Exhibit 10.11
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AMENDED AND RESTATED
RECEIVABLES SALE AGREEMENT
Among
LFI RECEIVABLES CORPORATION,
THE SELLERS NAMED HEREIN
and
THE SERVICERS NAMED HEREIN
Dated as of February 4, 1997
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TABLE OF CONTENTS
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms.............................................. 2
SECTION 1.02. Other Definitional Provisions.............................. 11
ARTICLE II
Purchase and Sale of Receivables
SECTION 2.01. Purchase and Sale of Receivables........................... 12
SECTION 2.02. Purchase Price............................................. 15
SECTION 2.03. Payment of Purchase Price.................................. 16
SECTION 2.04. No Repurchase.............................................. 17
SECTION 2.05. Rebates, Adjustments, Returns,
Reductions and Modifications............................. 18
SECTION 2.06. Payments in Respect of Ineligible
Receivables and Seller Indemnification Payments.......... 18
SECTION 2.07. Certain Charges............................................ 20
SECTION 2.08. Certain Allocations........................................ 21
ARTICLE III
Conditions to Purchase and Sale
SECTION 3.01. Conditions Precedent to the Company's Purchase of
Receivables on the Effective Date........................ 21
SECTION 3.02. Conditions Precedent to All the Company's Purchases of
Receivables.............................................. 23
Contents p. 2
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SECTION 3.03. Conditions Precedent to Sellers' Obligations on
the Effective Date....................................... 24
SECTION 3.04. Conditions Precedent to All the Sellers' Obligations....... 24
SECTION 3.05. Conditions Precedent to the Addition of a Seller........... 25
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the Sellers
Relating to the Sellers.................................. 27
SECTION 4.02. Representations and Warranties of the Sellers
Relating to the Receivables.............................. 33
SECTION 4.03. Representations and Warranties of the Company............. 35
ARTICLE V
Affirmative Covenants
SECTION 5.01. Certificates; Other Information............................ 36
SECTION 5.02. Compliance with Law and Policies........................... 37
SECTION 5.03. Preservation of Corporate
Existence................................................ 37
SECTION 5.04. Separate Corporate Existence............................... 37
SECTION 5.05. Inspection of Property; Books and
Records; Discussions..................................... 39
SECTION 5.06. Location of Records........................................ 39
SECTION 5.07. Computer Files............................................. 40
SECTION 5.08. Payment of and Compliance with Obligations................. 40
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SECTION 5.09. Collections................................................ 40
SECTION 5.10. Furnishing Copies, Etc..................................... 41
SECTION 5.11. Obligations with Respect to Obligors and Receivables....... 42
SECTION 5.12. Responsibilities of the Sellers............................ 42
SECTION 5.13. Assessments................................................ 42
SECTION 5.14. Further Action............................................. 42
SECTION 5.15. Sale of Receivables........................................ 43
SECTION 5.16. Baybank Depository Agreement............................... 44
Contents p. 4
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ARTICLE VI
Negative Covenants
SECTION 6.01. Limitations on Transfers of Receivables, Etc............... 44
SECTION 6.02. Extension or Amendment of Receivables...................... 44
SECTION 6.03. Change in Payment Instructions to Obligors................. 44
SECTION 6.04. Change in Name............................................. 45
SECTION 6.05. Policies................................................... 45
SECTION 6.06. Modification of Ledger..................................... 46
SECTION 6.07. Accounting for Purchases................................... 46
SECTION 6.08. Instruments................................................ 46
SECTION 6.09. Ineligible Receivables..................................... 46
SECTION 6.10. Business of the Seller..................................... 46
SECTION 6.11. Limitation on Fundamental Changes.......................... 47
ARTICLE VII
Purchase Termination Events
SECTION 7.01. Purchase Termination Events................................ 47
SECTION 7.02. Remedies................................................... 51
ARTICLE VIII
Seller Note
SECTION 8.01. Seller Note................................................ 53
SECTION 8.02. Restrictions on Transfer of Seller Note.................... 54
SECTION 8.03. Discretion; Aggregate Amount............................... 55
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ARTICLE IX
Miscellaneous
SECTION 9.01. Payments................................................... 55
SECTION 9.02. Costs and Expenses......................................... 56
SECTION 9.03. Successors and Assigns..................................... 57
SECTION 9.04. Governing Law.............................................. 58
SECTION 9.05. No Waiver; Cumulative Remedies............................. 58
SECTION 9.06. Amendments and Waivers..................................... 58
SECTION 9.07. Severability............................................... 59
SECTION 9.08. Notices.................................................... 59
SECTION 9.09. Counterparts............................................... 60
SECTION 9.10. Waivers of Jury Trial...................................... 60
SECTION 9.11. Jurisdiction; Consent to Service of Process................ 60
SECTION 9.12. Addition of Sellers........................................ 61
SECTION 9.13. Termination of Seller...................................... 61
SECTION 9.14. No Bankruptcy Petition..................................... 63
SECTION 9.15. Termination................................................ 63
SECTION 9.16. Construction of Agreement.................................. 64
EXHIBITS
Exhibit A Form of Seller Note
Exhibit B Form of Additional Seller/
Servicer Supplement
SCHEDULES
Schedule 1 Sellers and Servicers
Schedule 2 Receivables
Schedule 3 Lockboxes
Schedule 4 Location of Chief Executive Offices; Location
of Books and Records
Schedule 5 Names
Schedule 6 Discounted Percentage
AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
dated as of February 4, 1997 (this "Agreement"), among
each seller and servicer listed on Schedule 1 hereto (in
their capacity as sellers, the "Sellers" and in their
capacity as servicers, the "Servicers"), and LFI
RECEIVABLES CORPORATION, a Delaware corporation (the
"Company").
W I T N E S S E T H :
WHEREAS, the parties hereto entered into that certain Receivables
Sale Agreement, dated as of August 5, 1996 (the "Original Agreement") in order
for the Sellers to sell to the Company, and the Company to purchase from the
Sellers, all the Sellers' right, title and interest in, to and under the
Receivables then existing and thereafter created and all other Receivable
Assets;
WHEREAS, the parties hereto wish to amend and restate the Original
Agreement so as to amend various provisions of the Original Agreement;
WHEREAS, the Original Agreement shall be replaced in whole by this
Agreement; and
WHEREAS, the Master Servicer, the Company and The Chase Manhattan
Bank, as Trustee, have entered into a Pooling Agreement dated as of August 5,
1996 (such agreement, as amended and restated on the date hereof and as it may
be amended, modified or otherwise supplemented from time to time hereafter,
being the "Pooling Agreement") in order to create a master trust into which the
Company has transferred, and will continue to transfer, all its right, title and
interest in, to and under the Receivables and certain other assets then or
hereafter owned by the Company.
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Amended and Restated Receivables Sale Agreement
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. Capitalized terms defined or referenced
in the Pooling Agreement shall be used herein as therein defined (unless
otherwise defined or referenced herein), and the following terms shall have the
following meanings:
"ABR" shall mean, for any day, a per annum alternate base rate
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. If for any reason The Chase Manhattan Bank shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or both
for any reason, including the inability or failure of The Chase Manhattan Bank
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to clause
(b) or (c), or both, of the immediately preceding sentence, as appropriate,
until the circumstances giving rise to such inability no longer exist. Any
change in the Alternate Base Rate due to a change in the Prime Rate, the Base CD
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate, respectively. The term "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by The Chase Manhattan
Bank as its prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be
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Amended and Restated Receivables Sale Agreement
effective on the date such change is publicly announced as being effective. The
term "Base CD Rate" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment Rate. The
term "Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so reported
on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m., New York City time,
on such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by The Chase Manhattan Bank from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it. The term
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day for such transactions received by The Chase Manhattan
Bank from three Federal funds brokers of recognized standing selected by it.
"Adjustment Amount" shall have the meaning specified in subsection
2.06(a).
"Applicable Insolvency Laws" shall have the meaning specified in
subsection 7.01(d).
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Amended and Restated Receivables Sale Agreement
"Assessment Rate" shall mean, for any date, the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by The
Chase Manhattan Bank as the then current net annual assessment rate that will be
employed in determining amounts payable by The Chase Manhattan Bank to the
Federal Deposit Insurance Corporation (or any successor) for insurance by such
Corporation (or such successor) of time deposits made in U.S. Dollars at The
Chase Manhattan Bank's domestic offices.
"Collections" shall mean all collections and all amounts received in
respect of the Receivables sold to the Company, including Recoveries, Adjustment
Payments, indemnification payments made by the Master Servicer or, any Servicer
and payments received in respect of Dilution Adjustments, together with all
collections received in respect of the Related Property in the form of cash,
checks, wire transfers or any other form of cash payment, and all proceeds of
Receivables and collections thereof (including, without limitation, collections
evidenced by an account, note, instrument, letter of credit, security, contract,
security agreement, chattel paper, general intangible or other evidence of
indebtedness or security, whatever is received upon the sale, exchange,
collection or other disposition of, or any indemnity, warranty or guaranty
payable in respect of, the foregoing and all "proceeds" as defined in Section
9-306 of the UCC as in effect in the State of New York).
"Credit Agreement" shall mean the Credit Agreement dated as of
August 5, 1996, among: Lifestyle Furnishings International Ltd.; each subsidiary
of Lifestyle Furnishings International Ltd. listed on Schedule 1 thereto;
Furnishings International Inc.; the lenders identified therein; The Chase
Manhattan Bank, as a lender and as administrative agent and collateral agent for
the lenders; and Chase Manhattan Bank Delaware, as a letter of credit issuer
thereunder (including any amendments or modifications thereto or refinancing
thereof).
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Amended and Restated Receivables Sale Agreement
"Cut-Off Date" shall mean the close of business on January 29, 1997.
"Discounted Percentage" shall have the meaning specified in Schedule
6.
"Documents" shall have the meaning specified in subsection
7.02(b)(iii).
"Early Termination" shall have the meaning specified in Article VII.
"Effective Date" shall mean February 4, 1997.
"Eligible Letter of Credit" shall mean any irrevocable documentary
credit (a direct-pay letter of credit) or any irrevocable standby letter of
credit supporting a Receivable, or two or more Receivables sold to the Company
by the same Seller, that is (a) either (i) issued in favor of such Seller or the
Company and the right to draw under which is, or the proceeds of which are,
legally transferable and assignable to the Trustee or (ii) issued in favor of
the Trustee, (b) governed by the UCC of a state of the United States of America,
governed by the UCP 500 or governed as to certain terms by the UCP 500 and as to
any remaining terms by the UCC of a state of the United States of America, (c)
issued by a commercial bank that (i) has a combined capital and surplus of at
least $50,000,000 and (ii) has (or the holding company parent of which has)
either a long-term or a short-term senior unsecured debt rating in the highest
rating category by each Rating Agency and (d) permits the beneficiary to draw,
upon notice to the issuing bank, an amount equal to the entire Principal Amount
of any Receivable supported thereby in U.S. Dollars payable by the issuing bank
to the Trustee, as assignee or as original beneficiary, in the case of a
documentary credit (a direct-pay letter of credit), on or before the due date of
such Receivable and, in the case of a standby letter of credit, on or before the
fifth day following the due date of such Receivable.
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Amended and Restated Receivables Sale Agreement
"ERISA Affiliate" shall mean with respect to any Person, any trade
or business (whether or not incorporated) that is a member of a group of which
such Person is a member and which is treated as a single employer under Section
414 of the Internal Revenue Code.
"Excluded Note" shall mean any Receivable (i) which originally
represented obligations owing by the account debtor thereon to more than one
Seller, (ii) which is or will be evidenced by an instrument payable to the
Seller who will administer such Receivable, (iii) which will be treated as an
account receivable on the books and records of such Sellers until an instrument
is executed in favor of the Seller who will administer such Receivable and
thereafter will be treated as a note receivable on the books of such
administering Seller and (iv) for which payments are not at any time to be made
to a Lockbox or Lockbox Account.
"Excluded Receivables" shall mean, as of any date of determination,
any indebtedness and payment obligations of any Person to any Seller arising
from a sale of merchandise or services by such Seller that has the attributes
set forth in any of the following paragraphs:
(a) it is owing by an Obligor that is an Affiliate of any Seller;
(b) it is owing by an Obligor that is not "located" (within the
meaning of Section 9-103(3)(d) of the UCC as in effect in the State of New
York) in the United States and it is not supported by an Eligible Letter
of Credit;
(c) it is an Excluded Note;
(d) it is a Receivable originated by the Beacon Hill division of
▇▇▇▇▇▇ ▇▇▇▇▇ Fabrics, Inc.; or
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Amended and Restated Receivables Sale Agreement
(e) it is owing by ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Holding Corporation or any of its
subsidiaries to The Berkline Corporation.
"Indemnification Event" shall have the meaning specified in
subsection 2.06(b).
"Ineligibility Event" shall have the meaning specified in subsection
2.06(a).
"Ineligible Receivable" shall have the meaning specified in
subsection 2.06(a).
"Insolvency Event", with respect to a Seller, shall mean the
occurrence of any one or more of the Purchase Termination Events specified in
subsection 7.01(d).
"Multiemployer Plan" shall mean with respect to any Person, a
multiemployer plan as defined in Section 4001(a)(3) of ERISA to which such
Person or any ERISA Affiliate of such Person (other than one considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Internal
Revenue Code) is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
"One-Month LIBOR" shall mean for any Accrual Period after the
initial Accrual Period, the rate per annum, as determined by The Chase Manhattan
Bank, which is the arithmetic mean (rounded to the nearest 1/100th of 1%) of the
offered rates for U.S. Dollar deposits having a maturity of one month commencing
on the first day of such Accrual Period that appears on Page 3750 of the
Telerate Service (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of the Telerate Service, as
determined by The Chase Manhattan Bank for purposes of providing interest rates
applicable to U.S. Dollar deposits having a maturity of one
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Amended and Restated Receivables Sale Agreement
month in the London interbank market) at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Accrual Period. In the event
that such rate is not so available at such time for any reason, then "One-Month
LIBOR" for such Accrual Period shall be the rate at which U.S. Dollar deposits
in a principal amount of not less than $1,000,000 maturing in one month are
offered to the principal London office of The Chase Manhattan Bank in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Accrual Period.
"Payment Date" shall have the meaning specified in subsection
2.03(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA, or any successor
thereto.
"Plan" shall mean, with respect to any Person, any pension plan
(other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA
or Section 412 of the Internal Revenue Code which is maintained for employees of
such Person or any ERISA Affiliate of such Person.
"Pooling Agreement" shall have the meaning specified in the recitals
hereto.
"Potential Purchase Termination Event" shall mean any condition or
act specified in Article VII that, with the giving of notice or the lapse of
time or both, would become a Purchase Termination Event.
"Purchase Price" shall have the meaning specified in Section 2.02.
"Purchase Termination Event" shall have the meaning specified in
Section 7.01.
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Amended and Restated Receivables Sale Agreement
"Purchased Receivable" shall mean, at any time, any Receivable sold
to the Company by any Seller pursuant to, and in accordance with the terms of,
this Agreement.
"Receivable Assets" shall have the meaning specified in subsection
2.01(a).
"Receivable" shall mean the indebtedness and payment obligations of
any Person to any Seller (including, without limitation, obligations evidenced
by an account, note, instrument, contract, security agreement, chattel paper,
general intangible or other evidence of indebtedness or security) arising from a
sale of merchandise or services by such Seller, including, without limitation,
any right to payment for goods sold or for services rendered, and including the
right to payment of any interest, sales taxes, finance charges, returned check
or late charges and other obligations of such Person with respect thereto, but
not including any Excluded Receivable.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Internal Revenue Code).
"Sale Documents" shall mean this Agreement and the Seller Note.
"Sale Termination Date" shall have the meaning specified in
subsection 9.13(b).
"Sellers" shall have the meaning specified in the recitals hereto.
"Seller Addition Date" shall have the meaning specified in Section
3.05.
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Amended and Restated Receivables Sale Agreement
"Seller Adjustment Payment" shall have the meaning specified in
subsection 2.06(a).
"Seller Dilution Adjustment Payment" shall have the meaning
specified in Section 2.05.
"Seller Indemnification Payment" shall have the meaning specified in
subsection 2.06(b).
"Seller Note" shall have the meaning specified in Section 8.01.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which [The Chase Manhattan Bank]is subject for new negotiable nonpersonal
time deposits in dollars of over $100,000 with maturities approximately equal to
three months. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
"Subordinated Notes" shall mean the 107/8% Senior Subordinated Notes
due 2006 issued by Lifestyle Furnishings International Ltd. on August 5, 1996 in
an aggregate principal amount of not less than $200,000,000 and shall include
any substantially identical notes issued in exchange therefore after August 5,
1996, pursuant to the indenture governing such Notes.
"Transactions" shall have the meaning specified in subsection
4.01(b).
"Withdrawal Liability" shall mean liability to a Multiemployer Plan
as a result of a complete or partial
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Amended and Restated Receivables Sale Agreement
withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Other Definitional Provisions. (a) The words "hereof",
"herein", "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and article, section, subsection, schedule and exhibit
references are to this Agreement unless otherwise specified.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms relating to the Sellers and the
Company, unless otherwise defined herein, shall have the respective meanings
given to them under GAAP.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) Any reference herein to a Schedule or Exhibit to this Agreement
shall be deemed to be a reference to such Schedule or Exhibit as it may be
amended, modified or supplemented from time to time to the extent that such
Schedule or Exhibit may be amended, modified or supplemented (or any term or
provision of any Transaction Document may be amended that would have the effect
of amending, modifying or supplementing information contained in such Schedule
or Exhibit) in compliance with the terms of the Transaction Documents.
(e) Any reference in this Agreement to any representation, warranty
or covenant "deemed" to have been made is intended to encompass only
representations, warranties or covenants that are expressly stated to be
repeated on or as of dates following the execution and delivery of this
Agreement, and no such reference shall be interpreted as a reference to any
implicit, inferred, tacit
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Amended and Restated Receivables Sale Agreement
or otherwise unexpressed representation, warranty or covenant.
(f) The words "include", "includes" or "including" shall be
interpreted as if followed, in each case, by the phrase "without limitation".
ARTICLE II
Purchase and Sale of Receivables
SECTION 2.01. Purchase and Sale of Receivables. (a) Subject to the
terms and conditions of this Agreement (including, without limitation, Article
III), each Seller hereby sells, transfers, assigns, and conveys, without
recourse (except as expressly provided herein), to the Company, all its present
and future right, title and interest in, to and under:
(i) all Receivables originated by such Seller, including those
existing at the close of business on the Effective Date and all such
Receivables thereafter arising from time to time until but not including
the date an Early Termination occurs;
(ii) the Related Property;
(iii) all Collections;
(iv) all rights (including rescission, replevin or reclamation)
relating to any Receivable originated by such Seller or arising therefrom;
(v) all proceeds of or payments in respect of any and all of the
foregoing clauses (i) through (iv) (including Collections).
Such property described in the foregoing clauses (i) through (v) shall be
referred to herein as the "Receivable Assets".
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Amended and Restated Receivables Sale Agreement
(b) Subject to the terms and conditions of this Agreement
(including, without limitation, Article III), on the Effective Date and on the
date of creation of each newly created Receivable (but only so long as no Early
Termination shall have occurred and be continuing), all of each Seller's right,
title and interest in and to (i) in the case of the Effective Date, all then
existing Receivables originated by such Seller, all Related Property,
Collections, all rights (including rescission, replevin or reclamation) in
respect of such Receivables originated by such Seller and all proceeds or
payments in respect of any of the foregoing and (ii) in the case of each such
date of creation, all such newly created Receivables originated by such Seller,
all Related Property, Collections, all rights (including rescission, replevin or
reclamation) in respect of such Receivables and all proceeds or payments in
respect of any of the foregoing shall be considered to be part of the assets
that have been sold, transferred, assigned, set over and otherwise conveyed to
the Company pursuant to paragraph (a) above without any further action by such
Seller or any other Person. Anything herein to the contrary notwithstanding, to
the extent any Seller shall not have received payment from the Company of the
Purchase Price for any Receivable and other related Receivable Assets in
accordance with the terms of Section 2.03, such Seller shall give written notice
to the Company and the Trustee on the Payment Date for such Purchase to the
effect that such Receivable and other related Receivable Assets shall be deemed
to not have been so sold, transferred, assigned, set over or conveyed to the
Company.
(c) The parties to this Agreement intend that, for accounting and
commercial purposes, the transactions contemplated by Section 2.01 hereby shall
be, and shall be treated as, a purchase by the Company and a sale by the Sellers
of the Purchased Receivables and not a lending transaction. All sales of
Receivables and other Receivable Assets by the Sellers hereunder shall be
without recourse to, or representation or warranty of any kind (express or
implied) by, the Sellers, except as otherwise specifically
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Amended and Restated Receivables Sale Agreement
provided herein. The foregoing sale, assignment, transfer and conveyance does
not constitute and is not intended to result in the creation or assumption by
the Company of any obligation of the Sellers or any other Person in connection
with the Receivables, the other Receivable Assets or any agreement or instrument
relating thereto, including any obligation to any Obligor. Although it is the
intent of the parties to this Agreement that the conveyance of the Sellers'
right, title and interest in, to and under the Receivables, the Related
Property, Collections, all rights (including rescission, replevin or
reclamation) in respect of the Receivables and all proceeds or payments in
respect of any of the foregoing pursuant to this Agreement shall constitute
purchases and sales and not loans, in the event that any such conveyance is
deemed to be a loan, it is the intent of the parties to this Agreement that each
Seller hereby grant to the Company a perfected first priority security interest
in all of such Seller's present and future right, title and interest in, to and
under the Receivables, the Related Property, all Collections, all rights
(including rescission, replevin or reclamation) relating to any Receivable
originated by such Seller or arising therefrom and all proceeds or payments in
respect of any of the foregoing and that this Agreement shall constitute a
security agreement under applicable law in favor of the Company.
(d) In connection with the foregoing conveyances, each Seller agrees
to record and file, or cause to be recorded and filed, at its own expense,
financing statements (and continuation statements with respect to such financing
statements when applicable), (i) with respect to the Receivables originated by
such Seller now existing and hereafter acquired pursuant to this Agreement by
the Company from such Seller and (ii) with respect to any other Receivable
Assets for which a security interest may be perfected under the relevant UCC,
legislation or similar statute by such filing, in each case meeting the
requirements of applicable law in such manner and in such jurisdictions as are
necessary to perfect and maintain
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Amended and Restated Receivables Sale Agreement
perfection of the conveyance of such Receivables and any other Receivable Assets
to the Company, and to deliver to the Company on or prior to the Effective Date
(i) where available, a file-stamped copy or certified statement of such
financing statement or other evidence of such filing and (ii) otherwise, a
photocopy, certified by a Responsible Officer to be a true and correct copy, of
each such financing statement or other filing made prior to the Effective Date.
(e) In connection with the foregoing sales, transfers, assignments
and conveyances, each Seller agrees at its own expense, on or prior to the
Effective Date with respect to the Receivables and any other similar receivables
originated by such Seller that it will, as agent of the Company, (i) indicate or
cause to be indicated on the computer files and other physical records (but not
including individual invoices or individual collection files) relating to such
Receivables and any such other receivables (by means of a general legend that
will automatically appear at or near the beginning of any screen, list or
print-out of such Receivables) that, unless otherwise specifically identified on
such screen, list or print-out as a receivable not so sold, transferred,
assigned and conveyed, all Receivables (and any such other receivables) included
in such screen, list or print-out and all other Receivable Assets (and any other
similar related property) have been sold, transferred, assigned and conveyed to
the Company in accordance with this Agreement and (ii) deliver or transmit or
cause to be delivered or transmitted to the Company a computer tape, diskette or
data transmission containing at least the information specified in Schedule 2 as
to all such Receivables, as of a date no later than the Cut-Off Date.
SECTION 2.02. Purchase Price. The aggregate purchase price payable
by the Company to the Sellers (the "Purchase Price") for Receivables and other
Receivable Assets on any Payment Date under this Agreement shall be equal to the
product of (a) the aggregate outstanding
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Amended and Restated Receivables Sale Agreement
Principal Amount of Receivables as set forth in the applicable Daily Reports and
(b) the Discounted Percentage.
SECTION 2.03. Payment of Purchase Price. (a) The Company shall pay
or provide for the Purchase Price for Receivables and other Receivable Assets
(net of the deductions referred to in Section 2.03(d)) in the manner provided
below on each day for which Daily Reports are prepared and delivered to the
Company (each such day, a "Payment Date"). Each Seller hereby appoints the
related Servicer as its agent to receive payment of the Purchase Price and
hereby authorizes the Company to make all payments due to such Seller directly
to, or as directed by, the related Servicer. Each Servicer hereby accepts and
agrees to such appointment.
(b) The Purchase Price (net of the deductions referred to in Section
2.03(d)) shall be paid by the Company to the Sellers or, in the case of amounts
payable pursuant to clauses (i), (ii) and (iii) below, to the Sellers or to such
accounts or such Persons as the Sellers may direct in writing (which direction
may consist of standing instructions provided by the Sellers that shall remain
in effect until changed by the Sellers in writing), on each Payment Date as
follows:
(i) to the extent available for such purpose, in cash from the net
proceeds of a transfer of such Purchased Receivables by the Company to
other Persons (including the Trustee pursuant to the Pooling Agreement);
(ii) to the extent available for such purpose, in cash from
Collections received by the Company from other Persons (including from the
Trustee pursuant to the Pooling Agreement and any Supplement thereto);
(iii) from contributions made by Lifestyle Holdings Ltd., in its
sole discretion, to the capital of the
17
Amended and Restated Receivables Sale Agreement
Company in respect of Lifestyle Holdings Ltd.'s common equity interest in
the Company; and
(iv) at the option of the Company (subject to the provisions of
Sections 8.03), by incurring Indebtedness to the Sellers evidenced by the
Seller Note.
(c) Any increase in the principal amount of the Seller Note, in
payment of any Purchase Price pursuant to Section 2.03(b), shall be applied to
the Purchase Price in an amount equal to such increase.
(d) The Company shall deduct from the Purchase Price otherwise
payable to the Sellers on any Payment Date, any Seller Dilution Adjustment
Payments, Seller Adjustment Payments or Seller Indemnification Payments pursuant
to Section 2.05, 2.06(a) or 2.06(b), respectively.
(e) All cash payments under this Agreement shall be made not later
than 3:30 p.m. (New York City time) on the date specified therefor in same day
funds, and if to the Sellers, to the bank account for each Seller designated in
writing by the related Servicer to the Company and if to the Servicers, to the
bank account designated in writing by the Servicers to the Company.
(f) Whenever any payment to be made under this Agreement shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day. Amounts not paid when due in accordance
with the terms of this Agreement shall bear interest at a rate equal at all
times to the ABR, payable on demand.
SECTION 2.04. No Repurchase. No Seller shall have any right or
obligation under this Agreement, by implication or otherwise, to repurchase from
the Company any Purchased Receivables originated by such Seller or other
Receivable Assets or to rescind or otherwise retroactively effect any purchase
of any such Purchased Receivables or
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Amended and Restated Receivables Sale Agreement
other Receivable Assets after the Payment Date relating thereto; provided that
the foregoing shall not be interpreted to limit the right of the Company herein
to receive a Seller Adjustment Payment or Seller Indemnification Payment.
SECTION 2.05. Rebates, Adjustments, Returns, Reductions and
Modifications. From time to time a Seller may make Dilution Adjustments to
Receivables in accordance with this Section 2.05 and Section 6.02.
Each Seller agrees to pay to the Company, on the Payment Date
immediately succeeding the date of the grant of any Dilution Adjustment, the
amount of any such Dilution Adjustment (a "Seller Dilution Adjustment Payment").
The amount of any Dilution Adjustment shall be set forth on the first Daily
Report prepared after the date of the grant thereof.
SECTION 2.06. Payments in Respect of Ineligible Receivables and
Seller Indemnification Payments. (a) If (i) any representation or warranty under
subsections 4.02(a) or (b) is not true and correct as of the date specified
therein with respect to any Receivable sold to the Company or any Receivable
encompassed by the representation or warranty under subsection 4.02(c) is
determined not to be an Eligible Receivable as of its date of purchase, (ii)
there is a breach of any covenant under Section 6.01 with respect to any
Receivable or (iii) the Company's interest in any Receivable is not a first
priority perfected ownership or security interest at any time as a result of any
action taken by, or the failure to take action by, a Seller (each event referred
to in clause (i), (ii) and (iii) of this subsection 2.06(a) shall be referred to
herein as an "Ineligibility Event" and any Receivable as to which an
Ineligibility Event applies shall be referred to herein as an "Ineligible
Receivable"), then the Seller that originated such Receivable agrees to pay to
the Company, upon the request of the Company or such Seller obtaining knowledge
thereof, an amount (the "Adjustment Amount") equal to the
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Amended and Restated Receivables Sale Agreement
Principal Amount of such Receivable (whether the Company paid the related
Purchase Price in cash or otherwise) less Collections received by the Company in
respect of such Receivable. Such payment shall be made on or prior to the 30th
day after the day the Company requests such payment or such Seller obtains
knowledge thereof (except that if such day is not a Business Day, then such
payment shall be made on the Business Day immediately succeeding such day);
provided that in the event that (x) a Purchase Termination Event with respect to
such Seller has occurred and is continuing or (y) the Company shall be required
to make a payment in respect of such Receivable pursuant to Section 2.05 of the
Pooling Agreement and the Company has insufficient funds to make such payment,
such Seller shall make such payment immediately. Any payment by such Seller
pursuant to this subsection 2.06(a) is referred to as a "Seller Adjustment
Payment". If, on or prior to such 30th day (or the Business Day immediately
succeeding such 30th day, as applicable), a Seller shall make a Seller
Adjustment Payment in respect of any such Ineligible Receivable, then the
Company shall have no further remedy against such Seller in respect of the
Ineligibility Event with respect to such Receivable. Upon a Seller Adjustment
Payment, the Company shall automatically agree to pay to the appropriate Seller
all Collections received with respect to such Ineligible Receivable.
(b) Special Indemnification. In addition to its obligations under
Section 9.02 hereunder, each Seller agrees to pay, indemnify and hold harmless
the Company from any loss, liability, expense, damage or injury which may at any
time be imposed on, incurred by or asserted against the Company in any way
relating to or arising out of (i) any Eligible Receivable originated by such
Seller becoming subject to any defense, dispute, offset or counterclaim of any
kind (other than as expressly permitted by this Agreement or the Pooling
Agreement) or (ii) such Seller breaching any covenant contained in Section 5.02,
5.08, 5.09, 5.10, 6.01, 6.02, 6.03, 6.04, 6.05, 6.09 or 6.10 with respect to any
Receivable originated by it (each of the
20
Amended and Restated Receivables Sale Agreement
foregoing events or circumstances being an "Indemnification Event"), and such
Receivable (or a portion thereof) ceasing to be an Eligible Receivable on the
date on which such Indemnification Event occurs. The amount of such
indemnification shall be equal to the Principal Amount of such Receivable
(whether the Company paid the related Purchase Price in cash or otherwise) less
Collections received by the Company in respect of such Receivable. Such payment
shall be made on or prior to the 30th Business Day after the day the Company
requests such payment or such Seller obtains knowledge thereof unless such
Indemnification Event shall have been cured on or before such 30th Business Day;
provided, however, that in the event that (x) a Purchase Termination Event with
respect to such Seller has occurred and is continuing or (y) the Company shall
be required to make a payment with respect to such Receivable pursuant to
Section 2.05 of the Pooling Agreement and the Company has insufficient funds to
make such a payment, such Seller shall make such payment immediately. If, on or
prior to such 30th Business Day, such Seller shall make such payment, then the
Company shall have no further remedy against such Seller in respect of such
Indemnification Event. Any payment by such Seller pursuant to this subsection
2.06(b) is referred to as a "Seller Indemnification Payment". Upon a Seller
Indemnification Payment, the Company shall automatically agree to pay to the
appropriate Seller all Collections with respect to the Receivable in respect of
which a Seller Indemnification Payment is made.
SECTION 2.07. Certain Charges. Each of the Sellers and the Company
agree that late charge revenue, reversals of discounts, other fees and charges
and other similar items, whenever created, accrued in respect of Purchased
Receivables shall be the property of the Company notwithstanding the occurrence
of an Early Termination and all Collections with respect thereto shall continue
to be allocated and treated as Collections in respect of Purchased Receivables.
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Amended and Restated Receivables Sale Agreement
SECTION 2.08. Certain Allocations. Each Seller hereby agrees that,
following the occurrence of an Early Termination, all Collections and other
proceeds received in respect of Receivables generated by the Sellers shall be
applied, first, to pay the outstanding Principal Amount of Purchased Receivables
(as of the date of such Early Termination) of the Obligor to whom such
Collections are attributable until such Purchased Receivables are paid in full
and, second, to the Sellers to pay Receivables of such Obligor not sold to the
Company; provided, however, that notwithstanding the foregoing, if any Seller
can attribute a Collection to a specific Obligor and a specific Receivable, then
such Collection shall be applied to pay such Receivable of such Obligor.
ARTICLE III
Conditions to Purchase and Sale
SECTION 3.01. Conditions Precedent to the Company's Purchase of
Receivables on the Effective Date. The obligation of the Company to purchase the
Receivables and the other Receivable Assets hereunder on the Effective Date from
the Sellers is subject to the conditions precedent, which may be waived by the
Company, that (a) each of the Sale Documents shall be in full force and effect
and (b) the conditions set forth below shall have been satisfied on or before
the Effective Date:
(i) the Company shall have received copies of duly adopted
resolutions of the Board of Directors of each Seller, as in effect on such
Effective Date, authorizing this Agreement, the documents to be delivered
by such Seller hereunder and the transactions contemplated hereby,
certified by the Secretary or Assistant Secretary of such Seller;
(ii) the Company shall have received duly executed certificates of
the Secretary or an Assistant Secretary
22
Amended and Restated Receivables Sale Agreement
of each Seller, dated the Effective Date, and in form and substance
reasonably satisfactory to the Company, certifying the names and true
signatures of the officers authorized on behalf of such Seller to sign
this Agreement and any instruments or documents in connection with this
Agreement;
(iii) each Seller shall have filed and recorded before such
Effective Date, at its own expense, UCC-1 financing statements with
respect to the Receivables originated by such Seller and other Receivable
Assets in such manner and in such jurisdictions as are necessary to
perfect the Company's ownership interest thereof under the UCC and
delivered evidence of such filings to the Company on or prior to such
Effective Date; and all other action necessary, in the reasonable judgment
of the Company, to perfect under the UCC (to the extent applicable) the
Company's ownership of the Receivables originated by such Seller and other
Receivable Assets shall have been duly taken;
(iv) each Seller shall have delivered or transmitted to the Company,
with respect to the Receivables originated by it, a computer tape,
diskette or data transmission reasonably acceptable to the Company
showing, as of a date no later than the Cut-Off Date, at least the
information specified in Schedule 2 as to all Receivables to be
transferred by such Seller to the Company on such Effective Date;
(v) the Company shall have received reports of UCC-1 and other
searches of each Seller with respect to the Receivables originated by such
Seller and the other Receivable Assets reflecting the absence of Liens
thereon, except for Liens created in connection with the sale by the
Sellers to the Company, and by the Company to the Trust, of such
Receivables and other Receivable Assets.
23
Amended and Restated Receivables Sale Agreement
(vi) the Company shall be satisfied that each Seller's systems,
procedures and record keeping relating to the Purchased Receivables
originated by such Seller are sufficient and satisfactory in order to
permit the purchase and administration of such Purchased Receivables in
accordance with the terms and intent of this Agreement; and
(vii) the Company shall have received such other approvals, opinions
or documents as the Company may reasonably request.
SECTION 3.02. Conditions Precedent to All the Company's Purchases of
Receivables. The obligation of the Company to purchase any Receivable and the
other related Receivable Assets on each date (including the Effective Date)
shall be subject to the further conditions precedent, which may be waived by the
Company, that, on and as of the related Payment Date, the following statements
shall be true (and the acceptance by the related Seller of the Purchase Price
for such Receivable on such Payment Date shall constitute a representation and
warranty by such Seller that on such Payment Date the statements in clauses (i)
and (ii) below are true):
(i) the representations and warranties of such Seller contained in
Sections 4.01 and 4.02 shall be true and correct on and as of such Payment
Date as though made on and as of such date, except insofar as such
representations and warranties are expressly made only as of another date
(in which case they shall be true and correct as of such other date);
(ii) after giving effect to such purchase, no Purchase Termination
Event or Potential Purchase Termination Event with respect to such Seller
shall have occurred and be continuing;
(iii) after giving effect to such purchase, no Early Amortization
Event or Potential Early Amortization
24
Amended and Restated Receivables Sale Agreement
Event with respect to any Outstanding Series shall have occurred and be
continuing; and
(iv) the Company shall have received such other approvals, opinions
or documents as the Company may reasonably request;
provided, however, that the failure of any Seller to satisfy any of the
foregoing conditions shall not prevent such Seller from subsequently selling
Receivables originated by it upon satisfaction of all such conditions.
SECTION 3.03. Conditions Precedent to Sellers' Obligations on the
Effective Date. The obligations of each Seller on the Effective Date shall be
subject to the conditions precedent, which may be waived by such Seller, that
such Seller shall have received on or before the Effective Date the following,
each dated such Effective Date and in form and substance satisfactory to such
Seller:
(i) a copy of duly adopted resolutions of the Board of Directors of
the Company authorizing this Agreement, the documents to be delivered by
the Company hereunder and the transactions contemplated hereby, certified
by the Secretary or Assistant Secretary of the Company; and
(ii) a duly executed certificate of the Secretary or Assistant
Secretary of the Company certifying the names and true signatures of the
officers authorized on its behalf to sign this Agreement and the other
documents to be delivered by it hereunder.
SECTION 3.04. Conditions Precedent to All the Sellers' Obligations.
The obligation of each Seller to sell any Receivable on any date (including on
the Effective Date) shall be subject to the further conditions precedent, which
may be waived by such Seller, that, on the related Payment Date, the following
statement shall be true (and the payment by the Company of the Purchase Price
for such Receivable on
25
Amended and Restated Receivables Sale Agreement
such date shall constitute a representation and warranty by the Company on such
Payment Date that the statement in clause (ii) below is true): after giving
effect to such purchase, (i) no Purchase Termination Event set forth in
paragraph (d) of Section 7.01 hereof, and (ii) no Early Amortization Event set
forth in paragraph (a) of Section 7.01 of the Pooling Agreement (as in effect on
the date hereof and without giving effect to any amendment or supplement to, or
modification or waiver of, or departure from, such paragraph unless, in each
case, each Seller shall have consented thereto) shall have occurred and be
continuing.
SECTION 3.05. Conditions Precedent to the Addition of a Seller. No
wholly owned, direct or indirect, Subsidiary of Furnishings International Inc.
approved by the Company as an additional Seller pursuant to Section 9.12 shall
be added as a Seller hereunder unless the conditions set forth below shall have
been satisfied on or before the date designated for the addition of such Seller
(the "Seller Addition Date"):
(i) the Company shall have received an Additional Seller Supplement
substantially in the form of Exhibit B hereto, duly executed and delivered
by such Seller;
(ii) each of the conditions precedent set forth in Section 2.08(m)
of the Pooling Agreement and in any Supplement shall have been satisfied;
(iii) the Company shall have received copies of duly adopted
resolutions of the Board of Directors of such Seller, as in effect on the
related Seller Addition Date, authorizing this Agreement, the documents to
be delivered by such Seller hereunder and the transactions contemplated
hereby, certified by the Secretary or Assistant Secretary of such Seller;
26
Amended and Restated Receivables Sale Agreement
(iv) the Company shall have received duly executed certificates of
the Secretary or an Assistant Secretary of such Seller, dated the related
Seller Addition Date, and in form and substance reasonably satisfactory to
the Company, certifying the names and true signatures of the officers
authorized on behalf of such Seller to sign the Additional Seller
Supplement or any instruments or documents in connection with this
Agreement;
(v) a Lockbox Account with respect to Receivables to be sold by such
Seller shall have been established in the name of the Trustee;
(vi) such Seller shall have filed and recorded, at its own expense,
UCC-1 financing statements (and other similar instruments) with respect to
the Receivables originated by such Seller and the other Receivable Assets
in such manner and in such jurisdictions as are necessary to perfect the
Company's ownership interest thereof under the UCC and delivered evidence
of such filings to the Company on or prior to the Seller Addition Date;
and all other action necessary, in the reasonable judgment of the Company,
to perfect the Company's ownership of the Receivables originated by such
Seller shall have been duly taken;
(vii) such Seller shall have delivered or transmitted to the
Company, with respect to the Receivables originated by it, a computer
tape, diskette or data transmission reasonably acceptable to the Company
showing, as of a date no later than five Business Days preceding the
related Seller Addition Date, at least the information specified in
Schedule 2 as to all Receivables to be transferred by such Seller to the
Company on the related Seller Addition Date;
(viii) the Company shall have received reports of UCC-1 and other
searches of such Seller with respect to the Receivables originated by such
Seller and other
27
Amended and Restated Receivables Sale Agreement
Receivable Assets reflecting the absence of Liens thereon, except for (i)
Liens created in connection with the sale by such Seller to the Company,
and by the Company to the Trust, of such Receivables and other Receivable
Assets and (ii) Liens as to which the Company has received UCC termination
statements to be filed on or prior to the related Seller Addition Date;
(ix) the Company shall be satisfied that such Seller's systems,
procedures and record keeping relating to the Purchased Receivables
originated by such Seller are sufficient and satisfactory in order to
permit the purchase and administration of such Purchased Receivables in
accordance with the terms and intent of this Agreement; and
(x) the Company shall have received such other approvals, opinions
or documents as the Company may reasonably request.
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the Sellers Relating
to the Sellers. Each Seller represents and warrants as to itself as follows:
(a) Organization; Powers. It (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted and as proposed to be
conducted, (iii) is qualified to do business in, and is in good standing in,
every jurisdiction where the nature of its business so requires, except where
the failure so to qualify could not reasonably be expected to result in a Seller
Material Adverse Effect and (iv) has the corporate power and
28
Amended and Restated Receivables Sale Agreement
authority to execute, deliver and perform its obligations under each of the
Transaction Documents and each other agreement or instrument contemplated hereby
or thereby to which it is or will be a party.
(b) Authorization. The execution, delivery and performance by such
Seller of each of the Transaction Documents to which such Seller is a party and
the other transactions contemplated hereby and thereby (collectively, the
"Transactions") (i) have been duly authorized by all requisite corporate and, if
required, stockholder action and (ii) will not (A) violate (1) any Requirement
of Law or the certificate or articles of incorporation or other constitutive
document or by-laws of any Subsidiary or (2) any provision of any Contractual
Obligation to which it or any Subsidiary is a party or by which any of them or
any of their property is or may be bound, (B) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such
Contractual Obligation except where any such conflict, violation, breach or
default referred to in clause (A) or (B), individually or in the aggregate,
could not reasonably be expected to have a Seller Material Adverse Effect or (C)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by it or any Subsidiary
(other than any Lien created hereunder or contemplated or permitted hereby).
(c) Enforceability. This Agreement has been duly executed and
delivered by such Seller and constitutes, and each other Transaction Document to
which such Seller is a party when executed and delivered by such Seller will
constitute, a legal, valid and binding obligation of such Seller enforceable
against such Seller in accordance with its respective terms, subject (a) as to
enforcement of remedies, to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of creditors' rights
generally, from time to
29
Amended and Restated Receivables Sale Agreement
time in effect and (b) to general principles of equity (whether enforcement is
sought by a proceeding in equity or at law).
(d) Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except for (i) the
filing of Uniform Commercial Code financing statements, (ii) such as have been
made or obtained and are in full force and effect and (iii) such actions,
consents, approvals and filings the failure of which to obtain or make could not
reasonably be expected to result in a Seller Material Adverse Effect; provided,
however, that with respect to Receivables owing by Government Obligors, any
failure by such Seller to comply with the United States Federal Nonassignment
Act (Public Contracts), 41 U.S.C. ss. 15, or Assignment of Claims Act, 31 U.S.C.
ss. 3727, or with any similar legislation of any State shall not constitute a
breach of this subsection 4.01(d).
(e) Litigation; Compliance with Laws. (i) 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 such Seller, threatened against or
affecting such Seller or any Subsidiary or any business, property or rights of
any such Person (A) that involve any Transaction Document or the Transactions or
(B) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to result in a Seller Material Adverse Effect.
(ii) Neither it nor any Subsidiary is in default with respect to any
judgment, writ, injunction, decree or order of any Governmental Authority, where
such violation or default could reasonably be expected to result in a Seller
Material Adverse Effect.
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Amended and Restated Receivables Sale Agreement
(f) Agreements. (i) Neither it nor any Subsidiary is a party to any
agreement or instrument or subject to any corporate restriction that has
resulted or could reasonably be expected to result in a Seller Material Adverse
Effect.
(ii) Neither it nor its Subsidiary is in default in any manner under
any provision of any Contractual Obligation to which it is a party or by which
it or any of its properties or assets are bound, where such default could
reasonably be expected to result in a Seller Material Adverse Effect.
(g) Federal Reserve Regulations. (i) Neither it nor its Subsidiary
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of buying or carrying Margin Stock.
(ii) No part of the proceeds from the sale of Receivables hereunder
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of, or that
is inconsistent with, the provisions of the Regulations of the Board, including
Regulation G, U or X.
(h) Investment Company Act. It is not an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940.
(i) Tax Returns. It and each Subsidiary has filed or caused to be
filed all Federal, state and other material tax returns and has paid or caused
to be paid all taxes due and payable by it and all assessments received by it to
the extent that nonpayment could reasonably be expected to result in a Seller
Material Adverse Effect.
(j) Employee Benefit Plans. Except to the extent failure to comply
could not reasonably be expected to result in a Seller Material Adverse Effect,
such Seller and its ERISA Affiliates are in compliance in all material respects
31
Amended and Restated Receivables Sale Agreement
with the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder. No Reportable Event has occurred or is
reasonably expected to occur that, when taken together with all other such
Reportable Events, could reasonably be expected to result in a Seller Material
Adverse Effect.
(k) Accounting Treatment. It will not prepare any financial
statements that shall account for the transactions contemplated hereby, nor will
it in any other respect (other than for tax purposes) account for the
transactions contemplated hereby, in a manner that is inconsistent with the
Company's ownership interest in the Receivables.
(l) Indebtedness to Company. Immediately prior to consummation of
the transactions contemplated hereby on such Effective Date, it had no
outstanding Indebtedness to the Company other than amounts permitted by this
Agreement.
(m) Lockboxes. Set forth in Schedule 3 is a complete and accurate
description as of the Effective Date of each Lockbox Account currently
maintained by each of the Sellers. Each of the Lockbox Agreements to which such
Seller is a Party is the legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms.
(n) Chief Executive Office. The offices at which each Seller keeps
its records concerning the Receivables originated by it either (x) are located
as set forth on Schedule 4 hereto or (y) such Seller has notified the Company of
the location thereof in accordance with Section 5.06. The chief executive office
of such Seller is listed opposite its name on Schedule 4 and is the place where
such Seller is "located" for the purposes of Section 9-103(3)(d) of the UCC as
in effect in the State of New York. As of the Effective Date, the state and
county where the chief executive office of such Seller is "located" for the
purposes of 9-103(3)(d) of the UCC as in effect in
32
Amended and Restated Receivables Sale Agreement
the State of New York has not changed in the past four months.
(o) Bulk Sales Act. No transaction contemplated hereby with respect
to such Seller requires compliance with, or will be subject to avoidance under,
any bulk sales act or similar law.
(p) Names. The legal name of such Seller is as set forth in this
Agreement. It has no trade names, fictitious names, assumed names or "doing
business as" names except as set forth on Schedule 5.
(q) Solvency. No Insolvency Event with respect to such Seller has
occurred and the sale of the Receivables by it to the Company has not been made
in contemplation of the occurrence thereof. Both prior to and after giving
effect to the transactions occurring on the Effective Date and after giving
effect to each subsequent transaction contemplated hereunder, (i) the fair value
of the assets of such Seller at a fair valuation will exceed the debts and
liabilities, subordinated, contingent or otherwise, of such Seller; (ii) the
present fair salable value of the property of such Seller will be greater than
the amount that will be required to pay the probable liability of such Seller on
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (iii) such Seller will
be able to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (iv) such Seller
will not have unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted and is proposed to be
conducted. For all purposes of clauses (i) through (iv) above, the amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
Such Seller does not intend to, nor does it believe that it will, incur debts
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Amended and Restated Receivables Sale Agreement
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness.
(r) No Purchase Termination Event. As of the Effective Date, no
Purchase Termination Event or Potential Purchase Termination Event with respect
to such Seller has occurred and is continuing.
(s) No Fraudulent Transfer. Such Seller is not entering into this
Agreement with the intent (whether actual or constructive) to hinder, delay, or
defraud its present or future creditors and is receiving reasonably equivalent
value and fair consideration for the Receivables originated by it being
transferred hereunder.
(t) Liabilities. Other than the liabilities, commitments or
obligations (whether absolute, accrued, contingent or otherwise) arising under
or in respect of the Transaction Documents, the Credit Agreement, the
Subordinated Notes or any documents executed in connection with any of the
foregoing, such Seller does not have any liabilities, commitments or obligations
(whether absolute, accrued, contingent or otherwise), whether due or to become
due which would be reasonably likely to have a Seller Material Adverse Effect.
(u) Collection Procedures. Such Seller has in place procedures
pursuant to the Transaction Documents which are either necessary or advisable to
ensure the timely collection of Receivables originated by it.
(v) Ownership. Except in the case of Furnishings International Inc.,
all of its issued and outstanding capital stock is wholly owned, directly or
indirectly, legally and beneficially, by Furnishings International Inc.
SECTION 4.02. Representations and Warranties of the Sellers Relating
to the Receivables. Each Seller hereby
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Amended and Restated Receivables Sale Agreement
represents and warrants to the Company on each Payment Date that with respect to
the Receivables originated by it being paid for as of such date:
(a) Receivables Description. As of the Cut-Off Date, the computer
tape, diskette or data transmission delivered or transmitted pursuant to
Section 2.01(e) sets forth in all material respects an accurate and
complete listing of all Receivables sold to the Company as of the Cut-Off
Date and the information contained therein in accordance with Schedule 2
with respect to each such Receivable is true and correct as of the Cut-Off
Date. As of the Cut-Off Date, the aggregate amount of Receivables owned by
the Sellers is accurately set forth on such computer tape, diskette or
data transmission.
(b) No Liens. Each Receivable existing on the Effective Date or, in
the case of Receivables sold to the Company after the Effective Date, on
the date that each such Receivable shall have been sold to the Company,
has been conveyed to the Company free and clear of any Liens, except for
Permitted Liens specified in clause (i) of the definition thereof.
(c) Eligible Receivable. On the Effective Date, each Receivable that
is represented to be an Eligible Receivable sold to the Company on such
date is an Eligible Receivable on the Effective Date and, in the case of
Receivables sold to the Company after the Effective Date, each such
Receivable that is represented to be an Eligible Receivable sold to the
Company on such later date is an Eligible Receivable on such later date.
(d) Filings. On or prior to the Effective Date, all filings and
other acts necessary (including but not limited to all filings and other
acts necessary or advisable under the UCC) shall have been made or
performed in order to grant the Company on the
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Amended and Restated Receivables Sale Agreement
Effective Date a first priority perfected ownership or security interest
in respect of all Receivables.
SECTION 4.03. Representations and Warranties of the Company. The
Company represents and warrants as to itself as follows:
(a) Organization; Powers. The Company (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (iii) is qualified to do business in, and is in good
standing in, every jurisdiction where the nature of its business so requires,
except where the failure so to qualify would not have a Company Material Adverse
Effect and (iv) has the corporate power and authority to execute, deliver and
perform its obligations under each of the Transaction Documents and each other
agreement or instrument contemplated hereby or thereby to which it is or will be
a party.
(b) Authorization. The execution, delivery and performance by the
Company of each of the Transactions (i) have been duly authorized by all
requisite corporate and, if required, stockholder action and (ii) will not (A)
violate (1) any Requirement of Law or (2) any provision of any Transaction
Document or any other material Contractual Obligation to which the Company is a
party or by which it or any of its property is or may be bound, (B) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under, or give rise to any right to accelerate
or to require the pre-payment, repurchase or redemption of any obligation under
any Transaction Document or any other material Contractual Obligation or (C)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by the Company (other than
any Lien created hereunder or contemplated or permitted hereby).
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Amended and Restated Receivables Sale Agreement
(c) Enforceability. This Agreement has been duly executed and
delivered by the Company and constitutes, and each other Transaction Document to
which the Company is a party when executed and delivered by the Company will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its respective terms, subject (a) as to
enforcement of remedies, to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of creditors' rights
generally, from time to time in effect and (b) to general principles of equity
whether enforcement is sought by a proceeding in equity or at law.
(d) Accounting Treatment. The Company will not prepare any financial
statements that shall account for the transactions contemplated hereby, nor will
it in any other respect (other than for tax purposes) account for the
transactions contemplated hereby, in a manner that is inconsistent with the
Company's ownership interest in the Receivables.
ARTICLE V
Affirmative Covenants
Each Seller hereby agrees that, so long as there are any amounts
outstanding with respect to Purchased Receivables originated by it previously
sold by such Seller to the Company or until an Early Termination, whichever is
later, such Seller shall:
SECTION 5.01. Certificates; Other Information. Furnish to the
Company:
(a) not later than 120 days after the end of each fiscal year and
not later than 90 days after the end of each of the first three fiscal
quarters of each fiscal year, a certificate of a Responsible Officer of
the
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Amended and Restated Receivables Sale Agreement
Seller stating that, to the knowledge of such Responsible Officer (after
due inquiry), such Seller during such period has observed or performed all
of its covenants and other agreements, and satisfied every condition,
contained in the Sale Documents to which it is a party to be observed,
performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Purchase Termination Event or Potential
Purchase Termination Event except as specified in such certificate; and
(b) promptly, such additional financial and other information as the
Company may from time to time reasonably request.
SECTION 5.02. Compliance with Law and Policies. (i) Comply with all
Requirements of Law and material Contractual Obligations applicable to it.
(ii) Perform its obligations in accordance and compliance with the
Policies, as amended from time to time in accordance with the Transaction
Documents, in regard to the Receivables originated by it and the other
Receivable Assets.
SECTION 5.03. Preservation of Corporate Existence. (i) Preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation and (ii) qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the nature of its
business so requires, except where the failure so to qualify would not,
individually or in the aggregate with other such failures, have a Seller
Material Adverse Effect.
SECTION 5.04. Separate Corporate Existence.
(i) Maintain its deposit account or accounts, separate from those of
the Company and ensure that its funds
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Amended and Restated Receivables Sale Agreement
will not be diverted to the Company, nor will such funds be commingled with the
funds of the Company;
(ii) To the extent that it shares any officers or other employees
with the Company, the salaries of and the expenses related to providing benefits
to such officers and other employees shall be fairly allocated among it and the
Company, and it and the Company shall bear their fair shares of the salary and
benefit costs associated with all such common officers and employees;
(iii) To the extent that it jointly contracts with the Company to do
business with vendors or service providers or to share overhead expenses, the
costs incurred in so doing shall be allocated fairly between it and the Company,
and it and the Company shall bear their fair shares of such costs. To the extent
that it contracts or does business with vendors or service providers where the
goods and services provided are partially for the benefit of the Company, the
costs incurred in so doing shall be fairly allocated between it and the Company
in proportion to the benefit of the goods or services each is provided, and it
and the Company shall bear their fair shares of such costs. All material
transactions between it and the Company, whether currently existing or hereafter
entered into, shall be only on an arm's length basis;
(iv) Maintain office space separate from the office space of the
Company (but which may be located at the same address as the Company). To the
extent that it and the Company have offices in the same location, there shall be
a fair and appropriate allocation of overhead costs between them, and each shall
bear its fair share of such expenses;
(v) Issue financial statements separate from any financial
statements issued by the Company;
(vi) Not assume or guarantee any of the liabilities of the Company;
and
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Amended and Restated Receivables Sale Agreement
(vii) Take, or refrain from taking, as the case may be, all other
actions that are necessary to be taken or not to be taken in order (x) to ensure
that the assumptions and factual recitations set forth in the Specified
Bankruptcy Opinion Provisions remain true and correct with respect to it (and,
to the extent within its control, to ensure that the assumptions and factual
recitations set forth in the Specified Bankruptcy Opinion Provisions remain true
and correct with respect to the Company) and (y) to comply with those procedures
described in such provisions that are applicable to it.
SECTION 5.05. Inspection of Property; Books and Records;
Discussions. Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of the Company upon reasonable advance
notice to visit and inspect any of its properties and examine and make abstracts
from any of its books and records during normal business hours on any Business
Day and as often as may reasonably be requested, subject to such Seller's
security and confidentiality requirements and to discuss the business,
operations, properties and financial and other condition of such Seller with
officers and employees of such Seller and with its Independent Public
Accountants.
SECTION 5.06. Location of Records. Keep its chief place of business
and chief executive office, and the offices where it keeps the records
concerning the Purchased Receivables (and all original documents relating
thereto), at the locations referred to for it on Schedule 4 hereto or upon 30
days' prior written notice to the Company, at such other locations in a
jurisdiction where all action required by Section 5.14 shall have been taken and
completed and be in full force and effect; provided, however, that the Rating
Agency shall be notified of any such changes in location and such location shall
not be changed to a state which is within the Tenth Circuit unless it delivers
an opinion of
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Amended and Restated Receivables Sale Agreement
counsel reasonably acceptable to the Rating Agencies to the effect that Octagon
Gas Systems, Inc. ▇. ▇▇▇▇▇▇, 995 F.2d 948 (10th Cir. 1993), is no longer
controlling precedent in the Tenth Circuit.
SECTION 5.07. Computer Files. At its own cost and expense, retain
the ledger used by it as a master record of the Obligors and retain copies of
all documents relating to each Obligor as custodian and agent for the Company
and other Persons with interests in the Purchased Receivables originated by it.
SECTION 5.08. Payment of and Compliance with Obligations. Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its obligations of whatever nature, except
where the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on its books or except where the failure to so pay,
discharge or otherwise satisfy such obligations would not have a Seller Material
Adverse Effect. Such Seller shall defend the right, title and interest of the
Company in, to and under the Receivables originated by it and the other
Receivable Assets, whether now existing or hereafter created, against all claims
of third parties claiming through such Seller. Such Seller will duly fulfill all
obligations on its part to be fulfilled under or in connection with each
Receivable originated by it and will do nothing to impair the rights of the
Company in such Receivable.
SECTION 5.09. Collections. Instruct each Obligor to make payments in
respect of its Receivables to a Lockbox or a Lockbox Account or by wire transfer
to the applicable Collection Account and to comply in all material respects with
procedures with respect to Collections reasonably specified from time to time by
the Company. In the event that any payments in respect of any such Receivables
are made directly to such Seller (including, without limitation,
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Amended and Restated Receivables Sale Agreement
any employees thereof or independent contractors employed thereby), such Seller
shall, within two Business Days of receipt thereof, deliver (which may be via
regular mail) or deposit such amounts to a Lockbox, a Lockbox Account or the
Collection Account and, prior to forwarding such amounts, such Seller shall hold
such payments in trust as custodian for the Company and the Trustee.
SECTION 5.10. Furnishing Copies, Etc. Furnish to the Company:
(a) within five Business Days of the Company's request, a
certificate of the chief financial officer of such Seller or of the
related Servicer, on behalf of such Seller, certifying, as of the date
thereof, to the knowledge of such officer, that no Purchase Termination
Event has occurred and is continuing or if one has so occurred, specifying
the nature and extent thereof and any corrective action taken or proposed
to be taken with respect thereto;
(b) promptly after a Responsible Officer of such Seller obtains
knowledge of the occurrence of any Purchase Termination Event or Potential
Purchase Termination Event, written notice thereof;
(c) promptly following request therefor, such other information,
documents, records or reports regarding or with respect to the Purchased
Receivables of such Seller, as the Company may from time to time
reasonably request;
(d) promptly after a Responsible Officer of such Seller obtains
knowledge of the occurrence thereof, written notice of any event of
default or default under any other Sale Document; and
(e) promptly upon determining that any Purchased Receivable
originated by it designated as an Eligible Receivable on the applicable
Daily Report or Monthly
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Amended and Restated Receivables Sale Agreement
Settlement Statement was not an Eligible Receivable as of the date
provided therefor, written notice of such determination.
SECTION 5.11. Obligations with Respect to Obligors and Receivables.
Take all actions on its part reasonably necessary to maintain in full force and
effect its rights under all contracts relating to the Purchased Receivables
originated by it.
SECTION 5.12. Responsibilities of the Sellers. Notwithstanding
anything herein to the contrary, (i) such Seller shall perform or cause to be
performed all its obligations under the Policies related to the Purchased
Receivables to the same extent as if such Purchased Receivables had not been
transferred to the Company hereunder, (ii) the exercise by the Company of any of
its rights hereunder shall not relieve such Seller of its obligations with
respect to such Purchased Receivables and (iii) except as provided by law, the
Company shall not have any obligation or liability with respect to any Purchased
Receivables, nor shall the Company be obligated to perform any of the
obligations or duties of such Seller thereunder.
SECTION 5.13. Assessments. Promptly pay and discharge all taxes,
assessments, levies and other governmental charges imposed on it except such
taxes, assessments, levies and charges which are being contested in good faith
and for which such Seller has set aside on its books adequate reserves.
SECTION 5.14. Further Action. In addition to the foregoing:
(a) Such Seller agrees that 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 in such Seller's
reasonable judgment or that the Company may reasonably request, in order
to more fully effect the purposes of
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Amended and Restated Receivables Sale Agreement
this Agreement and the transfer of the Receivables hereunder, to protect
or more fully evidence the Company's right, title and interest in the
Purchased Receivables, or to enable the Company to exercise or enforce any
of its rights in respect thereof. Without limiting the generality of the
foregoing, the Seller will upon the request of the Company (i) execute and
file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or, in the opinion
of the Company, advisable and (ii) obtain the agreement of any Person
having a Lien on any Receivables owned by such Seller (other than any Lien
created or imposed hereunder or under the Pooling Agreement or any
Permitted Lien) to release such Lien upon the purchase of any such
Receivables by the Company.
(b) Such Seller hereby irrevocably authorizes the Company to file
one or more financing or continuation statements (and other similar
instruments), and amendments thereto, relative to all or any part of the
Purchased Receivables and the other Receivable Assets sold or to be sold
by such Seller without the signature of such Seller to the extent
permitted by applicable law.
(c) If such Seller fails to perform any of its agreements or
obligations under this Agreement, the Company may (but shall not be
required to) perform, or cause performance of, such agreements or
obligations, and the expenses of the Company incurred in connection
therewith shall be payable by such Seller as provided in Section 9.02. The
Company agrees promptly to notify such Seller after any such performance;
provided, however, that the failure to give such notice shall not affect
the validity of any such performance.
SECTION 5.15. Sale of Receivables. Sell Receivables solely in
accordance with the terms of this Agreement.
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Amended and Restated Receivables Sale Agreement
SECTION 5.16. BayBank Depository Agreement. ▇▇▇▇▇▇ ▇▇▇▇▇ Fabrics,
Inc., as Seller and Servicer, will take all reasonably necessary steps to
establish a lockbox account to replace the BayBank Depository Agreement as soon
as reasonably possible.
ARTICLE VI
Negative Covenants
Each Seller hereby agrees that, so long as there are any amounts
outstanding with respect to Purchased Receivables originated by it previously
sold by such Seller to the Company or until an Early Termination with respect to
such Seller, whichever is later, such Seller shall not, directly or indirectly:
SECTION 6.01. Limitations on Transfers of Receivables, Etc. At any
time sell, transfer or otherwise dispose of any of the Receivables or other
Receivable Assets pursuant to:
(i) any Lien Creation except for Permitted Liens; or
(ii) any Investment.
SECTION 6.02. Extension or Amendment of Receivables. Extend, make
any Dilution Adjustment to, rescind, cancel, amend or otherwise modify, or
attempt or purport to extend, amend or otherwise modify, the terms of any
Purchased Receivables, except (a) in accordance with the terms of the Policies,
(b) as required by any Requirement of Law or (c) in the case of Dilution
Adjustments, upon making a Seller Dilution Adjustment Payment pursuant to
Section 2.05.
SECTION 6.03. Change in Payment Instructions to Obligors. Instruct
any Obligor of any Purchased Receivables
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Amended and Restated Receivables Sale Agreement
to make any payments with respect to any Receivables other than, in accordance
with Section 5.09, to a Lockbox, a Lockbox Account or by wire transfer to the
Collection Account; provided, however, that, in accordance with Section 2.03 of
the Servicing Agreement, (i) it may terminate any Lockbox Agreements or Lockbox
Accounts and (ii) it may execute additional Lockbox Agreements or Lockbox
Accounts and instruct Obligors to make payments in respect of any Receivables to
such additional accounts; provided, however, upon the satisfaction of the Rating
Agency Condition (or, if no Outstanding Series has been rated by a Rating
Agency, with the consent of the Agent) the Seller may enter into any amendments
or modifications of a Lockbox Agreement that the Seller reasonably deems
necessary to conform such Lockbox Agreement to the cash management system of the
Company or such Seller.
SECTION 6.04. Change in Name. Change its name, use an additional
name, or change its identity or corporate structure in any manner which would or
might make any financing statement or continuation statement (or other similar
instrument) relating to this Agreement seriously misleading within the meaning
of Section 9-402(7) of the UCC, or impair the perfection of the Company's
interest in any Receivable under any other similar law, without 30 days' prior
written notice to the Company.
SECTION 6.05. Policies. Make any change or modification (or permit
any change or modification to be made) in any material respect to the Policies,
except (i) if such changes or modifications are necessary under any Requirement
of Law, or (ii) if the Rating Agency Condition is satisfied with respect
thereto; provided, however, that if any change or modification, other than a
change or modification permitted pursuant to clause (i) above, would be
reasonably likely to have a Material Adverse Effect on the interests of the
Investor Certificateholders of a Series which is not rated by a Rating Agency,
the consent of the applicable Agent (or if none, as specified in the related
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Amended and Restated Receivables Sale Agreement
Supplement) shall be required to effect such change or modification.
SECTION 6.06. Modification of Ledger. Delete or otherwise modify the
marking on the ledger referred to in Section 2.01(e).
SECTION 6.07. Accounting for Purchases. Prepare any financial
statements which shall account for the transactions contemplated hereby (other
than capital contributions and the Seller Note contemplated hereby) in any
manner other than as a sale of the Purchased Receivables originated by such
Seller to the Company or in any other respect account for or treat the
transactions contemplated hereby (including for financial accounting purposes,
except as required by law) (other than capital contributions and the Seller Note
contemplated hereby) in any manner other than as sales of the Purchased
Receivables originated by such Seller to the Company; provided, however, that
this subsection shall not apply for any tax or tax accounting purposes.
SECTION 6.08. Instruments. Subject to the delivery requirements set
forth in Section 2.01(b) of the Pooling Agreement, take any action to cause any
Receivable not evidenced by an "instrument" (as defined in the UCC as in effect
in the State of New York or other similar statute or legislation) upon
origination to become evidenced by an instrument, except in connection with the
enforcement or collection of an overdue Receivable.
SECTION 6.09. Ineligible Receivables. Without the prior written
approval of the Company, take any action to cause, or which would permit, a
Receivable that was designated as an Eligible Receivable on the Payment Date
relating to such Receivable to cease to be an Eligible Receivable, except as
otherwise expressly provided by this Agreement.
SECTION 6.10. Business of the Seller. Fail to maintain and operate
the business currently conducted by
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Amended and Restated Receivables Sale Agreement
such Seller and business activities reasonably incidental or related thereto in
substantially the manner in which it is presently conducted and operated if such
failure would materially adversely affect the interests of the Company under the
Transaction Documents.
SECTION 6.11. Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or make any material change in its
present method of conducting business, or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets other than the assignments and transfers contemplated hereby; provided,
however that Furnishings International Inc. may transfer the property, business
and assets of its Lineage Home Furnishings and Contract Furnishings divisions to
any, direct or indirect, wholly owned subsidiary of Lifestyle Holdings Ltd.
ARTICLE VII
Purchase Termination Events
SECTION 7.01. Purchase Termination Events. If any of the following
events (herein called "Purchase Termination Events") shall have occurred and be
continuing with respect to one or more Sellers:
(a) a Seller shall fail (i) to pay any amount due pursuant to
Section 2.06 in accordance with the provisions thereof and such failure
shall continue unremedied for a period of five Business Days from the
earlier of (A) the date any Responsible Officer of such Seller obtains
knowledge of such failure and (B) the date such Seller receives notice of
such failure from the Company, the related Servicer or the Trustee or (ii)
to pay any other amount required to be paid by
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Amended and Restated Receivables Sale Agreement
such Seller hereunder within two Business Days of the date when due; or
(b) a Seller shall fail to observe or perform in any material
respect any covenant or agreement applicable to it contained herein (other
than as specified in paragraph (a) of this Section 7.01); provided that no
such failure shall constitute a Purchase Termination Event under this
paragraph (b) unless such failure shall continue unremedied for a period
of 30 consecutive days from the date such Seller receives notice of such
failure from the Company, the related Servicer or the Trustee; or
(c) any representation, warranty, certification or statement made or
deemed made by such Seller in this Agreement or in any statement, record,
certificate, financial statement or other document delivered pursuant to
this Agreement shall prove to have been incorrect in any material respect
when made or deemed made, provided that a Purchase Termination Event shall
not be deemed to have occurred under this paragraph (c) based upon a
breach of any representation or warranty set forth in Section 4.02 if such
Seller shall have complied with the provisions of Section 2.06 in respect
thereof; or
(d) (i) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Seller in an involuntary case
under the Bankruptcy Code or any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect (the Bankruptcy Code and all
other such applicable laws being collectively, "Applicable Insolvency
Laws"), which decree or order is not stayed or any other similar relief
shall be granted under any applicable federal or state law now or
hereafter in effect and shall not be stayed; (ii)(A) an involuntary case
is commenced against the Seller under any Applicable Insolvency Law now or
hereafter in effect, a
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Amended and Restated Receivables Sale Agreement
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over the Seller, or over all or a
substantial part of the property of the Seller, shall have been entered,
an interim receiver, trustee or other custodian of the Seller for all or a
substantial part of the property of the Seller is involuntarily appointed,
a warrant of attachment, execution or similar process is issued against
any substantial part of the property of the Seller, and (B) any event
referred to in clause (ii)(A) above continues for 60 days unless
dismissed, bonded or disclosed; (iii) the Seller shall at its request have
a decree or an order for relief entered with respect to it or commence a
voluntary case under any Applicable Insolvency Law now or hereafter in
effect, or shall consent to the entry of a decree or an order for relief
in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such Applicable Insolvency Law, consent to the
appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; (iv) the making
by the Seller of any general assignment for the benefit of creditors; (v)
the inability or failure of the Seller generally to pay its debts as such
debts become due; or (vi) the Board of Directors of the Seller authorizes
action to approve any of the foregoing; or
(e) there shall have occurred (i) an Early Amortization Event set
forth in Section 7.01 of the Pooling Agreement or (ii) the Amortization
Period with respect to all Outstanding Series shall have occurred and be
continuing; or
(f) a Seller has been terminated as Servicer following a Servicer
Default with respect to such Seller under the Servicing Agreement; or
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Amended and Restated Receivables Sale Agreement
(g) a notice of Lien shall have been filed by the PBGC against a
Seller under Section 412(n) of the Code or Section 302(f) of ERISA for a
failure to make a required installment or other payment to a plan to which
Section 412(n) of the Code or Section 302(f) of ERISA applies unless there
shall have been delivered to the Trustee and the Rating Agencies proof of
release of such Lien; or
(h) any Lien in an amount equal to or greater than $1,000,000 has
been asserted against or imposed on, any real or personal property of a
Seller pursuant to the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. ss. 9607(l), or any equivalent or comparable
state law, relating to or arising from the costs of, response to, or
investigation, remediation or monitoring of, any environmental
contamination resulting from the current or past operations of such
Seller; or
(i) a Federal tax notice of Lien, in an amount equal to or greater
than $1,000,000, shall have been filed against a Seller unless there shall
have been delivered to the Trustee and the Rating Agencies proof of
release of such Lien.
then, (i) in the case of any Purchase Termination Event described in paragraph
(e)(i) above, the obligation of the Company to purchase Receivables from all
Sellers shall thereupon automatically terminate without further notice of any
kind, which is hereby waived by the Sellers, (ii) in the case of any Purchase
Termination Event described in paragraph (d), (g), (h) or (i) above, the
obligation of the Company to purchase Receivables from such Seller shall
thereupon automatically terminate without further notice of any kind, which is
hereby waived by such Seller, (iii) in the case of any Purchase Termination
Event described in paragraph (e)(ii) above, the obligation of the Company to
purchase Receivables from such Seller shall thereupon terminate without notice
of any kind, which is hereby waived
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Amended and Restated Receivables Sale Agreement
by such Seller unless both the Company and such Seller agree in writing that
such event shall not trigger an Early Termination hereunder and (iv) in the case
of any other Purchase Termination Event, so long as such Purchase Termination
Event shall be continuing, the Company may terminate its obligation to purchase
Receivables from such Seller by written notice to such Seller (any termination
pursuant to clause (i), (ii), (iii) or (iv) of this Article VII is herein called
an "Early Termination"); provided, however, that in the event of an involuntary
petition or proceeding as described in paragraphs (d)(i) and (d)(ii) above, the
Company shall not purchase Receivables from such Seller unless such involuntary
petition or proceeding is dismissed, bonded or discharged within 60 days of the
filing of such petition or the commencement of such proceeding.
SECTION 7.02. Remedies. (a) If a Purchase Termination Event has
occurred and is continuing, the Company (and its assignees) shall have all of
the rights and remedies provided to a secured creditor or a purchaser of
accounts under the UCC by applicable law in respect thereto.
(b) Such Seller agrees that, upon the occurrence and during the
continuation of a Purchase Termination Event under Section 7.01(d) or (e)(i):
(i) the Company (and its assignees) shall have the right at any time
to notify, or require that such Seller at such Seller's expense notify,
the respective Obligors of the Company's ownership of the Purchased
Receivables and other Receivable Assets and may direct that payment of all
amounts due or to become due under the Purchased Receivables be made
directly to the Company or its designee;
(ii) the Company (and its assignees) shall have the right to (A) ▇▇▇
for collection on any Purchased Receivables or (B) sell any Purchased
Receivables to any Person for a price that is acceptable to the
52
Amended and Restated Receivables Sale Agreement
Company. If required by the terms of Section 9-504 or 9-505 of the UCC (or
analogous provisions of any other similar law applicable to the
Receivables), the Company (and its assignees) may offer to sell any
Purchased Receivable to any Person, together, at its option, with all
other Receivables created by the same Obligor. Any Purchased Receivable
sold hereunder (other than pursuant to the Pooling Agreement) shall cease
to be a Receivable for all purposes under this Agreement as of the
effective date of such sale;
(iii) such Seller shall, upon the Company's written request and at
such Seller's expense, (A) assemble all of such Seller's documents,
instruments and other records (including credit files and computer tapes
or disks) that (1) evidence or will evidence or record Receivables sold by
such Seller and (2) are otherwise necessary or desirable to effect
Collections of such Purchased Receivables (collectively, the "Documents")
and (B) deliver the Documents to the Company or its designee at a place
designated by the Company. In recognition of such Seller's need to have
access to any Documents which may be transferred to the Company hereunder,
whether as a result of its continuing business relationship with any
Obligor for Receivables purchased hereunder or as a result of its
responsibilities as a Servicer, the Company hereby grants to such Seller
an irrevocable license to access the Documents transferred by such Seller
to the Company and to access any such transferred computer software in
connection with any activity arising in the ordinary course of such
Seller's business or in performance of such Seller's duties as a Servicer;
provided that such Seller shall not disrupt or otherwise interfere with
the Company's use of and access to the Documents and its computer software
during such license period;
(iv) such Seller hereby grants to the Company an irrevocable power
of attorney (coupled with an interest) to take any and all steps in such
Seller's
53
Amended and Restated Receivables Sale Agreement
name necessary or desirable, in the reasonable opinion of the Company, to
collect all amounts due under the Purchased Receivables, including,
without limitation, endorsing such Seller's name on checks and other
instruments representing Collections, enforcing the Purchased Receivables
and exercising all rights and remedies in respect thereof; and
(v) upon written request of the Company, such Seller will (A)
deliver to the Company all licenses, rights, computer programs, related
material, computer tapes, disks, cassettes and data necessary for the
immediate collection of the Purchased Receivables by the Company, with or
without the participation of such Seller (excluding software licenses
which by their terms are not permitted to be so delivered; provided that
such Seller shall use reasonable efforts to obtain the consent of the
relevant licensor to such delivery) and (B) make such arrangements with
respect to the collection of the Purchased Receivables as may be
reasonably required by the Company.
ARTICLE VIII
Seller Note
SECTION 8.01. Seller Note. On the Effective Date, the Company shall
issue to the Sellers a subordinated note substantially in the form of Exhibit A
(as amended, supplemented or otherwise modified from time to time, the "Seller
Note"). The Seller Note will have an initial principal amount equal to the
amount outstanding under that certain seller note issued pursuant to the
Receivables Sale Agreement, dated as of August 5, 1996, among the parties
hereto. The Company has incurred Indebtedness evidenced by the Seller Note and
may continue to incur Indebtedness evidenced by the Seller Note on any date only
(i) if such date is a Payment Date; (ii) in payment to the Sellers of all or a
portion of the Purchase Price (net of such
54
Amended and Restated Receivables Sale Agreement
deductions as provided in Section 2.03(d)) for Receivables and other Receivable
Assets required to be paid for by the Company to the Sellers on such Payment
Date in accordance with Section 2.02; (iii) to the extent that cash was not
available to pay such Purchase Price (net of such deductions) in accordance with
subsections 2.03(b)(i), 2.03(b)(ii) and 2.03(b)(iii) (as applicable); and (iv)
subject, in any event, to Section 8.03. Interest on the principal amount of the
Seller Note (as such principal amount may have been increased pursuant to the
following proviso) shall accrue at One-Month LIBOR plus 2.50% per annum (or, if
less, the "Applicable Percentage" with respect to "Eurodollar Loans" (as each
such term is defined in the Credit Agreement)) from and including the Effective
Date and shall be paid on each Distribution Date with respect to amounts accrued
and not paid as of the last day of the preceding Settlement Period and the
maturity date thereof; provided, however, that, to the maximum extent permitted
by law, accrued interest on the Seller Note which is not so paid shall be added,
at the request of the Sellers, to the principal amount of the Seller Note. The
principal amount of the Seller Note (as such principal amount may have been
increased pursuant to the proviso to the preceding sentence) shall be payable on
the maturity date of the Seller Note (unless sooner prepaid pursuant to the
terms thereof and of the other Transaction Documents). Each Seller's interest
in, and all payments in respect of, the Seller Note shall be allocated among the
Sellers by the Master Servicer pro-rata in accordance with the amount of
Receivables sold by each such Seller to the Company that are paid for by the
incurrence of debt under the Seller Note. Default in the payment of principal or
interest under the Seller Note shall not constitute a default or event of
default or a Purchase Termination Event hereunder, a Servicer Default under the
Servicing Agreement or an Early Amortization Event under the Pooling Agreement
or any Supplement thereto.
SECTION 8.02. Restrictions on Transfer of Seller Note. Neither the
Seller Note, nor any right of the Sellers to receive payments thereunder, shall
be assigned, trans-
55
Amended and Restated Receivables Sale Agreement
ferred, exchanged, pledged, hypothecated, participated or otherwise conveyed.
SECTION 8.03. Discretion; Aggregate Amount. Anything herein to the
contrary notwithstanding, no Seller shall be obligated to accept payment of any
Purchase Price in the form of Indebtedness of the Company under the Seller Note
if, after giving effect to such Indebtedness to be incurred on such date, the
aggregate principal amount of Indebtedness evidenced by the Seller Note,
incurred on or before such Payment Date and outstanding on such Payment Date
(after giving effect to all repayments thereof on or before such Payment Date)
would be more than 50% of the outstanding balance of the Receivables on such
Payment Date, unless such Seller shall be satisfied (and, for purposes hereof,
in the absence of notice to the contrary by such Seller to the Company and the
Trustee, such Seller shall be deemed satisfied) that, in the ordinary course of
its business, the Company will pay the principal of, and interest on, such
Indebtedness in accordance with the terms thereof. The principal amount of
Indebtedness evidenced by the Seller Note incurred on any Payment Date shall
not, in any event, be greater than the excess, if any, of (x) the Purchase Price
for Receivables and other Receivable Assets required to be paid for by the
Company on such Payment Date pursuant to Section 2.03 over (y) the portion of
such Purchase Price paid in cash pursuant to subsections 2.03(b)(i), 2.03(b)(ii)
and 2.03(b)(iii).
ARTICLE IX
Miscellaneous
SECTION 9.01. Payments. Each cash payment to be made by any of the
Company or a Seller hereunder shall be made on the required payment date and in
immediately available funds at the office of the payee set forth below its
signature hereto or to such other office as may be
56
Amended and Restated Receivables Sale Agreement
specified by either party in a notice to the other party hereto.
SECTION 9.02. Costs and Expenses. Each Seller agrees (a) to pay or
reimburse the Company for all its out-of-pocket costs and expenses incurred in
connection with the preparation and execution of, and any amendment, supplement
or modification to, this Agreement, the other Sale Documents and any other
documents prepared in connection herewith and therewith, the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, all reasonable fees and disbursements of counsel, (b) to pay
or reimburse the Company for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement and any
of the other Transaction Documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Company, (c) to pay,
indemnify, and hold the Company harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay
caused by such Seller in paying, stamp, excise and other similar taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement and any such
other documents, and (d) to pay, indemnify, and hold the Company harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (i) which may at any time be imposed on, incurred by
or asserted against the Company in any way relating to or arising out of this
Agreement or the other Sale Documents or the transactions contemplated hereby
and thereby or in connection herewith or any action taken or omitted by the
Company under or in connection with any of the foregoing (all such other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and
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Amended and Restated Receivables Sale Agreement
disbursements being herein called "Indemnified Liabilities") or (ii) which would
not have been imposed on, incurred by or asserted against the Company but for
its having acquired the Receivables hereunder; provided, however, that such
indemnity shall not be available to the extent that such Indemnified Liabilities
result from the gross negligence or wilful misconduct of the Company; and
provided, further, that such Seller shall have no obligation under this Section
9.02 to the Company with respect to Indemnified Liabilities arising from (i) any
action taken, or omitted to be taken, by a Servicer that is not such Seller
itself or an Affiliate of such Seller, (ii) any action taken by the Trustee or
the Company at the direction of the Trustee in collecting from an Obligor or
(iii) a default by an Obligor with respect to any Purchased Receivable (other
than arising out of (x) any discharge, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Purchased Receivable (including, without limitation, a defense based on such
Purchased Receivable not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms) or any other claim
resulting from the sale of the merchandise or services related to any such
Purchased Receivable or the furnishing or failure to furnish such merchandise or
services, (y) a failure by such Seller to perform its duties or obligations
under this Agreement or (z) the sale of any Purchased Receivable that is
designated on the applicable Daily Report to be an Eligible Receivable and is
determined to have been at the date of such sale an Ineligible Receivable or any
Purchased Receivable which thereafter becomes subject to a Dilution Adjustment).
The agreements in this Section 9.02 shall survive the collection of all
Receivables, the termination of this Agreement and the payment of all amounts
payable hereunder.
SECTION 9.03. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Sellers and the Company and their
respective successors (whether by merger, consolidation or otherwise) and
assigns. Each Seller agrees that it will not assign or transfer all
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Amended and Restated Receivables Sale Agreement
or any portion of its rights or obligations hereunder without the prior written
consent of the Company. Each Seller acknowledges that the Company shall assign
all of its rights hereunder to the Trustee. Each Seller consents to such
assignment and agrees that the Trustee, to the extent provided in the Pooling
Agreement, shall be entitled to enforce the terms of this Agreement and the
rights (including, without limitation, the right to grant or withhold any
consent or waiver) of the Company directly against such Seller, whether or not a
Purchase Termination Event or a Potential Purchase Termination Event has
occurred. Each Seller further agrees that, in respect of its obligations
hereunder, it will act at the direction of and in accordance with all requests
and instructions from the Trustee until all amounts due to the Investor
Certificateholders are paid in full. The Trustee, on behalf of the Investor
Certificateholders, shall have the rights of a third-party beneficiary under
this Agreement.
SECTION 9.04. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ANY CONFLICT OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT ISSUES OF
PERFECTION ARE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION.
SECTION 9.05. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Company, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
SECTION 9.06. Amendments and Waivers. Neither this Agreement nor any
terms hereof may be amended, supplemented or modified except in a writing signed
by the Company and each Seller. Any amendment, supplement or
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Amended and Restated Receivables Sale Agreement
modification shall not be effective until the Rating Agency Condition has been
satisfied.
SECTION 9.07. Severability. 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, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 9.08. Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage pre-paid, or, in the case of telecopy notice,
when received, addressed as follows in the case of the Company and each Seller,
or to such other address as may be hereafter notified by the respective parties
hereto:
The Company:
LFI Receivables Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Sellers:
to the addresses set
forth in Schedule 4
in each case, with a copy to
Trustee: The Chase Manhattan Bank, as Trustee
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Amended and Restated Receivables Sale Agreement
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Advanced Structured
Products Group
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.09. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by tele- copy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Company.
SECTION 9.10. Waivers of Jury Trial. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER SALE
DOCUMENTS.
SECTION 9.11. Jurisdiction; Consent to Service of Process. (a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER SALE DOCUMENTS OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE COMPANY MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE OTHER
SALE
61
Amended and Restated Receivables Sale Agreement
DOCUMENTS AGAINST ANY SELLER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT THEY MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER SALE
DOCUMENTS IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT.
(c) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.08. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 9.12. Addition of Sellers. Subject to Section 3.05, Section
2.08(m) of the Pooling Agreement, any applicable provisions in any Supplement,
and the terms and conditions of this Section 9.12, from time to time one or more
additional wholly owned, direct or indirect, Subsidiaries of Furnishings
International Inc. may become Sellers hereunder and parties hereto. If any such
Subsidiary wishes to become an additional Seller, it shall submit a request to
such effect in writing to the Company. If the Company shall have agreed to any
such request, such Subsidiary shall become an additional Seller hereunder and a
party hereto on the related Seller Addition Date upon satisfaction of the
conditions set forth in Section 3.05.
SECTION 9.13. Termination of Seller. (a) Any Seller (other than
Furnishings International Inc.) shall be terminated as a Seller hereunder by the
Company on the date such Seller ceases to be a wholly owned, direct or indirect,
Subsidiary of Furnishings International Inc.; provided (i) that the aggregate
outstanding Principal Amount of
62
Amended and Restated Receivables Sale Agreement
Purchased Receivables sold by all Sellers which so cease to be wholly owned
Subsidiaries at such time (together with the aggregate outstanding Principal
Amount of Purchased Receivables sold by all Sellers which have been terminated
pursuant to this Section 9.13 within the preceding 90 days) shall not exceed 10%
of the aggregate outstanding Principal Amount of all Purchased Receivables and
(ii) that no Purchase Termination Event or Potential Purchase Termination Event
has occurred and is continuing, or would result as a result thereof. From and
after the date any such Seller ceases to be a wholly owned, direct or indirect,
Subsidiary of Furnishings International Inc., the Company shall cease buying
Receivables and other Receivable Assets from such Seller. Each such Seller shall
be released as a Seller party hereto for all purposes and shall cease to be a
party hereto on the 90th day after the date on which there are no amounts
outstanding with respect to Purchased Receivables previously sold by such Seller
to the Company, whether such amounts have been collected or written off in
accordance with the Policies of such Seller. Prior to such date, such Seller
shall be obligated to perform its servicing and other obligations hereunder and
under the Transaction Documents to which it is a party with respect to Purchased
Receivables previously sold by such Seller to the Company, including, without
limitation, its obligation to direct the deposit of Collections into the
appropriate Lockbox.
(b) From time to time the Sellers, or the Master Servicer on behalf
of the Sellers, may request in writing that the Company designate one or more
Sellers as Sellers that shall cease to be parties to this Agreement; provided
that no Purchase Termination Event or Potential Purchase Termination Event has
occurred and is continuing, or would result as a result thereof. Any such
request shall specify the minimum aggregate Principal Amount of outstanding
Purchased Receivables sold by the Sellers to be so designated and terminated by
the Company. Promptly after receipt of any such designation by the Company, the
Sellers shall either (i) elect not to terminate such designated Sellers or (ii)
select a date, which date shall not be later
63
Amended and Restated Receivables Sale Agreement
than 30 days after the date of receipt of such designation, as the "Sale
Termination Date" for such designated Sellers. From and after such date, the
Company shall cease buying Receivables and other Receivable Assets from such
Sellers. Each such Seller shall be released as a Seller hereunder and a party
hereto for all purposes and shall cease to be a party hereto on the 90th day
after the date on which there are no amounts outstanding with respect to
Purchased Receivables previously sold by such Seller to the Company, whether
such amounts have been collected or written off in accordance with the Policies
of such Seller. Prior to such date, such Seller shall be obligated to perform
its servicing and other obligations hereunder and under the Transaction
Documents to which it is a party with respect to Purchased Receivables
previously sold by such Seller to the Company, including, without limitation,
its obligation to direct the deposit of Collections into the appropriate
Lockbox.
(c) A terminated Seller shall have no obligation to repurchase any
Receivables previously sold by it to the Company, but will have continuing
obligations with respect to such Receivables (including making any Seller
Dilution Adjustment Payments, Seller Adjustment Payments and Seller
Indemnification Payments) to the extent such obligations arise hereunder.
SECTION 9.14. No Bankruptcy Petition. Each Seller, by entering into
this Agreement, and any present or future holder of the Seller Note, by its
acceptance thereof, covenants and agrees that, prior to the date which is one
year and one day after the date of termination of this Agreement pursuant to
Section 9.15, it will not institute against, or join any other Person in
instituting against, the Company any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any Applicable
Insolvency Laws.
SECTION 9.15. Termination. This Agreement will terminate at such
time as (a) the commitment of the Company
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Amended and Restated Receivables Sale Agreement
to purchase Receivables from all the Sellers hereunder shall have terminated and
(b) all Receivables purchased hereunder have been collected, and the proceeds
thereof turned over to the Company and all other amounts owing to the Company
hereunder shall have been paid in full or, if Receivables sold hereunder have
not been collected, such Receivables have become Defaulted Receivables and the
Company shall have completed its collection efforts in respect thereto;
provided, however, that the indemnities of the Sellers to the Company set forth
in this Agreement shall survive such termination and provided, further that, to
the extent any amounts remain due and owing to the Company hereunder, the
Company shall remain entitled to receive any collections on Receivables sold
hereunder which have become Defaulted Receivables after it shall have completed
its collection efforts in respect thereof.
SECTION 9.16. Construction of Agreement. (a) Each Seller hereby
grants to the Company a security interest in all of such Seller's right, title
and interest in, to and under the Receivables originated by it and other
Receivable Assets now existing and hereafter created, all monies due or to
become due and all amounts received with respect thereto and all "proceeds"
thereof (including Recoveries), to secure all of such Seller's obligations
hereunder.
(b) This Agreement shall constitute a security agreement under
applicable law.
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Amended and Restated Receivables Sale Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, all as of
the day and year first above written.
AMETEX FABRICS, INC.,
Seller and Servicer,
by_____________________________________
Name:
Title:
THE BERKLINE CORPORATION,
Seller and Servicer,
by_____________________________________
Name:
Title:
DREXEL HERITAGE
FURNISHINGS INC.,
Seller and Servicer,
by_____________________________________
Name:
Title:
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Amended and Restated Receivables Sale Agreement
DREXEL HERITAGE HOME
INSPIRATIONS, INC.,
Seller,
by_____________________________________
Name:
Title:
FURNISHINGS
INTERNATIONAL INC.,
Seller and Servicer,
by_____________________________________
Name:
Title:
HENREDON FURNITURE
INDUSTRIES, INC.,
Seller and Servicer,
by_____________________________________
Name:
Title:
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Amended and Restated Receivables Sale Agreement
LA BARGE, INC.,
Seller and Servicer,
by_____________________________________
Name:
Title:
LEXINGTON FURNITURE
INDUSTRIES, INC.,
Seller and Servicer,
by_____________________________________
Name:
Title:
▇▇▇▇▇▇▇▇-▇▇▇▇▇, INC.,
Seller and Servicer,
by_____________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇ FABRICS, INC.,
Seller and Servicer,
by_____________________________________
Name:
Title:
68
Amended and Restated Receivables Sale Agreement
UNIVERSAL FURNITURE
INDUSTRIES, INC.,
Seller and Servicer,
by_____________________________________
Name:
Title:
LFI RECEIVABLES CORPORATION,
by_____________________________________
Name:
Title:
Exhibit A to the
Amended and Restated Receivables Sale Agreement
[FORM OF
SELLER NOTE]
New York, New York
February 4, 1997
LFI RECEIVABLES CORPORATION, a Delaware corporation (the "Company"),
hereby promises to pay to the order of the Sellers listed on Schedule 1 to the
Receivables Sale Agreement described below the principal amount of this Seller
Note, determined as described below, together with interest thereon at a rate
per annum equal to One-Month LIBOR plus 2.50% (or, if less, the "Applicable
Percentage" with respect to "Eurodollar Loans" (as each such term is defined in
the Credit Agreement)) in lawful money of the United States of America.
Capitalized terms used herein but not defined herein shall have the meanings
assigned to such terms in the Amended and Restated Receivables Sale Agreement
dated as of February 4, 1997, among the Company, the Sellers named therein and
the Servicers named therein (as amended, supplemented or otherwise modified from
time to time in accordance with its terms, the "Receivables Sale Agreement") and
in the Amended and Restated Pooling Agreement, dated as of February 4, 1997,
among the Company, LFI Servicing Corporation, as Master Servicer, and The Chase
Manhattan Bank, a New York banking corporation, as Trustee (as amended,
supplemented or otherwise modified from time to time in accordance with its
terms, the "Pooling Agreement"). This Seller Note is the Seller Note referred to
in the Receivables Sale Agreement and is subject to the terms and conditions
thereof.
1. Principal Amount. The aggregate principal amount of this Seller
Note at any time shall be calculated in accordance with Section 8.01 of the
Receivables Sale Agreement and shall be recorded by the Master Servicer (the
authority to so record such amounts being hereby granted to
2
the Master Servicer) on the schedule annexed to and constituting a part of this
Seller Note.
2. Payments of Principal and Interest. (a) Principal on this Seller
Note may be prepaid at any time. Principal not prepaid shall be due and payable
on the Trust Termination Date (as defined in the Pooling Agreement).
(b) Payments of interest on this Seller Note shall be paid on each
Distribution Date (with respect to interest accrued and not paid as of the
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the date on which this Seller Note is issued)) and on the Trust Termination
Date by depositing such payment in such account of the Sellers as the Sellers
may designate in writing; provided, however, that accrued interest on this
Seller Note which is not so paid may (to the maximum extent permitted by law) be
added to the principal amount of this Seller Note as indicated on the schedule
annexed to and constituting a part of this Seller Note. Notwithstanding the
foregoing, no payments of interest or principal may be made under this Seller
Note at the times and to the extent prohibited under the Subordination
Provisions and Certain Termination Events described in Sections 3 and 6 below.
3. Subordination Provisions. The Company covenants and agrees, and
the Sellers, by their acceptance of this Seller Note, likewise covenant and
agree, that the payment of all obligations of the Company to the Sellers under
this Seller Note from or with the proceeds (such proceeds being the "Proceeds")
of Receivables (as defined in the Pooling Agreement), Related Property (as
defined in the Pooling Agreement) or the LHL Demand Note (as defined in the
Pooling Agreement) (and any extensions, renewals, financing, refundings and
replacements of all or any part of such obligations) (the "Seller Subordinated
Debt") are hereby expressly subordinated in right of payment to the payment and
performance of the obligations of the Company to the Trustee for the benefit of
the Holders (as defined in the
3
Pooling Agreement) howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become
due (the "Senior Obligations") to the extent and in the manner set forth in this
paragraph including each of the following subparts:
(a) Insolvency Events; Priority of Senior Obligations; Payments Made
Directly to the Trustee. In the event of any bankruptcy, dissolution,
winding up, liquidation, readjustment, reorganization or other similar
event relating to the Company, whether voluntary or involuntary, partial
or complete, and whether in bankruptcy, insolvency, receivership or other
similar proceedings, or upon an assignment for the benefit of creditors,
or any other marshalling of the assets and liabilities of the Company
(each an "Insolvency Event") or any sale of all or substantially all the
assets of the Company (except pursuant to the Pooling Agreement and any
Supplement thereto),
(i) the Senior Obligations shall first be paid and performed
in full and in cash before the Sellers shall be entitled to receive
and to retain any payment or distribution from or with the Proceeds
in respect of the Seller Subordinated Debt, whether of principal,
interest or otherwise; and
(ii) any payment or distribution from or with the Proceeds of
any kind (including cash or property arising from Proceeds which may
be payable or deliverable by reason of the payment of any other
indebtedness of the Company being subordinated to the payment of the
Seller Subordinated Debt) in respect of the Seller Subordinated Debt
that otherwise would be payable or deliverable with respect to the
Seller Subordinated Debt directly or indirectly, by set-off or in
any other manner to the Sellers, shall be paid or delivered by the
Person making such
4
payment or delivery (whether a trustee in bankruptcy, a receiver,
custodian, liquidating trustee or otherwise) directly to the Trustee
on behalf of the Holders for application to (in the case of cash) or
as collateral for (in the case of noncash property or securities)
the payment of the Senior Obligations until the Senior Obligations
shall have been paid in full in cash.
(b) Payments Received by Sellers. In the event that any Seller
receives any payment or other distribution of any kind or character
arising from Proceeds from the Company or from any other source whatsoever
in respect of the Seller Subordinated Debt after the commencement of an
Insolvency Event, such payment or other distribution shall be deemed to be
property of the Holders and shall be received and held by such Seller in
trust for the Trustee on behalf of the Holders and shall be turned over by
such Seller to the Trustee for the benefit of the Holders forthwith, until
all Senior Obligations have been paid and performed in full and in cash.
(c) Application of Payments. All payments and distributions arising
from Proceeds received by the Trustee in respect of the Seller
Subordinated Debt, to the extent received in or converted into cash, may
be applied by the Trustee for the benefit of the Holders (i) first to the
payment of any and all reasonable expenses (including reasonable
attorneys' fees and legal expenses) paid or incurred by the Trustee or any
Holder in enforcing these Subordination Provisions, or in endeavoring to
collect or realize upon the Seller Subordinated Debt, and (ii) any balance
remaining therefrom shall be applied by the Trustee toward the payment of
the Senior Obligations in a manner determined by the Trustee to be in
accordance with the Pooling Agreement.
5
(d) Sellers' Rights of Subrogation. Each Seller agrees that no
payment or distribution to Holders pursuant to these Subordination
Provisions shall entitle any Seller to exercise any right of subrogation
in respect thereof until the Senior Obligations shall have been paid in
full in cash. Each Seller agrees that these Subordination Provisions
herein shall not be affected by any action, or failure to act, by any
holder of Senior Obligations which results, or may result, in affecting,
impairing or extinguishing any right of reimbursement or subrogation or
other right or remedy of any Seller.
(e) Company's Obligations Absolute. The provisions of this paragraph
are intended solely for the purpose of defining the relative rights with
respect to Proceeds of the Sellers, on the one hand, and the Holders, on
the other hand. Nothing contained in these provisions or elsewhere in this
Seller Note is intended to or shall impair, as between the Company, its
creditors (other than the Holders) and the Sellers, the Company's
obligation, which is unconditional and absolute, to pay the Seller
Subordinated Debt as and when the same shall become due and payable in
accordance with the terms hereof and of the Receivables Sale Agreement or
to affect the relative rights of the Sellers and creditors of the Company
(other than the Certificateholders); provided that any payments made by
the Company pursuant to this subsection shall be made solely from funds
available to the Company which are not otherwise needed to be applied to
the payment of any amounts pursuant to any Pooling and Servicing
Agreements, shall be non-recourse other than with respect to proceeds in
excess of the proceeds to make such payment, and shall not constitute a
claim against the Company to the extent that insufficient proceeds exist
to make such payment.
(f) Avoided Payments. If, at any time, any payment (in whole or in
part) made with respect to any
6
Senior Obligations is rescinded or must be restored or returned by a
Holder or the Trustee on behalf of the Holders, the provisions of this
paragraph shall continue to be effective or shall be reinstated, as the
case may be, as though such payment had not been made.
(g) Subordination Not Affected by Certain Actions of Holders or the
Trustee. As between the Sellers, on the one hand, and the Holders and the
Trustee, on the other hand, each of the Holders or the Trustee may, from
time to time, at its sole discretion, without notice to the Sellers, and
without waiving any of its rights under these Subordination Provisions,
take any or all of the following actions: (i) retain or obtain an interest
in any property to secure any of the Senior Obligations; (ii) extend or
renew for one or more periods (whether or not longer than the original
period), alter, increase or exchange any of the Senior Obligations, or
release or compromise any obligation of any nature with respect to any of
the Senior Obligations; (iii) amend, supplement, amend and restate, or
otherwise modify any Transaction Document; and (iv) release its security
interest in, or surrender, release or permit any substitution or exchange
for all or any part of any rights or property securing any of the Senior
Obligations.
(h) Waiver of Notice. By its acceptance hereof, each Seller hereby
waives: (i) notice of acceptance of the provisions of this paragraph by
any of the Holders or the Trustee; (ii) notice of the existence, creation,
non-payment or non-performance of all or any of the Senior Obligations;
and (iii) all diligence in enforcement, collection or protection of, or
realization upon, the Senior Obligations or any security therefor.
4. Restrictions on Assignment. Neither this Seller Note, nor any
right of the Sellers to receive payments hereunder, shall be assigned,
transferred,
7
exchanged, pledged, hypothecated, participated or otherwise conveyed.
5. No Bankruptcy Petition. Each Seller covenants and agrees that,
prior to the date which is one year and one day after the date of termination of
the Receivables Sale Agreement pursuant to Section 9.15 thereof, it will not
institute against, or join any other 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.
6. Certain Termination Events. During the continuance of any Early
Amortization Event:
(a) the Company shall cease making any payments to the Sellers under
this Seller Note;
(b) the Trustee (on behalf of the Holders) may demand, ▇▇▇ for,
collect and receive every payment or distribution of any kind made in
respect of the Seller Subordinated Debt and file claims and proofs of
claim and take such other action (including enforcing any security
interest or other lien securing payment of the Seller Subordinated Debt)
as the Trustee (on behalf of the Holders) may deem necessary for the
exercise or enforcement of any of the rights or interests of Holders;
provided that in the event the Trustee takes such action, it shall apply
all proceeds first to the payment of costs under this Seller Note, then to
the payment of the Senior Obligations and any surplus proceeds remaining
thereafter to be paid over to whosoever may be lawfully entitled thereto;
and
(c) each Seller shall promptly take such action as the Trustee (on
behalf of the Holders) may request (i) to file appropriate claims or
proofs of claim in respect of the Seller Subordinated Debt; (ii) to
execute and deliver to the Trustee (on behalf of the
8
Holders) such powers of attorney, assignments, or other instruments as the
Trustee may request in order to enable it to enforce any and all claims
with respect to, and any security interests and other liens securing
payment of, the Seller Subordinated Debt, and (iii) to collect and receive
any and all payments or distributions which may be payable or deliverable
upon or with respect to the Seller Subordinated Debt for account of the
Trustee (on behalf of the Holders).
THIS SELLER NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ANY CONFLICT OF LAW
PRINCIPLES.
LFI RECEIVABLES CORPORATION,
by ___________________________________
Name:
Title:
Schedule 1 to
Seller Note
Subordinated Loans and Payments of Principal
Amount of Unpaid
Amount of Principal Principal Notation
Date Loans Repaid Balance Made By
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Exhibit B to the
Amended and Restated Receivables Sale Agreement
[FORM OF ADDITIONAL SELLER/SERVICER SUPPLEMENT]
SUPPLEMENT, dated [ ], to (i) the Amended and Restated Receivables
Sale Agreement, dated as of February 4, 1997 (as amended, supplemented or
otherwise modified from time to time in accordance with its terms, the
"Receivables Sale Agreement"), among LFI Receivables Corporation, the Sellers
named therein and the Servicers named therein and (ii) the Amended and Restated
Servicing Agreement, dated as of February 4, 1997 (as amended, supplemental or
otherwise modified from time to time in accordance with its terms, the
"Servicing Agreement"), among LFI Receivables Corporation, LFI Servicing
Corporation, as Master Servicer, the Servicers party thereto and The Chase
Manhattan Bank, as Trustee.
W I T N E S S E T H:
WHEREAS, the Receivables Sale Agreement provides that any wholly
owned, direct or indirect, Subsidiary of Furnishings International Inc.,
although not originally a Seller thereunder, may become a Seller under the
Receivables Sale Agreement upon the satisfaction of each of the conditions
precedent set forth in Sections 3.05 and 9.12 of the Receivables Sale Agreement,
Section 2.08(m) of the Pooling Agreement and any applicable provisions of any
Supplement;
WHEREAS, the Servicing Agreement provides that any wholly owned,
direct or indirect, Subsidiary of Furnishings International Inc., although not
originally a Servicer thereunder, may become a Servicer under the Servicing
Agreement upon (i) the delivery to the Company of a supplement in substantially
the form of this Supplement and (ii) the satisfaction of each of the conditions
precedent set forth in Sections 3.05 of the Receivables Sale Agreement; and
2
WHEREAS, the undersigned was not an original Seller under the
Receivables Sale Agreement and the Seller Note or an original Servicer under the
Servicing Agreement but now desires to become a Seller and a Servicer,
respectively, thereunder.
3
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of each
of the Receivables Sale Agreement and the Servicing Agreement applicable to a
Seller and a Servicer, respectively, thereunder and agrees that it shall, on the
date this Supplement is accepted by the Company and the Trustee, on behalf of
the Holders, become (a) in the case of the Receivables Sale Agreement, a Seller
and (b) in the case of the Servicing Agreement, a Servicer, for all purposes of
the Receivables Sale Agreement and the Servicing Agreement, respectively, to the
same extent as if originally a party thereto.
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.
[Insert name of Seller/Servicer]
by__________________________________
Title:
Accepted as of the date
first above written:
LFI RECEIVABLES COMPANY
by ________________________________
Title:
4
Acknowledged as of the date
first above written:
THE CHASE MANHATTAN BANK, as Trustee, on
behalf of the Holders,
by ________________________________
Title:
Schedule 1 to the
Amended and Restated Receivables Sale Agreement
Sellers and Servicers(1)
Ametex Fabrics, Inc.
The Berkline Corporation
Drexel Heritage Furnishings Inc.
Drexel Heritage Home Inspirations, Inc.
Furnishings International Inc.
Henredon Furniture Industries, Inc.
La Barge, Inc.
Lexington Furniture Industries, Inc.
▇▇▇▇▇▇▇▇-▇▇▇▇▇, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇ Fabrics, Inc.
Universal Furniture Industries, Inc.
----------
(1) Each Seller will service the Receivables originated by it, except that
Drexel Heritage Furnishings Inc. will service the Receivables originated by
Drexel Heritage Home Inspirations, Inc. and the Lineage Home Furnishings
division of FII.
Schedule 2 to the
Amended and Restated Receivables Sale Agreement
Receivables
Delivered or transmitted via computer tape, diskette or data transmission
pursuant to Section 3.01(iv).
Schedule 4 to the
Amended and Restated Receivables Sale Agreement
Jurisdiction of Location of Chief Office Where
Seller Incorporation Executive Office Records are Kept
------ ------------- ---------------- ----------------
Ametex Fabrics, Delaware ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. Same
Inc. ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
The Berkline Delaware One Berkline Same
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Drexel Heritage New York 101 North Main Same
Furnishings Inc. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Drexel Heritage North Carolina 101 North Main Same
Home Street
Inspirations, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Inc.
Furnishings Delaware 1300 National Same(1)
International Highway
Inc. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Henredon North Carolina ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
Industries, Inc. 28655
La Barge, Inc. Michigan ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇
Lexington North Carolina ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
Industries, Inc. 27292
----------
(1) The same, except that i) the Lineage Home Furnishings division's
records are kept at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and (ii) the
Contract Furnishings division's records are kept at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
2
Jurisdiction of Location of Chief Office Where
Seller Incorporation Executive Office Records are Kept
------ ------------- ---------------- ----------------
▇▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Lineage Same
Inc. Court
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Delaware ▇▇ ▇▇▇▇▇ ▇▇▇▇. Same
Fabrics, Inc. ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Universal Delaware 2622 Uwharrie Same
Furniture Road
Industries, Inc. ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇
Schedule 5 to the
Amended and Restated Receivables Sale Agreement
Names
Trade, "Doing Business As"
Seller or Assumed Name[s]
------ --------------------------
Ametex Fabrics, Inc. Ametex Fabrics, Inc. Contract
Division
The Berkline Corporation Motionworks
Drexel Heritage Furnishings Inc. D-H Retail Space, Inc.
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Heritage Advertising Inc.
Heritage
Lineage
Drexel Heritage Home None
Inspirations, Inc.
Furnishings International Inc. Lineage Home Furnishings, Inc.
Masco Home
Furnishings, Inc.
Henredon Furniture Industries, Henredon
Inc. Henredon Acquisition
Henredon Furniture
Henredon/▇▇▇▇▇ Lauren
Henredon Transportation, Inc.
Henredon Upholstery
N.C. ▇▇▇▇▇▇▇▇▇▇
La Barge, Inc. Entree
La Barge Mirrors, Inc.
La Barge/Marbro Factory
Outlet Store
LMI Advertising
Marbro Lamp
Lexington Furniture Industries, ▇▇▇▇▇ Link
Inc.
▇▇▇▇▇▇▇▇-▇▇▇▇▇, Inc. None
▇▇▇▇▇▇ ▇▇▇▇▇ Fabrics, Inc. American Textiles
▇▇▇▇▇▇ ▇▇▇▇▇ Fabrics, Inc.
Contract Division
▇▇▇▇▇▇ ▇▇▇▇▇ Fabrics of Cleveland
▇▇▇▇▇▇ ▇▇▇▇▇ Fabrics of Houston
2
Trade, "Doing Business As"
Seller or Assumed Name[s]
------ --------------------------
Universal Furniture Industries, Bench Craft
Inc. Blue Mountain Trucking
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
Norfolk Veneer ▇▇▇▇▇
Simply Together
Universal Bedroom Furniture
Universal Bedroom Furniture Ltd.
Universal Dining Room Furniture,
Ltd.
Universal Flooring Ltd.
Universal Occasional Furniture
Limited
Universal Upholstery
Woodmaster
Schedule 6 to the
Amended and Restated Receivables Sale Agreement
Discounted Percentage
All terms defined or referenced in the Receivables Sale Agreement,
the Pooling Agreement or a Supplement and not otherwise defined or referenced
herein are used herein as therein defined or referenced.
The Discounted Percentage applicable to the Receivables purchased on any date
from any Seller shall equal (a) during the initial Accrual Period, 98.50% and
(b) thereafter, the percentage obtained from the following formula:
100% - (A + B + C + D)
all determined by the Company as of the related Payment Date,
Where
A = Adjusted Loss Reserve Percentage, which as of such Payment Date will equal
the ratio obtained by dividing (a) Charged-Off Receivables (net of
recoveries in respect of Charged-Off Receivables) with respect to such
Seller during the six-fiscal-month period immediately preceding the
Settlement Report Date most recently preceding such Payment Date by (b)
two times the aggregate amount of Collections during the three-
fiscal-month period immediately preceding the Settlement Report Date most
recent to such Payment Date with respect to Receivables originated by such
Seller.
B = Adjusted Carrying Cost Reserve Percentage, which as of such Payment Date
will equal the amount obtained by dividing (a) the product of (i) 1.5,
(ii) Days Sales Outstanding and (iii) the ABR plus 2% by (b) 365.
C = The Servicing Fee Percentage divided by 360.
D = Processing Expense Reserve Percentage, which will equal 1/4% and reflects
the cost of the Company's overhead,
2
including costs of processing the purchase of Receivables and other normal
operating costs and a reasonable profit margin.
None of the elements of the above-referenced formula, in respect of any purchase
of Receivables, will be adjusted following the related Payment Date.
With respect to each calculation set forth above with respect to a Settlement
Report Date, such calculation as calculated on such Settlement Report Date and
included in the applicable Monthly Settlement Statement shall remain in effect
from and including the related Settlement Report Date to but excluding the
following Settlement Report Date.