance of such Series B Commercial Paper Note and the
application of the proceeds thereof, either
(i) a Base Amount Shortfall exists;
(ii) if the Term Loan is outstanding, a Modified Base
Amount Short fall exists;
(iii) the sum of the Aggregate Series B Loan Amount and
the aggregate outstanding face amount of the Series B
Commercial Paper would be greater than the Series B Facility
Amount;
(iv) the sum of the Aggregate Series B Loan Amount and
the aggregate face amount of outstanding Series B Commercial
Paper, minus the aggregate amount on deposit and credited to
the Downgraded Series B Bank Sub-account, would exceed the
Adjusted Series B Base Amount;
(v) the sum of the Aggregate Loan Amount and the
aggregate outstanding face amount of the Commercial
Paper would exceed the Facility Amount;
(vi) the sum of the Aggregate Loan Amount and the
aggregate face amount of outstanding Commercial Paper, minus
the aggregate amount on deposit and credited to the
Downgraded Series B Bank Sub-account and the Downgraded
Series B Bank Sub-account, would exceed the Adjusted Base
Amount; or
(vii) the aggregate outstanding amount of all
Commercial Paper which shall mature on any day would exceed
20% of the Facility Amount;
or (y) you shall have received notice that any condition
precedent specified in Article V of the Liquidity Agreement with
respect to such issuance has not been satisfied. In this
connection, the Company will provide you on each such day of
issuance with a copy of the Daily Report as to the Base Amount,
the Adjusted Base Amount, the Modified Base Amount, the Aggregate
CP Amount, the Aggregate Series B Loan Amount, the Aggregate
Series B CP Amount, the Aggregate Series B Facility Amount and
the Aggregate Net Outstandings (in each case before giving effect
to the issuance of Commercial Paper Notes on such day), the
Aggregate Loan Amount, the Term Loan Amount, and the Facility
Amount or any change in any of such amounts, and the satisfaction
of the conditions precedent referred to in the preceding
sentence, and at the time of delivering or issuing Series B
Commercial Paper Notes you may rely on the last such Daily Report
so received in determining the amount of Series B Commercial
Paper Notes that may then be issued. In addition, you shall
notify the Facility Agent, the Collateral Agent, the Servicer and
the Company on any day on which your records reflect an Aggregate
CP Amount different than the Aggregate CP Amount set forth in the
Daily Report prepared on the preceding Business Day.
You shall be completely protected in relying on the Daily
Report and on all instructions with respect to the issuance of
Series B Commercial Paper Notes given to you by an Authorized
Representative or the Facility Agent (with respect to
instructions not to issue Series B Commercial Paper Notes)
pursuant to this Section 3 provided, however, that if, after
receipt of such instructions, you receive a contrary or
supervening instruction, you shall use your best efforts to
comply with such contrary or supervening instruction.
(b) No Series B Commercial Paper Notes will be
authenticated and delivered, and no Book Entry Issuance
Instruction shall be given, by you unless you shall have
received, in your reasonable judgment, complete instructions from
an Authorized Representative as to the matters specified above in
clauses (i)(A) and, in the case of Certificated Notes, (i)(C) of
paragraph (a) of this Section 3. Any instructions given to you
by an Authorized Representative to authenticate and deliver
Certificated Notes or to enter a Book Entry Issuance Instruction
hereunder shall constitute a representation and warranty on the
part of the Company that the issuance of such Series B Commercial
Paper Notes will not violate or contravene any applicable law,
rule, regulation, order or contractual agreement binding upon the
Company (including, as appropriate and without limitation, any
securities law or law pertaining to investment companies or any
order of any court, governmental agency or regulatory authority)
and will be in conformity with the terms of the Liquidity
Agreement.
Notwithstanding any instructions received by you from an
Authorized Representative, you shall not deliver Series B
Commercial Paper Notes or enter any Book Entry Issuance
Instruction on any date pursuant to such instructions if a
Designated Person shall receive by 9:00 a.m. (New York City time)
on such date instructions from the Facility Agent pursuant to
Section 3.01(a) of the Liquidity Agreement instructing you not to
deliver Series B Commercial Paper Notes or to enter Book Entry
Issuance Instructions, which instructions may be specific with
respect to a particular issue of Series B Commercial Paper Notes
or may be general and applicable to all Series B Commercial Paper
Notes issued after receipt of such instructions, until such
instructions from the Facility Agent are revoked or superseded by
further instructions therefrom.
Any telephonic instructions given to you by an Authorized
Representative shall be confirmed in writing by such Authorized
Representative within twenty-four hours after the same are
received by you (according to your written records), and you
shall incur no liability for acting in accordance with any such
telephonic instructions reasonably believed by you in good faith
to have been given by an Authorized Representative. Should the
Company use your instruction and communication service Noteline
Direct ("Noteline Direct") to transmit to you the Company's
instructions for the issuance of Series B Commercial Paper Notes,
the Company understands that the transmission of an instruction
through Noteline Direct shall be equivalent to the giving of a
duly authorized written and signed instruction which you may act
upon without liability. Use of Noteline Direct by the Company
shall be subject to the terms and conditions set forth in
Exhibit B hereto.
It is the express intent of the parties hereto and the
parties to the Liquidity Agreement that the commercial paper
program contemplated hereby and thereby shall be operated in a
manner designed to ensure compliance by BT Securities Corporation
and its affiliates with law, including without limitation the
federal laws of the United States. In implementation of such
intent and in any event, the Depositary will (so long as Bankers
Trust Company is a "Bank" under the Liquidity Agreement):
(i) prior to the issuance of any Commercial Paper
hereunder establish such procedures (and maintain such books
and records) as shall be necessary to distinguish the Series
A Commercial Paper (including Series A Commercial Paper
issued through DTC and Series A Commercial Paper evidenced
by Commercial Paper Notes) in respect of which the Series A
Commitment is applicable and the Series B Commercial Paper
(including Series B Commercial Paper issued through DTC and
Series B Commercial Paper evidenced by definitive Commercial
Paper Notes) in respect of which the Series B Commitment is
applicable;
(ii) issue Commercial Paper sold or placed by BT
Securities Corporation only as Series B Commercial Paper;
(iii) not issue any Series A Commercial Paper to BT
Securities Corporation;
(iv) not deliver to BT Securities Corporation any
Series A Commercial Paper Note;
(v) not issue as Series A Commercial Paper any
Commercial Paper placed by BT Securities Corporation;
(vi) not transfer any funds on deposit in the Series B
Commercial Paper Account to the Series A Commercial Paper
Account; and
(vii) not transfer any funds on deposit in the Series A
Commercial Paper Account to the Series B Commercial Paper
Account.
It is expressly understood that Series A Commercial Paper and
Series B Commercial Paper need not be issued on a pro rata basis.
The Company and the Depositary acknowledge that it is the
intention of the parties hereto and the parties to the Liquidity
Agreement that:
(A) the proceeds of any Series B Liquidity Loan or a
Borrowing comprised of a Series B Liquidity Loan shall not
be used, directly or indirectly, to pay any Series A
Commercial Paper or to pay any Commercial Paper designated
as "Series A Commercial Paper" pursuant to the Facility
Documents;
(B) the proceeds of any Series A Liquidity Loan or a
Borrowing comprised of a Series A Liquidity Loan shall not
be used, directly or indirectly, to pay any Series B
Commercial Paper or to pay any Commercial Paper designated
as "Series B Commercial Paper" pursuant to the Facility
Documents;
(C) the proceeds of the sale of any Series B Commercial
Paper shall not be used, directly or indirectly, to pay any
Series A Commercial Paper or to pay any Commercial Paper
designated as "Series A Commercial Paper" pursuant to the
Facility Documents; and
(D) the proceeds of the sale of any Series A Commercial
Paper shall not be used, directly or indirectly, to pay any
Series B Commercial Paper or to pay any Commercial Paper
designated as "Series B Commercial Paper" pursuant to the
Facility Documents.
SECTION 4. Delivery of Series B Commercial Paper Notes. No
Certificated Note shall be delivered by you to any Series B
Dealer or any Series B Dealer's consignee except against payment
therefor. A Certificated Note shall be deemed delivered against
payment for purposes of this Section 4 if the net proceeds of
such Certificated Note are received by you in immediately
available funds at the time of your delivery of such Certificated
Note to any Series B Dealer or any Series B Dealer's consignee or
if, at the time you deliver such Certificated Note to such Series
B Dealer or such Series B Dealer's consignee, you receive such
Series B Dealer's receipt for the delivery in customary form. In
accordance with the custom in the commercial paper market,
delivery of such receipt shall obligate such Series B Dealer to
deliver or cause to be delivered to you the purchase price of
such Certificated Notes in immediately available funds prior to
your close of business on such day. Should you deliver any
Certificated Notes against receipt as provided in the second
sentence of this Section 4 you shall have no responsibility or
liability for the credit risks involved in your delivery of such
Certificated Notes to those Persons who shall be designated by an
Authorized Representative or for the failure of such Persons to
effectuate payment therefor as herein contemplated.
At the close of business on each Business Day on which
Series B Commercial Paper Notes are issued or mature, if Noteline
Direct is not operational, you shall prepare a written statement
showing (i) the aggregate face amount of all Series B Commercial
Paper Notes issued on that Business Day, which statement shall
include the serial number, in the case of Certificated Notes, or
the CUSIP number, in the case of Book Entry CP Notes, issue date,
maturity date and face amount thereof, and (ii) the aggregate
face amount of all Series B Commercial Paper Notes outstanding at
the close of business on such day. You shall furnish such
information to the Company, the Facility Agent and the Collateral
Agent on that day and at such other times as the Company, the
Facility Agent or the Collateral Agent may from time to time
reasonably request. A copy of each statement referred to above
shall be sent by you by either telecopy or overnight delivery
service to the Company, the Facility Agent and the Collateral
Agent at their addresses specified herein, no later than the
following Business Day.
SECTION 5. Payment of Series B Commercial Paper Notes at
Maturity. (a) Each matured Series B Commercial Paper Note
presented to you for payment on any Business Day prior to the
standard window closing time (as established by the rules of the
New York Clearing House Association in effect from time to time)
on such Business Day, shall be paid the same day in accordance
with the provisions of paragraph (b) of this Section 5. Each
matured Series B Commercial Paper Note presented to you for
payment on any Business Day after such time shall be paid on the
next succeeding Business Day in accordance with the provisions of
paragraph (b) of this Section 5.
(b) You shall pay each matured Series B Commercial Paper
Note presented to you for payment prior to the close of business
on any Business Day from funds available for such payment in the
Series B Commercial Paper Account (including funds from Series B
Commercial Paper Notes issued or to be issued on that day). If,
on any given day on which a Series B Commercial Paper Note is
scheduled to mature by its terms, the funds on deposit in the
Series B Commercial Paper Account are insufficient to pay such
Series B Commercial Paper Note in full after giving effect to the
anticipated proceeds of Series B Commercial Paper Notes issued on
such day and after giving effect to the transfers by the
Collateral Agent from the Series B Proceeds Account from the
General Series A Sub-account and the Collection Account that are
to be made on such day as set forth in the Daily Report delivered
on such day, you may, and the Company hereby irrevocably
authorizes you to, as attorney-in-fact of the Company, request a
Refunding Advance comprised of Series B Liquidity Loans in an
amount equal to such insufficiency by delivering a Notice of
Borrowing to the Facility Agent not later than 11:15 a.m., New
York City time, on the date of the proposed Borrowing. In
accordance with and subject to the terms of the Liquidity
Agreement, the proceeds of any such Refunding Advance shall be
remitted to the Series B Commercial Paper Account not later than
3:30 p.m. (New York City time) on the date of the requested
Borrowing. You shall apply the proceeds of any Refunding Advance
obtained by you first to reimburse yourself for any advances made
by you to pay any matured Series B Commercial Paper Note and
second to the payment of the Series B Commercial Paper Notes in
respect of which the Refunding Advances were obtained.
If, at the time any Series B Commercial Paper Note is
presented to you for payment, there are insufficient funds on
deposit and available in the Series B Commercial Paper Account
(after giving effect to transfers thereto, if any, from the
Series B Proceeds Account and the Collection Account and from the
Banks in the form of Refunding Advances comprised of Series B
Liquidity Loans in accordance with this paragraph (b) of this
Section 5) to pay such Series B Commercial Paper Note in full,
you shall be entitled, but not required, to pay such Series B
Commercial Paper Note out of your personal assets before your
close of business that day and you shall thereupon be deemed and
treated as the holder of such Series B Commercial Paper Note and
shall be entitled to receive payment for such Series B Commercial
Paper Note (from the proceeds of Refunding Advances comprised of
Series B Liquidity Loans or from any other source available in
accordance with the Liquidity Agreement for the payment of Series
B Commercial Paper Notes). Any such advance made by you out of
personal assets to pay maturing Series B Commercial Paper, if not
repaid by the close of business on the date when made, shall bear
interest from such date until repayment at a rate equal to 2% per
annum above the Alternate Base Rate.
(c) Certificated Notes paid in full by you shall be
canceled and held by you in safekeeping for disposition in
accordance with written instructions to you by the Company.
Unless the Company instructs you otherwise, you shall return to
the Company all Certificated Notes paid by you within sixty (60)
days after such payment.
SECTION 6. Book Entry Series B Commercial Paper Notes. (a)
The Company may elect to make the Series B Commercial Paper Notes
eligible for the book entry commercial paper program of The
Depository Trust Company ("DTC"), in which case (i) the Company
will instruct you in writing to issue book entry Series B
Commercial Paper Notes ("Book Entry Series B CP Notes") through
DTC instead of, or in addition to, issuing certificated Series B
Commercial Paper Notes as hereinbefore provided, (ii) you will
prepare for execution by the Company and you DTC's current form
Letter of Representations (with such changes as DTC may
reasonably request, the "Letter"), a copy of which is attached
hereto as Exhibit E, (iii) the Company will provide to you for
submission with the Letter a copy of the information memorandum
for the Company's commercial paper program under which the Series
B Commercial Paper Notes are issued by you pursuant to this
Agreement and (iv) you will deliver the Letter to DTC's Legal
Department and will return to the Company a copy of the Letter
after it has been received and accepted by DTC. You are
authorized and directed to issue and settle through DTC Book
Entry Series B CP Notes in accordance with the applicable rules
and procedures established by DTC for the issuance and settlement
of book entry notes upon receipt by you of written instructions
pursuant to clause (i) of the immediately preceding sentence.
DTC's procedures with respect to the issuance of book entry notes
(the "Book Entry Procedures"), among other things, currently
provide that issuance of Book Entry Series B CP Notes with a
maturity date on a holiday on which DTC is scheduled to be closed
for settlement services are not acceptable for deposit into DTC's
commercial paper program. In the event there is any delay in the
issuance of Book Entry Series B CP Notes resulting from the
Company's instructions to you providing for the issuance of Book
Entry Series B CP Notes to mature on DTC holidays, you shall not
be liable to the Company or any beneficial owner of a Book Entry
CP Note. Each Book Entry CP Note issued and distributed through
DTC upon the instruction of a Designated Person from an
Authorized Representative shall constitute the Company's
representation and warranty that such Book Entry CP Note is a
legal, valid and binding obligation of the Company.
(b) Once the Series B Commercial Paper Notes have been
accepted by DTC for DTC's commercial paper program and prior to
the issuance and distribution of any Book Entry Series B CP
Notes, the Company will deliver (i) to you, as custodian for DTC,
a Master Note Certificate (the "Master Note") with respect to
Book Entry Series B CP Notes issued at a discount from face value
to be paid at maturity (in the form of Exhibit F hereto), duly
executed on behalf of the Company by the manual or facsimile
signature of an Authorized Signatory to evidence Book Entry
Series B CP Notes to be issued and distributed through DTC by you
on behalf of the Company (and the obligation of the Company to
provide for payment of such Book Entry Series B CP Notes at their
respective maturities) and (ii) to you, copies of the Letter,
duly executed by the Company. You shall record on the schedule
attached to the Master Note each change in the face amount of
outstanding Book Entry Series B CP Notes represented thereby and
the maturity dates thereof.
(c) In accordance with DTC's book entry commercial paper
program, you shall obtain from the CUSIP Service Bureau a written
list of CUSIP numbers for the Book Entry Series B CP Notes that
will be issued through DTC as provided in the Letter, and you
shall deliver such list to DTC. You shall instruct the CUSIP
Service Bureau to bill you for the fee or fees payable to the
CUSIP Service Bureau for such list of CUSIP numbers for Book
Entry Series B CP Notes, and you will include such fees in your
billing to the Company pursuant to Section 8 of this Agreement.
The CUSIP numbers, as required by DTC's commercial paper program,
will be assigned to the Company's Book Entry Series B CP Notes
upon issuance and used to identify the Company's outstanding Book
Entry Series B CP Notes in DTC's book entry system.
(d) On and after the date when the Series B Commercial
Paper Notes become eligible for DTC's book entry commercial paper
program, you shall execute all instructions from the Company to
issue Series B Commercial Paper Notes by, subject to the
provisions of Section 3 of this Agreement, issuing and delivering
only Book Entry Series B CP Notes through DTC, except where you
have been specifically instructed in writing by the Company to
complete and deliver one or more Certificated Notes.
(e) In the event, and on each occasion, that the Company
agrees with a holder of Book Entry Series B CP Notes (a "Book
Entry CP Holder") to prepay such Book Entry CP Holder's Book
Entry Series B CP Notes on deposit with DTC prior to the
scheduled maturity of such Book Entry Series B CP Notes, the
Company shall make arrangements with such Book Entry CP Holder
and you for the delivery through the DTC system by the DTC
participant holding such Series B Commercial Paper Notes to your
designated account at DTC for payment.
(f) The Company may for any reason discontinue its
participation in DTC's book entry commercial paper program with
respect to the Series B Commercial Paper Notes at any time upon
not less than ten days prior written notice to you (with copies
of such notice to the Series B Dealers). In the event the
Company shall discontinue its participation in DTC's book entry
commercial paper program, or DTC shall discontinue its services
with respect to the Book Entry Series B CP Notes, the Company and
you shall cooperate in taking appropriate action, including
without limitation, if necessary, delivery of one or more
Certificated Notes to any DTC participant having Book Entry
Series B CP Notes credited to its DTC account. In the event of
such discontinuance of the Company's participation in DTC's
commercial paper program as herein described, and upon delivery
of Certificated Notes in respect of all Book Entry Series B CP
Notes represented by the Master Note, you shall destroy such
Master Note and provide the Company with a duly executed
certificate of destruction with respect to such Master Note.
Notice by the Company to you of the discontinuance of the
Company's participation in DTC's book entry commercial paper
program with respect to the Series B Commercial Paper Notes shall
not constitute notice of termination of your duties as issuing
and paying agent for Certificated Notes under this Agreement.
(g) All references in this Agreement to "Series B
Commercial Paper Notes" shall apply to and shall include any Book
Entry Series B CP Notes issued hereunder by the Company. Any
reference in this Agreement to authentication, completion and
delivery of the Series B Commercial Paper Notes shall, in the
context of Book Entry Series B CP Notes, be deemed to mean
issuance of Series B Commercial Paper Notes in accordance with
DTC's rules and procedures with respect to the Book Entry Series
B CP Notes and any reference to presentation of Series B
Commercial Paper Notes for payment shall, in the context of Book
Entry Series B CP Notes, be deemed to mean the procedure
undertaken by DTC to make a demand for payment from the Company
(through you) of matured Book Entry Series B CP Notes.
References in this Agreement to "holders" of the Series B
Commercial Paper Notes shall, in the context of Book Entry Series
B CP Notes, refer to the beneficial owners of such Book Entry
Series B CP Notes, except that in the case of payment of Book
Entry Series B CP Notes by you, the term "holder" shall be deemed
to refer to Cede & Co. Upon payment of all outstanding Book
Entry Series B CP Notes represented by the Master Note following
termination of this Agreement pursuant to Section 10 hereof, you
shall destroy the Master Note and provide the Company with a duly
executed certificate of destruction with respect to such Master
Note.
SECTION 7. Inspection of Documents by Series B Commercial
Paper Note Holders. You shall keep a fully executed, or
conformed, copy of the Liquidity Agreement and this Agreement
(together with all amendments, modifications, supplements,
waivers and consents made or given with respect thereto) on file
at the office of your Corporate Trust and Agency Group. The
Company agrees to provide to you a copy of all such documents
promptly following their execution. You shall permit reasonable
inspection to be made of such documents during normal business
hours by the holder of any Series B Commercial Paper Note or by
any officer, employee or agent of such holder, provided that the
Person purporting to be such holder establishes to your
satisfaction that he is in fact such holder of such Series B
Commercial Paper Note and, in cases where inspection is sought to
be made by a Person purporting to be an officer, employee or
agent of such holder, that such Person submits evidence
satisfactory to you of his authority to make such inspection on
behalf of the holder of such Series B Commercial Paper Note.
SECTION 8. Expenses and Indemnity. Subject to and in
accordance with the Facility Agreement, the Company agrees:
(a) to pay to you from time to time reasonable
compensation for all services rendered by you hereunder,
including for the issuance of Book Entry Series B CP Notes
through DTC, and to reimburse you for expenses,
disbursements and advances, in each case as mutually agreed
upon;
(b) to indemnify you for, and hold you harmless from
and against, any and all losses (except your loss of
profit), liabilities (including liabilities for penalties),
actions, suits, judgments, demands, damages, out-of-pocket
costs and expenses (including, without limitation, interest
and attorneys' fees and expenses, but excluding costs and
expenses attributable solely to administrative overhead)
arising out of, in connection with, or resulting from, the
exercise of your rights and/or the performance of your
duties, by you or by your agents and employees, hereunder;
provided, however, that the Company shall not be liable to
indemnify you for, or hold you harmless from, damage, cost
and expense resulting from or attributable to your gross
negligence or wilful misconduct or that of your officers,
employees or agents. The foregoing indemnity includes, but
is not limited to, any action taken or omitted to be taken
by you upon telephonic instructions (authorized herein)
received by you from, or believed by you in good faith to
have been given by, the proper person or persons; and
provided further that any claims arising hereunder shall be
limited by the provisions of Section 20 hereof. The
provisions of this section shall survive the termination of
this agreement and the resignation or removal of you as
Depositary.
SECTION 9. Representations and Warranties. In addition to
any other representations and warranties on the part of the
Company contained herein, the Company hereby represents and
warrants to you that its entry into this Agreement, and your
appointment by the Company as depositary and issuing and paying
agent and, in certain circumstances, as fiduciary or agent, have
been duly authorized by all necessary corporate action on the
part of the Company and will not violate, breach or contravene
any law, rule, regulation, order, contract or agreement binding
upon the Company. In addition, the Company represents and
warrants that the issuance of the Series B Commercial Paper
Notes, including, if the Series B Commercial Paper Notes become
eligible for deposit as book entry only in DTC's commercial paper
program, the issuance of Book Entry Series B CP Notes and the
execution of any instruments or documents required by DTC in
connection therewith, has been duly and validly authorized by all
necessary corporate action, and that the Series B Commercial
Paper Notes, when completed, countersigned and delivered pursuant
hereto, will constitute the Company's legal, valid and binding
obligation and will be in conformity with the terms of the
Liquidity Agreement. You hereby represent and warrant that your
acceptance of your appointment as issuing and paying agent and
depositary have been duly authorized by all necessary action on
your part.
SECTION 10. Term and Termination. (a) The term of this
Agreement (except for the provisions of Sections 8 and 20, which
shall survive indefinitely, and the provisions of Section 17,
which shall survive for the period set forth therein) shall
extend from the date hereof and shall end on the earliest of:
(i) the Termination Date; and
(ii) the date of termination specified in any
termination notice given pursuant to paragraph (b) of this
Section 10.
Any Series B Commercial Paper Notes outstanding on the date
of any termination of this Agreement pursuant to paragraph (a) or
paragraph (b) of this Section 10 shall nevertheless remain valid
obligations of the Company, and the provisions of this Agreement
shall continue to be applicable with respect to the payment of
such Series B Commercial Paper Notes to the same extent as if
this Agreement had not terminated.
(b) Either you or the Company may terminate this Agreement
and the authority granted to you herein, at any time upon not
less than thirty Business Days' prior written notice given to the
other parties hereto specifying the termination date hereof
(which shall not occur on the date of maturity of any Series B
Commercial Paper Notes nor the Business Day next preceding any
such date). Notwithstanding the preceding sentence, no
termination of this Agreement shall take effect until a
successor, issuing and paying agent has been duly appointed,
unless all outstanding Series B Commercial Paper Notes have been
paid in full and no amounts are due to Series B Commercial Paper
Note holders. No successor depositary, issuing and paying agent
may be appointed, however, if such appointment shall result in
the withdrawal or reduction of any rating assigned to the Series
B Commercial Paper Notes. Upon the termination of this Agreement
under paragraph (a) of this Section or this paragraph (b), you
shall promptly deliver to your successor, if one is appointed,
all Series B Commercial Paper Notes (including the Master Note)
then held by you hereunder for the Company's account for
safekeeping, against receipt by such successor, and shall cause
to be deposited in a segregated trust account maintained by your
successor for the exclusive benefit of the holders of outstanding
Series B Commercial Paper Notes, upon advice to the Company, the
Facility Agent and the Collateral Agent, all funds, if any, then
on deposit in, or otherwise to the credit of, the Series B
Commercial Paper Account; provided, however, if all outstanding
Series B Commercial Paper Notes have been paid in full and no
amounts are due to Series B Commercial Paper Note holders at the
time of such termination, you shall transfer such funds to the
Collateral Agent for deposit into the Series B Proceeds Account.
(c) No Series B Commercial Paper Notes shall be delivered
to you by the Company for safekeeping or issuance hereunder nor
shall any Certificated Notes be authenticated or delivered to any
Series B Dealer or any consignee of any Series B Dealer or any
Book Entry Issuance Instruction be issued by you upon the
termination of this Agreement and the authority granted to you
herein.
SECTION 11. Amendments and Modifications. (a) This
Agreement may be amended, modified or waived from time to time by
the parties hereto by a written instrument signed by each of the
parties hereto. No such amendment, modification or waiver shall
adversely affect the rights of the holder or holders of any
Series B Commercial Paper Notes outstanding at the time of such
amendment, modification, termination or waiver unless consented
to in writing by such holder or holders.
(b) Notwithstanding anything else (other than the proviso
hereof) to the contrary contained herein, the parties hereto
acknowledge and agree that any amendment, waiver, modification or
consent of this Agreement, the Liquidity Agreement or any other
Facility Document shall be governed by and subject to the
provisions and procedures set forth in Section 12.01 of the
Liquidity Agreement, the terms of which are herein incorporated
by this reference; provided, however, the final two paragraphs of
Section 3 hereof cannot be amended without the prior written
consent of the Company, Bankers Trust Company, and BT Securities
Corporation. No amendment of any of the foregoing agreements
which could reasonably be expected to materially adversely affect
your rights, duties or powers hereunder shall be effective
against you without your prior consent. Promptly after the
execution of any amendment, modification, consent or waiver, the
Company shall furnish you with a fully executed and conformed
copy of such amendment, modification, consent, or waiver.
SECTION 12. Notices. Except where telephonic instructions
or notices are authorized herein to be given, all notices,
demands, instructions and other communications required or
permitted to be given to any party hereunder shall be in writing
and addressed, delivered or transmitted to such party at its
address or facsimile number set forth below, or at any other
address or facsimile number, as the case may be, as such party
may notify to the other parties hereto in accordance with the
provisions of this Section 12. Any notice, if mailed and
properly addressed with postage prepaid or if properly addressed
and sent by prepaid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be
deemed given when transmitted upon receipt of electronic
confirmation of transmission.
If to the Depositary:
Bankers Trust Company
Four Albany Street
10th Floor
New York, New York 10006
Attention: Manager, Commercial Paper Group
Tel. No. (212) 250-6513
Facsimile No. (212) 250-6439
If to the Company:
JEFFERSON SMURFIT FINANCE CORPORATION
8182 Maryland Avenue
St. Louis, Missouri 63105
Attention: _______________
Tel. No. __________________
Facsimile No. _____________
If to the Collateral Agent:
Bankers Trust Company
Four Albany Street
10th Floor
New York, New York 10006
Attention: Corporate Trust and Agency Group
Tel. No. (212) 250-6513
Facsimile No. (212) 250-6439
If to the Facility Agent:
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Tel. No. (212) 250-2500
Facsimile No. (212) 250-7200
If to the Series B Dealers:
Morgan Stanley & Co. Incorporated
1221 6th Avenue
5th Floor
New York, New York 10020
Attn: Sanjeev Khanna
BT Securities Corporation
130 Liberty Street
New York, New York 10006
Attn: Global Investment Bank Asset Securitization
If to S&P:
STANDARD & POOR'S RATINGS GROUP
Asset Backed Surveillance Department
26 Broadway, 15th Floor
New York, New York 10004
Tel. No. (212) 208-8000
Facsimile No. (212) 412-0225
If to Duff & Phelps:
DUFF & PHELPS CREDIT RATING COMPANY
Structured Finance Group
55 East Monroe Street
Chicago, Illinois 60603
Tel. No. (312) 263-2610
Facsimile No. (312) 263-2852
Attn: Asset - Backed Research and Monitoring Group
SECTION 13. Binding Effect; Assignment. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. No
party hereto may assign any of its rights or obligations
hereunder (other than in connection with the appointment of a
successor Depositary under Section 10) except with (i) the prior
written consent of all parties hereto and (ii) the prior written
confirmation of each Rating Agency that its rating on the Series
B Commercial Paper Notes will not be lowered or withdrawn as a
result thereof.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
SECTION 15. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together,
shall constitute one and the same Agreement. Delivery of an
executed counterpart of a signature page to this Agreement by
facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 16. Headings. Section headings used in this
Agreement are for convenience only and shall not affect the
construction of this Agreement.
SECTION 17. No Petition. You, in your capacity as
depositary, issuing and paying agent hereby covenant and agree
that you will not institute against, or join any person in
instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other
proceedings under any Federal or state bankruptcy or similar law,
at any time other than on a date which is at least one year and
one day after the payment in full of the last Commercial Paper
Note, Liquidity Loan and Term Loan to mature. The foregoing
shall not limit your right to file any claim in or otherwise take
any action with respect to any such insolvency proceeding that
was instituted against the Company by any Person other than the
you.
SECTION 18. Duties and Responsibilities. It is understood
that you are acting as fiduciary solely to the extent that you
are holding and applying funds in the Series B Commercial Paper
Account, as provided in this Agreement on behalf of the holders
from time to time of the Series B Commercial Paper Notes.
Neither you nor any of your officers, directors, employees or
agents shall be liable for any action taken or omitted to be
taken by you or them hereunder except for acts of gross
negligence or wilful misconduct by you or your officers,
employees or agents. You undertake to perform such duties and
only such duties as are set forth in this Agreement and no
implied covenants shall be read into this Agreement against you.
You shall incur no liability in acting within the scope of
this Agreement on any notice or instruction, telephonic or
written, given hereunder which a Designated Person believes in
good faith to have been given by an Authorized Representative,
the Facility Agent or the Collateral Agent; nor shall you in so
acting assume or be deemed to have assumed any responsibility for
the propriety of any such transaction effected by you under, or
the compliance of any such transaction with, the Liquidity
Agreement or any other Facility Document. Your countersignature
of any Series B Commercial Paper Note shall be for authentication
purposes only and neither you nor any person countersigning on
your behalf shall have any liability on any Series B Commercial
Paper Note.
You may rely and shall be protected in acting or refraining
from acting upon any communication authorized by this Agreement
and upon any written instruction, notice, request, direction,
consent, report, certificate, Series B Commercial Paper Note or
other instrument, paper or document believed by you to be
genuine.
You may consult with counsel and the advice of such counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by you hereunder
in good faith and in reliance thereon.
You shall not be required to advance, expend or risk your
own funds or otherwise incur or become exposed to financial
liability in the performance of your duties hereunder,
notwithstanding any course of conduct or practice that you may
have engaged in, and no party or any holder of Series B
Commercial Paper Notes may rely on the continued existence of
such course of conduct or practice.
Except as otherwise expressly provided herein, whenever, in
the administration of this Agreement, you shall deem it necessary
that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate of an Authorized Representative, and such certificate
shall be full warranty to you for any action taken, suffered or
omitted under the provisions of this Agreement upon the faith
thereof.
SECTION 19. No Recourse. The obligations of the Company
under this Agreement are solely the corporate obligations of the
Company. No recourse shall be had for the payment of any amount
owing in respect to Section 8 hereof or for the payment of any
fee hereunder or any other obligation or claim arising out of or
based upon this Agreement against any Series B Dealer or against
any shareholder, employee, officer, director or incorporator of
the Company. For purposes of this Section 19, the term "Series B
Dealer" shall mean and include all Affiliates thereof and any
employee, officer, director, incorporator, shareholder or
beneficial owner of any of them; provided, however, that neither
you nor the Company shall be considered to be an Affiliate of any
Series B Dealer for purposes of this Section 19.
SECTION 20. Limited Recourse to Company. You agree that
(i) the obligations of the Company to you hereunder, including,
without limitation, the obligation of the Company in respect of
fees and indemnity pursuant to Section 8, shall be payable solely
from the Collateral in accordance with the priorities of payment
contained in the Liquidity Agreement, (ii) you shall not look to
any other property or assets of the Company in respect of such
obligations, (iii) such obligations shall not constitute a claim
against the Company in the event that the Company's assets are
insufficient to pay in full such obligations, and (iv) such
obligations, other than such fees and the obligations to repay
advances made under Section 5, are fully subordinated to the
Company's obligations under the Commercial Paper Notes.
SECTION 21. Merger or Consolidation. Any corporation or
other entity into which you may be merged or consolidated, or any
corporation or other entity resulting from any merger, conversion
or consolidation to which you shall be a party, or any Person or
entity succeeding to your corporate trust or agency business,
shall be successor hereunder (without relieving you of your
responsibilities hereunder if you survive such merger,
conversion, consolidation or succession) without the execution or
filing of any paper or any further act on the part of any party
hereto, anything to the contrary notwithstanding; provided,
however, that upon the request of the Company, the Collateral
Agent or the Facility Agent, such corporation, entity or
successor shall execute an assumption agreement providing for the
assumption by such corporation, entity or successor of your
rights and obligations in a form reasonably satisfactory to the
Company, the Collateral Agent and the Facility Agent.
SECTION 22. Liquidation Event. If you shall have been
notified that a Liquidation Event or the Termination Date shall
have occurred, you shall notify the Facility Agent and the
Collateral Agent in writing as soon as possible upon payment in
full of all outstanding Series B Commercial Paper Notes or the
receipt of funds in the amount required to pay all outstanding
Series B Commercial Paper Notes upon maturity.
SECTION 23. Entire Agreement. This Agreement constitutes
the entire understanding among the parties hereto with respect to
your role as depositary, issuing and paying agent.
<PAGE>
If the foregoing is acceptable to you, please indicate your
agreement therewith by signing this or a duplicate counterpart of
this Agreement in the space provided below, and returning this or
such duplicate signed counterpart to the Company, whereupon this
letter will become a binding agreement between us and you.
JEFFERSON SMURFIT FINANCE
CORPORATION
By:________________________
Authorized Signatory
ACCEPTED AND AGREED:
BANKERS TRUST COMPANY, as Depositary and Issuing
and Paying Agent,
By:_____________________________________
Authorized Officer
EXHIBIT A
to the Depositary and Issuing
and Paying Agent Agreement
JEFFERSON SMURFIT FINANCE CORPORATION
SERIES B COMMERCIAL PAPER NOTE
No.______
$_________ Issuing Date: _____, 199_
On _________________, for value received, JEFFERSON SMURFIT
FINANCE CORPORATION (the "Company") promises to pay to the order
of BEARER, _________ _____________________________ DOLLARS
($___________).
Payment of this Note shall be made at the office of Bankers
Trust Company (the "Depositary"), Corporate Trust and Agency
Group, 4 Albany Street, New York, New York 10006, the Depositary
pursuant to a certain Depositary and Issuing and Paying Agent
Agreement (the "Depositary Agreement"), by 3:00 p.m. New York
time on any Business Day, provided that this Note is presented
for payment not later than 3:00 p.m. New York time on such
Business Day. If this commercial paper note is presented for
payment after 3:00 p.m. New York time on a Business Day, payment
will be made on the next succeeding Business Day. "Business Day"
means a day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close in New York City.
The holder of this Note is entitled to the benefits of a
security interest provided by the Company in favor of Bankers
Trust Company, as Collateral Agent under a certain Liquidity
Agreement. By accepting the benefits of the security interest
granted therein, the holder of this Note hereby irrevocably
authorizes the Collateral Agent to take such action on behalf of
such holder under the provisions of the Liquidity Agreement and
the related documents to exercise such powers and perform such
duties as are expressly delegated to it by the terms thereof,
together with such other powers as are reasonably incidental
thereto.
The Liquidity Agreement, the Depositary Agreement and
related documents are on file with the Depositary at its
aforesaid office, and reference is made to such documents for the
terms upon which this Note has been issued, the collateral
security for this Note, the rights and duties of the Collateral
Agent and the terms of the Liquidity Agreement.
THIS SERIES B COMMERCIAL PAPER NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
This commercial paper note is not valid for any purpose
unless countersigned by Bankers Trust Company, as Depositary.
Countersigned for authentication only:
BANKERS TRUST COMPANY, JEFFERSON SMURFIT FINANCE
as Depositary, CORPORATION
By:_________________________ By:__________________________
Authorized Signature Authorized Signature
EXHIBIT B
to the Depositary and Issuing
and Paying Agent Agreement
BANKERS TRUST COMPANY
NOTELINE DIRECT
TERMS AND CONDITIONS
(a) The Company will use Noteline Direct in accordance
with the conditions, rules and regulations established or
specified by Bankers Trust Company from time to time and set
forth in manuals, material, documents, or instructions
furnished by Bankers Trust Company to the Company.
(b) Transmission of an instruction for the issuance of
Series B Commercial Paper Notes through Noteline Direct
shall be equivalent to the giving of a duly authorized
written and signed instruction in accordance with the
Depositary Agreement which Bankers Trust Company may act
upon without liability. Use of Noteline Direct by the
Company shall be subject to the terms and conditions herein.
(c) The Company will use Noteline Direct (i) to
initiate instructions for the issuance of Series B
Commercial Paper Notes, (ii) to receive reports concerning
issuances of Series B Commercial Paper Notes, (iii) to
receive electronic messages from Bankers Trust Company and
(iv) for other incidental services Bankers Trust Company may
make available from time to time through Noteline Direct.
(d) Bankers Trust Company will deliver or disclose
confidential security procedures materials for accessing
Noteline Direct to an Authorized Representative or to any
employee or agent designated as authorized by an Authorized
Representative of the Company. The Company shall be
responsible for any unauthorized use or disclosure of the
security materials delivered to it hereunder. All access
through Noteline Direct is subject to verification by
Bankers Trust Company pursuant to the security procedures.
Bankers Trust Company will allow access to Noteline Direct
reports and act upon instructions received through Noteline
Direct if verified pursuant to the security procedures.
(e) If Noteline Direct is unavailable for any reason
the Bankers Trust Company customer service representative
should be notified, and until Noteline Direct is made
available for use, the Company should follow the alternate
procedures for issuance of Commercial Paper Notes as
provided for herein and in Noteline Direct service
materials. The Company should not issue, and Bankers Trust
Company will not act upon, cancellation or override
instructions transmitted through Noteline Direct.
(f) The liability of the Company and Bankers Trust
Company for any act or omission in connection with Noteline
Direct shall be determined or limited in accordance with the
terms of the Depositary Agreement.
(g) The Company is granted a personal, non-
transferable and non-exclusive right to use Noteline Direct
to transmit through Noteline Direct instructions made
pursuant to Section 3 hereof. The Company may, by separate
agreement between the Company and one or more of its Series
B Dealers authorize the Series B Dealer to have access to
Noteline Direct for the purposes of transmitting
instructions to Bankers Trust Company or obtaining reports
with respect to the Series B Commercial Paper.
(h) The Company acknowledges that (a) some or all of
the services utilized in connection with Noteline Direct are
furnished by Digital Transactions Inc. ("DTI"), Dynamic
Microprocessor Associates Inc. ("DMS") and Bankers Trust
Company, (b) Noteline Direct is provided to the Issuer "AS
IS" without warranties or representations of any kind
whatsoever by DTI, DMA or Bankers Trust Company, and (c)
Noteline Direct propriety and confidential property
disclosed to the Company in confidence and only on the terms
and conditions and for the purposes set forth in this
Agreement.
(i) By this Agreement, the Company acquires no title,
ownership or sublicensing rights whatsoever in Noteline
Direct or in any trade secret, trademark, copyright or
patent of Bankers Trust Company, DTI, or DMA now or to
become applicable to Noteline Direct. The Company may not
transfer, sublicense, assign, rent, lease, convey, modify,
translate, convert to a programming language, decompile,
disassemble, recirculate, republish or redistribute Noteline
Direct for any purpose without the prior written consent of
Bankers Trust Company and, where necessary, DTI and DMA
(except for the access to Noteline Direct by the Series B
Dealers as provided in Paragraph (g) of this Exhibit B).
(j) In the event (a) any action is taken or threatened
which may result in a disclosure or transfer of Noteline
Direct or any part thereof, other than as authorized by this
Agreement, or (b) the use of any trademark, trade name,
service mark, service name, copyright or patent of Bankers
Trust Company, DTI or DMA by the Company amounts to unfair
competition, or otherwise constitutes a possible violation
of any kind, then Bankers Trust Company, DTI and DMA shall
each have the right to take any and all action deemed
necessary to protect their rights in Noteline Direct, and to
avoid the substantial and irreparable damage which would
result from such disclosure, transfer or use, including the
immediate termination of the Company's right to use Noteline
Direct.
(k) To permit the use of Noteline Direct to issue
instructions or obtain reports with respect to the Series B
Commercial Paper, Bankers Trust Company will supply the
Company with an identification number and initial passwords.
From time to time thereafter, the Company will keep all
information relating to its identification number and
passwords strictly confidential and will be responsible for
the maintenance of adequate security over its customer
identification number and passwords. For security purposes,
the Company should change its passwords frequently (at least
once a year).
(l) Instructions transmitted over Noteline Direct and
received by Bankers Trust Company pursuant to Section 5
hereof accompanied by the Company's identification number
and the passwords, shall be deemed conclusive evidence that
such instructions are correct and complete and that the
issuance or redemption of the Note(s) directed thereby has
been duly authorized by the Company.
EXHIBIT C
to the Depositary and Issuing
and Paying Agent Agreement
INCUMBENCY CERTIFICATE
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group
Ladies and Gentlemen:
This is to certify that, until such time as you shall have
received from Jefferson Smurfit Finance Corporation (the
"Company") a subsequent Incumbency Certificate or written notice
to the contrary (i) each of the persons listed on Appendix C-1
hereto is an "Authorized Signatory" and is authorized to execute
Series B Commercial Paper Notes and Series B Commercial Paper
Notes and (ii) each of the persons listed on Appendix C-2 hereto
is an "Authorized Representative" and is authorized to act and to
give instructions and notices on behalf of the Company under
Section 2 of the Depositary and Issuing and Paying Agent
Agreement (Series B Commercial Paper) dated as of February 23,
1995, entered into between Bankers Trust Company and the Company,
as it may from time to time be amended or modified and in effect,
and under Section 2 of the Depository and Issuing and Paying
Agency Agreement (Series B Commercial Paper) dated as of February
23, 1995, entered into between Bankers Trust Company and the
Company, as it may from time to time be amended or modified and
in effect.
Date:___________, 199_ JEFFERSON SMURFIT FINANCE CORPORATION
By:_________________________
Title:______________________
APPENDIX C-1
Authorized Signatories
NAME TITLE SIGNATURE
(please type or print)
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
Mailing Address:
Facsimile No.:
APPENDIX C-2
Authorized Representatives
NAME TITLE SIGNATURE
(please type or print)
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
Mailing Address:
Facsimile No.:
EXHIBIT D
to the Depositary and Issuing
and Paying Agent Agreement
DEPOSITARY AUTHORIZATION LETTER
Jefferson Smurfit Finance Corporation
8182 Maryland Avenue
St. Louis, Missouri 63105
Attention: ____________
Ladies and Gentlemen:
This is to certify that, until such time as you shall have
received from Bankers Trust Company (the "Depositary") a
subsequent Depositary Authorization Letter or written notice to
the contrary (i) each of the persons listed on Appendix X hereto
is an "Authenticating Representative" and is authorized to give
receipt for, complete, authenticate and deliver Series B
Commercial Paper Notes pursuant to the terms of the Depositary
and Issuing and Paying Agent Agreement (Series B Commercial
Paper), dated as of February 23, 1995, entered into between
Bankers Trust Company and Jefferson Smurfit Finance Corporation,
as it may from time to time be amended or modified and in effect
(the "Series B Depositary Agreement"), and Series B Commercial
Paper Notes pursuant to the terms of the Depositary and Issuing
and Paying Agent Agreement (Series B Commercial Paper), dated as
of February 23, 1995, entered into between Bankers Trust Company
and Jefferson Smurfit Finance Corporation, as it may from time to
time be amended or modified and in effect (the "Series B
Depositary Agreement") and (ii) each of the persons listed on
Appendix Y hereto is a "Designated Person" and is authorized to
act on behalf of the Depositary under the Series B Depositary
Agreement and the Series B Depositary Agreement and to give and
receive notices and instructions on behalf of the Depositary
thereunder.
Date: ______________, 199_ Bankers Trust Company,
as Depositary,
By:________________________
Title:_____________________
APPENDIX X
Authenticating Representatives
NAME TITLE SIGNATURE
(please type or print)
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
Mailing Address:
Facsimile No.:
APPENDIX Y
Designated Persons
NAME TITLE SIGNATURE
(please type or print)
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
_____________________ ____________________ _________________
Mailing Address:
Facsimile No.:
_____________________________
to the Depositary and Issuing
and Paying Agent Agreement
LETTER OF REPRESENTATIONS
TO BE COMPLETED BY ISSUER, ISSUING AGENT AND PAYING AGENT
_____________________________________________________
NAME OF ISSUER
____________________________________________________
NAME AND DTC PARTICIPANT NUMBER OF ISSUING AGENT
_____________________________________________________
NAME AND DTC PARTICIPANT NUMBER OF PAYING AGENT
___________________
DATE
The Depository Trust Company
55 Water Street
New York, New York 10041
Attention: General Counsel's Office
Re:_________________________________________________
_________________________________________________
_________________________________________________
DESCRIPTION OF PROGRAM INCLUDING REFERENCE TO THE PROVISION OF THE SECURITIES
ACT OF 1933, AS AMENDED, PURSUANT TO WHICH PROGRAM IS EXEMPT FROM REGISTRATION
Gentlemen:
The purpose of this letter is to set out certain matters relating
to the issuance by the __________________________" from time to
THE "ISSUER"
time of notes under its commercial paper program described above
(the "Notes"). _______________________ will act as the Issuer's
THE "ISSUING AGENT"
issuing agent. ____________________________ will act as the
THE "PAYING AGENT"
Issuer's paying agent. Descriptions of the Notes and the program
are contained in an information memorandum dated _______________,
a copy of which is attached.
<PAGE>
The Paying Agent has entered into a Commercial Paper Certificate
Agreement with DTC dated as of _____________________ pursuant to
which the Paying Agent will act as custodian of a Master Note
Certificate evidencing the Notes, when issued.
To induce The Depositary Trust Company ("DTC") to accept the
Notes as eligible for deposit at DTC and to act in accordance
with its Rules with respect to the Notes, the Issuer, the Issuing
Agent and the Paying Agent make the following representations to
DTC:
1. For Notes to be issued at face value with interest to
be added at maturity ("IAM Notes"), the Issuer or the
Issuing Agent has obtained from the CUSIP Service Bureau a
written list of approximately 900 nine-position CUSIP
numbers (the basic first six positions of which are the
same and uniquely identify the Issuer and the IAM Notes to
be issued under its commercial paper program described
above), and the Issuing Agent has delivered such list to
DTC. The CUSIP numbers on such list have been reserved for
assignment to issues of the IAM Notes. It is understood
that a number on such list can be re-assigned to an issue
of the IAM Notes but not sooner than 39 months after the
maturity of a prior issue of the IAM Notes to which the
number was assigned. At any time when only 100 of the
CUSIP numbers on such list remain, the Issuer or the
Issuing Agent shall obtain from the CUSIP Service Bureau an
additional written list, and the Issuing Agent shall
deliver such list to DTC.
For Notes to be issued at a discount from the face value to
be paid at maturity ("Discount Notes"), the Issuer or the
Issuing Agent has obtained from the CUSIP Service Bureau a
written list of two basic six-position CUSIP numbers (each
of which uniquely identifies the Issuer and two years of
maturity dates for the Discount Notes to be issued under
its commercial paper program described above), and the
Issuing Agent has delivered such list to DTC. The CUSIP
numbers on such list have been reserved for assignment to
issues of the Discount Notes based on the maturity year of
the Discount Notes and will be perpetually re-assignable in
accordance with DTC's Procedures, including the Final Plan
for a Commercial Paper Program (the "Procedures"), a copy
of which previously has been furnished to the Issuing Agent
and the Paying Agent.
2. The IAM Notes shall be evidenced by an IAM Master Note
Certificate in registered form registered in the name of
DTC's nominee, CEDE & CO., and such Note Certificate shall
represent 100% of the principal amount of the IAM Notes.
The Discount Notes shall be evidenced by a Discount Master
Note Certificate in registered form registered in the name
of DTC's nominee, CEDE & CO., and such Note Certificate
shall represent 100% of the principal amount of the
Discount Notes. The forms of Master Note Certificates to
be used for the Discount Notes and the IAM Notes are
attached hereto as exhibits.
3. When Notes are to be deposited with and distributed
through DTC, the Issuing Agent shall give notice to the
Paying Agent and delivery instructions to DTC in accordance
with the Procedures. The giving of such delivery
instructions to DTC shall constitute (a) a representation
that the Notes are delivered, in connection with their
issuance, upon payment or the promise to pay by the
receivers of such deliveries and (b) a confirmation that a
Master Note Certificate evidencing such Notes, in the form
described in Paragraph 2 above, has been issued and
authenticated.
4. At any time that the Paying Agent has Notes in its DTC
account, it may request withdrawal of such Notes from DTC
by giving a withdrawal instruction to DTC in accordance
with the Procedures. Upon DTC's acceptance of such
withdrawal instruction, the Paying Agent shall reduce the
principal amount of the Notes evidenced by the Master Note
Certificate accordingly.
5. The Paying Agent shall confirm with DTC daily the
aggregate principal amount of the Notes outstanding and the
corresponding maturity proceeds by CUSIP number, in
accordance with the Procedures.
6. Maturity payments on the Notes shall be made by the
Paying Agent to DTC in accordance with the Procedures. In
the event the Paying Agent does not make maturity payments
on the Notes to DTC in accordance with the Procedures, the
Issuer shall promptly make such payments to DTC.
7. In the event the Issuer determines that beneficial
owners of the Notes shall be able to obtain certificates
evidencing the Notes ("Note Certificates"), the Issuer or
the Paying Agent shall notify DTC of the availability of
Note Certificates, and shall issue, transfer and exchange
Note Certificates as required by DTC and others in
appropriate amounts.
8. DTC may determine to discontinue providing its services
as securities depository with respect to the Notes at any
time by giving reasonable notice to the Issuer or the
Paying Agent (at which time DTC shall confirm with the
Paying Agent the aggregate principal amount of the Notes
outstanding by CUSIP number). Under such circumstances, at
DTC's request the Issuer or the Paying Agent shall
cooperate with DTC in taking appropriate action to make
available one or more separate Note Certificates to any DTC
Participant having Notes credited to its DTC account.
9. The Issuer authorizes DTC to provide to the Issuing
Agent or the Paying Agent listings of DTC Participants'
holdings with respect to the Notes from time to time at the
request of the Issuing Agent or the Paying Agent. The
Issuer authorizes the Issuing Agent and the Paying Agent to
provide DTC with such signatures, exemplars of signatures
and authorizations to act as may be deemed necessary by DTC
to permit DTC to discharge its obligations to DTC
Participants and appropriate regulatory authorities.
10. Nothing herein shall be deemed to require the Issuing
Agent or Paying Agent to advance funds on behalf of the
Issuer.
Very truly yours,
______________________________
AS ISSUER
By:___________________________
AUTHORIZED OFFICER
______________________________
AS ISSUING AGENT
By:___________________________
AUTHORIZED OFFICER RECRUITER
______________________________
AS PAYING AGENT
By:___________________________
AUTHORIZED OFFICER RECRUITER
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:_______________________________
AUTHORIZED OFFICER
EXHIBIT F
to the Depositary and Issuing
and Paying Agent Agreement
COMMERCIAL PAPER MASTER NOTE
(SERIES B)
_________________, 199_
Date of Issuance
JEFFERSON SMURFIT FINANCE CORPORATION (the "Company"), a
corporation organized and existing under the laws of the State of
Delaware, for value received, hereby promises to pay to Cede &
Co. or registered assigns on the maturity date of each obligation
identified on the records of the Company (which records are
maintained by Bankers Trust Company (the "Depositary")) the
principal amount for each obligation. Payment shall be made by
wire transfer to the registered owner from the Depositary without
the necessity of presentation and surrender of this Master Note.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS
OF THIS MASTER NOTE SET FORTH ON THE REVERSE HEREOF.
This Master Note is a valid and binding obligation of the
Company.
JEFFERSON SMURFIT FINANCE
CORPORATION
By:___________________________
(Authorized Officer)
Name:
Title:
Countersigned for authentication
only:
BANKERS TRUST COMPANY,
as Depositary,
By:______________________________
(Authorized Officer)
Name:
Title:<PAGE>
At the request of the registered owner, the Company shall
promptly issue and deliver one or more separate note certificates
evidencing each obligation evidenced by this Master Note. As of
the date any such note certificate or certificates are issued,
the obligations which are evidenced thereby shall no longer be
evidenced by this Master Note.
_________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto
_________________________________________________________________
(Name, Address and Taxpayer Identification Number of Assignee)
the Master Note and all rights thereunder, hereby irrevocably
constituting and appointing ___________________________________
Attorney to transfer said Master Note on the books of the Issuer
with full power or substitution in the premises.
Dated: __________, 199_ _____________________________
(Signature)
Signature(s) Guaranteed:
NOTICE: The signature on this
assignment must correspond
with the name as written upon
the face of this Master Note,
in every particular, without
alteration or enlargement or
any change whatsoever.
UNLESS THIS MASTER NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER
STREET, NEW YORK, NEW YORK) TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY MASTER NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY
PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
THIS RECEIVABLES PURCHASE AND SALE AGREEMENT, dated as of
February 23, 1995 (this "Agreement") among (i) Jefferson Smurfit
Corporation (U.S.), as Seller ("Seller"), (ii) Jefferson Smurfit
Corporation (U.S.), as the initial Servicer ("JSC"), and (iii)
Jefferson Smurfit Finance Corporation, a Delaware corporation
("Finco").
WITNESSETH:
WHEREAS, all of the issued and outstanding capital stock of
Finco is owned by JSC;
WHEREAS, Finco was formed for the purpose of purchasing
accounts receivable and certain related assets from the Seller
and engaging in other activities incidental thereto;
WHEREAS, the Seller and Finco are party to the Existing
Receivables Purchase Documents, pursuant to which Finco has made
such purchases prior to the date of this Agreement;
WHEREAS, the Seller and Finco have agreed to enter into this
Agreement as a substitution for, and replacement of, the Master
Agreement; and
WHEREAS, JSC has agreed to enter into this Agreement for the
purposes of acting as Servicer;
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each party
hereto, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Definitions. For all purposes of
this Agreement, except as otherwise specifically provided herein,
capitalized terms used in this Agreement without definition shall
have the meanings ascribed to such terms in Annex 1 hereto. The
term "assigns" and "assignees", when used with reference to
Finco, shall have the meanings contemplated by Section 7.04.
SECTION 1.02. Accounting Terms. Under this Agreement, all
accounting terms not specifically defined herein shall be
interpreted, all accounting determinations made and all financial
statements prepared in accordance with GAAP.
SECTION 1.03. Other Terms. Unless the context indicates
otherwise: (a) otherwise undefined terms used in this Agreement
have the meanings provided for by the UCC to the extent the same
are used or defined therein; (b) the words "herein," "hereof,"
and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the exhibits and schedules
hereto, as the same may from time to time be amended or
supplemented and not to any particular section, subsection, or
clause contained in this Agreement; (c) all references to
Sections, Exhibits and Schedules shall mean, unless the context
clearly indicates otherwise, the Sections hereof and the Exhibits
and Schedules attached hereto, the terms of which Exhibits and
Schedules are hereby incorporated into this Agreement; (d) the
word "including" means "including without limitation," and other
forms of the verb "to include" have correlative meanings; (e) any
reference to a Person includes reference to that Person's
successors and assigns; and (f) whenever appropriate, in the
context, terms used herein in the singular also include the
plural, and vice versa.
SECTION 1.04. Computation of Time Periods. In this
Agreement, in the computation of a period of time from a speci-
fied date to a later specified date, the word "from" means "from
and including" and the words "to" and "until" each mean "to but
excluding."
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES AND CONTRIBUTIONS
SECTION 2.01. Agreement to Purchase or to Contribute. (a)
On the terms and conditions hereinafter set forth, on each
Business Day from and after the Initial Purchase Date until the
occurrence of the Termination Date, Finco agrees (except as
otherwise provided in Section 2.01(d) to purchase from the
Seller, and the Seller agrees to sell to Finco, all of the
Seller's right, title and interest in and to all of its Eligible
Receivables outstanding as of the Business Day before such date,
which have not been previously purchased by or contributed to
Finco, together with all of the Related Security relating to such
Eligible Receivables and all Collections with respect to and
other proceeds of such Eligible Receivables and Related Security
(including all Receivables Notes received in respect thereof).
Until the Termination Date, each Purchase described in the
preceding sentence shall occur, and title to the Purchased Assets
included in such Purchase shall vest in Finco, at the opening of
JSC's business on the date of such Purchase (or, in the case of
the initial Purchase hereunder, concurrently with the payment of
the Purchase Price therefor and the execution and delivery of the
Short-Term Note described herein).
(b) On the terms and conditions hereinafter set forth, on
each Business Day from and after the Initial Purchase Date
applicable to the Seller until the occurrence of the Termination
Date to the extent Finco does not have sufficient cash or
borrowing capacity under the Short-Term Note available to be
applied as the Purchase Price pursuant to Section 2.02(b) to
Purchase the Seller's Eligible Receivables outstanding as of the
Business Day before any such date, the Seller agrees to
contribute to Finco, all of the Seller's right, title and
interest in and to any of its Eligible Receivables outstanding as
of the Business Day before such date, which have not been
previously purchased by (after giving effect to any Purchase
pursuant to this Section 2.01(a)) or contributed to Finco,
together with all of the Related Security relating to such
Eligible Receivables and all Collections with respect to and
other proceeds of such Eligible Receivables and Related Security
(including all Receivable Notes received in respect thereof).
Subject to and upon the terms and conditions hereinafter set
forth, the Seller agrees to contribute, transfer, convey and
assign to the Purchaser on each Business Day from and after the
Initial Purchase Date until the occurrence of the Termination
Date, all of the Seller's rights, title and interest in, to and
under all of its Receivables (other than Excluded Receivables)
which are not Eligible Receivables (together with Receivables
contributed to Finco pursuant to the immediately preceding
paragraph, collectively, the "Contributed Receivables") existing
on each such Business Day which have not previously been
contributed to the Purchaser, together with all of the Related
Security relating to such Contributed Receivables and all
Collections with respect to and other proceeds of such
Contributed Receivables and Related Security (including all
Receivables Notes received in respect thereof).
It is understood that each transfer pursuant to this Section
2.01(b) shall occur automatically, without any further action, on
each Business Day from and after the Initial Purchase Date until
the occurrence of the Termination Date, and shall constitute a
present absolute transfer of all existing and future Contributed
Receivables as stated in this Section 2.01(b) and such absolute
transfer shall not be deemed terminated, and the Seller's
obligation to transfer Contributed Receivables shall not be
affected, by the occurrence of any subsequent events, except that
such obligation of the Seller to transfer such Contributed
Receivables will cease during a Liquidation Period.
(c) It is the intention of the parties hereto that each
Purchase of Eligible Receivables to be made hereunder shall
constitute a "sale of accounts," as such term is used in Article
9 of the UCC, and not a loan secured by such accounts, and the
Seller shall have no rights or obligations hereunder to
repurchase or otherwise reacquire any of the Receivables. The
parties to this Agreement further agree that the transfer of
Contributed Receivables by the Seller to Finco shall be deemed to
be capital contributions by the Seller to the Purchaser. Except
for Breached Receivables, Noncomplying Receivables Adjustments
and Dilution Adjustments, each sale of Eligible Receivables and
each contribution of Contributed Receivables by a Seller to Finco
is made without recourse to the Seller; provided, however, that
(i) the Seller shall be liable to Finco for all indemnities,
representations, warranties and covenants made by the Seller
pursuant to the terms of this Agreement, and (ii) such sale or
contribution does not constitute and is not intended to result in
an assumption by Finco or any assignee thereof of any obligation
of the Seller or any other Person arising in connection with the
Receivables, the Related Security and the related Invoices (or
contracts), or any other obligations of the Seller. In view of
the intention of the parties hereto that the Purchases of
Eligible Receivables to be made hereunder shall constitute a sale
of such Eligible Receivables rather than a loan to the Seller
secured by such Eligible Receivables, the Seller agrees to note
in its financial statements that its Eligible Receivables have
been sold or contributed to Finco. In view of the intention of
the parties hereto that the transfer of Contributed Receivables
to be made hereunder shall constitute a contribution of such
Contributed Receivables rather than a loan to the Seller secured
by such Contributed Receivables, the Seller agrees to note in its
financial statements that its Contributed Receivables have been
transferred to Finco.
The parties hereto intend that if, and to the extent that,
any Purchase of Receivables made hereunder is not deemed to be a
"sale of accounts", as such term is used in Article 9 of the UCC,
the Seller shall be deemed hereunder to have granted, and such
Seller does hereby grant, to Finco a security interest in and
Lien on all of the Seller's right, title and interest in and to
the Eligible Receivables and the Contributed Receivables, the
Related Security and the related Invoices (or contracts), and all
substitutions for and any proceeds thereof, for the purposes of
securing the rights of Finco under this Agreement, and that this
Agreement shall constitute a security agreement (as defined in
the UCC as in effect in the States of New York and Missouri).
(d) Notwithstanding any other provision of this Article II,
Finco shall not purchase from the Seller (or receive by way of
contribution), nor shall the Seller sell or contribute to Finco,
any Receivable on or after the earlier of (i) the Termination
Date, (ii) the date of any Insolvency Event occurring with
respect to JSC, the Seller or Finco, or (iii) the discovery by
Finco or the Seller of any Liquidation Event described in clause
(j) of the definition thereof with respect to the Receivables to
be sold or contributed by the Seller; provided, however that if:
(A) such Insolvency Event arises as a result of an
involuntary bankruptcy or other proceeding filed against
JSC, the Seller or Finco, and such proceeding is dismissed
or otherwise terminated, or
(B) such Liquidation Event is cured prior to the
Termination Date,
then, in any such case, Finco shall automatically resume its
Purchase of Eligible Receivables and acceptance of Contributed
Receivables from the Seller or the Seller hereunder, unless and
until the Termination Date has otherwise occurred in accordance
with the terms hereof.
(e) From and after the Initial Purchase Date, all
Receivables previously sold or contributed by the Seller to Finco
pursuant to the Existing Receivables Purchase Documents and
outstanding on the Initial Purchase Date shall be deemed, for all
purposes of this Agreement (including Breached Receivables,
Dilution Adjustments and Noncomplying Receivables Adjustments) to
have been sold or contributed, as the case may be, by the Seller
to Finco pursuant to this Agreement (but on the date that the
actual sale or contribution pursuant to the Existing Receivables
Purchase Documents took place), and the Seller shall be deemed to
have made the representations and warranties set forth in this
Agreement with respect to purchases or contributions, as the case
may be, of Receivables and Related Security by Finco from the
Seller upon each such date with respect to the Receivables and
related assets purchased on such date. From and after the
Initial Purchase Date, each Receivable previously sold by the
Seller to Finco pursuant to the Existing Receivables Purchase
Documents shall be deemed, for all purposes of this Agreement, to
be a "Purchased Receivable" and each Receivable previously
contributed by the Seller to Finco shall be deemed for all
purposes of this Agreement to be a "Contributed Receivable". To
the extent that any Related Security with respect to any
Receivable referred to in the previous sentence has not been
conveyed by the Seller to Finco pursuant to the Existing
Receivables Purchase Documents, title to all such Related
Security is hereby conveyed by the Seller to Finco with effect
from the date of sale or contribution of the related Receivable.
(f) Prior to making any Purchase or receiving any
Contribution hereunder, Finco may request from the Seller, and
the Seller shall promptly deliver, such approvals, opinions,
information, reports or documents as Finco or its assigns may
reasonably request.
SECTION 2.02. Initial Purchase Date Transactions; Seller's
Representations; Payment for Purchases; Adjustments to Purchase
Price. (a) On the Initial Purchase Date, Finco shall execute
and deliver to JSC a Short-Term Note substantially in the form of
Exhibit A, in substitution for the promissory note issued by
Finco to JSC pursuant to the Existing Receivables Purchase
Agreement (which existing note is hereby cancelled by
substitution), marking on the grid attached to such Short-Term
Note as its initial balance an amount equal to the sum of (A) the
principal balance of the existing note, plus (B) the portion (if
any) of the Purchase Price for Receivables arising on the
Business Day prior to the Initial Purchase Date that is being
paid with an advance represented by such Short-Term Note.
Finco hereby agrees that it shall, subject to the terms and
provisions of the Liquidity Agreement and upon the request of the
Seller from time to time, request the Banks to make a Borrowing
of Revolving Loans under the Liquidity Agreement. All proceeds
received by Finco from such Borrowings shall be remitted by Finco
to the Seller in payment of the Purchase Price for Receivables
and/or amounts outstanding under the Short-Term Note.
If, on or after the Initial Purchase Date, JSC elects to
advance to Finco, and Finco agrees to borrow from JSC, additional
loans, then JSC may make such additional loans under JSC's Short-
Term Note, the terms of which shall govern the repayment of such
loans. JSC may evidence the making of any such additional loan
or loans by recording the date and amount thereof on the grid
attached to JSC's Short-Term Note; provided that failure to make
any such recordation on such grid or any error in such grid shall
not adversely affect JSC's rights to recover the outstanding
amount of such loan. It is expressly acknowledged and agreed
that nothing in this Section 2.02(a) shall require JSC to
advance, or require Finco to borrow, any such additional loans.
(b) The Purchase Price for each Purchase of Receivables
hereunder shall be paid on the date of purchase as provided in
Section 2.01 in cash (whether obtained as Available Cash,
pursuant to an advance under the Short-Term Note, from the
proceeds of the Loans or otherwise), except (i) as otherwise
provided in Section 2.02(d), and (ii) that Finco may set off
against the amount of any such payment amounts then owing to
Finco as Dilution Adjustments and Noncomplying Receivables
Adjustments as provided in Section 2.02(f) below and/or other
uncontested amounts owing to Finco under this Agreement.
(c) It shall be a condition precedent to Finco's obligation
to make each Purchase hereunder from the Seller that (i) the
representations and warranties of the Seller contained in Section
3.01 are correct in all material respects as to it and as to the
Receivables purchased from it in such Purchase on and as of such
day as though made on and as of such date (except for
representations and warranties which relate to a specific date
only), and (ii) no event has occurred and is continuing, or would
result from such Purchase, which constitutes a Liquidation Event.
The Seller shall be deemed to have certified to Finco the
satisfaction of the foregoing conditions precedent with respect
to each Purchase from it unless the Seller shall have given Finco
actual notice that any such condition is not satisfied prior to
the consummation of that Purchase; provided, however, that the
Seller shall not be deemed to have certified the non-existence of
a Liquidation Event of which it does not have knowledge, which
Liquidation Event may have arisen solely on account of a
condition existing with respect to, or actions or omissions of,
Finco or the Servicer (if the Seller is not the Servicer).
(d) If, on any day, Finco has insufficient funds to pay in
full the Purchase Price owed on such day, or if the Seller
otherwise consents, Finco may pay all or part of the applicable
Purchase Price to be made on such day by borrowing under its
Short-Term Note, each in the form of Exhibit A and issued in
favor of the Seller, and the Seller shall have irrevocably agreed
to advance, and shall be deemed to have advanced, a revolving
loan in the amount so specified by Finco; provided, however, that
Finco may not make payments of Purchase Prices through the use of
such revolving loans if, as a result thereof, either (i) the
aggregate unpaid principal amount of the Short-Term Note would
exceed 10% of the aggregate Outstanding Balance of Receivables or
(ii) the aggregate unpaid principal amount of the Seller's Short-
Term Note would exceed the maximum stated amount thereof, and
subject (in either case) to the limitations on Indebtedness set
forth in Section 8.02 of the Liquidity Agreement. Each such
revolving loan shall be payable in accordance with the terms and
provisions of the Short-Term Note, this Agreement and Article IX
of the Liquidity Agreement. The Seller may evidence the making
of each revolving loan by recording the date and amount thereof
on the grid attached to its Short-Term Note; provided, that
failure to make any such recordation on such grid or any error in
such grid shall not adversely affect the Seller's rights to
recover the outstanding unpaid principal amount of the revolving
loans made under its Short-Term Note.
(e) [RESERVED].
(f) On each Business Day after the Initial Purchase Date,
the Seller shall (or shall cause the Servicer to) report the
amount of Dilution which occurred with respect to such Seller's
Receivables on the prior Business Day, and the Dilution
Adjustment owing on account of such Dilution and adjustments
shall be deducted from the applicable Purchase Price which would,
but for this Section 2.02(f), otherwise be payable to such Seller
on such date. If any such Dilution relates to goods which are
returned to a Seller or repossessed by a Seller, then,
concurrently with payment of such Dilution Adjustment (whether
through offset or otherwise), Finco shall assign and transfer to
the Seller, without any further action or consideration, all of
Finco's right, title and interest in and to such returned or
repossessed goods. In addition, if, on the Business Day
immediately preceding such date, Finco has (i) notified the
Seller that any Receivables previously sold to Finco under this
Agreement have been discovered to have been Noncomplying
Receivables at the time of sale and (ii) requested that the
Seller pay to Finco a Noncomplying Receivables Adjustment on
account of such Noncomplying Receivables, then any such
Noncomplying Receivables Adjustment payable by the Seller shall
also be credited against the applicable Purchase Price which
would, but for this Section 2.02(f), otherwise be payable to the
Seller on such date. If the sum of the applicable Dilution
Adjustment and any Noncomplying Receivables Adjustment payable by
the Seller on any date exceeds the applicable Purchase Price
otherwise owing to the Seller, Finco shall apply such excess to
reduce the principal amount outstanding under the applicable
Short-Term Note and, in the event the principal amount
outstanding under such Short-Term Note has been reduced to zero,
as a credit against the Purchase Price otherwise payable for
future purchases of Receivables from the Seller; provided,
however, that if any such credit is not fully utilized within
five Business Days, the Seller shall pay to Finco the remaining
amount of any such credit on the next following Business Day in
cash.
SECTION 2.03. Calculation of Purchase Price. (a) The
Purchase Price Percentage applicable to Purchases from the Seller
pursuant to Section 2.01(a) shall be set forth in Schedule 1 of
Annex I hereto for the period from the Initial Purchase Date
until the first Settlement Date. Thereafter, and from and after
each subsequent Settlement Date, the Purchase Price Percentage
applicable to Purchases from the Seller pursuant to Section
2.01(a) shall be as set forth in the most recent Settlement
Statement prepared by the Servicer pursuant to Section 5.03(b),
and the Purchase Price owed to the Seller for any Business Day
shall be calculated by the Servicer and notified to Finco and the
Seller. The Seller agrees to provide to the Servicer on a timely
basis all information necessary to calculate the applicable
Purchase Price Percentage and the applicable Purchase Price.
(b) Until Finco (or its assigns) shall notify the Seller or
the Servicer of any exceptions to the calculations contained in
any Daily Report, Settlement Statement or any calculation of the
Purchase Price for any Receivables (copies of which notices shall
be concurrently sent to the Agents), each such Daily Report,
Settlement Statement and calculation shall be deemed to be
correct as originally delivered. If Finco (or its assigns) shall
have notified the Seller or the Servicer and the Agents of any
exceptions to the Daily Report, Settlement Statement or such a
calculation, the Seller, the Servicer, Finco and the Agents shall
promptly endeavor to resolve the matters set forth in such
notice. Until such resolution is agreed upon, however, the Daily
Report or Settlement Statement originally delivered, or
calculation originally performed, by the Servicer shall, absent
manifest error, continue to be presumed correct until a
resolution is reached to the contrary.
(c) Nothing contained in Section 2.03(b), however, shall be
deemed to limit the rights of Finco under Article VI.
SECTION 2.04. Payments and Computations, Etc. All amounts
to be paid by Finco to the Seller or by the Seller to Finco
hereunder shall be paid in accordance with the terms hereof no
later than 3:00 p.m. (New York City time) on the day when due in
Dollars in immediately available funds to (a) the Collection
Account, in the case of amounts to be paid to Finco, and (b) such
account as the Seller may from time to time specify in writing,
in the case of amounts to be paid to the Seller. Payments
received by the Seller or Finco after such time shall be deemed
to have been received on the next Business Day. In the event
that any payment becomes due on a day which is not a Business
Day, then such payment shall be made on the next succeeding
Business Day. Each party hereto shall, to the extent permitted
by law, pay to the other party interest on all amounts not paid
when due hereunder, from and after the Business Day following the
Business Day when such amounts were due hereunder at 2% per annum
above the Discount Rate in effect on the date such payment was
due (subject, in the case of payments owing by Finco, to the
provisions of Section 9.07 and 9.08 of the Liquidity Agreement);
provided, however, that such interest rate shall not at any time
exceed the maximum rate permitted by applicable law. All
computations of interest payable hereunder shall be made on the
basis of a year of 365 or, as applicable, 366 days for the actual
number of days (including the first but excluding the last day)
elapsed.
SECTION 2.05. Transfer of Records to Finco. (a) Each
Purchase or Contribution of Receivables hereunder shall include
the transfer to Finco of all of the Seller's right and title to
and interest in the Records relating to such Receivables, and the
Seller hereby agrees that such transfer shall be effected
automatically with each such Purchase or Contribution, without
any further documentation. In connection with such transfer, the
Seller hereby grants to Finco an irrevocable, non-exclusive
license to use, without royalty or payment of any kind to the
Seller, all software used by the Seller to account for the
Receivables, to the extent necessary to administer and/or
recreate the Receivables, subject, however, in the case of any
software that is owned by others and used by the Seller under
license agreements with respect thereto, to any reasonable
restrictions set forth therein relating to the use of such
software by Finco. The license granted hereby shall be
irrevocable and shall terminate on the Collection Date.
(b) The Seller shall take such action requested by Finco,
from time to time hereafter, that may be necessary or appropriate
in the opinion of Finco on the part of the Seller, to ensure that
Finco has an enforceable ownership interest in the Records
relating to the Receivables purchased or contributed from the
Seller hereunder.
(c) The Seller shall use its best efforts to take such
action requested by Finco, from time to time hereafter, that may
be necessary or appropriate in the opinion of Finco on the part
of the Seller to ensure that Finco has an enforceable right
(whether by license or sublicense or otherwise) to use all of the
computer software used by the Seller to account for the
Receivables and/or to recreate such Records, subject, however, in
the case of any software that is owned by a Person other than the
Seller and used by the Seller under license agreements with
respect thereto, to any reasonable restrictions set forth in any
consent obtained by the Seller from the licensor of such software
relating to the use of such software by Finco.
SECTION 2.06. Indirect Seller. At any time prior to the
Termination Date, JSC may designate any Affiliate of JSC that is
a resident of, and incorporated in, the United States as an
"Indirect Seller" hereunder from which JSC will from time to time
purchase Receivables pursuant to a receivables purchase and sale
agreement (an "Affiliate Receivables Purchase Agreement"). Any
such Affiliate shall, subject to the conditions precedent set
forth below, become an "Indirect Seller" for all purposes of this
Agreement. The designation of any Affiliate as an "Indirect
Seller" hereunder shall be subject to the satisfaction of the
conditions precedent that (i) such Indirect Seller and JSC shall
have executed an Affiliate Receivables Purchase Agreement;
(ii) Finco, the Facility Agent, the Term Bank and each Rating
Agency shall have received, in form and substance acceptable to
each of them, an executed copy of such Affiliate Receivables
Purchase Agreement, and such evidence of corporate existence and
good standing, secretary's certificates, UCC lien search reports,
UCC financing statements, legal opinions and similar
documentation required of the Indirect Seller (with sufficient
copies of all such documentation provided to the Facility Agent
for delivery to the other Banks and the Term Bank) and such other
documentation as may be reasonably required by Finco or the
Facility Agent; and (iii) the Rating Agency Condition shall have
been satisfied with respect to such designation.
ARTICLE III REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of the Seller.
The Seller represents and warrants that as of the Initial
Purchase Date and (except for representations and warranties
which relate to a specific date only) as of the date of each
Purchase or Contribution:
(a) The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of its state of
incorporation and has all governmental licenses, authorizations,
consents and approvals required to carry on its business, and is
in good standing in each jurisdiction in which its business is
now conducted, except where the absence of such licenses,
authorizations, consents, approvals or good standing could not
reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by the Seller
of this Agreement, the other Facility Documents to which it is a
party and all other agreements, instruments and documents
executed and delivered by the Seller hereunder and thereunder,
and the transactions contemplated hereby and thereby, are within
the Seller's corporate powers, have been duly authorized by all
necessary corporate action, and do not and will not (i) result in
or require the creation of any Lien upon or with respect to any
Purchased Asset or any Contributed Asset, except as created in
favor of Finco hereunder, nor result in or require the creation
of any material Lien with respect to its other properties; (ii)
violate, conflict with or result in a breach or default under the
Seller's certificate of incorporation or by-laws; (iii) violate,
conflict with or result in a breach or default under any law,
rule or regulation applicable to the Seller or its property; (iv)
violate, conflict with or result in a breach or default under any
contractual restriction contained in any indenture, loan or
credit agreement, mortgage, security agreement, note, bond, lease
or other agreement or instrument binding on the Seller, or to
which its property is subject, which violation, conflict, breach
or default could reasonably be expected to have a Material
Adverse Effect; or (v) violate, conflict with or result in a
breach of or default under any order, writ, judgment, award,
injunction or decree binding on the Seller or to which its
property is subject. No transaction contemplated hereby requires
compliance by the Seller with any bulk sales act or similar law.
This Agreement and each Facility Document to which it is a party
has been duly executed and delivered on behalf of the Seller.
(c) No authorization, consent, filing or approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body, governmental agency or official or
other Person is required for the due execution, delivery and
performance by the Seller of this Agreement, any other Facility
Document to which it is a party or any other agreement, document
or instrument delivered hereunder or thereunder, except (i) for
the filing of UCC Financing Statements to evidence Finco's
ownership interests in the Receivables and other Purchased Assets
purchased from and the Contributed Assets contributed by the
Seller hereunder and all proceeds thereof, which filings have
been duly made and are, and on or prior to each Purchase will be,
in full force and effect, and (ii) for consents which have been
duly obtained.
(d) This Agreement and each of the other Facility Documents
to which the Seller is a party each constitutes the legal, valid
and binding obligation of the Seller enforceable against the
Seller in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity
or at law).
(e) Immediately prior to Finco's Purchase of each Purchased
Asset sold by the Seller hereunder, the Seller is or will be the
lawful owner of, and have good title to, such Purchased Asset,
free and clear of all Liens except Permitted Liens. Immediately
prior to Finco's receipt of each Contributed Asset transferred by
the Seller hereunder, the Seller is or will be the lawful owner
of, and have good title to, such Contributed Asset, free and
clear of all Liens except Permitted Liens. Upon the Purchase or
Contribution of each Receivable sold or contributed by the Seller
hereunder, Finco shall acquire all of the right and title to and
interest of the Seller in such Receivable and all other Purchased
Assets or Contributed Assets relating thereto, free and clear of
any Liens (except Permitted Liens) and shall have a perfected
ownership interest in such Receivables, subject only to Permitted
Liens. The Purchases of the Purchased Assets by Finco constitute
true and valid sales and transfers for consideration (and not
merely a pledge of such Purchased Assets for security purposes),
enforceable against creditors of the Seller, and no Purchased
Assets shall constitute property of the Seller. No Contributed
Assets shall constitute property of the Seller. No effective
financing statement or other instrument similar in effect
covering all or any part of such Purchased Assets or Contributed
Assets naming the Seller as assignor or debtor shall at such time
be on file in any filing or recording office, except as may be
filed in favor of Finco, the Collateral Agent or their assigns
pursuant to this Agreement or the other Facility Documents.
(f) The use of all funds received by the Seller under this
Agreement will not violate Regulations G, T, U and X, as in
effect from time to time.
(g) No information, exhibit, financial statement, document,
book, record or report (including the Information Memorandum)
furnished or to be furnished by the Seller (whether individually
or in its capacity as Servicer or sub-servicer, as the case may
be) to Finco, the Agents, the Term Bank and/or the Banks in
connection with this Agreement or any of the other Facility
Documents is or shall be inaccurate in any material respect, or
contains or shall contain any material misstatement of fact, or
omits or shall omit to state a material fact or any fact
necessary to make the statements contained therein, taken as a
whole, not materially misleading in light of the circumstances
under which they were made, in each case, as of the date it is or
shall be dated or (except as otherwise disclosed to Finco or the
foregoing parties, as the case may be, at such time) as of the
date so furnished.
(h) As of the Initial Purchase Date, the principal place of
business and chief executive office of the Seller is located at
the address of the Seller referred to in Section 7.02 hereof and
there were no other such locations during the four months
preceding the Initial Purchase Date. As of the Initial Purchase
Date, the locations of the offices where the Records and computer
software are kept are listed on Schedule 3.01(h) (or, as of any
date after the Initial Purchase Date, at such other locations,
notified to Finco and the Agents in accordance with Section
4.01(d), in jurisdictions where all action required by Section
5.05 has been taken and completed).
(i) Each Obligor has been instructed to remit payments on
the Receivables sold or contributed by it to Finco hereunder
either to (1) one of the Lock-Box Accounts to be utilized by
Finco or (2) via wire transfer, directly to the Collection
Account. From and after the Initial Purchase Date, the Seller
will have no right, title and/or interest to any of the Lock-Box
Accounts and will maintain no lock-box accounts in its own name
for the collection of the Receivables. The account numbers of
all Lock-Box Accounts, together with the names and addresses of
all the Lock-Box Banks maintaining such Lock-Box Accounts, are
specified in Schedule 3.01(i).
(j) During the six-year period prior to the Initial
Purchase Date, the Seller has had no trade names, fictitious
names, assumed names or any other names under which it has done
or is doing business except as set forth in Schedule 3.01(j).
(k) Except for the matters disclosed on Schedule 3.01(k),
there are no actions, injunctions, writs, restraining orders,
suits or proceedings pending, or to the knowledge of the Seller,
threatened, against it or affecting it or its property in any
court, or before any arbitrator of any kind, or before or by any
governmental body, which (i) could be reasonably expected to
adversely affect the validity, legality or enforceability of this
Agreement or any of the other Facility Documents, or (ii) could
reasonably be expected to have a Material Adverse Effect.
(l) All of the computer software used by the Seller to
account for the Receivables as of the Initial Purchase Date is
set forth in Schedule 3.01(l) hereto.
(m) The Seller is entering into the transactions
contemplated by this Agreement in reliance on Finco's identity as
a separate legal entity from the Seller and each of its
Affiliates other than Finco, and acknowledges that Finco and the
other parties to the other Facility Documents are similarly
entering into the transactions contemplated by the other Facility
Documents in reliance on Finco's identity as a separate legal
entity from the Seller and each such other Affiliate.
(n) The Seller is not an "investment company" registered or
required to be registered under the Investment Company Act of
1940, as amended.
(o) None of the inventory, the sale of which has given or
may hereafter give rise to a Receivable, is subject to any Lien
(other than Permitted Liens and Liens that, under the terms of
the related security agreement or a related intercreditor
agreement, do not extend to the Receivables, any Purchased Assets
or any Contributed Assets).
(p) As of the Initial Purchase Date, the Seller is not in
default, and no event has occurred or condition exists under any
indenture or any loan, credit or other agreement with respect to
Indebtedness, the effect of which is to cause, or to permit (or
would, with the giving of notice or the lapse of time or both,
permit) the holder or holders of such Indebtedness to cause, such
Indebtedness to become due prior to its stated maturity.
(q) As of the Initial Purchase Date, the Seller maintains,
and shall continue to maintain, such liability and casualty
insurance as may be required by applicable law, as is necessary
for the continued operation of its businesses and as is
customarily maintained by companies engaged in similar
businesses.
(r) JSC has filed or caused to be filed all foreign,
Federal, state and local tax returns which are required to be
filed by it, and has paid or caused to be paid all taxes shown to
be due and payable on such returns or in any assessments received
by it, other than taxes or assessments, the validity of which are
being contested in good faith by appropriate proceedings and with
respect to which JSC has set aside adequate reserves on its books
in accordance with GAAP and which proceedings could not
reasonably be expected to have a Material Adverse Effect.
(s) The transactions contemplated by this Agreement and by
each of the other Facility Documents are being consummated by the
Seller in furtherance of the Seller's ordinary business, with no
contemplation of insolvency and with no intent to hinder, delay
or defraud any of its present or future creditors. As of the
Initial Purchase Date, and as of each Purchase Date, the Seller
shall have received reasonably equivalent value for the
Receivables sold or otherwise conveyed to Finco under this
Agreement.
(t) As of the Initial Purchase Date, JSC owns, directly or
indirectly, 100% of the issued and outstanding stock of Finco;
and on each Purchase Date, JSC or an Affiliate thereof shall own
100% of the issued and outstanding stock of Finco.
(u) The Seller is in compliance in all respects with all
laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards with respect to it, its business and properties
and all of the Purchased Assets and all of the Contributed Assets
owned by it, including all Receivables and related Invoices (and
contracts) owned by it included therein, except where the failure
to so comply could not reasonably be expected to have a Material
Adverse Effect.
(v) Any proceeds received by the Seller from the sale of
Receivables shall be used solely for current expenditures of such
Persons which qualify as current transactions, or arise out of
current transactions, within the meaning of Section 3(a)(3) of
the Securities Act.
(w) All of Seller's (and its consolidated subsidiaries')
pension or profit sharing plans have been fully funded on an
accrued benefit basis as of December 31, 1994 in accordance with
Seller's applicable obligations.
(x) The Seller has treated the sale of Receivables pursuant
hereto as a sale for federal income tax, reporting and accounting
purposes.
SECTION 3.02. Representations and Warranties of Finco.
Finco represents and warrants that as of the Initial Purchase
Date and (except for representations and warranties which relate
to a specific date only) as of the date of each Purchase or
Contribution:
(a) Finco is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware. Finco has all governmental licenses, authorizations,
consents and approvals required to carry on its business, is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which its business is now
conducted except where the absence of such licenses,
authorizations, consents, approvals or good standing could not
reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by Finco of
this Agreement, the other Facility Documents to which it is a
party and all other agreements, instruments and documents
delivered by Finco hereunder and thereunder, and the transactions
contemplated hereby and thereby, are within Finco's corporate
powers, and have been duly authorized by all necessary corporate
action, and do not and will not (i) result in or require the
creation of any Lien upon or with respect to any of its
properties, except as created in favor of the Collateral Agent
for the benefit of the Agents, the Banks, the holders of the
Commercial Paper and the holder of the Term Note; (ii) violate,
conflict with or result in a breach or default under Finco's
certificate of incorporation or by-laws; (iii) violate, conflict
with or result in a breach or default under any law, rule or
regulation applicable to Finco or its property; (iv) violate,
conflict with or result in a breach or default under any
contractual restriction contained in any indenture, loan or
credit agreement, mortgage, security agreement, bond, note, lease
or other agreement or instrument binding on Finco or to which its
property is subject, which violation, conflict, breach or default
could reasonably be expected to have a Material Adverse Effect;
or (v) violate, conflict with or result in a breach or default
under any order, writ, judgment, award, injunction or decree
binding on Finco or to which its property is subject. This
Agreement has been duly executed and delivered on behalf of
Finco.
(c) No authorization or approval or other action by, and no
notice to or filing with, any government authority or regulatory
body or other Person is required for the due execution, delivery
and performance by Finco of this Agreement, any other Facility
Document executed between the Seller and Finco or any other
agreement, document or instrument delivered hereunder or
thereunder, except (i) for the filing of UCC Financing Statements
to evidence Finco's ownership interests in the Receivables
purchased or contributed hereunder and all proceeds thereof and
to evidence the Collateral Agent's security interest in the
Purchased Assets and the Contributed Assets under the Liquidity
Agreement and (ii) for consents which have been duly obtained.
(d) This Agreement and each of the other Facility Documents
to which Finco is a party constitutes the legal, valid and
binding obligation of Finco enforceable against Finco in
accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally
affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at
law).
(e) Any proceeds from the sale of Commercial Paper in
connection herewith shall be used solely for current expenditures
of JSC or its Subsidiaries which qualify as current transactions,
or arise out of current transactions, within the meaning of
Section 3(a)(3) of the Securities Act.
(f) From and after the Initial Purchase Date (after giving
effect to the transactions occurring on such date), no
liabilities shall continue to exist in connection with any of the
Existing Receivables Purchase Documents to which Finco is a party
which could reasonably be likely to have a Material Adverse
Effect on the financial condition or assets of Finco.
SECTION 3.03. Representations and Warranties of Servicer.
Servicer represents and warrants that as of the Initial Purchase
Date and (except for representations and warranties which relate
to a specific date only) continuing through the Collection Date:
(a) Servicer is duly organized, validly existing and in
good standing under the laws of its state of organization or
incorporation and has all governmental licenses, authorizations,
consents and approvals required to carry on its business, and is
in good standing in each jurisdiction in which its business is
now conducted, except where the absence of such licenses,
authorizations, consents, approvals or good standing could not
reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by Servicer of
this Agreement, the other Facility Documents to which it is a
party and all other agreements, instruments and documents
delivered by Servicer in such Person's capacity as Servicer
hereunder and thereunder, and the transactions contemplated
hereby and thereby, are within Servicer's corporate or
organizational powers, have been duly authorized by all necessary
action, and do not and will not (i) result in or require the
creation of any Lien upon or with respect to any of its
properties, except as created in favor of Finco hereunder;
(ii) violate, conflict with or result in a breach or default
under Servicer's certificate of incorporation, by-laws or other
organizational documents; (iii) violate, conflict with or result
in a breach or default under any law, rule or regulation
applicable to Servicer or its property; (iv) violate, conflict
with or result in a breach or default under any contractual
restriction contained in any indenture, loan, credit agreement,
mortgage, security agreement, note, bond, lease or other
agreement or instrument binding on Servicer, or to which its
property is subject, which violation, breach or default could
reasonably be expected to have a Material Adverse Effect; or
(v) violate, conflict with or result in a breach of any order,
writ, judgment, award, injunction or decree binding on Servicer
or to which its property is subject. This Agreement and each of
the other Facility Documents to which Servicer is party has been
duly executed and delivered on behalf of Servicer.
(c) No authorization, consent, filing or approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the
due execution, delivery and performance by Servicer of this
Agreement and any other Facility Document to which Servicer is
party, except (i) for the filing of UCC Financing Statements as
described in Section 3.01(c), and (ii) for consents which have
been duly obtained.
(d) This Agreement and each of the other Facility Documents
to which the Servicer is a party in such capacity constitutes the
legal, valid and binding obligation of Servicer enforceable
against Servicer in accordance with its terms, except to the
extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought
in equity or at law).
(e) The balance sheet of JSC which has been delivered to
Finco and the Facility Agent has been prepared in accordance with
GAAP and fairly presents the financial condition of JSC as of
September 30, 1994. As of the Initial Purchase Date, there has
been no change in the financial condition of JSC since September
30, 1994 which could reasonably be expected to have a Material
Adverse Effect.
Section 3.04. Credit to Finco for Breached Receivables.
If, in connection with any Purchase of a Receivable, such
Receivable was not an Eligible Receivable at the time of such
Purchase, such Receivable shall be reclassified as a "Breached
Receivable", will not be treated as an Eligible Receivable, and
will be reclassified as a Contributed Receivable. Finco shall be
entitled to a credit in an amount equal to the uncollected
principal balance of the Breached Receivable, and such credit
shall be applied to the Purchase Price for newly originated
Eligible Receivables thereafter purchased by Finco from the
Seller; provided, however, that (i) prior to the commencement of
the Liquidation Period, if such credit is not fully utilized
within ten Business Days, the Seller shall pay the remaining
amount of such credit to Finco in cash, and (ii) upon the
commencement of the Liquidation Period, the Seller shall pay the
amount of such credit to Finco in cash within five Business Days.
ARTICLE IV GENERAL COVENANTS
SECTION 4.01. Affirmative Covenants of the Seller. From
the date hereof (or, if stated otherwise in any covenant
contained in this Section 4.01, from the date stated therein)
until the Collection Date, the Seller will, unless Finco (or, to
the extent required under the Liquidity Agreement, its assigns)
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all respects with
all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards with respect to it, its business
and properties and all of the Purchased Assets sold and
Contributed Assets contributed by the Seller hereunder, including
all Receivables and related Invoices included therein, except
where the failure to so comply could not reasonably be expected
to have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, good standing, 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 in which its
business is conducted, except where the failure to preserve and
maintain such existence, good standing, rights, franchises,
privileges and qualification could not reasonably be expected to
have a Material Adverse Effect; provided, that nothing in this
Section 4.01(b) shall be deemed to prohibit the Seller from
merging with or consolidating with or into, or from disposing of
assets (other than Purchased Assets sold and Contributed Assets
contributed by the Seller hereunder) to and from, a Subsidiary of
the Seller (other than Finco); provided, further, that any
survivor of any such merger or consolidation (if not a Seller)
must satisfy each of the following conditions precedent
(provided, however that if a Seller merges or consolidates with
or into Smurfit Newsprint Corporation, then the survivor of such
merger must satisfy each of the following conditions precedent
except that such clause (i) need not be satisfied if the Seller
is the survivor of such merger or consolidation): (i) such
survivor shall have executed an Assumption Agreement
substantially in the form of Exhibit F (with the annexes thereto
appropriately completed); (ii) except as otherwise contemplated
in Section 2.02(c), the representations and warranties made by
the Seller as of the Effective Date shall be made by such
survivor as of the effective date of such merger or
consolidation, and shall be true and correct as to such Person in
all respects as of such date; (iii) Finco, the Facility Agent and
each Rating Agency shall have received, in form and substance
satisfactory to each of them, an executed copy of such Assumption
Agreement and such evidence of corporate existence and good
standing, secretary's certificates, UCC lien search reports, UCC
financing statements, legal opinions and similar documentation
required of the Seller on or prior to the Effective Date (with
sufficient copies of all such documentation provided to the
Facility Agent for delivery to the other Banks) and such other
documentation as may be reasonably required by Finco or the
Facility Agent; and (iv) the Rating Agency Condition shall have
been satisfied with respect to such merger or consolidation.
(c) Performance and Compliance with Receivables. At its
expense, timely and fully perform and comply with all provisions,
covenants and other promises required to be observed by it with
respect to the Receivables and related Invoices (and contracts)
included in the Purchased Assets sold and the Contributed Assets
contributed, by the Seller hereunder, except where the failure to
so perform and comply could not reasonably be expected to have a
Material Adverse Effect.
(d) Location of Records. Keep its principal place of
business and chief executive office at the address of the Seller
referred to in Section 7.02 hereof, and the offices where it
keeps the Records, at the addresses referred to on Schedule
3.01(h) or, upon 30 days' prior written notice to Finco and the
Facility Agent, at such other locations within the United States
where all action required by Section 5.05 shall have been taken
and completed. The Seller shall also provide Finco, and the
Collateral Agent with a Perfection Opinion prior to changing any
such location.
(e) Credit and Collection Policy. From the Initial
Purchase Date, comply in all material respects with the Credit
and Collection Policy attached hereto as Exhibit B (as such
Credit and Collection Policy may be amended in accordance with
Section 4.03(c)) applicable to the Receivables and the related
Invoices (and contracts) included in the Purchased Assets sold
and the Contributed Assets contributed by the Seller hereunder).
(f) Collections. From the Initial Purchase Date, instruct
all Obligors to cause all Collections relating to Receivables
sold or contributed by it to Finco hereunder to be deposited
directly to a Lock-Box Account. If the Seller or any of its
agents or representatives shall receive any Collections on or
after the Initial Purchase Date, such recipient will comply with
the terms and provisions of Section 5.01(a) hereof.
(g) Audits; Information. From the Initial Purchase Date,
furnish Finco and its permitted assigns from time to time such
information with respect to the Receivables sold or contributed
by it to Finco hereunder as Finco shall reasonably request from
the Seller. At any time and from time to time during the
Seller's normal business hours, with reasonable notice, the
Seller shall permit Finco, its permitted assigns or their
respective agents or representatives, (i) to examine and make
copies of and abstracts from all books, records and documents
(including computer tapes and disks) in the possession or under
the control of the Seller relating to such Receivables or the
other Purchased Assets sold and the Contributed Assets
contributed, by it to Finco hereunder, (ii) to visit the offices
and properties of the Seller for the purpose of examining such
materials described in clause (i) above, (iii) to discuss matters
relating to such Receivables, such other Purchased Assets or such
other Contributed Assets, or the Seller's performance hereunder
with any of the officers or employees of the Seller having
knowledge of such matters and (iv) to verify the validity, amount
or any other matter relating to any such Receivable.
The Seller further agrees that Finco shall be entitled to
have the Seller's certified public accountants or other auditors
conduct a review of its books and records relating to the
Purchased Assets sold and the Contributed Assets contributed, by
it to Finco hereunder; provided, however, that such review shall
be conducted at the same time as such certified public
accountants' or other auditors' annual audit of the Seller; and
provided, however, that unless a Liquidation Event has occurred
and is continuing, the scope of any such review shall be limited
to the procedures described in Exhibit E, and the expenses to be
borne by the Seller in connection with such review shall not
exceed $30,000. The Seller agrees that the Facility Agent shall
be permitted to substitute for and/or accompany Finco on any such
inspection or visit and to participate in any such discussion.
The Seller further agrees to instruct its independent accountants
to cooperate with any reasonable request of Finco, the Facility
Agent or their respective agents or representatives, in
connection with the performance of such accountants' routine
verification procedures with respect to the Receivables or the
Related Security sold or contributed by the Seller to Finco
hereunder. Without limiting the foregoing, the Seller shall, in
connection with any review of Finco's books and records by
certified public accountants or other auditors pursuant to
Section 7.02 of the Liquidity Agreement, permit such accountants
or auditors to examine its books and records relating to the
Purchased Assets sold and the Contributed Assets contributed by
it to Finco hereunder and the other Facility Documents.
(h) Delivery of Records. Upon the request of Finco, its
agents, representatives or permitted assignees, deliver or cause
to be delivered, copies of all Records, including computer tapes
generated by or on behalf of the Seller or any of its
Consolidated Affiliates, relating to the Purchased Assets sold
and the Contributed Assets contributed, by it to Finco hereunder
(including all Receivables and Collections included therein).
(i) Segregation of Collections. From the Initial Purchase
Date, use all reasonable efforts, whether in its capacity as
Seller or as Servicer (if applicable), to minimize the deposit of
any funds other than Collections into any of the Lock-Box
Accounts and, to the extent that any such funds owed to the
Seller are nevertheless deposited into any of such Lock-Box
Accounts, promptly identify any such funds to Finco.
(j) Books and Records. From the Initial Purchase Date,
maintain at all times complete books, records and accounts
relating to the Purchased Assets sold and the Contributed Assets
contributed, by the Seller hereunder (including all Receivables
and Collections thereof) in which timely entries are made in
accordance with GAAP. From the Initial Purchase Date, such books
and records shall be marked to indicate the sales or
contributions of all Receivables and Related Security by the
Seller hereunder and shall include (i) all payments received and
all credits and extensions granted with respect to such
Receivables; (ii) the return, rejection, repossessions, or
stoppage in transit of any merchandise the sale of which has
given rise to a Receivable included in the Purchased Assets or
the Contributed Assets; and (iii) any other Dilution Factors.
(k) Identification of Eligible Receivables. From the
Initial Purchase Date, establish and maintain procedures as are
necessary for determining whether each Receivable sold or
contributed by it to Finco hereunder qualifies as an Eligible
Receivable and for identifying, on any date, the aggregate
Outstanding Balances of all Eligible Receivables sold by it to
Finco hereunder.
(l) Notification of Noncomplying Receivables. Promptly
notify Finco, the Servicer and the Agents of the Seller's
determination that any Receivables previously sold by it to Finco
hereunder were, as of the date of Purchase thereof, Noncomplying
Receivables.
(m) Separate Identity. Take all actions which are within
the Seller's control required to maintain Finco's status as a
separate legal entity, including (i) not holding Finco out to
third parties as other than an entity with assets and liabilities
distinct from the Seller and JSC's other Subsidiaries; (ii) not
holding itself out to be responsible for the debts of Finco or,
other than by reason of owning capital stock of Finco (if
applicable), for any decisions or actions relating to the
business and affairs of Finco; (iii) taking such other actions as
are necessary on its part to ensure that all corporate procedures
required by its certificates of incorporation and by-laws are
duly and validly taken; (iv) keeping correct and complete records
and books of account and corporate minutes; and (v) not acting in
any other manner that could foreseeably mislead others with
respect to Finco's separate identity.
(n) Taxes. File or cause to be filed, and cause each of
its Subsidiaries with whom it shares consolidated tax liability
to file, all Federal, state, local and foreign tax returns which
are required to be filed by it, except where the failure to file
such returns and pay the tax required to be shown thereon could
not reasonably be expected to have a Material Adverse Effect, and
pay or cause to be paid all taxes shown to be due and payable on
such returns or on any assessments received by it, other than any
taxes or assessments, the validity of which are being contested
in good faith by appropriate proceedings and with respect to
which the Seller or such Subsidiary shall have set aside adequate
reserves on its books in accordance with GAAP.
(o) Ownership of Seller. The Seller shall notify the
Agents and each Rating Agency of any change in ownership of its
capital stock.
(p) Financial Statement Footnote; Response to Third Party
Inquiries. Cause any financial statements of the Seller which
are consolidated with those of Finco to contain a footnote to the
effect that Finco's business consists of the purchase of
Receivables from the Seller and that Finco is a separate
corporate entity with its own separate creditors and in response
to relevant inquiries from third parties shall indicate that all
of the Seller's Eligible Receivables are being, or have been,
sold or contributed to Finco.
SECTION 4.02. General Reporting Requirements of the Seller.
From the date hereof until the Collection Date, the Seller shall,
unless Finco (and, to the extent required under the Liquidity
Agreement, its assigns) shall otherwise consent in writing,
furnish to Finco (and to Finco's assigns or designees):
(a) As soon as practicable and in no event later than two
Business Days after a Responsible Officer of the Seller has
actual knowledge of the occurrence of a Liquidation Event or an
Unmatured Liquidation Event, a statement from such officer
setting forth such Liquidation Event or Unmatured Liquidation
Event and the action which the Seller proposes to take with
respect thereto (copies of which shall be concurrently furnished
to the Facility Agent and each Rating Agency); and
(b) Promptly, from time to time, such other information,
documents, records or reports respecting the Purchased Assets or
the Contributed Assets, including the Receivables, or the
conditions or operations, financial or otherwise, of the Seller
as Finco, the Facility Agent, the Collateral Agent or any of
their respective agents, representatives or permitted assignees,
may from time to time reasonably request, in order to protect the
interests of Finco and its assigns under or as contemplated by
this Agreement and the other Facility Documents and to enable
Finco and the Agents to perform their respective reporting
requirements under the other Facility Documents.
SECTION 4.03. Negative Covenants of the Seller. From the
date hereof (or, if stated otherwise in any subsection of this
Section 4.03, from the date stated therein) until the Collection
Date, the Seller will not, without the written consent of Finco
(and, to the extent required under the Liquidity Agreement, the
written consent of its assigns):
(a) Sales, Liens, Etc. Against Receivables. From the
Initial Purchase Date, except as otherwise provided herein, (i)
sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Liens (except as
created in favor of Finco hereby or as created by Finco pursuant
to any Facility Document and except for Permitted Liens) upon or
with respect to any of the Receivables sold, or other Purchased
Assets sold or to be sold, by the Seller hereunder, or with
respect to any of the Receivables contributed, or other
Contributed Assets contributed or to be contributed, by the
Seller hereunder, or with respect to any Lock-Box Account; or
(ii) assign any right to receive income in respect of such
Receivables, Purchased Assets, Contributed Assets or Lock-Box
Account. In the event that the Seller fails, after the Initial
Purchase Date, to keep any Purchased Assets sold or Contributed
Assets contributed by it to Finco hereunder free and clear of any
Lien in favor of any Person claiming by or through the Seller
(except as created in favor of Finco hereunder and except for
Permitted Liens), Finco may (without limiting its other rights
with respect to the Seller's breach of its obligations hereunder)
make reasonable expenditures necessary to release such Lien.
Finco shall be entitled to indemnification by the Seller for any
such expenditures pursuant to the indemnification provisions of
Section 6.01, and Finco may in addition (and not in limitation of
Section 6.01) deduct such expenditures as an offset to the
Purchase Price owed to the Seller hereunder or as a reduction to
the Seller's Short-Term Note; provided, however, that in the
event of any dispute between the Seller and the alleged holder of
such Lien as to the amount or validity of such Lien, such
expenditure shall be made only after consultation with the Seller
as to the status of such Lien and the action the Seller or any of
its Consolidated Affiliates is taking or plans to take with
respect thereto.
(b) Extension or Amendment of Receivables. From the
Initial Purchase Date, except, as applicable, for any adjustments
made in its capacity as Servicer or subservicer pursuant to
Section 5.03(a), extend, amend or otherwise modify the terms of
any of its Receivables included in the Purchased Assets or the
Contributed Assets without the prior consent of Finco.
(c) Change in Credit and Collection Policy. Make any
change in the Credit and Collection Policy which could reasonably
be expected to impair the collectibility of the Receivables sold
or contributed by it to Finco hereunder or to result in a
material delay in the collection thereof or would otherwise
adversely affect the interests of Finco and/or the Banks'
interests under the Liquidity Agreement in any material respect
(and provided that notice of any change in the Credit and
Collection Policy shall be given to the Facility Agent and each
Rating Agency concurrently with the effectiveness of that
change).
(d) Change in Payment Instructions to Obligors. From the
Initial Purchase Date: (i) make any change in its instructions
to Obligors regarding Collections on Receivables sold or
contributed by it to Finco hereunder, directing payments other
than to a Lock-Box Account or, via wire transfer, directly to the
Collection Account, or (ii) voluntarily add or terminate any bank
as a Lock-Box Bank unless, with respect to the addition of a
Lock-Box Bank, Finco and the Facility Agent shall have first
received and approved (which approval shall not be unreasonably
withheld) (x) copies of Lock-Box Agreements executed by each new
Lock-Box Bank and the Seller and (y) copies of all agreements and
documents signed by the Seller or the respective Lock-Box Bank
with respect to any new Lock-Box Account.
(e) Change in Corporate Name. Make any change to its
corporate name or conduct any business under any trade names,
fictitious names or assumed names other than those identified on
Schedule 3.01(j) unless (i) Finco, the Facility Agent and each
Rating Agency shall have received twenty (20) Business Days prior
written notice of such name change or use and (ii) at least ten
(10) Business Days prior to the effective date of any such name
change or use, the Seller shall have executed and delivered to
Finco (and its assigns) such Financing Statements (Form UCC-1 and
UCC-3) which Finco (or its assigns) may request to reflect such
name change or use, together with such other documents and
instruments that Finco (or its assigns) may request in connection
therewith. The Seller shall also provide Finco and the
Collateral Agent with a Perfection Opinion prior to such name
change or use.
(f) Accounting of Purchases. Prepare any financial
statements which shall account for the transactions contemplated
hereby in any manner other than the sale of the Purchased Assets
by the Seller to Finco and a contribution of the Contributed
Assets by the Seller to Finco, or in any other respect account
for or treat the transactions contemplated hereby (including but
not limited to accounting and, where taxes are not consolidated,
for tax reporting purposes) in any manner other than as a sale of
the Purchased Assets sold by it to Finco and a Contribution of
the Contributed Assets by it to Finco.
SECTION 4.04. Covenants of JSC. From the date hereof until
the Collection Date, JSC shall, unless Finco (and, to the extent
required under the Liquidity Agreement, its assigns) shall
otherwise consent in writing:
(a) Financial Statements. Furnish to Finco (and, to the
extent directed by Finco below, to Finco's assigns or designees):
(i) as soon as available and in any event within one-
hundred five (105) days after the end of each fiscal year of
JSC, a copy of the annual audited consolidated statements of
income and cash flows for JSC and its consolidated
Subsidiaries for such fiscal year and the related
consolidated balance sheet as at the end of such fiscal
year, setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year and
prepared in accordance with GAAP consistently applied
(except for such changes in application which are in
accordance with GAAP and are approved by JSC's independent
public accountants and disclosed therein), reported on in
reasonable detail and accompanied by an unqualified opinion
from Ernst & Young or other Independent Public Accountants
selected by JSC and reasonably acceptable to Finco (copies
of which shall be concurrently furnished to the Term Bank,
the Banks, the Agents and each Rating Agency);
(ii) as soon as available and in any event within
sixty (60) days after the end of each of the first three
fiscal quarters of each fiscal year of JSC, a copy of the
unaudited consolidated statements of income and cash flows
for JSC and its consolidated Subsidiaries for such fiscal
quarter and for the period from the beginning of the
respective fiscal year to the end of such fiscal quarter and
the related unaudited consolidated balance sheet as at the
end of such fiscal quarter setting forth in each case in
comparative form the corresponding figures for the preceding
fiscal year and all of the foregoing to be prepared in
accordance with GAAP consistently applied (except for such
changes in application which are in accordance with GAAP and
are approved by JSC's financial officer preparing such
statements and disclosed therein) (copies of which shall be
concurrently furnished to the Term Bank, the Banks and the
Agents); and
(iii) contemporaneously with the furnishing of a copy
of the annual and quarterly financial statements provided
for in subsections 4.04(a)(i) and (ii), respectively, a cer-
tificate dated the date of delivery and signed by a
Responsible Officer of JSC, which certificate shall state
(A) that said financial statements fairly present the
financial position and results of operations of JSC and its
consolidated Subsidiaries in accordance with GAAP
consistently applied (except for such changes in application
which are in accordance with GAAP and are approved by JSC's
independent public accountants or, in the case of the
quarterly reports, by such Responsible Officer and disclosed
therein and further subject to the absence of footnotes and
normal year-end adjustments) and (B) that the officer
signing such certificate has reviewed the relevant terms of
this Agreement and has made, or caused to be made under such
officer's supervision, a review of the Seller's and Finco's
activities during the period covered by the statements then
being furnished, and that the review has not disclosed the
existence of a Liquidation Event or Unmatured Liquidation
Event, or if there is such an event, describing it and the
steps, if any, taken or being taken to cure it (with copies
of each such certificate to be concurrently furnished to the
Banks, the Agents and each Rating Agency).
JSC will cause any future financial statements consolidated with
those of Finco (excluding such financial statements that are
provided only to JSC, its Affiliates and its independent public
accountants) to contain a footnote to the effect that Finco is a
wholly-owned, bankruptcy remote, limited purpose subsidiary of
JSC, which finances its Purchases of Receivables through the
issuance of commercial paper.
(b) Reporting. Notify each Rating Agency, within 90 days
of the end of JSC's fiscal year, beginning with the fiscal year
ending on December 31, 1995, if the Integration Percentage for
such fiscal year is less then 90%.
ARTICLE V ADMINISTRATION AND COLLECTION
SECTION 5.01. Collection of Receivables. (a) As of the
Initial Purchase Date (or, in the case of Lock-box Accounts
created by JSC under the Existing Receivables Purchase Agreement,
as of a date on or before the Initial Purchase Date applicable to
JSC), the Seller shall have transferred to Finco or its assigns
the exclusive ownership and control of the Lock-Box Accounts used
by it and all related lock-boxes. The Seller hereby agrees to
take any further action necessary or that Finco (or its assigns)
may reasonably request to effect or maintain the effectiveness of
any such transfer. From and after the Initial Purchase Date
applicable to the Seller, the Seller shall not have any further
right, title and/or interest in or control over any of the Lock-
Box Accounts or related lock-boxes. Unless instructed otherwise
by the Facility Agent or the Collateral Agent (with the consent
of the Majority Banks and the Term Bank) pursuant to their
authority under the Liquidity Agreement during the Liquidation
Period (in which case, concurrent notice thereof shall be given
to each Rating Agency), each Lock-Box Bank shall be instructed to
remit, on a daily basis from and after the Initial Purchase Date,
via overnight or same day transfer, all available amounts
deposited in its Lock-Box Accounts to the Collection Account in
accordance with the terms of a Lock-Box Agreement, with such
changes as the Facility Agent (with the consent of the Collateral
Agent, the Majority Banks and the Term Bank) may approve. The
Servicer shall advise Finco daily of the amount of Collections
received or to be received into the Collection Account on such
day with respect to the Receivables or, if applicable, the amount
of Term Loan proceeds made available to Finco by the Term Bank by
wire transfer to the Collection Account, and Finco shall
determine the amounts of such Collections or Term Loan proceeds,
if any, which, pursuant to the terms of the Liquidity Agreement,
may be used by Finco to purchase new Receivables hereunder. If
the Seller or its agents or representatives shall at any time
receive any cash, checks or other instruments which constitute
Collections, such recipient shall promptly segregate such payment
and hold such payment in trust for and in a manner acceptable to
Finco and its assigns and shall, promptly upon identification of
any such payment (and in any event within two Business Days
following such identification), remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of
transfer, to a Lock-Box Account or to the Collection Account.
Finco may notify any or all of the Obligors of the ownership of
Purchased Assets and the Contributed Assets by Finco and may
direct any or all of the Obligors of Receivables included in the
Purchased Assets or the Contributed Assets to pay all amounts
payable under any such Receivables directly to the Collection
Account (i) at any time, with contemporaneous notice to JSC and
the Seller, after the occurrence and during the continuance of a
Liquidation Event or (ii) otherwise, at any time following five
Business Days' advance notice to JSC and the Seller. At Finco's
request and at the Seller's expense, the Seller shall give notice
of Finco's ownership of Purchased Assets purchased from the
Seller or Contributed Assets contributed by the Seller, to each
Obligor thereunder and direct that payments be made directly to
the Collection Account and assemble all Records of the Seller,
and make the same available to Finco at a place selected by Finco
or its designee. The Seller hereby authorizes Finco, and gives
Finco its irrevocable power of attorney, which authorization
shall be coupled with an interest, to take any and all steps in
the Seller's name and on behalf of the Seller, which steps are
necessary or desirable, in the reasonable determination of Finco,
to collect all amounts due under the Purchased Assets or the
Contributed Assets, including endorsing the Seller's name on
checks and other instruments representing Collections and
enforcing such Receivables and the related Invoices (it being
understood that Finco or the Servicer on behalf of Finco, and not
the Seller, shall be responsible for such expenses of
enforcement).
(b) Finco shall, following notification that collections of
any receivable or other intangible owed to the Seller or any
Affiliate thereof, which is not a Purchased Asset or a
Contributed Asset, have been deposited into the Lock-Box
Accounts, request that the Collateral Agent segregate all such
collections. Promptly, after such misapplied collections have
been reasonably identified to Finco and the Collateral Agent,
Finco shall (or shall cause the Collateral Agent to) turn over to
the Seller or such Affiliate, as applicable, all such collections
less all reasonable and appropriate out-of-pocket costs and
expenses, if any, incurred by Finco and the Collateral Agent in
collecting such receivables. Except as expressly stated above in
this Section 5.01(b), and notwithstanding anything to the
contrary in this Agreement, Finco shall have no obligation to
collect, enforce or take any other action with respect to any
receivable or other intangible not included in the Purchased
Assets or the Contributed Assets.
SECTION 5.02. Designation of Servicer. (a) The servicing,
administering and enforcement of collection of the Receivables
shall be conducted by the Person (the "Servicer") so designated
from time to time in accordance with this Section 5.02; provided,
that the Servicer shall be entitled at any time and from time to
time to designate one or more third parties to act as
subservicers on its behalf in connection with its duties as
Servicer hereunder; provided further, however, that no such
designation shall relieve the Servicer of its obligations and
liabilities as Servicer. Until Finco or, in the event of a
Servicer Termination Event, the Collateral Agent, gives notice to
JSC of the termination of JSC's appointment as Servicer, JSC is
hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms hereof,
together with such other duties and obligations of the Servicer
set forth in the Liquidity Agreement; provided that neither Finco
nor the Collateral Agent shall give such notice to JSC without
the consent of the Majority Banks and the Term Bank; and,
provided further, that if a Servicer Termination Event exists,
the Collateral Agent will give such notice if directed to do so
by the Majority Banks and the Term Bank. It is expressly
understood that JSC may designate the Seller as the subservicer
with respect to the Receivables of the Seller. It is expressly
understood that neither JSC nor any subservicer shall have any
rights to withdraw amounts in any Lock-Box Account. Finco may,
with the consent of the Majority Banks and the Term Bank (or
following the occurrence of a Servicer Termination Event and at
the direction of the Majority Banks and the Term Bank, shall) (x)
remove JSC as Servicer, and (y) designate any Person as
substitute Servicer; provided, however, that (i) Finco shall
have (with the consent of the Majority Banks and the Term Bank)
identified three potential substitute Servicers to the Banks,
(ii) the substitute Servicer actually selected shall be one of
the three Persons so identified, and (iii) the substitute
Servicer actually selected shall have been approved by the
Majority Banks and the Term Bank. Any Servicer may at any time
resign as Servicer upon written notice to Finco, each Bank, the
Term Bank, the Facility Agent and the Collateral Agent.
(b) Finco and the Collateral Agent shall give notice to
each Rating Agency at least two days prior to any resignation,
replacement or removal of the Servicer. Notwithstanding anything
else in this Agreement to the contrary, but subject to Section
5.02(c), no resignation, replacement or removal of the Servicer
shall be effective until a successor Servicer has been appointed,
has accepted such appointment and is ready to perform the duties
and obligations of the Servicer hereunder.
(c) In the event that the Servicer resigns or is removed
under the terms of this Agreement, and a successor Servicer is
not appointed promptly in accordance with Section 5.02(a), the
Seller hereby acknowledges that Finco has agreed with the Banks
to appoint the Collateral Agent as Servicer.
SECTION 5.03. Duties of the Servicer; Daily Reports and
Settlement Statements; Servicer Fee. (a) From and after the
Initial Purchase Date the Servicer shall take or cause to be
taken all such actions as may be necessary or advisable to
collect each Receivable included in the Purchased Assets or the
Contributed Assets from time to time, all in accordance with the
Credit and Collection Policy; provided, however, that the
Servicer shall not extend, modify or amend any Receivable without
Finco's prior consent (and, to the extent required under the
Liquidity Agreement, the prior consent of its assigns), except
that the Servicer may make adjustments to reflect Dilution,
Write-Offs, and the taking of Receivable Notes and extend or
modify any delinquent Receivable to the extent it believes
necessary to maximize collections from that Receivable, all in
accordance with the terms of the Credit and Collection Policy.
The Servicer shall, in its capacity as Servicer, exercise the
same care and apply the same policies with respect to the
collection of the Receivables that it would exercise and apply if
it owned such Receivables, shall act in the best interests of
Finco and shall exercise loyalty to Finco, all with reasonable
care and diligence and otherwise in accordance with all
applicable laws, rules and regulations and in accordance with the
Credit and Collection Policy. The Servicer shall maintain all
Records belonging to Finco separate and apart from its other
records and the records of the other Affiliates. In addition,
the Servicer shall, unless Finco otherwise revokes such authority
in writing (with the consent of the Majority Banks and the Term
Bank) (a copy of which revocation shall be delivered to the
Facility Agent), enforce Finco's rights and interests, if any, in
and under the Receivables, the Related Security and the Invoices
included in the Purchased Assets or the Contributed Assets.
Notwithstanding anything to the contrary contained herein, the
Servicer shall not, under any circumstances, be entitled to make
Finco, any Bank or any Agent a party to any litigation without
Finco's, such Bank's or such Agent's express prior written
consent. From and after the Initial Purchase Date the Servicer
shall adjust the Outstanding Balance of any Receivable to reflect
Dilution and Write-Offs in accordance with the Credit and
Collection Policy. The Servicer's authorization under this
Agreement and JSC's obligation to act as Servicer shall terminate
on the Collection Date.
(b) In addition to its other responsibilities hereunder,
from and after the Initial Purchase Date the Servicer (i) shall
prepare and deliver to Finco and the Agents the Daily Reports and
Settlement Statements as more fully described below, (ii) prior
to the Liquidation Period, shall give the daily calculations as
to the transfer of funds on deposit in the Collection Account,
the Series A Proceeds Account and the Series B Proceeds Account
contemplated by Sections 2.07 and 9.07 of the Liquidity
Agreement, and (iii) during the Liquidation Period, shall give
the daily calculations as to the transfer of funds on deposit in
the Collection Account, the Series A Proceeds Account and the
Series B Proceeds Account contemplated by Sections 2.07 and 9.08
of the Liquidity Agreement.
On each Business Day after the Initial Purchase Date, the
Servicer shall deliver to Finco and the Agents by no later than
2:00 p.m. (New York City time) a Daily Report with respect to the
preceding Business Day in the form of Exhibit C-1 (if such
Business Day occurs prior to the commencement of the Liquidation
Period) or Exhibit C-2 (if such Business Day occurs during the
Liquidation Period).
With respect to each Collection Period after the Initial
Purchase Date, the Servicer shall prepare and deliver to Finco
(with copies to the Agents, the Banks and each Rating Agency), by
the Reporting Date of the subsequent month, a Settlement
Statement, in the form of Exhibit D-1 (if the Liquidation Period
has not yet commenced) or Exhibit D-2 (if the Liquidation Period
has commenced), as applicable. The Seller agrees to provide to
the Servicer on a timely basis all information necessary for the
preparation and delivery of the foregoing reports.
(c) In consideration for JSC's services as the Servicer,
Finco shall pay to the Servicer a fee (the "Servicer Fee") as set
forth in this paragraph below. The Servicer hereby acknowledges
that, except for the Servicer Fee owed under this paragraph, the
Servicer's costs of performing its duties as Servicer hereunder
(including the accounting costs and expenses for reviews of the
Purchased Assets or the Contributed Assets required under the
Liquidity Agreement and including the costs or expenses incurred
by the Seller or any other Person as subservicers hereunder)
shall not be chargeable against Finco or its assigns. For so
long as JSC or any Consolidated Affiliate of JSC acts as Servicer
hereunder, the Servicer Fee shall be paid monthly on each
Settlement Date (subject to Section 9.07 of the Liquidity
Agreement) prior to the Termination Date for the immediately
preceding Collection Period in an amount equal to the product of
(i) the average daily Outstanding Balances of all Receivables
during the prior Collection Period times (ii) one percent (1.0%)
per annum calculated on the basis of actual days elapsed during
such Collection Period and a year of 365 or 366 days, as
applicable. After the Termination Date, the Servicer Fee will be
paid as provided in Section 9.08 of the Liquidity Agreement. If
neither JSC nor any Consolidated Affiliate of JSC acts as
Servicer hereunder, then the Servicer Fee shall equal such fee as
may be agreed to by the Facility Agent, on behalf of Finco, and
such successor Servicer; provided that the Servicer Fee for any
Collection Period may in no event exceed the lesser of (1) 200%
of the Servicer Fee which would be applicable to JSC or any of
its Consolidated Affiliates and (2) 110% of the sum of the
aggregate reasonable costs and expenses of such Servicer incurred
in the performance of its duties hereunder during such Collection
Period. If JSC is replaced as the Servicer prior to the end of a
Collection Period, it shall be entitled to a pro rata portion of
the Servicer Fee for such Collection Period.
(d) The Servicer shall implement and maintain administra-
tive and operating procedures reasonably necessary for the
performance of its obligations hereunder (including an ability to
recreate Records in the event of the destruction of any originals
thereof). The Servicer shall also maintain at all times complete
books, records and accounts relating to the Receivables,
Collections, other Purchased Assets and other Contributed Assets
in which timely entries are made in accordance with GAAP, as are
necessary for the performance of its obligations hereunder. Such
books, records and accounts shall, without limitation, be
adequate to permit the daily calculation of all information
required to be included in the Daily Report. Copies of such
entries shall promptly be delivered to Finco or its agents,
representatives or permitted assignees upon request. Such books
and records shall be marked to indicate the ownership by Finco of
all Receivables and Related Security sold or contributed
hereunder, and such books and records shall reflect, without
limitation: (i) all payments received and all credits and
extensions granted with respect to the Receivables; (ii) the
return, rejection, repossession, or stoppage in transit of any
goods or merchandise the sale of which has given rise to a
Receivable; (iii) any other Dilution Factors; (iv) the taking of
Receivable Notes; and (v) all Write-Offs. At any time and from
time to time, following one Business Day's notice from Finco or
its agents, representatives or permitted assignees, and during
regular business hours, the Servicer will permit Finco or such
agent, representative or permitted assignee (A) to have access to
the Servicer's offices, properties and computer software for
purposes of examining and making copies of and abstracts from all
such books and records and (B) to discuss matters relating to the
Purchased Assets or the Contributed Assets with any of the
officers, employees, agents or representatives of the Servicer
having knowledge of such matters.
(e) Annual Statement as to Servicer Compliance. The
Servicer will deliver to the Collateral Agent and each Rating
Agency on or before March 31 of each year, beginning March 31,
1996, an officer's certificate stating, as to each signer
thereof, that (i) a review of the activities of the Servicer
during the preceding calendar year and of performance under this
Agreement has been made under such officer's supervision and (ii)
to the best of such officer's knowledge, based on such review,
the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default
in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof
and remedies therefor being pursued.
SECTION 5.04. Responsibilities of the Seller. Anything
herein to the contrary notwithstanding:
(a) The Seller shall (i) perform all of its obligations
under any contracts related to the Receivables sold or
contributed by it to Finco hereunder to the same extent as if
such Receivables had not been sold or contributed hereunder and
the exercise by Finco of its rights hereunder shall not relieve
the Seller from such obligations and (ii) pay, when due, any
taxes relating to the origination and sale of such Receivables
and the other Purchased Assets sold or Contributed Assets
contributed to it by Finco hereunder.
(b) Finco and its assignees shall have no obligation or
liability with respect to any Receivable or related contract sold
or contributed by the Seller to Finco, nor shall Finco or any
such assignee be obligated to perform any of the obligations of
the Seller thereunder, and the Seller agrees to indemnify and
hold harmless Finco against and from any and all liabilities
arising from or related to any such obligation or liability.
SECTION 5.05. Further Action Evidencing Purchases and
Contributions. (a) The Seller agrees that, at any time and from
time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all
further action that may be necessary to perfect, protect or more
fully evidence Finco's ownership of the Purchased Assets sold and
the Contributed Assets contributed by it to Finco hereunder, or
to enable Finco (or its assigns) to exercise or enforce any of
its rights hereunder. Without limiting the generality of the
foregoing, the Seller will (i) cause its computer files relating
to the Receivables sold or contributed by it to Finco hereunder
to indicate that, unless otherwise specifically identified on
such list or print-out as a Receivable not so sold or
contributed, all Receivables included in such list or print-out
and Related Security have been sold or contributed to Finco in
accordance with this Agreement and (ii) promptly execute and file
such financing or continuation statements, or amendments thereto
or assignments thereof, and such other instruments and notices,
as may be necessary or appropriate to evidence or perfect Finco's
ownership interest of all or any of the Purchased Assets and the
Contributed Assets now existing or hereafter arising or as Finco
or any of its agents, representatives or permitted assignees may
reasonably request for such purpose.
(b) In the event that the Seller, within five (5) Business
Days after notice from Finco, fails to deliver to Finco one or
more financing or continuation statements, and amendments thereto
and assignments thereof, that Finco or any of its agents,
representatives or permitted assignees may reasonably determine
to be necessary to evidence or perfect Finco's ownership of all
or any of the Purchased Assets and the Contributed Assets now
existing or hereafter arising, then the Seller hereby authorizes
Finco to file any such statements without the signature of the
Seller where permitted by law. A carbon, photographic or other
reproduction of this Agreement or any financing statement
covering the Purchased Assets, the Contributed Assets or any part
thereof, shall be sufficient as a financing statement.
SECTION 5.06. Application of Collections. From and after
the Initial Purchase Date, any payment by an Obligor in respect
of any indebtedness or other obligations owed by such Obligor to
the Seller or Finco shall, except as otherwise specified by such
Obligor or otherwise required by law, be applied as a Collection
of any Receivable of such Obligor purchased or contributed
hereunder (in the order of the age by invoice date of such
Receivables, starting with the oldest such Receivable) to the
extent of any amounts then due and payable thereunder before
being applied to (i) any Receivable arising subsequent to the
Termination Date which is not purchased or contributed hereunder
or (ii) any other indebtedness of such Obligor to the Seller.
SECTION 5.07. Performance by Finco. If the Seller fails to
perform any of its agreements or obligations under this
Agreement, following expiration of any applicable cure period,
Finco may (but shall not be required to) perform, or cause
performance of, such agreement or obligation, and the reasonable
expenses of Finco incurred in connection therewith shall be
payable by the Seller upon Finco's written demand therefor (which
demand shall itemize such expenses in reasonable detail).
ARTICLE VI INDEMNIFICATION
SECTION 6.01. Indemnities by the Seller. Without limiting
any other rights which Finco (or its assigns) may have hereunder
or under applicable law, but without duplication and without
duplication of any Dilution Adjustment, any Noncomplying
Receivables Adjustment or any credit for any Breached Receivable
pursuant to Section 3.04, the Seller hereby agrees to indemnify
Finco and its permitted assignees and its and their respective
officers, directors, agents and employees (all of the foregoing
collectively referred to herein as "Indemnitees") from and
against any and all damages, losses, claims, liabilities, costs
and expenses, including reasonable attorneys' fees, and dis-
bursements (all of the foregoing collectively referred to herein
as the "Indemnified Amounts") awarded against or incurred by any
Indemnitee relating to or resulting from:
(i) any representation or warranty made by the Seller
(or any of its officers) (individually or as Servicer) under
or in connection with this Agreement or any other Facility
Document to which it is a party or in connection with the
preparation or delivery by the Seller (individually or as
Servicer) of any Daily Report, any Settlement Statement, or
any other information or report delivered pursuant hereto or
thereto, which shall have been false, incomplete or
incorrect in any material respect when made;
(ii) the failure by the Seller (individually or as
Servicer) or an Indirect Seller to comply with any
applicable law, rule or regulation with respect to any
Receivable, the related Invoice (or contract) or the Related
Security, or the nonconformity of any Receivable, the
related Invoice (or contract) or the Related Security with
any such applicable law, rule or regulation;
(iii) the failure of the Seller to vest and (other
than to the extent resulting from acts or omissions by Finco
or the Collateral Agent) maintain vested in Finco, or to
transfer to Finco, legal and equitable title to and
ownership of the Receivables, the other Purchased Assets and
the other Contributed Assets which are, or are purported to
be, sold or contributed by the Seller hereunder, free and
clear of any Lien (other than Liens created in favor of
Finco hereunder and Liens created under the other Facility
Documents), including all amounts expended by Finco pursuant
to Section 4.03(a);
(iv) the failure by the Seller to file, 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 Receivables, any
Purchased Assets and any other Contributed Assets which are,
or are purported to be, sold or contributed by the Seller
hereunder, whether at the time of any Purchase or
Contribution or at any subsequent time;
(v) any dispute, claim, offset or defense to the
payment of any Receivable (other than discharge in
bankruptcy or under similar insolvency law) which is, or is
purported to be, sold or contributed by the Seller hereunder
which dispute, claim, offset or defense (a) is based on the
Receivable or related Invoice (or contract) not being a
legal, valid and binding obligation of the related Obligor,
enforceable in accordance with its terms, (b) relates to
Dilution Factors, (c) relates to any Receivable which was
represented to be an Eligible Receivable being a
Noncomplying Receivable on the date of Purchase thereof, (d)
is based on any similar ground not related to the
creditworthiness of the applicable Obligor, or (e) involves
any other claim asserted against any Indemnitee resulting
from the sale of the goods, merchandise or services related
to such Receivable or the furnishing or failure to furnish
such goods, merchandise or services;
(vi) the failure by the Seller (individually or as
Servicer) to comply with any term, provision or covenant
contained in this Agreement, any other Facility Document or
any agreement executed in connection with this Agreement or
any other Facility Document (in each case, where the Seller
is a party thereto);
(vii) any products liability claim or personal injury
or property damage suit or other similar or related claim or
action of whatever sort arising out of or in connection with
the goods and/or merchandise or services that are the
subject of any Receivable or the related Invoice or
contract; or
(viii) the failure of the Seller or an Indirect Seller
to pay when due any tax or governmental fee or charge (other
than taxes on or measured by the net income), all interest
and penalties thereon or with respect thereto, and all out-
of-pocket costs and expenses, including the reasonable fees
and expenses of counsel in defending the same, which may
arise by reason of (a) the Purchase or origination of all or
any portion of, or any other interest in, the Purchased
Assets or (b) the Contribution or origination of all or any
portion of, or any other interest in, the Contributed
Assets.
SECTION 6.02. Indemnity by Servicer. The Servicer agrees
to indemnify the Indemnitees from and against all Indemnified
Amounts relating to or resulting from any of the events listed in
Section 6.01, to the extent that such Indemnified Amounts also
relate to or result from any breach of its duties to be performed
hereunder as Servicer or under the other Facility Documents to
which it is a party as Servicer.
SECTION 6.03. General Indemnity Provisions. It is
expressly agreed and understood by the parties (a) that the
indemnifications in this Article VI are not intended to
constitute a guarantee of the collectibility or payment of the
Receivables sold or contributed hereunder and the other Purchased
Assets and Contributed Assets and (b) that nothing in Section
6.01 or Section 6.02 shall require the Seller, the Servicer or
JSC to indemnify any Indemnitee (1) for damages, losses, claims
or liabilities or related costs or expenses resulting from such
Indemnitee's gross negligence or willful misconduct (it being
understood that the gross negligence or willful misconduct of any
one Indemnitee shall not be a defense to, or in any way adversely
affect, mitigate or diminish, any other Indemnitee's right or
claim to indemnification under this Article VI); (2) for lost
profits, consequential, special or punitive damages or (3) for
any amounts to the extent the same comprise recourse for
Receivables which are not collected, not paid or uncollectible on
account of the insolvency, bankruptcy, inability or failure to
pay or lack of creditworthiness of the applicable Obligor. Any
amounts subject to the indemnification provisions of Section 6.01
or Section 6.02 shall be paid by the Seller, the Servicer or JSC
to the Collection Account for distribution to the applicable
Indemnitees within five (5) Business Days following such
Indemnitees' written demand therefor, setting forth in reasonable
detail the basis for such demand; provided, however, that to the
extent such amounts have been demanded by a permitted assignee of
an Indemnitee which is not Finco or an Affiliate of Finco, such
amounts shall be further credited to the Assignee Indemnification
Sub-account to be held in trust for the benefit of such Person
pending distribution by the Collateral Agent pursuant to Sections
9.07(i) or 9.08(d) of the Liquidity Agreement. Notwithstanding
anything to the contrary in this Agreement, for purposes of
Section 6.01 and Section 6.02, the representations, warranties
and covenants contained in Sections 3.01(a), 3.01(b), 3.01(k),
3.01(r), 3.01(u), 3.03(a), 3.03(b), 4.01(a), 4.01(b), 4.01(c),
4.01(n) and 4.04(a) shall not be deemed to be limited to failures
to perform or comply or to events, circumstances, conditions or
changes that did give rise to a Material Adverse Effect.
Any Indemnitee wishing to be indemnified under Section 6.01
or Section 6.02 shall give prompt notice to the provider of such
indemnity upon becoming aware of any event or circumstance which
such Indemnitee expects to give rise to a claim for
indemnification thereunder and shall permit (to the extent not
disadvantageous or prejudicial to it) such provider to
participate in the defense, settlement or resolution thereof;
provided that the failure by any Indemnitee to so act shall not
deprive it of its rights to indemnification under such Sections
unless such failure shall result in material damage, liability or
costs (including costs of indemnification hereunder) to the
provider of such indemnity.
ARTICLE VII MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment to any
provision of this Agreement, nor any waiver of any provision
thereof or consent to any departure by JSC, the Seller or Finco
therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Seller and Finco and such other
parties, if any, whose consent may be required under the
Liquidity Agreement. Notwithstanding anything else to the
contrary contained herein, the parties hereto acknowledge and
agree that any amendment, waiver or modification of this
Agreement or any other Facility Document shall be governed by and
subject to the provisions and procedures set forth in Section
12.01 of the Liquidity Agreement, the terms of which are herein
incorporated by this reference. Finco shall give concurrent
notice of any such amendment to each Rating Agency whether or not
satisfaction of the Rating Agency Condition is required. Any
such waiver, consent or approval shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 7.02. Notices, Etc. Any notice shall be con-
clusively deemed to have been received by a party hereto and,
subject to Section 7.04, to be effective (i) if sent by regular
mail, commercial delivery service or by personal delivery, on the
day on which delivered to such party at its address set forth
under its name on the signature pages hereof (or at such other
address as such party shall specify to the other parties hereto
in writing); (ii) if sent by telex, graphic scanning or other
telecopy communications of the sending party, when delivered by
such equipment to the number set forth under its name on the
signature pages hereof and confirmed by electronic receipt or
similar means or (iii) if sent by registered or certified mail,
on the day on which delivered to such party (or delivery is
refused), addressed to such party at its address set forth under
its name on the signature pages hereof or at such other address
as shall be designated by such party in a written notice to the
other parties hereto. Notices required to be delivered to the
Facility Agent, the Collateral Agent, any Bank or either Rating
Agency shall be given in the manner described in, and shall be
effective in accordance with the terms of, Section 12.05 of the
Liquidity Agreement. Notwithstanding the foregoing, notices and
communications pursuant to Article II will not be effective until
received by the addressee.
SECTION 7.03. No Waiver; Remedies. No waiver of any breach
or default of or by JSC, the Seller or Finco under this Agreement
shall be deemed a waiver of any other previous breach or default
or any thereafter occurring. No failure on the part of Finco on
the one hand, or JSC or the Seller on the other hand, to
exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder, or any abandonment or
discontinuation of steps to enforce such right, preclude any
other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04. Binding Effect; Assignability. This
Agreement shall be binding upon and inure to the benefit of JSC,
the Seller and Finco and their respective successors and
permitted assigns. Neither JSC nor the Seller may assign any of
its rights and obligations hereunder or any interest herein or
any other Facility Documents (except for assignment by the Seller
of its Short-Term Note and its rights hereunder and under the
other Facility Documents to its lenders as collateral, and any
merger or other transaction permitted by Section 4.01(b)),
without the prior written consent of Finco and the Facility Agent
(which consent shall not be unreasonably withheld) and
satisfaction of the Rating Agency Condition. Finco may (with the
consent of the Facility Agent and each Bank and subject to the
satisfaction of the Rating Agency Condition) assign any of its
rights hereunder to any Person who (a) is not (and none of whose
Affiliates or Persons related thereto are) a competitor of or
engages in a business similar to that of the Seller, (b) agrees
in writing to observe the confidentiality provisions of Section
7.07 hereof, and (c) to the extent applicable, has the financial
ability to perform Finco's obligations hereunder. The Seller,
the Servicer and JSC acknowledges that Finco intends, pursuant to
the Liquidity Agreement, to grant to the Collateral Agent for the
benefit of the Secured Parties, a security interest in the
Purchased Assets and the Contributed Assets and to assign to the
Collateral Agent, as further security, all of Finco's rights
under this Agreement. The Seller consents to such grant and such
assignment, subject to the limitations on enforcement set forth
in the Liquidity Agreement and provided, further, that each of
the Agents, the Banks and the Term Bank acknowledge and agree in
writing to observe the confidentiality provisions thereof for the
benefit of the Seller. Each of JSC and the Seller acknowledges
and agrees that the provisions of Sections 5.04(b) and 7.06 and
Article VI hereof run to the benefit of each of the Facility
Agent, the Collateral Agent, the Banks, the Term Bank, the
Dealers, the Depository and their respective officers, directors,
agents and employees, as permitted assigns of Finco, all of which
parties are entitled to the benefits of such Sections and
Article. Each of the Servicer, JSC and the Seller agrees that
the Collateral Agent (and any other permitted assignee of Finco
or of the Collateral Agent) shall have the right, as the assignee
of Finco (or the assignee of such assignee) and subject to the
terms of the other Facility Documents, to enforce this Agreement
and to exercise directly all of Finco's rights and remedies under
this Agreement. Each of the Seller, the Servicer and JSC also
agrees that (i) such Person shall simultaneously send to the
Facility Agent a copy of all notices, financial statements and
certificates and supporting material, required to be given by
such Person to Finco hereunder; (ii) upon its receipt of a notice
of further assignment by Finco or an assignee of Finco, such
Person shall send the assignee identified in such notice a copy
of all notices required to be given by such Person to Finco
hereunder; and (iii) so long as the Liquidity Agreement remains
in effect, such Person shall make any payments required to be
made to Finco under this Agreement directly to the Collection
Account or to such other account as the Collateral Agent may
direct. Finco, the Servicer, JSC and the Seller hereby
acknowledge and agree that the Agents and the Banks have each
relied upon the terms and provisions set forth in this Agreement
in entering into the Liquidity Agreement. This Agreement shall
create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full
force and effect until the Collection Date; provided, however,
that the provisions of Section 5.04(b), Section 7.06 and Section
7.07 and Article VI shall be continuing and shall survive any
termination of this Agreement.
SECTION 7.05. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION
OF THE INTERESTS OF FINCO IN THE PURCHASED ASSETS OR THE
CONTRIBUTED ASSETS OR REMEDIES HEREUNDER OR THEREUNDER, IN
RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. EACH OF JSC, THE SERVICER, THE
SELLER AND FINCO HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION
OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE CITY OF NEW
YORK, NEW YORK (AND ANY COURTS HEARING APPEALS FROM SUCH STATE OR
FEDERAL COURT), OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, AND WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO SUCH PARTY AT THE
ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF. EACH OF JSC, THE
SERVICER, THE SELLER AND FINCO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER WITHIN THE STATE OF NEW YORK AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY ANY COURT IN SUCH STATE. NOTHING IN THIS SECTION
7.05 SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF FINCO
TO BRING ANY ACTION OR PROCEEDING AGAINST THE SELLER, JSC, THE
SERVICER OR THEIR RESPECTIVE PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION TO THE EXTENT NECESSARY FOR REALIZING ON ITS
INTEREST IN ANY PURCHASED ASSET OR ANY CONTRIBUTED ASSET. EACH
OF JSC, THE SERVICER, THE SELLER AND FINCO HEREBY EXPRESSLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHT, POWER OR REMEDY UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR UNDER OR IN CONNECTION HEREWITH, AND AGREES THAT ANY
SUCH ACTION SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
THE TERMS AND PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.
SECTION 7.06. Costs, Expenses and Taxes. The Seller agrees
to pay on demand all reasonable costs and expenses of Finco in
connection with the sales or contributions of Receivables
hereunder, the negotiation, preparation, execution and delivery
of this Agreement and the other Facility Documents and all
amendments with respect to this Agreement and the other Facility
Documents, including the reasonable fees and expenses of counsel
for Finco with respect thereto and with respect to advising Finco
as to its rights and remedies under this Agreement, and all costs
and expenses (including reasonable counsel fees and expenses) of
Finco in connection with the enforcement as against the Seller of
this Agreement and the other Facility Documents executed by them.
In addition, the Seller will pay any and all stamp and similar
taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing, recording or enforcement of
this Agreement or the other Facility Documents, and hereby
indemnifies and saves Finco harmless from and against any and all
liabilities with respect to or resulting from any delay in paying
or omission to pay such taxes and fees.
SECTION 7.07. Confidentiality. Finco hereby acknowledges
that the Records and other information which the Seller must
assign and/or deliver to Finco hereunder may contain information
in which the Seller has a proprietary interest and which may not,
at the time of assignment and/or delivery, be generally available
to and known by the public (including information contained in
the Information Memorandum). Finco hereby agrees to maintain as
confidential all such information obtained from the Seller and
not to disclose such information to any other Person, provided,
however, that nothing in this Section 7.07 shall (a) restrict the
Seller from disclosing such confidential information to any
Person nor (b) prevent Finco from disclosing such information
(i) to any Dealer, the Depositary and, to the extent required
pursuant to any applicable securities laws, any holder or offeree
of Commercial Paper, (ii) to any permitted assignee of Finco, the
Agents or any Bank (or their permitted participants and assignees
and prospective participants and assignees), provided that each
such party agrees in writing, for the benefit of the Seller,
(x) to use such information and keep such information
confidential in accordance with the same terms set forth herein
or, in the case of the Agents, any Bank or any of their actual or
potential participants or assigns, as set forth in Section 12.08
of the Liquidity Agreement as in effect on the date hereof, and
(y) that it will not disclose such information to any of its
Affiliates which is not a financial institution or a parent
company of a financial institution, (iii) to its employees,
agents, attorneys, auditors and accountants, (iv) subject to the
further requirements set forth in this Section 7.07, upon the
order of any court or administrative agency or upon the request
or demand of any regulatory agency, authority or official having
jurisdiction over Finco, (v) which has (other than through a
breach of this Section 7.07) been obtained from any Person other
than Finco, any Seller or any other party hereto, or (vi) as
otherwise expressly contemplated by this Agreement or
Section 12.08 of the Liquidity Agreement as in effect on the date
hereof. Finco (a) will provide the Seller with prompt written
notice of any subpoena or any request or requirement by any
governmental authority (other than any such request or
requirement in connection with an audit or other regulatory
review of a financial institution) for disclosure of any
confidential information so that the Seller may seek a protective
order or other appropriate remedy prior to such disclosure and
(b) shall consult with the Seller to a reasonable extent on the
advisability of taking legally available steps to resist or
narrow such request or requirement. In the event that such
protective order or other remedy is not obtained, Finco will
exercise all reasonable efforts (x) to limit the information
disclosed to such information which it is legally required to
disclose and (y) to obtain reliable assurance that confidential
treatment will be accorded any such information so disclosed.
SECTION 7.08. Execution in Counterparts; Severability.
This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 7.09. Termination Date. The agreement of the
Seller to sell Eligible Receivables and to transfer Contributed
Receivables hereunder, and the agreement of Finco to purchase
Eligible Receivables and accept the transfer of Contributed
Receivables hereunder, shall in any event automatically terminate
on the Termination Date. JSC shall have the right, by giving
notice to Finco and to the Facility Agent as described in clause
(ii) of the definition of Liquidation Period in Annex I hereto,
to cause the Termination Date to occur on the date so designated
in such notice. Upon the occurrence and during the continuance
of any Liquidation Event, Finco shall have the right, by giving
notice to JSC and to the Facility Agent as described in clause
(iii) of the definition of Liquidation Period in Annex I hereto,
to cause the Termination Date to occur on the date so designated
in such notice. Notwithstanding any such termination described
above, all other provisions of this Agreement shall remain in
full force and effect as provided in Section 7.04. Finco shall
give each Rating Agency prompt notice of the occurrence of the
Termination Date. On or after the Collection Date, Finco will,
at the request and expense of JSC, execute and deliver to JSC
such UCC termination statements and other documents and take such
other action as JSC may reasonably request to evidence such
termination.
SECTION 7.10. No Recourse. The obligations of each Seller
and Finco hereunder shall be solely the obligations of such
Seller and/or Finco, as applicable, and shall in all respects be
non-recourse to all of its respective officers, directors,
controlling persons or stockholders, and each of the Seller and
Finco acknowledges the same with respect to the other and, to the
fullest extent permitted by law, waives any such recourse and any
claim against any of such parties of the other arising hereunder.
SECTION 7.11. No Proceedings. JSC, the Seller and the
Servicer hereby agrees, on behalf of itself and of all holders of
the Short-Term Note, that it will neither (i) institute against
Finco any involuntary proceeding of the type referred to in the
definition of "Insolvency Event" so long as this Agreement
remains in full force and effect and for at least one year and
one day following the latest to occur of: (a) the payment in full
of all Liquidity Loans; (b) the payment in full of the Term Loan;
or (c) the payment in full of the latest maturing Commercial
Paper Note, nor (ii) in its capacity (if any) as a shareholder of
Finco, cause Finco to file any voluntary proceeding of the type
referred to in the definition of "Insolvency Event" except as
otherwise permitted under Finco's certificate of incorporation.
SECTION 7.12. Entire Agreement. From and after the Initial
Purchase Date, this Agreement, together with the other Facility
Documents, including the annexes, exhibits and schedules hereto
and thereto, contains a final and complete integration of all
prior expressions by the parties hereto with respect to the
subject matter hereof (including the Master Agreement) and shall
constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all previous
oral statements and other writings with respect thereto. As of
the Initial Purchase Date, the Master Agreement and every
intercompany note issued thereunder shall be, and hereby is,
terminated.
SECTION 7.13. Survival of Agreement. All covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the Initial
Purchase Date and/or the Initial Purchase Date, as applicable,
and each Purchase or Contribution thereafter and shall continue
in full force and effect until the Collection Date; provided,
however, that the provisions of Section 5.04(b), Section 6.01,
Section 7.06, Section 7.07 and Section 7.11 shall be continuing
and shall survive any termination of this Agreement.
[Remainder of Page Intentionally Left Blank]<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
THE SELLER:
JEFFERSON SMURFIT CORPORATION (U.S.)
(including in its capacity as Servicer)
By: ___________________________
Name:
Title:
___________________________
___________________________
Attention: _______________
Facsimile: _______________
THE PURCHASER:
JEFFERSON SMURFIT FINANCE CORPORATION
By: ___________________________
Name:
Title:
Notice Address:
_____________________
_____________________
_____________________
Attention: ___________________
Facsimile: ___________________
<PAGE>
Execution Copy
ANNEX I. DEFINED TERMS
"Accrued Carrying Costs" shall mean, as of any date, the sum
of (i) accrued and unpaid Reserved Series A Carrying Costs,
Reserved Series B Carrying Costs and Reserved Other Carrying
Costs as of such date plus (ii) without duplication, the amount
of such costs (other than the portion of the face amount of the
Series A Commercial Paper or the Series B Commercial Paper
attributable to discount (and not principal)) that will, or are
estimated by the Servicer to, have accrued by the next Settlement
Date as set forth in the then-effective Settlement Statement plus
(iii) without duplication, the unaccrued portion of the face
amount of the outstanding Series A Commercial Paper or the
outstanding Series B Commercial Paper attributable to discount
(and not principal) as of such date.
"Accrued Other Carrying Costs" shall mean, as of any date,
the sum of (i) accrued and unpaid Reserved Other Carrying Costs
as of such date plus (ii) without duplication, the amount of
Reserved Other Carrying Costs that will, or are estimated by the
Servicer to, have accrued by the next Settlement Date as set
forth in the then-effective Settlement Statement.
"Accrued Series A Carrying Costs" shall mean, as of any
date, the sum of (i) accrued and unpaid Reserved Series A
Carrying Costs as of such date plus (ii) without duplication, the
amount of Reserved Series A Carrying Costs (other than the
portion of the face amount of the Series A Commercial Paper
attributable to discount (and not principal)) that will, or are
estimated by the Servicer to, have accrued by the next Settlement
Date as set forth in the then-effective Settlement Statement plus
(iii) without duplication, the unaccrued portion of the face
amount of the Series A Commercial Paper attributable to discount
(and not principal) as of such date.
"Accrued Series B Carrying Costs" shall mean, as of any
date, the sum of (i) accrued and unpaid Reserved Series B
Carrying Costs as of such date plus (ii) without duplication, the
amount of Reserved Series B Carrying Costs (other than the
portion of the face amount of the Series B Commercial Paper
attributable to discount (and not principal)) that will, or are
estimated by the Servicer to, have accrued by the next Settlement
Date as set forth in the then-effective Settlement Statement plus
(iii) without duplication, the unaccrued portion of the face
amount of the Series B Commercial Paper attributable to discount
(and not principal) as of such date.
"Adjusted Base Amount" shall mean:
(a) on any day prior to the occurrence of the Measurement
Date, the sum (without duplication) of:
(i) the result obtained by multiplying (x) the Net
Eligible Receivables as of such date times (y) 100% minus
the Adjusted Required Reserve Ratio, plus
(ii) the then aggregate amount of Collections received
by the Seller, the Servicer or Finco which have been applied
to reduce the outstanding balance of Receivables and which
have not been remitted to the Collection Account, plus
(iii) the aggregate amount on deposit and credited to
the Series A Equalization Sub-account and the Series B
Equalization Sub-account which was required to be retained
in such sub-accounts, pursuant to Section 2.07 of the
Liquidity Agreement, minus
(iv) the excess of the Discount Rate Reserve over the
portion of the outstanding face amount of the Commercial
Paper attributable to discount, minus
(v) the dollar amount of any Liens that attach to all
of the Eligible Receivables unless such Liens are of the
type described in subclauses (a) through (e) of clause (iv)
of the definition of Base Amount; plus
(vi) the aggregate Outstanding Balance of each
Receivable which was represented by the Seller to be an
Eligible Receivable at the time of its purchase by Finco,
which is subsequently discovered not to have been an
Eligible Receivable at such time; plus
(vii) the sum of (I) aggregate Outstanding Balance of
each Receivable which was an Eligible Receivable at the time
of its purchase by Finco, which, as of a date between the
date of its purchase and the date of determination, ceases
to be an Eligible Receivable pursuant to a failure to
satisfy any clause, other than clause (6), of the definition
of Eligible Receivable, and (II) the aggregate amount of
Dilution Adjustments with respect to all outstanding
Receivables; plus
(viii) if any Lien (other than a Lien permitted under
the Facility Documents) is attached to the Receivables
generally (and not to any individual Receivable) on such
date of determination, the amount equal to the lesser of (I)
the amount of such Lien and (II) the Outstanding Balance of
the Eligible Receivables which are subject to such Lien on
such date of determination and which were Purchased by or
Contributed to Finco before the date on which such Lien
attached to such Receivables; and
(b) on the Measurement Date or any day thereafter, the sum
(without duplication) of:
(i) the amount that would result from the calculation
set forth in clause (a) of this definition, if such
calculation were done on the Measurement Date, minus
(ii) the aggregate Outstanding Balances of all
Receivables which have become Defaulted Receivables since
the Measurement Date (without duplication of the amount that
results from the calculation in clause (a)(vi), (a)(vii) or
(a)(viii) of this definition), minus
(iii) the aggregate amount of all Dilution with respect
to (a) the Purchased Assets and (b) Contributed Assets
constituting Eligible Receivables, in each case, since the
Measurement Date (without duplication of the amount that
results from the calculation in clause (a)(vi), (a)(vii) or
(a)(viii) of this definition), minus
(iv) the aggregate amount of funds applied since the
Measurement Date to the repayment of Obligations pursuant to
Section 9.07 or 9.08 of the Liquidity Agreement.
If the Adjusted Base Amount is being calculated for purposes
of determining whether any Commercial Paper may be issued, such
calculation shall give effect to (A) such Commercial Paper having
been issued, and (B) any other Commercial Paper or Liquidity
Loans intended to be repaid with the proceeds of the Commercial
Paper referred to in clause (A) having been repaid.
"Adjusted Pro Rata Share" shall mean (i) as to any Bank,
(a) on any date prior to the Liquidation Period, a fraction, the
numerator of which equals the Commitment of such Bank and the
denominator of which equals the sum of the Facility Amount and
the Term Loan Amount, and (b) on any date during the Liquidation
Period, such Bank's Adjusted Pro Rata Share immediately prior to
the commencement of the Liquidation Period, and (ii) as to the
Term Bank, (a) on any date prior to the Liquidation Period, a
fraction, the numerator of which equals the Term Loan Amount and
the denominator of which equals the sum of the Facility Amount
and the Term Loan Amount, and (b) on any date during the
Liquidation Period, the Term Bank's Adjusted Pro Rata Share
immediately prior to the commencement of the Liquidation Period.
"Adjusted Required Reserve Ratio" shall mean, as of any
date, 20% of the sum of the Loss Reserve Ratio (used in
calculating the Base Amount) and the Dilution Reserve Ratio (used
in calculating the Base Amount) which are then in effect.
"Adjusted Series A Base Amount" shall mean:
(a) on any day prior to the occurrence of the Measurement
Date, the sum (without duplication) of:
(i) the result obtained by multiplying (x) the Net
Eligible Receivables as of such date times (y) 100% minus
the Adjusted Required Reserve Ratio, times (z) the Series A
Percentage, plus
(ii) the then aggregate amount of Collections received
by the Seller, the Servicer or Finco which have been applied
to reduce the outstanding balance of Receivables and which
have not been remitted to the Collection Account times the
Series A Percentage, plus
(iii) the amount on deposit and credited to the Series
A Equalization Sub-account which was required to be retained
in such sub-account pursuant to Section 2.07 of the
Liquidity Agreement, minus
(iv) the excess of the Discount Rate Reserve times the
Series A Percentage over the portion of the outstanding face
amount of the Series A Commercial Paper attributable to
discount; minus
(v) the dollar amount of any Liens that attach to all
of the Eligible Receivables unless such Liens are of the
type described in subclauses (a) through (e) of clause (iv)
of the definition of Base Amount times the Series A
Percentage; plus
(vi) the product of (x) aggregate Outstanding Balance
of each Receivable which was represented by the Seller to be
an Eligible Receivable at the time of its purchase by Finco,
which is subsequently discovered not to have been an
Eligible Receivable at such time times (y) the Series A
Percentage; plus
(vii) the sum of (I) aggregate Outstanding Balance of
each Receivable which was an Eligible Receivable at the time
of its purchase by Finco, which, as of a date between the
date of its purchase and the date of determination, ceases
to be an Eligible Receivable pursuant to a failure to
satisfy any clause, other than clause (6), of the definition
of Eligible Receivable, and (II) the aggregate amount of
Dilution Adjustments with respect to all outstanding
Receivables, times the Series A Percentage; plus
(viii) if any Lien (other than a Lien permitted under
the Facility Documents) is attached to the Receivables
generally (and not to any individual Receivable) on such
date of determination, the amount equal to the product of
(I) the lesser of (A) the amount of such Lien and (B) the
Outstanding Balance of the Eligible Receivables which are
subject to such Lien on such date of determination and which
were Purchased by or Contributed to Finco before the date on
which such Lien attached to such Receivables, and (II) the
Series A Percentage; and
(b) on the Measurement Date or any day thereafter, the sum
(without duplication) of:
(i) the amount that would result from the calculation
set forth in clause (a) of this definition, if such
calculation were done on the Measurement Date, minus
(ii) the aggregate Outstanding Balances of all
Receivables which have become Defaulted Receivables since
the Measurement Date (without duplication of the amount that
results from the calculation in clause (a)(vi), (a)(vii) or
(a)(viii) of this definition) times the Series A Percentage,
minus
(iii) the aggregate amount of all Dilution with respect
to (a) the Purchased Assets and (b) Contributed Assets
constituting Eligible Receivables, in each case, since the
Measurement Date (without duplication of the amount that
results from the calculation in clause (a)(vi), (a)(vii) or
(a)(viii) of this definition) times the Series A Percentage,
minus
(iv) the aggregate amount of funds applied since the
Measurement Date to the repayment of Obligations pursuant to
Section 9.07 or 9.08 of the Liquidity Agreement times the
Series A Percentage.
If the Adjusted Series A Base Amount is being calculated for
purposes of determining whether any Series A Commercial Paper may
be issued, such calculation shall give effect to (A) such Series
A Commercial Paper having been issued, and (B) any other Series A
Commercial Paper or Series A Liquidity Loans intended to be
repaid with the proceeds of the Series A Commercial Paper
referred to in clause (A) having been repaid.
"Adjusted Series B Base Amount" shall mean:
(a) on any day prior to the occurrence of the Measurement
Date, the sum (without duplication) of:
(i) the result obtained by multiplying (x) the Net
Eligible Receivables as of such date times (y) 100% minus
the Adjusted Required Reserve Ratio, times (z) the Series B
Percentage; plus
(ii) the then aggregate amount of Collections received
by the Seller, the Servicer or Finco which have been applied
to reduce the outstanding balance of Receivables and which
have not been remitted to the Collection Account times the
Series B Percentage; plus
(iii) the amount on deposit and credited to the Series
B Equalization Sub-account which was required to be retained
in such sub-account pursuant to Section 2.07 of the
Liquidity Agreement; minus
(iv) the excess of the Discount Rate Reserve times the
Series B Percentage over the portion of the outstanding face
amount of the Series B Commercial Paper attributable to
discount; minus
(v) the dollar amount of any Liens that attach to all
of the Eligible Receivables unless such Liens are of the
type described in subclauses (a) through (e) of clause (iv)
of the definition of Base Amount times the Series B
Percentage; plus
(vi) the aggregate Outstanding Balance of each
Receivable which was represented by the Seller to be an
Eligible Receivable at the time of its purchase by Finco,
which is subsequently discovered not to have been an
Eligible Receivable at such time times the Series B
Percentage; plus
(vii) the sum of (I) aggregate Outstanding Balance of
each Receivable which was an Eligible Receivable at the time
of its purchase by Finco, which, as of a date between the
date of its purchase and the date of determination, ceases
to be an Eligible Receivable pursuant to a failure to
satisfy any clause, other than clause (6), of the definition
of Eligible Receivable, and (II) the aggregate amount of
Dilution Adjustments with respect to all outstanding
Receivables, times (B) the Series B Percentage; plus
(viii) if any Lien (other than a Lien permitted under
the Facility Documents) is attached to the Receivables
generally (and not to any individual Receivable) on such
date of determination, the amount equal to the product of
(I) the lesser of (A) the amount of such Lien and (B) the
Outstanding Balance of the Eligible Receivables which are
subject to such Lien on such date of determination and which
were Purchased by or Contributed to Finco before the date
on which such Lien attached to such Receivables, and (II)
the Series B Percentage; and
(b) on the Measurement Date or any day thereafter, the sum
(without duplication) of:
(i) the amount that would result from the calculation
set forth in clause (a) of this definition, if such
calculation were done on the Measurement Date, minus
(ii) the aggregate Outstanding Balances of all
Receivables which have become Defaulted Receivables since
the Measurement Date (without duplication of the amount that
results from the calculation in clause (a)(vi), (a)(vii) or
(a)(viii) of this definition) times the Series B Percentage,
minus
(iii) the aggregate amount of all Dilution with respect
to (a) the Purchased Assets and (b) Contributed Assets
constituting Eligible Receivables, in each case, since the
Measurement Date (without duplication of the amount that
results from the calculation in clause (a)(vi), (a)(vii) or
(a)(viii) of this definition) times the Series B Percentage,
minus
(iv) the aggregate amount of funds applied since the
Measurement Date to the repayment of Obligations pursuant to
Section 9.07 or 9.08 of the Liquidity Agreement times the
Series B Percentage,
If the Adjusted Series B Base Amount is being calculated for
purposes of determining whether any Series B Commercial Paper may
be issued, such calculation shall give effect to (A) such Series
B Commercial Paper having been issued, and (B) any other Series B
Commercial Paper or Series B Liquidity Loans intended to be
repaid with the proceeds of the Series B Commercial Paper
referred to in clause (A) having been repaid.
"Affected Bank" shall have the meaning ascribed to such term
in Section 4.05(a) of the Liquidity Agreement or Section 3.03(a)
of the Term Loan Agreement, as the case may be.
"Affiliate" shall mean, with respect to any Person, a Person
that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with,
such Person. The term "control" shall mean the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting stock or any equity interest, by
contract, or otherwise.
"Affiliate Receivables Sale Agreement" shall have the
meaning ascribed thereto in Section 2.06 of the Receivables Sale
Agreement.
"Aged Receivables Ratio" shall mean the aged receivables
ratio calculated in the most recent Settlement Statement, which
ratio (expressed as a percentage) shall equal a fraction,
(1) the numerator of which equals the sum of (i) the
aggregate Outstanding Balances of Receivables which were
from 91 to 120 days past their respective due date as of the
most recent Cut-Off Date plus (ii) the aggregate Outstanding
Balances of Receivables which were (A) written off as
uncollectible during the most recently ended Collection
Period, (B) not more than 90 days past due date at the time
of such write-off and (C) not Receivables of Obligors of the
type described in clause (a) of the definition of "Eligible
Obligor", provided that for purposes of calculating the Aged
Receivables Ratio for any Settlement Statement prior to
March 22, 1995, such numerator shall be as set out in
Schedule 1; and
(2) the denominator of which equals the aggregate
Original Balances of all new Receivables generated during
the Collection Period that occurred four Collection Periods
prior to the most recently ended Collection Period, as
determined as of the Cut-Off Date for such fourth prior
Collection Period.
The Aged Receivables Ratio calculated in any Settlement Statement
shall be the Aged Receivables Ratio from the Settlement Date
relating thereto until the next Settlement Date. The Aged
Receivables Ratio from the Effective Date until the first
Settlement Statement shall be as set forth on Schedule 1 hereto
and the underlying calculations for each of the twelve Collection
Periods preceding the first Settlement Date to be used in future
calculations of the Aged Receivables Ratio shall be as set forth
in such Schedule 1.
"Agent" shall mean either the Facility Agent or the
Collateral Agent, as the context requires, and "Agents" shall
mean each of the Facility Agent and the Collateral Agent.
"Aggregate CP Amount" shall mean the sum of the Aggregate
Series A CP Amount plus the Aggregate Series B CP Amount.
"Aggregate Loan Amount" shall mean the sum of the Aggregate
Series A Loan Amount plus the Aggregate Series B Loan Amount.
"Aggregate Net Outstandings" shall mean, on any date, the
amount equal to (i) the Aggregate Loan Amount plus (ii) the Term
Loan Amount plus (iii) the Aggregate CP Amount then outstanding
minus (iv) the aggregate amount on deposit and credited to the
Downgraded Series A Bank Sub-account and the Downgraded Series B
Bank Sub-account.
"Aggregate Series A CP Amount" shall mean, on any date, the
then aggregate outstanding face amount of the Series A Commercial
Paper, less any portion of such outstanding face amount
attributable to discount.
"Aggregate Series A Loan Amount" shall mean, on any date,
the then aggregate outstanding principal amount of the Series A
Liquidity Loans.
"Aggregate Series B CP Amount" shall mean, on any date, the
then aggregate outstanding face amount of the Series B Commercial
Paper, less any portion of such outstanding face amount
attributable to discount.
"Aggregate Series B Loan Amount" shall mean, on any date,
the then aggregate outstanding principal amount of the Series B
Liquidity Loans.
"Allocation Agreement" shall mean the Allocation and
Financial Services Agreement dated as of February 23, 1995
between Finco and JSC.
"Alternate Base Rate" shall mean (a) with respect to
Liquidity Loans a fluctuating rate per annum on any date equal to
the higher of (i) the rate of interest most recently publicly
announced by the Facility Agent as its "prime," "reference" or
"base" rate and (ii) a rate of interest equal to the sum of
(A) the Federal Funds Rate, plus (B) 0.50% or (b) with respect to
the Term Loan, a fluctuating rate per annum on any date equal to
the higher of (i) the rate of interest most recently publicly
announced by the Term Bank as its "prime," "reference" or "base"
rate and (ii) a rate of interest equal to the sum of (A) the
Federal Funds Rate, plus (B) 0.50%. The Alternate Base Rate is
not necessarily intended to be the lowest rate of interest
determined by the Facility Agent or the Term Bank, as the case
may be, in connection with extensions of credit. Changes in the
Alternate Base Rate shall take effect immediately upon their
occurrence.
"Applicable Ratings Factor" shall mean (a) for purposes of
calculating the Dilution Reserve Ratio or the Loss Reserve Ratio
as elements of the Base Amount, the Series A Base Amount or the
Series B Base Amount, as the case may be, 2.5 and (b) for
purposes of calculating the Dilution Reserve Ratio or the Loss
Reserve Ratio as elements of the Modified Base Amount, the
Modified Series A Base Amount, the Modified Series B Base Amount,
as the case may be, 1.5.
"Applicable Reserve Ratio" shall mean, at any time, an
amount calculated in the then effective Settlement Statement to
be the greatest of:
(a) the Minimum Required Reserve Ratio; or
(b) the sum of the Required Reserve Ratios
calculated in such Settlement Statement;
provided, however, that from and after any Settlement Date until
the next Settlement Date, the Applicable Reserve Ratio shall mean
the greater of the above percentage or the sum of the Required
Reserve Ratios as calculated in the most recently delivered
Settlement Statement.
"Approved Delegate" shall have the meaning ascribed to such
term in Section 11.12(a) of the Liquidity Agreement.
"Assignment and Acceptance" shall mean, as the context
requires, an assignment and acceptance in substantially the form
of Exhibit 12.03 to the Liquidity Agreement or Exhibit 9.03 to
the Term Loan Agreement.
"Assignee Indemnification Sub-account" shall mean the sub-
account of the Collection Account established by the Collateral
Agent (for administrative purposes only) pursuant to Section 9.03
of the Liquidity Agreement and designated the "Assignee
Indemnification Sub-account".
"Available Cash" shall have the meaning set forth in Section
9.07(g) of the Liquidity Agreement.
"Average Dilution Ratio" shall mean, on any date, the
average of the Dilution Ratios for the periods commencing on the
Settlement Dates occurring during the twelve Collection Periods
ending on the most recent Cut-Off Date, as calculated in the most
recent Settlement Statement.
"Bankruptcy Code" shall mean Title 11 of the United States
Code, as amended from time to time, or any successor statute.
"Banks" shall mean, collectively, the Series A Bank and the
Series B Banks.
"Base Amount" as of any date, shall mean the amount equal to
(i) the result obtained by multiplying the product of (a) the Net
Eligible Receivables times (b) 100% minus the Applicable Reserve
Ratio, plus (ii) the amount on deposit and credited to the Series
A Equalization Sub-account and the Series B Equalization Sub-
account which was required to be retained therein pursuant to
Section 2.07 of the Liquidity Agreement, minus (iii) the Discount
Rate Reserve, minus (iv) the product of 1.1 times the dollar
amount of any Liens that attach to all of the Eligible
Receivables generally (rather than to any individual Eligible
Receivable) unless such Liens (a) are for taxes, assessments or
charges of any governmental authority for amounts not yet due,
(b) are Liens arising under the Facility Documents, (c) are
rights of offset of an Obligor with respect to payment of a
Receivable which has the economic effect of a priority claim and
as to which a deduction has been made in accordance with clause
(5) of the definition of "Eligible Receivable," (d) are Liens of
a collecting bank under Section 4-208 of the UCC or (e) have been
bonded in full by or on behalf of the Seller.
"Base Amount Shortfall" shall mean on any day, the amount by
which (i) the amount equal to (a) the Aggregate Loan Amount plus
(b) the Aggregate CP Amount (in each case after giving effect to
any New Credit Event or Refunding Advance on such day and the
application of proceeds therefrom) minus (c) the aggregate
amount on deposit and credited to the Downgraded Series A Bank
Sub-account and the Downgraded Series B Bank Sub-account, exceeds
(ii) the Base Amount.
"Base Rate Borrowing" shall mean a Borrowing consisting of
Base Rate Loans.
"Base Rate Loan" shall mean a Liquidity Loan or Term Loan,
interest on which is calculated at a per annum rate based on the
Alternate Base Rate.
"Bill and Hold" shall mean an arrangement in which the
Seller or any Indirect Seller, at the request of one of its
customers contained in a written purchase order and/or similar
writing (including any oral communication that is confirmed in
writing), invoices the customer for goods but retains possession
of such goods for a period of time, and all of the following
requirements are satisfied:
(a) title to, and the risk of loss of, the goods is
transferred to the customer, and the Seller's or Indirect
Seller's, as the case may be, inventory records are marked
to indicate that title has passed;
(b) the goods are segregated from the Seller's or
Indirect Seller's, as the case may be, inventory; and
(c) the related invoice is payable on the normal due
date for similar Receivables of the Seller or Indirect
Seller, as the case may be, that do not arise from a Bill
and Hold arrangement.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrowing" shall mean a group of Loans as to which a single
Interest Period is in effect.
"Breached Receivable" shall have the meaning ascribed to
such term in Section 3.04 of the Receivables Sale Agreement.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in New York City
are required or authorized by law to close and, when the term
"Business Day" is used with respect to any Eurodollar Borrowing,
shall also exclude any such day on which commercial banks are not
open for international business (including dealings in Dollar
deposits) in London, England.
"Calculation Period" shall mean each period commencing on
the first day of a fiscal month and ending on the last day of
such fiscal month.
"Canadian Obligor" shall mean any Obligor that is a resident
of a Province of Canada.
"Carrying Costs" shall mean, collectively, any Reserved
Carrying Costs, any Unreserved Series A Carrying Costs, any
Unreserved Series B Carrying Costs, and any Unreserved Other
Carrying Costs.
"Carrying Costs Percentage" shall mean, on any date, the
carrying costs percentage appearing on the most recent Settlement
Statement, which percentage shall be computed as of the most
recent Cut-Off Date by dividing (i) twelve times the sum of (a)
any Carrying Costs (other than interest on the Liquidity Loans,
the portion of the face amount of Commercial Paper attributable
to discount and interest on the Term Loan and the Short-Term
Note) accrued during the Collection Period then ended and (b) in
the case of any Carrying Costs which Finco has not been accruing
for purposes of calculating "Carrying Costs Percentage", the
amount of such Carrying Costs billed, or if not previously
billed, paid during such Collection Period, by (ii) the aggregate
Outstanding Balance of all Receivables as of such Cut-Off Date.
The Carrying Costs Percentage shall be determined monthly in each
Settlement Statement and such Carrying Costs Percentage shall be
the Carrying Costs Percentage for all purposes under the Facility
Documents from the Settlement Date relating thereto until the
next Settlement Date. The Carrying Costs Percentage from the
Effective Date until the first Settlement Date shall be as set
forth on Schedule 1 hereto. All fees and expenses which have
accrued as of the Effective Date shall be excluded from the
computation of the Carrying Costs Percentage in the first
Settlement Statement.
"Carrying Costs Reserve" shall mean, on any date, the sum of
(i) Accrued Carrying Costs as of such date (excluding, for this
purpose, interest accrued or to accrue on the Short-Term Note)
plus (ii) the product of (a) the amount by which (1) Aggregate
Net Outstandings exceeds (2) the amount which is then being
retained in and credited to the Series A Equalization Sub-account
and the Series B Equalization Sub-account as required by Section
2.07 of the Liquidity Agreement, times (b) the Cost of Funds Rate
divided by (c) twelve; provided, however, that Finco may direct
the Collateral Agent to increase the Carrying Costs Reserve to
the extent necessary to simplify the daily allocations of funds
required under Section 9.07 of the Liquidity Agreement.
"Collateral" shall have the meaning assigned to such term in
Section 9.01 of the Liquidity Agreement.
"Collateral Agent" shall mean the Person identified as such
in the Liquidity Agreement, not in its individual capacity but
solely in its capacity as collateral agent for the holders of the
Commercial Paper, the Banks, and the Term Bank under the
Liquidity Agreement, and any successor thereto.
"Collection Account" shall have the meaning assigned to such
term in Section 9.03(a) of the Liquidity Agreement.
"Collection Date" shall mean the date following the
Termination Date on which (i) the aggregate Outstanding Balance
of the Receivables included in the Purchased Assets shall have
been reduced to zero, (ii) the Aggregate Loan Amount has been
reduced to zero, (iii) the Aggregate CP Amount has been reduced
to zero and/or cash-collateralized in full, (iv) the Term Loan
Amount has been reduced to zero, and (v) Finco has paid to the
Banks, the Term Bank and the Agents in full all principal,
interest, fees and other amounts owed under the Facility
Documents.
"Collection Period" shall mean each fiscal month of Finco.
"Collections" shall mean, with respect to any Receivable or
all of the Receivables, as the case may be, all cash collections
and other cash proceeds of such Receivable or Receivables,
including all cash proceeds of any Related Security with respect
to such Receivable or Receivables.
"Commercial Paper" shall mean collectively, the Series A
Commercial Paper and Series B Commercial Paper.
"Commitments" shall mean the aggregate commitments of the
Banks to make Liquidity Loans up to the Facility Amount.
"Commitment Termination Date" shall mean:
(i) with respect to a Bank's obligation to make Revolving
Advances under the Liquidity Agreement, the Termination Date;
provided, however, the obligation of a Dissenting Bank to make
Revolving Advances shall terminate upon the termination of such
Bank's Commitment in accordance with Section 2.06(c) of the
Liquidity Agreement; and
(ii) with respect to a Bank's obligation to make Refunding
Advances, the Business Day following the Termination Date on
which the aggregate outstanding amount of the Commercial Paper is
reduced to zero; provided, however, the obligation of a
Dissenting Bank to make Refunding Advances shall terminate upon
the termination of such Bank's Commitment in accordance with
Section 2.06(c) of the Liquidity Agreement.
"Consolidated Affiliate" shall mean, with respect to any
Person, any other Person whose financial statements are, or
should be under GAAP, consolidated with the financial statements
of such Person.
"Contingent Obligation" shall mean, as applied to any
Person, any direct or indirect liability, contingent or
otherwise, of that Person (i) with respect to any Indebtedness,
lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be
paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof,
(ii) with respect to any letter of credit issued for the account
of that Person or as to which that Person is otherwise liable for
reimbursement of drawings or (iii) under interest rate and
currency caps, collars, swaps and similar agreements. Contingent
Obligations shall include (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation
of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other
party or parties to an agreement and (c) any liability of such
Person for the obligation of another through any agreement
(contingent or otherwise) (x) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (y) to maintain the solvency or
any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under
subclauses (x) or (y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if
less, the amount to which such Contingent Obligation is
specifically limited.
"Contributed Assets" shall mean, with respect to any
Contribution, (a) the Contributed Receivables transferred on the
date thereof in connection with such Contribution, (b) all
Related Security relating to such Receivables and (c) all
Collections with respect to, and other proceeds of, such
Receivables and such Related Security (including all Receivable
Notes received from time to time by the Seller in respect
thereof).
"Contributed Receivable" shall have the meaning ascribed
thereto in Section 2.01(b) of the Receivables Sale Agreement, and
shall include any Receivable deemed to be a Contributed
Receivable pursuant to Section 2.01(e) of the Receivables Sale
Agreement.
"Contribution" shall mean a capital contribution to Finco of
Receivables and the Related Security by the Seller made pursuant
to Article II of the Receivables Sale Agreement, and shall
include any deemed contribution by the Seller to Finco pursuant
to Section 2.01(e) of the Receivables Sale Agreement.
"Conversion/Continuation Date" shall mean, as to any
Borrowing, the date on which such Borrowing is converted into a
different Type of Borrowing or continued as the same Type of
Borrowing pursuant to Section 2.05 of the Liquidity Agreement or
Section 2.04 of the Term Loan Agreement, as the case may be.
"Corresponding Notice" shall mean, with respect to any
notice received by an Agent, a corresponding notice given by such
Agent to the Series A Bank (if such notice relates to the Series
A Commercial Paper) and/or each Series B Bank (if such notice
relates to the Series B Commercial Paper), within one-half hour
of Agent's receipt of such first notice; it being understood and
agreed that such Agent will give such corresponding notice by
telephone and will confirm such notice promptly by telecopy.
"Cost of Funds Rate" shall mean, on any date, the weighted
average of the per annum rates at which interest is then accruing
on the Series A Liquidity Loans, the Series B Liquidity Loans,
the Term Loan, the Series A Commercial Paper and the Series B
Commercial Paper (after converting, in the case of Commercial
Paper, the applicable discount rate and any related commissions
and charges of placement agents or dealers to an annual bond
equivalent yield rate per annum), as calculated in the most
recent Settlement Statement using the rates in effect and the
Liquidity Loans and Commercial Paper outstanding as of the close
of business on the most recent Cut-Off Date. The Cost of Funds
Rate calculated in any Settlement Statement shall be the Cost of
Funds Rate from the Settlement Date relating thereto until the
next Settlement Date. The Cost of Funds Rate from the Effective
Date until the first Settlement Date shall be as set forth on
Schedule 1.
"Credit and Collection Policy" shall mean, the credit
policies and procedures relating to the Receivables and Invoices
as described on Exhibit B to the Receivables Sale Agreement, as
the same may be amended from time to time in accordance with
Section 4.03(c) of the Receivables Sale Agreement and
Section 8.07 of the Liquidity Agreement.
"Cross-Over Date" shall mean the date following the
Termination Date on which (i) the Aggregate Loan Amount has been
reduced to zero, (ii) the Aggregate CP Amount has been reduced to
zero and/or cash-collateralized in full, and (iii) Finco has paid
to the Banks and the Facility Agent in full all principal,
interest, fees and other amounts owed under the Liquidity
Agreement.
"Cut-Off Date" shall mean the last day of a Collection
Period.
"Daily Report" shall mean the Daily Report substantially in
the form of Exhibit C-1 or Exhibit C-2 to the Receivables Sale
Agreement (as applicable) delivered by the Servicer on each
Business Day on which delivery is required by Section 5.03(b) of
the Receivables Sale Agreement.
"Dealer Agreement" shall mean the Commercial Paper Dealer
Agreement or Agreements among one or more Dealers and Finco.
"Dealers" shall mean the Series A Dealer and the Series B
Dealers.
"Defaulted Receivable" shall mean (a) a Receivable which, as
of the date of the most recent Daily Report, was aged more than
90 days past its due date or (b) a Receivable that is
disqualified from being an Eligible Receivable pursuant to
failure to satisfy clause (12) of the definition of Eligible
Receivable.
"Departing Bank" shall have the meaning ascribed to such
term in Section 2.09 of the Liquidity Agreement or Section 2.08
of the Term Loan Agreement, as the case may be.
"Departing Series A Bank" shall mean a Departing Bank which
is a Series A Bank.
"Departing Series B Bank" shall mean a Departing Bank which
is a Series B Bank.
"Depositary" shall mean Bankers Trust Company, or such other
banking institution as Finco shall appoint as issuing and paying
agent for Commercial Paper under either Depositary Agreement and
as fiduciary for the holders of the related Commercial Paper.
"Depositary Agreements" shall mean the Series A Depositary
Agreement and the Series B Depositary Agreement.
"Dilution" shall mean, with respect to any Receivable, (A)
the actual reduction in the Outstanding Balance of that
Receivable as a result of any claim or setoff of the Obligor or
(B) any other adjustment made by the Servicer with respect to the
Outstanding Balance of such Receivable or (C) any related payment
of the type described in the last sentence of the definition of
Dilution Factors which reduction, adjustment or related payment
arose as a result of a Dilution Factor.
"Dilution Adjustment" shall mean, on any date, amounts owed
by the Seller to Finco pursuant to Section 2.02(f) of the
Receivables Sale Agreement on account of Dilution reported for
such date with respect to the Receivables, which payments shall
equal the amount of such Dilution.
"Dilution Factors" shall mean any adjustments to the
Outstanding Balances of the Receivables other than adjustments
which arise as a result of Collections, Write-Offs or the taking
of any Receivable Notes. Dilution Factors shall include any
credits, rebates, sales or other similar taxes, volume discounts,
cooperative advertising expenses, allowances, disputes, billing
errors, chargebacks, returned or repossessed goods, inventory
transfers, allowances for early payments and other allowances and
discounts that are made or coordinated with JSC's or the Seller's
usual practices (other than cash discounts), but shall not
include adjustments made on account of the applicable Obligor's
inability to pay the Outstanding Balance thereof. Dilution
Factors shall also include any payments made by the Seller to an
Obligor in connection with a volume discount, notwithstanding
that there has been no adjustment to the Outstanding Balance of
the Receivables in connection with such payment.
"Dilution Horizon Variable" shall mean a fraction having (A)
a numerator equal to the aggregate Original Balances of all new
Receivables generated during the most recent Collection Period as
calculated on the most recent Cut-Off Date, and (B) a denominator
equal to the aggregate Outstanding Balances of all Eligible
Receivables as calculated on the most recent Cut-Off Date.
"Dilution Ratio" shall mean the dilution ratio calculated in
the most recent Settlement Statement to equal a fraction
(expressed as a percentage) the numerator of which shall be
Dilution during the most recent Collection Period, and the
denominator of which shall be the aggregate Original Balances of
new Receivables generated during the Collection Period which
ended one Collection Period prior to the last Cut-Off Date. The
underlying calculations for each of the twelve Collection Periods
preceding the first Settlement Date to be used in future
calculations of the Dilution Ratio shall be as set forth in
Schedule 1.
"Dilution Reserve Ratio" shall mean, commencing on any
Settlement Date and continuing until (but not including) the next
Settlement Date, an amount (expressed as a percentage) calculated
in accordance with the following formula:
DRR = [(ARF x ADR) + [(HDR-ADR) x HDR)]] x DHV
ADR
where:
DRR = the Dilution Reserve Ratio;
ADR = the Average Dilution Ratio calculated in the
most recent Settlement Statement;
ARF = the Applicable Ratings Factor;
HDR = the highest average of the Dilution Ratios
measured for any one month period which
commences on any Settlement Date during the
twelve Collection Periods ending on the most
recent Cut-Off Date; and
DHV = the Dilution Horizon Variable calculated in
the most recent Settlement Statement.
The Dilution Reserve Ratio calculated in any Settlement Statement
shall be the applicable Dilution Reserve Ratio from the
Settlement Date relating thereto until the next Settlement Date.
The Dilution Reserve Ratio from the Effective Date until the
first Settlement Date shall be as set forth on Schedule 1 hereto,
and the Dilution Ratios for the twelve Collection Periods
preceding the first Settlement Date to be used in future
calculations of the Dilution Reserve Ratio shall be as set forth
in such Schedule 1; provided, however, that for the purposes of
calculating the Dilution Ratio for such twelve Collection Periods
as set forth in Schedule 1, the numerator shall be increased by
$800,000.
"Discount Rate" shall mean, on any date, (i) the Cost of
Funds Rate plus (ii) the Carrying Costs Percentage, each as
determined in the most recent Settlement Statement with respect
to which a Settlement Date has occurred. The Discount Rate shall
be determined by the Servicer monthly in each Settlement
Statement and such Discount Rate shall be the Discount Rate for
all purposes under the Facility Documents from the Settlement
Date relating thereto until the next Settlement Date. The
Discount Rate from the Effective Date until the first Settlement
Date shall be as set forth in Schedule 1 hereto.
"Discount Rate Reserve" shall mean the discount rate reserve
calculated on each day, which amount shall be calculated in
accordance with the following formula:
DRR = ACC + (ANO - TLA) X (FR + SFR) X (2 X TD)
360
+ TLA X (TLR + SFR) X (2 X TD) - CCR
360
where:
DRR = the Discount Rate Reserve;
ACC = Accrued Carrying Costs as of the date of
determination;
ANO = the Aggregate Net Outstandings as of the most
recent Reporting Date minus the amount which is
being retained in and credited to the Series A
Equalization Sub-account and the Series B
Equalization Sub-account as required by Section
2.07 of the Liquidity Agreement as of the most
recent Reporting Date;
FR = the higher of (i) the Cost of Funds Rate then
in effect and (ii) the amount equal to the
product of 1.2 and the Alternate Base Rate
then in effect;
SFR = 2.00%;
TLA = the Term Loan Amount as of the date of
determination;
TLR = the higher of (i) FR (as defined above) and
(ii) the rate at which interest is currently
accruing on the Term Loan;
CCR = the aggregate balance of funds in the (i)
Collection Account and credited to the Other
Carrying Costs Sub-account on the date of
determination, (ii) Series A Proceeds Account
and credited to the Series A Carrying Costs
Sub-account on the date of determination, and
(iii) Series B Proceeds Account and credited to
the Series B Carrying Cost Sub-account on the
date of determination; and
TD = Turnover Days for all of the Receivables as
calculated in the most recent Settlement
Statement.
"Dissenting Bank" shall have the meaning ascribed to such term
in Section 2.06(c) of the Liquidity Agreement.
"Dollar" and the symbol "$" shall mean lawful money of the
United States of America.
"Downgraded Bank" shall mean (a) a Bank whose short-term debt
ratings have been reduced below A-1 by S&P or (b) a Bank whose
short-term debt ratings, if rated by Duff, have been reduced below
D-1 by Duff.
"Downgraded Series A Bank" shall mean a Series A Bank which
has become a Downgraded Bank.
"Downgraded Series A Bank Sub-account" shall mean the sub-
account of the Series A Proceeds Account established by the
Collateral Agent (for administrative purposes only) pursuant to
Section 9.03 of the Liquidity Agreement and designated the
"Downgraded Series A Bank Sub-account".
"Downgraded Series B Bank" shall mean a Series B Bank which
has become a Downgraded Bank.
"Downgraded Series B Bank Sub-account" shall mean the sub-
account of the Series B Proceeds Account established by the
Collateral Agent (for administrative purposes only) pursuant to
Section 9.03 of the Liquidity Agreement and designated the
"Downgraded Series B Bank Sub-account".
"Duff" shall mean Duff & Phelps Credit Rating Co., or any
successor to the rating agency business thereof.
"Effective Date" shall mean (i) with respect to the Liquidity
Agreement, the date on which the conditions precedent to the
effectiveness of the Liquidity Agreement have been satisfied
(and/or waived) and the Facility Agent has confirmed the
effectiveness of the Liquidity Agreement or (ii) with respect to
the Term Loan Agreement, the date on which the conditions precedent
to the effectiveness of the Term Loan Agreement have been satisfied
(and/or waived) and the Term Bank has confirmed the effectiveness
of the Term Loan Agreement.
"Eligible Account" means (a) a segregated account or accounts
maintained with a depository institution or trust company whose
long-term unsecured debt obligations are rated at least A by Duff
at the time of any deposit therein (or, if such obligations are, at
the time of such deposit, not rated by Duff, rated at least A by
S&P), or (b) a segregated trust account or accounts maintained with
a federal or state chartered depository institution subject to
regulations regarding fiduciary funds on deposit substantially
similar to 12 C.F.R. Section 9.10(b).
"Eligible Assignee" shall mean any commercial bank with (i) a
combined capital and surplus of at least $500,000,000 and (ii) a
rating on such bank's long-term deposits of not less than A-1 (or
its equivalent) by S&P and, if rated by Duff, not less than D-1;
provided, however, if at the time of any proposed assignment of a
Series B Commitment, BT Securities Corporation (or any of its
Affiliates) is a Series B Dealer, Bankers Trust Company (or any of
its Affiliates) shall not be considered an "Eligible Assignee"
thereof; provided, further, however, that neither Bankers Trust
Company nor any of its Affiliates shall be an Eligible Assignee of
the Term Bank.
"Eligible Obligor" shall mean each Obligor that satisfies the
following criteria:
(a) it is not (i) the United States of America or any
foreign government, (ii) any state, province or other local
governmental agency of the United States of America or of any
foreign government or (iii) any department, agency or
instrumentality of any of the foregoing;
(b) it is not a Consolidated Affiliate of JSC; and
(c) as of the date of the most recent Daily Report, no
more than 50% of the Receivables owed by such Obligor were
aged more than 90 days past their respective due dates.
"Eligible Receivable" shall mean, on any date, a Receivable
which satisfies the following criteria:
(1) such Receivable is (i) denominated in Dollars,
(ii) non-interest bearing, and (iii) owed by an Eligible
Obligor;
(2) such Receivable is in compliance with all
applicable laws, rules and regulations;
(3) such Receivable represents a bona fide obliga-
tion resulting from a sale of goods which have been
shipped or delivered or invoiced on a Bill and Hold basis
or from services which have been performed, and
constitutes the legally valid, binding and enforceable
obligation of the applicable Obligor in accordance with
its terms; provided, however, that the Rating Agency
Condition shall have been satisfied with respect to the
inclusion of any Receivable relating to goods that are
being held by the Seller or an Indirect Seller on a Bill
and Hold Basis, before any such Receivable shall be
considered to be an Eligible Receivable;
(4) such Receivable arose from the sale of
merchandise or services in the ordinary course of the
Seller's or Indirect Seller's, as the case may be,
business and neither the Receivable nor the related
contract has been satisfied, subordinated or rescinded;
(5) such Receivable is not subject to any reduction,
cancellation, refund or rebate (other than cash discounts
available to the applicable Obligor, in accordance with
the Credit and Collection Policy) or to any dispute,
right of rescission, set-off, offset (including any
offset arising out of an agreement to exchange goods),
counterclaim, Lien (other than a Lien created under the
Facility Documents) or other defense, provided that (i)
the Outstanding Balance of any such Receivable which is
otherwise an Eligible Receivable and is subject only in
part to any of the foregoing shall be an Eligible
Receivable to the extent not subject to any such
reduction, cancellation, refund, rebate, dispute, right
of rescission, set-off, offset, counterclaim, Lien or
other defense (provided, that if any Lien is not in the
nature of a dispute, offset or counterclaim and attaches
to any individual Receivable (and not Receivables
generally), such entire Receivable shall not be an
Eligible Receivable) and (ii) if any such Lien attaches
to all of the Receivables generally (rather than to any
individual Receivable), such Lien shall not affect the
eligibility of the affected Receivables, but shall
instead operate to reduce the Base Amount, the Adjusted
Base Amount, the Modified Base Amount, the Adjusted
Series A Base Amount, the Series A Base Amount, the
Modified Series A Base Amount, the Series B Base Amount,
the Adjusted Series B Base Amount and the Modified Series
B Base Amount, in each case as described in the
definition thereof;
(6) as of the date of the most recent Daily Report,
such Receivable was not aged more than 60 days past its
due date;
(7) the sale of such Receivable and the Related
Security to Finco by the Seller, the grant of a security
interest therein by Finco to the Collateral Agent, and,
in the case of a Receivable sold by an Indirect Seller to
the Seller, the sale of such Receivable and the Related
Security to the Seller by such Indirect Seller, does not
conflict with any law, rule or regulation or any
contractual or other restriction, limitation or
encumbrance that is not rendered ineffective by Section
9-318 of the UCC;
(8) the sale or assignment of such Receivable does
not require the consent of the Obligor or any other
Person, other than any such consent which has been
previously obtained or the requirement to obtain which is
rendered ineffective by Section 9-318 of the UCC;
(9) such Receivable was created in accordance with
and otherwise complies with all applicable requirements
of the Credit and Collection Policy;
(10) such Receivable is an "account" (and not
"chattel paper," a "general intangible" or a Receivable
Note or other "instrument") within the meaning of the
UCC;
(11) (a) immediately prior to the Purchase thereof
by Finco, the Seller had good title to the Receivable
free and clear of any adverse claim (other than Permitted
Liens), (b) in the case of a Receivable sold by an
Indirect Seller to the Seller, immediately prior to such
sale, the Indirect Seller had good title to the
Receivable free and clear of any adverse claim (other
than Permitted Liens) and (c) Finco's ownership interest,
the Collateral Agent's security interest, and in the case
of a Receivable sold by an Indirect Seller to the Seller,
the Seller's ownership interest, in such Receivable shall
have been perfected which security interest is prior in
right to all other Liens thereon (except for Permitted
Liens and Liens described in the provisos to clause (5)
of this definition);
(12) no Insolvency Event has occurred and is
continuing with respect to the Obligor of such
Receivable, unless such Receivable arose subsequent to a
decree or order for relief with respect to such Obligor
under the Bankruptcy Code; and
(13) such Receivable is not a Write-Off.
"ERISA" shall mean the U.S. Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"Eurodollar Borrowing" shall mean a Borrowing consisting of
Eurodollar Loans.
"Eurodollar Lending Office" shall mean, as to any Bank or the
Term Bank, the office designated on the signature pages of the
Liquidity Agreement, or the Term Loan Agreement, as the case may
be, as the office through which such Bank or the Term Bank makes
Eurodollar Loans (or, (i) if so indicated in the Liquidity
Agreement or an applicable Assignment and Acceptance thereto, all
Liquidity Loans, or (ii) if so indicated in the Term Loan Agreement
or an applicable Assignment and Acceptance thereto, the Term Loan)
whether or not such office is outside the United States of America.
"Eurodollar Loan" shall mean a Liquidity Loan or Term Loan,
interest on which is calculated at a per annum rate based on the
Eurodollar Rate.
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Borrowing, for any Interest Period, an interest rate determined by
the Facility Agent to be the rate for deposits in Dollars for a
period approximately equal to such Interest Period which appears on
Page 3750 of the Dow Jones Telerate Service (or such other page
that may replace that page on such service for the purpose of
displaying comparable rates) as of 11:00 a.m., London time, on the
day that is two London business days preceding the beginning of
such Interest Period; provided that for purposes of the Short-Term
Note, "Eurodollar Rate" for any day shall mean the foregoing
determined two London business days prior to the beginning of the
calendar quarter in which such day occurs for a deemed Interest
Period of three months, as notified by the Facility Agent to Finco
provided, further, that for purposes of the Term Loan, "Eurodollar
Rate" shall mean the foregoing as determined by the Term Bank.
"Excess Bill and Hold Balance" shall mean, on any Business
Day, an amount equal to the excess (if any) of (a) the aggregate
Outstanding Balances of Eligible Receivables relating to goods that
are being held by the Seller or an Indirect Seller on a Bill and
Hold basis on that Business Day over (b) the product of two percent
(2%) and the aggregate Outstanding Balances of all Eligible
Receivables on that Business Day.
"Excess Canadian Obligor Balances" shall mean, as of any date,
the dollar amount by which the result of
(i) the aggregate Outstanding Balances of Eligible
Receivables that are owing from Canadian Obligors
(expressed as a percentage of the Outstanding Balances of
all Eligible Receivables), minus
(ii) the Excess Concentration Balances of such
Obligors,
exceeds four and one-half percent (4.5%) of the aggregate
Outstanding Balances of all Eligible Receivables as of such date.
There shall be excluded from clause (i) any Receivables as to which
the Rating Agency Condition, relating to the inclusion of such
Receivables without consideration of the Excess Canadian Obligor
Balances, has been satisfied.
"Excess Concentration Balance" shall mean, on any day and with
respect to any Obligor and its consolidated Affiliates, the
aggregate Outstanding Balances of otherwise Eligible Receivables
due from such Obligor and (without duplication) its consolidated
Affiliates which, expressed as a percentage of the aggregate
Outstanding Balances of all Eligible Receivables, exceeds (i) 4.5%
with respect to Obligors having a short-term senior debt rating
from S&P of A-3 or better or a long-term senior debt rating from
S&P of BBB- or better, or (ii) 2.25% with respect to Obligors not
rated or having a short-term senior debt rating from S&P of less
than A-3 or a long-term senior debt rating from S&P of less than
BBB-. For purposes of the foregoing, the rating to be associated
with any Obligor shall be the lowest short-term or actual or
implied long-term senior debt rating that is in effect for such
Obligor or such Obligor's corporate parent. Finco may, by notice
thereof in any Settlement Statement (and after satisfying the
Rating Agency Condition) increase or decrease any of the
percentages above (each of the percentages above being herein
called a "Benchmark Percentage") for all subsequent Collection
Periods (until further changed in accordance with the terms
hereof). Any such change to a Benchmark Percentage shall result in
a corresponding change to the Excess Concentration Factor, and
hence in the Minimum Required Reserve Ratio, as set forth in the
definitions thereof.
"Excess Concentration Factor" shall mean, as of any Cut-Off
Date, the greatest of (i) three times the "Benchmark Percentage"
then in effect for purposes of clause (i) of the definition of
"Excess Concentration Balance," and (ii) six times the "Benchmark
Percentage" then in effect for purposes of clause (ii) of that
definition.
"Excess Foreign Obligor Balances" shall mean, as of any date,
the dollar amount by which (i) the aggregate Outstanding Balances
of Eligible Receivables that are owing from Foreign Obligors,
exceeds (ii) the Permitted Foreign Receivables Balance on such day.
"Exchange Receivable" shall mean (i) all indebtedness of a
Person (whether constituting an account, chattel paper, or a
general intangible) arising from or in connection with exchange
arrangements under which the Seller or an Indirect Seller sells
containerboard to such Person in exchange for the purchase by the
Seller or such Indirect Seller of containerboard from such Person,
and (ii) all other indebtedness of such Person arising from the
sale of merchandise or the furnishing of services by the Seller or
an Indirect Seller to such Person.
"Excluded Receivable" shall mean (i) all indebtedness of a
Person (whether constituting an account, chattel paper, or a
general intangible) arising from the sale of merchandise or the
furnishing of services by the Seller or an Indirect Seller to a
Subsidiary or an Affiliate of the Seller or such Indirect Seller,
including all interest or finance charges and other obligations of
such Person with respect thereto and (ii) any Exchange Receivable.
"Existing Receivables Purchase Accounts" shall have the
meaning ascribed to such term in Section 8.10 of the Liquidity
Agreement.
"Existing Receivables Purchase Documents" shall mean (i) the
Master Agreement, (ii) the Financial Services Agreement dated as of
August 22, 1991 and the Allocation Agreement dated as of August 22,
1991, between JSC and Finco, and (ii) the other Program Documents,
as defined in the Master Agreement.
"Extension Affirmation Request" shall have the meaning
ascribed to such term in Section 2.06(c) of the Liquidity
Agreement.
"Extension Request" shall have the meaning ascribed to such
term in Section 2.06(c) of the Liquidity Agreement or Section 2.06
of the Term Loan Agreement, as the case may be.
"Facility" shall mean the facility under the Liquidity
Agreement for the Series A Liquidity Loans and the Series B
Liquidity Loans.
"Facility Agent" shall mean the Person identified as such in
the Liquidity Agreement, not in its individual capacity but solely
in its capacity as agent for the Banks under the Liquidity
Agreement, and any successor thereto.
"Facility Amount" shall mean the sum of the Series A Facility
Amount and the Series B Facility Amount, which sum shall equal
$300,000,000 as of the Effective Date; provided, however, that such
amount may be increased or decreased pursuant to Sections 2.06 and
2.08 of the Liquidity Agreement.
"Facility Documents" shall mean collectively, the Receivables
Sale Agreement, any Affiliate Receivables Sale Agreement, the
Liquidity Agreement, the Lock-Box Agreements, the Term Loan
Agreement, the Dealer Agreements, the Depositary Agreements and the
Allocation Agreement.
"Facility Fee" shall have the meaning ascribed to such term in
Section 4.02(a) of the Liquidity Agreement.
"Federal Funds Rate" shall mean, on any day, a fluctuating
interest rate per annum equal to the rate of interest offered in
the interbank market to the Facility Agent as the overnight Federal
funds rate as of about 10:00 a.m., New York City time, on such day
(or, if such day is not a Business Day, for the next preceding
Business Day) provided, however, that for purposes of the Term
Loan, "Federal Funds Rate" shall mean the foregoing as determined
by the Term Bank.
"Finco" shall mean Jefferson Smurfit Finance Corporation, a
Delaware corporation.
"Finco Percentage" shall mean 100% minus the Secured Parties
Percentage; provided, however, that the Finco Percentage shall not
be less than zero.
"Flow of Funds Memorandum" shall mean Exhibit A to the
Termination and Reassignment Agreement dated as of February 27,
1995.
"Force Majeure Event" shall mean, with respect to any Person,
any riots, acts of God or the public enemy, acts of war, acts of
terrorists, epidemics, fire, equipment or power failures, flood,
embargoes, weather, earthquakes or similar events beyond the
control of such Person.
"Foreign Obligor" shall mean any Obligor that is not a
resident of a state of the United States of America, the District
of Columbia, the Commonwealth of Puerto Rico or a Province of
Canada.
"Funding Date" shall mean, (i) as to any Liquidity Loan, the
date on which such Liquidity Loan is made pursuant to Section 2.02
of the Liquidity Agreement or (ii) as to the Term Loan, the date on
which the Term Loan is made pursuant to Section 2.05 of the Term
Loan Agreement.
"GAAP" shall mean generally accepted accounting principles as
set forth from time to time in the opinions and pronouncements of
the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by significant
segments of the accounting profession.
"General Collection Sub-account" shall mean the sub-account of
the Collection Account established by the Collateral Agent (for
administrative purposes only) pursuant to Section 9.03 of the
Liquidity Agreement and designated the "General Collection Sub-
account", it being understood that any amounts in the Collection
Account not otherwise credited to or debited from any other sub-
account shall be credited to or debited from the General Collection
Sub-account.
"General Series A Sub-account" shall mean the sub-account of
the Series A Proceeds Account established by the Collateral Agent
(for administrative purposes only) pursuant to Section 9.03 of the
Liquidity Agreement and designated the "General Series A Sub-
account", it being understood that any amounts in the Series A
Proceeds Account not otherwise credited to or debited from any
other sub-account shall be credited to or debited from the General
Series A Sub-account.
"General Series B Sub-account" shall mean the sub-account of
the Series B Proceeds Account established by the Collateral Agent
(for administrative purposes only) pursuant to Section 9.03 of the
Liquidity Agreement and designated the "General Series B Sub-
account", it being understood that any amounts in the Series B
Proceeds Account not otherwise credited to or debited from any
other sub-account shall be credited to or debited from the General
Series B Sub-account.
"Indebtedness" shall mean on any date, for any Person, without
duplication, (i) all obligations of such Person for borrowed money,
(ii) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business which are payable
according to ordinary business terms, (iii) all obligations of such
Person as lessee under leases which shall have been, or should be,
in accordance with GAAP, recorded as capital leases, (iv) all
reimbursement obligations in respect of any letters of credit, (v)
all obligations secured by any Lien (other than a Permitted Lien)
on the property of such Person, (vi) all obligations of such Person
under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (v) above, and (vii) all net obligations of
such Person arising under any repurchase agreements or any interest
rate or currency protection or exchange agreements.
"Indemnitees" shall have the meaning ascribed to such term in
(i) Section 10.03 of the Liquidity Agreement, (ii) Section 8.03 of
the Term Loan Agreement, or (iii) Section 6.01 of the Receivables
Sale Agreement, as the case may be.
"Independent Public Accountants" means any of (a) Arthur
Andersen & Co., (b) Deloitte & Touche, (c) Coopers & Lybrand, (d)
Ernst & Young, (e) KPMG Peat Marwick, (f) Price Waterhouse and (g)
any successor to any of the foregoing; provided, that such firm is
independent with respect to the Servicer within the meaning of the
Securities Act.
"Indirect Seller" shall have the meaning ascribed thereto in
Section 2.06 of the Receivables Sale Agreement.
"Information Memorandum" shall mean that certain Preliminary
Information Memorandum dated January 26, 1995 (as the same has been
supplemented or otherwise updated prior to the Effective Date),
with respect to the transactions contemplated under the Facility
Documents.
"Initial Purchase Date" shall mean the Effective Date.
"Insolvency Event" shall mean, with respect to any Person, the
institution of any case or proceeding by or against such Person
under the Bankruptcy Code, or seeking liquidation, dissolution,
winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any other law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property or the taking of any
corporate action by such Person to authorize any of the foregoing
actions.
"Integration Percentage" shall mean, with respect to any
fiscal year of JSC, beginning with the fiscal year ending January
31, 1995, the percentage which is the numerical equivalent of a
fraction, the numerator of which equals the number of tons of
containerboard consumed by JSC during such fiscal year, and the
denominator of which equals the number of tons of containerboard
shipped by JSC during such fiscal year.
"Interest Period" shall mean:
(i) for each Eurodollar Loan comprising part of the same
borrowing, the period commencing on the Funding Date or the
Conversion/Continuation Date of such borrowing, as applicable,
and ending on the last day of the period selected by Finco
pursuant to the terms of the Liquidity Agreement or the Term
Loan Agreement, as the case may be, which period shall be one,
two, three or six months; and
(ii) for each Base Rate Loan comprising part of the same
borrowing, a period commencing on the Funding Date or the
Conversion/Continuation Date of such borrowing and ending on
the immediately following Settlement Date, and thereafter
commencing on each Settlement Date and ending on the
immediately following Settlement Date.
provided, however, that (a) if any Interest Period would otherwise
end on a day that shall not be a Business Day, such Interest Period
shall end on the next succeeding Business Day (unless, with respect
to any Eurodollar Loan, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day), (b) if any Interest
Period with respect to a Eurodollar Loan would otherwise end on a
calendar day for which there is no corresponding calendar day in
the applicable subsequent calendar month, such Interest Period
shall expire on the last Business Day of such applicable subsequent
calendar month, and (c) no Interest Period with respect to any
Eurodollar Loan shall end on a date later than the Commitment
Termination Date in the case of any Liquidity Loan, or the Stated
Term Loan Maturity Date, in the case of the Term Loan.
"Investment" shall mean, with respect to any Person, any
direct or indirect investment by such Person in any other Person,
whether by means of share purchase, capital contribution, loan or
otherwise, excluding the incurrence of receivables arising from
sales made or services rendered in the ordinary course of business
and excluding commission, travel and similar advances to officers,
directors and employees made in the ordinary course of such
Person's business.
"Invoice" shall mean an invoice issued by the Seller to an
Obligor pursuant to which such Obligor is obligated to pay for the
sale of goods, merchandise and/or services rendered by the Seller.
"IRC" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
"IRS" shall mean the Internal Revenue Service.
"JSC" shall mean Jefferson Smurfit Corporation (U.S.), a
Delaware corporation or any successor in interest by merger or
otherwise.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance,
security interest, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or
other title retention agreement, the interest of a lessor under a
capitalized lease obligation, any financing lease having
substantially the same economic effect as any of the foregoing and
the filing of any financing statement, naming the owner of the
asset to which such Lien relates as debtor, under the UCC or
comparable law of any jurisdiction). To avoid any doubt, any
interest of the "Trust" referred to in the Existing Receivables
Sale Agreement in the Receivables or Related Security would
constitute a "Lien."
"Liquidation Event" shall mean any one of the following
events:
(a) either (i) failure by Finco to make any
mandatory payment of principal on the Liquidity Loans
when required under the Facility Documents, which failure
continues for two (2) Business Days after such failure;
or (ii) failure by Finco to make any mandatory payment of
interest on the Liquidity Loans or any payment of fees
referred to in the definition of "Reserved Carrying
Costs" when required under the Facility Documents which
failure continues unremedied for five (5) Business Days
after notice from the Facility Agent of such failure;
(iii) failure by Finco to make any mandatory payment of
principal on the Term Loan when required under the Term
Loan Agreement, which failure continues for two (2)
Business Days after such failure; (iv) failure by Finco
to make any mandatory payment of interest on the Term
Loan when required under the Term Loan Agreement which
failure continues unremedied for five (5) Business Days
after notice from the Term Bank of such failure; or (v)
failure by Finco or the Seller (whether individually or
in its capacity as Servicer or subservicer) to pay any
other amount when due under the Facility Documents, which
failure continues unremedied for fifteen (15) days after
notice from the Facility Agent of such failure; provided,
however, that if Finco or the Seller is unable to make a
payment described above as a result of a Force Majeure
Event, or as a result of a Force Majeure Event relating
to the Servicer, then the time periods described above
shall be extended for so long as such Force Majeure Event
renders the Servicer, Seller or Finco unable to make such
payment, but in no event shall such extension exceed ten
(10) Business Days;
(b) any representation or warranty made by Finco,
JSC or by the Seller under or in connection with any
Facility Document, any Daily Report, any Settlement
Statement or other report, certificate, financial
statement or information furnished by the Seller and/or
Finco pursuant to the Facility Documents shall prove to
have been false or incorrect in any material respect when
made, and a Material Adverse Effect exists as a result
thereof and continues thirty (30) days after written
notice from the Facility Agent;
(c) the Seller shall fail to perform or observe in
any material respect any term, provision, covenant,
condition or agreement contained in the Receivables Sale
Agreement on its part to be performed or observed (other
than those referred to in clause (a) above) and (i) any
such failure shall remain unremedied for a period of
thirty (30) days after the date on which written notice
of such failure, requiring the same to be remedied, shall
have been given to the Seller or JSC by the Facility
Agent and (ii) a Material Adverse Effect exists as a
result of such failure and continues during such thirty-
day period; provided, however, notwithstanding the
foregoing, any such failure with respect to Section
4.03(d) of the Receivables Sale Agreement shall
immediately constitute a Liquidation Event without regard
to clauses (i) and (ii);
(d) Finco shall fail to perform or observe any
term, provision, covenant, condition or agreement
contained in Article VIII of the Liquidity Agreement or
Article VII of the Term Loan Agreement on its part to be
performed or observed and any such failure shall remain
unremedied for thirty (30) days or more after written
notice thereof shall have been given to Finco by the
Facility Agent or the Term Bank, respectively;
(e) Finco shall fail to perform or observe in any
material respect any term, provision, covenant, condition
or agreement contained in the Liquidity Agreement or any
other Facility Document (other than the Term Loan
Agreement) on its part to be performed or observed (other
than those covered by the other subsections of this
definition) and (i) any such failure shall remain
unremedied for a period of thirty (30) days after the
date on which written notice of such failure, requiring
the same to be remedied, shall have been given to Finco
by the Facility Agent and (ii) a Material Adverse Effect
exists as a result of such failure and continues during
such thirty-day period;
(f) Finco shall fail to perform or observe in any
material respect any term, provision, covenant, condition
or agreement contained in the Term Loan Agreement or any
other Facility Document (other than the Liquidity
Agreement) on its part to be performed or observed (other
than those covered by the other subsections of this
definition) and (i) any such failure shall remain
unremedied for a period of thirty (30) days after the
date on which written notice of such failure, requiring
the same to be remedied, shall have been given to Finco
by the Term Bank and (ii) a Material Adverse Effect
exists as a result of such failure and continues during
such thirty-day period;
(g) an Insolvency Event shall have occurred with
respect to JSC (if it is then the parent of Finco), the
Seller or Finco; provided, however, that if such
Insolvency Event arises as a result of an involuntary
bankruptcy petition being filed against JSC, the Seller
or Finco, the event described in this clause (g) shall
not mature into a Liquidation Event unless and until (i)
such proceeding shall continue undismissed for a period
of 60 days, (ii) an order of relief shall be entered in
such proceeding, or (iii) JSC, the Seller or Finco, as
the case may be, shall acquiesce in such proceeding,
whichever is earliest;
(h) either JSC or an Affiliate thereof shall cease
to own 100% of the issued and outstanding shares of
Finco, or the Seller shall cease to own 100% of its
Short-Term Note, in each case free and clear of any Liens
(except Permitted Liens);
(i) a Servicer Termination Event (other than any
described in any other clause of this definition) occurs;
(j) either (i) Finco shall cease to have a
perfected ownership interest in the Receivables, all
Related Security or Collections therefrom; or (ii) the
Collateral Agent shall cease to have a perfected security
interest in those portions of the Collateral in respect
of which the Collateral Agent's security interest thereof
may be perfected (subject, however, in either case, to
Permitted Liens);
(k) (i) a Base Amount Shortfall shall exist for a
period of five (5) or more consecutive Business Days
(after giving effect to all allocations of Collections
and Purchases or Contributions of Receivables made on
each such day) or (ii) if the Term Loan is outstanding, a
Modified Base Amount Shortfall exists for a period of
five (5) or more consecutive Business Days (after giving
effect to all allocations of Collections and Purchases
and Contributions of Receivables made on each such day);
(l) any proceedings shall have commenced and shall
be continuing to foreclose upon any Lien or other
encumbrance on any of the Receivables with respect to an
aggregate amount of liabilities exceeding $2,000,000;
(m) Finco shall become an "investment company"
within the meaning of the Investment Company Act of 1940,
as amended, and shall not be exempt from the provisions
thereof;
(n) Either the IRS or the PBGC shall have filed one
or more Liens against the assets of Finco in an aggregate
amount exceeding $5,000,000, unless (i) such amounts are
adequately bonded to the satisfaction of the Facility
Agent, or (ii) such amounts relate to taxes which are
being contested in good faith by appropriate proceedings
and with respect to which adequate reserves are being
maintained under GAAP;
(o) Any non-appealable judgment or non-appealable
order for the payment of money in an amount exceeding
$5,000,000 shall be rendered against Finco and such
judgment or order shall remain in effect and unpaid for a
period of ten (10) Business Days;
(p) Any foreclosure or similar proceedings in
respect of Permitted Liens on the Short-Term Note or
Finco's common stock shall have been commenced; or title
to any Short-Term Note or Finco's common stock shall pass
to the holders of such Permitted Liens; or
(q) Any Lien or other encumbrance shall attach to the
Receivables generally (and not to any individual Receivable)
with respect to an aggregate amount of liabilities exceeding
$15,000,000, unless (i) such amounts are adequately bonded to
the satisfaction of the Facility Agent and with respect to any
such bond the Rating Agency Condition shall have been
satisfied, or (ii) such amounts relate to matters which are
being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained
which shall satisfy the Rating Agency Condition.
"Liquidation Period" shall mean the period commencing on the
date on which the Seller's obligation to sell, and Finco's
obligation to purchase, Receivables under the Receivables Sale
Agreement terminates and continuing until the Collection Date. The
Liquidation Period shall commence on the earliest to occur of:
(i) the Scheduled Liquidation Commencement Date;
(ii) the date designated by JSC to Finco and to the
Facility Agent by not less than ten (10) days nor more
than sixty (60) days prior written notice as the date on
which the Seller wishes to cease the sales of Receivables
to Finco;
(iii) the date designated by Finco to the Seller
and to the Facility Agent by not less than ten (10)
Business Days prior written notice following the
occurrence and during the continuance of any Liquidation
Event as the date on which it wishes to cease the
purchases of Receivables from the Seller;
(iv) the occurrence and continuance of a
Liquidation Event described in clause (g) or clause (m)
of the definition thereof;
(v) the eleventh Business Day following the
occurrence and during the continuance of a Liquidation
Event described in clause (a) or (k) of the definition
thereof unless waived in accordance with Section 12.01 of
the Liquidity Agreement or otherwise cured prior to such
eleventh Business Day;
(vi) the eleventh Business Day following JSC's
knowledge of the occurrence of a Liquidation Event
described in clause (j) of the definition thereof, unless
such Liquidation Event is waived in accordance with
Section 12.01 of the Liquidity Agreement or otherwise
cured prior to such eleventh Business Day;
(vii) the first Business Day following the date
designated by the Facility Agent at the direction of the
Majority Banks by notice thereof by the Facility Agent to
Finco and the Servicer upon the occurrence and during the
continuance of any Liquidation Event other than those
Liquidation Events referred to in clauses (iv), (v), (vi)
or (viii) of this definition, as the date on which the
Liquidation Period shall commence; or
(viii) the tenth Business Day following JSC's
knowledge of the occurrence of a Liquidation Event
described in clause (q) of the definition thereof, unless
such Liquidation Event is waived in accordance with
Section 12.01 of the Liquidity Agreement or otherwise
cured prior to such tenth Business Day.
"Liquidity Agreement" shall mean that certain Liquidity
Agreement dated as of February 23, 1995 by and among Finco, the
Facility Agent, the Collateral Agent and the Banks, as the same may
be amended, restated or otherwise modified from time to time.
"Liquidity Loan" shall mean a Series A Liquidity Loan or a
Series B Liquidity Loan and "Liquidity Loans" shall mean,
collectively, the Series A Liquidity Loans and the Series B
Liquidity Loans.
"Liquidity Note" shall mean a Series A Liquidity Note or a
Series B Liquidity Note and "Liquidity Notes" shall mean,
collectively, the Series A Liquidity Notes and the Series B
Liquidity Notes.
"Loan" shall mean a Liquidity Loan or a Term Loan.
"Lock-Box Account" shall mean any lock-box account or other
depositary account maintained for the purpose of receiving
Collections on the Receivables.
"Lock-Box Agreement" shall mean any of the lock-box agreements
entered into in connection with the Existing Receivable Purchase
Documents, as modified by letter agreements entered into among
Finco, the Collateral Agent and each Lock-Box Bank on or prior to
the Effective Date and any other agreement substantially in the
form of those agreements from time to time entered into among
Finco, the Collateral Agent and a Lock-Box Bank.
"Lock-Box Bank" shall mean any of the banks holding one or
more Lock-Box Accounts.
"Loss Discount Ratio" shall mean the Loss to Liquidation Ratio
appearing on the most recent Settlement Statement. The underlying
calculations for each of the three Collection Periods preceding the
first Settlement Date to be used in future calculations of the Loss
Discount Ratio shall be as set forth in Schedule 1.
"Loss Reserve Ratio" shall mean, commencing on any Settlement
Date and continuing until (but not including) the next Settlement
Date, an amount (expressed as a percentage) calculated in
accordance with the following formula:
LRR = ARF x ARR x b x PTM
where:
LRR = the Loss Reserve Ratio;
ARF = the Applicable Ratings Factor;
ARR = the highest average of the Aged Receivables
Ratios for any three consecutive Collection
Periods that occur during the period of twelve
consecutive Collection Periods ending on the
most recent Cut-Off Date;
b = a fraction having (A) a numerator equal to the
aggregate Original Balances of all new
Receivables generated during the preceding
three Collection Periods preceding such
Settlement Date, and (B) a denominator equal to
the aggregate Outstanding Balances of all
Eligible Receivables as calculated on the most
recent Cut-Off Date; and
PTM = the Payment Term Multiplier.
The Loss Reserve Ratio calculated in any Settlement Statement shall
be the applicable Loss Reserve Ratio from the Settlement Date
relating thereto until the next Settlement Date. The Loss Reserve
Ratio from the Effective Date until the first Settlement Date shall
be as set forth on Schedule 1 hereto and the underlying
calculations for each of the three Collection Periods preceding the
first Settlement Date to be used in future calculations of the Loss
Reserve Ratio shall be as set forth in such Schedule 1.
"Loss to Liquidation Ratio" shall mean the applicable loss to
liquidation ratio appearing on the most recent Settlement
Statement, which ratio (expressed as a percentage) shall be
computed, as of the most recent Cut-Off Date, by dividing (i) the
excess, if any, of (A) the aggregate reduction in the Outstanding
Balances of the Receivables as a result of Write-Offs during the
three most recent Collection Periods plus without duplication, the
principal amount of all Receivable Notes taken in respect of the
Receivables during such three Collection Periods, over (B) any
Collections received during such three Collection Periods in
respect of Write-Offs of the Receivables and, without duplication,
Receivable Notes received in respect of the Receivables by (ii) the
aggregate amount of Collections with respect to the Receivables
received during such three Collection Periods. The underlying
calculations for each of the three Collection Periods preceding the
first Settlement Date to be used in future calculations of the Loss
to Liquidation Ratios shall be as set forth in Schedule 1.
"Majority Banks" shall mean a Bank or Banks whose
commitment(s) to make Liquidity Loans under the Liquidity Agreement
aggregate more than fifty percent (50%) of the Commitments.
"Master Agreement" shall mean the Master Agreement dated as of
August 22, 1991 and thereafter amended (as amended, the "Master
Agreement") among Emerald Funding Corporation, Finco, JSC,
Container Corporation of America, Dresdner Bank, A.G., as
Administrative Agent, and Bankers Trust Company, as Collateral
Agent.
"Material Adverse Effect" shall mean (i) any material adverse
effect upon the validity or enforceability of the Facility
Documents or any of the Liens created thereunder or (ii) any
adverse effect which, by itself or when taken together with all
other such adverse effects, would have a materially adverse effect
on the validity, enforceability or collectibility of the
Receivables and the other Purchased Assets taken as a whole
(including any such adverse effect on collectibility which arises
as a result of JSC's or the Seller's inability to perform its
duties as Servicer).
"Measurement Date" shall mean the earlier to occur of (x) the
Termination Date, and (y) the first date on which an Insolvency
Event shall occur with respect to Finco; provided that if the
Measurement Date shall have occurred as a result of an involuntary
bankruptcy petition having been filed against Finco and such
proceedings shall have been dismissed prior to the Termination
Date, then for purposes of future calculations and distributions,
the Measurement Date shall be deemed not to have occurred.
"Minimum Required Reserve Ratio" shall mean
(i) for purposes of calculating the Applicable Reserve
Ratio as an element of the Base Amount, the Series A Base
Amount or the Series B Base Amount, as the case may be, the
sum, as of any Cut-Off Date, of:
(a) the Excess Concentration Factor for such Cut-Off
Date; plus
(b) the Average Dilution Ratio for such Cut-Off Date,
multiplied by the Dilution Horizon Variable for such
Cut-Off Date;
provided, that in no event shall the Minimum Required Reserve
Ratio (as an element of the Base Amount, the Series A Base
Amount or the Series B Base Amount, as the case may be) be
less than ten percent (10%); and
(ii) for purposes of calculating the Applicable Reserve
Ratio as an element of the Modified Base Amount the Modified
Series A Base Amount or the Modified Series B Base Amount, as
the case may be, the sum, as of any Cut-Off Date, of:
(a) the product of three times the Benchmark Percentage
then in effect for clause (ii) of the definition of
Excess Concentration Balance; plus
(b) the Average Dilution Ratio for such Cut-Off Date,
multiplied by the Dilution Horizon Variable for such
Cut-Off Date;
provided, that in no event shall the Minimum Required Reserve
Ratio (as an element of the Modified Base Amount the Modified
Series A Base Amount or the Modified Series B Base Amount, as
the case may be) be less than five percent (5%).
The Minimum Required Reserve Ratio calculated in any Settlement
Statement shall be the applicable Minimum Required Reserve Ratio
from the Settlement Statement relating thereto until the next
Settlement Date. The Minimum Required Reserve Ratio from the
Effective Date until the first Settlement Date shall be as set
forth on Schedule 1 hereto.
"Modified Base Amount", as of any date, shall mean the amount
equal to (i) the result obtained by multiplying the product of (a)
the Net Eligible Receivables times (b) 100% minus the Applicable
Reserve Ratio, plus (ii) the amount on deposit and credited to the
Series A Equalization Sub-account and the Series B Equalization
Sub-account which was required to be retained therein pursuant to
Section 2.07 of the Liquidity Agreement, minus (iii) the Discount
Rate Reserve, minus (iv) the product of 1.1 times the dollar amount
of any Liens that attach to all of the Eligible Receivables unless
such Liens (a) are for taxes, assessments or charges of any
governmental authority for amounts not yet due, (b) are Liens
arising under the Facility Documents, (c) are rights of offset of
an Obligor with respect to payment of a Receivable which has the
economic effect of a priority claim and as to which a deduction has
been made in accordance with clause (5) of the definition of
"Eligible Receivable," (d) are Liens of a collecting bank under
Section 4-208 of the UCC or (e) have been bonded in full by or on
behalf of the Seller.
"Modified Base Amount Shortfall" shall mean on any day, the
amount by which (i) the amount equal to (a) the Aggregate Loan
Amount plus (b) the Term Loan Amount plus (c) the Aggregate CP
Amount (in each case after giving effect to any New Credit Event or
Refunding Advance on such day and the application of proceeds
therefrom) minus (c) the aggregate amount on deposit and credited
to the Downgraded Series A Bank Sub-account and the Downgraded
Series B Bank Sub-account, exceeds (ii) the Modified Base Amount.
"Modified Series A Base Amount", as of any date, shall mean
the amount equal to (i) the result obtained by multiplying the
product of (a) the Net Eligible Receivables times (b) 100% minus
the Applicable Reserve Ratio times (c) the Series A Percentage,
plus (ii) the amount on deposit in the Series A Equalization Sub-
account which was required to be retained therein pursuant to
Section 2.07 of the Liquidity Agreement, minus (iii) the Discount
Rate Reserve times the Series A Percentage, minus (iv) the product
of the Series A Percentage times 1.1 times the dollar amount of any
Liens that attach to all of the Eligible Receivables unless such
Liens (a) are for taxes, assessments or charges of any governmental
authority for amounts not yet due, (b) are Liens arising under the
Facility Documents, (c) are rights of offset of an Obligor with
respect to payment of a Receivable which has the economic effect of
a priority claim and as to which a deduction has been made in
accordance with clause (5) of the definition of "Eligible
Receivable," (d) are Liens of a collecting bank under Section 4-208
of the UCC or (e) have been bonded in full by or on behalf of the
Seller.
"Modified Series A Percentage" shall mean on any day the
quotient of (A) the amount equal to (i) the Aggregate Series A Loan
Amount plus (ii) the Aggregate Series A CP Amount as of the close
of business on the prior Business Day minus (iii) the aggregate
amount on deposit and credited to the Downgraded Series A Bank Sub-
account as of the close of business on the prior Business Day,
divided by (B) the amount of the Aggregate Net Outstandings as of
the close of business on the prior Business Day.
"Modified Series B Base Amount", as of any date, shall mean
the amount equal to (i) the result obtained by multiplying the
product of (a) the Net Eligible Receivables times (b) 100% minus
the Applicable Reserve Ratio times (c) the Series B Percentage,
plus (ii) the amount on deposit in the Series B Equalization Sub-
account which was required to be retained therein pursuant to
Section 2.07 of the Liquidity Agreement, minus (iii) the Discount
Rate Reserve times the Series B Percentage, minus (iv) the product
of the Series B Percentage times 1.1 times the dollar amount of any
Liens that attach to all of the Eligible Receivables unless such
Liens (a) are for taxes, assessments or charges of any governmental
authority for amounts not yet due, (b) are Liens arising under the
Facility Documents, (c) are rights of offset of an Obligor with
respect to payment of a Receivable which has the economic effect of
a priority claim and as to which a deduction has been made in
accordance with clause (5) of the definition of "Eligible
Receivable," (d) are Liens of a collecting bank under Section 4-208
of the UCC or (e) have been bonded in full by or on behalf of the
Seller.
"Modified Series B Percentage" shall mean on any day the
quotient of (A) the amount equal to (i) the Aggregate Series B Loan
Amount plus (ii) the Aggregate Series B CP Amount as of the close
of business on the prior Business Day minus (iii) the aggregate
amount on deposit and credited to the Downgraded Series B Bank Sub-
account as of the close of business on the prior Business Day,
divided by (B) the amount of the Aggregate Net Outstandings as of
the close of business on the prior Business Day.
"Net Eligible Receivables" shall mean the aggregate
Outstanding Balances of Eligible Receivables as reported in the
most recent Daily Report minus the sum of (i) the aggregate amount
of the Excess Concentration Balances for each Obligor and its
Consolidated Affiliates then in effect, (ii) the Excess Foreign
Obligor Balances then in effect, (iii) the Excess Canadian Obligor
Balances then in effect, (iv) if the Rating Agency Condition shall
have been satisfied with respect to Receivables relating to goods
that are being held by the Seller or an Indirect Seller on a Bill
and Hold Basis, the Excess Bill and Hold Balance and (v) the
maximum potential cash discount available to such Obligors in
accordance with the Credit and Collection Policy, as reported in
the most recent Daily Report.
"New Credit Event" shall mean the issuance of Commercial
Paper, the making of a Revolving Advance pursuant to the Liquidity
Agreement, or the making of the Term Loan pursuant to the Term Loan
Agreement.
"Newsprint" shall mean Smurfit Newsprint Corporation and its
successors and assigns (other than the Seller).
"Noncomplying Receivable" shall mean a Receivable which was
not an Eligible Receivable as of the date it was purchased by Finco
from the Seller but which was not identified as ineligible by
notice from the Servicer or the Seller to Finco on such date.
"Noncomplying Receivables Adjustment" shall mean, on any date
with respect to the Seller, the amount (if any) owed by the Seller
to Finco or by Finco to the Seller on such date pursuant to Section
2.02(f) of the Receivables Sale Agreement, which amounts shall
equal:
(a) in the case of any such amounts owing by the Seller
to Finco, the excess (if any) of (i) the Purchase Price
Percentage times the Original Balance of any Noncomplying
Receivables of the Seller identified as such (and not
previously the subject of a Noncomplying Receivables
Adjustment) minus (ii) the aggregate amount of Collections
received by Finco (and not previously the subject of an
adjustment to the Purchase Price payable pursuant to said
Section 2.02(f)) with respect to such Noncomplying
Receivables; and
(b) in the case of any such amounts owing by Finco to
the Seller, the excess (if any) of clause (a)(ii) over clause
(a)(i) with respect to the Seller.
"Notice of Borrowing" shall mean a "Notice of Borrowing"
described in Section 2.03(a) of the Liquidity Agreement or Section
2.04(a) of the Term Loan Agreement, as the case may be.
"Notice of Conversion/Continuation" shall mean a "Notice of
Conversion/Continuation" described in Section 2.05 of the Liquidity
Agreement or Section 2.04 of the Term Loan Agreement, as the case
may be.
"Obligations" shall have the meaning assigned to such term in
Section 9.01 of the Liquidity Agreement.
"Obligor" shall mean any Person obligated to make payments in
respect of a Receivable (other than Finco or the Seller or any
Indirect Seller).
"Ordinary Course Expenses" shall mean the accrued expenses of
Finco for employee salaries, benefits, directors' fees, office
lease payments, office supplies, amounts owed under the Allocation
Agreement or the Existing Receivables Sale Agreements, fees owed to
the Lock-Box Banks, Federal, state and local taxes and similar
expenses incurred in the ordinary course of its business other than
(a) interest expense under the Short-Term Note and (b) other
Carrying Costs specifically mentioned in the definitions of
Reserved Carrying Costs and Unreserved Carrying Costs.
"Original Balance" shall mean, with respect to any Receivable,
the face amount of such Receivable on the date it was purchased by
or contributed to Finco, which face amount shall be calculated net
of any credits issued on the date of Purchase or Contribution (or,
in the case of Purchases or Contributions on or before the
Effective Date, accrued through the Effective Date).
"Other Carrying Costs Reserve" shall mean, on any date, the
sum of (i) Accrued Other Carrying Costs as of such date (excluding,
for this purpose, interest accrued or to accrue on the Short-Term
Note) plus (ii) the product of (a) the amount by which the
Aggregate Net Outstandings exceeds the amount which is then being
retained in and credited to the Series A Equalization Sub-account
and the Series B Equalization Sub-account as required by Section
2.07 of the Liquidity Agreement, times (b) the Cost of Funds Rate
times (c) the Term Loan Percentage divided by (d) twelve; provided,
however, that Finco may direct the Collateral Agent to increase the
Other Carrying Costs Reserve to the extent necessary to simplify
the daily allocations of funds required under Section 9.07 of the
Liquidity Agreement.
"Other Carrying Costs Sub-account" shall mean the sub-account
of the Collection Account established by the Collateral Agent (for
administrative purposes only) pursuant to Section 9.03 of the
Liquidity Agreement and designated the "Other Carrying Costs Sub-
account".
"Outstanding Balance" shall mean, with respect to any
Receivable on any date, the then outstanding face amount thereof,
which is calculated by subtracting (without duplication) the
Collections, Dilution and Write-Offs relating to such Receivable
from the Original Balance of such Receivable.
"Payment Term" shall mean, with respect to any Receivable, the
number of days between its invoice date and its due date.
"Payment Term Multiplier" shall mean, with respect to a
Receivable, (a) 1.0, if the Payment Term Variable is not more than
36, (b) 1.1, if the Payment Term Variable is 37 to 39, (c) 1.17, if
the Payment Term Variable is 40 to 45, (d) 1.22, if the Payment
Term Variable is 46 to 50, (e) 1.28, if the Payment Term Variable
is 51 to 55, (f) 1.33 if the Payment Term Variable is 56 to 60,
and (g) 1.38 if the Payment Term Variable is 61 to 65; provided,
however, that, if the Payment Term Variable exceeds 65, the Payment
Term Multiplier for such Receivable shall be determined by
calculating the sum of (x) 1.38, and (y) 0.05, for each 5-day
increment by which the Payment Term Variable exceeds 65, it being
understood that the same number shall apply for all Payment Term
Variables that fall within a five-day range.
"Payment Term Variable" shall mean, as calculated in each
Settlement Statement as of the most recently ended Cut-Off Date,
the quotient of:
(x) the sum of (1) the product of the Outstanding
Balance of each Receivable as of such Cut-off Date times
(2) the Payment Term with respect to such Receivable;
divided by
(y) the aggregate Outstanding Balance of all
Receivables as of such Cut-off Date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Perfection Opinion" shall mean, with respect to any change in
location, change in name or other event, an opinion or opinions of
counsel (which counsel must be reasonably satisfactory to the
Agents) to the effect that (a) in the case of any such change or
other event affecting the Seller, that all UCC filings have been
made that are necessary to continue the perfection of Finco's
ownership interest in the Purchased Assets after giving effect to
that change or other event (and the lapse of any applicable grace
periods under the UCC), and (b) in the case of any such change or
event affecting Finco, that all UCC filings have been made that are
necessary to continue the perfection of the Collateral Agent's
security interest in all of the Collateral after giving effect to
that change or other event (and the passage of any relevant time
period under the UCC); provided, however, that matters covered by
such opinions shall be substantially similar to, and shall not
exceed the scope of, the opinions with respect to UCC matters
delivered pursuant to Section 5.01 of the Liquidity Agreement and
Section 4.01 of the Term Loan Agreement.
"Permitted Foreign Receivables Balance" shall mean, as of any
date, the amount of otherwise Eligible Receivables due from Foreign
Obligors and (without duplication) their consolidated Affiliates,
payment of which is fully supported by an irrevocable, direct
letter of credit or an irrevocable guaranty that is (A) issued by a
domestic banking institution rated at least A by each Rating Agency
and (B) assigned to the Collateral Agent, which amount shall in no
event exceed four and one-half percent (4.5%) of the aggregate
Outstanding Balances of all Eligible Receivables as of such date.
"Permitted Investments" shall mean any one or more of the
following:
(i) marketable securities issued or directly and
unconditionally guaranteed by the United States Government
maturing on or before the Settlement Date following the date
of acquisition thereof;
(ii) marketable securities issued by any agency of the
United States Government maturing on or before the Settlement
Date following the date of acquisition thereof;
(iii) marketable direct obligations issued by any state
of the United States of America or any political subdivision
of any such state or any public instrumentality thereof
maturing on or before the Settlement Date following
acquisition thereof and, at the time of acquisition, having
the highest rating obtained from each Rating Agency;
(iv) time deposits maturing within 30 days of the date
of acquisition thereof or certificates of deposit (including
domestic, Eurodollar and Yankee certificates of deposit) or
deposit notes or bankers' acceptances maturing on or before
the Settlement Date following the date of acquisition thereof,
in each case issued by or deposited in, as the case may be,
any commercial bank and in each case having a short term debt
rating of A-1+ (or the equivalent) from each Rating Agency;
(v) commercial paper maturing on or before the
Settlement Date following the date of acquisition, having a
short term debt rating of A-1+ (or the equivalent) from each
Rating Agency;
(vi) promissory notes (including both non-interest
bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date, or having been
called for redemption on a date, not later than the Settlement
Date following the date of acquisition), having a long term
(secured or unsecured) debt rating of at least AAA (or the
equivalent) from each Rating Agency;
(vii) repurchase obligations with terms of not more than
seven days from the date acquired, which obligations are
collateralized by securities of the type described in (i) and
(ii) above in an amount not less than 102% of such obligations
and each counterparty in respect of which is an entity which
is monitored by, reports to, and is recognized as a primary
dealer by the Federal Reserve Bank of New York (a "Primary
Dealer") having a minimum long term debt rating of AAA (or the
equivalent) by each Rating Agency; provided that all such
collateral be held in a custody account designated by JSC; and
(viii) investments in money market funds rated AAA-m or
AAA-mg (or the equivalent) by each Rating Agency or otherwise
approved in writing by each Rating Agency; it being understood
and agreed that all investments described in this
clause (viii) shall be deemed to have a daily maturity.
"Permitted Liens" shall mean (i) Liens for taxes, assessments
or charges of any governmental authority for amounts not yet due or
which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP; (ii) Liens
of landlords, carriers, warehousemen, mechanics and materialmen
imposed by law and created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves
or other appropriate provisions are being maintained in accordance
with GAAP; (iii) any right of offset of an Obligor with respect to
payment of a Receivable which has the economic effect of a priority
claim; (iv) Liens of a collecting bank under Section 4-208 of the
UCC; (v) Liens created by the Facility Documents; (vi) other Liens
not described in clause (i) above in favor of the PBGC or the IRS
or any lien creditor (as defined in Section 9-301(3) of the UCC)
which do not give rise to a Liquidation Event under clause (l) or
(n) of the definition thereof; and (vii) Liens on the Short-Term
Note and the capital stock of Finco in favor of Persons who provide
financing to JSC and/or the Seller.
"Person" shall mean an individual, partnership, corporation
(including a business trust), joint stock company, limited
liability company, trust, unincorporated association, joint
venture, government (or any agency or political subdivision
thereof) or other entity.
"Pro Rata Share" shall mean, (a) with respect to the Series A
Bank, 100% and (b) with respect to any Series B Bank, (i) on any
date prior to the Liquidation Period, a fraction, the numerator of
which equals the Series B Commitment of such Series B Bank and the
denominator of which equals the Series B Facility Amount, and
(ii) on any date during the Liquidation Period, as to any Bank,
such Series B Bank's Pro Rata Share immediately prior to the
commencement of the Liquidation Period; provided, however, that
solely for the purposes of Section 2.04(c) of the Liquidity
Agreement, with respect to any Series B Bank (other than a
Downgraded Series B Bank which has made a Liquidity Loan in the
amount required by Section 2.04(e) of the Liquidity Agreement on or
before the date of the proposed Borrowing under Section 2.04(c) of
the Liquidity Agreement), "Pro Rata Share" shall mean (i) on any
date prior to the Liquidation Period, a fraction, the numerator of
which equals the Series B Commitment of such Series B Bank and the
denominator of which equals the Series B Facility Amount less the
Series B Commitment of each such Downgraded Series B Bank, and
(ii) on any date during the Liquidation Period, such Series B
Bank's Pro Rata Share immediately prior to the commencement of the
Liquidation Period.
"Purchase" shall mean a purchase by Finco of Receivables and
the Related Security from the Seller made pursuant to Article II of
the Receivables Sale Agreement, and shall include any deemed
purchase by Finco pursuant to Section 2.01(e) of the Receivables
Sale Agreement.
"Purchase Discount Rate Reserve Ratio" shall mean, with
respect to the Receivables, a percentage calculated in the most
recent Settlement Statement in accordance with the following
formula:
PDRR = TD x DR
360
where:
PDRR = the Purchase Discount Rate Reserve Ratio;
TD = the Turnover Days during the prior Collection
Period; and
DR = the Discount Rate in the most recent Settlement
Statement.
"Purchase Price" shall mean, with respect to any Purchase
under the Receivables Sale Agreement, the aggregate price to be
paid by Finco to the Seller, which price shall be computed by
multiplying the aggregate Original Balances of the Eligible
Receivables included in such Purchase by the then effective
Purchase Price Percentage applicable to such Receivables.
"Purchase Price Percentage" shall mean a percentage calculated
in the most recent Settlement Statement to equal 100% minus the sum
of (i) the Loss Discount Ratio applicable thereto and (ii) the
Purchase Discount Rate Reserve Ratio applicable thereto, as each
such ratio has been computed in such Settlement Statement. The
Purchase Price Percentage calculated in any Settlement Statement
shall be the applicable Purchase Price Percentage from the
Settlement Date relating thereto until the next Settlement Date.
From the Effective Date to the first Settlement Date, the
applicable Purchase Price Percentage shall be as set forth in
Schedule 1 hereto.
"Purchased Assets" shall mean, with respect to any Purchase,
(a) the Receivables sold to Finco by the Seller on the date
thereof, (b) all Related Security relating to such Receivables and
(c) all Collections with respect to, and other proceeds of, such
Receivables and such Related Security (including all Receivable
Notes received from time to time by the Seller or an Indirect
Seller in respect thereof).
"Rating Agency" shall mean (i) with respect to the Series A
Commercial Paper or the Series B Commercial Paper, (A) each of S&P
and Duff, and (B) any successor rating agency acceptable to the
Facility Agent which issues a rating letter with respect to the
Series A Commercial Paper or the Series B Commercial Paper in
substitution for S&P or Duff and (ii) with respect to the Term Note
and the Liquidity Loans, (A) S&P, or (B) any successor rating
agency acceptable to the Term Bank or the Facility Agent, as the
case may be, which issues a rating letter with respect to the Term
Note or the Liquidity Loans, respectively, in substitution for S&P.
If either S&P or Duff, as the case may be, is replaced as the
Rating Agency, references to particular ratings shall mean the
corresponding rating of such successor Rating Agency.
"Rating Agency Condition" shall mean, with respect to any
circumstance or event, written confirmation from each Rating Agency
in writing that the circumstance or event will not result in a
lowering or withdrawal of the rating of the Series A Commercial
Paper, the Series B Commercial Paper or the Liquidity Loans.
"Receivable" shall mean all indebtedness of an Obligor
(whether constituting an account, chattel paper, or a general
intangible) arising from the sale of goods, merchandise or the
furnishing of services by the Seller or an Indirect Seller,
including all interest or finance charges and other obligations of
such Obligor with respect thereto, but excluding in any event any
such indebtedness which is not denominated in U.S. Dollars and all
Excluded Receivables. Until the Collection Date, each Write-Off
and each Receivable Note shall continue to constitute a Receivable
until the indebtedness of the Obligor thereunder shall have been
paid in full, extinguished by agreement between the Seller or such
Indirect Seller and such Obligor, or otherwise extinguished
pursuant to applicable law.
"Receivable Notes" shall mean any promissory notes issued by
an Obligor to evidence a Receivable.
"Receivables Sale Agreement" shall mean that certain
Receivables Purchase and Sale Agreement dated as of February 23,
1995 by and among JSC, the Seller and Finco, as the same may be
amended, restated or otherwise modified from time to time.
"Records" shall mean all Invoices and other documents, books,
records and other media for the storage of information (including
tapes, disks, computer programs and databases and related property)
maintained with respect to the Receivables and the related
Obligors.
"Refunding Advance" shall mean a Series A Liquidity Loan or a
Series B Liquidity Loan, as the case may be, the proceeds of which
shall be used (i) to repay maturing Series A Commercial Paper or
Series B Commercial Paper, respectively, (ii) to fund the
Downgraded Series A Bank Sub-account pursuant to Section 2.04(d) or
the Downgraded Series B Bank Sub-account pursuant to Section
2.04(e) or (iii) to refinance Refunding Advances.
"Regulations G, T, U and X" shall mean Regulations G, T, U and
X, respectively, as promulgated by the Board, or any similar
regulations substituted for any of the foregoing.
"Related Security" shall mean with respect to any Receivable:
(a) all of the Seller's or an Indirect Seller's rights
under the related Invoice (other than such Receivable);
(b) all guarantees, indemnities, warranties, chattel
paper, insurance policies and proceeds and security agreements
and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such
Receivable whether pursuant to the Invoice related to such
Receivable or otherwise;
(c) all of the Seller's or an Indirect Seller's residual
right, title and interest in and to all goods and/or
merchandise (including returned, repossessed or foreclosed
goods and/or merchandise) the sale of which gave rise to such
Receivable;
(d) all of the Seller's or an Indirect Seller's rights in,
to and under the (i) Records, (ii) instruments, checks and
other forms of payment and (iii) general intangibles relating
to such Receivable;
(e) when used with respect to Finco, all of Finco's right,
title and interest to and rights under the Receivables Sale
Agreement and when used with respect to the Seller, all of
Seller's right, title and interest to and rights under any
Affiliate Receivables Sale Agreement;
(f) the assignment to Finco or the Collateral Agent, as
applicable, of all UCC financing statements covering any
collateral security for the payment of any of the foregoing;
and
(g) all proceeds of the foregoing.
"Remaining Unreserved Series A Carrying Cost Amount" shall
have the meaning ascribed to such term in Section 9.07(g)(viii) of
the Liquidity Agreement.
"Remaining Unreserved Series B Carrying Cost Amount" shall
have the meaning ascribed to such term in Section 9.07(g)(ix) of
the Liquidity Agreement.
"Replacement Bank" shall have the meaning ascribed to such
term in Section 2.09 of the Liquidity Agreement.
"Replacement Term Bank" shall have the meaning ascribed to
such term in Section 2.08 of the Term Loan Agreement.
"Reporting Date" shall mean, with respect to any Collection
Period, the date which is three Business Days prior to the
Settlement Date relating to such Collection Period.
"Required Reserve Ratios" shall mean, as calculated,
separately for each of the Base Amount, the Series A Base Amount
and the Series B Base Amount, on the one hand, and the Modified
Base Amount, the Series A Modified Base Amount and the Series B
Modified Base Amount on the other, in each Settlement Statement,
(a) the Loss Reserve Ratio and (b) the Dilution Reserve Ratio.
"Reserved Carrying Costs" shall mean, collectively, any
Reserved Series A Carrying Costs, any Reserved Series B Carrying
Costs and any Reserved Other Carrying Costs.
"Reserved Other Carrying Costs" shall mean any of the
following items: (i) interest on the Short-Term Note (exclusive of
any default interest owed with respect thereto); (ii) interest on
the Term Note (exclusive of any default interest owed with respect
thereto); (iii) amounts owed to the Agents and the Depositary in
respect of fees or expenses; (iv) Ordinary Course Expenses of Finco
not in excess of $50,000 in the aggregate during any Collection
Period; and (v) Servicer Fees.
"Reserved Series A Carrying Costs" shall mean any of the
following items: (i) interest on any Series A Liquidity Loans owed
under the Liquidity Agreement (exclusive of any default interest
owed under Sections 4.01(d) and 4.03(b) thereof); (ii) the portion
of the face amount of outstanding Series A Commercial Paper
attributable to discount (and not principal); (iii) Facility Fees
payable to the Series A Bank; and (iv) amounts owed to the Series A
Dealer in respect of fees or expenses.
"Reserved Series B Carrying Costs" shall mean any of the
following items: (i) interest on any Series B Liquidity Loans owed
under the Liquidity Agreement (exclusive of any default interest
owed under Sections 4.01(d) and 4.03(b) thereof); (ii) the portion
of the face amount of outstanding Series B Commercial Paper
attributable to discount (and not principal); (iii) Facility Fees
payable to any Series B Bank; and (iv) amounts owed to the Series B
Dealer in respect of fees or expenses.
"Responsible Officer" shall mean, with respect to any Person,
any president, chairman of the board of directors, vice-president
(including any senior or executive vice-president), treasurer or
any assistant treasurer of such Person, in each case, acting in his
or her capacity as such, and, in the case of the Collateral Agent
or the Facility Agent shall mean any Vice President, any Assistant
Vice President, any Assistant Secretary, any Assistant Treasurer or
any officer of each of the Agents customarily performing functions
similar to those performed by any of the above-designated officers
and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Revolving Advance" shall mean any Liquidity Loan other than a
Refunding Advance.
"S&P" shall mean Standard & Poor's Ratings Group, or any
successor to the rating agency business thereof.
"Scheduled Liquidation Commencement Date" shall mean the
earlier of (i) the Settlement Date which occurs not more than three
calendar months nor less than two calendar months before the fifth
anniversary of the Effective Date, as such date may be extended
pursuant to Section 2.06 of the Liquidity Agreement, and (ii) the
date the Commitments are reduced to zero in accordance with Section
2.06(b) of the Liquidity Agreement.
"Scheduled Term Loan Payout Commencement Date" shall mean the
Settlement Date which occurs not more than three calendar months
nor less than two calendar months before the fifth anniversary of
the Effective Date of the Term Loan, as such date may be extended
pursuant to Section 2.06 of the Term Loan Agreement; provided,
however, the Scheduled Term Loan Payout Commencement Date shall in
no event be extended beyond the Scheduled Liquidation Commencement
Date.
"Secured Parties" shall mean the Banks, the holders of the
Commercial Paper, the Term Bank, the Dealers, the Depositary, the
Facility Agent and the Collateral Agent.
"Secured Parties Percentage" shall mean a percentage
calculated in accordance with the following formula:
SPP = ALA + ACPA + TLA - DBA
BA
where:
SPP = the Secured Parties Percentage;
ALA = the Aggregate Loan Amount;
ACPA = the Aggregate CP Amount;
TLA = the Term Loan Amount;
DBA = the aggregate amount on deposit and credited to
the Downgraded Series A Bank Sub-account and the
Downgraded Series B Bank Sub-account; and
BA = the Base Amount;
but not greater than 100%.
"Secured Parties Sub-account" shall mean the sub-account of
the Collection Account established by the Collateral Agent (for
administrative purposes only) pursuant to Section 9.03 of the
Liquidity Agreement and designated the "Secured Parties Sub-
account".
"Securities Act" shall mean the Securities Act of 1933, as
amended, and any rule or regulation promulgated thereunder.
"Seller" shall have the meaning ascribed to such term in the
Receivables Sale Agreement.
"Series A Bank" shall mean Bankers Trust Company or an
Eligible Assignee thereof.
"Series A Base Amount" as of any date, shall mean the amount
equal to (i) the result obtained by multiplying the product of (a)
the Net Eligible Receivables times (b) 100% minus the Applicable
Reserve Ratio times (c) the Series A Percentage, plus (ii) the
amount on deposit in the Series A Equalization Sub-account which
was required to be retained therein pursuant to Section 2.07 of the
Liquidity Agreement, minus (iii) the Discount Rate Reserve times
the Series A Percentage, minus (iv) the product of the Series A
Percentage times 1.1 times the dollar amount of any Liens that
attach to all of the Eligible Receivables unless such Liens (a) are
for taxes, assessments or charges of any governmental authority for
amounts not yet due, (b) are Liens arising under the Facility
Documents, (c) are rights of offset of an Obligor with respect to
payment of a Receivable which has the economic effect of a priority
claim and as to which a deduction has been made in accordance with
clause (5) of the definition of "Eligible Receivable," (d) are
Liens of a collecting bank under Section 4-208 of the UCC or (e)
have been bonded in full by or on behalf of the Seller.
"Series A Base Amount Shortfall" shall mean on any day, the
amount by which (i) the amount equal to (a) the Aggregate Series A
Loan Amount plus (b) the Aggregate Series A CP Amount (in each case
after giving effect to any New Credit Event or Refunding Advance on
such day and the application of proceeds therefrom) minus (c) the
aggregate amount on deposit and credited to the Downgraded Series A
Bank Sub-account, exceeds (ii) the Series A Base Amount.
"Series A Carrying Costs Reserve" shall mean, on any date, the
sum of (i) Accrued Series A Carrying Costs as of such date plus
(ii) the product of (a) the amount by which the Aggregate Net
Outstandings exceeds the amount which is then being retained in and
credited to the Series A Equalization Sub-account and the Series B
Equalization Sub-account as required by Section 2.07 of the
Liquidity Agreement, times (b) the Cost of Funds Rate times (c) the
Modified Series A Percentage divided by (d) twelve; provided,
however, that Finco may direct the Collateral Agent to increase the
Series A Carrying Costs Reserve to the extent necessary to simplify
the daily allocations of funds required under Section 9.07 of the
Liquidity Agreement.
"Series A Carrying Costs Sub-account" shall mean the sub-
account of the Series A Proceeds Account established by the
Collateral Agent (for administrative purposes only) pursuant to
Section 9.03 of the Liquidity Agreement and designated the "Series
A Carrying Costs Sub-account".
"Series A Cash Collateral Sub-account" shall mean the sub-
account of the Collection Account established by the Collateral
Agent (for administrative purposes only) pursuant to Section 9.03
of the Liquidity Agreement and designated the "Series A Cash
Collateral Sub-account".
"Series A Commercial Paper" shall mean the promissory notes of
Finco issued by Finco in the commercial paper market pursuant to
the Series A Depositary Agreement and designated as Series A
Commercial Paper thereunder.
"Series A Commercial Paper Account" shall have the meaning
assigned to such term in Section 3.02 of the Liquidity Agreement.
"Series A Commercial Paper Deficit" shall have the meaning
ascribed to such term in Section 2.03(b) of the Liquidity
Agreement.
"Series A Commitment" shall mean the commitment of the Series
A Bank to make Series A Liquidity Loans up to that dollar amount
set forth below its name on the signature pages to the Liquidity
Agreement, (or, as applicable, set forth in any amendment to the
Liquidity Agreement entered into pursuant to Section 2.09 of the
Liquidity Agreement) as such dollar amount may be reduced pursuant
to Section 2.06 of the Liquidity Agreement or increased pursuant to
Section 2.08 thereof.
"Series A Dealer" shall mean (i) Morgan Stanley & Co.
Incorporated in its capacity as a Dealer of Series A Commercial
Paper, (ii) any other Person appointed by Finco to act as a dealer
of Series A Commercial Paper, and (iii) any successor of any
thereof, for so long as such entity is so engaged by Finco.
"Series A Depositary Agreement" shall mean the Depositary and
Issuing and Paying Agent Agreement, dated as of the date hereof,
between Finco and the Depositary relating to the Series A
Commercial Paper, as amended, supplemented, restated or otherwise
modified from time to time in accordance with its terms.
"Series A Dissenting Bank Amount" shall have the meaning
ascribed to such term in Section 9.07(g)(v) of the Liquidity
Agreement.
"Series A Equalization Sub-account" shall mean the sub-account
of the Series A Proceeds Account established by the Collateral
Agent (for administrative purposes only) pursuant to Section 9.03
of the Liquidity Agreement and designated the "Series A
Equalization Sub-account".
"Series A Equalization Surplus" shall mean, on any day, the
lesser of (a) the amount retained in the Series A Equalization Sub-
account at the beginning of such day and (b) the lesser of (i) the
amount by which (A) the Series A Base Amount exceeds (B) the amount
equal to (1) the Aggregate Series A Loan Amount plus (2) the
Aggregate Series A CP Amount (in each case after giving effect to
any New Credit Event or Refunding Advance on such day and the
application of proceeds therefrom) minus (3) the aggregate amount
on deposit and credited to the Downgraded Series A Bank Sub-
account, and (ii) the amount by which the Modified Series A Base
Amount exceeds the amount equal to (A) the Aggregate Series A Loan
Amount plus (B) the Aggregate Series A CP Amount (in each case
after giving effect to any New Credit Event or Refunding Advance on
such day and the application of proceeds therefrom) minus (C) the
aggregate amount on deposit and credited to the Downgraded Series A
Bank Sub-account plus (D) the product of (1) the Term Loan Amount
times (2) the Series A Percentage.
"Series A Facility Amount" shall mean the aggregate Series A
Commitment of the Series A Bank.
"Series A Liquidity Loan" shall have the meaning ascribed to
such term in Section 2.01 of the Liquidity Agreement.
"Series A Liquidity Note" shall have the meaning ascribed to
such term in Section 2.02 of the Liquidity Agreement.
"Series A Percentage" shall mean the product of (A) the amount
equal to the Aggregate Series A Loan Amount plus the Aggregate
Series A CP Amount minus the account balance of the Downgraded
Series A Bank Sub-account divided by (B) the amount equal to the
Aggregate Loan Amount plus the Aggregate CP Amount minus the
aggregate account balance of the Downgraded Series A Bank Sub-
account and the Downgraded Series B Bank Sub-account; provided,
that for purposes of Section 9.08(b)(i)(B) of the Liquidity
Agreement only, the term "Series A Percentage" shall mean the
product of (A) the amount equal to the aggregate amount of accrued
and unpaid interest attributable to the outstanding Series A
Liquidity Loans divided by (B) the sum of the aggregate amount of
accrued and unpaid interest attributable to the outstanding Series
A Liquidity Loans plus the aggregate amount of accrued and unpaid
interest attributable to the outstanding Series B Liquidity Loans;
provided, further, that for purposes of Section 9.08(b)(i)(F) of
the Liquidity Agreement only, the term "Series A Percentage" shall
mean the product of (A) the amount equal to the aggregate amount of
Facility Fees payable to the Series A Bank divided by (B) the sum
of the aggregate amount of Facility Fees payable to the Series A
Bank plus the aggregate amount of Facility Fees payable to the
Series B Banks.
"Series A Proceeds Account" shall have the meaning assigned to
such term in Section 9.03 of the Liquidity Agreement.
"Series A Reimbursement Amount" shall have the meaning
ascribed to such term in Section 9.07(g)(iii) of the Liquidity
Agreement.
"Series A Remaining CP Amount" shall have the meaning ascribed
to such term in Section 9.07(g)(i) of the Liquidity Agreement.
"Series A Shortfall" shall mean, on any day, the amount equal
to the greater of the Modified Base Amount Shortfall and the Series
A Base Amount Shortfall.
"Series A Transfer Account" shall mean that segregated account
established by the Facility Agent for purposes of administering
amounts received from the Series A Bank in respect of Series A
Liquidity Loans (it being understood that no proceeds of any Series
B Liquidity Loans or other amounts provided by Series B Banks may
be held in the Series A Transfer Account).
"Series A Trigger Percentage" shall mean a fraction (expressed
as a percentage), (x) the numerator of which is the aggregate
outstanding principal amount of the Series A Liquidity Loans minus
the amount on deposit and credited to the Downgraded Series A Bank
Sub-account, in each case on the day on which the Trigger Event
occurs, and (y) the denominator of which is the Adjusted Series A
Base Amount on the day on which the Trigger Event occurs.
"Series B Banks" shall mean those financial institutions which
have agreed, pursuant to the Liquidity Agreement or an Assignment
and Acceptance, to make Series B Liquidity Loans pursuant to the
Liquidity Agreement.
"Series B Base Amount" as of any date, shall mean the amount
equal to (i) the result obtained by multiplying the product of
(a) the Net Eligible Receivables times (b) 100% minus the
Applicable Reserve Ratio times (c) the Series B Percentage, plus
(ii) the amount on deposit in the Series B Equalization Sub-account
which was required to be retained therein pursuant to Section 2.07
of the Liquidity Agreement, minus (iii) the Discount Rate Reserve
times the Series B Percentage, minus (iv) the product of the Series
B Percentage times 1.1 times the dollar amount of any Liens that
attach to all of the Eligible Receivables unless such Liens (a) are
for taxes, assessments or charges of any governmental authority for
amounts not yet due, (b) are Liens arising under the Facility
Documents, (c) are rights of offset of an Obligor with respect to
payment of a Receivable which has the economic effect of a priority
claim and as to which a deduction has been made in accordance with
clause (5) of the definition of "Eligible Receivable," (d) are
Liens of a collecting bank under Section 4-208 of the UCC or
(e) have been bonded in full by or on behalf of the Seller.
"Series B Base Amount Shortfall" shall mean on any day, the
amount by which (i) the amount equal to (a) the Aggregate Series B
Loan Amount plus (b) the Aggregate Series B CP Amount (in each case
after giving effect to any New Credit Event or Refunding Advance on
such day and the application of proceeds therefrom) minus (c) the
aggregate amount on deposit and credited to the Downgraded Series B
Bank Sub-account, exceeds (ii) the Series B Base Amount.
"Series B Carrying Costs Reserve" shall mean, on any date, the
sum of (i) Accrued Series B Carrying Costs as of such date plus
(ii) the product of (a) the amount by which the Aggregate Net
Outstandings exceeds the amount which is then being retained in and
credited to the Series A Equalization Sub-account and the Series B
Equalization Sub-account as required by Section 2.07 of the
Liquidity Agreement, times (b) the Cost of Funds Rate times (c) the
Modified Series B Percentage divided by (d) twelve; provided,
however, that Finco may direct the Collateral Agent to increase the
Series B Carrying Costs Reserve to the extent necessary to simplify
the daily allocations of funds required under Section 9.07 of the
Liquidity Agreement.
"Series B Carrying Costs Sub-account" shall mean the sub-
account of the Series B Proceeds Account established by the
Collateral Agent (for administrative purposes only) pursuant to
Section 9.03 of the Liquidity Agreement and designated the "Series
B Carrying Costs Sub-account".
"Series B Cash Collateral Sub-account" shall mean the sub-
account of the Collection Account established by the Collateral
Agent (for administrative purposes only) pursuant to Section 9.03
of the Liquidity Agreement and designated the "Series B Cash
Collateral Sub-account".
"Series B Commercial Paper" shall mean the promissory notes of
Finco issued by Finco in the commercial paper market pursuant to
the Series B Depositary Agreement and designated as Series B
Commercial Paper thereunder.
"Series B Commercial Paper Account" shall have the meaning
assigned to such term in Section 3.02 of the Liquidity Agreement.
"Series B Commercial Paper Deficit" shall have the meaning
ascribed to such term in Section 2.03(c) of the Liquidity
Agreement.
"Series B Commitment" shall mean, as to any Series B Bank, its
commitment to make Series B Liquidity Loans up to that dollar
amount set forth below its name on the signature pages to the
Liquidity Agreement, (or, as applicable, set forth in any amendment
to the Liquidity Agreement entered into pursuant to Section 2.09 of
the Liquidity Agreement or set forth in any Assignment and
Acceptance entered into pursuant to Section 12.03(a) of the
Liquidity Agreement) as such dollar amount may be reduced pursuant
to Section 2.06 of the Liquidity Agreement or increased pursuant to
Section 2.08 thereof, and "Series B Commitments" shall mean the
aggregate commitments of the Series B Banks to make Series B
Liquidity Loans up to the Series B Facility Amount.
"Series B Dealer" shall mean (i) BT Securities Corporation and
Morgan Stanley & Co. Incorporated, each in its capacity as a Dealer
of Commercial Paper, (ii) any other Person appointed by Finco to
act as a dealer of Series B Commercial Paper and (iii) any
successor of any thereof, for so long as any such entity is so
engaged by Finco.
"Series B Depositary Agreement" shall mean the Depositary and
Issuing and Paying Agent Agreement, dated as of the date hereof,
between Finco and the Depositary relating to the Series B
Commercial Paper, as amended, supplemented, restated or otherwise
modified from time to time in accordance with its terms.
"Series B Dissenting Bank Amount" shall have the meaning
ascribed to such term in Section 9.07(g)(vi) of the Liquidity
Agreement.
"Series B Equalization Sub-account" shall mean the sub-account
of the Series B Proceeds Account established by the Collateral
Agent (for administrative purposes only) pursuant to Section 9.03
of the Liquidity Agreement and designated the "Series B
Equalization Sub-account".
"Series B Equalization Surplus" shall mean, on any day, the
lesser of (a) the amount retained in the Series B Equalization Sub-
account at the beginning of such day and (b) the lesser of (i) the
amount by which (A) the Series B Base Amount exceeds (B) the amount
equal to (1) the Aggregate Series B Loan Amount plus (2) the
Aggregate Series B CP Amount (in each case after giving effect to
any New Credit Event or Refunding Advance on such day and the
application of proceeds therefrom) minus (3) the aggregate amount
on deposit and credited to the Downgraded Series B Bank Sub-
account, and (ii) the amount by which the Modified Series B Base
Amount exceeds the amount equal to (A) the Aggregate Series B Loan
Amount plus (B) the Aggregate Series B CP Amount (in each case
after giving effect to any New Credit Event or Refunding Advance on
such day and the application of proceeds therefrom) minus (C) the
aggregate amount on deposit and credited to the Downgraded Series B
Bank Sub-account plus (D) the product of (1) the Term Loan Amount
times (2) the Series B Percentage.
"Series B Facility Amount" shall mean the aggregate Series B
Commitments of the Series B Banks.
"Series B Liquidity Loan" shall have the meaning ascribed to
such term in Section 2.01(b) of the Liquidity Agreement.
"Series B Liquidity Note" shall have the meaning ascribed to
such term in Section 2.02(c) of the Liquidity Agreement.
"Series B Percentage" shall mean the product of (A) the amount
equal to the Aggregate Series B Loan Amount plus the Aggregate
Series B CP Amount minus the account balance of the Downgraded
Series B Bank Sub-account divided by (B) the amount equal to the
Aggregate Loan Amount plus the Aggregate CP Amount minus the
aggregate account balance of the Downgraded Series A Bank Sub-
account and the Downgraded Series B Bank Sub-account; provided,
that for purposes of Section 9.08(b)(i)(B) of the Liquidity
Agreement only, the term "Series B Percentage" shall mean the
product of (A) the amount equal to the aggregate amount of accrued
and unpaid interest attributable to the outstanding Series B
Liquidity Loans divided by (B) the sum of the aggregate amount of
accrued and unpaid interest attributable to the outstanding Series
B Liquidity Loans plus the aggregate amount of accrued and unpaid
interest attributable to the outstanding Series A Liquidity Loans;
provided, further, that for purposes of Section 9.08(b)(i)(F) of
the Liquidity Agreement only, the term "Series B Percentage" shall
mean the product of (A) the amount equal to the aggregate amount of
Facility Fees payable to the Series B Banks divided by (B) the sum
of the aggregate amount of Facility Fees payable to the Series B
Banks plus the aggregate amount of Facility Fees payable to the
Series A Bank.
"Series B Proceeds Account" shall have the meaning assigned to
such term in Section 9.03 of the Liquidity Agreement.
"Series B Reimbursement Amount" shall have the meaning
ascribed to such term in Section 9.07(g)(iv) of the Liquidity
Agreement.
"Series B Remaining CP Amount" shall have the meaning ascribed
to such term in Section 9.07(g)(ii) of the Liquidity Agreement.
"Series B Shortfall" shall mean, on any day, the amount equal
to the greater of the Modified Base Amount Shortfall and the Series
B Base Amount Shortfall.
"Series B Transfer Account" shall mean that segregated account
established by the Facility Agent for purposes of administering
amounts received from Series B Banks in respect of Series B
Liquidity Loans (it being understood that no proceeds of any Series
A Liquidity Loans or other amounts provided by the Series A Bank
may be held in the Series B Transfer Account).
"Series B Trigger Percentage" shall mean a fraction (expressed
as a percentage), (x) the numerator of which is the aggregate
outstanding principal amount of the Series B Liquidity Loans minus
the amount on deposit and credited to the Downgraded Series B Bank
Sub-account, in each case on the day on which the Trigger Event
occurs, and (y) the denominator of which is the Adjusted Series B
Base Amount on the day on which the Trigger Event occurs.
"Servicer" shall mean, on any date, the Person then authorized
pursuant to Article V of the Receivables Sale Agreement to service,
administer and collect the Receivables on behalf of Finco.
"Servicer Fee" shall mean the fee payable to the Servicer by
Finco pursuant to Section 5.03(c) of the Receivables Sale
Agreement.
"Servicer Termination Event" shall mean any of the following
events:
(a) an Insolvency Event shall occur with respect to the
Servicer and, if such Insolvency Event arises as a result of
an involuntary petition filed against the Servicer, shall have
remained undismissed and unstayed for a period of 60 days (or,
if earlier, the date on which an order for relief shall be
entered against the Servicer in any such involuntary case or
proceeding);
(b) the Servicer shall fail to (i) make any payment,
transfer, advance or deposit, or otherwise to apply any funds
in respect of the Collections on the date and in the manner
the Servicer is required to do so under the Receivables Sale
Agreement or (ii) remit any other amount when due under the
Receivables Sale Agreement or remit any Settlement Statement
or Daily Report or other information required under the
Receivables Sale Agreement when due, and, in the case of
clause (i) or clause (ii), a continuation of such failure for
a period of seven (7) Business Days after the date on which a
Responsible Officer of the Servicer has actual knowledge of
such failure; provided, however, that if the Servicer is
unable to make a payment described above as a result of a
Force Majeure Event, then the time period described above
shall be extended for so long as such Force Majeure Event
renders the Servicer unable to make such payment, but in no
event shall such extension exceed ten (10) Business Days;
(c) the Servicer shall fail to perform or observe any
other term, covenant or agreement contained in the Receivables
Sale Agreement on its part to be performed or observed, if (i)
such failure continues unremedied for a period of thirty (30)
days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to
the Servicer by the Facility Agent and (ii) a Material Adverse
Effect exists as a result of such failure and continues during
such thirty-day period; or
(d) any representation or warranty made or deemed made by
or on behalf of the Servicer under or in connection with the
Receivables Sale Agreement or other information or report
delivered by the Servicer pursuant thereto shall prove to have
been false or incorrect in any material respect when made or
deemed made, and a Material Adverse Effect exists as a result
of such breach and continues thirty (30) days after written
notice from the Facility Agent.
"Settlement Date" shall mean, with respect to any Collection
Period, the 22nd calendar day of the next succeeding Collection
Period, or if such day is not a Business Day, then the immediately
succeeding Business Day.
"Settlement Statement" shall mean a report prepared by the
Servicer pursuant to Section 5.03(b) of the Receivables Sale
Agreement and signed by officers of Finco and of the Servicer
certifying, among other things, that no Liquidation Event or
Unmatured Liquidation Event has occurred and is continuing, or, if
any such Liquidation Event or Unmatured Liquidation Event has
occurred and is continuing, describing such event and the steps, if
any, which are being taken in respect thereof. Each Settlement
Statement shall be in substantially the form of Exhibit D-1 or
Exhibit D-2, as applicable, to the Receivables Sale Agreement.
"Short-Term Loans" shall mean those certain loans which the
Seller may advance to Finco from time to time in lieu of cash
payment of the Purchase Price as provided in Section 2.02 of the
Receivables Sale Agreement, which loans are evidenced by and
subject to the terms and provisions of the Short-Term Note.
"Short-Term Note" shall mean that certain Short-Term Note
issued by Finco in favor of the Seller pursuant to Section 2.02(d)
of the Receivables Sale Agreement.
"Stated Liquidity Facility Maturity Date" shall mean the
twelfth Settlement Date from and after the Termination Date.
"Stated Term Loan Maturity Date" shall mean the twelfth
Settlement Date from and after the Termination Date.
"Subsidiary" shall mean, as to any Person, any corporation or
other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the Board of
Directors or other Persons performing similar functions are at the
time directly or indirectly owned by such Person.
"Taxes" shall have the meaning ascribed to such term in
Section 4.08(a) of the Liquidity Agreement.
"Term Bank" shall mean Bank Brussels Lambert, New York Branch,
or any Eligible Assignee of such financial institution pursuant to
Section 9.03 of the Term Loan Agreement.
"Term Loan" has the meaning set forth in Section 2.01 of the
Term Loan Agreement.
"Term Loan Agreement" shall mean that certain Term Loan
Agreement dated as of February 23, 1995, by and among Finco and the
Term Bank as the same may be amended, restated or otherwise
modified from time to time.
"Term Loan Amount" shall mean, on any date, the then aggregate
outstanding principal amount of the Term Loan.
"Term Loan Commitment" shall mean the obligation of the Term
Bank to make the Term Loan to Finco pursuant to Section 2.01 in an
aggregate principal amount not to exceed $15,000,000.
"Term Loan Percentage" shall mean the product of (a) the Term
Loan Amount divided by (b) the amount equal to (1) the Aggregate
Net Outstandings minus (2) the amount which is then being retained
in and credited to the Series A Equalization Sub-account and the
Series B Equalization Sub-account as required by Section 2.07 of
the Liquidity Agreement.
"Term Note" shall mean that certain promissory note evidencing
the Term Loan made by Finco and delivered to the Term Bank pursuant
to Section 2.03 of the Term Loan Agreement.
"Term-Only Liquidation Period" shall mean the period
commencing on the date on which Finco is obligated to prepay the
Term Loan pursuant to Section 2.07(d) of the Term Loan Agreement.
"Term-Only Liquidation Period Notice" shall have the
meaning ascribed to such term Section 2.07(d) of the Term Loan
Agreement.
"Termination Date" shall mean the date on which the
Liquidation Period commences.
"Trigger Event" shall mean the earlier to occur of (x) the
first date on which a Liquidation Event of the type described in
clause (g) of the definition of Liquidation Event shall occur with
respect to Finco, and (y) the first day on which the obligation of
the Banks to make Refunding Loans terminates for any reason other
than (i) the occurrence of the Commitment Termination Date with
respect thereto, or (ii) the amount equal to the aggregate
outstanding principal amount of the Liquidity Loans minus the
aggregate amount on deposit and credited to the Downgraded Series A
Bank Sub-account and the Downgraded Series B Bank Sub-account,
equalling or exceeding the Adjusted Base Amount; provided that if
the Trigger Event shall have occurred as a result of involuntary
bankruptcy petition being filed against Finco and such proceedings
shall have been dismissed prior to the Termination Date, then for
purposes of future calculations and distributions the Trigger Event
shall be deemed not to have occurred.
"Trigger Percentage" shall mean a fraction (expressed as a
percentage), (x) the numerator of which is the aggregate
outstanding principal amount of the Liquidity Loans on the day on
which the Trigger Event occurs minus the aggregate amount on
deposit and credited to the Downgraded Series A Bank Sub-account
and the Downgraded Series B Bank Sub-account on such day, and (y)
the denominator of which is the Adjusted Base Amount on the day on
which the Trigger Event occurs.
"Turnover Days" shall mean, as calculated in any Settlement
Statement, that period (expressed in days) calculated as (a) one-
half of the sum of the aggregate Outstanding Balances of such
Receivables as of the last two Cut-Off Dates divided by (b) the
aggregate Original Balances of such Receivables generated during
the most recent Collection Period multiplied by (c) the number of
days in such Collection Period. From the Effective Date until the
first Settlement Statement, the Turnover Days shall be calculated
as set forth on Schedule 1, and the underlying calculations for
each of the three Collection Periods preceding the first Settlement
Date to be used in future calculations of such Turnover Days shall
be as set forth in such Schedule 1.
"Type" of Borrowing shall mean a Base Rate Borrowing or Euro-
dollar Borrowing, as the case may be.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York, except to the extent that
the validity or perfection of any Lien created under any Facility
Document or any remedy in respect thereof is governed by the laws
of a jurisdiction other than the State of New York, in which case
(but only to such extent) the term "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction.
"Unmatured Liquidation Event" shall mean an event or condition
which, with the passage of time or the giving of notice or both,
would constitute a Liquidation Event.
"Unreserved Other Carrying Costs" shall mean any of the
following items (but in any event without duplication of any
Reserved Other Carrying Costs): (i) default interest owed under
Section 2.04 of the Receivables Sale Agreement, and default
interest owed on the Term Note and the Short-Term Note; (ii)
Ordinary Course Expenses of Finco in excess of $50,000 in the
aggregate during any Collection Period; (iii) indemnification
amounts owed to the Agents or the Term Bank under Sections 4.06 or
9.04(b) of the Liquidity Agreement; (iv) other amounts payable to
the Facility Agent in accordance with Sections 4.08 and 12.07 of
the Liquidity Agreement; (v) other amounts payable to the Agents or
the Term Bank in accordance with Section 9.05 of the Liquidity
Agreement; (vi) indemnification and other amounts owed under
Sections 3.04, 8.03 and 9.07 of the Term Loan Agreement; (vii)
other amounts payable in accordance with Sections 3.02, 3.03 and
3.05 of the Term Loan Agreement; and (viii) indemnification amounts
owed under Section 8(b) of any Depositary Agreement and (ix)
indemnification amounts owed under Section 10.03 of the Liquidity
Agreement (other than amounts payable thereunder to any Bank).
"Unreserved Series A Carrying Costs" shall mean any of the
following items (but in any event without duplication of any
Reserved Series A Carrying Costs): (i) default interest owed under
Sections 4.01(d) or 4.03(b) of the Liquidity Agreement in respect
of Series A Liquidity Loans; (ii) indemnification amounts owed to
the Series A Bank under Sections 4.06 and 9.04(b) of the Liquidity
Agreement; (iii) other amounts payable to the Series A Bank in
accordance with Sections 4.04, 4.08, 9.05, 10.03 and 12.07 of the
Liquidity Agreement; and (iv) indemnification amounts owed by Finco
under any Dealer Agreement to a Series A Dealer or any related
indemnitee.
"Unreserved Series B Carrying Costs" shall mean any of the
following items (but in any event without duplication of any
Reserved Series B Carrying Costs): (i) default interest owed under
Sections 4.01(d) or 4.03(b) of the Liquidity Agreement in respect
of Series B Liquidity Loans; (ii) indemnification amounts owed to
any Series B Bank under Sections 4.06 and 9.04(b) of the Liquidity
Agreement; (iii) other amounts payable to any Series B Bank in
accordance with Sections 4.04, 4.08, 9.05, 10.03 and 12.07 of the
Liquidity Agreement; and (iv) indemnification amounts owed by Finco
under any Dealer Agreement to a Series B Dealer or any related
indemnitee.
"Write-Off" shall mean all or a portion of a Receivable that,
consistent with the applicable Credit and Collection Policy, has
been or should be (i) specifically assigned to a category reserved
for doubtful Receivables or otherwise recorded on the Seller's or
Finco's books as a Receivable the collectibility of which is
doubtful or (without duplication) (ii) written off the Seller's or
Finco's books as uncollectible.
<PAGE>
SCHEDULE 1 to ANNEX 1
Chart of Assumed Values to be used from Effective Date
[To be attached, and to include the following:
Aged Receivables Ratio
underlying calculations for Aged Receivables Ratio
Carrying Costs Percentage
Cost of Funds Rate
underlying calculations for Dilution Ratio
Dilution Reserve Ratio
Dilution Ratios
Discount Rate
underlying calculations for Loss Discount Ratio
Loss Reserve Ratio
underlying calculations for Loss Reserve Ratio
underlying calculations for Loss to Liquidation Ratio
Minimum Required Reserve Ratio
Purchase Price Percentage
Turnover Days
underlying calculations for Turnover Days]
EXHIBIT A
[FORM OF SHORT-TERM NOTE]
The indebtedness evidenced by this instrument is
subordinated to the prior payment in full of the
Obligations (as defined in the Liquidity Agreement
hereinafter referred to) pursuant to, and to the extent
provided in, the Liquidity Agreement dated as of February
23, 1995 among the maker hereof and certain other parties
(the "Liquidity Agreement"). All payments of principal
and interest under this instrument shall be made subject
to Sections 9.07(g) and 9.08 of the Liquidity Agreement.
No such payments may be made under this instrument
following the Termination Date (as defined in the
Liquidity Agreement) until the Obligations have been
satisfied in full and all outstanding Commercial Paper
(as defined in the Liquidity Agreement) have been cash
collateralized in full in accordance with the terms of
the Liquidity Agreement.
SHORT-TERM NOTE
$50,000,000 _______________
___________, 1995
FOR VALUE RECEIVED, the undersigned, JEFFERSON SMURFIT FINANCE
CORPORATION, a Delaware corporation, ("Finco") hereby promises to
pay to the order of [Jefferson Smurfit Corporation (U.S.)], a
Delaware corporation (together with its successors and assigns, the
"Lender"), to the "Lender's Account" (as defined below) in lawful
money of the United States of America and in immediately available
funds, (i) on each Settlement Date prior to the commencement of the
Liquidation Period, the aggregate unpaid principal amount of each
Short-Term Loan made hereunder more than ninety (90) days prior to
such Settlement Date if permitted pursuant to Section 9.07 of the
Liquidity Agreement; (ii) on each Business Day during the
Liquidation Period, the Lender's pro rata share of the amount of
cash on deposit in the Series A Proceeds Account, the Series B
Proceeds Account and the Collection Account permitted to be paid to
the Seller under Section 9.08 of the Liquidity Agreement, up to the
aggregate unpaid principal sum then outstanding of all Short-Term
Loans made from time to time by the Lender to Finco; and (iii) on
the date which is one year after the Collection Date, the principal
sum of FIFTY MILLION Dollars ($50,000,000) or, if less than such
principal sum, the aggregate unpaid principal sum outstanding of
all Short-Term Loans made from time to time by the Lender to Finco
(it being understood that the terms of the "RPSA" described below
may restrict the making of such Short Term Loans in excess of ten
percent of the aggregate Outstanding Balance of Eligible
Receivables).
This Short-Term Note is referred to in and was executed and
delivered pursuant to that certain Receivables Purchase and Sale
Agreement dated as of February 23, 1995 (as such agreement may be
amended, restated or otherwise modified from time to time, the
"RPSA"). Reference to the RPSA is hereby made for a statement of
the terms and conditions under which the Short-Term Loans evidenced
hereby have been and will be made. All terms which are capitalized
and used herein (which are not otherwise specifically defined
herein) and which are defined in the RPSA shall have the meanings
assigned to such terms in the RPSA.
Finco further promises to pay interest on the outstanding
unpaid principal amount hereof, as provided in the RPSA, for each
day from the date hereof until payment in full hereof at a rate
equal to the Eurodollar Rate for such day plus one-half of one
percent (0.5%); provided, however, that if Finco shall default in
the payment of any principal hereof, Finco promises to pay interest
on any such unpaid amounts, from and after the Business Day
immediately following the Business Day Finco receives notice
thereof from the Lender to the date of actual payment, at two
percent (2%) per annum in excess of the rate of interest otherwise
payable hereunder (but in no case higher than the highest lawful
rate). Interest shall be payable on each Settlement Date in
arrears.
Finco may at any time and from time to time prepay the
outstanding indebtedness evidenced hereby, in whole or in part,
without premium or penalty.
The Lender is authorized and directed by Finco to enter on the
grid attached hereto, or, at its option, in its books and records,
the date and amount of each Short-Term Loan made by it which is
evidenced by this Short-Term Note and the amount of each payment of
principal made by Finco, and absent manifest error, such entries
shall constitute prima facie evidence of the accuracy of the
information so entered; provided, that neither the failure of the
Lender to make any such entry nor any error therein shall expand,
limit or affect the obligations of Finco hereunder.
All payments of principal and interest in respect of this
Short-Term Note shall be made to the Lender in lawful money of the
United States of America in same day funds to the Lender's account
at such place as shall be designated from time to time in writing
by the Lender for such purpose in accordance with the terms of the
RPSA (the "Lender's Account").
The indebtedness evidenced by this instrument is subordinated
to the prior payment in full of the Obligations pursuant to, and to
the extent provided in, the Liquidity Agreement and the other
agreements, documents and instruments delivered in connection
therewith, including, without limitation, Obligations that would
become due except for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. para. 362(a), and
interest fees and charges that, but for the filing of a petition in
bankruptcy with respect to Finco would accrue on such Obligations
whether or not a claim is allowed against Finco for the same in
such proceedings (collectively, the "Senior Claim" and the holders
thereof, from time to time, being referred to herein as the "Senior
Holders"). All payments of principal and interest under this
instrument shall be made subject to Sections 9.07(g) and 9.08 of
the Liquidity Agreement.
Lender agrees that upon any distribution of the assets or
readjustment of the obligations of Finco, whether by reason of
voluntary or involuntary liquidation, dissolution, winding up,
composition, bankruptcy, reorganization, arrangement, receivership,
assignment for the benefit of creditors or any marshalling of its
assets or the readjustment of its liabilities or any other action
or proceeding whether partial or total (collectively, "Bankruptcy
Proceeding"), Senior Holders shall be entitled to receive cash
payment in full of lawful money of the United States of America of
any and all Senior Claims in accordance with their respective terms
prior to the payment of, or other distribution in respect of, all
or any part of the indebtedness or other obligations hereunder.
In order to enable any Senior Holder or any such trustee,
agent or representative acting on behalf of any such Senior Holder,
to enforce their rights hereunder in any Bankruptcy Proceeding,
such Senior Holders are hereby irrevocably authorized and empowered
in their respective discretion to present for and on behalf of
Lender such proofs of claim against Finco on account of the
indebtedness or other obligations hereunder as such Senior Holder
may deem expedient or proper and to vote such proofs of claim in
any such Bankruptcy Proceeding, and to receive and collect any and
all dividends or other payments or disbursements made thereon in
whatever form the same may be paid or issued and to apply the same
on account of any Senior Claim in accordance with the provisions of
the Liquidity Agreement. Lender agrees to execute and deliver any
assignments or instruments which may be expedient or necessary to
enable any Senior Holder to enforce any such claims and to collect
any and all dividends or other payments or disbursements which may
be made at any time on account of this Short-Term Note.
Lender further agrees that it shall not (i) challenge the
legality, validity, enforceability or priority of the Senior Claim
or the legality, validity, enforceability, perfection or priority
of the liens granted in support of the Senior Claim or the rights
of Senior Holders in respect of the Senior Claim, (ii) exercise any
remedy or commence, prosecute or participate in any action, whether
private, judicial, equitable, administrative or otherwise,
including without limitation any bankruptcy case, against Finco or
any of its assets to enforce any rights under or in respect of this
Short-Term Note or otherwise take any action to collect, recover or
seek enforcement of payment of this Short-Term Note prior to one
year plus one day after the Collection Date (as defined in the
Liquidity Agreement); provided that this paragraph shall not
prohibit (subject to the subordination terms hereof) Lender from
filing a proof of claim or otherwise participating in any such
proceeding not commenced by it or Finco to the extent the Senior
Holder does not file a proof of claim in respect of this Short-Term
Note pursuant to the preceding paragraph.
In the event that, notwithstanding the foregoing provisions
prohibiting such payment or distribution, Lender shall have
received any payment under or in respect of this Short-Term Note at
a time when such payment is prohibited and before the principal,
interest and all other amounts constituting the Senior Claim are
paid in full in cash in accordance with their respective terms,
then in such event such payment or distribution shall be received
and held in trust for the Senior Holders and shall be paid over or
delivered to such Senior Holders or their agent to the extent
necessary to pay in full, in accordance with its terms the
principal, interest and all other amounts of such Senior Claim
after giving effect to any concurrent payment or distribution to
the Senior Holders in respect of such Senior Claim.
To the extent that Finco makes any payment on the Senior Claim
which is subsequently invalidated, declared to be fraudulent or
preferential, set aside or is required to be repaid to a trustee,
receiver or any other party under any Bankruptcy Proceeding or
otherwise (such payment being hereinafter referred to as a "Voided
Payment") then, to the extent of such voided payment, that portion
of the Senior Claim which had previously been satisfied by such
Voided Payment shall be revived to continue in full force and
effect as if such Voided Payment had never been made and, until the
amount of such Voided Payment is fully and finally restored to the
Senior Holders, the foregoing subordination provisions shall be in
full force and effect with respect to the obligations of Finco
hereunder.
The foregoing subordination provisions shall not be released,
discharged or otherwise affected by:
(1) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of any Seller,
the Servicer, Finco or JSC (each, a "Relevant Person") under
any Facility Document, by operation of law or otherwise;
(2) any modification or amendment of or supplement to any
Facility Document;
(3) any release, non-perfection or invalidity of any
direct or indirect security for any obligation of any Relevant
Person under any Facility Document;
(4) any change in the corporate existence, structure or
ownership of any Relevant Person, or any insolvency,
bankruptcy, reorganization or other similar proceeding
affecting any Relevant Person or its assets or any resulting
release or discharge of any obligation of any Relevant Person
contained in any Facility Document;
(5) the existence of any claim, set-off or other rights
which the holder hereof may have at any time against any
Relevant Person, including any Agent and any Bank, or any
other corporation or person, whether in connection herewith or
any unrelated transactions, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(6) any invalidity or unenforceability relating to or
against any Relevant Person for any reason of any Facility
Document, or any provision of applicable law or regulation
purporting to prohibit the payment by any Relevant Person of
any amount payable by any Relevant Person under any Facility
Document; or
(7) any other act or omission to act or delay of any kind
by any Relevant Person, any Agent, any Bank or any other
corporation or person or any other circumstance whatsoever
which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of such
subordination provisions.
This Short-Term Note shall not be amended or modified except
in accordance with Section 7.01 of the RPSA.
This Short-Term Note shall be interpreted and the rights and
liabilities of the parties hereto determined in accordance with the
laws of the State of New York (including, without limitation,
Section 5-1401 of the General Obligations Law of New York but
otherwise without regard to conflicts of laws principles).
Wherever possible each provision of this Short-Term Note shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Short-Term Note shall
be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Short-Term Note.
All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest
and notice of dishonor.
JEFFERSON SMURFIT FINANCE CORPORATION
By:______________________________
Name: _______________________
Title: ______________________
Schedule
to
SHORT-TERM NOTE
LOANS AND PAYMENTS OF PRINCIPAL
Amount Amount Unpaid
of of Principal Notation
Date Loan Principal Paid Balance made by
EXHIBIT B
CREDIT AND COLLECTION POLICY
EXHIBIT C-1
FORM OF DAILY REPORT
(PRE-LIQUIDATION PERIOD)
EXHIBIT C-2
FORM OF DAILY REPORT
(POST-LIQUIDATION PERIOD)
EXHIBIT D-1
FORM OF SETTLEMENT STATEMENT
(PRE-LIQUIDATION PERIOD)
EXHIBIT D-2
FORM OF SETTLEMENT STATEMENT
(POST-LIQUIDATION PERIOD)
EXHIBIT E
AGREED UPON PROCEDURES
Procedures set forth in the second sentence of
Section 7.01(c) of the Liquidity Agreement.
ANNEX I
TO
ASSUMPTION AGREEMENT
Amendments to [Schedule][Exhibit] __ of
the [RPSA][Liquidity Agreement]
[Set forth the changes to each exhibit and schedule to
the RPSA and the Liquidity Agreement, to the extent
applicable, in a separate annex hereto. Also, indicate
the applicable Purchase Price for the period after the
effectiveness of the Assumption Agreement and the next
succeeding Settlement Statement.]
Execution Copy
RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of February 23, 1995
among
JEFFERSON SMURFIT CORPORATION (U.S.),
as the Seller
JEFFERSON SMURFIT CORPORATION (U.S.),
as the Initial Servicer
and
JEFFERSON SMURFIT FINANCE CORPORATION,
as the Purchaser
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
1.01. Certain Definitions . . . . . . . . . . . . . . . . 1
1.02. Accounting Terms. . . . . . . . . . . . . . . . . . 1
1.03. Other Terms.. . . . . . . . . . . . . . . . . . . . 1
1.04. Computation of Time Periods . . . . . . . . . . . . 2
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES AND
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . 2
2.01. Agreement to Purchase or to Contribute. . . . . . . 2
2.02. Initial Purchase Date Transactions; Seller's
Representations; Payment for Purchases;
Adjustments to Purchase Price . . . . . . . . . . . 5
2.03. Calculation of Purchase Price . . . . . . . . . . . 8
2.04. Payments and Computations, Etc. . . . . . . . . . . 8
2.05. Transfer of Records to Finco. . . . . . . . . . . . 9
2.06. Indirect Seller.. . . . . . . . . . . . . . . . . . 9
ARTICLE III REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 10
3.01. Representations and Warranties of the Seller. . . . 10
3.02. Representations and Warranties of Finco . . . . . . 15
3.03. Representations and Warranties of Servicer. . . . . 16
ARTICLE IV GENERAL COVENANTS. . . . . . . . . . . . . . . . . . 18
4.01. Affirmative Covenants of the Seller . . . . . . . . 18
4.02. General Reporting Requirements of the Seller. . . . 22
4.03. Negative Covenants of the Seller. . . . . . . . . . 23
4.04. Covenants of JSC. . . . . . . . . . . . . . . . . . 24
ARTICLE V ADMINISTRATION AND COLLECTION . . . . . . . . . . . . 26
5.01. Collection of Receivables.. . . . . . . . . . . . . 26
5.02. Designation of Servicer . . . . . . . . . . . . . . 28
5.03. Duties of the Servicer; Daily Reports and
Settlement Statements; Servicer Fee . . . . . . . . 29
5.04. Responsibilities of the Seller. . . . . . . . . . . 32
5.05. Further Action Evidencing Purchases and
Contributions . . . . . . . . . . . . . . . . . . . 32
5.06. Application of Collections. . . . . . . . . . . . . 33
5.07. Performance by Finco. . . . . . . . . . . . . . . . 33
ARTICLE VI INDEMNIFICATION. . . . . . . . . . . . . . . . . . . 33
6.01. Indemnities by the Seller . . . . . . . . . . . . . 33
6.02. Indemnity by Servicer . . . . . . . . . . . . . . . 35
6.03. General Indemnity Provisions. . . . . . . . . . . . 35
ARTICLE VII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 36
7.01. Amendments, Etc . . . . . . . . . . . . . . . . . . 36
7.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . 37
7.03. No Waiver; Remedies.. . . . . . . . . . . . . . . . 37
7.04. Binding Effect; Assignability . . . . . . . . . . . 37
7.05. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
PERSONAL SERVICE AND VENUE; WAIVER OF JURY TRIAL. . 39
7.06. Costs, Expenses and Taxes . . . . . . . . . . . . . 39
7.07. Confidentiality . . . . . . . . . . . . . . . . . . 40
7.08. Execution in Counterparts; Severability . . . . . . 41
7.09. Termination Date. . . . . . . . . . . . . . . . . . 41
7.10. No Recourse . . . . . . . . . . . . . . . . . . . . 41
7.11. No Proceedings. . . . . . . . . . . . . . . . . . . 42
7.12. Entire Agreement. . . . . . . . . . . . . . . . . . 42
7.13. Survival of Agreement . . . . . . . . . . . . . . . 42
ANNEXES AND EXHIBITS
Annex I - Defined Terms
Exhibit A - Form of Short-Term Note
Exhibit B - Credit and Collection Policy
Exhibit C-1 - Form of Daily Report
(Pre-Liquidation Period)
Exhibit C-2 - Form of Daily Report
(Post-Liquidation Period)
Exhibit D-1 - Form of Settlement Statement
(Pre-Liquidation Period)
Exhibit D-2 - Form of Settlement Statement
(Post-Liquidation Period)
Exhibit E - Agreed Upon Procedures
Exhibit F - Assumption Agreement
SCHEDULES
Schedule 3.01(h) - Location of Records and Computer
Software
Schedule 3.01(i) - List of Lock-Box Banks
Schedule 3.01(j) - List of Other Corporate Names
Schedule 3.01(k) - Litigation and Related Matters
Schedule 3.01(l) - List of Computer Programs
TERMINATION AND REASSIGNMENT AGREEMENT
THIS TERMINATION AND REASSIGNMENT AGREEMENT (this
"Agreement"), dated as of March 3, 1995, is entered into by and
among (i) Jefferson Smurfit Finance Corporation, a Delaware
corporation (hereinafter "Finco"), (ii) Jefferson Smurfit
Corporation (U.S.), a Delaware corporation (hereinafter "JSC"),
(iii) Emerald Funding Corporation, a Delaware corporation
(hereinafter "Emerald"), (iv) Bankers Trust Company in its capacity
as collateral agent under the Master Agreement (hereinafter the
"Old Collateral Agent"), and (v) Bankers Trust Company in its
capacity as collateral agent under that certain Liquidity Agreement
(the "Liquidity Agreement") dated as of February 23, 1995 among
JSC, Finco, the financial institutions from time to time party
thereto as Banks, Bankers Trust Company, as Facility Agent, and
Bankers Trust Company, as Collateral Agent (hereinafter the
"Collateral Agent").
(A) WHEREAS, JSC, Finco, Emerald and the Old Collateral Agent have
entered into the Existing Receivables Purchase Documents for the
purposes of (i) JSC selling or contributing certain receivables to
Finco pursuant to the Parent Purchase Agreement (as defined in the
Master Agreement, the "Old Parent Purchase Agreement"), (ii) Finco
financing the purchase of such receivables through borrowings from
Emerald, (iii) Emerald issuing commercial paper notes and term
notes, and borrowing under a subordinated loan, in order to finance
such loans (the transactions contemplated by the Existing
Receivables Purchase Documents, the "Existing Program");
(B) WHEREAS, in connection with the Existing Program, Container
Corporation of America ("CCA") filed UCC-1 financing statements in
various filing offices in order to perfect, protect or more fully
evidence the ownership interest in receivables sold by CCA to
Jefferson Smurfit Corporation pursuant to the CCA Purchase
Agreement (as defined in the Master Agreement) (each such filing,
a "CCA Protective Filing");
(C) WHEREAS, Jefferson Smurfit Corporation assigned each CCA
Protective Filing to Finco, Finco assigned each CCA Protective
Filing to Emerald, Emerald assigned each protective Filing to the
Old Collateral Agent, and the CCA Protective Filings name the Old
Collateral Agent as assignee;
(D) WHEREAS, pursuant to Section 10.5 of the Master Agreement,
Jefferson Smurfit Corporation and CCA filed UCC-1 financing
statements in various filing offices in order to perfect, protect
or more fully evidence Finco's ownership interest of Pool
Receivables (as defined in the Master Agreement) and/or the lien of
the Old Collateral Agent in the Collateral (as defined in the
Master Agreement) (each such filing, a "Protective Filing");
(E) WHEREAS, Finco assigned each Protective Filing in which it is
named as "secured party" to Emerald, Emerald assigned each such
Protective Filing to the Old Collateral Agent, and the CCA
Protective Filings name the Old Collateral Agent as assignee;
(F) WHEREAS, Jefferson Smurfit Corporations and CCA have filed
UCC-1 financing statements in various filing offices in order to
preserve, protect or more fully evidence the Old Collateral Agent's
security interest in the Collateral (as defined in the Master
Agreement) (each such filing, a "Collateral Agent Protective
Filing");
(G) WHEREAS, pursuant to Section 2.1(c) of the Collateral Security
Agreement (as defined in the Master Agreement), Finco granted a
security interest in the Purchaser Collateral (as defined in the
Collateral Security Agreement (as defined in the Master
Agreement)) to the Old Collateral Agent to secure the obligations
of Finco to Emerald (such security interest, the "Finco Security
Interest"), and has filed UCC-1 financing statements in various
filing offices in order to perfect the Finco Security Interest
(each such filing, a "Finco Perfection Filing");
(H) WHEREAS, pursuant to Section 2.1(d) of the Collateral Security
Agreement (as defined in the Master Agreement), Emerald granted a
security interest in the Issuer Collateral (as defined in the
Collateral Security Agreement) to the Old Collateral Agent to
secure the Secured Obligations (as defined in the Master Agreement)
(such security interest, the "Emerald Security Interest"), and has
filed UCC-1 financing statements in various filing offices in order
to perfect the Emerald Security Interest (each such filing, an
"Emerald Perfection Filing");
(I) WHEREAS, JSC and Finco have entered into the Receivables Sale
Agreement, pursuant to which all receivables transferred by JSC or
its predecessors to Finco under the Old Parent Purchase Agreement
will be deemed to have been transferred to Finco under the
Receivables Sale Agreement;
(J) WHEREAS, Finco will, not later than 10:00 A.M. (New York City
time) on March 3, 1995, (i) pay to Emerald, or to the Old
Collateral Agent on behalf of Finco, all amounts then owing to
Emerald under the Purchaser Loans and all other amounts then owing
to Emerald under the Purchaser Loan Agreement and (ii) satisfy all
other obligations then owing by Finco to Emerald;
(K) WHEREAS, Emerald has no outstanding Commercial Paper (as
defined in the Master Agreement, "Emerald CP") and will not issue
Emerald CP on or after March 3, 1995;
(L) WHEREAS, Emerald will, not later than 10:00 A.M. (New York
City time) on March 3, 1995, either (i) pay all amounts owing to
the Liquidity Banks in respect of Issuer Loans (each as defined in
the Master Agreement), all other amounts owing by Emerald to the
Liquidity Banks under the Liquidity Facility (as defined in the
Master Agreement), and all fees and expenses payable by Emerald
under the Liquidity Facility, or (ii) provide immediately available
funds to the Old Collateral Agent which are adequate to pay such
amounts in full and instruct the Old Collateral Agent to pay such
amounts on March 3, 1995;
(M) WHEREAS, Emerald will, not later than 10:00 A.M. (New York
City time) on March 3, 1995, either (i) pay all amounts owing to
the Term Note Holders (as defined in the Master Agreement) in
respect of the Term Notes (as defined in the Master Agreement)
(including any prepayment premium payable in connection with such
payment) and any other amounts payable by Emerald to the Term Note
Holders under the Term Note Purchase Agreement (as defined in the
Master Agreement) or the Existing Receivables Purchase Documents,
or (ii) provide immediately available funds to the Old Collateral
Agent which are adequate to pay such amounts in full and instruct
the Old Collateral Agent to pay such amounts as are payable to each
Term Note Holder on March 3, 1995;
(N) WHEREAS, Emerald will, not later than 10:00 A.M. (New York
City time) on March 3, 1995, either (i) pay all amounts owing to
Bank Brussels Lambert in respect of the Subordinated Loan (as
defined in the Master Agreement) and any other amounts payable by
Emerald to Banque Brussels Lambert under the Subordinated Loan
Agreement (as defined in the Master Agreement) or the other
Existing Receivables Purchase Documents, or (ii) provide
immediately available funds to the Old Collateral Agent which are
adequate to pay such amounts on March 3, 1995;
(O) WHEREAS, Emerald will, not later than 10:00 A.M. (New York
City time) on March 3, 1995, either (i) pay in full all of the
Secured Obligations (as defined in the Master Agreement) (without
duplication of the three preceding recitals), or (ii) provide
immediately available funds to the Old Collateral Agent which are
adequate to pay such other Secured Obligations in full;
(P) WHEREAS, Finco, the Collateral Agent, Bankers Trust Company in
its capacity as Facility Agent, and the financial institutions
thereto as Banks, have executed the Liquidity Agreement, pursuant
to which Finco has granted to the Collateral Agent a security
interest in the Collateral, to secure payment of the Obligations;
(Q) WHEREAS, Finco and JSC have entered into the Facility
Documents for the purpose of permitting Finco to issue commercial
paper notes, borrowing under the Term Loan, and borrowing under the
Liquidity Agreement;
(R) WHEREAS, the parties hereto intend that, after giving effect
to the transactions contemplated by this Agreement, neither the Old
Collateral Agent nor Emerald shall hold any security interest in
any property of JSC or Finco; and
(S) WHEREAS, the parties hereto intend that, after giving effect
to the transactions contemplated by this Agreement, that neither
the Old Collateral Agent nor Emerald shall be named as "secured
party" on any UCC financing statement that relates to such any such
property;
NOW THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Certain Definitions. For all purposes of this
Agreement, except as otherwise specifically provided herein,
capitalized terms used in this Agreement without definition
(including its preamble and recitals) shall have the meanings
ascribed to such terms in Annex I to the Liquidity Agreement.
SECTION 2. Other Terms. Unless the context indicates
otherwise: (a) otherwise undefined terms used in this Agreement
have the meanings provided for by the UCC to the extent the same
are used or defined therein; (b) the words "herein," "hereof," and
"hereunder" and other words of similar import refer to this
Agreement as a whole, including the exhibits and schedules hereto,
as the same may from time to time be amended or supplemented and
not to any particular section, subsection, or clause contained in
this Agreement; (c) the word "including" means "including without
limitation," and other forms of the verb "to include" have
correlative meanings; (d) any reference to a Person includes
reference to that Person's successors and assigns; and (e) whenever
appropriate, in the context, terms used herein in the singular also
include the plural, and vice versa.
SECTION 3. Release of Finco Collateral. The Old Collateral
Agent is hereby directed to and shall do the following :
(i) release the Purchaser Collateral from the lien of the
Finco Security Interest effective as at such time on March 3,
1995 as Finco shall have given irrevocable instructions to
make wire transfers from the Closing Account in respect of the
matters referred to on the Flow of Funds Memorandum as items
[7, 8 and 9] (the "Effective Time"), and hereby waives any
requirement of Article VII of the Collateral Security
Agreement to such release;
(ii) convey to Finco the Purchaser Collateral, to the
extent that the Old Collateral Agent is the legal owner
thereof (rather than the holder of a security interest
therein), effective as of the Effective Time;
(iii) at Finco's request, notify such Persons as Finco
shall designate that the Finco Security Interest has been
released; and
(iv) execute and deliver to Finco, upon Finco's request,
such UCC termination statements as may be necessary to
terminate any UCC financing statement which was filed to
perfect the Finco Security Interest.
SECTION 4. Release of Emerald Collateral. The Old Collateral
Agent is hereby directed to and shall do the following:
(i) releases the Issuer Collateral from the lien of the
Emerald Security Interest effective as of the Effective Time,
and waives any requirement of Article VII of the Collateral
Security Agreement to such release;
(ii) conveys to Emerald the Issuer Collateral, to the
extent that the Old Collateral Agent is the legal owner
thereof (rather than the holder of a security interest
therein), effective as of the Effective Time;
(iii) agrees, at Emerald's request, to notify such
Persons as Emerald shall designate that the Emerald Security
Interest has been released; and
(iv) agrees to execute and deliver to Finco, upon
Emerald's request, such UCC termination statements as may be
necessary to terminate any UCC financing statement which was
filed to perfect the Emerald Security Interest.
SECTION 5. Protective Filings. The Old Collateral Agent:
(i) assigns to Finco, effective as of the Effective Time,
each Protective Filing and CCA Protective Filing in respect of
which the Old Collateral Agent is the assignee of the secured
party, and waives any requirement of Article VII of the
Collateral Security Agreement to such assignment;
(ii) agrees to execute and deliver to Finco, at Finco's
request, such UCC amendments and assignments of the Protective
Filings and the CCA Protective Filings referred to in clause
(i) as are prepared by Finco and may be necessary to evidence
the assignment thereof to Finco;
(iii) terminates, effective as of the Effective Time,
each Collateral Agent Protective Filing in which the Old
Collateral Agent is named as the "secured party", and waives
any requirement of Article VII of the Collateral Security
Agreement to such termination; and
(iv) agrees to execute and deliver to Finco such UCC
termination statements as are prepared by Finco and may be
necessary to terminate the Collateral Agent Protective Filings
referred to in clause (iii).
SECTION 6. Release of Liens by Emerald. Emerald:
(i) hereby releases any security interest granted or
assigned to it by Finco, JSC or CCA pursuant to or in
connection with any of the Existing Receivables Purchase
Document (any such security interest, an "Emerald II Security
Interest"), effective as of the Effective Time;
(ii) conveys to Finco (or, if JSC or CCA is the debtor
under any Emerald Security Interest, JSC), to the extent that
Emerald is the legal owner thereof, any property which is held
by Emerald pursuant to any Emerald II Security Interest;
(iii) agrees, at Finco's request, to notify such Persons
as Finco or JSC shall designate that any Emerald II Security
Interest has been released;
(iv) agrees to execute and deliver to Finco, upon Finco's
or JSC's request, such UCC termination statements as may be
necessary to terminate any UCC financing statement which was
filed to perfect any Emerald II Security Interest;
(v) terminates, effective as of the Effective Time, each
Protective Filing and each CCA Protective Filing in which
Emerald is named as the "secured party" or is the assignee of
the secured party; and
(vi) agrees to execute and deliver to Finco such UCC
termination statements as may be necessary to terminate the
Protective Filings and CCA Protective Filing referred to in
clause (v).
SECTION 7. Reduction of Commitments. Notwithstanding any
provision of the Liquidity Facility or any other Existing
Receivables Purchase Document to the contrary, Emerald reduces the
Commitment of each Liquidity Bank and the Aggregate Liquidity
Commitment (each as defined in the Liquidity Facility) to zero,
effective as of the Effective Time.
SECTION 8. Establishment of Closing Account; Closing
Procedures. Notwithstanding any provision of the Liquidity
Facility or any other Existing Receivables Purchase Documents to
the contrary, Emerald and the Old Collateral Agent acknowledge and
consent to:
(i) the establishment of a segregated trust account by
Finco and designated the "Closing Account" into which the
account balances of the Existing Receivables Purchase Accounts
(whether owned by Finco or by Emerald) shall be consolidated
prior to the termination of the Existing Receivables Purchase
Documents; and
(ii) the application of proceeds from transactions
occurring on the Effective Date, as contemplated by this
Agreement and the Facility Documents, in accordance with the
Flow of Funds Memorandum attached hereto as Exhibit A.
(iii) the Old Collateral Agent shall have no obligation
to advance funds hereunder.
SECTION 9. Instructions to Cease Issuing Commercial Paper.
Emerald instructs Bankers Trust Company, as depository under the
Depositary Agreement (as defined in the Master Agreement) to stop
issuing Emerald CP effective as of the opening of business on March
3, 1995 and Bankers Trust Company, by consenting to this Agreement
in such capacity, acknowledges receipt of such instruction.
SECTION 10. Termination of Agreements.
(a) Notwithstanding anything to the contrary contained in the
Old Parent Purchase Agreement or the other Existing Receivables
Purchase Documents, the Old Parent Purchase Agreement (except such
terms thereof which expressly survive termination) shall terminate
effective as of the Effective Time.
(b) Notwithstanding anything to the contrary contained in the
Depositary Agreement (as defined in the Master Agreement) or the
other Existing Receivables Purchase Documents, the obligations of
JSC as Servicer under the Depositary Agreement (except such
obligations of JSC which expressly survive termination) shall
terminate effective as of the Effective Time.
(c) Notwithstanding anything to the contrary contained in the
Collateral Security Agreement or the other Existing Receivables
Purchase Documents, the obligations of Finco as Grantor under the
Collateral Security Agreement (except such obligations of JSC which
expressly survive termination) shall terminate effective as of the
Effective Time.
(d) Notwithstanding anything to the contrary contained in the
Master Agreement or the other Existing Receivables Purchase
Documents, the obligations of JSC as Servicer (except such
obligations of JSC which expressly survive termination) under the
Master Agreement shall terminate effective as of the Effective
Time.
(e) Notwithstanding anything to the contrary contained in the
Financial Services Agreement or the other Existing Receivables
Purchase Documents, the obligations of JSC under the Financial
Services Agreement, and under any other agreement pursuant to which
JSC agrees to provide services to Emerald (except such obligations
of JSC which expressly survive termination), shall terminate
effective as of the Effective Time.
(f) Notwithstanding anything to the contrary contained in the
Allocation Agreement or the other Existing Receivables Purchase
Documents, the Allocation Agreement shall terminate effective as of
the Effective Time.
(g) Notwithstanding anything to the contrary contained in any
Existing Receivables Purchase Documents to the contrary, the
obligations of Finco under each Existing Receivables Purchase
Document (except such obligations of Finco which expressly survive
termination) shall terminate upon the payment by Finco to Emerald,
or to the Old Collateral Agent on behalf of Finco, all amounts then
owing to Emerald under the Purchaser Loans and all other amounts
then owing to Emerald under the Purchaser Loan Agreement and (ii)
satisfy all other obligations then owing by Finco to Emerald.
SECTION 11. Payment Instructions.
Emerald hereby instructs the Collateral Agent to pay from
the Closing Account, not later than 10:00 A.M. on March 3, 1995,
the amounts referred to in recitals (L), (M), (N) and (O) to the
parties named in such recitals entitled thereto, as more
particularly set forth in the Flow of Funds Memorandum, and to make
the other payments from the Closing Account referred to in the Flow
of Funds Memorandum.
SECTION 12. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
SECTION 13. Payment of Obligation.
(a) Effective as of the close of business on March 2,
1995, JSC will no longer sell or contribute receivables to Finco
pursuant to the Old Parent Purchase Agreement, but will sell and
contribute Receivables to Finco pursuant to the Receivables Sale
Agreement.
(b) Effective as of the close of business on March 2,
1995, Emerald will no longer make Purchaser Loans to Finco under
the Purchaser Loan Agreement (each as defined in the Master
Agreement);
SECTION 14. Successors; Counterparts.
(a) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors;
provided, however, that no assignment by any party shall be
effective without the prior written consent of the other party
hereto and the Facility Agent.
(b) This Agreement may be executed in several
counterparts, each of which shall be deemed an original hereof.
SECTION 15. Captions.
The captions in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or
provisions hereof.
[Balance of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
JEFFERSON SMURFIT CORPORATION (U.S.)
By: ___________________________
Name:
Title:
JEFFERSON SMURFIT FINANCE CORPORATION
By: ___________________________
Name:
Title:
EMERALD FUNDING CORPORATION
By: ___________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Old Collateral Agent
By: ___________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Collateral Agent
By: ___________________________
Name:
Title:
<PAGE>
CONSENT AND WAIVER
The undersigned acknowledge that the actions referred to in
the Termination and Reassignment Agreement (the "Termination
Actions") are occurring pursuant to the agreement of each of the
undersigned, and are intended to facilitate the termination of
Emerald Funding Corporation's commercial paper program and to
permit Jefferson Smurfit Finance Corporation to commence the
direct issuance of commercial paper. By its execution of this
Consent and Waiver, each of the undersigned (each, a "Consent
Party"), on behalf of itself, its successors and assigns:
(i) consents to (A) each Termination Action, (B) the
execution and delivery of the Termination and Reassignment
Agreement and each Facility Document, the consummation of the
transactions under the Termination and Reassignment Agreement
and any Facility Document, and the performance under or
compliance with the Termination and Reassignment Agreement and
any Facility Document by any party thereto, and (C) any
further actions which may be necessary to effectuate the
purposes of the foregoing, in each case notwithstanding
anything to the contrary contained in any Facility Document or
in any Existing Receivables Purchase Document; and
(ii) waives any provision contained in any Existing
Receivables Purchase Document to which such Consent Party is
a party, an assignee or a beneficiary, or any Facility
Document, which requires
(a) the giving of consent by, or notice to, such
Consent Party with respect to any action referred to in
clause (i) above, or
(b) the satisfaction of any condition precedent to
any action referred to in clause (i) above, including the
giving of notices or consents; and
(iii) waives any violation with, conflict with, breach or
default under, or potential breach or default under, any
Existing Receivables Purchase Document to which such Consent
Party is a party, an assignee or a beneficiary, or a Facility
Document, which arises from any action referred to in clause
(i) above.
Capitalized terms used in this Consent and Waiver shall have
the meaning ascribed thereto in Annex I to the Liquidity Agreement
dated February 23, 1995.
<PAGE>
DATED as of this 3rd day of March, 1995.
JEFFERSON SMURFIT CORPORATION (U.S.)
By: ___________________________
Name:
Title:
JEFFERSON SMURFIT FINANCE CORPORATION
By: ___________________________
Name:
Title:
EMERALD FUNDING CORPORATION
By: ___________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Collateral Agent,
as Depositary
By: ___________________________
Name:
Title:
BANKERS TRUST COMPANY, as Facility Agent
By: ___________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Collateral Agent and as Depositary
under the Existing Receivables Purchase
Documents and in its individual capacity
By: ___________________________
Name:
Title:
DRESDNER BANK, A.G.,
as Administrative Agent under the
Existing Receivables Purchase Documents
By: ___________________________
Name:
Title:
BANK BRUSSELS LAMBERT, NEW YORK BRANCH
as Subordinated Lender under the Existing
Receivables Purchase Documents and as
Term Bank
By: ___________________________
Name:
Title:
Exhibit A
Flow of Funds Memorandum
[To Follow]
Execution Copy
LIQUIDITY AGREEMENT
Dated as of February 23, 1995
among
JEFFERSON SMURFIT FINANCE CORPORATION
THE FINANCIAL INSTITUTIONS PARTIES HERETO AS BANKS,
BANKERS TRUST COMPANY,
as FACILITY AGENT
and
BANKERS TRUST COMPANY,
as COLLATERAL AGENT
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Certain Definitions. . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms . . . . . . . . . . . . . 1
SECTION 1.03. Other Terms. . . . . . . . . . . . . . . . 1
SECTION 1.04. Computation of Time Periods. . . . . . . . 2
ARTICLE II THE LIQUIDITY LOAN FACILITY. . . . . . . . . . . . 2
SECTION 2.01. Liquidity Loan Facility. . . . . . . . . . 2
SECTION 2.02. Making of Liquidity Loans. . . . . . . . . 2
SECTION 2.03. Notice of Borrowings . . . . . . . . . . . 4
SECTION 2.04. Disbursement of Funds. . . . . . . . . . . 7
SECTION 2.05. Conversion and Continuation of
Borrowings . . . . . . . . . . . . . . . . 11
SECTION 2.06. Termination, Reduction and Renewal of
Commitments. . . . . . . . . . . . . . . . 13
SECTION 2.07. Mandatory and Voluntary Prepayments and
Mandatory Reductions in Aggregate Net
Outstandings . . . . . . . . . . . . . . . 16
SECTION 2.08. Additional Banks; Increase in Facility
Amount . . . . . . . . . . . . . . . . . . 20
SECTION 2.09. Replacement of Certain Banks . . . . . . . 21
ARTICLE III COMMERCIAL PAPER OPERATIONS . . . . . . . . . . . 24
SECTION 3.01. Issuance of Commercial Paper . . . . . . . 24
SECTION 3.02. Commercial Paper Account; Payment of
Commercial Paper . . . . . . . . . . . . . 25
SECTION 3.03. Attachments. . . . . . . . . . . . . . . . 26
SECTION 3.04. Purchases of Series A Commercial Paper . . 26
ARTICLE IV INTEREST, FEES AND OTHER PAYMENT TERMS . . . . . . 26
SECTION 4.01. Interest . . . . . . . . . . . . . . . . . 26
SECTION 4.02. Fees . . . . . . . . . . . . . . . . . . . 27
SECTION 4.03. Payments and Computations. . . . . . . . . 27
SECTION 4.04. Yield Protection . . . . . . . . . . . . . 28
SECTION 4.05. Illegality; Unavailability . . . . . . . . 31
SECTION 4.06. Indemnity. . . . . . . . . . . . . . . . . 31
SECTION 4.07. Pro Rata Treatment . . . . . . . . . . . . 32
SECTION 4.08. Taxes. . . . . . . . . . . . . . . . . . . 34
ARTICLE V CONDITIONS OF LIQUIDITY LOANS AND COMMERCIAL
PAPER ISSUANCE . . . . . . . . . . . . . . . . . . 36
SECTION 5.01. Conditions Precedent to Initial New
Credit Event . . . . . . . . . . . . . . . 36
SECTION 5.02. Conditions Precedent to Each New Credit
Event. . . . . . . . . . . . . . . . . . . 39
SECTION 5.03. Conditions Precedent to Each Refunding
Advance. . . . . . . . . . . . . . . . . . 41
ARTICLE VI REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 41
SECTION 6.01. Representations and Warranties of Finco. . 41
ARTICLE VII AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . 46
SECTION 7.01. Reports; Certificates; Other Informa-
tion . . . . . . . . . . . . . . . . . . . 46
SECTION 7.02. Inspection . . . . . . . . . . . . . . . . 49
SECTION 7.03. Books and Records of Finco . . . . . . . . 50
SECTION 7.04. Corporate Existence. . . . . . . . . . . . 50
SECTION 7.05. Compliance with Laws . . . . . . . . . . . 50
SECTION 7.06. Obligations and Taxes. . . . . . . . . . . 51
SECTION 7.07. Facility Documents . . . . . . . . . . . . 51
SECTION 7.08. Location of Records. . . . . . . . . . . . 51
SECTION 7.09. Separate Corporate Existence . . . . . . . 51
ARTICLE VIII NEGATIVE COVENANTS . . . . . . . . . . . . . . . 54
SECTION 8.01. Liens; Sales of Collateral . . . . . . . . 54
SECTION 8.02. Indebtedness . . . . . . . . . . . . . . . 54
SECTION 8.03. Net Worth. . . . . . . . . . . . . . . . . 55
SECTION 8.04. Contingent Obligations . . . . . . . . . . 55
SECTION 8.05. Investments; Joint Ventures. . . . . . . . 55
SECTION 8.06. Bankruptcy . . . . . . . . . . . . . . . . 55
SECTION 8.07. Facility Documents . . . . . . . . . . . . 55
SECTION 8.08. Charter and By-Laws. . . . . . . . . . . . 56
SECTION 8.09. [Reserved] . . . . . . . . . . . . . . . . 56
SECTION 8.10. Bank Accounts. . . . . . . . . . . . . . . 56
SECTION 8.11. Lock-Box Banks; Change in Payment
Instructions to Obligors . . . . . . . . . 57
SECTION 8.12. Accounting Treatment . . . . . . . . . . . 57
SECTION 8.13. Merger, Consolidation, Etc . . . . . . . . 57
SECTION 8.14. Capital Expenditures . . . . . . . . . . . 57
SECTION 8.15. Restriction on Leases. . . . . . . . . . . 57
SECTION 8.16. Conduct of Business. . . . . . . . . . . . 57
ARTICLE IX SECURITY INTEREST; ADMINISTRATION AND
COLLECTION OF RECEIVABLES . . . . . . . . . . . 58
SECTION 9.01. Grant of Security Interest . . . . . . . . 58
SECTION 9.02. Continuing Liability of Finco. . . . . . . 60
SECTION 9.03. Collection of Receivables; Establishment
of Accounts. . . . . . . . . . . . . . . . 60
SECTION 9.04. Responsibilities of Finco. . . . . . . . . 64
SECTION 9.05. Further Action Evidencing Security
Interest . . . . . . . . . . . . . . . . . 64
SECTION 9.06. Application of Collections . . . . . . . . 65
SECTION 9.07. Administration of the Series A Proceeds
Account, the Series B Proceeds Account
and the Collection Account Prior to the
Liquidation Period . . . . . . . . . . . . 65
SECTION 9.08. Administration of Series A Proceeds
Account, the Series B Proceeds Account
and the Collection Account During the
Liquidation Period . . . . . . . . . . . . 74
SECTION 9.09. Remittances and Investment of Funds. . . . 81
ARTICLE X TERMINATION; REMEDIES . . . . . . . . . . . . . . . 82
SECTION 10.01. Termination; Remedies. . . . . . . . . . . 82
SECTION 10.02. Binding Effect . . . . . . . . . . . . . . 82
SECTION 10.03. Indemnities by Finco . . . . . . . . . . . 83
ARTICLE XI THE AGENTS . . . . . . . . . . . . . . . . . . . . 85
SECTION 11.01. Authorization and Action . . . . . . . . . 85
SECTION 11.02. Nature of Agents' Duties . . . . . . . . . 85
SECTION 11.03. UCC Filings. . . . . . . . . . . . . . . . 86
SECTION 11.04. Agent's Reliance, Etc. . . . . . . . . . . 86
SECTION 11.05. Agent and Affiliates . . . . . . . . . . . 87
SECTION 11.06. Credit Decision. . . . . . . . . . . . . . 88
SECTION 11.07. Indemnification. . . . . . . . . . . . . . 88
SECTION 11.08. Successor Agents . . . . . . . . . . . . . 89
SECTION 11.09. Direction by the Banks and Term Bank . . . 91
SECTION 11.10. Notice of Liquidation Events . . . . . . . 91
SECTION 11.11. Duty of Care . . . . . . . . . . . . . . . 91
SECTION 11.12. Delegation of Agency . . . . . . . . . . . 91
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . 93
SECTION 12.01. Amendments, Etc. . . . . . . . . . . . . . 93
SECTION 12.02. No Waiver; Remedies. . . . . . . . . . . . 96
SECTION 12.03. Successors and Assigns; Assignment;
Participations . . . . . . . . . . . . . . 96
SECTION 12.04. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE;
WAIVER OF JURY TRIAL . . . . . . . . . . . 99
SECTION 12.05. Notices. . . . . . . . . . . . . . . . . . 99
SECTION 12.06. Survival of Agreement. . . . . . . . . . .100
SECTION 12.07. Expenses; Indemnification. . . . . . . . .100
SECTION 12.08. Confidentiality. . . . . . . . . . . . . .101
SECTION 12.09. No Recourse. . . . . . . . . . . . . . . .102
SECTION 12.10. No Proceedings . . . . . . . . . . . . . .102
SECTION 12.11. Execution in Counterparts; Severability. .102
SECTION 12.12. Entire Agreement . . . . . . . . . . . . .103
ANNEXES AND EXHIBITS
Annex I - Defined Terms
Exhibit 2.02(b) - Form of Series A Liquidity Note and Series B
Liquidity Note
Exhibit 2.03 - Form of Notice of Borrowing
Exhibit 2.05(b) - Form of Notice of Conversion/Continuation
Exhibit 6.01(p) - Names and Addresses of Lock-Box Banks
Exhibit 7.08 - Location of Records, Chief Executive Offices
and Principal Place of Business
Exhibit 12.03 - Form of Assignment and Acceptance
THIS LIQUIDITY AGREEMENT (this "Agreement"), dated as of
February 23, 1995, is entered into by and among (i) Jefferson
Smurfit Finance Corporation, a Delaware corporation (hereinafter
"Finco"), (ii) the undersigned financial institutions, including
Bankers Trust Company, in their capacities as banks hereunder
(collectively, the "Banks" and each individually, a "Bank"),
(iii) Bankers Trust Company, as the Collateral Agent and (iv)
Bankers Trust Company, as Facility Agent.
W I T N E S S E T H:
WHEREAS, Jefferson Smurfit Corporation (U.S.), a Delaware
corporation ("JSC"), owns all of the issued and outstanding
capital stock of Finco;
WHEREAS, the regular business activities of Finco consist of
(i) the purchase of accounts receivable and certain related
assets from JSC (the "Seller"), (ii) the sale of commercial paper
to fund such purchases, and (iii) other activities incidental
thereto; and
WHEREAS, Finco, in order to provide liquidity support for
its commercial paper program and to finance its purchases of
receivables and other assets from the Seller, has entered into
this Agreement whereby the Series A Bank and the Series B Banks
will, subject to the terms and conditions set forth herein, agree
to make Series A Liquidity Loans and Series B Liquidity Loans,
respectively, from and after the Effective Date to Finco;
NOW THEREFORE, in consideration of the foregoing premises
and for other good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Definitions. For all purposes of
this Agreement, except as otherwise specifically provided herein,
capitalized terms used in this Agreement without definition
(including its preamble and recitals) shall have the meanings
ascribed to such terms in Annex I.
SECTION 1.02. Accounting Terms. Under this Agreement, all
accounting terms not specifically defined herein shall be
interpreted, all accounting determinations made and all financial
statements prepared in accordance with GAAP.
SECTION 1.03. Other Terms. Unless the context indicates
otherwise: (a) otherwise undefined terms used in this Agreement
have the meanings provided for by the UCC to the extent the same
are used or defined therein; (b) the words "herein," "hereof,"
and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the exhibits and schedules
hereto, as the same may from time to time be amended or
supplemented and not to any particular section, subsection, or
clause contained in this Agreement; (c) all references to
Sections, Annexes, Exhibits and Schedules shall mean, unless the
context clearly indicates otherwise, the Sections hereof and the
Exhibits, Annexes and Schedules attached hereto, the terms of
which Exhibits, Annexes and Schedules are hereby incorporated
into this Agreement; (d) the word "including" means "including
without limitation," and other forms of the verb "to include"
have correlative meanings; (e) any reference to a Person includes
reference to that Person's successors and assigns; and (f)
whenever appropriate, in the context, terms used herein in the
singular also include the plural, and vice versa.
SECTION 1.04. Computation of Time Periods. In this
Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to
but excluding."
ARTICLE II THE LIQUIDITY LOAN FACILITY
SECTION 2.01. Liquidity Loan Facility.
(a) Subject to the terms and conditions and in reliance upon
the representations and warranties hereinafter set forth
(including without limitation the conditions precedent set forth
in Article V), the Series A Bank agrees, at any time and from
time to time from and after the Effective Date until the
Commitment Termination Date, to make a loan or loans (each such
loan, a "Series A Liquidity Loan" and, collectively, the "Series
A Liquidity Loans"), in an amount such that the aggregate amount
of Series A Liquidity Loans made by the Series A Bank at any time
outstanding shall not exceed the Series A Commitment.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties hereinafter set forth
(including without limitation the conditions precedent set forth
in Article V), each Series B Bank severally agrees, at any time
and from time to time from and after the Effective Date until the
Commitment Termination Date, to make a loan or loans (each such
loan, a "Series B Liquidity Loan" and, collectively, the "Series
B Liquidity Loans" and, together with the Series A Liquidity
Loans, the "Liquidity Loans"), in an amount such that the
aggregate amount of Series B Liquidity Loans made by such Series
B Bank at any time outstanding shall not exceed such Bank's
Series B Commitment.
SECTION 2.02. Making of Liquidity Loans. (a) Each
Liquidity Loan shall be made as part of a Borrowing consisting of
Series A Liquidity Loans or Series B Liquidity Loans made by the
Series A Bank or the Series B Banks, respectively, ratably in
accordance with their respective Pro Rata Shares and each such
Borrowing shall, at the option of Finco, be either a Base Rate
Borrowing or a Eurodollar Borrowing; provided, however, that the
failure of any Series B Bank to make any Series B Liquidity Loan
shall not in itself relieve any other Series B Bank of its
obligation to make Series B Liquidity Loans hereunder (it being
understood, however, that no Bank shall be responsible or liable
for the failure of any other Bank to make any Liquidity Loan
required to be made by such other Bank and it being further
understood that no Bank in its capacity as a Series A Bank shall
be required or permitted to make a Series B Liquidity Loan and no
Bank in its capacity as a Series B Bank shall be required or
permitted to make a Series A Liquidity Loan). The Liquidity
Loans comprising each Borrowing shall be in an aggregate amount
that is equal to (i) in the case of any Base Rate Borrowing,
$1,000,000 or an integral multiple of $100,000 in excess thereof
and (ii) in the case of any Eurodollar Borrowing, $1,000,000 or
an integral multiple of $100,000 in excess thereof; provided,
however, that, notwithstanding the foregoing numerical
requirements, Finco may at any time request (A) a Base Rate
Borrowing in an aggregate principal amount equal to the excess of
(x) the lesser of the Series A Facility Amount or the Series A
Base Amount over (y) the sum of the Aggregate Series A Loan
Amount (after giving effect to any Base Rate Borrowing of Series
A Liquidity Loans) and the Aggregate Series A CP Amount then in
effect, and the Series A Bank shall, subject to the satisfaction
of the other terms and conditions hereunder, make available the
Series A Liquidity Loans comprising such Borrowing and (B) a Base
Rate Borrowing in an aggregate principal amount equal to the
excess of (x) the lesser of the Series B Facility Amount or the
Series B Base Amount over (y) the sum of the Aggregate Series B
Loan Amount (after giving effect to any Base Rate Borrowing of
Series B Liquidity Loans) and the Aggregate Series B CP Amount
then in effect, and the Series B Banks shall, subject to the
satisfaction of the other terms and conditions hereunder, make
available the Series B Liquidity Loans comprising such Borrowing.
(b) Finco's obligations to pay the principal of and
interest on all of the Series A Liquidity Loans made by the
Series A Bank shall be evidenced by a promissory note payable to
the Series A Bank substantially in the form of Exhibit 2.02(b)
(the "Series A Liquidity Note"), which Series A Liquidity Note
shall be dated the Effective Date and be in a stated principal
amount equal to the Series A Commitment. The Series A Liquidity
Notes will mature on the Stated Liquidity Facility Maturity Date
and be otherwise entitled to the benefits of this Agreement.
Notwithstanding the stated principal amount of any Series A
Liquidity Note, the aggregate outstanding principal amount of the
Series A Liquidity Loans made by the Series A Bank at any time
shall be the aggregate principal amount owing on the Series A
Liquidity Note at such time. The Series A Bank shall and is
hereby authorized to record on the grid attached to its Series A
Liquidity Note (or, alternatively, in its internal books and
records) the date and amount of each Series A Liquidity Loan made
by the Series A Bank, the interest rate and Interest Period
applicable thereto and each repayment thereof; and such grid or
other books and records shall, as between Finco and the Series A
Bank, absent manifest error, constitute prima facie evidence of
the accuracy of the information contained therein. Failure by
the Series A Bank to so record any Series A Liquidity Loan made
by it (or any error in such recordation) or any payment thereon
shall not affect the obligations of Finco under this Agreement or
under the Series A Liquidity Notes and shall not adversely affect
the Series A Bank's rights under this Agreement with respect to
the repayment thereof.
(c) Finco's obligations to pay the principal of and
interest on all of the Series B Liquidity Loans made by each
Series B Bank shall be evidenced by a promissory note payable to
each such Series B Bank substantially in the form of Exhibit
2.02(b) (each, a "Series B Liquidity Note" and collectively, the
"Series B Liquidity Notes"), which Series B Liquidity Note shall
be dated the Effective Date and be in a stated principal amount
equal to such Series B Bank's Commitment. The Series B Liquidity
Notes will mature on the Stated Liquidity Facility Maturity Date
and be otherwise entitled to the benefits of this Agreement.
Notwithstanding the stated principal amount of any Series B
Liquidity Note, the aggregate outstanding principal amount of the
Series B Liquidity Loans made by any Series B Bank at any time
shall be the aggregate principal amount owing on such Series B
Bank's Liquidity Note at such time. Each Series B Bank shall and
is hereby authorized to record on the grid attached to its Series
B Liquidity Note (or, alternatively, in its internal books and
records) the date and amount of each Series B Liquidity Loan made
by such Series B Bank, the interest rate and Interest Period
applicable thereto and each repayment thereof; and such grid or
other books and records shall, as between Finco and such Series B
Bank, absent manifest error, constitute prima facie evidence of
the accuracy of the information contained therein. Failure by
any Series B Bank to so record any Series B Liquidity Loan made
by it (or any error in such recordation) or any payment thereon
shall not affect the obligations of Finco under this Agreement or
under the Series B Liquidity Notes and shall not adversely affect
such Series B Bank's rights under this Agreement with respect to
the repayment thereof.
SECTION 2.03. Notice of Borrowings. Finco or (as provided
in clause (b) below) the Depositary may give notice of borrowing
hereunder (a "Notice of Borrowing") by telephone (promptly
confirmed by telecopy) as provided below:
(a) Whenever Finco wishes for the Banks to make Liquidity
Loans, Finco shall give a Notice of Borrowing to the Facility
Agent, (i) in the case of a Base Rate Borrowing, not later than
11:15 A.M., New York City time, on the Business Day of such
proposed Borrowing, and (ii) in the case of a Eurodollar
Borrowing, not later than 12:00 noon, New York City time, three
Business Days prior to such proposed Borrowing. Each such Notice
of Borrowing shall be substantially in the form attached hereto
as Exhibit 2.03, shall be irrevocable and shall in each case
refer to this Agreement and specify (a) whether the Borrowing
then being requested is to be a Eurodollar Borrowing or a Base
Rate Borrowing; (b) the date of such Borrowing (which shall be a
Business Day) and the amount thereof; (c) if such Borrowing is to
be a Eurodollar Borrowing, the Interest Period with respect
thereto; (d) whether such Borrowing is to be comprised of Series
A Liquidity Loans or Series B Liquidity Loans (it being
understood that a separate Notice of Borrowing must be submitted
for each series of Liquidity Loans comprising a Borrowing); and
(e) whether such Borrowing is to be a Revolving Advance or a
Refunding Advance. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall
be a Base Rate Borrowing. If no Interest Period with respect to
any Eurodollar Borrowing is specified in any such notice, then
Finco shall be deemed to have selected an Interest Period of one
month's duration. The Facility Agent shall give a Corresponding
Notice (i) to the Series A Bank (unless the Series A Bank has
become a Downgraded Series A Bank and a Corresponding Notice
shall have been given under Section 2.03(d) on or before the date
of such Borrowing) of any notice given pursuant to this
clause (a) specifying a Borrowing comprised of Series A Liquidity
Loans and (ii) to each Series B Bank (other than a Series B Bank
which has become a Downgraded Series B Bank as to which a
Corresponding Notice has been given under Section 2.03(d) on or
before the date of such Borrowing) of any notice given pursuant
to this clause (a) specifying a Borrowing comprised of Series B
Liquidity Loans and of each such Series B Bank's Pro Rata Share
of the requested Borrowing. Notwithstanding anything else in
this Agreement to the contrary, until the Series A Commitment is
terminated, Finco agrees to request and to borrow Revolving
Advances from the Series A Bank, to the extent permitted by
Article V hereof, prior to borrowing Revolving Advances from the
Series B Banks.
(b) If Finco or the Depositary determines that, on any
Business Day that Series A Commercial Paper matures, the amount
required to pay in full all Series A Commercial Paper maturing on
such Business Day will be more than the net amount obtained by
the issuance of Series A Commercial Paper on such day plus the
amount available for payment of such Series A Commercial Paper in
the Series A Commercial Paper Account (the amount of such excess,
the "Series A Commercial Paper Deficit"), Finco or the
Depositary, as attorney-in-fact for Finco, by delivering a Notice
of Borrowing to the Facility Agent for a Borrowing of Refunding
Advances not later than 11:15 A.M., New York City time, on the
date of a proposed Borrowing, may request a Borrowing of
Refunding Advances comprised of Series A Liquidity Loans in an
aggregate principal amount equal to the excess of (x) the Series
A Commercial Paper Deficit over (y) the sum of the aggregate
amount, if any, applied or to be applied on such Business Day to
the Series A Commercial Paper Deficit from amounts available
therefor in any sub-account of the Collection Account and the
Series A Proceeds Account that are designated for payment of the
maturing Series A Commercial Paper. Such Borrowing shall be a
Base Rate Borrowing, and such Notice of Borrowing shall be in the
form of the applicable exhibit to the Series A Depositary
Agreement. The Facility Agent shall give a Corresponding Notice
to the Series A Bank (unless the Series A Bank has become a
Downgraded Series A Bank and a Corresponding Notice shall be
given under Section 2.03(d) on or before such Business Day) of
any notice given pursuant to this clause (b). For the purposes
of this clause (b), Series A Commercial Paper maturing on any day
which has been paid from an advance made by the Depositary
pursuant to the Depositary Agreement shall nonetheless be deemed
to be unpaid.
(c) If Finco or the Depositary determines that, on any
Business Day that Series B Commercial Paper matures, the amount
required to pay in full all Series B Commercial Paper maturing on
such Business Day will be more than the net amount obtained by
the issuance of Series B Commercial Paper on such day plus the
amount available for payment of such Series B Commercial Paper in
the Series B Commercial Paper Account (the amount of such excess,
the "Series B Commercial Paper Deficit"), Finco or the
Depositary, as attorney-in-fact for Finco, by delivering a Notice
of Borrowing to the Facility Agent for a Borrowing of Refunding
Advances not later than 11:15 A.M., New York City time, on the
date of a proposed Borrowing, may request a Borrowing of
Refunding Advances comprised of Series B Liquidity Loans in an
aggregate principal amount equal to the excess of (x) the Series
B Commercial Paper Deficit over (y) the sum of the aggregate
amount, if any, applied or to be applied on such Business Day to
the Series B Commercial Paper Deficit from amounts available
therefor in any sub-account of the Collection Account and the
Series B Proceeds Account that are designated for payment of the
maturing Series B Commercial Paper. Such Borrowing shall be a
Base Rate Borrowing, and such Notice of Borrowing shall be in the
form of the applicable exhibit to the Series B Depositary
Agreement. The Facility Agent shall give a Corresponding Notice
to each Series B Bank (other than a Series B Bank which has
become a Downgraded Series B Bank as to which a Corresponding
Notice has been given under subsection 2.03(d) on or before such
Business Day) of any notice given pursuant to this clause (c) and
of each such Series B Bank's portion of the requested Borrowing.
For the purposes of this clause (c), Series B Commercial Paper
maturing on any day which has been paid from an advance made by
the Depositary pursuant to the Depositary Agreement shall
nonetheless be deemed to be unpaid.
(d) If, on the 30th Business Day after a Bank becomes a
Downgraded Bank, such Bank remains a Downgraded Bank and has not
been replaced in accordance with Section 2.09, Finco shall give a
Notice of Borrowing to the Facility Agent, (i) in the case of a
Base Rate Borrowing, not later than 11:15 A.M., New York City
time, on the Business Day prior to such proposed Borrowing, and
(ii) in the case of a Eurodollar Borrowing, not later than 12:00
noon, New York City time, three Business Days prior to such
proposed Borrowing. Each such Notice of Borrowing shall be
substantially in the form attached hereto as Exhibit 2.03, shall
be irrevocable and shall in each case refer to this Agreement and
specify (a) whether the Borrowing then being requested is to be a
Eurodollar Borrowing or a Base Rate Borrowing; (b) the date of
such Borrowing (which shall be a Business Day); (c) if such
Borrowing is to be a Eurodollar Borrowing, the Interest Period
with respect thereto; and (d) whether such Borrowing is to be
comprised of a Series A Liquidity Loan if the Series A Bank
becomes a Downgraded Series A Bank, or a Series B Liquidity Loan,
if a Series B Bank becomes a Downgraded Series B Bank (it being
understood that a separate Notice of Borrowing must be submitted
for each series of Liquidity Loans comprising a Borrowing). The
amount of any such Borrowing shall be the amount by which the
Commitment of such Bank exceeds the outstanding principal balance
of such Bank's Loans on the date such Loan is made. If no
election as to the Type of Borrowing is specified in any such
notice, then the requested Borrowing shall be a Base Rate
Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then Finco shall be
deemed to have selected an Interest Period of one month's
duration. The Facility Agent shall give a Corresponding Notice
to the Bank which has become a Downgraded Bank of any notice
given pursuant to this clause (d) and the amount of the requested
Borrowing.
SECTION 2.04. Disbursement of Funds. (a) After receiving
a Corresponding Notice from the Facility Agent of any Notice of
Borrowing given pursuant to Section 2.03(a), (A) the Series A
Bank (unless the Series A Bank has become a Downgraded Series A
Bank and a Corresponding Notice has been given under Section
2.03(d) on or before such date of the proposed Borrowing to which
such Notice of Borrowing relates) shall make a Series A Liquidity
Loan in the amount of the related Series A Borrowing on the
proposed date thereof by wire transfer of immediately available
funds to the Facility Agent at its address referred to in Section
12.05 for credit to the Facility Agent's Series A Transfer
Account not later than 2:00 p.m. New York City time, and the
Facility Agent shall, by 3:00 p.m., New York City time, make
available to Finco by wire transfer of immediately available
funds to the Series A Proceeds Account the amount of the
Borrowing funded by the Series A Bank on such date and (B) each
Series B Bank (other than a Series B Bank which has become a
Downgraded Series B Bank as to which a Corresponding Notice has
been given under Section 2.03(d) on or before such date of the
proposed Borrowing to which such Notice of Borrowing relates)
shall make a Series B Liquidity Loan in the amount of its pro
rata portion of the related Series B Borrowing, ratably according
to its Pro Rata Share, on the proposed date thereof by wire
transfer of immediately available funds to the Facility Agent at
its address referred to in Section 12.05 for credit to the
Facility Agent's Series B Transfer Account not later than 2:00
p.m. New York City time, and the Facility Agent shall, by 3:00
p.m., New York City time, make available to Finco by wire
transfer of immediately available funds to the Series B Proceeds
Account the aggregate amount of the Borrowing funded by the
Series B Banks on such date to which such corresponding notice
relates.
(b) After receiving a Corresponding Notice from the
Facility Agent of any Notice of Borrowing given pursuant to
Section 2.03(b), the Series A Bank (unless the Series A Bank has
become a Downgraded Series A Bank and has made a Series A
Liquidity Loan in the amount required by Section 2.04(d) on or
before the date of the proposed Borrowing to which such Notice of
Borrowing relates) shall make a Series A Liquidity Loan in the
amount of the related Series A Borrowing, on the proposed date
thereof by wire transfer of immediately available funds to the
Facility Agent at its address referred to in Section 12.05 for
credit to the Facility Agent's Series A Transfer Account not
later than 3:00 p.m. New York City time, and the Facility Agent
shall, by 3:30 p.m., New York City time, make available to the
Depositary (for deposit in the Series A Commercial Paper Account)
by wire transfer of immediately available funds the aggregate
amount of the Borrowing funded by the Series A Bank on such date.
(c) After receiving a Corresponding Notice from the
Facility Agent of any Notice of Borrowing given pursuant to
Section 2.03(c), each Series B Bank (other than a Downgraded
Series B Bank which has made a Liquidity Loan in the amount
required by Section 2.04(e) on or before the date of the proposed
Borrowing to which such Notice of Borrowing relates) shall make a
Series B Liquidity Loan in the amount of its pro rata portion of
the related Borrowing, ratably according to its Pro Rata Share,
on the proposed date thereof by wire transfer of immediately
available funds to the Facility Agent at its address referred to
in Section 12.05 for credit to the Facility Agent's Series B
Transfer Account not later than 3:00 p.m. New York City time, and
the Facility Agent shall, by 3:30 p.m., New York City time, make
available to the Depositary (for deposit in the Series B
Commercial Paper Account) by wire transfer of immediately
available funds the aggregate amount of the Borrowing funded by
the Series B Banks on such date.
(d) After receiving a Corresponding Notice from the
Facility Agent of any Notice of Borrowing given pursuant to
Section 2.03(d), the Downgraded Series A Bank shall make a Series
A Liquidity Loan in the amount by which the Series A Commitment
exceeds the outstanding principal balance of such Bank's Series A
Liquidity Loans on the date such Series A Liquidity Loan is made,
on the proposed date thereof by wire transfer of immediately
available funds to the Collateral Agent at its address referred
to in Section 12.05 not later than 2:00 p.m. New York City time,
for deposit in the Downgraded Series A Bank Sub-account as soon
as practicable but in no event later than the close of business
on such date. The initial Series A Liquidity Loan made by the
Downgraded Series A Bank to fund the Downgraded Series A Bank
Sub-account shall be deemed a Refunding Advance. Upon any
repayment of such first Refunding Advance and without giving
effect to Section 5.03 hereof, the Downgraded Series A Bank shall
be deemed to have made another Refunding Advance to repay such
first Refunding Advance; provided that all payments to the
Downgraded Series A Bank with respect to outstanding Series A
Liquidity Loans (other than payments made in connection with a
Series A Commitment reduction) shall be made by crediting the
Downgraded Series A Bank Sub-account. The Downgraded Series A
Bank shall be deemed to have continued making Refunding Advances
to refinance the original principal amount of the first Refunding
Advance made under this clause (d) until the earliest to occur of
the following events (if any):
(i) the Series A Commitment is reduced and such
Refunding Advances are repaid to the extent of such
reduction,
(ii) the Series A Commitment and the Series A Liquidity
Loans of the Downgraded Series A Bank are assigned to an
Eligible Assignee (other than pursuant to Section 2.09), in
which case the amount credited to the Downgraded Series A
Bank Sub-account which represents the proceeds of Refunding
Advances made by the Downgraded Series A Bank in accordance
with this Section 2.04(d), shall be withdrawn from the
Downgraded Series A Bank Sub-account and be paid to such
Eligible Assignee as a prepayment of the Liquidity Loans
purchased by such Eligible Assignee from the Downgraded
Series A Bank,
(iii) the Series A Commitment and the Series A
Liquidity Loans of the Downgraded Series A Bank are assigned
to an Eligible Assignee pursuant to Section 2.09, in which
case the amount credited to the Downgraded Series A Bank
Sub-account which represents the proceeds of Refunding
Advances made by the Downgraded Series A Bank in accordance
with this Section 2.04(d), shall be applied in accordance
with Section 2.09, or
(iv) the Collateral Agent is notified that the Series A
Bank has ceased to be a Downgraded Series A Bank, in which
case the amount credited to the Downgraded Series A Bank
Sub-account which represents the proceeds of Refunding
Advances made by the Downgraded Series A Bank in accordance
with this Section 2.04(d), shall be withdrawn from the
Downgraded Series A Bank Sub-account and be paid to the
Series A Bank as a prepayment of its outstanding Liquidity
Loans.
(e) After receiving a Corresponding Notice from the
Facility Agent of any Notice of Borrowing given pursuant to
Section 2.03(d), each Downgraded Series B Bank shall make a
Series B Liquidity Loan in the amount by which the Series B
Commitment of such Series B Bank exceeds the outstanding
principal balance of such Series B Bank's Liquidity Loans on the
date such Series B Liquidity Loan is made, on the proposed date
thereof by wire transfer of immediately available funds to the
Collateral Agent at its address referred to in Section 12.05 not
later than 2:00 p.m. New York City time, for deposit in the
Downgraded Series B Bank Sub-account as soon as practicable, but
in no event later than the close of business on such date. The
initial Series B Liquidity Loan made by any Downgraded Series B
Bank to fund the Downgraded Series B Bank Sub-account shall be
deemed a Refunding Advance. Upon any repayment of such first
Refunding Advance, and without giving effect to Section 5.03
hereof, such Downgraded Series B Bank shall be deemed to have
made another Refunding Advance to repay such first Refunding
Advance; provided that all payments to such Downgraded Series B
Bank with respect to outstanding Series B Liquidity Loans (other
than payments made in connection with a Series B Commitment
reduction) shall be made by crediting the Downgraded Series B
Bank Sub-account. Such Downgraded Series B Bank shall be deemed
to have continued to make Refunding Advances to refinance the
original principal amount of the first Refunding Advance made
under this clause (e) until the earliest to occur of the
following events (if any):
(i) the Series B Commitment of such Downgraded Series
B Bank has been reduced and such Refunding Advances are
repaid to the extent of such reduction,
(ii) the Series B Commitment and the Series B Liquidity
Loans of such Downgraded Series B Bank are assigned to an
Eligible Assignee (other than pursuant to Section 2.09), in
which case the amount credited to the Downgraded Series B
Bank Sub-account which represents the proceeds of Refunding
Advances made by such Downgraded Bank in accordance with
this Section 2.04(e), shall be withdrawn from the Downgraded
Series B Bank Sub-account and be paid to such Eligible
Assignee as a prepayment of the Liquidity Loans purchased by
such Eligible Assignee from such Downgraded Series B Bank,
(iii) the Series B Commitment and the Series B
Liquidity Loans of such Downgraded Series B Bank are
assigned to an Eligible Assignee pursuant to Section 2.09,
in which case the amount credited to the Downgraded Series B
Bank Sub-account which represents the proceeds of Refunding
Advances made by such Downgraded Series B Bank in accordance
with this Section 2.04(e), shall be applied in accordance
with Section 2.09, or
(iv) the Collateral Agent is notified that such Series
B Bank has ceased to be a Downgraded Series B Bank, in which
case the amount credited to the Downgraded Series B Bank
Sub-account which represents the proceeds of Refunding
Advances made by such Downgraded Series B Bank in accordance
with this Section 2.04(e), shall be withdrawn from the
Downgraded Series B Bank Sub-account and be paid to such
Series B Bank as a prepayment of its outstanding Liquidity
Loans.
(f) Unless the Facility Agent shall have received notice
from a Bank prior to the time at which such Bank is required to
make funds available to the Facility Agent pursuant to
clause (a), (b), (c), (d) or (e) above that such Bank will not
make such funds available to the Facility Agent, the Facility
Agent may (but shall not be required to) assume that such Bank
has made such funds available to the Facility Agent on the date
of such Borrowing in accordance with this Section 2.04, and the
Facility Agent may (but shall not be required to) make available
to Finco or the Depositary, as the case may be, on such date, a
corresponding amount in reliance upon such assumption. If, and
to the extent that, (x) any Bank shall not have made its portion
of a Borrowing available to the Facility Agent and (y) the
Facility Agent has made available a corresponding amount to
Finco, such Bank and Finco each severally agrees to repay to the
Facility Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such
amount is made available to Finco until the date such amount is
repaid to the Facility Agent at (i) the rate at which interest
accrues on the Liquidity Loans comprising such Borrowing, in the
case of Finco, and (ii) (1) the Federal Funds Rate for such date
and the next succeeding Business Day, and (2) the Federal Funds
Rate plus two percent (2%) for each day thereafter, in the case
of such Bank. If such Bank shall repay to the Facility Agent
such corresponding amount, such amount shall constitute such
Bank's Liquidity Loan as part of such Borrowing for purposes of
this Agreement. Nothing contained in this paragraph shall be
construed to relieve any Bank from its obligations hereunder to
make Liquidity Loans to Finco and to make available to the
Facility Agent its ratable portion of each Borrowing.
SECTION 2.05. Conversion and Continuation of Borrowings.
(a) Subject to the terms and conditions set forth in this Section
2.05, Finco shall have the option: (i) on any day, to convert all
or part of a Base Rate Borrowing comprised of Series A Liquidity
Loans or Series B Liquidity Loans to a Eurodollar Borrowing
comprised of Series A Liquidity Loans or Series B Liquidity
Loans, respectively, and (ii) on the last day of any Interest
Period of a Eurodollar Borrowing comprised of Series A Liquidity
Loans or Series B Liquidity Loans, to convert all or any part of
the Eurodollar Loans comprising such Borrowing to Base Rate Loans
comprised of Series A Liquidity Loans or Series B Liquidity
Loans, respectively, and/or to continue all or any remaining part
of such Eurodollar Loans as a new Eurodollar Borrowing comprised
of Series A Liquidity Loans or Series B Liquidity Loans,
respectively, the Interest Period for which shall commence on the
last day of such prior Interest Period; provided, however, that:
(1) each conversion or continuation of a Series B
Liquidity Loan shall be made ratably among the Series B
Banks in accordance with their respective Pro Rata Shares;
(2) if less than all the outstanding amount of any
Borrowing shall be converted or continued, the aggregate
amount of such Borrowing converted or continued shall be in
an integral multiple of $100,000 and shall not be less than
$1,000,000;
(3) no outstanding Eurodollar Borrowing may be
continued as a Eurodollar Borrowing, and no outstanding Base
Rate Borrowing may be converted into a Eurodollar Borrowing,
at any time that a Liquidation Event or an Unmatured
Liquidation Event has occurred and is continuing; and
(4) there shall not be more than 5 separate Eurodollar
Borrowings comprised of Series A Liquidity Loans and not be
more than 5 separate Eurodollar Borrowings comprised of
Series B Liquidity Loans outstanding at any one time.
(b) Whenever Finco wishes to convert and/or continue a
Borrowing under this Section 2.05, Finco shall give the Facility
Agent telephone notice (promptly confirmed in writing including
by telecopy), (i) in the case of a conversion to a Base Rate
Borrowing, not later than 12:00 noon, New York City time, one
Business Day prior to the proposed Conversion/Continuation Date,
and (ii) in the case of a conversion to or continuation of a
Eurodollar Borrowing, not later than 12:00 noon, New York City
time, three Business Days before such proposed
Conversion/Continuation Date. Each such notice (each, a "Notice
of Conversion/Continuation") shall be substantially in the form
of Exhibit 2.05(b), shall be irrevocable and shall refer to this
Agreement and specify (1) the identity and amount of the
Borrowing that Finco requests be converted or continued, (2)
whether such Borrowing is to be converted to or continued as a
Eurodollar Borrowing or a Base Rate Borrowing, (3) the proposed
Conversion/Continuation Date (which shall be a Business Day), (4)
if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto
and (5) whether such Borrowing represents Series A Liquidity
Loans or Series B Liquidity Loans. If no Interest Period is
specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, Finco shall be deemed to
have selected an Interest Period of one month's duration. If
Finco shall not have delivered a timely Notice of
Conversion/Continuation in accordance with this Section 2.05 with
respect to any Borrowing, such Borrowing shall, on the last day
of the Interest Period applicable thereto (unless repaid pursuant
to the terms hereof), automatically be converted into or
continued as a Base Rate Borrowing. The Facility Agent shall
give a Corresponding Notice to the Series A Bank of any notice
given pursuant to this Section 2.05 relating to a Borrowing which
represents Series A Liquidity Loans. The Facility Agent shall
give a Corresponding Notice to each Series B Bank of any notice
given pursuant to this Section 2.05 relating to a Borrowing which
represents Series B Liquidity Loans and of such Series B Bank's
portion of any such converted or continued Borrowing.
SECTION 2.06. Termination, Reduction and Renewal of
Commitments. (a) The Commitments shall be automatically and
permanently terminated on the Commitment Termination Date (prompt
notice of which shall be given by Finco to each Rating Agency).
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Facility Agent (promptly
confirmed by telephone), Finco may at any time terminate in whole
or reduce in part the Commitments, which reduction shall cause a
corresponding irrevocable reduction in the Facility Amount;
provided, however, that (i) each such partial reduction of the
Commitments shall be in a minimum amount of $5,000,000 and an
integral multiple of $1,000,000, (ii) no such partial reduction
shall be made which would reduce the Facility Amount to an amount
less than the amount equal to (a) the Aggregate Loan Amount plus
(b) the aggregate outstanding amount of the Commercial Paper at
such time minus (c) the aggregate amount on deposit and credited
to the Downgraded Series A Bank Sub-account and the Downgraded
Series B Bank Sub-account, (iii) no such reduction of the Series
A Commitment shall reduce the Series A Commitment to an amount
less than the aggregate outstanding face amount of the Series A
Commercial Paper, (iv) no such reduction of the Series B
Commitment shall reduce the Series B Commitment to an amount less
than the aggregate outstanding face amount of the Series B
Commercial Paper, and (v) no such reduction shall become
effective unless the Rating Agency Condition shall have been
satisfied. Each reduction in the Commitments pursuant to this
Section 2.06 shall be made ratably between the Series A
Commitments and the Series B Commitments and among the Series B
Banks, in accordance with the ratio which each Bank's Commitment
bears to the Facility Amount. The Facility Agent shall give a
Corresponding Notice to each Bank of any notice given, and advise
each Rating Agency and the Dealers of any notice given, pursuant
to this Section 2.06(b).
(c) No more than ninety days and no less than sixty days
prior to the second anniversary of the Effective Date, and (if
and when applicable) no more than ninety days and no less than
sixty days prior to any successive anniversary of the Effective
Date, Finco may notify the Facility Agent and the Banks
(including any Bank which is then a Dissenting Bank) in writing
of its request (each such request, an "Extension Request") to
extend the then effective Scheduled Liquidation Commencement Date
by one additional year, and each Bank shall notify Finco and the
Facility Agent in writing whether it agrees to such extension not
later than thirty days after such Bank's receipt of such
Extension Request. If Finco desires to extend the then effective
Scheduled Term Loan Payout Commencement Date, it shall deliver
the Extension Request pursuant to the Term Loan Agreement
concurrently with the delivery of any Extension Request
hereunder.
If, so long as no Liquidation Event has occurred and is
continuing at the time the Extension Request is distributed by
Finco, (i) the Majority Banks give timely written notice of their
agreement to extend the Scheduled Liquidation Commencement Date,
notwithstanding whether the Term Bank has agreed to extend the
Scheduled Term Loan Payout Commencement Date, and (ii) the
aggregate Commitments of the Banks (including Banks which were
Dissenting Banks in respect of a prior Extension Request)
agreeing to such extension is not less than 50% of the aggregate
Commitments in effect on the Effective Date, then the Scheduled
Liquidation Commencement Date shall be so extended (and Finco
shall give concurrent notice thereof to each Rating Agency);
provided, however, that (1) the failure of any Bank to respond
timely to an Extension Request shall be deemed to constitute such
Bank's denial of such Extension Request; and (2) no Bank which
has denied or is deemed to have denied its consent to an
Extension Request (each such Bank, a "Dissenting Bank") shall be
bound by the Majority Banks' approval of such Extension Request,
and the Series A Commitment or the Series B Commitment, as the
case may be, of each Dissenting Bank shall expire on the
Scheduled Liquidation Commencement Date which was applicable
hereunder at the time of such Bank's receipt of the Extension
Request. If a Bank which is a Dissenting Bank at the time of an
Extension Request agrees to extend the Scheduled Liquidation
Commencement Date in the manner set forth in such Extension
Request then, upon the satisfaction of the conditions contained
in clauses (i) and (ii) of the preceding sentence, (a) the Series
A Commitment or the Series B Commitment, as the case may be, of
such Dissenting Bank shall be extended and shall expire on such
extended Scheduled Liquidation Commencement Date (rather than on
the Scheduled Liquidation Commencement Date which was applicable
hereunder at the time of such Dissenting Bank's receipt of the
prior Extension Request in respect of which such Bank dissented),
and (b) such Dissenting Bank shall cease to be a Dissenting Bank
for all purposes of this Agreement.
If (i) a Liquidation Event has occurred and is
continuing at the time the Extension Request is distributed by
Finco and (ii) the Term Bank does not assent to extension of the
Scheduled Term Loan Payout Commencement Date pursuant to Section
2.06 of the Term Loan Agreement, then Finco shall notify each
Bank thereof in writing (such notice, an "Extension Affirmation
Request") and request whether each Bank which has given timely
written notice of its agreement to extend the then effective
Scheduled Liquidation Commencement Date hereunder continues to
agree to such extension. If, after receipt of the Extension
Affirmation Request, (i) the Majority Banks give timely written
notice of their agreement to continue to extend the Scheduled
Liquidation Commencement Date, notwithstanding that the Term Bank
has not agreed to extend the Scheduled Term Loan Payout
Commencement Date, and (ii) the aggregate Commitments of the
Banks agreeing to such extension is not less than 50% of the
aggregate Commitments in effect on the Effective Date, then the
Scheduled Liquidation Commencement Date shall be so extended (and
Finco shall give concurrent notice thereof to each Rating
Agency); provided, however, that (1) the failure of any Bank to
respond timely to an Extension Affirmation Request shall be
deemed to constitute such Bank's denial of such Extension
Affirmation Request (whether or not such Bank responded to the
related Extension Request); and (2) no Bank which has denied or
is deemed to have denied its consent to an Extension Affirmation
Request (such Bank being referred to as a Dissenting Bank) shall
be bound by the Majority Banks' approval of such Extension
Affirmation Request, and the Series A Commitment or the Series B
Commitment, as the case may be, of each Dissenting Bank shall
expire on the Scheduled Liquidation Commencement Date which was
applicable hereunder at the time of such Bank's receipt of the
related Extension Affirmation Request.
If (i) a Liquidation Event has occurred and is
continuing at the time the Extension Request is distributed by
Finco, (ii) the Term Bank has, notwithstanding such Liquidation
Event, assented to extension of the Scheduled Term Loan Payout
Commencement Date pursuant to Section 2.06 of the Term Loan
Agreement, (iii) the Majority Banks give timely written notice of
their agreement, notwithstanding such Liquidation Event, to
extend the Scheduled Liquidation Commencement Date, and (iv) the
aggregate Commitments of the Banks agreeing to such extension is
not less than 50% of the aggregate Commitments in effect on the
Effective Date, then the Scheduled Term Loan Payout Commencement
Date and the Scheduled Liquidation Commencement Date shall be so
extended (and Finco shall give concurrent notice thereof to each
Rating Agency); provided, however, that (1) the failure of any
Bank to respond to an Extension Request shall be deemed to
constitute such Bank's denial of such Extension Request; and (2)
no Dissenting Bank shall be bound by the Majority Banks' approval
of such Extension Request, and the Series A Commitment or the
Series B Commitment, as the case may be, of each Dissenting Bank
shall expire on the Scheduled Liquidation Commencement Date which
was applicable hereunder at the time of such Bank's receipt of
the Extension Request.
(d) Finco shall have the right, at any time, to replace a
Dissenting Bank in accordance with the provisions of this Section
2.06(d) and Section 2.09 (and Finco shall give concurrent notice
thereof to each Rating Agency). In the event that the entire
Series A Commitment or the Series B Commitment, as the case may
be, of any Dissenting Bank is not so purchased prior to such
expiration, then as of the date of such expiration, but only if
and so long as the Liquidation Period has not commenced in
accordance with the terms of this Agreement, (i) the Series A
Facility Amount or the Series B Facility Amount, as the case may
be, the Facility Amount, and the aggregate amount of the Series A
Commitments or the Series B Commitments, as the case may be,
shall be reduced by the aggregate amount of the expiring Series A
Commitments or the Series B Commitments, as the case may be, of
all such Dissenting Banks not so replaced, (ii) with respect to
Series B Banks, each remaining Series B Bank's Pro Rata Share
shall be adjusted accordingly, (iii) Finco shall direct that all
Available Cash available under Section 9.07(g) permitted to be
applied thereto, shall be paid on such day and each Business Day
thereafter to each such Dissenting Bank which is a Series A Bank
until its then outstanding Series A Liquidity Loans, all accrued
interest thereon and all amounts due and owing to each such
Dissenting Bank hereunder or under any other Facility Document
have been paid in full, and (iv) Finco shall direct that all
Available Cash available under Section 9.07(g) permitted to be
applied thereto, shall be paid on such day and each Business Day
thereafter to each such Dissenting Bank which is a Series B Bank
(pro rata in accordance with the amount of each such Dissenting
Bank's Commitment) until all of its then outstanding Series B
Liquidity Loans, all accrued interest thereon and all amounts due
and owing to each such Dissenting Bank hereunder or under any
other Facility Document have been paid in full. Upon the
replacement of a Dissenting Bank, or upon the expiration of such
Dissenting Bank's Commitment and payment in full of the amounts
described above, such Dissenting Bank shall cease to be a party
hereto (subject to any rights of indemnification and payment that
survive termination of this Agreement). In the event that the
Liquidation Period commences prior to payment in full of the
amounts described above to any Dissenting Bank which is a Series
A Bank, then all Available Cash available therefor and other
funds of Finco shall thereafter be paid in accordance with the
terms of Section 9.08. In the event that the Liquidation Period
commences prior to payment in full of the amounts described above
to any Dissenting Bank which is a Series B Bank, then (x) such
Dissenting Bank shall be deemed to have a Pro Rata Share of the
aggregate amount of outstanding Series B Liquidity Loans owing to
such Dissenting Bank, (y) the Pro Rata Shares of all of the other
Series B Banks shall be adjusted accordingly, and (z) all
Available Cash available therefor and other funds of Finco shall
thereafter be paid in accordance with the terms of Section 9.08.
SECTION 2.07. Mandatory and Voluntary Prepayments and
Mandatory Reductions in Aggregate Net Outstandings.
(a) Any amount credited to the Series A Equalization Sub-
account pursuant to Section 9.07(e) shall be applied, in
accordance with Section 2.07(b) below, and shall be held in the
Series A Proceeds Account pending such application.
(b) Amounts deposited in the Series A Proceeds Account and
credited to the Series A Equalization Sub-account shall, prior to
the commencement of the Liquidation Period, be applied in the
following order of priority:
(i) debit the Series A Equalization Sub-account and
credit the General Series A Sub-account, the amount equal to
the Series A Equalization Surplus;
(ii) if the Series A Bank has not become a Downgraded
Series A Bank, to repay any then outstanding Series A
Liquidity Loans which are Base Rate Loans;
(iii) if the Series A Bank has not become a Downgraded
Series A Bank, to repay any then outstanding Series A
Liquidity Loans which are Eurodollar Loans; provided that,
at Finco's election, any payment to be made pursuant to this
subclause (iii) with respect to a Eurodollar Loan may be
deferred until the last day of the then current Interest
Period for such Eurodollar Loan (or such earlier date as
Finco shall select), and the amount of such payment will be
retained (subject to the further provisions of this
Section 2.07(b)) in the Series A Proceeds Account and
credited to the Series A Equalization Sub-account during
such period of deferral;
(iv) to repay maturing Series A Commercial Paper;
(v) if the Series A Bank has become a Downgraded
Series A Bank, at Finco's option Finco may repay any then
outstanding Series A Liquidity Loans which are Base Rate
Loans; provided, however, that to the extent such repayment
does not concurrently reduce the Series A Commitment, such
repayment shall be made by debiting the Series A
Equalization Sub-account and crediting the Downgraded Series
A Bank Sub-account (provided, however, that such amount
shall not exceed the amount by which the outstanding Series
A Liquidity Loans exceeds the amount credited to the
Downgraded Series A Bank Sub-account);
(vi) if the Series A Bank has become a Downgraded
Series A Bank, at Finco's option Finco may repay any then
outstanding Series A Liquidity Loans which are Eurodollar
Loans; provided, however, that to the extent such repayment
does not concurrently reduce the Series A Commitment, such
repayment shall be made by debiting the Series A
Equalization Sub-account and crediting the Downgraded Series
A Bank Sub-account (provided, however, that such amount
shall not exceed the amount by which the outstanding Series
A Liquidity Loans exceeds the amount credited to the
Downgraded Series A Bank Sub-account); provided, further,
that, at Finco's election, any payment to be made pursuant
to this subclause (vi) with respect to a Eurodollar Loan may
be deferred until the last day of the then current Interest
Period for such Eurodollar Loan (or such earlier date as
Finco shall select), and the amount of such payment will be
retained (subject to the further provisions of this
Section 2.07(b)) in the Series A Proceeds Account and
credited to the Series A Equalization Sub-account during
such period of deferral; and
(vii) at Finco's option, to prepay the Term Loan (in
whole or in part) pursuant to the terms of the Term Loan
Agreement; provided that after giving effect to such
prepayment there would not be a Base Amount Shortfall; and
provided, further, however, that no payment shall be made
pursuant to this clause (vii) if a Liquidation Event or an
Unmatured Liquidation Event exists and is then continuing;
and provided further that, if a Trigger Event shall have
occurred, the aggregate amount of Series A Liquidity Loan
repayments pursuant to subclauses (ii), (iii), (v) and (vi) from
funds transferred from the General Collection Sub-account and the
General Series A Sub-account to the Series A Equalization Sub-
account above shall not exceed the Series A Trigger Percentage of
such amount, and the remainder of such amount shall be applied as
provided in subclause (iv) above until no maturing Series A
Commercial Paper remains outstanding and then as provided in
clauses (ii), (iii), (v) and (vi).
On the commencement of the Liquidation Period, the
amount in the Series A Proceeds Account credited to the Series A
Equalization Sub-account shall be debited from the Series A
Equalization Sub-account, credited to the General Series A Sub-
account, and applied in accordance with Section 9.08.
(c) Any amount transferred and credited to the Series
B Equalization Sub-account pursuant to Section 9.07(f) shall be
applied, in accordance with Section 2.07(d) below, and shall be
held in the Series B Proceeds Account pending such application.
(d) Amounts deposited in the Series B Proceeds Account
and credited to the Series B Equalization Sub-account prior to
the commencement of the Liquidation Period shall be applied in
the following order of priority:
(i) debit the Series B Equalization Sub-account and
credit the General Series B Sub-account, the amount equal to
the Series B Equalization Surplus;
(ii) to repay any then outstanding Series B Liquidity
Loans (other than Series B Liquidity Loans made by a
Downgraded Series B Bank) which are Base Rate Loans;
(iii) to repay any then outstanding Series B Liquidity
Loans (other than Series B Liquidity Loans made by a
Downgraded Series B Bank) which are Eurodollar Loans;
provided that, at Finco's election, any payment to be made
pursuant to this subclause (iii) with respect to a
Eurodollar Loan may be deferred until the last day of the
then current Interest Period for such Eurodollar Loan (or
such earlier date as Finco shall select), and the amount of
such payment will be retained (subject to the further
provisions of this Section 2.07(d)) in the Series B Proceeds
Account and credited to the Series B Equalization Sub-
account during such period of deferral;
(iv) to repay maturing Series B Commercial Paper;
(v) at Finco's option, Finco may repay any then
outstanding Series B Liquidity Loans made by a Downgraded
Series B Bank which are Base Rate Loans; provided, however,
that to the extent such repayment does not concurrently
reduce such Downgraded Series B Bank's Series B Commitment,
such repayment shall be made by debiting the Series B
Equalization Sub-account and crediting the Downgraded Series
B Bank Sub-account (provided, however, that such amount
shall not exceed the amount by which the outstanding Series
B Liquidity Loans exceeds the amount credited to the
Downgraded Series B Bank Sub-account);
(vi) at Finco's option, Finco may repay any then
outstanding Series B Liquidity Loans made by a Downgraded
Series B Bank which are Eurodollar Loans; provided, however,
that to the extent such repayment does not concurrently
reduce such Downgraded Series B Bank's Series B Commitment,
such repayment shall be made by debiting the Series B
Equalization Sub-account and crediting the Downgraded Series
B Bank Sub-account (provided, however, that such amount
shall not exceed the amount by which the outstanding Series
B Liquidity Loans exceeds the amount credited to the
Downgraded Series B Bank Sub-account); provided, further,
that, at Finco's election, any payment to be made pursuant
to this subclause (vi) with respect to a Eurodollar Loan may
be deferred until the last day of the then current Interest
Period for such Eurodollar Loan (or such earlier date as
Finco shall select), and the amount of such payment will be
retained (subject to the further provisions of this
Section 2.07(d)) in the Series B Proceeds Account and
credited to the Series B Equalization Sub-account during
such period of deferral; and
(vii) at Finco's option, to prepay the Term Loan
(in whole or in part) pursuant to the terms of the Term Loan
Agreement; provided that after giving effect to such
prepayment there would not be a Base Amount Shortfall; and
provided, further, however, that no payment shall be made
pursuant to this clause (vii) if a Liquidation Event or an
Unmatured Liquidation Event exists and is then continuing;
and provided further that, if a Trigger Event shall have
occurred, the aggregate amount of Series B Liquidity Loan
repayments pursuant to subclauses (ii), (iii), (v) and (vi) from
funds transferred from the General Collection Sub-account and the
General Series B Sub-account to the Series B Equalization Sub-
account above shall not exceed the Series B Trigger Percentage of
such amount, and the remainder of such amount shall be applied as
provided in subclause (iv) above until no maturing Series B
Commercial Paper remains outstanding and then as provided in
clauses (ii), (iii), (v) and (vi).
On the commencement of the Liquidation Period, the
amount in the Series B Proceeds Account credited to the Series B
Equalization Sub-account shall be debited from the Series B
Equalization Sub-account, credited to the General Series B Sub-
account, and applied in accordance with Section 9.08.
SECTION 2.08. Additional Banks; Increase in Facility
Amount. From time to time, Finco shall have the right, subject
to the terms set forth herein, to request in writing an increase
in the Series A Facility Amount or the Series B Facility Amount
as follows:
(i) Finco shall first request that the Series A Bank
or the Series B Banks, as the case may be, in their sole
discretion, increase their Commitments in an aggregate
amount up to the amount of the requested increase in the
Series A Facility Amount or the Series B Facility Amount, as
the case may be. Any such request with respect to the
Series B Facility Amount shall be made to all the Series B
Banks. Failure of the Series A Bank or any Series B Bank,
as the case may be, to respond to any such request within 30
days shall be deemed to be a refusal to increase such Bank's
Commitment. In the event that more than one Series B Bank
so agrees to increase its Commitment and the aggregate
thereof exceeds the amount of the increase in the Series B
Facility Amount requested under this clause (i), each such
Series B Bank shall receive an additional Commitment equal
to (a) the amount of such Bank's agreed increase in its
Commitment, minus (b) a ratable share in the excess of the
increases agreed to by all Series B Banks over the amount of
the increase in the Series B Facility Amount requested by
Finco (based upon the amounts of such Banks' existing
Commitments), provided that each such increase shall be
rounded up or down to an integral multiple of $1,000,000 and
may not exceed the amount of the increase agreed to by the
applicable Bank.
(ii) To the extent that a Series B Bank has not agreed
to increase its Commitment by the remaining amount of the
requested increase in the Series B Facility Amount within 30
days of the written request of Finco, Finco shall have the
right to select one or more additional financial
institutions to become a party hereto as a Series B Bank
with a Commitment equal to any remaining requested increase
in the Series B Facility Amount, which Bank is reasonably
acceptable to the Facility Agent and is an Eligible
Assignee.
Any such increase in the Series A Facility Amount or the Series B
Facility Amount shall, however, be subject to the prior
satisfaction of the Rating Agency Condition. Upon satisfaction
of the Rating Agency Condition, the Facility Agent shall promptly
notify the Banks and the Collateral Agent of the increase in the
Series A Facility Amount or the Series B Facility Amount and
Finco, the Agents, the original Banks and the additional Banks
shall enter into an amendment to this Agreement and the other
applicable Facility Documents which shall effectuate such
increase and, if applicable, incorporate each such additional
Bank as a Series B Bank for all purposes of the Facility
Documents. Immediately upon the effectiveness of such amendment,
(a) the Series A Facility Amount or the Series B Facility Amount,
as the case may be, shall be increased by the amount of the
requested increase (which increase shall be in a minimum amount
of $25,000,000 in the case of the Series B Facility Amount and
$25,000,000 in the case of the Series A Facility Amount and in an
integral multiple of $5,000,000 in the case of the Series B
Facility Amount and $5,000,000 in the case of the Series A
Facility Amount); (b) the respective Pro Rata Shares of the
Series B Banks, as the case may be, (including the additional
Banks, if applicable) shall be recalculated accordingly; and
(c) each additional Series B Bank or any Series B Bank increasing
its Series B Commitment shall purchase, by wire transfer of
immediately available funds to the other Series B Banks, as the
case may be, its Pro Rata Share of all outstanding Series B
Liquidity Loans of such series made by the other Banks in an
amount necessary so that the Liquidity Loans of all Series B
Banks (including, if applicable, any additional Bank) shall be
outstanding according to their respective Pro Rata Shares as the
same have been recalculated pursuant to the preceding provisions
of this Section 2.08.
SECTION 2.09. Replacement of Certain Banks. In the event
that any Bank has (i) denied its consent to an Extension Request
pursuant to Section 2.06 hereof, which has been consented to by
the Majority Banks, (ii) requested compensation from Finco
pursuant to Section 4.04 or Section 4.08 hereof to recover
additional costs or Taxes incurred by such Bank which are not
being incurred generally by the other Banks, (iii) delivered a
notice pursuant to Section 4.05 hereof claiming that such Bank is
unable to make Eurodollar Loans for reasons not generally
applicable to the other Banks, (iv) become unable to honor its
Commitment hereunder because the funding of such Commitment has
become unlawful, (v) in the case of the Series A Bank, failed to
fund any Series A Liquidity Loan, (vi) in the case of a Series B
Bank, failed to fund its Pro Rata Share of any Series B Liquidity
Loan, or (vii) become a Downgraded Bank (whereupon such
Downgraded Bank shall immediately notify Finco and the Facility
Agent of such fact), then, in any such case, Finco may make
written demand on such Bank (each such Bank, a "Departing Bank")
(with a copy to the Facility Agent) for such Departing Bank to
assign all of its Liquidity Loans and all of its other rights and
obligations under this Agreement as follows:
(i) In the case of a Departing Series B Bank, Finco
shall first request that the Series B Banks, in their sole
discretion, purchase the remaining Series B Commitment, or
any portion thereof, of such Departing Bank. Failure of any
Series B Bank to respond to such a request shall be deemed
to be a refusal of such request. In the event that more
than one Series B Bank so agrees to purchase all or a
portion of the Series B Commitment of the Departing Bank and
the aggregate amount agreed to be purchased under this
clause (i) exceeds the Series B Commitment of such Departing
Bank, each such Series B Bank shall purchase a portion of
such Departing Bank's Series B Commitment equal to (a) the
amount of such Series B Bank's agreed purchase, minus (b) a
ratable share in the excess of the purchases agreed to by
all Series B Banks over the amount of the Departing Bank's
Series B Commitment (based upon the amounts of such Series B
Banks' existing Series B Commitments), provided that each
such purchase shall be rounded up or down to an integral
multiple of $1,000,000 and may not exceed the amount of the
purchase agreed to by the applicable Series B Bank. To the
extent that the Series B Banks have not agreed to purchase
all of the Series B Commitment, if any, of a Departing
Series B Bank within thirty (30) Business Days of a written
request from Finco pursuant to subclause (i) above, Finco
shall have the right, at any time,
(A) to select an Eligible Assignee reasonably
acceptable to the Facility Agent to purchase any
remaining Series B Commitment, or any portion thereof,
of such Departing Bank and thereby become designated a
Series B Bank (each such new financial institution, a
"Replacement Bank"), or
(B) to request that the Series A Bank purchase the
portion of the Series B Commitment of such Departing
Series B Bank which exceeds the amount equal to the
product of (i) the then outstanding face amount of the
Series B Commercial Paper and (ii) such Departing
Series B Bank's Pro Rata Share. Failure of the Series
A Bank to respond to such a request shall be deemed to
be a refusal of such request. Upon any such purchase
of a portion of the Series B Commitment, the Series B
Commitment of such Departing Series B Bank shall be
reduced by the amount so purchased and the Series A
Commitment shall be increased by the amount so
purchased.
(ii) In the case that the Series A Bank is a Departing
Bank, Finco shall have the right, at any time, to request
that a Series B Bank selected by Finco, in its sole
discretion, purchase (in one or more installments) the
portion of the Series A Commitment which exceeds the then
outstanding face amount of the Series A Commercial Paper.
Failure of such Series B Bank to respond to such a request
shall be deemed to be a refusal of such request. Upon any
such purchase of a portion of the Series A Commitment, the
Series A Commitment shall be reduced by the amount so
purchased and the Series B Commitment shall be increased by
the amount so purchased.
Each such purchase shall be executed pursuant to one or more duly
executed Assignments and Acceptances in the form of Exhibit
12.03, shall be consummated within sixty (60) Business Days after
the date the Banks and Replacement Banks, as applicable, agree to
purchase the Departing Bank's rights and obligations as described
above at an aggregate purchase price equal to the principal
amount of such Departing Bank's outstanding Liquidity Loans, all
accrued interest thereon and all other amounts accrued for the
account of such Departing Bank hereunder or under any other
Facility Document (which purchase price shall be payable at such
times as the parties shall agree).
If the Collateral Agent has received at least two
Business Days notice of any assignment by a Departing Bank which
is a Downgraded Bank pursuant to this Section 2.09, the
Collateral Agent shall, on the effectiveness of any such
assignment, (i) withdraw from the Downgraded Series A Bank Sub-
account or the Downgraded Series B Bank Sub-account, as the case
may be, any amount credited thereto which represents proceeds of
Refunding Advances made by such Downgraded Bank in accordance
with Section 2.04(d) or 2.04(e), and (ii) shall pay such amount
to the assignee as a prepayment of the Liquidity Loans purchased
by such assignee from such Downgraded Bank. If the Collateral
Agent does not receive at least two (2) Business Days notice of
any such assignment, the Collateral Agent shall take the action
referred to in clauses (i) and (ii) of the preceding sentence on
the second Business Day following such assignment.
Upon the replacement of a Departing Bank as described
above, such Departing Bank shall cease to be a party hereto
(subject to any rights of indemnification and payment which
survive the termination of this Agreement). The Facility Agent
is hereby authorized to execute one or more Assignment and
Acceptances as attorney-in-fact for any Departing Bank failing to
execute and deliver the same within ten (10) Business Days after
the date on which the Departing Bank was tendered the purchase
price and was required to execute such Assignment and Acceptance
in accordance with the foregoing provisions of this Section 2.09.
ARTICLE III COMMERCIAL PAPER OPERATIONS
SECTION 3.01. Issuance of Commercial Paper. (a) On the
terms and subject to the provisions of this Agreement and the
other Facility Documents, Finco may from time to time on or after
the Effective Date and prior to the Termination Date, issue and
sell Series A Commercial Paper and Series B Commercial Paper;
provided, however, that Finco may not issue and sell Series A
Commercial Paper or Series B Commercial Paper, as the case may
be, if (i) such issuance is otherwise prohibited by this
Agreement or any other Facility Document, (ii) any condition
precedent specified in Article V with respect to such issuance
has not been satisfied, (iii) if Finco and the Depositary have
received instructions then in effect from the Facility Agent,
given in accordance with this clause (a), not to issue or deliver
Series A Commercial Paper because (x) Finco shall have terminated
the Series A Commitments hereunder in whole pursuant to Section
2.06, (y) the Series A Commitments are otherwise terminated in
whole for any reason in accordance herewith, or (z) the issuance
of Series A Commercial Paper is prohibited by the terms of
Article V, or (iv) if Finco and the Depositary have received
instructions then in effect from the Facility Agent, given in
accordance with this clause (a), not to issue or deliver Series B
Commercial Paper because (x) Finco shall have terminated the
Series B Commitments hereunder in whole pursuant to Section 2.06,
(y) the Series B Commitments are otherwise terminated in whole
for any reason in accordance herewith, or (z) the issuance of
Series B Commercial Paper is prohibited by the terms of
Article V. The Facility Agent shall have no obligation to
deliver any such instructions except upon the instructions of the
Majority Banks.
Any instructions from the Facility Agent to Finco and
the Depositary in accordance with this clause (a) shall specify
one or more of the events described in subclause (iii)(x), (y) or
(z) of this clause (a) as being the reason(s) to cease issuing
and delivering Series A Commercial Paper, and each Bank agrees
that it shall only instruct the Facility Agent to instruct, and
the Facility Agent agrees that it shall only instruct, Finco and
the Depositary not to issue and sell Series A Commercial Paper if
one of such events shall have occurred. Any such instructions
shall become effective as of the opening of business of the
immediately following Business Day.
Any instructions from the Facility Agent to Finco and
the Depositary in accordance with this clause (a) shall specify
one or more of the events described in subclause (iv)(x), (y) or
(z) of this clause (a) as being the reason(s) to cease issuing
and delivering Series B Commercial Paper, and each Bank agrees
that it shall only instruct the Facility Agent to instruct, and
the Facility Agent agrees that it shall only instruct, Finco and
the Depositary not to issue and sell Series B Commercial Paper if
one of such events shall have occurred. Any such instructions
shall become effective as of the opening of business of the
immediately following Business Day.
Concurrently with the giving of any such instructions
to Finco and the Depositary, the Facility Agent shall give notice
thereof to the Collateral Agent, the Dealers and each Rating
Agency.
(b) Finco agrees that each note constituting Commercial
Paper shall (i) be substantially in the form of Exhibit A or
Exhibit B to the related Depositary Agreement or in the form of
the Master Note attached to the related Depositary Agreement, and
be completed in accordance with this Agreement and the related
Depositary Agreement (including any provisions for book-entry
securities contained therein), (ii) be dated the date of issuance
thereof, (iii) be made payable to the order of a named payee or
bearer, but in no event shall be in registered form, (iv) have a
maturity date which shall not be later than the earlier of (A)
fifteen days prior to the Scheduled Liquidation Commencement
Date in effect on the date of issuance thereof, and (B) the 180th
day next succeeding the date of issuance thereof, (v) be in a
face amount of $100,000 or an integral multiple of $1,000 in
excess thereof, (vi) be exempt from the registration requirements
of the Securities Act, pursuant to Section 3(a)(3) thereof, and
(vii) be delivered and issued in accordance with the terms of
this Agreement and the related Depositary Agreement. Finco
agrees that no note constituting Commercial Paper shall bear
interest, and that each such note shall be initially issued for a
discount from its face amount.
SECTION 3.02. Commercial Paper Account; Payment of
Commercial Paper. (a) Contemporaneously with the execution and
delivery by Finco of the Depositary Agreements, and for the
purposes of this Agreement and of the Depositary Agreements, the
Depositary shall establish at its corporate trust office at 4
Albany Street, New York, New York, a segregated trust account,
which shall be an Eligible Account, for the exclusive benefit of
the holders of the outstanding Series A Commercial Paper (the
"Series A Commercial Paper Account") and a segregated trust
account for the exclusive benefit of the holders of the
outstanding Series B Commercial Paper (the "Series B Commercial
Paper Account"), over which the Depositary shall have exclusive
control and sole right of withdrawal.
(b) Proceeds of the sale of Series A Commercial Paper and
other proceeds available to pay maturing Series A Commercial
Paper (including, Available Cash available for such purpose
pursuant to Section 9.07(g)) shall be deposited in the Series A
Commercial Paper Account and any excess of such deposited amount
over the amount necessary to pay matured and concurrently
maturing Series A Commercial Paper, whether or not presented to
the Depositary for payment, shall be deposited in the Series A
Proceeds Account and credited to the General Series A Sub-account
and applied pursuant to Section 9.07 hereof.
(c) Proceeds of the sale of Series B Commercial Paper and
other proceeds available to pay maturing Series B Commercial
Paper (including, Available Cash available for such purpose
pursuant to Section 9.07(g)) shall be deposited in the Series B
Commercial Paper Account and any excess of such deposited amount
over the amount necessary to pay matured and concurrently
maturing Series B Commercial Paper, whether or not presented to
the Depositary for payment, shall be deposited in the Series B
Proceeds Account and credited to the General Series B Sub-account
and applied pursuant to Section 9.07 hereof.
SECTION 3.03. Attachments. Anything in this Article III to
the contrary notwithstanding, Finco shall not be permitted to
issue or sell Commercial Paper after Finco has received notice
that the Series A Commercial Paper Account, the Series B
Commercial Paper Account, or any funds on deposit in, or
otherwise to the credit of, such accounts are or have become
subject to any stay, writ, judgment, warrant or attachment,
execution or similar process.
SECTION 3.04. Purchases of Series A Commercial Paper.
Until the Series A Commitment is terminated and except as
provided for in Section 12.03 in connection with an assignment of
the Series A Commitment, Finco shall instruct the Dealers to
solicit purchases of Series A Commercial Paper before soliciting
purchases of Series B Commercial Paper until substantially all of
the Series A Commercial Paper is outstanding (to the extent
permitted by Sections 5.02(i) and (j) hereof).
ARTICLE IV INTEREST, FEES AND OTHER PAYMENT TERMS
SECTION 4.01. Interest. (a) Subject to the provisions of
Section 4.01(d), interest shall accrue on the outstanding amount
of all Liquidity Loans comprising part of a Base Rate Borrowing
at a rate per annum equal to the Alternate Base Rate. Such rate
shall be computed on the basis of the actual number of days
elapsed (including the first but excluding the day of payment)
over a year of 365 or 366 days, as the case may be.
(b) Subject to the provisions of Section 4.01(d), interest
shall accrue on the outstanding amount of Eurodollar Loans at a
rate per annum equal to the Eurodollar Rate for the Interest
Period relating to such Eurodollar Loans plus three-eighths of
one percent (0.375%) with respect to Revolving Advances and one
and one-eighths of one percent (1.125%) with respect to Refunding
Advances. Such rate shall be computed on the basis of the actual
number of days elapsed (including the first but excluding the day
of payment) over a year of 360 days.
(c) Accrued and unpaid interest with respect to any
Liquidity Loan shall be payable in arrears on the last day of the
Interest Period relating thereto pursuant hereto except (i) that
accrued and unpaid interest with respect to any Eurodollar Loan
as to which a 6-month Interest Period is in effect shall also be
paid on the date corresponding to the first day of that Interest
Period in the third calendar month thereafter (or, if there is no
such corresponding date, on the last day of that third calendar
month) and (ii) as otherwise provided in this Agreement.
(d) From and after the Business Day following the Business
Day upon which written notice of the occurrence of a Liquidation
Event from the Facility Agent is received by Finco and so long as
such Liquidation Event continues, or at any time after the sixth
Settlement Date falling after the Termination Date, interest will
accrue on all Liquidity Loans until paid at a per annum rate
equal to two percent (2.0%) above the otherwise applicable rate
described in Section 4.01(a) or (b) above (such additional
interest being payable subject to the terms of Sections 9.07 and
9.08 hereof).
SECTION 4.02. Fees. Pursuant to Section 9.07 or Section
9.08, Finco shall direct the Collateral Agent to pay to the
Facility Agent, for the benefit of the Banks, a facility fee (the
"Facility Fee") (i) for the period from and including the
Effective Date until the Termination Date, equal to three-eighths
of one percent (0.375%) per annum (the "Facility Fee Rate") times
the Facility Amount, computed on the basis of the actual number
of days elapsed (including the first but excluding the day of
payment) over a year of 365 or 366 days and (ii) for the period
from the Termination Date until the Collection Date, equal to the
Facility Fee Rate multiplied by the sum of the Aggregate Loan
Amounts plus the Aggregate CP Amount for each day during any
Collection Period for which the Facility Fee is being calculated,
divided by 365 or 366, as the case may be. The Facility Fee
shall be payable monthly in arrears on each Settlement Date with
respect to the prior Collection Period and shall be forwarded by
the Facility Agent to (i) the Series A Bank based on the
available Series A Commitment and the Facility Fee Rate
applicable to the Series A Bank's Commitment, and (ii) ratably to
the Series B Banks according to their Pro Rata Shares of the
available Series B Commitment and the Facility Fee Rate
applicable to each Series B Bank's Commitment.
SECTION 4.03. Payments and Computations. (a) All payments
and prepayments on the Liquidity Notes and all other amounts to
be paid or deposited by Finco hereunder shall, in accordance with
Sections 2.07, 4.07, 9.07, and 9.08, be paid to or deposited with
the Facility Agent no later than 2:00 p.m. (New York City time)
on the day when due in lawful money of the United States of
America in same day funds, and any payments received after such
time shall be deemed to have been made on the next Business Day;
provided, however, any principal payments or prepayments (other
than to the extent resulting from a Commitment reduction) of
Liquidity Loans made by a Downgraded Bank shall be subject to
Section 4.03(c) hereof. Whenever any payments to be made
hereunder shall be stated to be due on a day other than a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day (and such extension of time shall in such
case be included in the computation of interest or fees as
applicable). The Facility Agent shall disburse amounts so
received to the Banks in same day funds (i) on the date received
if such funds are received at or prior to 2:00 p.m. (New York
City time) and (ii) on the next Business Day if such funds are
received after 2:00 p.m. (New York City time). If the Facility
Agent fails to so disburse funds on such Business Day, the
Facility Agent shall pay to each Bank interest on the funds owing
to such Bank until such amount is paid in full at (i) the Federal
Funds Rate for such Business Day and the next Business Day and
(ii) the Federal Funds Rate plus 2% per annum for each day
thereafter.
(b) Finco will, to the extent permitted by law (and without
duplication to any interest payable pursuant to the provisions of
Section 4.01(d)), pay to the Facility Agent interest on all
amounts not paid or deposited when due hereunder, from and after
the Business Day after the Business Day such amounts were due
hereunder until such amounts are paid in full, at 2% per annum
above the Alternate Base Rate. Such interest shall, subject to
Sections 9.07 and 9.08, be payable on demand and shall be for the
account of, and distributed by the Facility Agent to, the Banks
and the Agents ratably in accordance with their respective
interests in such overdue amounts.
(c) Until the Commitment of any Downgraded Bank has been
reduced to zero or assigned to an Eligible Assignee, or such
Downgraded Bank ceases to be a Downgraded Bank, any payments or
prepayments of principal (other than to the extent resulting from
a Commitment reduction) on any Liquidity Loan made by such
Downgraded Bank shall be effected by the Facility Agent by
transferring any such amount to the Collateral Agent for credit
to the Downgraded Series A Bank Sub-account, in the case of
principal payments or prepayments made to the Downgraded Series A
Bank, or the Downgraded Series B Bank Sub-account, in the case of
principal payments or prepayments made to a Downgraded Series B
Bank.
SECTION 4.04. Yield Protection. (a) Notwithstanding any
other provision herein, if, after the Effective Date, either (i)
the adoption of any law, rule or regulation (including any
imposition or increase of reserve requirements) or any change
after the Effective Date in the interpretation or administration
of any such law, rule or regulation by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or (ii) the compliance
by any Bank with any guideline or request from any central bank
or other governmental authority or quasi-governmental authority
exercising control over banks or financial institutions generally
(whether or not having the force of law), shall subject any Bank
to any reserve (including any imposed by the Board), special
deposit, assessment or similar requirement (including a reserve,
special deposit, assessment or similar requirement that takes the
form of a tax) against assets of, deposits with or for the
account of, or credit extended by, such Bank's Eurodollar Lending
Office or impose any other condition on any Bank affecting its
Liquidity Loans or its obligation to make Liquidity Loans, and as
a result of either of the foregoing there shall be any increase
in the cost to such Bank of agreeing to make or making, funding
or maintaining Liquidity Loans or issuing its Commitment, or
there shall be a reduction in the amount received or receivable
by that Bank or its Eurodollar Lending Office, then Finco shall
from time to time, in accordance with the provisions of Section
4.04(c), upon written notice from and demand by such Bank (with a
copy of such notice and demand to the Facility Agent), and in
accordance with Section 9.07 or Section 9.08 hereof, direct the
Collateral Agent to pay to the Facility Agent for the account of
such Bank additional amounts sufficient to indemnify that Bank,
on an after tax basis, against such increased cost or reduction
in amount received or receivable; provided, however, that this
Section 4.04 shall not apply to any additional cost or reduction
in amounts received or receivable that is attributable to taxes,
except as specified above in this Section 4.04.
(b) If any Bank (including the Facility Agent) shall
reasonably determine that the adoption after the Effective Date
of any law, rule or regulation regarding capital adequacy or
capital maintenance, or any change after the Effective Date in
any of the foregoing or in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by any Bank (or any lending office of such Bank) or
any Bank's holding company with any request or directive
regarding capital adequacy or capital maintenance (whether or not
having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the
rate of return on such Bank's or such Bank's holding company's
capital as a consequence of this Agreement or the Liquidity Loans
made by such Bank pursuant hereto to a level below that which
such Bank or such Bank's holding company could have achieved but
for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital
adequacy), then from time to time in accordance with the
provisions of Section 4.04(c), Finco shall direct the Collateral
Agent to pay to such Bank, in accordance with Section 9.07 or
Section 9.08 hereof, such additional amount or amounts as will
compensate such Bank or such Bank's holding company, on an after
tax basis, for such reduction.
(c) Each Bank (or, as applicable, a Responsible Officer of
the Facility Agent) shall promptly notify Finco and the Facility
Agent of any event of which it has knowledge occurring after the
Effective Date which will entitle such Bank to compensation
pursuant to this Section 4.04. A certificate of each such Bank
setting forth such amount or amounts as shall be necessary to
compensate such Bank as specified in clause (a) or (b) above, as
the case may be (including calculations thereof in reasonable
detail), and the adoption, change or compliance giving rise to
such compensation shall be delivered to Finco and shall be
conclusive absent demonstrable error. Finco shall direct that
the Collateral Agent pay each such Bank, in accordance with
Section 9.07 or Section 9.08 hereof, the amount shown as due on
any such certificate delivered by it within fifteen (15) days
after its receipt of the same. Any Bank receiving any such
payment shall promptly make a refund thereof to Finco if the law,
regulation, guideline or change in circumstances giving rise to
such payment is subsequently deemed or held to be invalid or
inapplicable by a final nonappealable order or decision and as a
result thereof, such Bank shall not have incurred any increased
costs or suffered any reduction in the amounts received or
receivable or the rate of return on capital under this Agreement.
(d) Any Bank (or, as applicable, any Agent) claiming any
additional amounts payable pursuant to this Section 4.04 shall
use reasonable efforts (consistent with legal and regulatory
restrictions) to take any action to avoid or minimize any amounts
that otherwise may be payable pursuant to this Section 4.04,
provided that such action would not, in the good faith
determination of the applicable affected party, be otherwise
disadvantageous to it.
(e) Notwithstanding the foregoing, Finco shall not be
required to make any payments nor indemnify any Bank or Agent
under this Section 4.04 with respect to any increased costs or
reduced returns incurred by such Bank or Agent more than (i)
ninety (90) days (in the case of amounts described in Section
4.04(a)) and (ii) six (6) months (in the case of amounts
described in Section 4.04(b)) before the date a request for
payment or indemnification is delivered to Finco, provided that
(x) the foregoing limitation shall not apply to any amounts
payable on account of changes having retroactive effect and (y)
to receive any such payment or indemnity with respect to amounts
described in Section 4.04(b), a Bank or Agent need not give
notice of the amount of such payment or indemnity until eighteen
(18) months after the incurrence of the related costs or the
related reduction in returns so long as it has given notice
within six (6) months of incurring those costs or reduction that
it intends to make a claim hereunder.
(f) All payments owing by Finco under this Section 4.04
shall be made subject to the terms of Sections 9.07 and 9.08
hereof.
SECTION 4.05. Illegality; Unavailability. (a) In the event
that on any date any Bank shall have reasonably determined (which
determination shall be final and conclusive and binding upon all
parties) that the making or continuation of its Eurodollar Loans
has become unlawful by compliance by that Bank in good faith with
any law, governmental rule, regulation or order, then, and in any
such event, that Bank (an "Affected Bank") shall promptly give
notice (by telephone confirmed in writing) to Finco and the
Facility Agent (a copy of which notice the Facility Agent shall
promptly transmit to each Bank) of that determination. The
obligation of the Affected Bank to make or maintain its
Eurodollar Loans during any such period shall be terminated at
the earlier of the termination of the Interest Period then in
effect for each Eurodollar Loan or when required by law and Finco
shall, no later than the termination of the Interest Period in
effect at the time any such determination pursuant to this
Section 4.05 is made or earlier, when required by law, convert
the Eurodollar Loans of the Affected Bank into Base Rate Loans.
(b) If, prior to the beginning of any Interest Period,
either (1) the Majority Banks shall have given notice to Finco
and the Facility Agent as set forth in subsection (a) above, or
(2) the Facility Agent shall have reasonably determined (which
determination shall be final and conclusive and binding upon all
parties) that: (i) Dollar deposits in the relevant amount and for
such Interest Period are not available in the interbank
eurodollar market or (ii) by reason of circumstances affecting
the interbank eurodollar market for the Facility Agent's
Eurodollar Lending Office, that adequate and fair means do not
exist for ascertaining the applicable Eurodollar Rate applicable
to a Eurodollar Borrowing, then, and in any such event, the
Facility Agent shall promptly give notice of such determination
to Finco and to each Bank indicating the facts and circumstances
giving rise to such determination. Thereafter and continuing
until the Facility Agent shall notify Finco that the
circumstances giving rise to such determination no longer exist,
each Eurodollar Borrowing will, on the last day of the applicable
Interest Period, automatically convert into a Base Rate
Borrowing, the obligation of the Banks to make Eurodollar Loans
shall be suspended and any Eurodollar Borrowings requested to be
made at such time shall be made as Base Rate Borrowings.
(c) For purposes of this Section 4.05, a notice to Finco by
any Bank shall be effective as to each of such Bank's outstanding
Eurodollar Loans, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loans; in all
other cases, such notice shall be effective on the date of
receipt by Finco.
SECTION 4.06. Indemnity. Finco shall direct that the
Collateral Agent compensate each Bank, in accordance with Section
9.07 or Section 9.08 hereof, upon written request by that Bank
(which request shall set forth in reasonable detail the basis for
requesting such amounts) for all reasonable losses, expenses and
liabilities (including any interest paid by the Bank to lenders
of funds borrowed by it to make its Eurodollar Loans and any loss
sustained by that Bank in connection with the re-employment of
such funds, but excluding taxes, which are not covered by this
Section 4.06), which that Bank may sustain with respect to
Eurodollar Loans: (a) if for any reason (other than a default or
error by that Bank) a Eurodollar Loan does not occur on the date
specified therefor in the related Notice of Borrowing or (b) if
any payment or conversion, including under Section 2.05,
Section 2.07, Section 2.08, Section 2.09 or Section 4.05 hereof,
of any such Bank's Eurodollar Loans occurs (i) on a date which is
not the last day of the Interest Period applicable to such
Eurodollar Loan or (ii) on a date which is not the date specified
in a notice of payment given by Finco. All payments owing by
Finco under this Section 4.06 shall be made subject to the terms
of Sections 9.07 and 9.08 hereof.
SECTION 4.07. Pro Rata Treatment.
(a) Each repayment of principal and interest on the Series
B Liquidity Loans, each payment of the Facility Fee owing to any
Series B Bank, each reduction of the Series B Commitments and
each conversion of any Borrowing comprised of Series B Liquidity
Loans to a Borrowing of another Type or with a different Interest
Period shall be allocated pro rata among the affected Series B
Banks in accordance with their respective Pro Rata Shares. Each
Series B Bank agrees that in computing such Series B Bank's
portion of any Borrowing to be made hereunder, the Facility Agent
may, in its discretion, round each Series B Bank's percentage of
such Borrowing, computed in accordance with Section 2.02, to the
next higher or lower whole dollar amount. If any Series B Bank
shall, through the exercise of a right of banker's lien, set-off,
counterclaim or otherwise, obtain payment with respect to its
Series B Liquidity Loans which results in its receiving more than
its Pro Rata Share of any payments described above or more than
its priority share of any payments to be made to it under Section
9.07 or 9.08 as applicable, then (A) such Series B Bank shall be
deemed to have simultaneously purchased from each of the other
Series B Banks a share in such other Series B Banks' Liquidity
Loans so that the amount of the Series B Liquidity Loans of all
Series B Banks shall be pro rata as otherwise set forth above,
(B) such Series B Bank shall immediately pay to the other Series
B Banks their Pro Rata Shares of the payments otherwise received
as consideration for such purchase and (C) such other adjustments
shall be made from time to time as shall be equitable to insure
that all Series B Banks share such payments ratably or according
to the priority set forth in such Section 9.07 or 9.08. If all
or any portion of any such excess payment is thereafter recovered
from the Series B Bank which received the same, the purchase
provided in this Section 4.07 shall be deemed to have been
rescinded to the extent of such recovery, without interest.
Finco expressly consents to the foregoing arrangements and agrees
that each Series B Bank so purchasing a portion of another Series
B Bank's Liquidity Loans may exercise all rights of payment
(including all rights of set-off, banker's lien or counterclaim)
with respect to such portion as fully as if such Series B Bank
were the direct holder of such portion.
(b) Notwithstanding anything in this Agreement to the
contrary, upon the commencement of the Liquidation Period, (i) if
any Series B Bank has become a Downgraded Series B Bank, then,
effective as of the first date of the Liquidation Period, each
other Series B Bank shall be deemed to have simultaneously
purchased from each Downgraded Series B Bank a share, in the
order and in the amount determined pursuant to Section 4.07(c)(i)
below, in such Downgraded Series B Bank's Liquidity Loans and
(ii) effective as of the first date of the Liquidation Period,
after giving effect to any purchase contemplated by clause (i)
hereof, each Series B Bank shall be deemed to have simultaneously
purchased from the Series A Bank a share, in the order and in the
amount determined pursuant to Section 4.07(c)(ii) below, in the
Series A Bank's Liquidity Loans and Commitment. Finco expressly
consents to the foregoing arrangements, and agrees that each Bank
so purchasing a portion of another Bank's Liquidity Loans may
exercise all rights of payment (including all rights of set-off,
banker's lien or counterclaim) with respect to such portion as
fully as if such Bank were the direct holder of such portion;
provided, however, nothing in this Section 4.07(b) shall affect
or be deemed to relieve either the Series A Bank (if it is not a
Downgraded Series A Bank) or any Series B Bank which is not a
Downgraded Series B Bank from its obligation to fund maturing
Series A Commercial Paper or Series B Commercial Paper, as the
case may be.
(c) The share of any Downgraded Series B Bank's Liquidity
Loans or the Series A Bank's Liquidity Loans purchased pursuant
to Section 4.07(b) shall be calculated in the following manner
and purchased in the following order:
(i) first, each Series B Bank which is not a
Downgraded Series B Bank shall purchase from each
Downgraded Series B Bank an amount of such Downgraded
Series B Bank's Liquidity Loans equal to: the amount
by which such purchasing Series B Bank's "Pro Rata
Exposure" exceeds its "Adjusted Exposure"; where, for
purposes of this Section 4.07(c)(i) only, the "Pro Rata
Exposure" of a Series B Bank (which is not a Downgraded
Series B Bank) shall mean an amount equal to the
product of (1) such Series B Bank's Pro Rata Share
times (2) the sum of (x) the aggregate outstanding face
amount of Series B Commercial Paper minus the account
balance of the Downgraded Series B Bank Sub-account
plus (y) the aggregate outstanding principal amount of
all Series B Liquidity Loans; and where, for purposes
of this Section 4.07(c)(i) only, the "Adjusted
Exposure" of a Series B Bank (which is not a Downgraded
Series B Bank) shall mean an amount equal to the sum of
(1) the aggregate outstanding principal amount of such
Series B Bank's Series B Liquidity Loans plus (2) the
product of (x) such Series B Bank's Commitment divided
by the sum of all Commitments of Series B Banks which
are not Downgraded Series B Banks times (y) the
aggregate outstanding face amount of Series B
Commercial Paper minus the account balance of the
Downgraded Series B Bank Sub-account; and
(ii) second, after giving effect to any purchase
pursuant to Section 4.07(c)(i) hereof, each Series B
Bank shall purchase from the Series A Bank an amount of
such Series A Bank's Liquidity Loans equal to: the
amount by which such purchasing Series B Bank's "Pro
Rata Exposure" exceeds its "Adjusted Exposure"; where,
for purposes of this Section 4.07(c)(ii) only, the "Pro
Rata Exposure" of a Series B Bank shall mean an amount
equal to the product of (1) such Series B Bank's Series
B Commitment divided by the Facility Amount times (2)
the sum of (x) the aggregate outstanding face amount of
Series B Commercial Paper minus the account balance of
the Downgraded Series B Bank Sub-account plus (y) the
aggregate outstanding principal amount of all Liquidity
Loans plus (z) the aggregate outstanding face amount of
Series A Commercial Paper minus the account balance of
the Downgraded Series A Bank Sub-account; and where,
for purposes of this Section 4.07(c)(ii) only, the
"Adjusted Exposure" of a Series B Bank shall mean an
amount equal to the product of (1) such Series B Bank's
Pro Rata Share times (2) the sum of (x) the aggregate
outstanding principal amount of Series B Liquidity
Loans plus (y) the aggregate outstanding face amount of
Series B Commercial Paper minus the account balance of
the Downgraded Series B Bank Sub-account.
SECTION 4.08. Taxes. Finco agrees that:
(a) Any and all payments by Finco under this Agreement
shall be made free and clear of and without deduction for any and
all taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding (i) taxes
(other than withholding taxes) imposed on the net income of any
Bank or Agent by any jurisdiction under whose laws that Bank or
Agent is organized or in which the office through which it makes
its Liquidity Loans is located or any political subdivision of
any such jurisdiction or (ii) taxes (other than withholding
taxes) imposed on the gross receipts or gross income of, or
franchise taxes imposed on, any Bank or Agent by any state
jurisdiction under whose laws that Bank or Agent is organized or
in which the office through which it makes its Liquidity Loans is
located or any political subdivision of any such jurisdiction
(all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred
to as "Taxes"). If Finco shall be required by law to withhold or
deduct any Taxes from or in respect of any sum payable hereunder
to any Bank or Agent, then (i) the sum payable shall be increased
by the amount necessary to yield to that Bank or Agent (after
payment of all Taxes) an amount equal to the sum it would have
received had no such deductions been made; (ii) Finco shall make
such withholding or deductions; (iii) Finco shall pay the full
amount withheld or deducted to the relevant taxing authority or
other authority in accordance with applicable law; and (iv) Finco
shall remit to the Facility Agent the required receipts or other
required documentary evidence.
(b) If Finco fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Facility
Agent the required receipts or other required documentary
evidence, (i) the applicable Agent or Bank may (but shall not be
required to) pay such Taxes on behalf of Finco, and (ii) Finco
shall promptly indemnify the Agents and the Banks, as applicable,
for such Taxes, for any incremental taxes, interest or penalties
that may become payable by such party as a result of any such
failure, and as a result of any accrual or receipt of any
indemnity payment under this subsection (b) and for reasonable
counsel fees and out-of-pocket expenses arising from any such
failure.
(c) On or before the date it becomes a party to this
Agreement and on any extension of its Commitment, each Bank (and,
to the extent applicable, each Agent) that is organized under the
laws of a jurisdiction outside the United States shall deliver to
Finco such certificates, documents or other evidence, as required
by the IRC or Treasury Regulations issued pursuant thereto,
including (i) two original copies of Internal Revenue Service
Form 1001 or Form 4224 or successor applicable form, properly
completed and duly executed by such Bank or Agent certifying in
each case that such party is entitled to receive payments under
this Agreement without deduction or withholding of any United
States federal income taxes, and (ii) an original copy of
Internal Revenue Service Form W-8 or W-9 (or applicable successor
form) properly completed and duly executed by such party.
(d) Any obligation of Finco to pay any additional amounts
to any Bank or Agent in respect of United States Federal
withholding tax pursuant to this Section 4.08 (other than
pursuant to Section 4.08(b)), shall be net of any credits in
respect of other tax liabilities of such Person which credits
relate to or result from such withholding tax (as determined by
such Person in its reasonable discretion, it being understood
that nothing in this Agreement shall impose any duty on any Bank
or Agent to disclose its internal tax records as a condition to
reimbursement under this Section).
(e) Any Bank (or as applicable, any Agent) claiming any
additional amounts payable pursuant to this Section 4.08 shall
use reasonable efforts (consistent with legal and regulatory
restrictions) to take any action to avoid or minimize any amounts
that otherwise may be payable by Finco pursuant to this Section
4.08, including filing any certificate or document or changing
the jurisdiction of its applicable office from which it funds any
Liquidity Loans, provided that such action would not, in the good
faith determination of the Bank or Agent, as the case may be, be
otherwise disadvantageous to it.
(f) Notwithstanding the foregoing, Finco shall not be
required to make any payments nor indemnify any Bank or Agent
under this Section 4.08 with respect to any Taxes paid directly
(and not by withholding) by such Bank or Agent more than ninety
(90) days before the date a request for payment or
indemnification is delivered to Finco (it being understood that
the date of payment of such Taxes and not the time period to
which such Taxes relate shall begin the running of the ninety
(90) day period described above). In addition, if a Bank or
Agent is entitled to an exemption from withholding with respect
to payments to be made to such Bank or Agent under this Agreement
and does not provide the applicable certificate demonstrating its
right to such exemption to Finco as required by Section 4.08(c)
or Section 4.08(e) (unless such failure is due to a change in
treaty, law or regulation occurring subsequent to the date on
which a form originally was required to be provided), Finco shall
withhold taxes from payments to such Bank or Agent at the
applicable statutory rates and Finco shall not be required to pay
any additional amounts as a result of such withholding as
provided in this Section 4.08; provided, however, that all such
withholding and associated limitations in payment shall cease
upon delivery by such Bank or Agent of such certificate to Finco.
(g) All payments owing by Finco under this Section 4.08
shall be made subject to the terms of Sections 9.07 and 9.08
hereof.
ARTICLE V CONDITIONS OF LIQUIDITY LOANS AND COMMERCIAL PAPER
ISSUANCE
SECTION 5.01. Conditions Precedent to Initial New Credit
Event. The occurrence of the first New Credit Event shall be
subject to satisfaction of the conditions precedent that the
Facility Agent shall have received, on or before the Effective
Date, all of the following, each fully executed by all
signatories thereto (where applicable) and in form and substance
satisfactory to the Facility Agent:
(a) this Agreement;
(b) the Series A Liquidity Notes and the Series B
Liquidity Notes;
(c) the Receivables Sale Agreement;
(d) the Depositary Agreements;
(e) the Dealer Agreements;
(f) certificates of the Secretaries or Assistant
Secretaries of the Servicer, Finco and the Seller, cer-
tifying in each case (i) the names and true signatures of
the officers authorized to sign the Facility Documents to be
delivered by such party pursuant hereto or thereto (on which
certificate the Agents and the Banks may conclusively rely
until such time as the Facility Agent shall receive a
revised certificate meeting the requirements of this clause
(f)(i)), (ii) that attached thereto is a true and complete
copy of the certificate or articles of incorporation and by-
laws of such corporation as in effect on the date of such
certification and (iii) that attached thereto are true and
complete copies of resolutions by such corporation's Board
of Directors approving the execution, delivery and
performance of the Receivables Sale Agreement and all other
Facility Documents to which such corporation is a party;
(g) if the Effective Date is different from the date
of this Agreement, a certificate executed by an officer of
Finco certifying that as of the Effective Date, all of the
representations and warranties contained in Article VI
hereof are true and accurate in all respects with the same
force and effect as though such representations and
warranties had been made as of such time;
(h) if the Effective Date is different from the date
of this Agreement, a certificate executed by an officer of
the Servicer and the Seller certifying that as of the
Effective Date, all of the representations and warranties
contained in Article III of the Receivables Sale Agreement
by such party are true and accurate in all respects with the
same force and effect as though such representations and
warranties had been made as of such time;
(i) a copy of Finco's Certificate of Incorporation,
certified by the Secretary of State of Delaware;
(j) a copy of the Certificate of Incorporation for the
Servicer and the Seller, certified by the appropriate
Secretary of State or Commonwealth;
(k) certificates relating to the good standing of
Finco, the Servicer and the Seller from the Secretaries of
State of the States in which each such Person has its chief
executive office or in which such Person is incorporated;
(l) copies of UCC lien search reports with respect to
Finco and the Seller, dated a date reasonably close to the
Effective Date, disclosing no effective financing statements
or other instruments on file with respect to the Collateral
(in the case of Finco) or the Purchased Assets sold or to be
sold by the Seller and the Contributed Assets contributed or
to be contributed by the Seller except for (i) those in
favor of Finco or the Collateral Agent and (ii) financing
statements which will be terminated as of the Effective
Date;
(m) copies of UCC financing statements, in form and
substance satisfactory to the Facility Agent, as filed with
the appropriate offices deemed necessary by the Facility
Agent to perfect (i) the transfers of interests in Purchased
Assets and Contributed Assets by the Seller to Finco under
the Receivables Sale Agreement and (ii) the grant of
security in the Collateral by Finco under this Agreement;
(n) (i) evidence that any financing statements
described in clause (l) above filed in favor of any Person
other than the Collateral Agent or Finco have been, or will
be as soon as practicable after the Effective Date,
terminated, (ii) evidence that any Lien granted by Finco
pursuant to the Existing Receivable Purchase Documents shall
have been released, and (iii) delivery of pay-off letters in
form and substance satisfactory to the Facility Agent,
relating to the Existing Receivables Purchase Documents;
(o) favorable opinions of (1) Winston & Strawn,
counsel for the Servicer, the Seller and Finco, (2) Michael
E. Tierney, Esq., general counsel for JSC, and
(3) Armstrong, Teasdale, Schlafly & Davis, Missouri counsel
for the Seller and Finco, each in form and substance
satisfactory to the Agents and each Rating Agency,
including, in the aggregate, opinions as to:
(i) corporate organization, authority, execution,
the absence of conflicts with respect to Finco, the
Servicer and the Seller, perfection under the UCC of
the sale of the Purchased Assets by the Seller to
Finco, and enforceability and perfection under the UCC
of the security interest granted by Finco to the
Collateral Agent under this Agreement;
(ii) true sale issues relating to the transfer of
the Purchased Assets by the Seller to Finco and such
property being treated as property of Finco in the
event of a bankruptcy of the Seller; and
(iii) non-consolidation of JSC and Finco in
the event of the bankruptcy of JSC;
(p) a rating letter from each Rating Agency indicating
a rating of not less than A-1/D-1 with respect to the
Commercial Paper and a rating letter from S&P indicating a
rating of not less than AAA with respect to the Liquidity
Loans;
(q) a letter from Ernst & Young, satisfactory in form
and substance to the Facility Agent and the Dealers, with
respect to the information contained in the Information
Memorandum relating to the Receivables;
(r) Lock-Box Agreements executed by the Seller, Finco
and each Lock-Box Bank;
(s) a balance sheet of Finco as of September 30, 1994;
(t) evidence of the payment in full of all fees owing
to the Banks as of the Effective Date;
(u) evidence that any governmental or third-party
consent required by Finco, the Servicer or the Seller in
connection with the execution and delivery of any Facility
Document has been obtained and is in full force and effect;
and
(v) such other documents and instruments as the
Facility Agent may reasonably request relating to the
Facility Documents and the transactions contemplated
thereby.
SECTION 5.02. Conditions Precedent to Each New Credit
Event. The occurrence of each New Credit Event (including the
first New Credit Event) on any day shall be subject to the
receipt by the Facility Agent of the Daily Report required to be
delivered on such day and to the conditions precedent that, on
the date thereof, after giving effect thereto and to the
application of any proceeds therefrom, the following statements
shall be true:
(a) the representations and warranties contained in
Article VI hereof and all representations and warranties of
the Seller and the Servicer in the Receivables Sale
Agreement (except, in each case, for representations and
warranties which speak as of a specific date only), are true
and accurate as of such date in all respects with the same
force and effect as though such representations and
warranties had been made as of such time;
(b) no event has occurred and is continuing, or
would result from such New Credit Event, which
constitutes a Liquidation Event or an Unmatured
Liquidation Event;
(c) no Base Amount Shortfall shall exist;
(d) if the Term Loan is outstanding, no Modified Base
Amount Shortfall shall exist;
(e) the amount equal to (i) the Aggregate Loan
Amount plus (ii) the aggregate outstanding face amount
of the Commercial Paper, shall not be greater than the
Facility Amount;
(f) if such New Credit Event is the issuance of
Series A Commercial Paper or the making of a Series A
Liquidity Loan, the amount equal to (i) the Aggregate
Series A Loan Amount plus (ii) the aggregate
outstanding face amount of the Series A Commercial
Paper, shall not be greater than the Series A Facility
Amount;
(g) if such New Credit Event is the issuance of
Series B Commercial Paper or the making of a Series B
Liquidity Loan, the amount equal to (i) the Aggregate
Series B Loan Amount plus (ii) the aggregate
outstanding face amount of the Series B Commercial
Paper, shall not be greater than the Series B Facility
Amount;
(h) if such New Credit Event is the issuance of
Commercial Paper, the amount equal to (i) the Aggregate Loan
Amount plus (ii) the aggregate face amount of outstanding
Commercial Paper minus (iii) the aggregate amount on deposit
and credited to the Downgraded Series A Bank Sub-account and
the Downgraded Series B Bank Sub-account, shall not exceed
the Adjusted Base Amount;
(i) if such New Credit Event is the issuance of Series
A Commercial Paper, the amount equal to (i) the Aggregate
Series A Loan Amount plus (ii) the aggregate face amount of
outstanding Series A Commercial Paper minus (iii) the
aggregate amount on deposit and credited to the Downgraded
Series A Bank Sub-account, shall not exceed the Adjusted
Series A Base Amount;
(j) if such New Credit Event is the issuance of Series
B Commercial Paper, the amount equal to (i) the Aggregate
Series B Loan Amount plus (ii) the aggregate face amount of
outstanding Series B Commercial Paper minus (iii) the
aggregate amount on deposit and credited to the Downgraded
Series B Bank Sub-account, shall not exceed the Adjusted
Series B Base Amount;
(k) if such New Credit Event is the issuance of
Commercial Paper, the aggregate outstanding amount of all
Commercial Paper which shall mature on any day (giving
effect to all issuances of Commercial Paper on the day such
New Credit Event occurs) shall not exceed 20% of the
Facility Amount; and
(l) the Termination Date shall not have occurred.
Each of (i) the giving of the applicable Notice of Borrowing and
the acceptance by Finco of the proceeds of any such Borrowing and
(ii) the issuance of such Commercial Paper shall constitute a
representation and warranty by Finco that, as of the Funding Date
or issuance date, as applicable, before and after giving effect
to any such Borrowing or issuance and to the application of any
proceeds therefrom, the foregoing statements are true.
SECTION 5.03. Conditions Precedent to Each Refunding
Advance. The borrowing on any day of a Refunding Advance,
including the making of an initial Refunding Advance to fund the
Downgraded Series A Bank Sub-account or the Downgraded Series B
Bank Sub-account, shall be subject to the conditions precedent
that, on the date thereof, after giving effect thereto and the
application of the proceeds therefrom, the following statements
shall be true:
(a) no Liquidation Event of the type described in
clause (g) of the definition of Liquidation Event shall have
occurred with respect to Finco;
(b) the Aggregate Loan Amount shall not exceed the
lesser of (i) the Facility Amount and (ii) the Adjusted Base
Amount;
(c) for a Refunding Advance made by the Series A Bank
(if the Series A Bank has not become a Downgraded Series A
Bank), the Aggregate Series A Loan Amount shall not exceed
the lesser of (i) the Series A Facility Amount or (ii) the
Adjusted Series A Base Amount; and
(d) for a Refunding Advance made by a Series B Bank,
the Aggregate Series B Loan Amount (other than the amount of
any Series B Liquidity Loan made by a Downgraded Series B
Bank) shall not exceed the lesser of (i) the Series B
Facility Amount minus the amount of any Series B Liquidity
Loan made by a Downgraded Series B Bank or (ii) the Adjusted
Series B Base Amount.
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Finco.
Finco represents and warrants that:
(a) Organization; Qualification. Finco is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware. Finco has all governmental
licenses, authorizations, consents and approvals required to
carry on its business, is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction
in which its business is now conducted except where the absence
of such licenses, authorizations, consents, approvals or good
standing could not reasonably be expected to have a Material
Adverse Effect.
(b) Corporate Authority. Finco has corporate power and
authority to execute and deliver this Agreement, to borrow money
and to grant a security interest hereunder, to execute and
deliver the Facility Documents to which it is a party and to
perform its obligations hereunder and thereunder and all such
action has been duly and validly authorized by all necessary
corporate proceedings on its part.
(c) Execution; Binding Effect. This Agreement and each of
the other Facility Documents to which Finco is a party have been
duly and validly executed and delivered by Finco and constitute
the legal, valid and binding obligations of Finco enforceable
against Finco in accordance with their respective terms except to
the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought
in equity or at law).
(d) Authorizations. No authorization or approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body, agency, official or other Person is
required for the due execution, delivery and performance by Finco
of this Agreement, any other Facility Document or any other
agreement, document or instrument delivered hereunder or
thereunder, except (i) for the filing of financing statements
pursuant to the UCC required (A) to perfect the security
interests granted by Finco hereunder (all of which filings have
been duly made and are, and on or prior to each Purchase, will
be, in full force and effect) or (B) to terminate the security
interests or amend the financing statements filed pursuant to the
Existing Receivables Purchase Documents (which terminations or
amendments will be filed as of, or as soon as practicable after,
the Effective Date), and (ii) for consents which have been duly
obtained or will have been obtained as of the Effective Date. No
transaction contemplated hereby requires compliance with any bulk
sales act or similar law. There are no injunctions, orders,
suits or proceedings of any nature that adversely affect Finco's
performance of its agreements or transactions.
(e) Absence of Conflicts. Neither the execution and
delivery of this Agreement or any other Facility Document to
which Finco is a party, nor consummation of the transactions
herein or therein contemplated nor performance of or compliance
with the terms and conditions hereof or thereof will (i) violate
or conflict with any law, rule or regulation applicable to Finco
or any of its properties; (ii) violate, conflict with or result
in a breach of or a default under (A) the certificate of
incorporation or by-laws of Finco, (B) any agreement (other than
the Existing Receivables Purchase Documents) or instrument to
which Finco is a party or by which it or any of its properties
(now owned or hereafter acquired) may be subject or bound, which
violation, conflict, breach or default could reasonably be
expected to have a Material Adverse Effect, or (C) any order,
writ, judgment, award, injunction or decree binding on or
affecting Finco or its property (now owned or hereafter
acquired); or (iii) except for Liens created pursuant to the
Facility Documents, result in the creation or imposition of any
Lien in favor of any other party upon any property (now owned or
hereafter acquired) of Finco. Any such violation, conflict,
breach or default, or potential breach or default referred to in
clause (ii)(B) of the preceding sentence under the Existing
Receivables Purchase Agreement shall have been consented to and
waived by the affected parties as of the Effective Date.
(f) Perfected Security Interest. Upon the making of the
initial Liquidity Loan and/or the issuance of the initial
Commercial Paper hereunder, and at all times thereafter, the
Collateral Agent, for the benefit of the Secured Parties, will
have a legal, valid, perfected and enforceable security interest
upon the Collateral, which security interest is prior in right to
all other Liens thereon (except Permitted Liens), and such
Collateral shall not be subject to any other Liens (except for
Permitted Liens).
(g) Consideration for Purchases by Finco. Finco shall have
given reasonably equivalent value to the Seller in consideration
for the transfer, sale or conveyance to Finco of the Receivables
and Related Security by the Seller to Finco under the Receivables
Sale Agreement, and no such transfer shall have been made for or
on account of an antecedent debt owed by the Seller to Finco.
(h) Accuracy of Written Information. All written
information, exhibits, documents, records, Daily Reports,
Settlement Statements, certificates, reports, financial
statements and similar writings (including, without limitation,
the Information Memorandum) (collectively, the "Written
Information") furnished by Finco to the Facility Agent or the
Banks at any time pursuant to any requirement of, or in response
to any request of any such party under, this Agreement or any
other Facility Document or any transaction contemplated hereby or
thereby, have been, and all such Written Information hereafter
furnished by Finco to such parties will be, true and accurate in
all material respects on the date as of which any such Written
Information was or will be delivered, and shall not omit to state
any material facts or any facts necessary to make the statements
contained therein, taken as a whole, not materially misleading in
light of the circumstances under which they were made, in each
case, as of the date it is or shall be dated or (except as
otherwise disclosed to Finco or the foregoing parties, as the
case may be, at such time) as of the date so furnished.
(i) Litigation. There are no actions, suits or proceedings
at law or in equity or by or before any governmental authority
pending or, to the knowledge of Finco, threatened against or
affecting Finco or any property or rights of Finco, which could
be reasonably expected to: (i) adversely affect the legality,
validity or enforceability of this Agreement or any other
Facility Document or (ii) materially impair the ability of Finco
to carry on business substantially as now being conducted, or
(iii) materially adversely affect the condition (financial or
otherwise), operations or properties of Finco.
(j) Governmental Regulations. Finco is not an "investment
company" registered or required to be registered under the
Investment Company Act of 1940, as amended.
(k) Margin Regulations. Finco is not engaged, principally
or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" (as each of the quoted terms is defined or
used in Regulation G, T, U or X). No part of the proceeds of any
of the Liquidity Loans has been used for so purchasing or
carrying margin stock or for any purpose which violates, or which
would be inconsistent with, the provisions of Regulation G, T, U
or X.
(l) Separate Corporate Existence. Finco is operated as an
entity with assets and liabilities distinct from those of the
Seller and any other Affiliates of Finco, and Finco hereby
acknowledges that the Agents and the Banks are entering into the
transactions contemplated by this Agreement in reliance upon
Finco's identity as a separate legal entity from the Seller and
each such Affiliate. Finco has no Subsidiaries.
(m) Investments. As of the Effective Date, Finco has no
Investments other than Permitted Investments. Finco does not own
or hold, directly or indirectly, any capital stock or equity
security of, or any equity interest in, any Person.
(n) Facility Documents. As of the Effective Date, the
Receivables Sale Agreement will be the only agreement pursuant to
which Finco purchases Receivables or any other accounts
receivable, and the Facility Documents delivered to the Banks
represent all agreements between the Seller, on the one hand, and
Finco on the other. Finco has furnished to the Facility Agent
and each Bank true, correct and complete copies of each Facility
Document to which Finco is a party, each of which is in full
force and effect. Neither Finco nor any of its Affiliates party
thereto is in default of any of their respective obligations
thereunder in any material respect. Upon the Purchase or
Contribution of each Receivable pursuant to the Receivables Sale
Agreement, Finco shall be the lawful owner of, and have good
title to, such Receivable and all Purchased Assets or Contributed
Assets relating thereto, free and clear of any Liens (except for
Liens created hereunder and Permitted Liens). All such Purchased
Assets are purchased, and all such Contributed Assets are
contributed, without recourse to the Seller except as described
in the Receivables Sale Agreement. The Purchases of the
Purchased Assets by Finco constitute valid and true sales and
transfers for consideration (and not merely a pledge of such
Purchased Assets for security purposes), enforceable against
creditors of the Seller, and no Purchased Assets or Contributed
Assets shall constitute property of the Seller.
(o) Business; Balance Sheet. Since its incorporation,
Finco has conducted no business other than the purchase of
Receivables and related assets from the Seller under the
Receivables Sale Agreement and other similar agreements, the
incurrence of Indebtedness under this Agreement, the Existing
Receivables Purchase Documents and such other agreements to
finance such Purchases, and such other activities as are
incidental to the foregoing. The balance sheet of Finco
delivered pursuant to Section 5.01(s) has been prepared in
accordance with GAAP and fairly presents the financial condition
of Finco as of September 30, 1994. From and after the Effective
Date (after giving effect to the transactions occurring on such
date), no liabilities shall continue to exist in connection with
any of the Existing Receivables Purchase Documents to which Finco
is a party which could reasonably be likely to have a material
adverse effect on the financial condition or assets of Finco.
(p) Lock-Box Accounts. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the Lock-Box
Accounts, are set forth on Exhibit 6.01(p) (or as hereafter
notified to the Facility Agent in accordance with Section 8.11),
and each Lock-Box Bank has executed a Lock-Box Agreement. All
Obligors have been instructed to remit payment on the Receivables
to a Lock-Box Account or, via wire transfer, directly to the
Collection Account.
(q) Treatment of Purchased Receivables. Finco is treating
and has treated its Purchase of Receivables from the Seller as a
sale by the Seller and a purchase by Finco for federal income
tax, reporting and accounting purposes.
(r) Ownership of Finco. One hundred percent (100%) of the
outstanding capital stock of Finco is directly owned (both
beneficially and of record) by JSC or an Affiliate thereof. Such
stock is validly issued, fully paid and nonassessable and there
are no options, warrants or other rights to acquire capital stock
from Finco.
(s) Taxes. Finco has filed or caused to be filed all
Federal, state, local and foreign tax returns which are required
to be filed by it, and has paid or caused to be paid all taxes
shown to be due and payable on such returns or on any assessments
received by it, other than any taxes or assessments, the validity
of which are being contested in good faith by appropriate
proceedings and with respect to which Finco has set aside
adequate reserves on its books in accordance with GAAP and which
proceedings are not reasonably likely to have a Material Adverse
Effect.
(t) Locations. As of the Effective Date, the principal
place of business and chief executive office of Finco is located
at its address set forth in Exhibit 7.08 and there were no other
such locations during the four months preceding the Effective
Date. As of the Effective Date, the locations of the offices
where the Records and computer software are kept are listed on
such exhibit (or, as of any date after the Effective Date, at
such other locations, notified to the Facility Agent in
accordance with Section 7.08, with respect to which all action
required by such Section 7.08 has been taken and completed).
(u) Other Names. Since its inception, Finco has had no
trade names, fictitious names, assumed names, "doing business as"
names or other names under which it has done or is doing
business.
(v) Use of Proceeds. Any proceeds from the sale of
Commercial Paper in connection herewith shall be used solely for
current expenditures of Finco which qualify as current
transactions, or arise out of current transactions, within the
meaning of Section 3(a)(3) of the Securities Act.
(w) Compliance with Law. Finco is in compliance with all
applicable laws, rules, regulations, and orders with respect to
it, its business and properties, except where failure to so
comply would not have a Material Adverse Effect.
ARTICLE VII AFFIRMATIVE COVENANTS
Finco covenants and agrees that, from the date hereof (or,
if stated otherwise in any covenants contained in this Article
VII, from the date stated therein) until the expiration or
termination of the Commitments and thereafter until the
Collection Date, unless the requisite Banks required under
Section 12.01 shall otherwise consent in writing, it will:
SECTION 7.01. Reports; Certificates; Other Information.
Furnish or cause to be furnished to the Facility Agent and to
each Bank (and, with respect to the reports described in Sections
7.01(a), 7.01(b), 7.01(c), 7.01(f)(i) and 7.01(g), with a copy
thereof to each Rating Agency):
(a) Annual Reports. As soon as available and in
any event within one-hundred five (105) days after the
end of each fiscal year of Finco, a copy of the annual
statements of income and cash flows of Finco for such
fiscal year and the related balance sheet as at the end
of such fiscal year, setting forth in each case in
comparative form the corresponding figures for the
preceding fiscal year and prepared in accordance with
GAAP consistently applied (except for such changes in
application which are approved by Finco's independent
public accountants and disclosed therein), accompanied
by an opinion of Ernst & Young or other Independent
Public Accountants selected by Finco and otherwise
reasonably acceptable to the Majority Banks and the
Term Bank (which accountants may also provide services
to JSC and JSC's other Subsidiaries), together with a
certificate from Finco's independent public accountants
confirming that, in conducting such audit, nothing came
to their attention which caused them to believe that
Finco was not in compliance with this Agreement insofar
as it relates to accounting matters, with the
understanding that such audit was not directed
primarily toward obtaining knowledge of such
noncompliance;
(b) Quarterly Reports. As soon as available and
in any event within sixty (60) days after the end of
the first three fiscal quarters of each fiscal year of
Finco, a copy of (A) the unaudited statement of income
and cash flows of Finco for such fiscal quarter and for
the period from the beginning of the respective fiscal
year to the end of such fiscal quarter; and (B) an
unaudited balance sheet of Finco as at the end of such
fiscal quarter; setting forth in each case in
comparative form the corresponding figures for the
preceding fiscal year and all of the foregoing prepared
in accordance with GAAP consistently applied (except
for such changes in application which are approved by
Finco's financial officer preparing such statements and
disclosed therein);
(c) Annual Accountants' Report. Within one-
hundred five (105) days after the end of each fiscal
year of Finco, a report with respect to the Facility
Documents by Ernst & Young or any other firm of
Independent Public Accountants reasonably acceptable to
the Majority Banks and the Term Bank (who may also
render other services to Finco, JSC or their
Affiliates); provided, however, that if the Liquidation
Period shall have occurred by reason of the occurrence
of a Liquidation Event, then the Majority Banks and the
Term Bank may direct Finco to replace such accountants
with another firm of Independent Public Accountants
selected by the Majority Banks and the Term Bank and
reasonably acceptable to Finco. Each such report shall
state that the accountants have compared the amounts
contained in a sample of Daily Reports and Settlement
Statements randomly selected from all Daily Reports and
Settlement Statements delivered to the Facility Agent
during the period covered by such report with the
records (including computer records) from which such
amounts were derived and that, on the basis of such
comparison, such accountants are of the opinion that
the amounts are in agreement with such documents and
records, except for such exceptions as they believe to
be immaterial and such other exceptions as shall be set
forth in such report;
(d) Certificates. Contemporaneously with the
furnishing of a copy of each annual and quarterly
report provided for in subsections 7.01(a) and (b),
respectively, a certificate dated the date of delivery
and signed by a Responsible Officer of Finco, which
certificate shall state that said financial statements
fairly present the financial position and results of
operations of Finco in accordance with GAAP
consistently applied (except for such changes in
application identified in such certificate which are
approved by Finco's independent public accountants or,
in the case of the quarterly reports, by such officer
and further subject to normal year-end adjustments) and
that such Responsible Officer has reviewed the relevant
terms of this Agreement and has made, or caused to be
made under such Responsible Officer's supervision, a
review of Finco's activities during the period covered
by the statements then being furnished, and that the
review has not disclosed the existence of a Liquidation
Event or Unmatured Liquidation Event, or if there is
such an event, describing it and the steps, if any,
taken or being taken to cure it;
(e) Notice of Liquidation Event and Litigation.
As soon as possible and in any event within two
Business Days upon learning of the occurrence of any of
the following, written notice thereof (with a copy
concurrently sent to each Rating Agency), describing
the same and the steps being taken by Finco with
respect thereto: (a) a Liquidation Event or Unmatured
Liquidation Event, or (b) the institution against Finco
of, or any adverse determination in, any litigation,
arbitration proceeding or governmental proceeding;
(f) Reports under Receivables Sale Agreement.
Promptly upon receipt thereof, copies of (i) all annual
and quarterly financial statements and monthly
Settlement Statements delivered to Finco by the Seller
or by the Servicer pursuant to the Receivables Sale
Agreement (each such Settlement Statement to be
delivered no later than the Business Day of Finco's
receipt but in no event later than the applicable
Reporting Date) and (ii) (to the Facility Agent and the
Collateral Agent only) all Daily Reports (to be
delivered no later than the Business Day of Finco's
receipt) and all other reports and other written
information not specified above which are required to
be delivered by the Seller or the Servicer to Finco
pursuant to the terms of the Receivables Sale
Agreement;
(g) Other Information. Promptly, from time to time,
such other information, documents, records or reports
respecting the Purchased Assets or the Contributed Assets,
including the Receivables, or the condition or operations,
financial or otherwise, of Finco as any Agent or any Bank or
their respective agents or representatives may from time to
time reasonably request.
SECTION 7.02. Inspection. (a) At any time and from time to
time during Finco's normal business hours, with reasonable
notice, permit the Facility Agent, or its agents or
representatives, or any Bank (i) to examine and make copies of
and abstracts from all books, records and documents (including
computer tapes and disks) in the possession or under the control
of Finco relating to the Receivables, the other Purchased Assets
or the other Contributed Assets, and (ii) to visit the offices
and properties of Finco for the purpose of examining such
materials described in clause (i) above, and to discuss matters
relating to the Receivables, the other Purchased Assets or the
other Contributed Assets, or Finco's performance hereunder with
any of the officers or employees of Finco having knowledge of
such matters. Finco agrees to instruct its independent
accountants to cooperate with any reasonable request of the
Facility Agent, its permitted assigns, or their respective agents
or representatives, in connection with the performance of such
accountants' routine verification procedures with respect to the
Receivables or the other Collateral. If a Liquidation Event
shall have occurred and be continuing, and the Aggregate Net
Outstandings (calculated without giving effect to any amount then
on deposit and credited to the Downgraded Series A Bank Sub-
account or the Downgraded Series B Bank Sub-account) are greater
than zero at such time, the Facility Agent (upon instruction by
the Majority Banks or the Term Bank) or its assigns, agents or
representatives, shall also be permitted to verify the validity,
amount or any other matter relating to any Receivable, and may
notify any or all of the Obligors of the security interests
granted hereunder or direct such Obligors to make payments under
any Receivables directly to the Banks or their designees.
(b) Without limiting the foregoing, Finco shall, from time
to time during Finco's normal business hours, with reasonable
notice upon request of the Facility Agent (or its respective
agents or representatives) on its own behalf or pursuant to
instructions received by the Facility Agent from any Bank or the
Term Bank, permit Ernst & Young, or such other certified public
accountants or other auditors selected by Finco to conduct a
review of Finco's books and records relating to the Purchased
Assets, the Contributed Assets and the Facility Documents and the
Facility Agent shall provide a copy of any report or results of
such inspection to the Person so requesting the inspection or any
other Person that is a Bank or the Term Bank upon request;
provided that unless a Liquidation Event has occurred and is
continuing (i) such review shall be limited to the performance of
the procedures specified on Exhibit E to the Receivables Sale
Agreement, and (ii) such review shall not be conducted more than
once during any calendar year. The costs and expenses of any
such review shall be borne by Finco, provided that for any such
review performed prior to the Liquidation Period, Finco shall not
be responsible for any costs and expenses in excess of $30,000,
such excess amounts to be shared ratably among all Persons
requesting such review.
SECTION 7.03. Books and Records of Finco. Maintain and
implement administrative and operating procedures reasonably
necessary in the performance of its obligations hereunder
(including an ability to recreate records evidencing the
Receivables in the event of the destruction of the originals
thereof), and keep and maintain at all times, or cause to be kept
and maintained at all times, all documents, books, records,
accounts and other information relating to the Receivables, the
Purchased Assets and the Contributed Assets reasonably necessary
or advisable for the collection of all Receivables (including
records adequate to permit the daily identification of each
Receivable and all collections of and reductions or adjustments
to each Receivable).
SECTION 7.04. Corporate Existence. Observe all corporate
procedures required by its certificate of incorporation and by-
laws and do or cause to be done all things necessary to preserve
and maintain its corporate existence and good standing (except
where the failure to be in good standing would not have a
Material Adverse Effect), material rights, licenses, permits and
franchises.
SECTION 7.05. Compliance with Laws. From and after the
Effective Date comply in all respects with all applicable laws,
rules, regulations, writs, judgments, injunctions, decrees,
awards and orders with respect to it, its business and
properties, except where the failure to so comply would not have
a Material Adverse Effect.
SECTION 7.06. Obligations and Taxes. Pay all its
indebtedness and obligations promptly and in accordance with
their terms and pay and discharge promptly all taxes, assessments
and governmental charges or levies imposed upon it or in respect
of its property, before the same shall become in default, as well
as all lawful claims for labor, materials and supplies or other-
wise which, if unpaid, might become a Lien or charge upon such
properties or any part thereof (except such indebtedness,
obligations, taxes, assessments, governmental charges and levies
and claims being contested in good faith by appropriate
proceedings and for which Finco has set aside adequate reserves
therefor).
SECTION 7.07. Facility Documents. Comply in all material
respects with the terms of and employ the procedures outlined in
and enforce the obligations of the Seller and the Servicer under
the Receivables Sale Agreement, and all of the other Facility
Documents to which it is a party.
SECTION 7.08. Location of Records. Keep its principal
place of business and chief executive office, and the offices
where it keeps its books, records and documents concerning the
Receivables (including all original documents relating thereto)
at the addresses specified in Exhibit 7.08, or, upon thirty days'
prior written notice to the Facility Agent, at such other
locations in the United States where all action required to
maintain the perfection of Finco's ownership interest in the
Purchased Assets and the Contributed Assets and the Collateral
Agent's security interest in the Collateral shall have been taken
and completed. Finco shall also provide a Perfection Opinion
prior to such change.
SECTION 7.09. Separate Corporate Existence. Finco shall
take all reasonable steps to maintain Finco's identity as a
separate legal entity from JSC and to make it manifest to third
parties that Finco is an entity with assets and liabilities
distinct from those of JSC and each other Affiliate thereof.
Without limiting the generality of the foregoing and in addition
to and consistent with the covenants set forth in Sections 7.04
and 7.07, Finco shall:
(i) conduct all of its business, and make all
communications to third parties (including all invoices (if
any), letters and other instruments) solely in its own name
(and not as a division of any other Person), and identify
employees of Finco (if any) as such (including by means of
providing appropriate employees with business or
identification cards identifying such employees as Finco's
employees);
(ii) compensate all consultants and agents of Finco
that are not employees, consultants or agents of any
Affiliate of Finco directly, from Finco's bank accounts, for
services provided to Finco by such employees, consultants
and agents and, in the case of any employee, consultant or
agent of Finco that is also an employee, consultant or agent
of any Affiliate of Finco, allocate the compensation of such
employee, consultant or agent between Finco and such
Affiliate on a basis which reflects the services rendered to
Finco and such Affiliate (it being understood that such
allocation may be made on the basis of estimates of such
services and accomplished through the payment of an
administrative fee by Finco to one or more of its Affiliates
and that ministerial services of negligible value will not
be compensated);
(iii) allocate all overhead expenses (including
telephone and other utility charges) for items shared
between Finco and any Affiliate 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;
(iv) at all times have at least one "Independent
Director" as defined in and as required under Finco's
Certificate of Incorporation; and each "Independent
Director" shall not be, and shall never have been, a
director, officer, employee or stockholder of the Seller;
(v) maintain Finco's books and records separate from
those of any Affiliate;
(vi) prepare its financial statements separately from
those of its other Affiliates and use its best efforts to
insure that any future consolidated financial statements of
JSC that include Finco (excluding such financial statements
that are provided only to JSC and its Affiliates or their
independent public accountants) have a footnote to the
effect that Finco is a wholly-owned, bankruptcy remote,
limited purpose subsidiary of JSC, which finances its
purchases of receivables through the issuance of commercial
paper;
(vii) (a) use its best efforts not to commingle funds
or other assets of Finco with those of any other Affiliate,
(b) not hold its assets in any manner that would create an
appearance that such assets belong to any other Affiliate,
and (c) not maintain bank accounts or other depository
accounts to which any Affiliate is an account party, or from
which any Affiliate (except in its capacity as Servicer or
as otherwise permitted under the Facility Documents) has the
power to make withdrawals;
(viii) not permit any Affiliate to pay any of Finco's
operating expenses (except pursuant to allocation
arrangements that comply with the requirements of subsection
(iii) of this Section 7.09, pursuant to the terms of the
Receivables Sale Agreement or any Dealer Agreement or
pursuant to any arrangements by which any operating expense
of Finco is paid by an Affiliate and is promptly reimbursed
by Finco);
(ix) not guarantee any obligation of any Affiliate nor
(to the extent that Finco has the legal power to prevent
such) have any of its obligations guaranteed by any such
Affiliate (either directly or by seeking credit based on the
assets of such Affiliate) or otherwise hold itself out as
responsible for the debts of any Affiliate; provided,
however, that for the purposes of this clause (ix), no
arrangement or transaction permitted by the Facility
Documents shall be deemed to constitute such a guarantee;
(x) maintain at all times a separate stationery from
that of any Affiliate, and have all its officers conduct all
of its business solely in its own name and strictly observe
all corporate formalities;
(xi) (x) not, to the extent within its power, permit
Finco to be named as a direct or contingent beneficiary or
loss payee on any insurance policy covering the property of
any Affiliate, and (y) not name other Affiliates as a direct
or contingent beneficiary or loss payee on its own insurance
policies, in either case such that (A) in the event of a
loss in connection with such property, payments on account
thereof would be made to Finco or would be jointly made to
Finco and such Affiliate, or (B) payments on account of
losses to Finco's property would be made to any Affiliates
or would be jointly made to Finco and any Affiliates;
(xii) not permit the Seller, in its capacity as such,
to be involved in the day-to-day management of Finco, and
other than with respect to the purchase and sale and
contribution and transfer of Receivables pursuant to the
Facility Documents (including, without limitation,
transactions contemplated by the Short-Term Note and
adjustments for Dilution, Breached Receivables or
Noncomplying Receivables) and the performance of its
obligations under the Facility Documents and the Existing
Receivables Purchase Documents, Finco shall not engage in
any intercorporate transaction with the Seller;
(xiii) hold regular meetings of its board of directors
in accordance with the provisions of Finco's Certificate of
Incorporation; and
(xiv) take such other actions as are necessary on its
part to ensure that the facts and assumptions set forth in
the opinion described in Section 5.01(o)(iii) are true and
correct as of the date of such opinion and remain true and
correct at all times; provided, however, that after the date
of such opinion, Finco shall not be required pursuant to
this clause (xiv) to take any such actions as are not within
its power.
ARTICLE VIII NEGATIVE COVENANTS
Finco covenants and agrees that, from the date hereof (or,
if stated otherwise in any covenants contained in this Article
VIII, from the date stated therein) until the expiration or
termination of the Commitments and thereafter until the
Collection Date, unless the requisite Banks required under
Section 12.01 shall otherwise consent in writing, it will not,
directly or indirectly:
SECTION 8.01. Liens; Sales of Collateral. From the
Effective Date, create, incur, assume or permit to exist any Lien
(other than Permitted Liens or any Lien pursuant to the Existing
Receivables Purchase Documents which shall terminate on the
Effective Date) on or with respect to any property or asset of
any kind (including any document or instrument in respect of
goods or accounts receivable) of Finco whether now owned or
hereafter acquired, or any income or profits therefrom, or file
or permit the filing of any financing statement or other similar
notice of any Lien with respect to any such property, asset,
income or profits under the UCC of any state or under any similar
recording or notice statute, except Permitted Liens; or (except
as expressly contemplated pursuant to the Facility Documents)
sell, convey, assign (by operation of law or otherwise), transfer
or otherwise dispose of any of the Collateral or Finco's right to
receive income in respect thereof.
SECTION 8.02. Indebtedness. From the Effective Date,
create, incur, assume, permit to exist or guaranty, or otherwise
become or remain directly or indirectly liable with respect to,
any Indebtedness, except:
(a) Finco may become and remain liable with respect to
(i) the Indebtedness to the Agents and the Banks expressly
contemplated hereunder, (ii) the Indebtedness to the Term
Bank expressly contemplated by the Term Loan Agreement and
(iii) the Indebtedness evidenced by the Commercial Paper;
(b) Finco may become and remain liable with respect to
Contingent Obligations permitted by Section 8.04 and, upon
any matured obligations actually arising pursuant thereto,
the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(c) Finco may become and remain liable with respect to
the Ordinary Course Expenses (to the extent, if any, that
such items constitute Indebtedness) and Indebtedness to the
Seller pursuant to the Receivables Sale Agreement and the
Short-Term Note; and
(d) Finco may be liable with respect to (i)
Indebtedness pursuant to its Purchaser Note (as defined in
the Master Agreement) payable to Emerald Funding
Corporation, provided that such Indebtedness is paid in full
on the Effective Date; and (ii) certain other expenses or
obligations incurred in connection with the Existing
Receivables Purchase Documents, which expenses or
obligations shall be paid in full on or before June 30,
1995.
SECTION 8.03. Net Worth. Permit its net worth (defined as
the sum of (i) the amount of its capital stock plus (ii) the
amount of surplus and retained earnings (or, in the case of a
surplus or retained earnings deficit, minus the amount of such
deficit), in each case determined in accordance with GAAP) to be
less than 6.75% of the Outstanding Balance of the Eligible
Receivables.
SECTION 8.04. Contingent Obligations. From the Effective
Date, create or become or remain liable with respect to any
Contingent Obligation, except endorsements of negotiable
instruments for collection in the ordinary course of business and
reimbursement or indemnification obligations (i) in favor of the
Agents or the Banks as provided for under this Agreement, (ii) in
favor of the Term Bank as provided for in the Term Loan
Agreement, (iii) in favor of the Depositary as provided in the
Series A Depositary Agreement or the Series B Depositary
Agreement, (iv) in favor of any Dealer or any other Indemnitee
(as defined in the Dealer Agreement) pursuant to the Dealer
Agreement and (v) pursuant to the Master Agreement.
SECTION 8.05. Investments; Joint Ventures. Make or own any
Investment in any Person, including any joint venture, except
Purchased Assets, Contributed Assets, Receivable Notes and
Permitted Investments.
SECTION 8.06. Bankruptcy. Without the consent of the
"Independent Director" (as defined in Finco's certificate of
incorporation), file or cause to be filed any voluntary
proceeding of the type referred to in the definition of
"Insolvency Event" so long as this Agreement remains in full
force and effect and for at least one year and one day following
the latest to occur of: (i) the payment in full of all Liquidity
Loans; (ii) the payment in full of the Term Loan; or (iii) the
payment in full of the latest maturing Commercial Paper Note.
SECTION 8.07. Facility Documents. Except as otherwise
permitted under Section 12.01, (a) amend any Facility Document to
which it is a party, or give or withhold any consent or waiver
thereunder, (b) designate a Termination Date if, at the time of
such designation, the Aggregate Net Outstandings exceeds the Base
Amount, or (c) without the prior written consent of the Majority
Banks and the Term Bank, consent to any amendment or modification
to the Credit and Collection Policy that is reasonably likely to
have a Material Adverse Effect; except that Finco may, with prior
written notice to the Facility Agent and the Term Bank, but
without any prior written consent, amend the Allocation
Agreement, provided that any such amendment shall be on fair and
reasonable terms materially no less favorable to Finco than would
be obtained in a comparable arm's-length transaction with a
Person not an Affiliate and such amendment shall not be
prohibited by, or otherwise adversely affect Finco's ability to
comply with, Section 7.09.
SECTION 8.08. Charter and By-Laws. Amend or otherwise
modify its certificate of incorporation or by-laws in any manner
which requires the consent of the "Independent Director" (as
defined in Finco's certificate of incorporation), without
(x) obtaining the prior written consent of the Majority Banks and
the Term Bank, (y) satisfying the Rating Agency Condition and (z)
delivering a favorable update of the opinion of counsel referred
to in Section 5.01(o)(iii). In addition, Finco shall not make
any change to its corporate name unless (i) the Facility Agent,
the Term Bank and each Rating Agency shall have received twenty
(20) Business Days' prior written notice of such name change and
(ii) at least ten (10) Business Days prior to the effective date
of any such name change, Finco shall have executed and delivered
to the Facility Agent such Financing Statements (Form UCC-1 and
UCC-3) which the Facility Agent may request to reflect such name
change, together with such other documents and instruments that
the Facility Agent may request in connection therewith and a
Perfection Opinion.
SECTION 8.09. [Reserved]
SECTION 8.10. Bank Accounts. From the Effective Date,
maintain any bank accounts other than the Collection Account
(including the sub-accounts thereof), the Series A Proceeds
Account (including any sub-accounts thereof), the Series B
Proceeds Account (including any sub-accounts thereof), the Lock-
Box Accounts, checking accounts for payments of Ordinary Course
Expenses and such other accounts which Finco, with approval of
the Collateral Agent (which approval shall not be unreasonably
withheld), shall consider to be advisable for the administration
of this Agreement and the other Facility Documents; provided,
however, that Finco shall have given notice of the existence and
location of any such account to each of the Agents at or before
the time such accounts are opened; and further provided, however,
that Finco may maintain, until June 30, 1995, any bank account
required or permitted to be maintained under the Existing
Receivables Purchase Documents, so long as Finco shall have given
notice of the existence and location of any such account to each
of the Agents at or before the Effective Date (such bank
accounts, the "Existing Receivables Purchase Accounts").
SECTION 8.11. Lock-Box Banks; Change in Payment
Instructions to Obligors. From and after the Effective Date,
make any changes in instructions to Obligors directing payments
other than to a Lock-Box Bank or, via wire transfer, to the
Collection Account, or voluntarily add or terminate any bank as a
Lock-Box Bank from those listed in Exhibit 6.01(p) unless, with
respect to the addition of any Lock-Box Bank, the Facility Agent
shall have first received and approved, which approval shall not
be unreasonably withheld, (x) copies of Lock-Box Agreements
executed by each new Lock-Box Bank and Finco and (y) copies of
all agreements and documents signed by Finco (and, if applicable,
by the Seller) and the respective Lock-Box Bank with respect to
any new Lock-Box Account.
SECTION 8.12. Accounting Treatment. Prepare any financial
statements or other statements (including any tax filings which
are not consolidated with those of JSC) which shall account for
the transactions contemplated by the Receivables Sale Agreement
in any manner other than as the sale of the Purchased Assets, and
the contribution of the Contributed Assets, by the Seller to
Finco.
SECTION 8.13. Merger, Consolidation, Etc. Alter its
corporate, capital or legal structure, or enter into any
transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, sub-lease, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part
of its business, property or fixed assets, whether now owned or
hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person,
except to the extent provided in the Facility Documents.
SECTION 8.14. Capital Expenditures. Make or incur any
capital expenditures except as necessary to conduct its business
in accordance with the terms of the Facility Documents.
SECTION 8.15. Restriction on Leases. Become liable in any
way, whether directly or by assignment or as a guarantor or other
surety, for the obligations of the lessee under any lease, except
as necessary to conduct its business in accordance with the terms
of this Agreement and except pursuant to the Allocation
Agreement.
SECTION 8.16. Conduct of Business. From the Effective
Date, engage in any business other than (a) the businesses
engaged in by Finco on the Effective Date, (b) those businesses
described in Section 6.01(o), and (c) such other lines of
business as may be consented in writing to by the Majority Banks
and the Term Bank. Notwithstanding anything to the contrary in
this Agreement or any other Facility Document: (i) Finco shall
not engage in any business or activities other than in connection
with, or relating to, (A) the holding, acquisition, ownership,
management, control, use, sale and disposition of the Purchased
Assets and the Contributed Assets, (B) the execution, delivery
and performance of this Agreement, the other Facility Documents
to which it is a party and the Existing Receivables Purchase
Documents to which it is a party, (C) any and all business or
activities that are required by or authorized by the terms of
this Agreement, the other Facility Documents and the Existing
Receivables Purchase Documents, (D) the winding up of Emerald
Funding Corporation's trade receivables securitization program,
and (E) any and all business or activities that are incidental to
or necessary to accomplish any of the foregoing, (ii) Finco shall
not enter into any transaction with any Person which is not
contemplated by or incidental to the performance of its
obligations under the Facility Documents and the Existing
Receivables Purchase Documents, and (iii) Finco shall not create,
acquire or otherwise hold any interest in any Subsidiary or other
Person, other than the Permitted Investments.
ARTICLE IX SECURITY INTEREST; ADMINISTRATION AND COLLECTION
OF RECEIVABLES
SECTION 9.01. Grant of Security Interest. To secure the
prompt and complete payment when due of (i) all Liquidity Loans,
interest, fees, indemnities, expenses and all other amounts owed
hereunder or in connection herewith, (ii) the Term Note and any
interest, fees, indemnities, expenses and any other amount owed
under the Term Loan Agreement or in connection with the Term
Note, (iii) the Commercial Paper, and (iv) all amounts owing
under the Facility Documents to the Dealers or the Depositary
(all the items referred to in the foregoing subclauses (i)
through (iv) being collectively called the "Obligations"), Finco
hereby assigns and pledges to the Collateral Agent, for the
benefit of the Secured Parties, a security interest in and Lien
on all of Finco's right, title and interest in and to the
following property, whether now owned or existing or hereafter
arising or acquired and wheresoever located (collectively, the
"Collateral"):
(a) all Receivables, together with all Related
Security, Collections, Records, other Purchased Assets
and other Contributed Assets related thereto;
(b) all right, title and interest of Finco in, to
and under the Receivables Sale Agreement, including all
monies due and to become due to Finco from the Seller
or the Servicer under or in connection therewith,
whether as Receivables or fees, expenses, costs,
indemnities, insurance recoveries, damages for breach
or otherwise, and all rights, remedies, powers,
privileges and claims of Finco against the Seller and
the Servicer under or with respect to the Receivables
Sale Agreement (whether arising pursuant to the terms
of the Receivables Sale Agreement or otherwise
available at law or in equity), including (i) the right
at any time to appoint a successor to the Servicer as
set forth therein (provided, however, that the
Collateral Agent's right to appoint a successor to the
Servicer shall arise only upon the occurrence of a
Servicer Termination Event), and (ii) all licenses
granted to Finco by the Seller in connection with the
administration and collection of the Receivables;
(c) all right, title and interest of Finco in, to and
under each of the other Facility Documents (excluding this
Agreement and the Term Loan Agreement) (whether as an
original party thereto, as assignee or otherwise), including
all monies due and to become due to Finco under or in
connection with such other Facility Documents, and all
rights, remedies, powers, privileges, benefits and claims of
Finco under or with respect to such other Facility Documents
(whether arising pursuant to the terms of such Facility
Documents or otherwise available at law or in equity);
(d) the Collection Account (and any sub-accounts
thereof), the Series A Proceeds Account (and any sub-
accounts thereof) and the Series B Proceeds Account
(and any sub-accounts thereof) and all other bank and
similar accounts established for the benefit of the
Collateral Agent, the Banks and/or the Term Bank (other
than the accounts referred to below in clause (e)), and
all funds held therein or in such other accounts, and
all income from the investment of funds in such
accounts; and all certificates and instruments, if any,
from time to time representing or evidencing such
accounts;
(e) (i) all lock boxes, all Lock-Box Accounts,
all Existing Receivables Purchase Accounts, and all
other bank and similar accounts relating to the
collection of Receivables, (ii) all funds held in the
Lock-Box Accounts, the Existing Receivables Purchase
Accounts, or in such other accounts, (iii) all income
from the investment of funds in the Lock-Box Accounts,
the Existing Receivables Purchase Accounts and such
other accounts, and (iv) all certificates and
instruments if any, from time to time in such lock
boxes or representing or evidencing the Lock-Box
Accounts, the Existing Receivables Purchase Accounts
or such other accounts;
(f) all interest, dividends, cash, instruments
and other property from time to time received, receiv-
able or otherwise distributed in respect of or in
exchange for any and all of the foregoing; and
(g) all substitutions for and proceeds of any of
the foregoing and, to the extent not otherwise
included, all payments under insurance (whether or not
the Collateral Agent is the loss payee thereof) or any
indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of
the foregoing.
Notwithstanding the foregoing, it is expressly understood and
agreed that any assignment and transfer to the Seller of Finco's
interest in returned or repossessed goods, which transfer is made
pursuant to the terms of Section 2.02(f) of the Receivables Sale
Agreement and subject to the payment requirements contemplated
thereunder, shall be made free and clear of any security interest
of the Collateral Agent in such goods.
SECTION 9.02. Continuing Liability of Finco. The security
interests described above are granted as security only and shall
not subject any Secured Party or its assigns to, or transfer or
in any way affect or modify, any obligation or liability of Finco
with respect to, any of the Collateral or any transaction in
connection therewith. No Secured Party shall be required or
obligated in any manner to make any inquiry as to the nature or
sufficiency of any payment received by it or the sufficiency of
any performance by any party under any such obligation, or to
make any payment or present or file any claim, or to take any
action to collect or enforce any performance or the payment of
any amount thereunder to which it may be entitled at any time.
SECTION 9.03. Collection of Receivables; Establishment of
Accounts. (a) As of the Effective Date, Finco hereby transfers
to the Collateral Agent for the benefit of the Banks, the holders
of the Commercial Paper and the Term Bank the exclusive ownership
and control of the Lock-Box Accounts and all related lock-boxes
owned by Finco, and Finco hereby agrees to take any further
action necessary or that the Collateral Agent may reasonably
request to effect such transfer. Each Lock-Box Bank shall be
instructed by Finco to remit, on a daily basis, via overnight or
same day transfer, all amounts deposited in its Lock-Box Accounts
to a segregated trust account maintained with and under the
exclusive control of the Collateral Agent (in the corporate trust
department thereof), which shall be an Eligible Account, for the
benefit of the Banks, the holders of the Commercial Paper and the
Term Bank (the "Collection Account") in accordance with the terms
of a Lock-Box Agreement. Solely for purposes of administration
of the Collection Account, the Collateral Agent shall initially
establish six sub-accounts within the Collection Account: the
Other Carrying Costs Sub-account, the General Collection Sub-
account, the Secured Parties Sub-account, the Series A Cash
Collateral Sub-account, the Series B Cash Collateral Sub-account
and the Assignee Indemnification Sub-account. The Collateral
Agent may establish additional sub-accounts from time to time
relating to funds credited to the General Collection Sub-account.
Amounts credited to any sub-account shall not be applied for
purposes other than those to which this Agreement permits amounts
credited to such sub-account to be applied. Deposits to or from
the Collection Account shall be credited or debited to one or
more of such sub-accounts in accordance with the terms hereof,
and any amount retained in the Collection Account not otherwise
credited to a specific sub-account shall be credited to the
General Collection Sub-account. Finco shall have no control over
the Lock-Box Accounts, any related lock-box or the Collection
Account and shall have no rights of withdrawals therefrom except
for (i) the right to receive Available Cash to the extent
provided under this Agreement, (ii) the right to direct a Lock-
Box Bank to make withdrawals from the related Lock-Box Account
and transfer such funds to the Collection Account, and (iii) the
other rights to receive withdrawals expressly provided for in
Section 9.07 or Section 9.08. Finco shall, not later than 1:00
p.m. (New York City time) on each Business Day, cause the
Servicer to advise in writing (in the form of a Daily Report or
such other form as is acceptable to the recipients) Finco and the
Agents of the amount of Collections to be received into the Lock-
Box Accounts and the Collection Account on such Business Day with
respect to the Receivables and the Facility Agent shall, based
solely on such advice, advise Finco and the Agents as to the
amounts of such Collections which constitute Available Cash. If
Finco or its agents or representatives shall at any time receive
any cash, checks or other instruments constituting Collections,
such recipient shall promptly hold such payment in trust for and
in a manner acceptable to the Agents, and shall, promptly upon
receipt of any such payment, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of
transfer, to a Lock-Box Account or the Collection Account.
(b) At any time upon the occurrence and during the
continuance of a Liquidation Event (and only at such time): (i)
with contemporaneous notice to Finco, the Collateral Agent (at
the direction of the Majority Banks and the Term Bank) shall
notify any or all of the Obligors of the security interest
granted hereunder and may direct any or all of the Obligors of
Receivables included in the Collateral to pay all amounts payable
under any such Receivables directly to the Collateral Agent or
its designee; (ii) at the Collateral Agent's request (at the
direction of the Majority Banks and the Term Bank) and at Finco's
expense, Finco shall give notice of the Secured Parties' interest
in the Collateral to each Obligor whose Receivables are included
in the Purchased Assets and the Contributed Assets and direct
that payments be made directly to the Collateral Agent or its
designee; (iii) Finco shall promptly assemble all Records
included in the Collateral, and make the same available to the
Collateral Agent at a place selected by the Collateral Agent or
its designee; and (iv) the Collateral Agent shall (at the
direction of the Majority Banks and the Term Bank) enforce the
Receivables Sale Agreement against the Seller and the Servicer
and shall have the right to give or withhold any or all consents,
requests, notices, directions, approvals, demands, extensions or
waivers under or with respect thereto, and exercise affirmative
rights thereunder, to the same extent as Finco would otherwise be
entitled to do. In addition to the foregoing, upon the
occurrence and during the continuance of a Servicer Termination
Event, Finco shall, at the request of the Collateral Agent (at
the direction of the Majority Banks and the Term Bank), exercise
its rights under the Receivables Sale Agreement to notify any or
all of the Obligors of Finco's interests in the Purchased Assets
and the Contributed Assets. Finco hereby authorizes the Banks
and the Term Bank, and gives to the Banks and the Term Bank its
irrevocable power of attorney, which shall be coupled with an
interest, and the Banks and the Term Bank hereby designate the
Collateral Agent to exercise such authorization and power of
attorney, to take any and all steps in the name of Finco, which
steps are necessary or desirable, in the reasonable determination
of the Collateral Agent, to collect all amounts due under the
Collateral, including endorsing Finco's name on checks and other
instruments representing Collections and, upon the occurrence and
during the continuance of a Liquidation Event, enforcing such
Receivables and the related Invoices; provided, however, for
purposes of this Section 9.03(b), upon reduction of all
Commitments to zero and upon payment in full of all amounts owing
hereunder to the Facility Agent and the Banks, the term "Majority
Banks" as used herein shall be deemed to refer to a majority of
the holders of outstanding Commercial Paper.
(c) Following notification that collections of any
receivable or other intangible owed to the Seller or an Affiliate
thereof, which is not a Purchased Asset or a Contributed Asset,
have been deposited into the Lock-Box Accounts, Finco shall, or
shall cause the Servicer to, direct the Collateral Agent to
segregate all such collections or, if such collections have been
deposited in the Collection Account, request the Collateral Agent
to segregate such collections. Promptly after such misapplied
collections have been reasonably identified to the Collateral
Agent, the Collateral Agent shall turn over to the Seller or such
Affiliate, as applicable, all such collections less all
reasonable and appropriate out-of-pocket costs and expenses, if
any, incurred by the Collateral Agent in identifying and
collecting such receivables.
(d) Finco shall cause to be delivered to the Agents, on
each day when a Daily Report is required to be delivered by the
Servicer pursuant to Section 5.03(b) of the Receivables Sale
Agreement, a copy of such Daily Report and shall cause to be
delivered to the Agents and the Banks, no later than each
Reporting Date with respect to the Collection Period most
recently ended, the Settlement Statement prepared by the Servicer
pursuant to such Section 5.03(b).
(e) In the event that the Servicer resigns or is removed
under the terms of the Receivables Sale Agreement and this
Agreement, and a successor Servicer is not promptly named by
Finco (or, following a Servicer Termination Event, the Collateral
Agent), Finco hereby agrees to appoint the Collateral Agent, and
the Collateral Agent hereby agrees to accept such appointment
(or, following a Servicer Termination Event, agrees to appoint
itself) as Servicer, and to assume all of the duties and
obligations thereof. Notwithstanding the foregoing, the
Collateral Agent shall, if it is legally unable so to act,
petition a court of competent jurisdiction to appoint any
established institution that meets the requirements set forth in
the definition of "Eligible Assignee" and whose regular business
includes the servicing of trade receivables similar to the
Receivables as the successor servicer hereunder.
(f) In addition to the foregoing, the Collateral Agent
shall establish a segregated trust account maintained with and
under the exclusive control of the Collateral Agent (in the
corporate trust department thereof), which account shall be an
Eligible Account, for the benefit of the Series A Bank, the
holders of Series A Commercial Paper and the Term Bank to be
designated the Series A Proceeds Account (the "Series A Proceeds
Account"). Solely for purposes of administration of the Series A
Proceeds Account, the Collateral Agent shall initially establish
four sub-accounts within the Series A Proceeds Account: the
Series A Equalization Sub-account, the Series A Carrying Costs
Sub-account, the General Series A Sub-account and the Downgraded
Series A Bank Sub-account. The Collateral Agent may establish
additional sub-accounts from time to time relating to funds
credited to the General Series A Sub-account. Amounts credited
to any sub-account of the Series A Proceeds Account shall not be
applied for purposes other than those to which this Agreement
permits amounts credited to such sub-account to be applied, and
any amount retained in the Series A Proceeds Account not
otherwise credited to a specific sub-account shall be credited to
the General Series A Sub-account.
(g) In addition to the foregoing, the Collateral Agent
shall establish a segregated trust account maintained with and
under the exclusive control of the Collateral Agent (in the
corporate trust department thereof), which account shall be an
Eligible Account, for the benefit of the Series B Banks, the
holders of Series B Commercial Paper and the Term Bank to be
designated the Series B Proceeds Account (the "Series B Proceeds
Account"). Solely for purposes of administration of the Series B
Proceeds Account, the Collateral Agent shall initially establish
four sub-accounts within the Series B Proceeds Account: the
Series B Equalization Sub-account, the Series B Carrying Costs
Sub-account, the General Series B Sub-account and the Downgraded
Series B Bank Sub-account. The Collateral Agent may establish
additional sub-accounts from time to time relating to funds
credited to the General Series B Sub-account. Amounts credited
to any sub-account of the Series B Proceeds Account shall not be
applied for purposes other than those to which this Agreement
permits amounts credited to such sub-account to be applied, and
any amount retained in the Series B Proceeds Account not
otherwise credited to a specific sub-account shall be credited to
the General Series B Sub-account.
SECTION 9.04. Responsibilities of Finco. Anything herein
to the contrary notwithstanding:
(a) Finco shall (i) diligently perform (either directly or
indirectly by causing the Servicer and/or the Seller to perform)
all of its obligations under the Invoices and the contracts
related to the Receivables and the exercise by the Facility Agent
or the Collateral Agent of their respective rights hereunder
shall not relieve Finco from such obligations and (ii) pay when
due (either directly or, to the extent provided for in the
Receivables Sale Agreement, indirectly by causing the Seller to
pay when due) any taxes relating to the origination and sale of
the Receivables, the other Purchased Assets and the other
Contributed Assets, and/or the grant of any security interest
hereunder.
(b) None of any Agent, any Bank or the Term Bank shall have
any obligation or liability with respect to any Receivable or
related contract nor be obligated to perform any of the
obligations of Finco or the Seller thereunder and Finco agrees to
indemnify and hold harmless each of the Agents, the Banks and the
Term Bank against and from any and all liabilities arising from
or related to any such obligation or liability (the payment of
such indemnity to be subject to the terms of Sections 9.07 and
9.08 hereof).
SECTION 9.05. Further Action Evidencing Security Interest.
(a) Finco agrees that at any time and from time to time, at its
expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that may
be necessary to perfect, protect or more fully evidence the
security interests granted hereunder to the Collateral Agent, to
enable the Collateral Agent, the Facility Agent or the Banks to
exercise or enforce any of their respective rights hereunder or
to enable the Term Bank to exercise or enforce any of its rights
hereunder or under the Term Loan Agreement. Without limiting the
generality of the foregoing, Finco will (i) cause its computer
files and other physical records relating to the Receivables to
indicate that, unless otherwise specifically identified on any
list or print-out of Receivables as a Receivable not so pledged,
all Receivables included in such list or print-out and Related
Security are part of the Collateral in accordance with this
Agreement and (ii) execute and file such financing or
continuation statements or amendments thereto or assignments
thereof, and such other instruments and notices, as may be
necessary or appropriate or as the Collateral Agent may
reasonably request in connection with the perfection of the
security interests granted hereunder to the Collateral Agent.
(b) In the event that Finco, within one (1) Business Day
after notice from the Facility Agent, fails to deliver one or
more financing or continuation statements, and amendments thereto
and assignments thereof, that the Facility Agent or any of its
agents, representatives or permitted assignees may reasonably
determine to be necessary to evidence or perfect the Collateral
Agent's security interest in the Collateral or Finco's ownership
of all or any of the Purchased Assets and the Contributed Assets
now existing or hereafter arising, then Finco hereby authorizes
either of the Agents to file any such statements without the
signature of Finco where permitted by law. A carbon,
photographic or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof,
shall be sufficient as a financing statement. If Finco fails to
perform any of its agreements or obligations under this
Agreement, following expiration of any applicable cure period,
either Agent may (but shall not be required to) perform, or cause
performance of, such agreement or obligation, and the reasonable
expenses of the Agents, the Banks or the Term Bank incurred in
connection therewith shall be payable by Finco upon the Facility
Agent's or the Term Bank's written demand therefor (which demand
shall itemize such expenses in reasonable detail).
(c) All amounts payable by Finco under this Section 9.05
shall be payable subject to the terms of Sections 9.07 and 9.08
hereof.
SECTION 9.06. Application of Collections. From and after
the Effective Date, any payment by an Obligor in respect of any
indebtedness or other obligations owed by such Obligor to Finco
shall, except as otherwise specified by such Obligor or otherwise
required by law, be applied as a Collection of any Receivable
included in the Purchased Assets or the Contributed Assets (in
the order of the age by invoice date of such Receivables,
starting with the oldest such Receivable, as determined under the
Credit and Collection Policy) to the extent of any amounts then
due and payable thereunder before being applied to (i) any
Receivable arising subsequent to the Termination Date which is
not included in the Purchased Assets or the Contributed Assets or
(ii) any other indebtedness of such Obligor to the Seller or to
Finco.
SECTION 9.07. Administration of the Series A Proceeds
Account, the Series B Proceeds Account and the Collection Account
Prior to the Liquidation Period. On each Business Day prior to
the commencement of the Liquidation Period, commencing with the
first Business Day after the Effective Date, the Collateral Agent
shall administer all amounts received in the Series A Proceeds
Account, the Series B Proceeds Account and the Collection Account
as set out below in this Section 9.07. On the Effective Date,
the Collateral Agent shall administer all such amounts first for
the purpose of satisfying Finco's indebtedness under the Existing
Receivables Purchase Documents, pursuant to and in accordance
with the Flow of Funds Memorandum and then, as set out below in
this Section 9.07. The Collateral Agent shall rely on
calculations provided by the Servicer and set forth in the Daily
Report in carrying out such administration.
(a) On each such Business Day, the Collateral Agent shall:
(i) transfer from the Collection Account to the Series
A Proceeds Account, for credit to the Series A Carrying
Costs Sub-account, an amount equal to (a) if the sum of the
Series A Carrying Costs Reserve plus the Series B Carrying
Costs Reserve would not exceed the amount of Collections in
the Collection Account, the amount equal to the excess of
(1) the Series A Carrying Costs Reserve over (2) the amount
credited to the Series A Carrying Costs Sub-account, or (b)
otherwise, the amount of Collections in the Collection
Account times the Series A Percentage;
(ii) after giving effect to the transfer contemplated
by clause (i) above, retain in the Series A Proceeds Account
and credit to the Series A Carrying Costs Sub-account the
amount equal to the excess of (1) the Series A Carrying
Costs Reserve over (2) the balance then credited to the
Series A Carrying Costs Sub-account;
(iii) transfer from the Collection Account to the
Series B Proceeds Account, for credit to the Series B
Carrying Costs Sub-account, an amount equal (a) if the sum
of the Series A Carrying Costs Reserve plus the Series B
Carrying Costs Reserve would not exceed the amount of
Collections in the Collection Account, the amount equal to
the excess of (1) the Series B Carrying Costs Reserve over
(2) the amount credited to the Series B Carrying Costs Sub-
account, or (b) otherwise, the amount of Collections in the
Collection Account times the Series B Percentage;
(iv) after giving effect to the transfer contemplated
by clause (iii) above, retain in the Series B Proceeds
Account and credit to the Series B Carrying Costs Sub-
account the amount equal to the excess of (1) the Series B
Carrying Costs Reserve over (2) the balance then credited to
the Series B Carrying Costs Sub-account;
(v) after giving effect to any transfers from the
Collection Account pursuant to clauses (a)(i) and (a)(iii)
of this Section 9.07, retain in the Collection Account and
credit to the Other Carrying Costs Sub-account the amount
equal to the excess of (1) the Other Carrying Costs Reserve
over (2) the amount credited to the Other Carrying Costs
Sub-account;
(b) Whenever any Reserved Series A Carrying Costs have
become due and payable, the Collateral Agent shall withdraw funds
from the Series A Proceeds Account (debiting the Series A
Carrying Costs Sub-account) to pay such Reserved Series A
Carrying Costs. Any excess of (x) the amount credited to the
Series A Carrying Costs Sub-account over (y) the Series A
Carrying Costs Reserve, shall be credited to the General Series A
Sub-account.
(c) Whenever any Reserved Series B Carrying Costs have
become due and payable, the Collateral Agent shall withdraw funds
from the Series B Proceeds Account (debiting the Series B
Carrying Costs Sub-account) to pay such Reserved Series B
Carrying Costs. Any excess of (x) the amount credited to the
Series B Carrying Costs Sub-account over (y) the Series B
Carrying Costs Reserve, shall be credited to the General Series B
Sub-account.
(d) Whenever any Reserved Other Carrying Costs (other than
Servicer Fees owing to JSC or an Affiliate thereof, as Servicer,
during any period when there exists a Modified Base Amount
Shortfall) have become due and payable, the Collateral Agent
shall withdraw funds from the Collection Account (debiting the
Other Carrying Costs Sub-account) to pay such Reserved Other
Carrying Costs (or, in the case of Ordinary Course Expenses which
constitute Reserved Other Carrying Costs, to deposit the amount
of such requested funds in Finco's checking account maintained
for such purposes). Any excess of (x) the amount credited to the
Other Carrying Costs Sub-account over (y) the Other Carrying
Costs Reserve, shall be credited to the General Collection Sub-
account.
(e) If, on any Business Day, a Series A Shortfall exists,
then in such event, an amount equal to
(x) if the sum of such Series A Shortfall plus any
Series B Shortfall existing on such day would not exceed the
amount of Collections remaining in the Collection Account
and credited to the General Collection Sub-account (after
giving effect to the transfers contemplated by Section
9.07(a)), such Series A Shortfall, or
(y) otherwise, the amount of Collections remaining in
the Collection Account and credited to the General
Collection Sub-account (after giving effect to the transfers
contemplated by Section 9.07(a)) times the Series A
Percentage,
shall be debited from the General Collection Sub-account,
transferred from the Collection Account to the Series A Proceeds
Account, credited to the Series A Equalization Sub-account and
applied in accordance with Section 2.07. If, on any Business
Day, after giving effect to any transfer pursuant to the
immediately preceding sentence, there remains a Series A
Shortfall, then in such event, an amount equal to the lesser of
(x) such remaining Series A Shortfall, or
(y) the account balance of the General Series A Sub-
account,
shall be debited from the General Series A Sub-account, credited
to the Series A Equalization Sub-account and applied in
accordance with Section 2.07.
(f) If, on any Business Day, a Series B Shortfall exists,
then in such event, an amount equal to
(x) if the sum of such Series B Shortfall plus any
Series A Shortfall existing on such day would not exceed the
amount of Collections remaining in the Collection Account
and credited to the General Collection Sub-account (after
giving effect to the transfers contemplated by Section
9.07(a)), such Series B Shortfall, or
(y) otherwise, the amount of Collections remaining in
the Collection Account and credited to the General
Collection Sub-account (after giving effect to the transfers
contemplated by Section 9.07(a)) times the Series B
Percentage,
shall be debited from the General Collection Sub-account,
transferred from the Collection Account to the Series B Proceeds
Account, credited to the Series B Equalization Sub-account and
applied in accordance with Section 2.07. If, on any Business
Day, after giving effect to any transfer pursuant to the
immediately preceding sentence, there remains a Series B
Shortfall, then in such event, an amount equal to the lesser of
(x) such remaining Series B Shortfall, or
(y) the account balance of the General Series B Sub-
account,
shall be debited from the General Series B Sub-account, credited
to the Series B Equalization Sub-account, and applied in
accordance with Section 2.07.
(g) After giving effect to the retention and or remittance
of funds under clauses (a) through (f) of this Section 9.07, all
amounts credited to the General Series A Sub-account, the General
Series B Sub-account or the General Collection Sub-account
(including any cash income received by reason of investments of
any retained cash) (collectively, "Available Cash") shall, except
as otherwise required in clause (h) below of this Section 9.07,
be remitted to Finco or, if any payment described below in this
clause (g) is owing to any Agent, any Bank, the Term Bank, the
Depositary or any Dealer, to such Person directly. All such
Available Cash shall be applied in the following order of
priority (in each case, unless otherwise indicated, debiting a
corresponding amount from the General Series A Sub-account, the
General Series B Sub-account or the General Collection Sub-
account, as the case may be):
(i) Available Cash credited to the General Series A
Sub-account, Available Cash credited to the General
Collection Sub-account and amounts credited to the
Downgraded Series A Sub-account, shall be applied to repay
maturing Series A Commercial Paper (excluding any discount
thereon which is paid from funds retained in the Series A
Proceeds Account and credited to the Series A Carrying Costs
Sub-account pursuant to Section 9.07(a)(i)) first, by
debiting the Downgraded Series A Bank Sub-account; second,
by debiting the General Series A Sub-account; and third, by
debiting the General Collection Sub-account by an amount
equal to (a) if the sum of the remaining outstanding
maturing Series A Commercial Paper after giving effect to
the application of funds in accordance with clauses first
and second hereof (the "Series A Remaining CP Amount") plus
the Series B Remaining CP Amount (as defined in clause (ii)
hereof) would not exceed the amount of Available Cash in the
General Collection Sub-account, the Series A Remaining CP
Amount, or (b) otherwise, the amount of Available Cash in
the General Collection Sub-account times the Series A
Percentage;
(ii) Available Cash credited to the General Series B
Sub-account, Available Cash credited to the General
Collection Sub-account and amounts credited to the
Downgraded Series B Bank Sub-account, shall be applied to
repay maturing Series B Commercial Paper (excluding any
discount thereon which is paid from funds retained in the
Series B Proceeds Account and credited to the Series B
Carrying Costs Sub-account pursuant to Section 9.07(a)(iii))
first, by debiting the Downgraded Series B Bank Sub-account;
second, by debiting the General Series B Sub-account; and
third, by debiting the General Collection Sub-account by an
amount equal to (a) if the sum of the remaining outstanding
maturing Series B Commercial Paper after giving effect to
the application of funds in accordance with clauses first
and second hereof (the "Series B Remaining CP Amount") plus
the Series A Remaining CP Amount would not exceed the amount
of Available Cash in the General Collection Sub-account, the
Series B Remaining CP Amount, or (b) otherwise, the amount
of Available Cash in the General Collection Sub-account
times the Series B Percentage;
(iii) Available Cash credited to the General Series
A Sub-account and Available Cash credited to the General
Collection Sub-account shall be used to pay any amounts
owing to the Facility Agent under Section 2.04(f) in
connection with any Series A Bank's failure to fund a Series
A Liquidity Loan first, by debiting the General Series A
Sub-account and second, by debiting the General Collection
Sub-account by an amount equal to (a) if the sum of the
remaining amounts payable to the Facility Agent under
Section 2.04(f) in connection with any Series A Bank's
failure to fund a Series A Liquidity Loan after giving
effect to the application of funds in accordance with clause
first hereof (the "Series A Reimbursement Amount") plus the
Series B Reimbursement Amount (as defined in clause (iv))
would not exceed the amount of Available Cash in the General
Collection Sub-account, the Series A Reimbursement Amount,
or (b) otherwise, the amount of Available Cash in the
General Collection Sub-account times the Series A
Percentage;
(iv) Available Cash credited to the General Series B
Sub-account and Available Cash credited to the General
Collection Sub-account shall be used to pay any amounts
owing to the Facility Agent under Section 2.04(f) in
connection with any Series B Bank's failure to fund its Pro
Rata Share of a Series B Liquidity Loan first, by debiting
the General Series B Sub-account and second, by debiting the
General Collection Sub-account by an amount equal to (a) if
the sum of the remaining amounts payable to the Facility
Agent under Section 2.04(f) in connection with any Series B
Bank's failure to fund its share of a Series B Liquidity
Loan after giving effect to the application of funds in
accordance with clause first hereof (the "Series B
Reimbursement Amount") plus the Series A Reimbursement
Amount would not exceed the amount of Available Cash in the
General Collection Sub-account, the Series B Reimbursement
Amount, or (b) otherwise, the amount of Available Cash in
the General Collection Sub-account times the Series B
Percentage;
(v) if the Series A Bank is a Dissenting Bank,
Available Cash credited to the General Series A Sub-account
and Available Cash credited to the General Collection Sub-
account shall be applied to pay any amounts owing to the
Series A Bank pursuant to Section 2.06(d) first, by debiting
the General Series A Sub-account, and second, by debiting
the General Collection Sub-account by an amount equal to (a)
if the sum of the remaining amounts payable to a Series A
Bank which is a Dissenting Bank after giving effect to the
application of funds in accordance with clause first hereof
(the "Series A Dissenting Bank Amount") plus the Series B
Dissenting Bank Amount (as defined in clause (vi)) would not
exceed the amount of Available Cash in the General
Collection Sub-account, the Series A Dissenting Bank Amount,
or (b) otherwise, the amount of Available Cash in the
General Collection Sub-account times the Series A
Percentage;
(vi) Available Cash credited to the General Series B
Sub-account and Available Cash credited to the General
Collection Sub-account shall be applied to pay any amounts
owing to Dissenting Banks which are Series B Banks pursuant
to Section 2.06(d) first, by debiting the General Series B
Sub-account, and second, by debiting the General Collection
Sub-account by an amount equal to (a) if the sum of the
remaining amounts payable to a Series B Bank which is a
Dissenting Bank after giving effect to the application of
funds in accordance with clause first hereof (the "Series B
Dissenting Bank Amount") plus the Series A Dissenting Bank
Amount would not exceed the amount of Available Cash in the
General Collection Sub-account, the Series B Dissenting Bank
Amount, or (b) otherwise, the amount of Available Cash in
the General Collection Sub-account times the Series B
Percentage;
(vii) amounts owing to the Term Bank pursuant to
Section 2.06(b) of the Term Loan Agreement shall be paid
from Available Cash credited to the General Collection Sub-
account; provided, however, that after giving effect to such
prepayment there would not be a Base Amount Shortfall; and
provided, further, however, that no payment shall be made
pursuant to this clause (vii) if a Liquidation Event or an
Unmatured Liquidation Event exists and is then continuing;
(viii) Available Cash credited to the General Series
A Sub-account and Available Cash credited to the General
Collection Sub-account shall be used to pay any Unreserved
Series A Carrying Costs owing to the Series A Bank, the
Agents and the Series A Dealer first, by debiting the
General Series A Sub-account, and second, by debiting the
General Collection Sub-account by an amount equal to (a) if
the sum of the remaining Unreserved Series A Carrying Costs
after giving effect to the application of funds in
accordance with clause first hereof (for purposes of
Sections 9.07(g)(viii) and (ix) the "Remaining Unreserved
Series A Carrying Costs Amount") plus the Remaining
Unreserved Series B Carrying Costs Amount (as defined in
clause (ix) hereof) would not exceed the amount of Available
Cash in the General Collection Sub-account, the Remaining
Unreserved Series A Carrying Costs Amount, or (b) otherwise,
the amount of Available Cash in the General Collection Sub-
account times the Series A Percentage;
(ix) Available Cash credited to the General Series B
Sub-account and Available Cash credited to the General
Collection Sub-account shall be used to pay any Unreserved
Series B Carrying Costs owing to the Series B Banks, the
Agents and the Series B Dealers first, by debiting the
General Series B Sub-account, and second, by debiting the
General Collection Sub-account by an amount equal to (a) if
the sum of the remaining Unreserved Series B Carrying Costs
after giving effect to the application of funds in
accordance with clause first hereof (for purposes of
Sections 9.07(g)(viii) and (ix), the "Remaining Unreserved
Series B Carrying Costs Amount") plus the Remaining
Unreserved Series A Carrying Costs Amount would not exceed
the amount of Available Cash in the General Collection Sub-
account, the Remaining Unreserved Series B Carrying Costs
Amount, or (b) otherwise, the amount of Available Cash in
the General Collection Sub-account times the Series B
Percentage;
(x) Unreserved Other Carrying Costs owing to the Term
Bank shall be paid from Available Cash credited to the
General Collection Sub-account;
(xi) Unreserved Other Carrying Costs (other than
Unreserved Other Carrying Costs owing to the Term Bank)
shall be paid from Available Cash credited to the General
Collection Sub-account;
(xii) to the extent requested by Finco, Available Cash
credited to the General Series A Sub-account and Available
Cash credited to the General Collection Sub-account shall be
applied in the manner set forth in Section 2.07 to make any
voluntary prepayments of the Series A Liquidity Loans;
(xiii) to the extent requested by Finco, Available
Cash credited to the General Series B Sub-account and
Available Cash credited to the General Collection Sub-
account shall be applied in the manner set forth in Section
2.07 to make any voluntary prepayments of the Series B
Liquidity Loans;
(xiv) (A) to the extent requested by Finco, Available
Cash credited to the General Series A Sub-account, the
General Series B Sub-account and the General Collection Sub-
account shall be applied to make any voluntary prepayment of
the Term Loan pursuant to Section 2.07(b) of the Term Loan
Agreement; provided, however, that no payment shall be made
pursuant to this clause (xiv)(A) if (after giving effect to
such payment) there exists a Base Amount Shortfall; and
provided, further, however, that no payment shall be made
pursuant to this clause (xiv)(A) if a Liquidation Event or
an Unmatured Liquidation Event exists and is then
continuing; and (B) Available Cash credited to the General
Series A Sub-account, the General Series B Sub-account and
the General Collection Sub-account shall be applied to make
any mandatory prepayment of the Term Loan pursuant to
Section 2.07(d) of the Term Loan Agreement; provided,
however, that no payment shall be made pursuant to this
clause (xiv)(B) if (after giving effect to such payment)
there exists a Base Amount Shortfall;
(xv) Available Cash credited to the General Series A
Sub-account, the General Series B Sub-account and the
General Collection Sub-account shall be applied (at Finco's
option as to allocation among such accounts) to pay the
Purchase Price for newly generated Purchased Assets under
the Receivables Sale Agreement; and
(xvi) Available Cash credited to the General Series A
Sub-account, the General Series B Sub-account and the
General Collection Sub-account shall be applied to make
payments on the Short-Term Note, the payment of dividends or
other corporate purposes, as Finco shall elect.
(h) If, on any such Business Day, either (i) an Insolvency
Event exists with respect to JSC, the Seller or Finco or (ii) to
Finco's knowledge, a Liquidation Event described in clause (j) of
the definition thereof with respect to the Seller's Receivables
has occurred and is continuing (and, in either case, so long as
the Liquidation Period has not commenced and is continuing),
then, during either such event, the Collateral Agent shall, after
giving effect to the retention and/or remittance of funds under
clauses (a) through (f) inclusive of this Section 9.07,
separately identify the Secured Parties Percentage and the Finco
Percentage of the Collections attributable to the Seller's
Receivables. The Secured Parties Percentage of such Collections
shall be set aside in trust for the holders of the Obligations
and credited to the Secured Parties Sub-account until the
earliest of (i) commencement of the Liquidation Period (at which
time such funds shall be remitted and applied as provided in
Section 9.08), (ii) dismissal of the proceedings giving rise to
such Insolvency Event (in which event such funds shall be
remitted and applied as provided above in this Section 9.07 and
debited from the Secured Parties Sub-account and credited to the
General Collection Sub-account) and (iii) waiver or cure of the
Liquidation Event described in clause (j) thereof (in which event
such funds shall be remitted and applied as provided above in
this Section 9.07 and debited from the Secured Parties Sub-
account and credited to the General Collection Sub-account); the
Series A Percentage of the Secured Parties Percentage of such
Collections shall also be used to make any payments described in
Section 2.07(b), and the Series B Percentage of the Secured
Parties Percentage of such Collections shall be used to make any
payments described in Section 2.07(d). The Finco Percentage of
such Collections shall be remitted and applied as follows:
(x) fifty percent (50%) of the Finco Percentage of
such Collections shall be retained in the Collection Account
as cash collateral for the payment of any not-yet accrued
Series A Carrying Costs, Series B Carrying Costs or Other
Carrying Costs (including indemnification amounts) and
credited to the Series A Cash Collateral Sub-account and the
Series B Cash Collateral Sub-account (ratably according to
the Series A Percentage and the Series B Percentage
accordingly) until the aggregate amount of such cash
collateral so retained equals (x) fifteen percent (15%)
times (y) the Dilution Reserve Ratio then in effect times
(z) the Net Eligible Receivables as of the date such
Insolvency Event or Liquidation Event first occurred; and
(y) the remainder of the Finco Percentage of such
Collections shall be remitted to Finco on account of the
Finco Percentage and may be used by Finco to make any
payments which it is authorized to make under clause (g) of
this Section 9.07.
(i) The Collateral Agent shall, on each Business Day, pay
(to the extent of funds credited to the Assignee Indemnification
Sub-account) to each permitted assignee of an Indemnitee pursuant
to the Receivables Sale Agreement which is not Finco or an
Affiliate of Finco, the amounts demanded by such Person by
debiting the Assignee Indemnification Sub-account.
SECTION 9.08. Administration of Series A Proceeds Account,
the Series B Proceeds Account and the Collection Account During
the Liquidation Period.
(a) On the commencement of the Liquidation Period,
(i) the amount in the Series A Proceeds Account
credited to the Series A Equalization Sub-account, the
Downgraded Series A Sub-account and the Series A Carrying
Costs Sub-account shall be debited from such sub-accounts
and credited to the General Series A Sub-account;
(ii) the amount in the Series B Proceeds Account
credited to the Series B Equalization Sub-account, the
Downgraded Series B Sub-account and the Series B Carrying
Costs Sub-account shall be debited from such sub-accounts
and credited to the General Series B Sub-account;
(iii) the amount in the Collection Account credited to
the Other Carrying Costs Sub-account shall be debited from
such sub-account and credited to the General Collection Sub-
account; and
(iv) the amount in the Collection Account credited to
the Secured Parties Sub-account shall be debited from such
sub-account and credited to the General Collection Sub-
account.
(b) On each Business Day during the Liquidation Period, the
Collateral Agent shall remit all amounts on deposit and credited
to the Collection Account, the Series A Proceeds Account and the
Series B Proceeds Account to the appropriate parties in the
following order of priority:
(i) to pay from the General Collection Sub-account,
the General Series A Sub-account and the General Series B
Sub-account the following accrued and unpaid Reserved
Carrying Costs in the following order of priority:
(A) first, to the payment (I) of all accrued and
unpaid interest on the Series A Liquidity Loans (other
than interest owed pursuant to Sections 4.01(d) and
4.03(b)) and all accrued and unpaid discount included
in the face amount of outstanding Series A Commercial
Paper, by debiting the General Series A Sub-account;
provided, that with respect to unpaid discount included
in the face amount of outstanding Series A Commercial
Paper not maturing on such day, the amount of such
unpaid discount shall be remitted to the Series A
Commercial Paper Account to be held in trust for the
benefit of holders of Series A Commercial Paper pending
such maturity, and (II) all accrued and unpaid interest
on the Series B Liquidity Loans (other than interest
owed pursuant to Sections 4.01(d) and 4.03(b)) and all
accrued and unpaid discount included in the face amount
of outstanding Series B Commercial Paper, by debiting
the General Series B Sub-account; provided, that with
respect to unpaid discount included in the face amount
of outstanding Series B Commercial Paper not maturing
on such day, the amount of such unpaid discount shall
be remitted to the Series B Commercial Paper Account to
be held in trust for the benefit of holders of Series B
Commercial Paper pending such maturity; and
(B) second, to the payment of (I) all remaining
accrued and unpaid interest (after giving effect to the
immediately preceding clause (A)) on the Series A
Liquidity Loans (other than interest owed pursuant to
Sections 4.01(d) and 4.03(b)) and all accrued and
unpaid discount included in the face amount of
outstanding Series A Commercial Paper, by debiting the
General Collection Sub-account (to the extent of the
Series A Percentage of the amounts credited to such
sub-account); provided, that with respect to unpaid
discount included in the face amount of outstanding
Series A Commercial Paper not maturing on such day, the
amount of such unpaid discount shall be remitted to the
Series A Commercial Paper Account to be held in trust
for the benefit of holders of Series A Commercial Paper
pending such maturity, and (II) all remaining accrued
and unpaid interest (after giving effect to the
immediately preceding clause (A)) on the Series B
Liquidity Loans (other than interest owed pursuant to
Sections 4.01(d) and 4.03(b)) and all accrued and
unpaid discount included in the face amount of
outstanding Series B Commercial Paper, by debiting the
General Collection Sub-account (to the extent of the
Series B Percentage of the amounts credited to such
sub-account); provided, that with respect to unpaid
discount included in the face amount of outstanding
Series B Commercial Paper not maturing on such day, the
amount of such unpaid discount shall be remitted to the
Series B Commercial Paper Account to be held in trust
for the benefit of holders of Series B Commercial Paper
pending such maturity; and
(C) third, to the payment of any Servicer Fees
owed to the Servicer, if other than Finco or any
Affiliate thereof, first by debiting the General
Collection Sub-account and then by debiting the General
Series A Sub-account and the General Series B Sub-
account, ratably based on the Series A Percentage and
the Series B Percentage; and
(D) fourth, to the payment of Reserved Carrying
Costs owed to the Depositary, first by debiting the
General Collection Sub-account and then by debiting the
General Series A Sub-account and the General Series B
Sub-account, ratably based on the Series A Percentage
and the Series B Percentage; and
(E) fifth, to pay (I) all Facility Fees payable
to the Series A Bank by debiting the General Series A
Sub-account, and (II) all Facility Fees payable to the
Series B Banks by debiting the General Series B Sub-
account; and
(F) sixth, to pay (after giving effect to the
immediately preceding clause (E)) (I) all remaining
Facility Fees payable to the Series A Bank by debiting
the General Collection Sub-account (to the extent of
the Series A Percentage of the amounts credited to such
sub-account), and (II) all remaining Facility Fees
payable to the Series B Banks by debiting the General
Collection Sub-account (to the extent of the Series B
Percentage of the amounts credited to such sub-
account); and
(G) seventh, if there exists no Series A Base
Amount Shortfall and no Series B Base Amount Shortfall,
to the payment of all accrued and unpaid interest on
the Term Note (other than interest owed pursuant to
Section 2.02(d) or 3.01(b) of the Term Loan Agreement),
first by debiting the General Collection Sub-account
and then by debiting the General Series A Sub-account
and the General Series B Sub-account, ratably based on
the Series A Percentage and the Series B Percentage;
(ii) to prepay first, from amounts credited to the
General Series A Sub-account, and second, (subject to the
final proviso to subclause (iii) below) from amounts
credited to the General Collection Sub-account (to the
extent of the Series A Percentage of the amounts credited to
such sub-account), the Series A Liquidity Loans until the
Aggregate Series A Loan Amount equals zero; provided, that
any such reductions shall be applied first, against all
Series A Liquidity Loans which are Base Rate Loans then
outstanding, second, to all Series A Liquidity Loans which
are Eurodollar Loans then outstanding with Interest Periods
ending on such date, and third, to any other Series A
Liquidity Loans which are Eurodollar Loans then outstanding;
and provided, further, that if a Trigger Event has occurred,
the amount applied to the repayment of Liquidity Loans on
any day shall not exceed the Series A Trigger Percentage of
the amounts otherwise available for such purpose under this
subclause (ii) on such day, and the remainder of such
otherwise available funds in the General Series A Sub-
account or the General Collection Sub-account shall be
applied as provided in subclause (iv) below, after giving
effect to the final proviso of subclause (iii) below;
(iii) to prepay first, from amounts credited to the
General Series B Sub-account, and second, subject to the
final proviso of this clause (iii), from amounts credited to
the General Collection Sub-account (to the extent of the
Series B Percentage of the amounts credited to such sub-
account), the Series B Liquidity Loans until the Aggregate
Series B Loan Amount equals zero; provided, that any such
reductions shall be applied first, against all Series B
Liquidity Loans which are Base Rate Loans then outstanding,
second, to all Series B Liquidity Loans which are Eurodollar
Loans then outstanding with Interest Periods ending on such
date, and third, to any other Series B Liquidity Loans which
are Eurodollar Loans then outstanding; provided, further,
that if a Trigger Event has occurred, the amount applied to
the repayment of Liquidity Loans on any day shall not exceed
the Series B Trigger Percentage of the amounts otherwise
available for such purpose under this subclause (iii) on
such day, and the remainder of such otherwise available
funds in the General Series B Sub-account or the General
Collection Sub-account shall be applied as provided in
subclause (v) below; and further provided, however, that if
the amount credited to the General Collection Sub-account
shall be less than the amount required to be paid therefrom
pursuant to subclause (ii) above and this subclause (iii),
such amount shall be applied ratably to such required
payments, based on the Series A Percentage and the Series B
Percentage;
(iv) (a) to repay first, from amounts credited to the
General Series A Sub-account, second from the Series A Cash
Collateral Sub-account, and third, from the General
Collection Sub-account (to the extent of the Series A
Percentage of the amounts credited to such sub-account), the
outstanding Series A Commercial Paper or (b) to cash
collateralize the outstanding Series A Commercial Paper by
crediting the Series A Cash Collateral Sub-account (and
debiting first, the Series A General Sub-account and second,
the General Collection Sub-account to the extent of the
Series A Percentage) until the amount of cash collateral
held by the Collateral Agent in trust for the benefit of
holders of Series A Commercial Paper in the Series A Cash
Collateral Sub-account equals the Aggregate Series A CP
Amount;
(v) (a) to repay first, from amounts credited to the
General Series B Sub-account, second from the Series B Cash
Collateral Sub-account, and third, from the General
Collection Sub-account (to the extent of the Series B
Percentage of the amounts credited to such sub-account), the
outstanding Series B Commercial Paper or (b) to cash
collateralize the outstanding Series B Commercial Paper by
crediting the Series B Cash Collateral Sub-account (and
debiting first, the Series B General Sub-account and second,
the General Collection Sub-account to the extent of the
Series B Percentage) until the amount of cash collateral
held by the Collateral Agent in trust for the benefit of
holders of Series B Commercial Paper in the Series B Cash
Collateral Sub-account equals the Aggregate Series B CP
Amount;
(vi) if, upon the commencement of the Liquidation
Period, there exists a Series A Base Amount Shortfall or a
Series B Base Amount Shortfall, to pay all accrued and
unpaid interest on the Term Note (other than interest owed
pursuant to Section 2.02(d) and Section 3.01(b) of the Term
Loan Agreement), first by debiting the General Collection
Sub-account and then by debiting the General Series A Sub-
account and the General Series B Sub-account (ratably, based
on the Series A Percentage and the Series B Percentage);
(vii) to prepay first, from amounts credited to the
General Collection Sub-account, and second, from amounts
credited to the General Series A Sub-account and the General
Series B Sub-account (ratably, based on the Series A
Percentage and the Series B Percentage), the Term Note until
the Term Loan Amount equals zero;
(viii) to pay from the General Collection Sub-account,
the General Series A Sub-account and the General Series B
Sub-account to Finco (or to remit to the party entitled
thereto) for the payment of Ordinary Course Expenses which
constitute Reserved Other Carrying Costs, first by debiting
the General Collection Sub-account and then by debiting the
General Series A Sub-account and the General Series B Sub-
account (ratably, based on the Series A Percentage and the
Series B Percentage);
(ix) to pay any Unreserved Series A Carrying Costs
owing to the Series A Bank, the Agents or the Series A
Dealer first, by debiting the General Series A Sub-account
and second, by debiting the General Collection Sub-account
by an amount equal to (a) if the sum of the remaining
Unreserved Series A Carrying Costs after giving effect to
the application of funds in accordance with clause first
hereof (for purposes of Sections 9.08(b)(ix) and (x), the
"Remaining Unreserved Series A Carrying Costs Amount") plus
the Remaining Unreserved Series B Carrying Costs Amount (as
defined in clause (x) hereof) would not exceed the account
balance of the General Collection Sub-account, the Remaining
Unreserved Series A Carrying Costs Amount or (b) otherwise,
the account balance of the General Collection Sub-account
times the Series A Percentage;
(x) to pay any Unreserved Series B Carrying Costs
owing to the Series B Banks, the Agents or the Series B
Dealers first, by debiting the General Series B Sub-account
and second, by debiting the General Collection Sub-account
by an amount equal to (a) if the sum of the remaining
Unreserved Series B Carrying Costs after giving effect to
the application of funds in accordance with clause first
hereof (for purposes of Sections 9.08(b)(ix) and (x), the
"Remaining Unreserved Series B Carrying Costs Amount") plus
the Remaining Unreserved Series A Carrying Costs Amount
would not exceed the account balance of the General
Collection Sub-account, the Remaining Unreserved Series B
Carrying Costs Amount or (b) otherwise, the account balance
of the General Collection Sub-account times the Series B
Percentage;
(xi) to pay any Unreserved Other Carrying Costs owing
to the Banks, the Agents or the Depositary (by debiting the
corresponding amount first from the General Collection Sub-
account, then from the General Series A Sub-account and the
General Series B Sub-account, ratably, based on the Series A
Percentage and the Series B Percentage);
(xii) to pay any Unreserved Other Carrying Costs
owing to the Term Bank (by debiting the corresponding
amount, first from the General Collection Sub-account, then
from the General Series A Sub-account and the General Series
B Sub-account, ratably, based on the Series A Percentage and
the Series B Percentage);
(xiii) to pay any Unreserved Other Carrying Costs
remaining after payments pursuant to clauses (xi) and (xii)
above (and debit the corresponding amount, first from the
General Collection Sub-account, then from the General Series
A Sub-account and the General Series B Sub-account, ratably,
based on the Series A Percentage and the Series B
Percentage);
(xiv) to pay any Servicer Fees owed to Finco or any
Affiliate thereof (and debit the corresponding amount, first
from the General Collection Sub-account, then from the
General Series A Sub-account and the General Series B Sub-
account, ratably, based on the Series A Percentage and the
Series B Percentage); and
(xv) to pay interest and principal amounts owed under
the Short Term Note (and debit the corresponding amount,
first from the General Collection Sub-account, then from the
General Series A Sub-account and the General Series B Sub-
account, ratably, based on the Series A Percentage and the
Series B Percentage).
All Unreserved Series A Carrying Costs, Unreserved Series B
Carrying Costs or Unreserved Other Carrying Costs shall only be
paid from Collections and other assets of Finco, and there shall
be no recourse to or claim against Finco at any time (whether
prior to or during the Liquidation Period) for the payment
thereof to the extent that such Collections and other assets are
insufficient to satisfy such costs. After the Liquidity Loans
have been paid in full, the Aggregate CP Amount has been paid or
cash collateralized in full, and the Term Loan has been paid in
full, any remaining Collections and proceeds of the Collateral
(including any income from the investment of the cash collateral
in the Collection Account), less any continued Series A Carrying
Costs, Series B Carrying Costs or Other Carrying Costs, shall be
remitted to Finco.
(c) During the Liquidation Period, the Collateral Agent
may, at its discretion, require that all Collections and other
proceeds which would otherwise be received in the Series A
Proceeds Account, the Series B Proceeds Account and the
Collection Account be held in a special segregated trust account
maintained in the corporate trust department of the Collateral
Agent pending the determination of whether or not such
Collections and other proceeds are included in the Purchased
Assets or the Contributed Assets. In such event, the Servicer
shall, as soon as possible after receipt of any Collections and
other proceeds by the Collateral Agent, (i) determine whether
such Collections and proceeds are included in the Purchased
Assets or the Contributed Assets or otherwise (such determination
to be satisfactory to the Collateral Agent) and (ii) notify
Finco, the Seller, the Term Bank and the Agents of such
determination. The Collateral Agent shall as soon as possible
thereafter transfer any Collections or proceeds included in the
Purchased Assets or the Contributed Assets to the Collection
Account for application pursuant to the other terms of this
Section 9.08 and pay any Collections that are not included in the
Purchased Assets or the Contributed Assets to the applicable
Person. Notwithstanding the foregoing, during any Liquidation
Period, all Collections received from an Obligor in respect of
any Receivables or other indebtedness owed to the Seller and/or
Finco shall continue to be applied in accordance with the
provisions of Section 9.06 hereof and Section 5.06 of the
Receivables Sale Agreement.
(d) The Collateral Agent shall pay to each permitted
assignee of an Indemnitee pursuant to the Receivables Sale
Agreement which is not Finco or an Affiliate of Finco, the
amounts demanded by such Person by debiting the Assignee
Indemnification Sub-account.
SECTION 9.09. Remittances and Investment of Funds. All
remittances from the Series A Proceeds Account, the Series B
Proceeds Account or the Collection Account to the Banks, to
Finco, to the Agents or to the Term Bank as required under
Section 9.07 or under Section 9.08 shall be by wire transfer of
immediately available funds. All funds which are retained in the
Series A Proceeds Account, the Series B Proceeds Account or the
Collection Account pursuant to Section 9.07 or Section 9.08
(including funds maintained as part of the Series A Carrying
Costs Reserve, the Series B Carrying Costs Reserve or the Other
Carrying Costs Reserve) shall be invested in Permitted
Investments by the Collateral Agent at the direction of Finco
(such direction to be set forth in the applicable Daily Report),
or, absent such direction or at any time during the Liquidation
Period or following notice to Finco from the Collateral Agent
following the occurrence and during the continuance of a
Liquidation Event, in overnight Permitted Investments selected by
the Collateral Agent; provided, however, that (i) each such
investment shall be in the name of the Collateral Agent or
otherwise in a form which permits the Collateral Agent to
maintain a perfected security interest in such investment, (ii)
the maturities of Permitted Investments maintained as part of the
Series A Carrying Costs Reserve, the Series B Carrying Costs
Reserve or the Other Carrying Cost Reserve shall be limited to
ensure that all such Permitted Investments mature in time for
Finco to make timely payments of all such costs as the same
become due, and (iii) the maturities of Permitted Investments
(other than those referred to in the preceding clause (ii) of
this sentence) shall be limited to ensure that all such Permitted
Investments mature in time for Finco to make timely payments of
all its obligations including, without limitation, payment of the
principal component of its Commercial Paper, as the same become
due. The Collateral Agent may liquidate any Permitted
Investments prior to maturity in order to transfer funds or make
any distributions which transfers or distributions are required
under the Facility Documents, provided that no such Permitted
Investments may be liquidated at a price less than the purchase
price therefor without the prior written consent of all of the
Banks and the Term Bank. It is understood that the Collateral
Agent shall have no liability to Finco, to any other party hereto
or to any other Person for (i) the rate of return on any such
Permitted Investments or (ii) any failure to pay, remit,
distribute or transfer funds to such party or to make any
required payment, remittance, distribution or transfer on account
of the Collateral Agent's inability to liquidate any Permitted
Investments as a result of the foregoing sentence.
ARTICLE X TERMINATION; REMEDIES
SECTION 10.01. Termination; Remedies. The obligation of the
Banks to make Revolving Advances shall terminate on the
Termination Date. In addition, (i) the Facility Agent shall be
entitled, in accordance with the requirements of Section 3.01(a),
to instruct the Depositary not to issue or deliver Series A
Commercial Paper or Series B Commercial Paper, (ii) the Agents
shall be entitled to pursue any other right or remedy under this
Agreement; and (iii) if the Termination Date occurs as the result
of the occurrence of a Liquidation Event (or, at any time after
the Termination Date, a Liquidation Event has occurred and is
continuing), the Collateral Agent shall be entitled to exercise
all the rights and remedies provided to a secured creditor upon
default under the UCC or otherwise, all of which rights and
remedies shall be cumulative to those provided in this Agreement
and the other Facility Documents; provided, that (A) all sales of
Receivables must be on commercially reasonable terms, (B) the
Collateral Agent may not sell more than 25% of the aggregate
Outstanding Balance of Receivables, in one or more related sales
(measured at the time of such sales) without the prior written
consent of the Majority Banks and the Term Bank and (C) the
Collateral Agent may not sell all or substantially all of the
Receivables in one or more related sales unless all of the Banks
and the Term Bank consent in writing thereto; and provided
further that the Banks shall not be relieved of their obligations
to make Refunding Advances in accordance with the terms hereof.
In addition to the foregoing, if Finco becomes the subject of a
Liquidation Event described in clause (g) of the definition of
Liquidation Event, then, in addition to the foregoing, the
principal and interest on the Liquidity Notes and the other
Obligations shall become immediately due and payable, without
presentment, demand, protest or other notice of any kind
whatsoever. Absent the occurrence of such a Liquidation Event
with respect to Finco, the principal and interest on the
Liquidity Notes shall become immediately due and payable upon the
Stated Liquidity Facility Maturity Date.
SECTION 10.02. Binding Effect. Notwithstanding any
Termination Date, the obligations of Finco under this Agreement
shall be absolute and unconditional and shall remain in full
force and effect until the Obligations have been fully paid and
satisfied.
Upon the date on which the Obligations described in clauses
(i) and (iii) of the definition thereof have been paid in full,
(i) all references herein to rights of the Facility
Agent, the Majority Banks or any Bank shall be deemed to be
rights of the Term Bank, and such Persons shall no longer be
entitled to exercise any such rights,
(ii) all notices required to be given hereunder to the
Facility Agent, the Majority Banks or any Bank shall be
required to be given to the Term Bank, and
(iii) any references herein to consents, directions,
notices or waivers given by the Facility Agent, the Majority
Banks or any Bank shall be deemed to be references to the
Term Bank, and such Persons shall no longer be entitled to
give any such consent, direction, notice or waiver.
Upon the Collection Date, the security interests granted
hereby shall terminate and the Collateral Agent will, at Finco's
expense, execute and deliver to Finco such UCC termination
statements and other documents as Finco may reasonably request to
evidence such termination.
SECTION 10.03. Indemnities by Finco. Without limiting any
other rights which the Facility Agent, the Collateral Agent, the
Banks, the Dealers and the Depositary may have hereunder or under
applicable law, but without duplication, Finco hereby agrees to
indemnify each of the Facility Agent, the Collateral Agent, the
Banks, the Dealers, the Depositary, their respective officers,
directors, agents and employees (all of the foregoing
collectively referred to herein as "Indemnitees") from and
against any and all damages, losses, claims, liabilities,
reasonable costs and reasonable expenses, including reasonable
attorneys' fees, and disbursements (all of the foregoing
collectively referred to herein as the "Indemnified Amounts")
awarded against or incurred by any Indemnitee relating to or
resulting from:
(i) any representation or warranty made by Finco (or any of
its officers) under or in connection with this Agreement or any
other Facility Document to which Finco is a party or in
connection with the preparation or delivery by Finco of any Daily
Report, any Settlement Statement, or any other information or
report delivered by Finco pursuant hereto or thereto, which shall
have been false, incomplete or incorrect in any material respect
when made;
(ii) the failure by Finco to comply with any applicable law,
rule or regulation with respect to any Receivable, the related
Invoice (or contract) or the Related Security, or the
nonconformity of any Receivable, the related Invoice (or
contract) or the Related Security with any such applicable law,
rule or regulation;
(iii) the failure by Finco to file, 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 Receivables and other Purchased Assets
or Contributed Assets which are, or are purported to be, the
subject of a security interest granted under this Agreement,
whether at the time of any Purchase or Contribution or at any
subsequent time;
(iv) the failure by Finco to comply with any term, provision
or covenant contained in this Agreement, any other Facility
Document or any agreement executed in connection with this
Agreement or any other Facility Document (in each case, where
Finco is a party thereto);
(v) the failure by Finco to pay when due any tax or
governmental fee or charge (other than taxes on or measured by
net income), all interest and penalties thereon or with respect
thereto, and all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending the same,
which may arise by reason of (a) the Purchase or ownership of all
or any portion of, or any other interest in, the Purchased Assets
or (b) the Contribution or ownership of all or any portion of, or
any other interest in, the Contributed Assets.
It is expressly agreed and understood by the parties (i) that
such indemnification is not intended to constitute a guarantee of
the collectibility or payment of the Receivables and the other
Purchased Assets or Contributed Assets and (ii) that nothing in
this Section 10.03 shall require Finco to indemnify any
Indemnitee (A) for damages, losses, claims or liabilities or
related costs or expenses resulting from such Indemnitee's gross
negligence or willful misconduct, or (B) for lost profits,
consequential, special or punitive damages. Notwithstanding
anything in this Agreement to the contrary, the gross negligence
or willful misconduct of any one Indemnitee shall not be a
defense to, or in any other way adversely affect, mitigate or
diminish any other Indemnitee's right or claim to indemnification
under this Section 10.03. Finco shall direct the Collateral
Agent to pay any amounts subject to the indemnification
provisions of this Section 10.03 from the Collection Account for
distribution, subject to Sections 9.07 and 9.08 hereof, to the
applicable Indemnitees within five (5) Business Days following
such Indemnitees' written demand therefor, setting forth in
reasonable detail the basis for such demand, in each case out of
Available Cash (including any proceeds received by Finco pursuant
to the indemnifications made in its favor under the Receivables
Sales Agreement). Notwithstanding anything to the contrary in
this Agreement, for purposes of this Section 10.03, any
representations, warranties and covenants contained in this
Agreement shall not be deemed to be limited to failures to
perform or comply or to events, circumstances, conditions or
changes that did give rise to a Material Adverse Effect. The
indemnity obligations set forth in this Section 10.03 shall be
continuing and shall survive any termination of this Agreement.
Any Indemnitee wishing to be indemnified under this Section
10.03 shall give prompt notice to Finco upon becoming aware of
any event or circumstance which such Indemnitee expects to give
rise to a claim for indemnification under this Section 10.03 and
shall permit (to the extent not disadvantageous or prejudicial to
it) Finco to participate in the defense, settlement or resolution
thereof; provided that the failure by any Indemnitee to so act
shall not deprive it of its rights to indemnification under this
Section unless such failure shall result in material damage,
liability or costs (including costs of indemnification hereunder)
to Finco.
ARTICLE XI THE AGENTS
SECTION 11.01. Authorization and Action. Each Bank hereby
accepts the appointment of and irrevocably (but subject to
Section 11.08) authorizes each of the Agents to take such action
as agent on its behalf and to exercise such powers as are
expressly delegated to such Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. The Term
Bank hereby accepts the appointment of and irrevocably (but
subject to Section 11.08) authorizes the Collateral Agent to take
such action as agent on its behalf and to exercise such powers as
are expressly delegated to such Agent by the terms hereof,
together with such powers as are reasonably incidental thereto.
Neither Agent shall be required to take any action which exposes
such Agent to personal liability or which is contrary to this
Agreement or applicable law. Each Agent agrees to give to the
other Agent and to each Bank prompt notice of each notice given
to it by Finco or the Seller pursuant to the terms of this
Agreement. The Collateral Agent agrees to give the Term Bank
prompt notice of each notice given to it, in its capacity as
Collateral Agent, by Finco or the Seller pursuant to the terms of
this Agreement. The appointment and authority of the Agents
hereunder shall terminate upon the Collection Date.
SECTION 11.02. Nature of Agents' Duties. The Agents shall
have no duties or responsibilities except those expressly set
forth in this Agreement or in the other Facility Documents. The
duties of the Agents shall be mechanical and administrative in
nature. Neither Agent shall have by reason of this Agreement a
fiduciary relationship in respect of the other Agent or any Bank
(or, in the case of the Collateral Agent, to the Term Bank).
Nothing in this Agreement or any of the Facility Documents,
express or implied, is intended to or shall be construed to
impose upon either Agent any obligations in respect of this
Agreement or any of the Facility Documents except as expressly
set forth herein or therein. Neither Agent shall have any duty
or responsibility, either initially or on a continuing basis, to
provide any Bank, the Term Bank or the other Agent with any
credit or other information with respect to Finco or the Seller,
whether coming into its possession before the date hereof or at
any time or times thereafter (except as expressly set forth in
this Agreement). If either Agent seeks the consent or approval
of the Banks and the Term Bank, to the taking or refraining from
taking any action hereunder, such Agent shall send notice thereof
to each Bank and the Term Bank. The Agents shall promptly notify
each Bank and the Term Bank any time that the Banks and the Term
Bank have instructed the Agents to act or refrain from acting
pursuant hereto.
SECTION 11.03. UCC Filings. Each of Finco, the Facility
Agent, the Banks and the Term Bank expressly recognizes and
agrees that the Collateral Agent may be listed as the assignee or
secured party of record on the various UCC filings required to be
made hereunder in order to perfect the grant of a security
interest in the Collateral herein for the benefit of the Secured
Parties, that such listing shall be for administrative
convenience only in creating a single secured party to take
certain actions hereunder on behalf of the holders of the
Obligations, and that such listing will not affect in any way the
status of such holders as the beneficial holders of such security
interest. In addition, such listing shall impose no duties on
the Collateral Agent other than those expressly and specifically
undertaken in accordance with this Article XI.
SECTION 11.04. Agent's Reliance, Etc. Neither of the Agents
nor any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them
as Agent under or in connection with this Agreement (including
such Agent's servicing, administering or collecting Receivables)
except for its or their own gross negligence or willful
misconduct. Without limiting the foregoing, each Agent: (i) may
consult with legal counsel (including counsel for Finco),
independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (ii) makes no warranty or
representation to the other Agent, to any Bank or to the Term
Bank and shall not be responsible to the other Agent, any Bank or
the Term Bank for any statements, warranties or representations
made in or in connection with this Agreement; (iii) shall not
have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this
Agreement on the part of Finco or to inspect the property
(including the books and records) of Finco (except as otherwise
expressly set forth in this Agreement); (iv) shall not be
responsible to the other Agent, to any Bank or to the Term Bank
for the due execution, legality, validity, enforceability,
genuineness, sufficiency, or value of this Agreement, or any
other instrument or document furnished pursuant hereto, or any
certificate, report, statement or other document referred to or
provided for in, or received by the Agents under or in connection
with, the Facility Documents, or for any failure of Finco or any
of its Affiliates to perform its obligations under the Facility
Documents; and (v) shall incur no liability under or in respect
of this Agreement by acting upon any notice (including notice by
telephone), consent, certificate or other instrument or writing
(which may be by telex or telecopier) believed by it to be
genuine and to be or to have been signed or sent by the proper
party or parties. Each Agent may at any time request instruc-
tions from the Banks and the Term Bank, with respect to any
actions or approvals which by the terms of this Agreement or of
any of the other Facility Documents such Agent is permitted or
required to take or to grant, and such Agent shall be absolutely
entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any
Person for refraining from any action or withholding any approval
under any of the Facility Documents until it shall have received
such instructions from the requisite Banks and/or the Term Bank,
as applicable in accordance with this Agreement. Without lim-
iting the foregoing, no Bank nor the Term Bank shall have any
right of action whatsoever against either Agent as a result of
such Agent acting or refraining from acting under this Agreement
or any of the other Facility Documents in accordance with the
instructions of the requisite Banks and/or the Term Bank, as
applicable in accordance with this Agreement. The Agents shall
be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or
conversation reasonably believed by it or them to be genuine and
correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel
(including counsel to Finco), independent accountants and other
experts selected by the Agents.
SECTION 11.05. Agent and Affiliates. To the extent that the
Agents or any of their Affiliates are or shall become Banks
hereunder or the Term Bank under the Term Loan Agreement, such
Agent or such Affiliate, in such capacity, shall have each and
every right and power under this Agreement as would any other
Bank hereunder (including the right to vote upon any matter upon
which any of the Banks is entitled to vote) or as would the Term
Bank hereunder and under the Term Loan Agreement and, without
exception, may exercise the same as though it were not an Agent.
Each Agent and its Affiliates may engage in any kind of business
with Finco or the Seller, any of their respective Affiliates and
any Person who may do business with or own securities of Finco or
the Seller or any of their respective Affiliates, all as if it
were not an Agent hereunder and without any duty to account
therefor to the other Agent, the Banks or the Term Bank.
SECTION 11.06. Credit Decision. Each Bank acknowledges that
it has, independently and without reliance upon either Agent or
any other Bank and based on such documents and information as it
has deemed appropriate, made its own evaluation and decision to
enter into this Agreement and, to the extent it so determines, to
make Liquidity Loans hereunder. Each Bank also acknowledges that
it will, independently and without reliance upon either Agent or
any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under this Agreement.
The Term Bank acknowledges that it has, independently and without
reliance upon either Agent or any Bank and based on such
documents and information as it has deemed appropriate, made its
own evaluation and decision to enter into the Term Loan Agreement
and this Agreement and, to the extent it so determines, to make
the Term Loan pursuant to the Term Loan Agreement. The Term Bank
also acknowledges that it will, independently and without
reliance upon either Agent or any Bank, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking
action under this Agreement or the Term Loan Agreement.
SECTION 11.07. Indemnification. (a) Each Bank agrees to
indemnify the Facility Agent (to the extent not reimbursed by
Finco or, to the extent applicable, by the Seller), ratably in
accordance with the ratio which each Bank's Commitment bears to
the Facility Amount, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted
against the Facility Agent in any way relating to or arising out
of this Agreement or any action taken or omitted by the Facility
Agent under this Agreement; provided, however, that no Bank shall
be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from the Facility Agent's
gross negligence or willful misconduct. Without limiting the
generality of the foregoing, each Bank agrees to reimburse the
Facility Agent (to the extent not reimbursed by Finco or, to the
extent applicable, by the Seller), ratably in accordance with the
ratio which each Bank's Commitment bears to the Facility Amount,
promptly upon demand, for any out-of-pocket expenses (including
reasonable counsel fees) incurred by the Facility Agent in
connection with the administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of its rights or
responsibilities under, this Agreement. The rights of the
Facility Agent under this Section 11.07(a) shall survive the
termination of this Agreement. For purposes of this paragraph,
the term "Facility Agent" shall include such Agent, its
affiliates and their respective officers, directors, employees
and agents.
(b) Each Bank and the Term Bank agrees to indemnify
the Collateral Agent (to the extent not reimbursed by Finco or,
to the extent applicable, by the Seller), ratably according to
its Adjusted Pro Rata Share, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by, or
asserted against the Collateral Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by
the Collateral Agent under this Agreement; provided, however,
that no Bank or the Term Bank shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements
resulting from the Collateral Agent's gross negligence or willful
misconduct. Without limiting the generality of the foregoing,
each Bank and the Term Bank agrees to reimburse the Collateral
Agent (to the extent not reimbursed by Finco or, to the extent
applicable, by the Seller), ratably according to their Adjusted
Pro Rata Shares, promptly upon demand, for any out-of-pocket
expenses (including reasonable counsel fees) incurred by the
Collateral Agent in connection with the administration,
modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice
in respect of its rights or responsibilities under, this
Agreement. The rights of the Collateral Agent under this Section
11.07(b) shall survive the termination of this Agreement. For
purposes of this paragraph, the term "Collateral Agent" shall
include such Agent, its affiliates and their respective officers,
directors, employees and agents.
SECTION 11.08. Successor Agents. (a) The Facility Agent may
resign at any time by giving thirty days' notice thereof to the
other Agent, the Banks, the Term Bank, Finco and the Servicer.
The Majority Banks shall have the right to remove the Facility
Agent, with or without cause. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a
successor Facility Agent approved by Finco (which approval will
not be unreasonably withheld or delayed), and such resignation or
removal shall not be effective until such successor Facility
Agent is appointed and has accepted such appointment; provided,
that Finco shall not have the right to approve any successor
Facility Agent following the occurrence and during the
continuance of a Liquidation Event or during the Liquidation
Period, if the Liquidation Period commenced as the result of the
occurrence of a Liquidation Event. The Banks shall provide the
Term Bank and each Rating Agency with prompt notice of the
resignation or removal of the Facility Agent. If no successor
Facility Agent shall have been so appointed and accepted such
appointment within seventy-five (75) days after the retiring
Facility Agent's giving of notice of resignation or removal, then
the retiring or removed Facility Agent may, on behalf of the
Banks, appoint a successor Facility Agent approved by Finco (to
the extent Finco has the right to approve such successor pursuant
to this Section 11.08(a)) (which approval will not be
unreasonably withheld or delayed), which successor Facility Agent
shall be (a) a commercial bank meeting the requirements set forth
in the definition of "Eligible Assignee" and (b) experienced in
the types of transactions contemplated by this Agreement. Upon
the acceptance of any appointment as Facility Agent hereunder by
a successor Facility Agent, such successor Facility Agent shall
thereupon succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Facility Agent, and
the retiring Facility Agent shall be discharged from all further
duties and obligations under this Agreement. After any retiring
Facility Agent's resignation or removal hereunder as Facility
Agent, the provisions of this Article XI shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was the Facility Agent under this Agreement.
(b) The Collateral Agent may resign at any time by giving
thirty days' notice thereof to the other Agent, the Banks, the
Term Bank, Finco and the Servicer. Before the Cross-Over Date,
the Majority Banks, with the consent of the Term Bank, shall have
the right to remove the Collateral Agent, with or without cause.
On or after the Cross-Over Date, the Term Bank shall have the
right to remove the Collateral Agent, with or without cause.
Upon any such resignation or removal, the Majority Banks, with
the consent of the Term Bank, shall have the right to appoint a
successor Collateral Agent approved by Finco (which approval will
not be unreasonably withheld or delayed), and such resignation or
removal shall not be effective until such successor Collateral
Agent is appointed and has accepted such appointment; provided,
that Finco shall not have the right to approve any successor
Collateral Agent following the occurrence and during the
continuance of a Liquidation Event or during the Liquidation
Period, if the Liquidation Period commenced as the result of the
occurrence of a Liquidation Event. The Facility Agent shall
provide each Rating Agency with prompt notice of the resignation
or removal of the Collateral Agent. If no successor Collateral
Agent shall have been so appointed and accepted such appointment
within seventy-five (75) days after the retiring Collateral
Agent's giving of notice of resignation or removal, then the
retiring or removed Collateral Agent may, on behalf of the Banks
or the Term Bank, appoint a successor Collateral Agent approved
by Finco (to the extent Finco has the right to approve such
successor pursuant to this Section 11.08(b)) (which approval will
not be unreasonably withheld or delayed), which successor
Collateral Agent shall be (a) a commercial bank meeting the
requirements set forth in the definition of "Eligible Assignee"
and (b) experienced in the types of transactions contemplated by
this Agreement. Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become
vested with all of the rights, powers, privileges and duties of
the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from all further duties and obligations under
this Agreement. After any retiring Collateral Agent's
resignation or removal hereunder as Collateral Agent, the
provisions of this Article XI shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the
Collateral Agent under this Agreement. In addition, any
successor Collateral Agent must be authorized under United States
law to maintain and operate the Collection Account.
SECTION 11.09. Direction by the Banks and Term Bank. (a)
Each Agent shall be fully justified in failing or refusing to
take any action under the Facility Documents unless it shall
first receive such advice or concurrence of the requisite Banks
and/or the Term Bank, as applicable in accordance with this
Agreement, or it shall first be indemnified to its satisfaction
by the Banks and the Term Bank against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action; and (b) each Agent shall in
all cases be fully protected in acting, or in refraining from
acting, under the Facility Documents in accordance with a request
of the requisite Banks and/or the Term Bank, as applicable in
accordance with this Agreement, and such request and any action
taken or failure to act pursuant thereto shall be binding upon
all the Banks, the Term Bank, and all future holders of the
Liquidity Notes and the Term Note.
SECTION 11.10. Notice of Liquidation Events. The Agents
shall not be deemed to have knowledge or notice of the occurrence
of any Liquidation Event hereunder unless either Agent shall have
received notice from a Bank, the Term Bank or Finco describing
such Liquidation Event and stating that such notice is a "notice
of Liquidation Event." In the event that an Agent receives such
a notice, such Agent shall give a Corresponding Notice thereof to
the Banks and the Term Bank. The Agents shall take such action
or refrain from taking such action with respect to such
Liquidation Event as shall be reasonably directed by the
requisite Banks and/or the Term Bank, as applicable in accordance
with this Agreement; provided, the Agents may (but shall not be
obligated to) take such action, or refrain from taking such
action, as is permitted hereunder, with respect to such
Liquidation Event as it or they shall deem advisable in the best
interests of the Banks (and, in the case of the Collateral Agent,
also in the best interest of the Term Bank).
SECTION 11.11. Duty of Care. The Facility Agent shall
endeavor to exercise the same care in its administration of the
Facility Documents as it exercises with respect to similar
transactions in which it is involved and where no other co-
lenders or participants are involved; provided that the liability
of the Facility Agent for failing to do so shall be limited as
provided in the preceding paragraphs of this Article XI.
SECTION 11.12. Delegation of Agency. (a) If at any time or
times it shall be necessary or prudent in connection with the
exercise or protection of the Agents' rights hereunder in order
to conform to any law of any jurisdiction in which any of the
Collateral shall be located, or either Agent shall be advised by
counsel that it is so necessary or prudent in the interest of the
Banks (and, in the case of the Collateral Agent, also in the best
interest of the Term Bank), or the Agents shall deem it necessary
for its or their own protection in the performance of its or
their duties hereunder, the Agents and (to the extent required by
the Agents) Finco shall execute and deliver all instruments and
agreements reasonably necessary or proper to constitute another
bank or trust company, or one or more individuals approved by the
Collateral Agent (to the extent necessary or required by the
Collateral Agent) (each an "Approved Delegate"), either to act as
co-agent or co-agents or trustee of all or any of the Collateral,
jointly with the Collateral Agent originally named herein or any
successor, or to act as separate agent or agents or trustee of
any such Collateral. In the event that Finco shall not have
joined in the execution of such instruments or agreements with
any Approved Delegate within thirty (30) Business Days after the
receipt of a written request from the Collateral Agent to do so,
or in case a Liquidation Event shall have occurred and be
continuing, Finco hereby irrevocably appoints each Agent as its
agent and attorney to act for it under the foregoing provisions
of this Section 11.12 in such contingency, it being understood
that the power of attorney granted hereunder is coupled with an
interest. Every separate agent and every co-agent and every
trustee, other than any agent which may be appointed as successor
to the Facility Agent, shall, to the extent permitted by
applicable law, be appointed to act and be such, subject to the
following provisions and conditions, namely:
(i) except as otherwise provided herein, all
rights, remedies, powers, duties and obligations conferred
upon, reserved or imposed upon the Collateral Agent in
respect of the custody, control and management of moneys,
paper or securities shall be exercised solely by the
Collateral Agent hereunder;
(ii) all rights, remedies, powers, duties and
obligations conferred upon, reserved to or imposed upon each
Agent hereunder shall be conferred, reserved or imposed and
exercised or performed by such Agent except to the extent
that the instrument appointing such separate agent or
separate agents or co-agent or co-agents or trustee shall
otherwise provide, and except to the extent that under any
law of any jurisdiction in which any particular act or acts
are to be performed, such Agent shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, remedies, powers, duties and obligations shall be
exercised and performed by such separate agents or co-agent
or co-agents to the extent specifically directed in writing
by such Agent;
(iii) no power given hereby to, or which it is
provided hereby may be exercised by, any such separate agent
or separate agents or co-agent or co-agents or trustee shall
be exercised hereunder by such separate agent or separate
agents or co-agent or co-agents or trustee except jointly
with, or with the consent in writing of, the Collateral
Agent or the Facility Agent, as the case may be, anything
herein contained to the contrary notwithstanding;
(iv) no separate agent or co-agent or trustee
constituted under this Section 11.12 shall be personally
liable by reason of any act or omission of any other agent,
separate agent, co-agent or trustee hereunder; and
(v) each Agent, at any time by an instrument in
writing, executed by it, may accept the resignation of or
remove any such separate agent or co-agent or trustee of
such Agent, and in that case, by an instrument in writing
executed by such Agent and Finco (to the extent necessary or
requested by such Agent) jointly may appoint a successor to
such separate agent or co-agent or trustee, as the case may
be, anything therein contained to the contrary
notwithstanding. In the event that Finco shall not have
joined in the execution of any such instrument with a Person
or entity within ten (10) days after the receipt of a
written request from such Agent to do so, or in the case a
Liquidation Event shall have occurred and be continuing,
such Agent, acting alone, may appoint a successor and may
execute any instrument in connection therewith, and Finco
hereby irrevocably appoints the Facility Agent its agent and
attorney to act for it in such connection in either of such
contingencies.
(b) The Agents may execute any of their duties under the
Facility Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel, and other specialists and
advisors (including affiliates of such Agent) selected by it,
concerning all matters pertaining to such duties. The Agents
shall not be responsible for the negligence or misconduct of any
such agents, attorneys-in-fact, counsel and other specialists and
advisors selected by it with reasonable care.
ARTICLE XII MISCELLANEOUS
SECTION 12.01. Amendments, Etc. (a) This Agreement and the
other Facility Documents (other than the Term Loan Agreement) may
be amended from time to time by the Servicer, Finco, the Facility
Agent and the Term Bank by a written instrument signed by each of
them, without the consent of any of the Banks; provided, however,
that such action shall not affect in any material respect the
interests of any Bank.
(b) The Term Loan Agreement may be amended from time to
time by the Servicer, Finco and the Term Bank without the consent
of the Banks; provided, however, that any such amendment will not
affect in any material respect the interests of the Banks (it
being understood and agreed that any amendment to the Term Loan
Agreement which has the effect of increasing the Term Loan Amount
shall not be deemed to affect the interests of the Banks in a
material respect).
(c) The provisions of this Agreement, the other Facility
Documents and the Term Loan Agreement may also be amended,
modified or waived from time to time by the Servicer, Finco and
the Facility Agent with the prior written consent of the Term
Bank and, if the interest of any Bank shall or would be affected
in any material respect, the Majority Banks; provided, however,
that no such agreement or amendment shall at any time (a)
decrease the amount of, or extend the repayment of or any
scheduled payment date for the payment of, any principal or
interest in respect of any Liquidity Loan or any fees owed to a
Bank without the prior written consent of such Bank and the Term
Bank (it being understood that an amendment made to Section 9.07
or 9.08 shall not be deemed to fall within this clause (a) unless
such amendment changes the priority of payment of interest, fees
or principal payable to any Bank); (b) forgive or waive or
otherwise excuse any repayment of the Aggregate Loan Amount
without the prior written consent of each Bank affected thereby;
(c) increase the Commitment of any Bank without its prior written
consent; (d) except as otherwise expressly contemplated under
Section 2.06(d) or Section 2.08, amend or modify the Pro Rata
Share or the Adjusted Pro Rata Share of any Bank without its
prior written consent; (e) amend or modify the provisions of this
Section 12.01 without the prior written consent of each Bank and
the Term Bank; (f) amend or modify the definition of "Majority
Banks" or "Rating Agency Condition" without the prior written
consent of each Bank; (g) without the prior written consent of
each Bank and the Term Bank, waive any Liquidation Event arising
from an Insolvency Event with respect to JSC, the Servicer, Finco
or the Seller; (h) without the prior written consent of each Bank
and the Term Bank, waive, amend or otherwise modify the
definition of "Termination Date" or "Commitment Termination
Date"; provided, however, it being understood that any extension
of the Scheduled Liquidation Commencement Date consistent with
the terms of Section 2.06 hereof shall not be considered a
waiver, amendment or modification pursuant to this clause (h);
(i) amend, modify or otherwise affect the rights or duties of the
Facility Agent or the Collateral Agent hereunder without the
prior written consent of such Person; (j) amend, waive or modify
any definition or provision expressly requiring the consent of
the Term Bank, the Series A Bank and/or all Banks, or Series B
Banks with specified Pro Rata Shares, without the prior written
consent of the Term Bank, the Series A Bank and/or all Banks, or
Series B Banks with the specified Pro Rata Shares, as applicable;
(k) amend, waive or modify any definition or provision expressly
requiring the consent of the Majority Banks, without the prior
written consent of the Majority Banks; (l) except as expressly
permitted hereunder, release any Collateral without the prior
written consent of each Bank and the Term Bank; (m) without the
prior written consent of each Bank and the Term Bank, amend,
waive or modify the definition of: (i) "Base Amount", (ii)
"Series A Base Amount", (iii) "Series B Base Amount", (iv)
"Modified Base Amount", (v) "Modified Series A Base Amount", (vi)
"Modified Series B Base Amount", and (vii) any definition or
provision which would result in a decrease in the Applicable
Reserve Ratio if the Rating Agency Condition shall not have been
satisfied in connection with that amendment, waiver or
modification; (n) without the prior written consent of each Bank
and the Term Bank, (A) waive any Liquidation Event described in
clauses (j), (k) or (q) of the definition of that term or (B)
amend the definition of "Excess Concentration Balance"; (o)
without the prior written consent of Banks whose commitments to
make Liquidity Loans aggregate more than sixty percent (60%) of
the Commitments, waive the Liquidation Event described in clause
(i) of the definition of "Liquidation Event"; and (p) without the
prior written consent of Banks whose commitments to make
Liquidity Loans aggregate more than sixty percent (60%) of the
Commitments, amend, waive or modify subclauses (c) through (l) of
Section 5.02 or Section 5.03. No waiver of any Liquidation Event
or other default hereunder given at any time shall apply to any
other prior or subsequent Liquidation Event or default.
(d) Promptly after the execution of any amendment, consent
or waiver described in clause (b) or (c) above, the Facility
Agent shall furnish written notification of the substance of such
amendment or consent to each Bank and the Term Bank, and the
Servicer shall furnish written notification of the substance of
such amendment or consent to the Rating Agencies.
(e) It shall not be necessary for any waiver or consent
given by the Banks under this Section 12.01 to approve the
particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof.
The manner of obtaining such waivers and consents and of
evidencing the authorization of the execution thereof by the
Banks shall be subject to such reasonable requirements as the
Facility Agent may prescribe.
(f) [Reserved]
(g) This Agreement and any other Facility Document may not
be amended unless Finco shall have delivered the proposed
amendment to the Agents and the Rating Agencies at least ten
Business Days (or such shorter period as shall be acceptable to
each of them) prior to the execution and delivery thereof.
(h) Notwithstanding anything else in this Section 12.01 to
the contrary, the provisions of Section 9.07 and 9.08 hereof may
not be modified or amended if such action would adversely affect
in any material respect the interests of any holder of Commercial
Paper without satisfaction of the Rating Agency Condition.
SECTION 12.02. No Waiver; Remedies. No waiver by the
Facility Agent, the Collateral Agent or the Banks of any breach
or default of or by Finco under this Agreement shall be deemed a
waiver of any other previous breach or default or any thereafter
occurring. No failure on the part of the Facility Agent, the
Collateral Agent or the Banks to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right
hereunder, or any abandonment or discontinuation of steps to
enforce such right, power or privilege, preclude any other or
further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 12.03. Successors and Assigns; Assignment;
Participations. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to
include the successors and permitted assigns of such party; all
covenants, promises and agreements by or on behalf of any parties
hereto that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and permitted
assigns. Finco may not (except pursuant to this Agreement or
another Facility Document) assign or transfer any of its rights
or obligations hereunder or under any of the other Facility
Documents without (i) the written consent of the Facility Agent,
(ii) satisfaction of the Rating Agency Condition and (iii) the
written consent of the Term Bank and Banks whose commitments to
make Liquidity Loans under the Liquidity Agreement aggregate more
than sixty percent (60%) of the Commitments. Each of the Series
B Banks, unless otherwise provided herein, with the prior written
consent of Finco (such consent not to be unreasonably withheld or
delayed), may assign any of its interests, rights and obligations
hereunder to an Eligible Assignee; provided, that, with respect
to any assignment pursuant to this Section 12.03(a), (i) the
Series B Commitment amount to be assigned pursuant to this
Section 12.03(a) shall not be less than $10,000,000 (unless the
amount assigned either (x) constitutes all of the Series B
Commitment of the assigning Series B Bank or (y) is being
assigned from one Series B Bank to another Series B Bank already
party to this Agreement and equals an amount not less than
$5,000,000), (ii) prior to the effective date of any such
assignment, the assignee and assignor shall have (1) executed and
delivered to the Facility Agent and to Finco an Assignment and
Acceptance substantially in the form of Exhibit 12.03 and (2)
paid a processing fee of $2,500 to the Facility Agent, (iii)
prior to giving effect to any such assignment, the Rating Agency
Condition shall have been satisfied, and (iv) Finco's consent
shall not be necessary with respect to any assignment by a Series
B Bank to an Affiliate of such Series B Bank or to any other
Series B Bank which is also an Eligible Assignee. Upon the
effectiveness of any such permitted assignment, (i) the assignee
thereunder shall, to the extent of the interests assigned to it,
be entitled to the interests, rights and obligations of a Bank
under this Agreement, (ii) the assigning Bank shall, to the
extent of the interest assigned, be released from its obligations
under this Agreement and (iii) the Facility Agent shall give
immediate notice of any such assignment to Finco.
(b) Notwithstanding anything contained in paragraph (a) of
this Section 12.03, (i) each Bank may at any time pledge or
assign all or any portions of its interests and rights under this
Agreement to a Federal Reserve Bank, and (ii) each Bank may sell
participations in all or any part of its Commitment, any
Liquidity Loan or Liquidity Loans made by such Bank to another
Bank or other financial institution meeting the criteria of an
Eligible Assignee; provided, that: (A) no such grant of a
participation shall, without the consent of Finco, require Finco
to file a registration statement with the Securities and Exchange
Commission or otherwise comply with the blue sky laws of any
state; (B) such Bank's obligations under this Agreement shall
remain unchanged and such Bank shall remain solely responsible to
Finco for performance of such obligations; (C) Finco shall
continue to deal solely and directly with the Bank in connection
with such Bank's rights and obligations under this Agreement; (D)
such participant shall agree to be bound by the confidentiality
provisions of Section 12.08 and (E) no holder of any such
participation shall be entitled to require such Bank to take or
omit to take any action hereunder except that such Bank may agree
with such participant that, without such participant's consent,
such Bank will not consent to an amendment, modification or
waiver referred to in clauses (a), (b), (h), (m) or (n), of the
first proviso to Section 12.01(c) . Any such participant shall
not have any rights hereunder or under the Facility Documents
except each participant shall have rights under Sections 4.04,
4.06, 4.08, 9.04 (b), 10.03 and 12.07 as if it were a Bank;
provided, that no such participant shall be entitled to receive
any payment pursuant to such sections which is greater in amount
than the payment which the transferor Bank would have otherwise
been entitled to receive in respect of the participation interest
so sold.
(c) Notwithstanding anything in this agreement to the
contrary, with the prior written consent of Finco (such consent
not to be unreasonably withheld or delayed), the Series A Bank
may assign any of its interests, rights and obligations hereunder
to an Eligible Assignee pursuant to the terms of this Section
12.03(c) (such assignee, a "Series A Eligible Assignee") as
follows:
(i) the Series A Bank may assign all of its Series A
Commitment (including any Series A Loan) to a Series A
Eligible Assignee, which assignee shall also be or become a
Series B Bank hereunder; provided that (A) Finco agrees to
cease issuing Series A Commercial Paper, (B) to the extent
the Series A Commitment at such time exceeds the sum of (x)
the Aggregate Series A Loan Amount and (y) the Series A CP
Amount (such excess amount on any date of determination, the
"Conversion Amount"), the Series A Commitment of the Series
A Eligible Assignee shall be immediately reduced, without
any further action hereunder, by the Conversion Amount and
the Series B Commitment of the Series A Eligible Assignee
shall be concurrently increased, without any further action
hereunder, by the Conversion Amount, it being understood
that the calculation of Pro Rata Share shall be adjusted
accordingly, and (C) on each Business Day after such
assignment (and after giving effect to the immediately
preceding clause (B)), the Series A Commitment of the Series
A Eligible Assignee shall be immediately reduced, without
any further action hereunder, by the Conversion Amount and
the Series B Commitment of the Series A Eligible Assignee
shall be concurrently increased, without any further action
hereunder, by the Conversion Amount, it being understood
that the calculation of Pro Rata Share shall be adjusted
accordingly; and
(ii) the Series A Bank may assign less than all of its
Series A Commitment (including any Series A Loans) to a
Series A Eligible Assignee, which assignee shall also be or
become a Series B Bank hereunder; provided that (A) to the
extent possible, the Conversion Amount shall be deemed to be
assigned before any other portion of the Series A Commitment
(including Series A Loans) shall be deemed to be assigned,
(B) Finco agrees not to issue Series A Commercial Paper in
excess of the Series A Commitment of Bankers Trust Company
after giving effect to such assignment, (C) the Series A
Commitment of the Series A Eligible Assignee shall be
immediately reduced, without any further action hereunder,
by the amount by which such assignment exceeds the sum of
(x) the allocable portion of the Series A Eligible
Assignee's Aggregate Series A Loan Amount and (y) the
allocable portion of the Series A Eligible Assignee's Series
A CP Amount (such excess amount on any date of
determination, the "Partial Conversion Amount") and the
Series B Commitment of the Series A Eligible Assignee shall
be concurrently increased, without any further action
hereunder, by the Partial Conversion Amount, it being
understood that the calculation of Pro Rata Share shall be
adjusted accordingly, and (D) on each Business Day after
such assignment (and after giving effect to the immediately
preceding clause (C)), the Series A Commitment of the Series
A Eligible Assignee shall be immediately reduced, without
any further action hereunder, by the Partial Conversion
Amount and the Series B Commitment of the Series A Eligible
Assignee shall be concurrently increased, without any
further action hereunder, by the Partial Conversion Amount,
it being understood that the calculation of Pro Rata Share
shall be adjusted accordingly.
SECTION 12.04. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTERESTS OF THE
COLLATERAL AGENT IN THE COLLATERAL OR REMEDIES HEREUNDER OR
THEREUNDER IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. EACH OF THE
PARTIES HERETO HEREBY AGREES TO THE NONEXCLUSIVE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN THE CITY OF NEW YORK,
NEW YORK (AND ANY COURTS HEARING APPEALS FROM SUCH STATE OR
FEDERAL COURT) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, AND WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO SUCH PARTY AT ITS
ADDRESS SPECIFIED IN SECTION 12.05 OR PROVIDED THEREIN. EACH OF
THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER WITHIN THE
STATE OF NEW YORK AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY ANY COURT IN SUCH
STATE. NOTHING IN THIS SECTION 12.04 SHALL AFFECT THE RIGHT OF
ANY PARTY HEREUNDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF THE COLLATERAL AGENT, THE
FACILITY AGENT OR THE BANKS TO BRING ANY ACTION OR PROCEEDING
AGAINST FINCO OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION OR JURISDICTIONS TO THE EXTENT NECESSARY FOR
REALIZING ON THEIR INTERESTS IN ANY COLLATERAL GRANTED HEREUNDER.
EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER OR
REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR UNDER OR IN
CONNECTION HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY
SUCH ACTION SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
THE TERMS AND PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.
SECTION 12.05. Notices. Except as otherwise expressly
provided in this Agreement, any notice shall be conclusively
deemed to have been received by a party hereto and to be
effective (i) if sent by regular mail or commercial delivery
service, on the day on which delivered to such party at its
address set forth below its name on the signature pages hereto
(or at such other address as such party shall specify to the
other parties hereto in writing), (ii) if sent by telex, graphic
scanning or other telecopy communications of the sending party,
when delivered by such equipment to the number set forth below
its name on the signature pages hereto and confirmed by
electronic receipt or similar means or (iii) if sent by
registered or certified mail, on the day on which delivered to
such party (or delivery is refused), addressed to such party at
such address. Any notices required to be delivered to each
Rating Agency under this Agreement or any of the other Facility
Documents shall be addressed to each Rating Agency at the
following address (or to such other address as each Rating Agency
may hereafter specify to the other parties hereto in writing):
Standard & Poor's Ratings Group, 25 Broadway, Attn: Asset-Backed
Surveillance Group, New York, NY 10004, Telephone: (212) 208-
8000; Telecopy: (212) 412-0225; and Duff & Phelps Credit Rating
Co., Attn: Asset-Backed Research and Monitoring Group, 55 East
Monroe Street, Chicago, IL 60603, Telephone: (312) 263-2610;
Telecopy: (312) 263-2852.
SECTION 12.06. Survival of Agreement. All covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making
of the Liquidity Loans and the execution and delivery of this
Agreement and shall continue in full force and effect until the
Collection Date has occurred; provided, however, that the
indemnities contained in Sections 4.06, 4.08, 9.04(b), 10.03,
11.07 and 12.07 of this Agreement and the obligations of the
parties hereto under Sections 12.08 and 12.10 shall be continuing
and shall survive any termination of this Agreement.
SECTION 12.07. Expenses; Indemnification. Finco shall pay
on demand (i) all reasonable out-of-pocket fees and expenses
(including reasonable attorneys fees and expenses) of the Agents
incurred in connection with the negotiation, preparation,
execution or delivery of this Agreement and the other Facility
Documents and the making and repayment of the Liquidity Loans and
the reasonable attorneys fees and expenses of the Banks incurred
in connection with the delivery of legal opinions necessary for
the satisfaction of the condition set forth in Section 5.01(p),
(ii) all reasonable out-of-pocket fees and expenses (including
reasonable fees and expenses of a single law firm representing
the Facility Agent and the Banks and selected by the Facility
Agent) of the Facility Agent, the Collateral Agent and the Banks
incurred in connection with the administration, amendment,
modification or waiver of this Agreement or any other Facility
Document, and (iii) all reasonable out-of-pocket fees and
expenses of each of the Facility Agent and the Collateral Agent
(including reasonable attorneys' fees and expenses of counsel)
and reasonable fees and expenses of a single law firm
representing the Banks, as selected by the Majority Banks, in
each case incurred from and after a Liquidation Event in
connection with the enforcement of this Agreement and the other
Facility Documents against Finco, the Servicer and the Seller.
In addition, Finco will pay any and all stamp and other taxes and
fees payable or determined to be payable in connection with the
execution, delivery, filing, recording or enforcement of this
Agreement or the other Facility Documents, and hereby indemnifies
and saves the Facility Agent and the Banks harmless from and
against any and all liabilities with respect to or resulting from
any delay in paying or omission to pay such taxes and fees. All
payments owing by Finco under this Section 12.07 shall be made
subject to the terms of Sections 9.07 and 9.08 hereof.
SECTION 12.08. Confidentiality. Each of the Facility Agent,
the Collateral Agent and the Banks hereby acknowledges that the
Records and other information which it or Finco receives from the
Seller may contain information in which Finco or the Seller have
a proprietary interest and which may not, at the time of
assignment and/or delivery, be generally available to and known
by the public (including information relating to Finco or the
Seller contained in the Information Memorandum). Each of the
Facility Agent, the Collateral Agent and the Banks hereby agrees,
for the benefit of Finco and the Seller, to maintain as
confidential all such information obtained from the Seller or
Finco and not to disclose such information to any other Person
other than (i) an Affiliate of such Person which is a financial
institution or a parent company of a financial institution and
(ii) the Dealers, the Depositary and, to the extent required by
applicable securities laws, any holder or offeree of Commercial
Paper and, without limiting the generality of the foregoing, each
of the Facility Agent and the Banks further agrees to comply with
the confidentiality provisions set forth in Section 7.07 of the
Receivables Sale Agreement; provided, however, that nothing in
this Section 12.08 shall (A) impose any liability on any Agent or
Bank that has acted in accordance with reasonable and customary
standards for maintaining the confidentiality of information
relating to its corporate customers or (B) prevent any Person
from disclosing such information (i) to any permitted assignee of
Finco, the Facility Agent or any Bank (or their permitted
prospective participants and assignees), provided that each such
party agrees in writing, for the benefit of Finco and the Seller,
(x) to use such information and keep such information
confidential in accordance with the same terms set forth herein
and (y) that it will not disclose such information to any of its
Affiliates which is not a financial institution or a parent
company of a financial institution, (ii) to its employees,
agents, attorneys, auditors and accountants, (iii) subject to the
further requirements set forth in this Section 12.08, upon the
order of any court or administrative agency or upon the request
or demand of any regulatory agency, authority or official having
jurisdiction over the Facility Agent or Bank, as the case may be,
(iv) which has (other than through a breach of this Section
12.08) been obtained from any Person other than Finco, the Seller
or any other party hereto, or (v) to the extent such information
(other than through a breach of this Section 12.08) has become
generally available to and known by the public subsequent to the
time of delivery hereunder. Any Bank or Agent (a) to the extent
permitted by applicable law will provide Finco with prompt
written notice of any subpoena or any request or requirement by
any governmental authority (other than any such request or
requirement in connection with an audit or other regulatory
review of a financial institution) for disclosure of any
confidential information so that Finco and/or the Seller may seek
a protective order or other appropriate remedy prior to such
disclosure and (b) shall consult with Finco to a reasonable
extent on the advisability of taking legally available steps to
resist or narrow such request or requirement (it being understood
that, after such notice and consultation, such party shall be
under no further obligations to Finco under this Section 12.08 to
refrain from disclosure in connection with such proceeding during
the pendency thereof as provided under clause (iii) of the
immediately preceding sentence). In the event a protective order
or other remedy is not obtained, the affected Bank or Agent will
exercise reasonable efforts (x) to limit the information
disclosed to such information which it is legally required to
disclose and (y) to obtain assurance that confidential treatment
will be accorded any such information so disclosed, in each case
only to the extent efforts would not cause the affected Bank or
Agent to incur costs which it deems to be material. Without
limiting any of the foregoing, so long as it is the Facility
Agent or a Bank, Bankers Trust Company may disclose such
information to BT Securities Corporation.
SECTION 12.09. No Recourse. The obligations of Finco
hereunder shall be solely its obligations and shall in all
respects be non-recourse to all of its officers, directors,
controlling persons or stockholders (including the Seller), and
each of the Facility Agent and the Banks acknowledges the same
with respect to Finco and, to the fullest extent permitted by
law, waives any such recourse and any claim against any of such
parties arising hereunder.
SECTION 12.10. No Proceedings. Each of the Agents, the
Banks and the Term Bank hereby agrees that it will not institute
against Finco any involuntary proceeding of the type referred to
in the definition of "Insolvency Event" so long as this Agreement
remains in full force and effect and for at least one year and
one day following the latest to occur of: (i) the payment in full
of all Liquidity Loans; (ii) the payment in full of the Term
Loan; or (iii) the payment in full of the latest maturing
Commercial Paper Note.
SECTION 12.11. Execution in Counterparts; Severability.
This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 12.12. Entire Agreement. This Agreement, together
with the other Facility Documents, including the exhibits and
schedules hereto and thereto, contains a final and complete
integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the
entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all previous oral statements
and other writings with respect thereto.
[Remainder of Page Intentionally Left Blank]<PAGE>
For purposes of Articles IX, X, XI and XII of this Agreement
the undersigned acknowledges, consents and agrees to be bound by
and subject to the provisions thereof in its capacity as Term
Bank.
BANK BRUSSELS LAMBERT, NEW YORK BRANCH,
as Term Bank
By:
Title:
[Signature pages appear at document no: 21564]
COMMERCIAL PAPER DEALER AGREEMENT (this
"Agreement") dated as of February 23, 1995, among BT
SECURITIES CORPORATION, a Delaware corporation
("BTSC"), MORGAN STANLEY & CO. INCORPORATED, a Delaware
corporation ("Morgan"; BTSC and Morgan being sometimes
collectively referred to herein as the "Dealers"),
JEFFERSON SMURFIT CORPORATION (U.S.), a Delaware
corporation ("JSC"), and JEFFERSON SMURFIT FINANCE
CORPORATION, a Delaware corporation (the "Company").
WHEREAS the Company has acquired Receivables and
proposes to acquire additional Receivables from JSC pursuant to
the Receivables Purchase and Sale Agreement dated as of
February 23, 1995, among JSC, as Seller and Servicer, and the
Company;
WHEREAS the Company proposes to issue and sell its
short term promissory notes in the United States commercial paper
market and use the net proceeds thereof to, among other things,
acquire Receivables; and
WHEREAS JSC and the Company have requested BTSC and
Morgan to act as agents of the Company for the placement from
time to time of the Company's commercial paper notes, and BTSC
and Morgan have indicated their willingness to do so on the terms
and conditions contained herein; provided, however that BTSC will
only act as agent of the Company for the placement of commercial
paper notes designated as "Series B" notes.
NOW, THEREFORE, BTSC, Morgan, JSC and the Company
hereby agree as follows:
1. Definition of Terms. All capitalized terms used
herein and not otherwise defined herein shall have the meanings
set forth for such terms in Annex I to the Liquidity Agreement
dated as of the date hereof among the Company, certain financial
institutions, Bankers Trust Company, as Facility Agent, and
Bankers Trust Company, as Collateral Agent (as amended,
supplemented or otherwise modified from time to time, the
"Liquidity Agreement").
2. The Commercial Paper Notes. The term "Commercial
Paper Notes" means promissory notes issued by the Company
pursuant to the Depositary Agreements, each such note having a
maturity at the time of issuance of not later than the earlier to
occur of (A) fifteen days prior to the Scheduled Liquidation
Commencement Date in effect on the date of issuance thereof, and
(B) the 180th day next succeeding the date of issuance thereof.
The proceeds from the sale of the Commercial Paper Notes will be
used by the Company for "current transactions" within the meaning
of Section 3(a)(3) of the Securities Act of 1933, as amended (the
"1933 Act"). The Commercial Paper Notes will be issued in such
face amounts (in integral multiples of $1,000 but not less than
$100,000 each) and will be sold at such discounts from their face
amounts as shall be approved by the Company.
As of the date hereof, Bankers Trust Company shall
serve as Depositary and Issuing and Paying Agent for the
Commercial Paper Notes (the "Depositary"), pursuant to the
Depositary and Issuing and Paying Agent Agreements dated as of
February 23, 1995 (as such agreements may be amended,
supplemented or otherwise modified in accordance with the terms
thereof, the "Depositary Agreements" and, collectively with this
Agreement, the "CP Agreements"), between Bankers Trust Company,
as Depositary, and the Company. One such Depositary Agreement
pertains to Series A Commercial Paper, and the other pertains to
Series B Commercial Paper.
The parties hereto acknowledge that it is a fundamental
premise of BTSC's participation as a Dealer, and it is the
intention of the parties hereto, that the Company's program for
the issuance of Commercial Paper Notes be operated in such a way
that (i) BTSC will not place any Commercial Paper Notes which are
supported, directly or indirectly, by the credit of its affiliate
Bankers Trust Company or otherwise deal in such Commercial Paper
Notes in the primary or secondary market, and that (ii) any funds
provided by Bankers Trust Company will not be used to pay
interest or principal on Commercial Paper Notes placed by BTSC
("BTSC Notes"). Without limiting the foregoing, it is the intent
of the parties that, at any time when Bankers Trust Company shall
be a Bank under the Liquidity Agreement and BTSC shall be a
Dealer hereunder, the Facility Documents (including all
amendments and supplements thereto) provide as follows:
(A) the Depositary Agreements and the Liquidity
Agreement provide that the Banks are divided into two
syndicates, with Bankers Trust Company being in one
syndicate only (the "BTCo Syndicate");
(B) the Company and the Depositary may draw upon the
commitments of the BTCo Syndicate solely to retire
Commercial Paper Notes which are not BTSC Notes;
(C) in no event will the commitment of the members of
the BTCo Syndicate be used to support or pay, directly or
indirectly, BTSC Notes and the BTSC Notes will be paid
solely out of other funds;
(D) funds obtained from drawings under the Liquidity
Agreement in respect of BTSC Notes are placed in a
segregated account pending payment of the BTSC Notes and are
not commingled with any funds from the BTCo Syndicate;
(E) no Commercial Paper Notes are offered or sold to
BTSC hereunder if the holder of such Note or the Depositary
would have a right to funds from the BTCo Syndicate for any
payment with respect thereto at maturity; and
(F) the Company does not, directly or indirectly, use
the proceeds of any Series A Liquidity Loan, or use the
proceeds of sale of any Series A Commercial Paper, to pay
any BTSC Notes.
All instructions given by JSC, the Company and their affiliates
will be consistent with the foregoing intentions, and JSC and the
Company will not state in any writing to any Person that any
liquidity or credit provided by Bankers Trust Company to the
Company pursuant to the Liquidity Agreement or otherwise serves
to enhance the creditworthiness or marketability of any BTSC
Notes. JSC and the Company will include in any written material
delivered to any purchaser or offeree of the Commercial Paper
Notes that either refers to BTSC as a dealer of the Commercial
Paper Notes or to Bankers Trust Company as a liquidity provider
for the Commercial Paper Notes, an express statement that BTSC is
a dealer only of Series B Commercial Paper Notes and that Bankers
Trust Company provides liquidity support only for Commercial
Paper Notes which are not BTSC Notes. If at any time any
provision of the Facility Documents appears to conflict with the
intentions of the parties set forth above, JSC and the Company
will use their best efforts to amend or modify such provision so
as to avoid such conflict, and in no event will JSC or the
Company agree to any amendment, modification, or supplement of,
or any waiver or consent to, any Facility Document that would
cause such a conflict unless it shall have obtained the prior
written consent of BTSC.
3. Appointment of the Dealers. (a) The Company
hereby appoints BTSC and Morgan to be its Dealers in respect of
the Commercial Paper Notes, and BTSC and Morgan each accepts such
appointment, subject to the terms and conditions set forth
herein; provided, however, that BTSC's appointment and acceptance
shall be limited to acting as Dealer in respect of Series B
Commercial Paper Notes.
(b) In soliciting purchases of the Commercial Paper
Notes in accordance with clause (a) of this Section 3, each
Dealer shall act solely as agent for the Company and not as
principal, except as described below. Subject to Section 7, each
Dealer shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase
Commercial Paper Notes has been solicited by such Dealer and
accepted by the Company. No Dealer shall have any liability to
the Company in the event any such purchase is not consummated for
any reason. No Dealer shall have any obligation to, but may,
purchase, as principal, Commercial Paper Notes from the Company.
(c) Although (i) the Company has and shall have no
obligation to sell, or arrange for the sale of, Commercial Paper
Notes to or through the Dealers and (ii) the Dealers have and
shall have no obligation to purchase Commercial Paper Notes from,
or arrange for the sale of Commercial Paper Notes for the account
of, the Company, the parties hereto agree that any purchase of,
or arrangement for the sale of, Commercial Paper Notes made by
the Dealers will be made in reliance on, among other things, the
representations, warranties, covenants and agreements of JSC and
the Company contained herein or made pursuant hereto and on the
terms and conditions and in the manner provided herein.
4. Issuance of Commercial Paper Notes.
(a) Upon receipt of instructions from the Company,
Morgan and, if such Commercial Paper Notes are Series B
Commercial Paper Notes, BTSC shall use reasonable efforts to
solicit purchases of such face amount of the Commercial Paper
Notes as the Company and the applicable Dealer(s) agree upon from
time to time during the term of this Agreement. Unless otherwise
instructed by the Company, each Dealer shall communicate to the
Company, orally or in writing, each offer to purchase Commercial
Paper Notes made to or through such Dealer, other than those
rejected by such Dealer. Each Dealer shall have the right, in
its discretion reasonably exercised, to reject any proposed
purchase of Commercial Paper Notes, in whole or in part. Any
offer or sale by a Dealer of any Commercial Paper Notes shall be
made only to institutional purchasers which such Dealer
reasonably believes are sophisticated, and not to individuals or
by means of any solicitation of the general public (other than
institutional investors).
(b) If the Company and either Dealer shall agree upon
the sale of any Commercial Paper Notes (including, but not
limited to, agreement with respect to the price, face amount,
maturity and discount rate thereof), (i) the Company or such
Dealer, as agent of the Company, shall give instructions to the
Depositary to complete, authenticate and deliver Certificated
Notes, or cause the issuance of Book Entry CP Notes of the
related Series (each as defined in the applicable Depositary
Agreement), as the case may be, in the manner described in the
applicable Depositary Agreement and (ii) the authentication and
delivery to such Dealer of such Certificated Notes, or the
entering of Book Entry Issuance Instructions (as defined in the
applicable Depositary Agreement), as the case may be, by the
Depositary shall constitute the issuance of such Commercial Paper
Notes by the Company. The Company shall deliver Commercial Paper
Notes (including Master Notes (as defined in the applicable
Depositary Agreement)) signed by the Company to the Depositary
and instructions to the Depositary to complete, authenticate and
deliver such Commercial Paper Notes in the manner prescribed in
the applicable Depositary Agreement.
(c) At or prior to 11:00 a.m., New York City time, on
any Business Day on which either Dealer shall have determined, in
its sole judgment, that no market exists for the Commercial Paper
Notes, such Dealer shall provide notice to the Depositary, the
Company and the Facility Agent of such occurrence.
(d) If either Dealer is in receipt on any date of a
proposed issuance of Commercial Paper Notes of instructions then
in effect from the Facility Agent pursuant to Section 3.01(a) of
the Liquidity Agreement that the Depositary shall not issue or
deliver Commercial Paper Notes, then such Dealer shall stop any
further placements of Commercial Paper Notes by the opening of
business on the next Business Day.
(e) In the event the Company or the Facility Agent
shall direct the Depositary to cease issuing Commercial Paper
Notes, the Company shall instruct the Depositary to issue such
Commercial Paper Notes as either Dealer shall certify were sold
on the day of such Dealer's receipt of written notice of such
cessation.
(f) Neither the Company nor either Dealer has or will
have any agreement, understanding or other arrangement for
extension or automatic rollover of any Commercial Paper Notes.
5. Representations and Warranties. (a) As of each
date on which a Dealer solicits offers to purchase Commercial
Paper Notes, as of each date on which the Company accepts an
offer to purchase Commercial Paper Notes, as of each date the
Company issues and delivers Commercial Paper Notes and as of each
date the Offering Materials (as hereinafter defined) are amended
or supplemented, the Company represents and warrants to each
Dealer that (it being understood that such representations and
warranties shall be deemed to relate to the Offering Materials as
amended and supplemented to each such date):
(i) The Company is a duly organized and validly
existing corporation in good standing under the laws of the
state of Delaware and has the corporate power and authority
to own its property, to carry on its business as presently
being conducted, to execute and deliver the CP Agreements to
which it is a party and the Commercial Paper Notes, and to
perform and observe the conditions hereof and thereof.
(ii) The execution, delivery and performance of
the CP Agreements to which the Company is a party and the
issuance and sale of the Commercial Paper Notes have been
duly authorized by the Company, and the CP Agreements
constitute, and, when the Commercial Paper Notes have been
duly executed and authenticated in accordance with the
applicable Depositary Agreement against payment therefor,
such Commercial Paper Notes will be entitled to the benefits
of the applicable Depositary Agreement and will constitute,
legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
or other similar laws relating to or affecting generally the
enforcement of creditors' rights or by general equitable
principles.
(iii) No consent or action of, or filing or
registration with, any governmental or public regulatory
body or authority is required to authorize, or is otherwise
required in connection with, the execution, delivery or
performance of the CP Agreements or the Commercial Paper
Notes by the Company, except such as have already been
obtained.
(iv) Neither the execution and delivery by the
Company of the CP Agreements or the Commercial Paper Notes,
nor the fulfillment of or compliance with the terms and
provisions hereof or thereof, will (A) violate or conflict
with any law, rule or regulation applicable to the Company
or any of its properties; (B) violate, conflict with or
result in a breach of or a default under (I) the certificate
of incorporation or by-laws of the Company (II) any
agreement or instrument to which the Company is a party or
by which or any of its properties (now owned or hereafter
acquired) may be subject or bound, which violation,
conflict, breach or default could reasonably be expected to
have a Material Adverse Effect, or (III) any order, writ,
judgment, award, injunction or decree binding on or
affecting the Company or its property (now owned or
hereafter acquired); or (C) except for Liens created
pursuant to the Facility Documents, result in the creation
or imposition of any Lien in favor of any other party upon
any property (now owned or hereafter acquired) of the
Company.
(v) Each Commercial Paper Note issued by the
Company pursuant to the applicable Depositary Agreement and
in accordance with the terms hereof is exempt from the
registration requirements of the 1933 Act by reason of
Section 3(a)(3) thereof. Neither registration of any
Commercial Paper Note under the 1933 Act nor qualification
of an indenture under the Trust Indenture Act of 1939, as
amended, with respect to such Commercial Paper Note will be
required in connection with the offer, issuance, sale or
delivery of such Commercial Paper Note in accordance with
the terms hereof and of the applicable Depositary Agreement.
(vi) The Company is not an "investment company"
or a "company controlled by an investment company" within
the meaning of the Investment Company Act of 1940, as
amended.
(vii) There are no actions, suits, proceedings or
investigations pending or, to the Company's knowledge,
threatened against it or to which any of its property is
subject, which could reasonably be expected to materially
and adversely affect its execution, delivery or performance
of each CP Agreement or the Commercial Paper Notes.
(viii) The Offering Materials (except to the
extent that information therein constitutes Dealer
Information, as defined in Section 10) do not include any
untrue statement of a material fact, or omit to state a
material fact, necessary in order to make the statements
made therein, in light of the circumstances under which they
are made, not misleading.
(ix) The financial and statistical information
included in the Offering Materials is in accordance with the
related books and records of the Company and JSC, and is
complete and correct and presents fairly, in accordance with
generally accepted accounting principles, the financial
position of the Company and JSC as at the dates set forth
therein and the results of operations for the periods set
forth therein. Such information has been prepared in
conformity with generally accepted accounting principles
applied on a basis which is consistent in all material
respects during the periods involved, it being understood
that, in the case of quarterly reports, such reports are
subject to year-end adjustments.
(x) There are no actions, suits or proceedings at
law or in equity or by or before any governmental authority
now pending or, to the knowledge of the Company, threatened
against or affecting the Company or any property or rights
of the Company which purport to challenge the legality,
validity or enforceability of any CP Agreement or Commercial
Paper Note or which may materially impair the ability of the
Company to carry on business substantially as now being
conducted by it, or which may materially adversely affect
the condition (financial or otherwise), operations or
properties of the Company.
(xi) Each of its representations and warranties
contained in Article VI of the Liquidity Agreement is true
and correct in all material respects, except to the extent
such representations and warranties expressly relate to an
earlier date.
(b) As of each date on which a Dealer solicits offers
to purchase Commercial Paper Notes, as of each date on which the
Company accepts an offer to purchase Commercial Paper Notes, as
of each date the Company issues and delivers Commercial Paper
Notes and as of each date the Offering Materials are amended or
supplemented, JSC represents and warrants to each Dealer that (it
being understood that such representations and warranties shall
be deemed to relate to the Offering Materials as amended and
supplemented to each such date):
(i) JSC is a duly organized and validly existing
corporation in good standing under the laws of the state of
Delaware and has the corporate power and authority to own
its property, to carry on its business as presently being
conducted, to execute and deliver this Agreement and to
perform and observe the conditions hereof.
(ii) The execution, delivery and performance of
this Agreement has been duly authorized by JSC, and this
Agreement constitutes the legal, valid and binding
obligation of JSC, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting
generally the enforcement of creditors' rights or by general
equitable principles.
(iii) No consent or action of, or filing or
registration with, any governmental or public regulatory
body or authority is required to authorize, or is otherwise
required in connection with, the execution, delivery or
performance of this Agreement by JSC, except such as have
already been obtained.
(iv) Neither the execution and delivery by JSC of
this Agreement nor the fulfillment of or compliance with the
terms and provisions hereof, will (A) violate or conflict
with any law, rule or regulation applicable to JSC or any of
its properties; (B) violate, conflict with or result in a
breach of or a default under (I) the certificate of
incorporation or by-laws of JSC (II) any agreement or
instrument to which JSC is a party or by which or any of its
properties (now owned or hereafter acquired) may be subject
or bound, which violation, conflict, breach or default could
reasonably be expected to have a Material Adverse Effect, or
(III) any order, writ, judgment, award, injunction or decree
binding on or affecting JSC or its property (now owned or
hereafter acquired); or (C) except for Liens created
pursuant to the Facility Documents, result in the creation
or imposition of any Lien in favor of any other party upon
any property (now owned or hereafter acquired) of JSC.
(v) Each Commercial Paper Note issued by the
Company pursuant to the applicable Depositary Agreement and
in accordance with the terms hereof is exempt from the
registration requirements of the 1933 Act by reason of
Section 3(a)(3) thereof. Neither registration of any
Commercial Paper Note under the 1933 Act nor qualification
of an indenture under the Trust Indenture Act of 1939, as
amended, with respect to such Commercial Paper Note will be
required in connection with the offer, issuance, sale or
delivery of such Commercial Paper Note in accordance with
the terms hereof and of the applicable Depositary Agreement.
(vi) Neither the Company nor JSC is an
"investment company" or a "company controlled by an
investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(vii) There are no actions, suits, proceedings or
investigations pending or, to JSC's knowledge, threatened
against it or to which any of its property is subject, which
could reasonably be expected to materially and adversely
affect its execution, delivery or performance of each CP
Agreement.
(viii) The Offering Materials (except to the
extent that information therein constitutes Dealer
Information, as defined in Section 10) do not include any
untrue statement of a material fact, or omit to state a
material fact, necessary in order to make the statements
made therein, in light of the circumstances under which they
are made, not misleading.
(ix) The financial and statistical information
included in the Offering Materials is in accordance with the
related books and records of the Company and JSC, and is
complete and correct and presents fairly, in accordance with
generally accepted accounting principles, the financial
position of the Company and JSC as at the dates set forth
therein and the results of operations for the periods set
forth therein. Such information has been prepared in
conformity with generally accepted accounting principles
applied on a basis which is consistent in all material
respects during the periods involved, it being understood
that, in the case of quarterly reports, such reports are
subject to year-end adjustments.
(x) There are no actions, suits or proceedings at
law or in equity or by or before any governmental authority
now pending or, to the knowledge of JSC, threatened against
or affecting JSC or any property or rights of JSC which
purport to challenge the legality, validity or
enforceability of any CP Agreement or which may materially
impair the ability of JSC to carry on business substantially
as now being conducted by it, or which may materially
adversely affect the condition (financial or otherwise),
operations or properties of the Company.
(xi) Each of its representations and warranties
contained in Article III of the Receivables Sale Agreement
is true and correct in all material respects, except to the
extent such representations and warranties expressly relate
to an earlier date.
6. Offering Materials. (a) In connection with the
sale of the Commercial Paper Notes, the Company will prepare a
selling memorandum (as the same may be amended, supplemented or
otherwise modified from time to time, the "Offering Memorandum").
As soon as practicable after the end of each fiscal year of JSC
(and in any event no more than 100 days thereafter), the Company
will amend or supplement the Offering Memorandum to reflect the
events of such fiscal year. The Company shall provide to each
Dealer, as soon as possible after preparation of the same, the
Offering Memorandum and each amendment and supplement thereto.
The Company shall also supply each Dealer on a monthly basis with
a Settlement Statement pursuant to Section 5.03 of the Purchase
Agreement. The Offering Memorandum, each such update, each
Settlement Statement and all other materials distributed by the
Company or JSC, or authorized by the Company and JSC in writing
for distribution by the Dealers, in connection with the sale of
the Commercial Paper Notes are collectively referred to herein as
the "Offering Materials". The Offering Materials may be
distributed to account executives of the Dealers and their
respective Affiliates and purchasers and prospective purchasers
of the Commercial Paper Notes. To provide a basis for the
preparation of the Offering Materials and to assist the Dealers'
normal credit review procedures, the Company shall provide each
of the Dealers with copies of (i) within 100 days after the end
of each fiscal year of the Company, the Company's and JSC's
balance sheet and related statement of income and cash flows,
showing the financial condition of JSC and the Company, as the
case may be, as of the close of such fiscal year and the results
of its operations during such Fiscal Year, all audited by
independent public accountants of recognized national standing,
and, within 45 days after the end of the related fiscal quarter
of JSC, any quarterly financial statements of JSC and (ii) within
five Business Days after the filing of the same, all documents
filed by JSC with the Securities and Exchange Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), subsequent to the
date hereof and (iii) at any time when JSC has any securities
outstanding which are registered pursuant to Section 12 of the
Exchange Act, any other reports and proxy materials furnished by
JSC to its stockholders generally until the later of the
termination of this Agreement or the repayment in full of all the
Commercial Paper Notes. The Company represents and warrants to
each Dealer that the financial statements of JSC and the Company
delivered to the Dealers in accordance with this Section 6 are or
will be prepared in accordance with GAAP and fairly do or will
present the financial condition and operations of JSC or the
Company, as the case may be, at such date and the results of its
operations for the period then ended. In addition, the Company
agrees to provide each of the Dealers with such other information
concerning the Company or JSC as either Dealer may from time to
time reasonably request and to notify each Dealer promptly of any
downgrading, or any notice of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's or JSC's securities by any
"nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the 1933
Act. JSC and the Company authorize the exchange of information
(including, without limitation, nonpublic information, except to
the extent exchange of such nonpublic information would violate
applicable securities laws) with respect to JSC, its subsidiaries
and/or affiliates, and/or the transactions contemplated by the
Facility Documents (including, without limitation, information
bearing on the creditworthiness of JSC, its subsidiaries and/or
affiliates and the Receivables) among the Dealers and their
respective affiliates.
(b) The Company agrees that the Offering Memorandum
shall contain a statement expressly offering an opportunity for
each prospective purchaser to ask questions of, and receive
answers from, the Company concerning the offering of the
Commercial Paper Notes and to obtain additional relevant
information which the Company possesses or can acquire without
unreasonable effort or expense. In addition, such Dealer may
make copies of the Facility Documents available for review to
purchasers and potential purchasers of Commercial Paper Notes (or
their representatives) at the offices of such Dealer.
(c) No written information, circulars or statements,
other than the Offering Materials and copies of such of the
Facility Documents (as amended or supplemented from time to time)
which have been filed with the Securities and Exchange
Commission, will be distributed by either Dealer in connection
with the offering of the Commercial Paper Notes. If, at any time
when either Dealer is offering Commercial Paper Notes or any
Commercial Paper Notes are outstanding, any event occurs or
condition exists as a result of which (x) the Offering Materials
would include an untrue statement of a material fact, or omit to
state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading or (y) any information furnished to either Dealer
pursuant to Section 6(a) hereof would be rendered untrue or
misleading, or if, in the opinion of either Dealer or the
Company, it is necessary at any time to amend or supplement the
Offering Materials to comply with applicable law, the Company
shall immediately suspend all sales of Commercial Paper Notes,
notify each Dealer and prepare and furnish to each Dealer a
revision or supplement to the Offering Materials satisfactory in
all respects to each Dealer, that will correct such statement or
omission or effect such compliance and, upon each Dealer's
approval of such revision or supplement, reinstate sales of
Commercial Paper Notes; provided that the Company's obligations
under this Section 6(c) with respect to untrue statements or
omissions in Dealer Information (as defined in Section 10) shall
be limited to untrue statements or omissions as to which the
Company has knowledge.
7. Conditions Precedent to Placement of the
Commercial Paper Notes. (a) It is understood that each Dealer's
obligation to use its reasonable efforts to solicit offers to
purchase Commercial Paper Notes will be subject to the accuracy
of the representations and warranties on the part of the Company
and JSC herein and to the performance and observance by the
Company and JSC of all agreements herein contained on their part
to be performed and observed (in the case of such Dealer's
obligation to solicit offers to purchase Commercial Paper Notes,
at the time of such solicitation, and, in the case of any
purchaser's obligation to purchase Commercial Paper Notes, at the
time the Company accepts the offer to purchase such Commercial
Paper Notes and at the time of purchase).
(b) Prior to the solicitation or purchase of any
Commercial Paper Notes hereunder, such Commercial Paper Notes
shall have been rated at least "A-1" by S&P and at least "D-1" by
Duff and upon each subsequent placement of Commercial Paper Notes
hereunder such ratings shall be in full force and effect.
(c) Prior to the solicitation by a Dealer or purchase
of any Commercial Paper Notes hereunder, there shall not have
occurred (i) any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review
for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's or
JSC's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the 1933 Act, or (ii) any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company or JSC from that set forth in the
Offering Materials, that, in such Dealer's judgment, is material
and adverse and that makes it, in such Dealer's judgment,
impracticable to market the Commercial Paper Notes, except, in
each case described in clause (i) or (ii) above, as disclosed to
such Dealer in writing by the Company prior to such solicitation
or, in the case of a purchase of Commercial Paper Notes, as
disclosed to such Dealer before the offer to purchase such
Commercial Paper Notes was made.
8. Corporate Documents. The Company will furnish
each Dealer with the following documents, in form and substance
satisfactory to each of the Dealers, prior to the initial sale of
Commercial Paper Notes: (a) true and complete copies of the
Depositary Agreements and each other Facility Document; (b) a
certified copy of resolutions, duly adopted by the Board of
Directors of JSC and the Company, respectively, authorizing the
execution, delivery and performance of the CP Agreements and each
other Facility Document to which it is a party and, in the case
of the Company, the issuance and sale of the Commercial Paper
Notes; (c) a certificate from the Secretary or an Assistant
Secretary of the Company and of JSC, as to the incumbency and
specimen signatures of those officers authorized to sign the
Commercial Paper Notes and the CP Agreements, and those officers
of the Company authorized to give instructions to the Dealers
concerning the issuance and sale of Commercial Paper Notes; (d)
an opinion of counsel to JSC and the Company with respect to
enforceability, the Company's exemption from the provisions of
the Investment Company Act of 1940, as amended, and the exemption
from the registration requirements of the 1933 Act and the
qualification requirements of the Trust Indenture Act of 1939, as
amended, and such other matters as the Dealers may reasonably
request, and reliance letters for the benefit of the Dealers with
respect to each other opinion delivered pursuant to the Liquidity
Agreement or the Term Loan Agreement; (e) a specimen copy of each
Master Note and of a Certificated Note; (f) true and correct
copies of all correspondence from the rating agencies to the
Company or any of its Affiliates assigning a rating to the
Commercial Paper Notes; (g) a certificate of the Treasurer, Chief
Financial Officer or other appropriate officer of the Company
certifying that the representations and warranties set forth in
Sections 5 and 6 hereof are true and correct; and (h) such other
documents as either Dealer may reasonably request. The
acceptance by the Company of proceeds from each sale of
Commercial Paper Notes hereunder shall be deemed to constitute a
representation and warranty by the Company that its certified
resolutions and its incumbency certificate referred to in clauses
(b) and (c) of this Section 8 are accurate and complete and that
its resolutions certified in the certificate referred to in such
clause (b) are in full force and effect, in each case, as of the
date of such acceptance of proceeds. The acceptance by the
Company of proceeds from each sale of Commercial Paper Notes
hereunder shall be deemed to constitute a representation and
warranty by JSC that its certified resolutions and its incumbency
certificate referred to in clauses (b) and (c) of this Section 8
are accurate and complete and that its resolutions certified in
the certificate referred to in such clause (b) are in full force
and effect, in each case, as of the date of such acceptance of
proceeds.
9. Covenants. (a) The Company covenants and agrees
that:
(i) For the benefit of the Dealers and the
holders from time to time of the Commercial Paper Notes, the
Company will not permit to become effective any amendment,
supplement, waiver or consent to or under any Commercial
Paper Note, any Liquidity Note, the Depositary Agreements,
the Liquidity Agreement, the Purchase Agreement or any other
Facility Document which (w) could result in a change in the
relative rights and benefits of outstanding Series A and
Series B Commercial Paper Notes or, without at least 5 days'
advance written notice to the Dealers, the relative size of
the Commitments which support such Series of Commercial
Paper Notes, (x) could reasonably be expected to adversely
affect the interests of the holder of any Commercial Paper
Note then outstanding (unless the Rating Agency Condition
shall have been satisfied) or any Dealer (unless such Dealer
has given its prior written consent), (y) without the prior
written consent of BTSC, would be inconsistent with the
provisions contained in the third paragraph of Section 2, or
(z) without the prior written consent of each Dealer, change
the provisions of Section 7.02 of the Liquidity Agreement.
(ii) The Company will furnish prior notice to each
of the Dealers of any proposed resignation, termination or
replacement of the Depositary.
(iii) The Company will comply fully with the
agreements made by it in the Liquidity Agreement and the
other Facility Documents to which it is a party and further
agrees to furnish promptly to each of the Dealers copies of
all notices given or delivered to or by the Facility Agent,
the Collateral Agent or any Liquidity Bank under the
Liquidity Agreement and the other Facility Documents.
Without limiting the foregoing, the Company agrees to (A)
furnish immediately to each of the Dealers notices received
by it or required to be delivered by it under the Liquidity
Agreement to any party thereto concerning any event or
events which would result in (I) reduction of the Facility
Amount under the Liquidity Agreement or (II) a Liquidation
Event or Unmatured Liquidation Event, (B) immediately
furnish telephonic notice to each of the Dealers (confirmed
immediately thereafter in writing) of any instructions given
by the Facility Agent or the Collateral Agent pursuant to
the Liquidity Agreement to cease issuing and delivering
Commercial Paper Notes, (C) furnish immediately to each of
the Dealers notice of any event or events of which it has
knowledge which would result in (I) the commencement of the
Liquidation Period, (II) any Bank's short-term ratings being
downgraded below A-1 by S&P or (if such Bank is rated by
Duff) Duff-1 by Duff or (III) the termination or purported
termination of the Commitment of any Bank or the termination
or purported termination of the obligation of any Bank to
make Refunding Advances and (D) promptly notify each of the
Dealers of any downgrading, or of its receipt of any notice
of any intended or potential downgrading or of any review
for a possible change that does not indicate the direction
of a possible change, in the rating accorded any of the
Company's securities (including the Commercial Paper Notes)
by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the 1933 Act; provided, however, that the
Company shall not be obligated to deliver any notice
pursuant to subclause (C) above to the extent that JSC shall
have given such notice pursuant to Section 9(b)(ii)(A).
(iv) The Company shall give each of the Dealers
written notice of any proposed amendment, modification,
supplement, waiver or consent to or under the CP Agreements
or the other Facility Documents, promptly upon receipt
thereof (or, in the case of any amendment, modification,
supplement, waiver, or consent requested by the Company,
promptly upon the Company's request therefor), and in any
event at least 5 days prior to the effectiveness of the
same; provided, however, that, without in any way limiting
Section 9(a)(i), such notice of any waiver of or consent to
a Liquidation Event or Servicer Termination Event which has
a grace period of 5 days or less may be given as soon as
possible, but less than 5 days prior to the effectiveness of
the same, if such waiver or consent is to become effective
on or prior to the expiration of such grace period.
(v) The offering of Commercial Paper Notes will
be made for the purposes set forth in the Liquidity
Agreement and the Offering Materials and the proceeds of the
sale of Commercial Paper Notes will be used solely for
current expenditures of the Company which qualify as current
transactions, within the meaning of Section 3(a)(3) of the
1933 Act.
(vi) The Company shall endeavor, in cooperation
with the Dealers, to qualify the Commercial Paper Notes for
offer and sale under the applicable securities laws of such
states and other jurisdictions of the United States as the
Company and either Dealer shall determine, and shall
maintain such qualifications in effect for as long as may be
required for the distribution of the Commercial Paper Notes.
The Company shall file such statements and reports as may be
required to be filed by it by the laws of each jurisdiction
in which the Commercial Paper Notes have been qualified as
above provided. The Company shall also reimburse each
Dealer for any reasonable fees or costs (including fees and
disbursements of counsel) incurred by it in so qualifying
the Commercial Paper Notes.
(b) JSC covenants and agrees that:
(i) For the benefit of the Dealers and the
holders from time to time of the Commercial Paper Notes, JSC
will not consent as shareholder of the Company to the
effectiveness of any amendment, supplement, waiver or
consent to or under any Commercial Paper Note, any Liquidity
Note, the Depositary Agreements, the Liquidity Agreement,
the Purchase Agreement or any other Facility Document and
will not permit to become effective any amendment,
supplement, waiver or consent to or under any Facility
Document to which it is a party, in either case which (w)
could result in a change in the relative rights and benefits
of outstanding Series A and Series B Commercial Paper Notes
or, without at least 5 days' advance written notice to the
Dealers, the relative size of the Commitments which support
such Series of Commercial Paper Notes, (x) could reasonably
be expected to adversely affect the interests of the holder
of any Commercial Paper Note then outstanding (unless the
Rating Agency Condition shall have been satisfied) or any
Dealer (unless such Dealer has given its prior written
consent), (y) without the prior written consent of BTSC,
would be inconsistent with the provisions contained in the
third paragraph of Section 2, or (z) without the prior
written consent of each Dealer, change the provisions of
Section 4.01(g) of the Purchase Agreement.
(ii) JSC will comply fully with the agreements
made by it in the Facility Documents to which it is a party
and further agrees to furnish promptly to each of the
Dealers copies of all notices given or delivered to or by it
under the Facility Documents to which it is a party.
Without limiting the foregoing, JSC agrees to (A) furnish
immediately to each of the Dealers notices of any event or
events of which it has knowledge which would result in (I)
the commencement of the Liquidation Period, (II) any Bank's
short-term ratings being downgraded below A-1 by S&P or (if
such Bank is rated by Duff) Duff-1 by Duff or (III) the
termination or purported termination of the Commitment of
any Bank or the termination or purported termination of the
obligation of any Bank to make Refunding Advances and (B)
promptly notify each of the Dealers of any downgrading, or
of its receipt of any notice of any intended or potential
downgrading or of any review for a possible change that does
not indicate the direction of a possible change, in the
rating accorded any of JSC's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the 1933 Act;
provided, however, that JSC shall not be obligated to
deliver any notice pursuant to subclause (A) above to the
extent the Company shall have given such notice pursuant to
Section 9(a)(iii)(C).
(iii) JSC shall give each of the Dealers written
notice of any proposed amendment, modification, supplement,
waiver or consent to or under the CP Agreements or the other
Facility Documents, requested or to be executed by it,
promptly upon receipt thereof, and in any event at least 5
days prior to the effectiveness of the same.
(iv) The offering of Commercial Paper Notes will
be made for the purposes set forth in the Liquidity
Agreement and the Offering Materials and the proceeds of the
sale of Commercial Paper Notes will be used solely for
current expenditures of the Company which qualify as current
transactions, within the meaning of Section 3(a)(3) of the
1933 Act.
(v) JSC shall file such statements and reports as
may be required by the laws of each jurisdiction in which
the Commercial Paper Notes have been qualified as provided
in Section 9(a)(vi) above.
10. Indemnification. (a) The Company and JSC agree
to indemnify and hold harmless each Dealer, each Person who
"controls" either Dealer within the meaning of either the 1933
Act or the Exchange Act), any Affiliate of either of the Dealers
or of any such controlling Person and their respective directors,
officers, incorporators, shareholders, partners, employees and
agents (each such Person being an "Indemnitee") against any and
all losses, claims, damages, liabilities, costs or expenses
(including, without limitation, reasonable fees and disbursements
of counsel), or judgments of whatever kind or nature, imposed on,
incurred by or asserted against such an Indemnitee arising out of
or based upon any allegation that any Offering Materials include
an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
The Company and JSC will reimburse each Indemnitee for all
expenses (including, without limitation reasonable fees and
disbursements of counsel) as they are incurred by such Indemnitee
in connection with investigating or defending any such loss,
claim, damage, liability or judgment. The above indemnifications
and other obligations shall be joint and several obligations of
JSC and the Company.
It is agreed, however, that the obligations of the
Company and JSC to any Indemnitee under this Section 10 shall not
extend to loss, claim, damage, liability or judgment arising out
of or based upon any untrue statement or alleged untrue statement
or alleged omission made in the Offering Materials that, in the
case of each of the foregoing, is made in reliance upon and in
conformity with information that is furnished to the Company in
writing by such Indemnitee (or the related Dealer) after the date
hereof expressly for use in the Offering Materials (such
information being herein called "Dealer Information").
Each Indemnitee shall notify the Company and JSC
promptly of any investigation, litigation or proceeding known to
it in respect of which it may seek indemnification hereunder and
shall allow the Company or JSC, should either of them elect to do
so, to assume the defense or conduct thereof; provided, however,
that if an Indemnitee shall have been advised by its counsel that
materially different defenses are available to it than to the
Company and/or JSC, as the case may be, then such Indemnitee
shall be entitled to retain its own counsel and shall be entitled
to reimbursement by the Company and JSC for the reasonable fees
and disbursements of such counsel as provided in this Section 10.
(b) Each of the Company and JSC further agrees that it
will not, without the prior written consent of the Dealer seeking
indemnification (or the affiliate of such Dealer, in the case of
an Indemnitee other than a Dealer), settle or compromise or
consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which
indemnification is or may be sought by such Dealer or any other
Indemnitee related to such Dealer hereunder (whether or not BTSC,
Morgan or any other Indemnitee is an actual or potential party to
such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such
Dealer and each other Indemnitee from all liability arising out
of such claim, action, suit or proceeding.
(c) If, for any reason, the indemnification in the
first paragraph of Section 10(a) is unavailable (other than for
the reason set forth in the second paragraph of Section 10(a)) to
an Indemnitee or is insufficient to hold such Indemnitee
harmless, the Company and JSC jointly and severally further
agree, subject to the following paragraph, to contribute to the
amount to be paid or payable by the applicable Dealer (or
affiliated Indemnitee) as a result of such losses, claims,
damages, liabilities, judgments, costs and expenses (including,
without limitation reasonable fees and disbursements of counsel)
in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the
Indemnitee (or, if the Indemnitee is not a Dealer, the related
Dealer) on the other hand; or, if such allocation is not
permitted by applicable law, to reflect not only the relative
benefits described above but also the relative fault of the
Company and JSC on the one hand and such Indemnitee (or, if the
Indemnitee is not a Dealer, the related Dealer) on the other
hand, as well as any relevant equitable considerations, in each
case under this subsection (c), subject to the limitation that,
in any event, the aggregate contribution by a Dealer and its
affiliated Indemnitees to all losses, claims, damages,
liabilities, judgments, costs and expenses with respect to which
contribution is available hereunder shall not exceed the amount
of fees actually received by such Dealer hereunder.
No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
(d) Notwithstanding anything to the contrary herein,
all obligations of the Company pursuant to this Section 10 shall
be payable by the Company only to the extent of its assets
available therefor pursuant to Sections 9.07 and 9.08 of the
Liquidity Agreement and, to the extent assets are not available
for the payment thereof, shall not constitute a claim against the
Company.
11. Payment and Delivery. Payment for and delivery of
Commercial Paper Notes sold pursuant to this Agreement shall be
made in accordance with the applicable Depositary Agreement.
12. Compensation. As consideration for each Dealer's
decision to enter into this Agreement, and its agreement to be
bound by the terms set forth herein, the Company shall pay each
Dealer, on a discount basis, a commission (the "Dealer Fee") for
the sale of each Commercial Paper Note at such rate as shall be
agreed from time to time by the Company and such Dealer. In
addition, the Company shall, whether or not any sale of
Commercial Paper Notes is consummated, pay all expenses
(including the printing and distribution costs associated with
any Offering Materials, and the reasonable fees and expenses of
such Dealer's counsel) incurred by each Dealer in relation to
this Agreement and the transactions contemplated herein.
13. Notices. All notices required or permitted under
the terms and provisions hereof shall be made in writing or by
facsimile transmission, other than the notices pursuant to
Section 4(d), Section 9(a)(iii) and Section 9(b)(ii) hereof which
shall be made by telephonic communication and followed up later
that day in writing or by facsimile transmission, and shall,
unless otherwise provided for herein, be effective when received
at the address specified below each party's signature hereon or
at such other address as shall be specified in a notice furnished
hereunder.
14. Governing Law. This Agreement and the rights of
the parties hereunder shall be governed by, and construed in
accordance with, the laws of the State of New York, without
regard to conflict of laws principles.
15. CONSENT TO JURISDICTION; WAIVER OF PERSONAL
SERVICE AND VENUE; WAIVER OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY AGREES TO THE NONEXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN THE CITY OF NEW YORK, NEW
YORK (AND ANY COURTS HEARING APPEALS FROM SUCH STATE OR FEDERAL
COURT) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, AND WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO SUCH PARTY AT ITS
ADDRESS SPECIFIED IN ACCORDANCE WITH SECTION 13. EACH OF THE
PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER WITHIN THE
STATE OF NEW YORK AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY ANY COURT IN SUCH
STATE. EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER
OR REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR UNDER OR
IN CONNECTION HEREWITH, AND AGREES THAT ANY SUCH ACTION SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE TERMS AND
PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT FOR
THE PARTIES ENTERING INTO THIS AGREEMENT.
16. Termination. This Agreement may be terminated as
to either or both Dealers, at any time, by the Company or either
Dealer (as to its own rights and obligations hereunder), upon at
least 30 days' written notice to the Collateral Agent and to the
other parties hereto; provided, however, that such termination
shall not affect the obligations of the parties hereunder with
respect to Commercial Paper Notes unpaid at the time of such
termination or with respect to actions or events occurring prior
to such termination and; provided further, that the reimbursement
and indemnification provisions of Sections 9(a)(vi), 9(b)(v), 10
and 12 hereof shall survive any such termination; and provided,
further that any termination of this Agreement as to one Dealer
shall terminate the rights and obligations of such Dealer
hereunder without in any way affecting the rights and obligations
of the other Dealer hereunder.
17. Assignments. JSC and the Company may not assign
(excluding an assignment for security purposes under Section 9.01
of the Liquidity Agreement), either in whole or in part, any of
their rights or obligations under this Agreement without the
prior consent of each of the Dealers, and any such assignment
without such consent shall be null and void. No Dealer may
assign, either in whole or in part, any of its rights or
obligations under this Agreement to any Person without the prior
written consent of the Company, and any such assignment without
such consent shall be null and void.
18. Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together, shall
constitute one and the same instrument and any party hereto may
execute this Agreement by signing one or more counterparts.
Delivery of an executed counterpart of a signature page to this
Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart of this Agreement.
19. Entire Agreement. This Agreement constitutes the
entire understanding among the parties hereto with respect to the
placement of Commercial Paper Notes and supersedes any prior
agreements, written or oral, with respect to such subject matter.
20. Captions. The captions in this Agreement are for
convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
21. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity of such provisions in any other jurisdiction.
22. No Proceeding. Each of the Dealers hereby agrees
that it will not institute against the Company any involuntary
proceeding of the type referred to in the definition of
"Insolvency Event" for at least one year and one day following
the latest to occur, after termination of this Agreement, of (i)
payment in full of the latest maturing Commercial Paper Note,
(ii) payment in full of all Liquidity Loans and (iii) payment in
full of the Term Loan. The foregoing shall not limit the right
of either Dealer to file any claim in or otherwise take any
action with respect to any such proceeding which was instituted
against the Company by any Person other than such Dealer.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
JEFFERSON SMURFIT CORPORATION (U.S.)
by
Name:
Title:
Jefferson Smurfit Corporation (U.S.)
8182 Maryland Ave.
St. Louis, MO 63105
Attention of General Counsel
Telephone No.: (314) 746-1153
Facsimile No.: (314) 746-1184
JEFFERSON SMURFIT FINANCE CORPORATION
by
Name:
Title:
______________________________________
______________________________________
Telephone No.:
Facsimile No.:
BT SECURITIES CORPORATION
by
Name:
Title:
BT Securities Corporation
130 Liberty Street, 33rd Floor
New York, NY 10006
Telephone No.: (212) 775-2361
Facsimile No.: (212) 250-0810
Attention: __________________
MORGAN STANLEY & CO. INCORPORATED
by
Name:
Title:
1221 6th Avenue, 5th Floor
New York, NY 10020
Telephone No.: (212) 296-2011
Facsimile No.: (212) 296-2034
Attention: Sanjeev Khanna
ADDENDUM TO COMMERCIAL PAPER DEALER AGREEMENT
Jefferson Smurfit Finance Corporation (the "Company") hereby appoints
NationsBanc Capital Markets, Inc. ("NCMI") to be an additional Dealer under and
pursuant to the Commercial Paper Dealer Agreement dated as of February 23, 1995
(the "Commercial Paper Dealer Agreement") among the Company, Jefferson Smurfit
Corporation (U.S.) ("JSC"), BT Securities Corporation ("BTSC") and Morgan
Stanley & Co. Incorporated ("Morgan"), in respect of the Commercial Paper
Notes referred to herein, and NCMI hereby (i) accepts such appointment,
subject to the terms and conditions set forth in the Commercial Paper Dealer
Agreement and (ii) becomes a party thereto as a Dealer of Series A and Series
B Notes. Capitalized terms defined in the Commercial Paper Dealer Agreement
shall have their respective defined meanings herein.
In furtherance of the foregoing, NCMI hereby acknowledges and confirms
that it has received a copy of the Commercial Paper Dealer Agreement. From
and after the date hereof, NCMI (a) shall be deemed automatically to have
become a Dealer, (b) shall have all the rights and obligations of a Dealer
under the Commercial Paper Dealer Agreement provided to be applicable to
Dealers generally, and (c) agrees to be bound by the terms and conditions set
forth in the Commercial Paper Dealer Agreement applicable to Dealers.
In addition, each of the parties hereto agrees that the words ", NCMI"
shall be deemed added immediately after the word "Morgan" in each of Section 4
and Section 10 of the Commercial Paper Dealer Agreement.
The address for notices to NCMI for purposes of the Commercial Paper
Dealer Agreement is as follows:
NationsBank Corporate Center
100 North Tryon Street
NC1-007-06-07
Charlotte, North Carolina 28255
Attention: Mr. Steven Shorkey
Telephone No.: (704) 386-5104
Facsimile No.: (704) 388-9212
This addendum may be executed by the parties hereto in any number of
counterparts.
IN WITNESS WHEREOF, each of NCMI and the Company have caused this
Addendum to be executed as of this sixth day of March, 1995.
JEFFERSON SMURFIT FINANCE
CORPORATION
By
Title:
JEFFERSON SMURFIT CORPORATION (U.S.)
By
Title:
NATIONSBANC CAPITAL MARKETS, INC.
By
Title:
BTSC and Morgan each consents to the addition of the above-described Dealer
to the Commercial Paper Dealer Agreement.
BT SECURITIES CORPORATION
By
Title:
MORGAN STANLEY & CO. INCORPORATED
By
Title:
<TABLE>
EXHIBIT 11.1
JEFFERSON SMURFIT CORPORATION
CALCULATION OF PER SHARE EARNINGS
(In millions, except per share data)
<CAPTION>
Three months ended
March 31,
1995 1994<F1>
<S> <C> <C>
Primary earnings per share <F2>
Weighted average shares outstanding 110.989 80.200
Income (loss) applicable to common shares
before extraordinary item $ 39.3 $(11.8)
Extraordinary item (.4)
Net income (loss) applicable to common shares $ 38.9 $(11.8)
Per share amounts
Income (loss) before extraordinary item $ .35 $ (.15)
Extraordinary item -
Net income (loss) applicable to common shares $ .35 $ (.15)
Fully diluted earnings per share <F2>
Weighted average shares outstanding 110.989 80.200
Income (loss) applicable to common shares
before extraordinary item $ 39.3 $(11.8)
Extraordinary item (.4)
Net income (loss) applicable to common shares $ 38.9 $(11.8)
Per share amounts
Income (loss) before extraordinary item $ .35 $ (.15)
Extraordinary item -
Net income (loss) applicable to common shares $ .35 $ (.15)
<FN>
<F1> Gives effect to the reclassification on May 4, 1994 pursuant to
which the Company's five classes of common stock were converted into
one class on a basis of ten shares of common stock for each
outstanding share of each of the old classes.
<F2> The computations do not include common stock equivalents associated
with stock options since the dilutive effect on earnings per share
is not material.
</FN>
</TABLE>
