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EXHIBIT 10.2
EXECUTION
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RECEIVABLES PURCHASE AGREEMENT
Dated as of June 19, 2000
Among
LPAC CORP.
as the Seller
and
LENNOX INDUSTRIES INC.,
as the Master Servicer
and
BLUE RIDGE ASSET FUNDING CORPORATION
as the Purchaser
and
WACHOVIA BANK, N.A.
as the Administrative Agent
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TABLE OF CONTENTS
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ARTICLE I PURCHASES AND REINVESTMENTS............................................................................2
Section 1.1 Commitments to Purchase; Limits on Purchaser's Obligations.........................................2
Section 1.2 Purchase Procedures; Assignment of the Purchaser's Interests.......................................2
Section 1.3 Reinvestments of Certain Collections; Payment of Remaining Collections.............................3
Section 1.4 Asset Interest.....................................................................................5
ARTICLE II COMPUTATIONAL RULES...................................................................................6
Section 2.1 Selection of Asset Tranches........................................................................6
Section 2.2 Computation of Purchaser's Total Investment and Purchaser's Tranche Investment.....................6
Section 2.3 Computation of Concentration Limits and Unpaid Balance.............................................7
Section 2.4 Computation of Earned Discount.....................................................................7
Section 2.5 Estimates of Earned Discount Rate, Fees, etc.......................................................7
ARTICLE III SETTLEMENTS..........................................................................................8
Section 3.1 Settlement Procedures..............................................................................8
Section 3.2 Deemed Collections; Reduction of Purchaser's Total Investment, Etc................................10
Section 3.3 Payments and Computations, Etc....................................................................12
Section 3.4 Treatment of Collections and Deemed Collections...................................................13
ARTICLE IV FEES AND YIELD PROTECTION............................................................................13
Section 4.1 Fees..............................................................................................13
Section 4.2 Yield Protection..................................................................................13
Section 4.3 Funding Losses....................................................................................15
ARTICLE V CONDITIONS OF PURCHASES...............................................................................16
Section 5.1 Conditions Precedent to Initial Purchase..........................................................16
Section 5.2 Conditions Precedent to All Purchases and Reinvestments...........................................18
ARTICLE VI REPRESENTATIONS AND WARRANTIES.......................................................................20
Section 6.1 Representations and Warranties of the Seller Parties..............................................20
ARTICLE VII GENERAL COVENANTS OF THE SELLER PARTIES.............................................................24
Section 7.1 Affirmative Covenants of the Seller Parties.......................................................24
Section 7.2 Reporting Requirements of the Seller Parties......................................................26
Section 7.3 Negative Covenants of the Seller Parties..........................................................28
Section 7.4 Separate Corporate Existence of the Seller........................................................30
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ARTICLE VIII ADMINISTRATION AND COLLECTION......................................................................32
Section 8.1 Designation of Master Servicer....................................................................32
Section 8.2 Duties of Master Servicer.........................................................................34
Section 8.4 Servicer Defaults.................................................................................35
Section 8.5 Rights of the Administrative Agent................................................................36
Section 8.6 Responsibilities of the Seller Parties............................................................37
Section 8.7 Further Action Evidencing Purchases and Reinvestments.............................................37
Section 8.8 Application of Collections........................................................................39
ARTICLE IX SECURITY INTEREST....................................................................................39
Section 9.1 Grant of Security Interest........................................................................39
Section 9.2 Further Assurances................................................................................39
Section 9.3 Remedies..........................................................................................39
ARTICLE X LIQUIDATION EVENTS....................................................................................39
Section 10.1 Liquidation Events...............................................................................39
Section 10.2 Remedies.........................................................................................42
ARTICLE XI THE ADMINISTRATIVE AGENT.............................................................................43
Section 11.1 Authorization and Action.........................................................................43
Section 11.2 Administrative Agent's Reliance, Etc.............................................................43
Section 11.3 Wachovia and Affiliates..........................................................................43
ARTICLE XII ASSIGNMENT OF THE PURCHASER'S INTEREST..............................................................44
Section 12.1 Restrictions on Assignments......................................................................44
Section 12.2 Rights of Assignee...............................................................................44
Section 12.3 Terms and Evidence of Assignment.................................................................45
Section 12.4 Rights of Liquidity Banks........................................................................45
ARTICLE XIII INDEMNIFICATION....................................................................................45
Section 13.1 Indemnities by the Seller........................................................................45
Section 13.2 Indemnities by Master Servicer...................................................................47
ARTICLE XIV MISCELLANEOUS.......................................................................................48
Section 14.1 Amendments, Etc..................................................................................48
Section 14.2 Notices, Etc.....................................................................................49
Section 14.3 No Waiver; Remedies..............................................................................49
Section 14.4 Binding Effect; Survival.........................................................................49
Section 14.5 Costs, Expenses and Taxes........................................................................50
Section 14.6 No Proceedings...................................................................................50
Section 14.7 Confidentiality of Seller Information............................................................51
Section 14.8 [Reserved].......................................................................................53
Section 14.9 Captions and Cross References....................................................................53
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Section 14.10 Integration.....................................................................................53
Section 14.11 Governing Law...................................................................................53
Section 14.12 Waiver Of Jury Trial............................................................................53
Section 14.13 Consent To Jurisdiction; Waiver Of Immunities...................................................54
Section 14.14 Execution in Counterparts.......................................................................54
Section 14.15 No Recourse Against Other Parties...............................................................54
Section 14.16 Severability of Provisions......................................................................55
APPENDIX
Appendix A Definitions
SCHEDULES
Schedule 6.1(i) Description of Material Adverse Changes
Schedule 6.1(n) List of Offices of the Master Servicer and the Seller where
Records are kept
Schedule 6.1(o) List of Lockbox Banks
Schedule 14.2 Notice Addresses
EXHIBITS
Exhibit 1.2(a) Form of Purchase Request
Exhibit 3.1(a) Form of Information Package
Exhibit A-1 Form of Lockbox Agreement
Exhibit B Form of Certificate of Financial Officer
Exhibit C-1 Credit and Collection Policy of Lennox
Exhibit C-2 Credit and Collection Policy of Heatcraft
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RECEIVABLES PURCHASE AGREEMENT
Dated as of June 19, 2000
THIS IS A RECEIVABLES PURCHASE AGREEMENT (the "Agreement") among:
(1) LPAC CORP., a Delaware corporation (together with its successors
and permitted assigns, the "Seller"),
(2) LENNOX INDUSTRIES INC., an Iowa corporation (together with its
successors, "Lennox"), as master servicer hereunder (in such capacity, together
with any successor master servicer appointed pursuant to Section 8.1, the
"Master Servicer", Lennox in its capacity as the Master Servicer, together with
the Seller, each a "Seller Party" and collectively the "Seller Parties"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware corporation
(together with its successors and assigns, the "Purchaser"),
(4) WACHOVIA BANK, N.A., a national banking association ("Wachovia"),
as administrative agent for the Purchaser (in such capacity, together with any
successors thereto in such capacity, the "Administrative Agent").
Unless otherwise indicated, capitalized terms used in this Agreement
are defined in Appendix A.
Background
1. The Seller is jointly owned by the Originators, ▇▇▇▇▇▇▇▇▇ and
Heatcraft Technologies.
2. The Originators and ▇▇▇▇▇▇▇▇▇ are engaged in the heating,
ventilating, air conditioning and refrigeration businesses.
3. Each of the Originators and the Seller has entered into the Sale
Agreement pursuant to which the Originators have transferred, and hereafter will
transfer, to the Seller all of their respective right, title and interest in and
to the Pool Receivables and certain related property; provided, that ▇▇▇▇▇▇▇▇▇
will not make any such transfers until the ▇▇▇▇▇▇▇▇▇ Commencement Date.
4. The Seller has requested the Purchaser, and the Purchaser has
agreed, subject to the terms and conditions contained in this Agreement, to
purchase from the Seller from time to time an undivided percentage interest,
referred to herein as the Asset Interest, in Pool Receivables and related
property.
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5. The Seller and the Purchaser also desire that, subject to the terms
and conditions of this Agreement, certain of the daily Collections in respect of
the Asset Interest be reinvested in Pool Receivables, which reinvestment shall
constitute part of the Asset Interest.
6. Wachovia has been requested, and is willing, to act as the
Administrative Agent under this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.1 COMMITMENTS TO PURCHASE; LIMITS ON PURCHASER'S OBLIGATIONS.
Upon the terms and subject to the conditions of this Agreement
(including, without limitation, Article V), from time to time during the
Revolving Period, prior to the Termination Date, the Seller may request that the
Purchaser purchase from the Seller ownership interests in Pool Receivables and
Related Assets, and the Purchaser shall make such purchase (each being a
"Purchase"); provided that no Purchase shall be made by the Purchaser if, after
giving effect thereto, either (a) the then sum of the Purchaser's Total
Investment and aggregate CP Discount would exceed $ 130,000,000 (as adjusted
pursuant to Section 3.2(b)) (the "Purchase Limit"), or (b) the Asset Interest,
expressed as a percentage of Net Pool Balance, would exceed 100% (the
"Allocation Limit"); and provided, further that each Purchase made pursuant to
this Section 1.1 shall have a purchase price equal to at least $1,000,000 and
shall be an integral multiple of $100,000.
SECTION 1.2 PURCHASE PROCEDURES; ASSIGNMENT OF THE PURCHASER'S
INTERESTS.
(a) Purchase Request. Each Purchase from the Seller by the Purchaser
shall be made on notice from the Seller to the Administrative Agent (on behalf
of the Purchaser) received by the Administrative Agent not later than 12:00 noon
(New York City time) on the second Business Day preceding the date of such
proposed Purchase. Each such notice of a proposed Purchase shall be
substantially in the form of Exhibit 1.2(a) and shall specify, among other
items, the desired amount and date of such Purchase. The Administrative Agent
shall promptly upon receipt notify the Purchaser of any such notice. The Seller
shall not request more than one Purchase in any calendar week.
(b) Funding of Purchase. On the date of each Purchase, the Purchaser
shall, upon satisfaction of the applicable conditions set forth in Article V,
make available to the Seller the amount of its Purchase in same day funds by
wire transfer to an account designated in writing by the Seller.
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(c) Assignment of Asset Interests. The Seller hereby sells, assigns and
transfers to the Purchaser, effective on and as of the date of each Purchase and
each Reinvestment by the Purchaser hereunder, the Asset Interest in the Pool
Receivables and Related Assets.
SECTION 1.3 REINVESTMENTS OF CERTAIN COLLECTIONS; PAYMENT OF REMAINING
COLLECTIONS.
(a) On the close of business on each day during the period from the
date of the first Purchase to the Termination Date, the Master Servicer will,
out of all Collections received on such day from Pool Receivables and Related
Assets:
(i) determine the portion of the Collections attributable to
the Asset Interest by multiplying (A) the amount of such Collections
times (B) the lesser of (1) the Asset Interest and (2) 100%;
(ii) out of the portion of such Collections allocated to the
Asset Interest pursuant to clause (i) above, identify and hold in trust
for the Purchaser (provided that unless otherwise requested by the
Administrative Agent, on behalf of the Purchaser, after a Credit Event,
such Collections shall not be required to be held in a separate
account) an amount equal to the sum of the estimated amount of Earned
Discount accrued in respect of each Asset Tranche (based on the rate
information provided by the Administrative Agent pursuant to Section
2.5), all other amounts due to the Purchaser or the Administrative
Agent hereunder and the Purchaser's Share of the Servicing Fee (in each
case, accrued through such day) and not so previously identified; and
(iii) apply the Collections allocated to the Asset Interest
pursuant to clause (i) above and not required to be identified and held
in trust pursuant to clause (ii) above to the purchase from the Seller
of ownership interests in Pool Receivables and Related Assets (each
such purchase being a "Reinvestment"); provided that:
(A) if, after giving effect to such Reinvestment, (1)
the Asset Interest would exceed the Allocation Limit or (2)
the sum of (I) the Purchaser's Total Investment and (II) the
aggregate CP Discount would exceed the Purchase Limit, then
the Master Servicer shall not reinvest, but shall identify and
hold in trust for the benefit of the Purchaser, a portion of
such Collections which, together with other Collections
previously identified and then so held, shall equal the amount
necessary to reduce (1) the sum of (I) the Purchaser's Total
Investment and (II) the aggregate CP Discount to the Purchase
Limit and (2) the Asset Interest to the Allocation Limit; and
(B) if any of the conditions precedent to
Reinvestment in clause (a), (b) and (d) of Section 5.2,
subject to the proviso set forth in Section 5.2, are not
satisfied, then the Master Servicer shall not reinvest any of
such remaining Collections, but shall identify them and hold
them in trust for the benefit of the Purchaser;
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(iv) out of the portion of Collections not allocated to the
Asset Interest pursuant to clause (i) above, pay to the Master Servicer
or set aside (at the option of the Master Servicer) the Seller's Share
of the Servicing Fee accrued through such day and not previously paid;
and
(v) pay to the Seller (A) the remaining portion of Collections
not allocated to the Asset Interest pursuant to clause (i) above and
(B) the Collections applied to Reinvestment pursuant to clause (iii)
above.
(b) Unreinvested Collections. The Master Servicer shall identify and
hold in trust for the benefit of the Purchaser all Collections which, pursuant
to clause (iii) of Section 1.3(a), may not be reinvested in the Pool Receivables
and Related Assets, provided that unless otherwise requested by the
Administrative Agent after a Credit Event, such Collections need not be held in
a segregated account. If, prior to the date when such Collections are required
to be paid to the Administrative Agent for the benefit of the Purchaser pursuant
to Section 1.3(c)(iv), the amount of Collections so identified exceeds the
amount, if any, necessary to reduce (i) the sum of (A) the Purchaser's Total
Investment and (B) the aggregate CP Discount to the Purchase Limit and (ii) the
Asset Interest to the Allocation Limit, and the conditions precedent to
Reinvestment set forth in clauses (a), (b) and (d) of Section 5.2, subject to
the proviso set forth in Section 5.2, are satisfied, then the Master Servicer
shall apply such Collections (or, if less, a portion of such Collections equal
to the amount of such excess) to the making of a Reinvestment.
(c) Payment of Amounts.
(i) The Master Servicer shall pay all amounts identified
pursuant to Section 1.3(a)(ii) in respect of Earned Discount on an
Asset Tranche funded by a Liquidity Funding to the Administrative
Agent, on the Purchaser's behalf, on the last day of the then current
Yield Period for an Asset Tranche, as provided in Section 3.1.
(ii) The Master Servicer shall pay all amounts of Collections
identified pursuant to Section 1.3(a)(ii) in respect of Earned Discount
on any Asset Tranche funded by Commercial Paper Notes to the
Administrative Agent, on the Purchaser's behalf, on the last day of the
then current CP Tranche Period for such Asset Tranche, as provided in
Section 3.1.
(iii) The Master Servicer shall pay all amounts of Collections
identified pursuant to Section 1.3(a)(ii) and not applied pursuant to
clauses (i) or (ii) above to the Administrative Agent, on the
Purchaser's behalf, on each Settlement Date for each Collection Period,
as provided in Section 3.1.
(iv) The Master Servicer shall pay all amounts identified
pursuant to Section 1.3(b) to the Administrative Agent for the account
of the Purchaser (A) on the last day of the then current Yield Period
for any Asset Tranche funded by a Liquidity Funding, as provided in
Section 3.1(b), in an amount not exceeding the Purchaser's
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Tranche Investment of such Asset Tranche, and (B) on the last day of
the then current CP Tranche Period for any Asset Tranche funded by
Commercial Paper Notes, as provided in Section 3.1, in an amount not
exceeding the Purchaser's Tranche Investment of such Asset Tranche;
provided, however, no payment shall be made under clause (B) above
unless the Purchaser's Tranche Investments of all Asset Tranches, if
any, funded by the Liquidity Fundings shall have been reduced to zero.
(d) Funds Under Sale Agreement. Upon the written request of the
Administrative Agent, on the Purchaser's behalf, given at any time when (i)
based on the most recent Information Package, either (A) the Asset Interest
would exceed the Allocation Limit or, (B) the sum of (1) the Purchaser's Total
Investment and (2) the aggregate CP Discount would exceed the Purchase Limit, or
(ii) a Liquidation Event or Unmatured Liquidation Event shall have occurred and
be continuing, the Seller shall identify all funds that under the Sale Agreement
would be applied to repay principal of the Initial Seller Notes (as defined in
the Sale Agreement) owing to the Originators. The Seller may make withdrawals of
such funds only for the purposes of (i) at any time, purchasing Receivables from
an Originator in accordance with the Sale Agreement; (ii) on the Settlement Date
for any Collection Period, making payments in accordance with the last sentence
of Section 3.1(c)(ii), and (iii) on the Settlement Date for any Collection
Period, if, on the basis of the most recent Information Package, and after
giving effect to any payment made to the Master Servicer on such date pursuant
to the last sentence of Section 3.1(c)(ii), both (i) the sum of (A) the
Purchaser's Total Investment and (B) the aggregate CP Discount does not exceed
the Purchase Limit and (ii) the Asset Interest does not exceed the Allocation
Limit, and provided that no Liquidation Event or Unmatured Liquidation Event
shall have occurred and be continuing, repaying principal of the Initial Seller
Notes in accordance with this Agreement and the Sale Agreement.
SECTION 1.4 ASSET INTEREST.
(a) Components of Asset Interest. On any date the Asset Interest will
represent the Purchaser's undivided percentage ownership interest in all then
outstanding Pool Receivables and all Related Assets with respect to such Pool
Receivables as at such date.
(b) Computation of Asset Interest. On any date, the Asset Interest will
be equal to the percentage equivalent of the following fraction:
PTI+RR
------
NPB
where:
PTI = the sum of the Purchaser's Total Investment
and aggregate CP Discount;
RR = the Required Reserve; and
NPB = the Net Pool Balance;
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provided, however, that the Asset Interest during the Liquidation Period shall
equal 100% and shall at no time exceed 100%.
(c) Frequency of Computation. The Asset Interest shall be computed (i)
as provided in Section 3.1, as of the Initial Cut-Off Date and as of the Cut-Off
Date for each Collection Period, and (ii) on the Settlement Date following each
Reporting Date, after giving effect to the payments made pursuant to Section
3.1. In addition, at any time, the Administrative Agent, on the Purchaser's
behalf, may require the Master Servicer to provide an Information Package, based
on the information then available to the Master Servicer, for purposes of
computing the Asset Interest or the Purchase Limit as of any other date, and the
Master Servicer agrees to do so within five (5) (or three (3), if a Liquidation
Event or a Credit Event has occurred and is continuing) Business Days of its
receipt of the Administrative Agent's request.
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.1 SELECTION OF ASSET TRANCHES.
The Administrative Agent shall, from time to time for purposes of
computing Earned Discount, divide the Asset Interest into Asset Tranches. The
applicable Earned Discount Rate may be different for each Asset Tranche. The
Purchaser's Total Investment and aggregate CP Discount shall be allocated to
each Asset Tranche by the Administrative Agent, on the Purchaser's behalf, to
reflect the funding sources for the Asset Interest, so that:
(a) there will be one or more Asset Tranches equal to the excess of the
sum of the Purchaser's Total Investment and the aggregate CP Discount over the
aggregate amount allocated at such time pursuant to clause (b) below, which
Asset Tranche shall reflect the portion of the Asset Interest funded by
Commercial Paper Notes; and
(b) there may be one or more Asset Tranches, selected by the
Administrative Agent, on the Purchaser's behalf, reflecting the portion or
portions of the Asset Interest funded by outstanding Liquidity Fundings.
SECTION 2.2 COMPUTATION OF PURCHASER'S TOTAL INVESTMENT AND PURCHASER'S
TRANCHE INVESTMENT.
In making any determination of the Purchaser's Total Investment and any
Purchaser's Tranche Investment, the following rules shall apply:
(a) the Purchaser's Total Investment shall not be considered reduced by
any allocation, setting aside or distribution of any portion of Collections
unless such Collections shall have been actually delivered hereunder to the
Administrative Agent, on the Purchaser's behalf;
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(b) the Purchaser's Total Investment shall not be considered reduced by
any distribution of any portion of Collections if at any time such distribution
is rescinded or must otherwise be returned for any reason; and
(c) if there is any reduction in the Purchaser's Total Investment,
there shall be a corresponding reduction in the Purchaser's Tranche Investment
with respect to one or more Asset Tranches selected by the Administrative Agent,
on the Purchaser's behalf, in its discretion.
SECTION 2.3 COMPUTATION OF CONCENTRATION LIMITS AND UNPAID BALANCE.
The Obligor Concentration Limits and the aggregate Unpaid Balance of
Pool Receivables of any Obligor and its Affiliated Obligors (if any) shall be
calculated as if such Obligor and its Affiliated Obligors were one Obligor.
SECTION 2.4 COMPUTATION OF EARNED DISCOUNT.
In making any determination of Earned Discount, the following rules
shall apply:
(a) the Administrative Agent, on the Purchaser's behalf, shall
determine the Earned Discount accruing with respect to each Asset Tranche, and
each CP Tranche Period therefor (or, in the case of the Asset Tranche funded by
Liquidity Fundings, each Yield Period), in accordance with the definition of
Earned Discount;
(b) no provision of this Agreement shall require the payment or permit
the collection of Earned Discount in excess of the maximum permitted by
applicable law; and
(c) the Earned Discount for any Asset Tranche shall not be considered
paid by any distribution if at any time such distribution is rescinded or must
otherwise be returned for any reason.
It is the intent of the Purchaser to fund the Asset Interest by the issuance of
Commercial Paper Notes. If, for any reason, the Purchaser is unable, or
determines that it is undesirable, to issue Commercial Paper Notes to fund the
Asset Interest, or is unable, for any reason, to repay such Commercial Paper
Notes upon the maturity thereof, the Purchaser will draw on Liquidity Fundings
to the extent available. If the Purchaser funds itself through Liquidity
Fundings, the Earned Discount payable by the Seller will be based on the Bank
Rate.
SECTION 2.5 ESTIMATES OF EARNED DISCOUNT RATE, FEES, ETC.
For purposes of determining the amounts required to be identified by
Master Servicer pursuant to Section 1.3, the Administrative Agent, on the
Purchaser's behalf, shall notify the Master Servicer (and, if Lennox is not the
Master Servicer, the Seller) from time to time of the Purchaser's Tranche
Investment of each Asset Tranche, the Earned Discount Rate applicable to each
Asset Tranche and the rates at which fees and other amounts are accruing
hereunder. It is
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understood and agreed that (a) the Earned Discount Rate for any Asset Tranche
may change from one applicable Yield Period or CP Tranche Period to the next,
and the Bank Rate used to calculate the Earned Discount Rate may change from
time to time during an applicable Yield Period, (b) certain rate information
provided by the Administrative Agent to the Master Servicer shall be based upon
the Administrative Agent's good faith estimate, (c) the amount of Earned
Discount actually accrued with respect to an Asset Tranche during any CP Tranche
Period (or, in the case of the Asset Tranche funded by Liquidity Fundings any
Yield Period) may exceed, or be less than, the amount identified with respect
thereto by Master Servicer, and (d) the amount of fees or other amounts payable
by the Seller hereunder which have accrued hereunder with respect to any
Collection Period may exceed, or be less than, the amount identified with
respect thereto by the Master Servicer. Failure to identify any amount so
accrued shall not relieve the Master Servicer of its obligation to remit
Collections to the Administrative Agent, for the benefit of the Purchaser, with
respect to such accrued amount, as and to the extent provided in Section 3.1.
ARTICLE III
SETTLEMENTS
SECTION 3.1 SETTLEMENT PROCEDURES.
The parties hereto will take the following actions with respect to each
Collection Period:
(a) Information Package. On the fifteenth day of each month or if such
day is not a Business Day, the next succeeding Business Day (each a "Reporting
Date"), the Master Servicer shall deliver to the Administrative Agent, on the
Purchaser's behalf, a report in the form of Exhibit 3.1(a), provided that, if a
Credit Event has occurred and is continuing, such Information Package shall be
accompanied by an electronic file in a form satisfactory to the Administrative
Agent (collectively, an "Information Package").
(b) Earned Discount; Other Amounts Due. On or before 12:00 noon,
Atlanta, Georgia, time on the Business Day before the last day of each CP
Tranche Period or Yield Period, as the case may be, the Administrative Agent
shall notify the Master Servicer of the amount of Earned Discount accrued with
respect to any Asset Tranche corresponding to such CP Tranche Period or Yield
Period, as the case may be. The Master Servicer shall pay to the Administrative
Agent for the benefit of the Purchaser the amount of such Earned Discount before
12:00 noon, Atlanta, Georgia time on the last day of such CP Tranche Period or
Yield Period. On or before 12:00 noon, Atlanta, Georgia time, on the Business
Day before each Reporting Date, the Administrative Agent, on the Purchaser's
behalf, shall notify the Master Servicer of all fees and other amounts accrued
and payable by the Seller under this Agreement during the prior calendar month
(other than amounts described in clause (c) below). The Master Servicer shall
pay to the Administrative Agent, for the benefit of the Purchaser, the amount of
fees and other amounts (to the extent of Collections attributable to the Asset
Interest during such Collection Period) on the Settlement Date for such month.
Such payments shall be made (i) out of amounts identified pursuant to Section
1.3 for such payment, (ii) in the case of amounts other than Earned Discount, to
the extent that amounts were not set aside pursuant to Section 1.3 for such
payment
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(because the actual Earned Discount for such month was greater than the
estimated Earned Discount used in calculating the Asset Interest during such
month), out of funds paid by the Master Servicer to the Seller (which amounts
the Seller hereby agrees to pay to the Master Servicer), up to the aggregate
amount of Collections applied to Reinvestments under Section 1.3(a) or (b)
during such month.
(c) Asset Interest Computations.
(i) On the Reporting Date for each Collection Period, the
Master Servicer shall compute, as of the related Cut-Off Date and based
upon the assumptions in the next sentence, (A) the Asset Interest, (B)
the amount of the reduction or increase (if any) in the Asset Interest
since the next preceding Cut-Off Date, (C) the excess (if any) of the
Asset Interest over the Allocation Limit, and (D) the excess (if any)
of the sum of (1) the Purchaser's Total Investment and (2) the
aggregate CP Discount over the Purchase Limit. Such calculations shall
be based upon the assumptions that (A) the information in the
Information Package is correct, and (B) Collections identified pursuant
to Section 1.3(b) will be paid to the Administrative Agent, for the
benefit of the Purchaser, on the Settlement Date for such Collection
Period.
(ii) If, according to the computations made pursuant to clause
(i) above, either (A) the Asset Interest exceeds the Allocation Limit
or (B) the sum of (1) the Purchaser's Total Investment and (2) the
aggregate CP Discount exceeds the Purchase Limit, then on the
Settlement Date for such Collection Period, the Master Servicer shall
pay to the Administrative Agent, for the benefit of the Purchaser, (to
the extent of Collections during the related Collection Period
attributable to all Asset Tranches and not previously paid to the
Administrative Agent) the amount necessary to reduce both (A) the sum
of the Purchaser's Total Investment and the aggregate CP Discount to
the Purchase Limit and (B) the Asset Interest to the Allocation Limit,
subject, however, to the proviso to Section 1.3(c)(iv). Such payment
shall be made out of amounts identified pursuant to Section 1.3 for
such purpose and, to the extent such amounts were not so identified,
the Seller hereby agrees to pay such amounts to the Master Servicer to
the extent of Collections applied to Reinvestment under Section 1.3
during the relevant Collection Period.
(iii) In addition to the payments described in clause (ii)
above, during the Liquidation Period, the Master Servicer shall pay to
the Administrative Agent, for the benefit of the Purchaser, all amounts
identified pursuant to Section 1.3 (A) on the last day of the current
Yield Period for any Asset Tranche funded by a Liquidity Funding, in an
amount not exceeding the Purchaser's Tranche Investment of such Asset
Tranche, and (B) after reduction to zero of the Purchaser's Tranche
Investments of the Asset Tranches, if any, funded by Liquidity
Fundings, on the last day of the each CP Tranche Period, in an amount
not exceeding the Purchaser's Tranche Investment of the Asset Tranche
funded by Commercial Paper Notes.
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(d) Order of Application. Upon receipt by the Administrative Agent, on
the Purchaser's behalf, of funds distributed pursuant to this Section 3.1, the
Administrative Agent shall apply them to the items specified in the subclauses
below, in the order of priority of such subclauses:
(i) to accrued Earned Discount, plus any previously accrued
Earned Discount not paid;
(ii) to the Purchaser's Share of the accrued and unpaid
Servicing Fee (if the Master Servicer is not Lennox or its Affiliate);
(iii) to the Program Fee and the Unused Fee accrued during
such Collection Period, plus any previously accrued Program Fee and the
Unused Fee not paid on a prior Settlement Date;
(iv) to the reduction of the Purchaser's Total Investment and
aggregate CP Discount, to the extent such reduction is required under
Section 3.1(c);
(v) to other accrued and unpaid amounts owing to the Purchaser
or the Administrative Agent hereunder (except Earned Discount on any
Asset Tranche funded by a Liquidity Funding which has accrued but is
not yet overdue under Section 1.3(c));
(vi) to the Purchaser's Share of the accrued and unpaid
Servicing Fee (if the Master Servicer is Lennox or its Affiliate); and
(vii) to purchase newly originated Receivables during the
Revolving Period.
(e) Non-Distribution of Servicing Fee. The Administrative Agent hereby
consents (which consent may be revoked at any time after the occurrence and
during the continuance of a Liquidation Event or a Credit Event), to the
retention by the Master Servicer of the amounts (if any) identified pursuant to
Section 1.3 in respect of the Servicing Fee, in which case no distribution shall
be made in respect of the Servicing Fee pursuant to clause (d) above.
(f) Delayed Payment. If on any day described in this Section 3.1 (or in
Section 1.3(c) in respect of accrued Earned Discount on Asset Tranches funded by
Liquidity Fundings or by the issuance of Commercial Paper Notes), because
Collections during the relevant CP Tranche Period or Yield Period were less than
the aggregate amounts payable, the Master Servicer shall not make any payment
otherwise required, the next available Collections in respect of the Asset
Interest shall be applied to such payment, and no Reinvestment shall be
permitted hereunder until such amount payable has been paid in full.
SECTION 3.2 DEEMED COLLECTIONS; REDUCTION OF PURCHASER'S TOTAL
INVESTMENT, ETC.
(a) Deemed Collections. If on any day:
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(i) the Unpaid Balance of any Pool Receivable is:
(A) reduced as a result of any defective, rejected or
returned merchandise or services, any cash discount, or any
other adjustment by any Seller Party or any Affiliate thereof,
or as a result of any tariff or other governmental or
regulatory action, or
(B) reduced or canceled as a result of a setoff in
respect of any claim by the Obligor thereof (whether such
claim arises out of the same or a related or an unrelated
transaction, including without limitation, any setoff or claim
arising as a result of any amount at any time owed by any
Originator in connection with any account receivable owed by
any such Originator to such Obligor), or
(C) reduced on account of the obligation of any
Seller Party or any Affiliate thereof to pay to the related
Obligor any rebate or refund, or
(D) less than the amount included in calculating the
Net Pool Balance for purposes of any Information Package (for
any reason other than such Receivable becoming a Defaulted
Receivable), or
(ii) any of the representations or warranties of the Seller
set forth in Section 6.1(j), (l) or (p) were not true when made with
respect to any Pool Receivable, or any of the representations or
warranties of the Seller set forth in Section 6.1(l) are no longer true
with respect to any Pool Receivable, or any Pool Receivable is
repurchased by an Originator pursuant to the Sale Agreement,
then, on such day, the Seller shall be deemed to have received a Collection of
such Pool Receivable
(A) in the case of clause (i) above, in the amount of
such reduction or cancellation or the difference between the
actual Unpaid Balance and the amount included in calculating
such Net Pool Balance, as applicable; and
(B) in the case of clause (ii) above, in the amount
of the Unpaid Balance of such Pool Receivable.
Collections deemed received by the Seller under this Section 3.2(a) are herein
referred to as "Deemed Collections."
(b) Seller's Optional Reduction of the Purchaser's Total Investment.
The Seller may at any time elect to reduce the Purchaser's Total Investment as
follows:
(i) the Seller shall give the Administrative Agent, on the
Purchaser's behalf, at least five (5) Business Days' prior written
notice of such reduction (including the
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amount of such proposed reduction and the proposed date on which such
reduction will commence),
(ii) on the proposed date of commencement of such reduction
and on each day thereafter, the Master Servicer shall refrain from
reinvesting Collections pursuant to Section 1.3 until the amount
thereof not so reinvested shall equal the desired amount of reduction,
and
(iii) the Master Servicer shall hold such Collections in trust
for the Purchaser, pending payment to the Administrative Agent, as
provided in Section 1.3;
provided that:
(A) the amount of any such reduction shall be in (1)
an amount of $1,000,000, (2) an integral multiple thereof or
(3) an amount equal to the remaining Purchaser's Total
Investment,
(B) the Seller shall use reasonable efforts to
attempt to choose a reduction amount, and the date of
commencement thereof, so that such reduction shall commence
and conclude in the same Collection Period, and
(C) unless the Purchaser's Total Investment will be
reduced to zero, after giving effect to such reduction, the
Purchaser's Total Investment will be at least $25,000,000.
SECTION 3.3 PAYMENTS AND COMPUTATIONS, ETC.
(a) Payments. All amounts to be paid to the Administrative Agent or any
other Person or deposited by the Seller or the Master Servicer hereunder (other
than amounts payable under Section 4.2) shall be paid or deposited in accordance
with the terms hereof no later than 12:00 noon (Atlanta, Georgia time) on the
day when due in lawful money of the United States of America in same day funds
to the Purchaser in care of Wachovia Bank, N.A., ABA #8735-098787, Account #0531
00494, for credit: Blue Ridge Asset Funding Corporation, Reference: LPAC Corp.,
Attention: ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇, or to such other account at the bank
named therein or at such other bank as the Administrative Agent on behalf of the
Purchaser may designate by written notice to the Person making such payment.
(b) Late Payments. The Seller or the Master Servicer, as applicable,
shall, to the extent permitted by law, pay to the Person to whom payment is due
interest on all amounts not paid or deposited when due hereunder at 2% per annum
above the Alternate Base Rate, payable on demand, provided, however, that such
interest rate shall not at any time exceed the maximum rate permitted by
applicable law.
(c) Method of Computation. All computations of interest, Earned
Discount, any fees payable under Section 4.1 and any other fees payable by the
Seller to the Purchaser or the
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Administrative Agent hereunder shall be made on the basis of a year of 360 days
for the actual number of days (including the first day but excluding the last
day) elapsed.
SECTION 3.4 TREATMENT OF COLLECTIONS AND DEEMED COLLECTIONS.
The Seller shall forthwith deliver to the Master Servicer all Deemed
Collections, and the Master Servicer shall hold or distribute such Deemed
Collections as Earned Discount, accrued Servicing Fee, repayment of the
Purchaser's Total Investment, and to other accrued amounts owing hereunder to
the same extent as if such Deemed Collections had actually been received on the
date of such delivery to the Master Servicer. If Collections are then being paid
to the Administrative Agent, on the Purchaser's behalf, or its designee, or lock
boxes or accounts directly or indirectly owned or controlled by the
Administrative Agent, the Master Servicer shall forthwith cause such Deemed
Collections to be paid to the Administrative Agent, on the Purchaser's behalf,
or its designee or to such lock boxes or accounts, as applicable, or as the
Administrative Agent shall request. So long as the Seller shall hold any
Collections (including Deemed Collections) required to be paid to the Master
Servicer or the Administrative Agent, it shall hold such Collections in trust
for the benefit of the Administrative Agent, on behalf of the Purchaser, and
shall clearly ▇▇▇▇ its records to reflect such trust; provided that unless the
Administrative Agent shall have requested it in writing to do so, the Seller
shall not be required to hold such Collections in a separate deposit account
containing only such Collections.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.1 FEES.
The Seller shall pay to the Purchaser certain fees from time to time in
amounts and payable on such dates as are set forth in the letter dated on or
about the date hereof (as amended from time to time, the "Fee Letter") among the
Seller, the Purchaser and the Administrative Agent. Lennox shall pay or cause to
be paid to the Administrative Agent the structuring fee set forth in the letter
dated April 13, 2000 between Lennox International and Wachovia (the "Mandate
Letter") on or before the date this Agreement is executed.
SECTION 4.2 YIELD PROTECTION.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring after
the date hereof:
(A) shall subject an Affected Party to any tax, duty
or other charge with respect to the Asset Interest owned by or
funded by it, or any obligations or right to make Purchases or
Reinvestments or to provide funding therefor, or shall change
the basis of taxation of payments to the Affected Party of any
Purchaser's Total Investment or Earned Discount owned by, owed
to or funded in whole or in part by it or any other amounts
due under this Agreement in respect of the Asset Interest
owned by or funded by it or its obligations or rights, if any,
to make
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Purchases or Reinvestments or to provide funding therefor
(except for (1) taxes based on, or measured by, net income, or
changes in the rate of tax on or determined by reference to
the overall net income, of such Affected Party imposed by the
United States of America, by the jurisdiction in which such
Affected Party's principal executive office is located and, if
such Affected Party's principal executive office is not in the
United States of America, by the jurisdiction where such
Affected Party's principal office in the United States is
located or, (2) franchise taxes, taxes on, or in the nature
of, doing business taxes or capital taxes); or
(B) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by
the Federal Reserve Board, but excluding any reserve included
in the determination of Earned Discount), special deposit or
similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any
Affected Party or with or for the account of any affiliate (or
entity deemed by the Federal Reserve Board to be an affiliate)
of any Affected Party, or credit extended by any Affected
Party; or
(C) shall change the amount of capital maintained or
required or requested or directed to be maintained by any
Affected Party; or
(D) shall impose any other condition affecting any
Asset Interest owned or funded in whole or in part by any
Affected Party, or its obligations or rights, if any, to make
Purchases or Reinvestments or to provide funding therefor; or
(E) shall change the rate for, or the manner in which
the Federal Deposit Insurance Corporation (or a successor
thereto) assesses, deposit insurance premiums or similar
charges;
and the result of any of the foregoing is or would be
(A) to increase the cost to or to impose a cost on
(1) an Affected Party funding or making or maintaining any
Purchases or Reinvestments, any purchases, reinvestments, or
loans or other extensions of credit under the Liquidity
Agreement, or any commitment of such Affected Party with
respect to any of the foregoing, or (2) the Administrative
Agent for continuing its or the Seller's relationship with the
Purchaser, in each case, in an amount deemed to be material by
such Affected Party,
(B) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement or under
the Liquidity Agreement, or
(C) in the reasonable determination of such Affected
Party, to reduce the rate of return on the capital of an
Affected Party as a consequence of its
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obligations hereunder or arising in connection herewith to a
level below that which such Affected Party could otherwise
have achieved,
then, within thirty days after demand by such Affected Party (which demand shall
be accompanied by a certificate setting forth, in reasonable detail, the basis
of such demand and the methodology for calculating, and the calculation of, the
amounts claimed by the Affected Party), the Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such additional or increased cost or such reduction;
provided, however, the Seller shall only be required to compensate any such
Affected Party for such amounts to the extent that such Affected Party is
requiring all of its other similarly situated customers to compensate it for
such amounts.
(b) Each Affected Party will promptly notify the Seller and the
Administrative Agent of any event of which it has knowledge (including any
future event that, in the judgment of such Affected Party, is reasonably certain
to occur) which will entitle such Affected Party to compensation pursuant to
this Section 4.2; provided, however, no failure to give or delay in giving such
notification shall adversely affect the rights of any Affected Party to such
compensation.
(c) In determining any amount provided for or referred to in this
Section 4.2, an Affected Party may use any reasonable averaging and attribution
methods (consistent with its ordinary business practices) that it (in its
reasonable discretion) shall deem applicable. Any Affected Party when making a
claim under this Section 4.2 shall submit to the Seller the certificate
(referred to in subsection (a) above) as to such increased cost or reduced
return (including calculation thereof in reasonable detail), which statement
shall, in the absence of demonstrable error, be conclusive and binding upon the
Seller.
SECTION 4.3 FUNDING LOSSES.
In the event that the Purchaser or any Liquidity Bank shall actually
incur any loss or expense (including any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by the
Purchaser or such Liquidity Bank to make any Liquidity Funding or maintain any
Liquidity Funding) as a result of (a) any settlement with respect to the
Purchaser's Tranche Investment of any Asset Tranche funded by a Liquidity
Funding being made on any day other than the scheduled last day of an applicable
Yield Period with respect thereto (it being understood that the foregoing shall
not apply to any portion of the Purchasers' Total Investment that is accruing
Earned Discount calculated by reference to the Alternate Base Rate), or (b) any
Purchase not being made in accordance with a request therefor under Section 1.2,
then, upon written notice from the Administrative Agent to the Seller and the
Master Servicer, the Seller shall pay to the Master Servicer, and the Master
Servicer shall pay to the Administrative Agent for the account of such Liquidity
Bank, the amount of such loss or expense. Such written notice (which shall
include the methodology for calculating, and the calculation of, the amount of
such loss or expense, in reasonable detail) shall, in the absence of
demonstrable error, be conclusive and binding upon the Seller and the Master
Servicer.
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ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE.
The initial Purchase pursuant to this Agreement is subject to the
following conditions precedent:
(a) the Administrative Agent, on the Purchaser's behalf, shall have
received, on or before the date of such initial Purchase, the following each
(unless otherwise indicated) dated such date and in form and substance
reasonably satisfactory to the Administrative Agent:
(i) The Sale Agreement and any other Transaction Document,
duly executed by the parties thereto;
(ii) A certificate of the Secretary or Assistant Secretary of
each Seller Party certifying the names and true signatures of the
officers authorized on its behalf to sign this Agreement and the other
Transaction Documents to be delivered by it hereunder (on which
certificate the Administrative Agent and the Purchaser may conclusively
rely until such time as the Administrative Agent, on the Purchaser's
behalf, shall receive from such Seller Party a revised certificate
meeting the requirements of this subsection (ii));
(iii) The Articles or Certificate of Incorporation of each
Seller Party, duly certified by the Secretary of State of such Seller
Party's state of incorporation, as of a recent date acceptable to
Administrative Agent, on the Purchaser's behalf, in each case together
with a copy of the by-laws of such Seller Party, duly certified by the
Secretary or an Assistant Secretary of such Seller Party;
(iv) A true and complete copy of the resolutions of the Board
of Directors of each Seller Party authorizing the execution, delivery
and performance of this Agreement and the Transaction Documents to
which it is a party and the transactions contemplated hereby and
thereby;
(v) Copies of good standing certificates for each Seller
Party, issued by the Secretaries of State of the state of incorporation
of such Seller Party and the state where such Seller Party's principal
place of business is located;
(vi) Acknowledgment copies (or other evidence of filing
reasonably acceptable to the Administrative Agent, on the Purchaser's
behalf) of (A) proper financing statements (Form UCC-1), in such form
as the Administrative Agent, on the Purchaser's behalf, may reasonably
request, naming each of the Originators as the debtor and the seller of
the Receivables and Related Assets, the Seller as the secured party and
purchaser thereof and the Administrative Agent, as agent for the
Secured Parties as assignee, and (B) financing statements (Form UCC-1),
in such form as the Administrative Agent, on
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the Purchaser's behalf, may reasonably request, naming the Seller as
the debtor and the seller of an undivided percentage interest in the
Pool Receivables and Related Assets and the Administrative Agent, as
agent for the Secured Parties as the secured party and purchaser
thereof, or other, similar instruments or documents as may be necessary
or, in the opinion of the Administrative Agent, on the Purchaser's
behalf, desirable under the UCC or any comparable law of all
appropriate jurisdictions to perfect the sale by each Originator to the
Seller of, and the Purchaser's undivided percentage interest in, the
Pool Receivables and Related Assets;
(vii) Search reports provided in writing to the Administrative
Agent, on the Purchaser's behalf, (A) listing all effective financing
statements that name any Seller Party or Originator (including legal
names and tradenames) as debtor and that are filed in the jurisdictions
in which filings were made pursuant to subsection (vi) above and in
such other jurisdictions that the Administrative Agent shall reasonably
request, together with copies of such financing statements (none of
which (other than any of the financing statements described in
subsection (vi) above) shall cover any Receivables or Related Assets,
and (B) listing all tax liens and judgment liens (if any) filed against
any debtor referred to in clause (A) above in the jurisdictions
described therein and showing no such Liens;
(viii) Evidence that the Initial Seller Notes have been duly
executed and delivered by the Seller;
(ix) [Reserved];
(x) A favorable opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel
to the Seller Parties and Lennox International, as to:
(A) the existence of a "true sale" of the Receivables
from the Originators to the Seller under the Sale Agreement;
(B) the inapplicability of the doctrine of
substantive consolidation to the Seller and the Originators in
connection with any bankruptcy proceeding involving Heatcraft
Technologies, ▇▇▇▇▇▇▇▇▇ or the Originators;
(C) the creation of a first priority perfected
security interest in favor of the Purchaser in (1) all the
Pool Receivables and Related Assets (and including
specifically any undivided interest therein retained by Seller
hereunder), the Sale Agreement and other Transaction Documents
and (2) all proceeds of any of the foregoing;
(D) due authorization, execution, delivery,
enforceability and other corporate matters of the Seller
Parties and Lennox International as to the Transaction
Documents (however, the opinion as to certain New York law
matters may be provided by in-house counsel); and
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(E) such other matters as the Administrative Agent,
acting on behalf of the Purchaser, may reasonably request.
(xi) A pro forma Information Package, prepared as of the
Cut-Off Date of May 31, 2000;
(xii) A report in form and substance satisfactory to the
Administrative Agent, on the Purchaser's behalf, from the Initial Due
Diligence Auditor as to a pre-closing due diligence audit by the
Initial Due Diligence Auditor;
(xiii) The Liquidity Agreement, in form and substance
satisfactory to the Administrative Agent, on the Purchaser's behalf,
duly executed by the Purchaser, the Liquidity Agent and each Liquidity
Bank;
(xiv) Lockbox Agreements with respect to each Lockbox Account;
(xv) Evidence that the Assurance Agreement has been duly
executed and delivered by Lennox International;
(xvi) [Reserved];
(xvii) With respect to Lennox International, a consolidated
balance sheet, income statement and statement of shareholders' equity
as at December 31, 1999 and with respect to the Seller, a balance
sheet, income statement and statement of shareholders' equity as at
June 9, 2000, each of the foregoing together with a certification of
the chief financial officer, chief accounting officer, controller or
treasurer in the form attached hereto as Exhibit B; and
(xviii) such other agreements, instruments, certificates,
opinions and other documents as the Administrative Agent may reasonably
request; and
(b) Lennox shall have paid or caused to be paid (i) the Structuring Fee
and (ii) all Transaction Fees.
SECTION 5.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS.
Each Purchase (including the initial Purchase) and each Reinvestment
shall be subject to the further conditions precedent that on the date of such
Purchase or Reinvestment the following statements shall be true (and the Seller,
by accepting the amount of such Purchase or by receiving the proceeds of such
Reinvestment, and each other Seller Party, upon such acceptance or receipt by
the Seller, shall be deemed to have certified that):
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(a) the representations and warranties contained in Section 6.1 are
correct in all material respects on and as of such day as though made on and as
of such day and shall be deemed to have been made on such day,
(b) no event has occurred and is continuing, or would result from such
Purchase or Reinvestment, that constitutes a Liquidation Event or Unmatured
Liquidation Event,
(c) after giving effect to each proposed Purchase or Reinvestment, the
sum of the Purchaser's Total Investment and aggregate CP Discount will not
exceed the Purchase Limit, and the Asset Interest will not exceed the Allocation
Limit,
(d) the Termination Date shall not have occurred,
(e) in the case of a Purchase, the Administrative Agent shall have
timely received an appropriate notice of the proposed Purchase in accordance
with Section 1.2(a),
(f) a completed Information Package shall have been delivered by the
Master Servicer to the Administrative Agent, on the Purchaser's behalf, as of
the applicable Reporting Date,
(g) both prior to and after giving effect to each proposed Purchase or
Reinvestment, the requirements of the Credit Agreement and any other agreement
evidencing any Material Indebtedness of Lennox International with respect to
transfers of assets and creation of liens shall not have been violated,
(h) after giving effect to each proposed Purchase or Reinvestment, the
Weighted Average Term (with respect to Receivables included in the Net Pool
Balance) shall not exceed 60 days, and
(i) such other agreements, instruments, certificates, opinions and
other documents as the Administrative Agent may reasonably request have been
delivered;
provided, however, the absence of the occurrence and continuance of an Unmatured
Liquidation Event shall not be a condition precedent to any Reinvestment or any
Purchase on any day which does not cause the Purchaser's Total Investment and
aggregate CP Discount, after giving effect to such Reinvestment or Purchase, to
exceed the Purchaser's Total Investment and aggregate CP Discount as of the
opening of business on such day.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES.
Each Seller Party represents and warrants as to itself, except when
specifically provided, in which case, the specified Seller Party represents and
warrants as follows:
(a) Organization and Good Standing; Ownership. It has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of its incorporation, with power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted. The Seller had at all relevant times,
and now has, all necessary power, authority, and legal right to acquire and own
the Pool Receivables and Related Assets. The Originators, ▇▇▇▇▇▇▇▇▇ and
Heatcraft Technologies own directly all the issued and outstanding capital stock
of the Seller.
(b) Due Qualification. It is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of property or
the conduct of its business requires such qualification, licenses or approvals,
except where the failure to be so qualified or have such licenses or approvals
would not have a Material Adverse Effect.
(c) Power and Authority; Due Authorization. It (i) has all necessary
power, authority and legal right (A) to execute and deliver this Agreement and
the other Transaction Documents to which it is a party, (B) to carry out the
terms of the Transaction Documents to which it is a party, (C) in the case of
the Master Servicer, to service the Receivables and the Related Assets in
accordance with this Agreement and the Sale Agreement, and (D) in the case of
the Seller, sell and assign the Asset Interest on the terms and conditions
herein provided, and (ii) has duly authorized by all necessary corporate action
the execution, delivery and performance of this Agreement and the other
Transaction Documents and, in the case of the Seller, the sales and assignments
described in clause (i)(D) above.
(d) Valid Sale; Binding Obligations. (i) This Agreement constitutes a
valid sale, transfer, and assignment of the Asset Interest to the Purchaser,
enforceable against creditors of, and purchasers from, the Seller, and (ii) this
Agreement and each other Transaction Document signed by such Seller Party
constitutes, a legal, valid and binding obligation of such Seller Party,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other similar laws from
time to time in effect affecting the enforcement of creditors' rights generally
and by general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance by it of this
Agreement and the other Transaction Documents to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby will not
(i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default under,
its articles or certificate of incorporation or by-laws, or any material
indenture, loan agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument to which it is a party or by which it or
any of its properties is bound (including, but not limited to, those agreements
or instruments evidencing Material Indebtedness of Lennox International), (ii)
result in the creation or imposition of any Lien upon any its properties
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pursuant to the terms of any such material indenture, loan agreement,
receivables purchase agreement, mortgage, deed of trust, or other agreement or
instrument, other than this Agreement and the other Transaction Documents, or
(iii) violate any law or any order, rule, or regulation applicable to it of any
court or of any federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over it or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations pending,
or, to its knowledge, threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality (i)
asserting the invalidity of this Agreement or any other Transaction Document,
(ii) seeking to prevent the sale and assignment of the Receivables under the
Sale Agreement or of the Asset Interest under this Agreement or the consummation
of any of the other transactions contemplated by this Agreement or any other
Transaction Document, or (iii) that would have a Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(h) Government Approvals. No authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority or regulatory
body is required for the due execution, delivery and performance by it of this
Agreement and each other Transaction Document to which it is a party, except, in
the case of the Seller, for (i) the filing of the UCC financing statements
referred to in Article V, and (ii) the filing of any UCC continuation statements
and amendments from time to time required in relation to any UCC financing
statements filed in connection with this Agreement, as provided in Section 8.7,
all of which, at the time required in Article V or Section 8.7, as applicable,
shall have been duly made and shall be in full force and effect.
(i) Financial Condition. (i) The consolidated and consolidating balance
sheets of the Lennox International and its consolidated subsidiaries as at
December 31, 1999, and the related statements of income and shareholders' equity
of Lennox International and its consolidated subsidiaries for the fiscal year
then ended, certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent certified public
accountants, copies of which have been furnished to the Administrative Agent,
fairly present in all material respects the consolidated financial condition of
Lennox International and its consolidated subsidiaries as at such date and the
consolidated results of the operations of Lennox International and its
consolidated subsidiaries for the period ended on such date, all in accordance
with GAAP consistently applied, (ii) since December 31, 1999 there has been no
material adverse change in any such financial condition, business or operations
except as described in Schedule 6.1(i), (iii) the balance sheet of the Seller as
at June 9, 2000, certified by the chief financial officer or treasurer of the
Seller by means of a Certificate of Financial Officer in the form attached
hereto as Exhibit B, copies of which have been furnished to the Administrative
Agent, fairly present in all material respects the financial condition, assets
and liabilities of the Seller as at such date, all in accordance with GAAP
consistently applied, and (iv) since June 9, 2000, there has been no material
adverse change in the Seller's financial condition, business or operations.
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(j) Nature of Receivables. Each Receivable constitutes an "account" as
such term is defined in the UCC.
(k) Margin Regulations. The use of all funds obtained by such Seller
Party under this Agreement or any other Transaction Document will not conflict
with or contravene any of Regulation T, U and X promulgated by the Federal
Reserve Board from time to time.
(l) Quality of Title. (i) Each Pool Receivable, together with the
Related Assets, is owned by the Seller free and clear of any Lien (other than
any Lien arising solely as the result of any action taken by the Purchaser (or
any assignee thereof) or by the Administrative Agent); (ii) when the Purchaser
makes a Purchase or Reinvestment, it shall have acquired and shall at all times
thereafter continuously maintain a valid and perfected first priority undivided
percentage ownership interest to the extent of the Asset Interest in each Pool
Receivable, each Related Asset and Collections with respect thereto, free and
clear of any Lien (other than any Lien arising as the result of any action taken
by the Purchaser (or any assignee thereof or by the Administrative Agent); and
(iii) no financing statement or other instrument similar in effect covering any
Pool Receivable, any interest therein, the Related Assets or Collections with
respect thereto is on file in any recording office except such as may be filed
(A) in favor of the Originators in accordance with the Contracts, (B) in favor
of the Seller in connection with the Sale Agreement or (C) in favor of the
Purchaser or the Administrative Agent in accordance with this Agreement or in
connection with any Lien arising solely as the result of any action taken by the
Purchaser (or any assignee thereof) or by the Administrative Agent.
(m) Accurate Reports. No Information Package (if prepared by such
Seller Party, or to the extent information therein was supplied by such Seller
Party) or other information, exhibit, financial statement, document, book,
record or report furnished or to be furnished, in each case in writing, by or on
behalf of such Seller Party to the Administrative Agent or the Purchaser
pursuant to this Agreement was or will be inaccurate in any material respect as
of the date it was or will be dated or (except as otherwise disclosed to the
Administrative Agent or Purchaser at such time) as of the date so furnished, or
contained or (in the case of information or other materials to be furnished in
the future) will contain any material misstatement of fact or omitted or (in the
case of information or other materials to be furnished in the future) will omit
to state a material fact or any fact necessary to make the statements contained
therein not materially misleading in light of the circumstances made or
presented.
(n) Offices. The principal places of business and chief executive
offices of the Master Servicer and the Seller are located at the respective
addresses set forth on Schedule 14.2, and the offices where the Master Servicer
and the Seller keep all their books, records and documents evidencing Pool
Receivables, the related Contracts and all purchase orders and other agreements
related to such Pool Receivables are located at the addresses specified in
Schedule 6.1(n) (or at such other locations, notified to the Administrative
Agent, on the Purchaser's behalf, in accordance with Section 7.1(f), in
jurisdictions where all action required by Section 8.5 has been taken and
completed).
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(o) Lockbox Accounts. The names and addresses of all the Lockbox Banks,
together with the account numbers of the accounts of the Originators or the
Seller at such Lockbox Banks, are specified in Schedule 6.1(o) (or have been
notified to and approved by the Administrative Agent, on the Purchaser's behalf,
in accordance with Section 7.3(d)).
(p) Eligible Receivables. Each Receivable included in the Net Pool
Balance as an Eligible Receivable on the date of any Purchase, Reinvestment or
computation of Net Pool Balance shall be an Eligible Receivable on such date.
(q) Servicing Programs. No license or approval is required for the
Administrative Agent's use of any program used by the Master Servicer in the
servicing of the Receivables, other than those which have been obtained and are
in full force and effect.
(r) Compliance with Credit and Collection Policy. With respect to each
Eligible Receivable, it has complied in all material respects with the Credit
and Collection Policy.
(s) [Reserved].
(t) Names. Since the date of its incorporation, the Seller has not used
any corporate names, trade names or assumed names other than the name in which
it has executed this Agreement.
(u) Ownership of the Seller. The Originators, ▇▇▇▇▇▇▇▇▇ and Heatcraft
Technologies own 100% of the issued and outstanding capital stock of the Seller,
free and clear of any Lien. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of the Seller.
(v) Investment Company. The Seller is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended from time
to time, or any successor statute.
(w) Taxes. Each Seller Party has filed all material tax returns and
reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except for immaterial amounts,
unless such immaterial amounts give rise to a Lien, and except for any such
taxes which are not yet delinquent or are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with generally accepted accounting principles shall have been set aside on its
books.
(x) Compliance with Laws. Each Seller Party is in compliance with all
applicable laws, rules, regulations and orders, including those with respect to
the Pool Receivables and related Contracts, except where the failure to so
comply would not individually or in the aggregate have a Material Adverse
Effect.
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ARTICLE VII
GENERAL COVENANTS OF THE SELLER PARTIES
SECTION 7.1 AFFIRMATIVE COVENANTS OF THE SELLER PARTIES.
From the date hereof until the Final Payout Date, unless the
Administrative Agent shall otherwise consent in writing:
(a) Compliance With Laws, Etc. Each Seller Party will comply in all
material respects with all applicable laws, rules, regulations and orders,
including those with respect to the Pool Receivables and related Contracts,
except where the failure to so comply would not individually or in the aggregate
have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Each Seller Party will
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification would have a Material Adverse Effect.
(c) Audits. Each Seller Party will (i) at any time and from time to
time upon not less than five (5) Business Days' notice (unless a Liquidation
Event has occurred and is continuing (or the Administrative Agent, on the
Purchaser's behalf, believes in good faith that a Liquidation Event has occurred
and is continuing), in which case no such notice shall be required) during such
Seller Party's regular business hours, permit the Administrative Agent, on the
Purchaser's behalf, or any of its agents or representatives, (A) to examine and
make copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession or under the
control of such Seller Party relating to Pool Receivables, including, without
limitation, the related Contracts and purchase orders and other agreements, and
(B) to visit the offices and properties of such Seller Party for the purpose of
examining such materials described in clause (i)(A) next above, and to discuss
matters relating to Pool Receivables or such Seller Party's performance
hereunder with any of the officers or employees (with notification to and
coordination with the treasurer of such Seller or his designee) of such Seller
Party having knowledge of such matters; (ii) permit the Administrative Agent or
any of its agents or representatives, upon not less than five (5) Business Days'
notice from the Administrative Agent and the consent (which consent shall not
unreasonably be withheld) of such Seller Party (unless a Liquidation Event has
occurred and is continuing (or the Administrative Agent believes in good faith
that a Liquidation Event has occurred and is continuing) in which case no such
notice or consent shall be required), to meet with the independent auditors of
such Seller Party, to review such auditors' work papers and otherwise to review
with such auditors the books and records of such Seller Party with respect to
the Pool Receivables and Related Assets; and (iii) without limiting the
provisions of clause (i) or (ii) next above, from time to time, at the expense
of such Seller Party, permit certified public accountants or other auditors
acceptable to the Administrative Agent to conduct a review of such Seller
Party's books and records with respect to the Pool Receivables and Related
Assets; provided, that, so long as no Liquidation Event has
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occurred and is continuing, (i) such reviews shall not be done more than two (2)
times in any one calendar year and (ii) the Seller Parties shall only be
responsible for the costs and expenses of one such review in any one calendar
year.
(d) Keeping of Records and Books of Account. The Master Servicer will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Pool Receivables
in the event of the destruction of the originals thereof), and keep and
maintain, all documents, books, records and other information reasonably
necessary or advisable for the collection of all Pool Receivables (including,
without limitation, records adequate to permit the daily identification of
outstanding Unpaid Balances by Obligor and related debit and credit details of
the Pool Receivables).
(e) Performance and Compliance with Receivables and Contracts. Each
Seller Party will, at its expense, timely and fully perform and comply with all
material provisions, covenants and other promises, if any, required to be
observed by it under the Contracts related to the Pool Receivables and all
agreements related to such Pool Receivables.
(f) Location of Records. Each Seller Party will keep its chief place of
business and chief executive office, and the offices where it keeps its records
concerning the Pool Receivables, all related Contracts and all agreements
related to such Pool Receivables (and all original documents relating thereto),
at the address(es) of the Master Servicer and the Seller referred to in Section
6.1(n) or, upon 30 days' prior written notice to the Administrative Agent, at
such other locations in jurisdictions where all action required by Section 8.5
shall have been taken and completed.
(g) Credit and Collection Policies. Each Seller Party will comply in
all material respects with the Credit and Collection Policy in regard to each
Pool Receivable and the related Contract.
(h) Sale Agreement. The Seller will perform and comply in all material
respects with all of its covenants and agreements set forth in the Sale
Agreement, and will enforce the performance by the Originators of their
respective obligations under the Sale Agreement.
(i) Lockbox Agreements. The Seller and the Master Servicer shall enter
into a Lockbox Agreement with Wachovia with respect to each Lockbox Bank with
respect to each Lockbox Account, and shall instruct all Obligors to deposit all
Collections to the Lockbox Accounts. Upon the establishment of the Collection
Account, if any, the Master Servicer shall instruct each Lockbox Bank to deposit
all Collections to the Collection Account. The Seller will not give any contrary
or conflicting instructions, and will, upon the request of the Master Servicer
or the Administrative Agent, confirm such instructions by the Master Servicer or
take such other action as may be reasonably required to give effect to such
instructions.
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SECTION 7.2 REPORTING REQUIREMENTS OF THE SELLER PARTIES.
From the date hereof until the Final Payout Date, unless the
Administrative Agent, on the Purchaser's behalf, shall otherwise consent in
writing:
(a) Quarterly Financial Statements - Lennox International. The Master
Servicer will furnish to the Administrative Agent, on the Purchaser's behalf, as
soon as available and in any event within 45 days after the end of each of the
first three quarters of each fiscal year of Lennox International, copies of its
consolidated, and, to the extent otherwise available, consolidating balance
sheets and related statements of income and statements of cash flow, showing the
financial condition of Lennox International and its consolidated Subsidiaries as
of the close of such fiscal quarter and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then elapsed
portion of the fiscal year, together with a Certificate of Financial Officer in
the form attached hereto as Exhibit B executed by the chief financial officer or
treasurer of the Lennox International.
(b) Annual Financial Statements - Lennox International. The Master
Servicer will furnish to the Administrative Agent, as soon as available and in
any event within 90 days after the end of each fiscal year of Lennox
International, copies of its consolidated and consolidating balance sheets and
related statements of income and statements of cash flow, showing the financial
condition of Lennox International and its consolidated Subsidiaries as of the
close of such fiscal year and the results of its operations and the operations
of such Subsidiaries during such year, all audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or
other independent public accountants of recognized national standing acceptable
to the Administrative Agent and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition and
results of operations of Lennox International on a consolidated basis (except as
noted therein) in accordance with GAAP consistently applied;
(c) Quarterly Financial Statements - Seller. The Seller will furnish to
the Administrative Agent, as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year of the
Seller, copies of the financial statements of the Seller, consisting of at least
a balance sheet as at the close of such quarter and statements of earnings and
changes in cash flows for such quarter and for the period from the beginning of
the fiscal year to the close of such quarter, together with a Certificate of
Financial Officer in the form attached hereto as Exhibit B executed by the chief
financial officer, chief accounting officer, controller or treasurer of the
Seller or Lennox International;
(d) Annual Financial Statements - Seller. The Seller will furnish to
the Administrative Agent, as soon as available and in any event within 90 days
after the end of each fiscal year of the Seller, copies of the financial
statements of the Seller, consisting of at least a balance sheet of the Seller
for such year and statements of earnings, cash flows and shareholders' equity,
setting forth in each case in comparative form corresponding figures from the
preceding fiscal year, together with a Certificate of Financial Officer in the
form attached hereto as Exhibit B executed by the chief financial officer or
treasurer of the Seller;
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(e) Reports to Holders and Exchanges. In addition to the reports
required by subsections (a), (b), (c) and (d) above, promptly upon the
Administrative Agent's request, the Master Servicer will furnish or cause to be
furnished to the Administrative Agent, on the Purchaser's behalf, copies of any
reports specified in such request which the Master Servicer sends to any of its
securityholders, and any reports, final registration statements (excluding
exhibits), and each final prospectus and all amendments thereto that the Master
Servicer files with the Securities and Exchange Commission or any national
securities exchange other than registration statements relating to employee
benefit plans and registrations of securities for selling securities;
(f) ERISA. Promptly after the filing or receiving thereof, each Seller
Party will furnish to the Administrative Agent, on the Purchaser's behalf,
copies of all reports and notices with respect to any Reportable Event defined
in Article IV of ERISA which any Seller Party or ERISA Affiliate thereof files
under ERISA with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or which such Seller Party or ERISA
Affiliate thereof receives from the Pension Benefit Guaranty Corporation, which
Reportable Event(s) individually or in the aggregate could have a Material
Adverse Effect;
(g) Liquidation Events, Etc. As soon as possible and in any event
within three (3) Business Days after obtaining knowledge of the occurrence of
any Liquidation Event, any Unmatured Liquidation Event, or any Credit Event,
each Seller Party will furnish to the Administrative Agent, on the Purchaser's
behalf, a written statement of the chief financial officer, treasurer or chief
accounting officer of such Seller Party setting forth details of such event and
the action that such Seller Party will take with respect thereto;
(h) Litigation. As soon as possible and in any event within ten (10)
Business Days of any Seller Party's knowledge thereof, such Seller Party will
furnish to the Administrative Agent, on the Purchaser's behalf, notice of (i)
any litigation, investigation or proceeding which may exist at any time which
could reasonably be expected to have a Material Adverse Effect and (ii) any
development in previously disclosed litigation which development could
reasonably be expected to have a Material Adverse Effect;
(i) [Reserved];
(j) Change in Credit and Collection Policy. Prior to its effective
date, each Seller Party will furnish to the Administrative Agent, on the
Purchaser's behalf, notice of (i) any material change in the character of such
Seller Party's business, and (ii) any material change in the Credit and
Collection Policy;
(k) Credit Event. Within five (5) Business Days of the occurrence
thereof, each Seller Party will furnish to the Administrative Agent, on the
Purchaser's behalf, notice of any Credit Event;
(l) [Reserved]; and
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(m) Other. Promptly, from time to time, each Seller Party will furnish
to the Administrative Agent, on the Purchaser's behalf, such other information,
documents, records or reports respecting the Receivables or the condition or
operations, financial or otherwise, of such Seller Party as the Administrative
Agent may from time to time reasonably request in order to protect the interests
of the Administrative Agent or Purchaser under or as contemplated by this
Agreement.
SECTION 7.3 NEGATIVE COVENANTS OF THE SELLER PARTIES.
From the date hereof until the Final Payout Date, without the prior
written consent of the Administrative Agent:
(a) Sales, Liens, Etc. (i) The Seller will not, except as otherwise
provided herein and in the other Transaction Documents, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Lien upon or with respect to, any Pool Receivable or any Related
Asset, or any interest therein, or any account to which any Collections of any
Pool Receivable are sent, or any right to receive income or proceeds from or in
respect of any of the foregoing (except, prior to the execution of Lockbox
Agreements, set-off rights of any bank at which any such account is maintained),
and (ii) the Master Servicer will not assert any interest in the Receivables,
except as Master Servicer.
(b) Extension or Amendment of Receivables. No Seller Party will, except
as otherwise permitted in Section 8.2(c), extend, amend or otherwise modify the
terms of any Pool Receivable, or amend, modify or waive any material term or
condition of any Contract related thereto in any way that adversely affects the
collectibility of any Pool Receivable or the Purchaser's rights therein.
(c) Change in Credit and Collection Policy. No Seller Party will make
or permit to be made any material change in the Credit and Collection Policy,
which change would impair the collectibility of any significant portion of the
Pool Receivables or otherwise adversely affect the interests or remedies of the
Purchaser under this Agreement or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. No Seller Party will
add or terminate any bank as a Lockbox Bank from those listed in Schedule 6.1(o)
or, after Lockbox Accounts have been delivered pursuant to Section 7.1(i), make
any change in its instructions to Obligors regarding payments to be made to the
Seller or Master Servicer or payments to be made to any Lockbox Bank (except for
a change in instructions solely for the purpose of directing Obligors to make
such payments to another existing Lockbox Bank), unless (i) the Administrative
Agent shall have received prior written notice of such addition, termination or
change and (ii) if a Credit Event has occurred, the Administrative Agent shall
have received duly executed copies of Lockbox Agreements with each new Lockbox
Bank.
(e) Deposits to Collection Account. No Seller Party will deposit or
otherwise credit, or cause or permit to be so deposited or credited, to the
Collection Account, any cash or cash proceeds other than Collections of Pool
Receivables.
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(f) Changes to Other Documents. The Seller will not enter into any
amendment or modification of, or supplement to, the Sale Agreement or the
Seller's certificate of incorporation.
(g) [Reserved].
(h) Seller Indebtedness. The Seller will not incur or permit to exist
any Indebtedness or liability on account of deposits or advances or for borrowed
money or for the deferred purchase price of any property or services, except (i)
indebtedness of the Seller to the Originators incurred in accordance with the
Sale Agreement, (ii) current accounts payable arising under the Transaction
Documents and not overdue and (iii) other current accounts payable arising in
the ordinary course of business and not overdue, in an aggregate amount at any
time outstanding not to exceed $10,000.
(i) Negative Pledges. No Seller Party will enter into or assume any
agreement (other than this Agreement and the other Transaction Documents)
prohibiting the creation or assumption of any Lien upon any Pool Receivables or
Related Assets, whether now owned or hereafter acquired, except as contemplated
by the Transaction Documents, or otherwise prohibiting or restricting any
transaction contemplated hereby or by the other Transaction Documents.
(j) Change of Name. The Seller will not change its name, any trade name
or corporate structure, or commence the use of any new trade name unless it has
given the Administrative Agent at least 30 days prior written notice thereof and
has taken all steps necessary to continue the perfection of the Purchaser's
interest, including the filing of amendments to the UCC financing statements
filed pursuant to Section 5.1(a).
(k) [Reserved].
(l) Mergers, Consolidations and Acquisitions.
(i) The Master Servicer will not, nor will it permit any
subservicer to merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or
purchase, lease or otherwise acquire (in one transaction or a series of
transactions) all or substantially all of the assets of any other
Person (whether directly by purchase, lease or other acquisition of all
or substantially all of the assets of such Person or indirectly by
purchase or other acquisition of all or substantially all of the
capital stock of such other Person) other than acquisitions in the
ordinary course of their business, except that if at the time thereof
and immediately after giving effect thereto no Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing (A)
the Master Servicer or such subservicer may merge or consolidate with
any Subsidiary (other than Seller) in a transaction in which such
Master Servicer or such subservicer is the surviving corporation, and
(B) the Master Servicer or such subservicer may purchase, lease or
otherwise acquire from any Subsidiary (other than Seller) all or
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substantially all of its assets and may purchase or otherwise acquire
all or substantially all of the capital stock of any Person who
immediately thereafter is a Subsidiary.
(ii) Seller will not merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with
it, or purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or substantially all of the assets of any
other Person (whether directly by purchase, lease or other acquisition
of all or substantially all of the assets of such Person or indirectly
by Purchase or other acquisition of all or substantially all of the
capital stock of such other Person) other than the acquisition of the
Receivables and Related Assets pursuant to the Sale Agreement and the
sale of an interest in the Pool Receivables and Related Assets
hereunder.
(m) [Reserved].
(n) Change in Business. No Seller Party will make or permit to be made
any material change in the character of its business, which change would impair
the collectibility of any significant portion of the Pool Receivables or
otherwise adversely affect the interests or remedies of the Purchaser under this
Agreement or any other Transaction Document.
SECTION 7.4 SEPARATE CORPORATE EXISTENCE OF THE SELLER.
Each Seller Party hereby acknowledges that the Purchaser and the
Administrative Agent are entering into the transactions contemplated hereby in
reliance upon the Seller's identity as a legal entity separate from the Master
Servicer and its other Affiliates. Therefore, each Seller Party shall take all
steps specifically required by this Agreement or reasonably required by the
Administrative Agent to continue the Seller's identity as a separate legal
entity and to make it apparent to third Persons that the Seller is an entity
with assets and liabilities distinct from those of its Affiliates, and is not a
division of the Master Servicer or any other Person. Without limiting the
foregoing, each Seller Party will take such actions as shall be required in
order that:
(a) The Seller will be a limited purpose corporation whose primary
activities are restricted in its Certificate of Incorporation to purchasing or
otherwise acquiring from the Originators, owning, holding, granting security
interests, or selling interests, in Receivables in the Receivables Pool and
Related Assets, entering into agreements for the selling and servicing of the
Receivables Pool, and conducting such other activities as it deems necessary or
appropriate to carry out its primary activities;
(b) At least one member of the Seller's Board of Directors (the
"Independent Director") shall be an individual who is not, and never has been, a
direct, indirect or beneficial stockholder, officer, director, employee,
affiliate, associate, material supplier or material customer of any Seller Party
or any of its Affiliates. The certificate of incorporation of the Seller shall
provide that (i) at least one member of the Seller's Board of Directors shall be
an Independent Director, (ii) the Seller's Board of Directors shall not approve,
or take any other action to cause the filing of, a voluntary bankruptcy petition
with respect to the Seller unless the
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Independent Director shall approve the taking of such action in writing prior to
the taking of such action and (iii) the provisions requiring an Independent
Director and the provisions described in clauses (i) and (ii) of this paragraph
(b) cannot be amended without the prior written consent of the Independent
Director;
(c) The Independent Director shall not at any time serve as a trustee
in bankruptcy for the Seller or any Affiliate thereof;
(d) Any employee, consultant or agent of the Seller will be compensated
from the Seller's funds for services provided to the Seller. The Seller will not
engage any agents other than its attorneys, auditors and other professionals,
and a servicer and any other agent contemplated by the Transaction Documents for
the Receivables Pool (the parties acknowledge that the Master Servicer will be
fully compensated for its services by payment of the Servicing Fee), and certain
organizational expenses in connection with the formation of the Seller;
(e) The Seller will contract with the Master Servicer to perform for
the Seller all operations required on a daily basis to service the Receivables
Pool. The Seller will pay the Master Servicer the Servicing Fee pursuant hereto.
The Seller will not incur any material indirect or overhead expenses for items
shared with the Master Servicer (or any other Affiliate thereof) which are not
reflected in the Servicing Fee. To the extent, if any, that the Seller (or any
other Affiliate thereof) shares items of expenses not reflected in the Servicing
Fee, for legal, auditing and other professional services and directors' fees,
such expenses will be allocated to the extent practical on the basis of actual
use or the value of services rendered, and otherwise on a basis reasonably
related to the actual use or the value of services rendered, it being understood
that Lennox shall pay or cause to be paid all expenses relating to the
preparation, negotiation, execution and delivery of the Transaction Documents,
including, without limitation, legal, rating agency and other fees;
(f) The Seller's operating expenses will not be paid by any other
Seller Party or other Affiliate of the Seller;
(g) The Seller will have its own stationery;
(h) The books of account, financial reports and corporate records of
the Seller will be maintained separately from those of the Master Servicer and
each other Affiliate of the Seller;
(i) Any financial statements of any Seller Party or Affiliate thereof
which are consolidated to include the Seller will contain detailed notes clearly
stating that (i) all of the Seller's assets are owned by the Seller, and (ii)
the Seller is a separate corporate entity with its own separate creditors that
will be entitled to be satisfied out of the Seller's assets prior to any value
in the Seller becoming available to the Seller's equity holders; and the
accounting records and the published financial statements of the Originators
will clearly show that, for accounting purposes, the Pool Receivables and
Related Assets have been sold by the Originators to the Seller;
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(j) The Seller's assets will be maintained in a manner that facilitates
their identification and segregation from those of the Master Servicer and the
other Affiliates;
(k) Each Affiliate of the Seller will strictly observe corporate
formalities in its dealings with the Seller, and, except as permitted pursuant
to this Agreement with respect to Collections, funds or other assets of the
Seller will not be commingled with those of any of its Affiliates;
(l) No Affiliate of the Seller will maintain joint bank accounts with
the Seller or other depository accounts with the Seller to which any such
Affiliate (other than in its capacity as the Master Servicer hereunder or under
the Sale Agreement) has independent access, provided that prior to the
occurrence of a Credit Event, Collections may be deposited into general accounts
of the Master Servicer, subject to the obligations of the Master Servicer
hereunder;
(m) No Affiliate of the Seller shall, directly or indirectly, name the
Seller or enter into any agreement to name the Seller as a direct or contingent
beneficiary or loss payee on any insurance policy covering the property of any
Affiliate of the Seller;
(n) Each Affiliate of the Seller will maintain arm's length
relationships with the Seller, and each Affiliate of the Seller that renders or
otherwise furnishes services or merchandise to the Seller will be compensated by
the Seller at market rates for such services or merchandise;
(o) No Affiliate of the Seller will be, nor will it hold itself out to
be, responsible for the debts of the Seller or the decisions or actions in
respect of the daily business and affairs of the Seller. The Master Servicer and
the Seller will immediately correct any known misrepresentation with respect to
the foregoing and they will not operate or purport to operate as an integrated
single economic unit with respect to each other or in their dealing with any
other entity;
(p) The Seller will keep correct and complete books and records of
account and minutes of the meetings and other proceedings of its stockholder and
board of directors, as applicable, and the resolutions, agreements and other
instruments of the Seller will be continuously maintained as official records by
the Seller; and
(q) The Seller, on the one hand, and each Originator, on the other
hand, will conduct its business solely in its own corporate name and in such a
separate manner so as not to mislead others with whom they are dealing.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.1 DESIGNATION OF MASTER SERVICER.
(a) Lennox as Initial Master Servicer. The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person designated
as Master Servicer hereunder
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from time to time in accordance with this Section 8.1. Until the Administrative
Agent, on the Purchaser's behalf, gives to Lennox a Successor Notice (as defined
in Section 8.1(b)), Lennox is hereby designated as, and hereby agrees to perform
the duties and obligations of, the Master Servicer pursuant to the terms hereof.
Each of the Originators named in the Sale Agreement, has agreed to act as
subservicer for the purpose of performing certain duties and obligations with
respect to all Receivables purchased by the Seller from such Originator pursuant
to the terms of the Sale Agreement. In so acting as subservicer, each of the
Originators has agreed to comply with, and be bound by, all of the terms and
provisions of this Agreement applicable to such Originator in the performance of
its duties as subservicer; provided, however, that each such Originator (i)
shall cease to act as subservicer upon the Administrative Agent's delivery of a
Successor Notice to Lennox, and (ii) shall not be entitled to receive any
Servicing Fee provided for herein (except that the Master Servicer may agree to
pay to the subservicers a proportional share of the Servicing Fee which
obligation shall be that of the Master Servicer).
(b) Successor Notice; Master Servicer Transfer Events. Upon Lennox's
receipt of a notice from the Administrative Agent of the Administrative Agent's
designation, on the Purchaser's behalf, of a new Master Servicer (a "Successor
Notice"), Lennox agrees that it will terminate its activities as Master Servicer
hereunder in a manner that the Administrative Agent believes will facilitate the
transition of the performance of such activities to the new Master Servicer, and
the Administrative Agent (or its designee) shall assume each and all of Lennox's
obligations to service and administer such Receivables, on the terms and subject
to the conditions herein set forth, and Lennox shall use its best efforts to
assist the Administrative Agent (or its designee) in assuming such obligations.
Without limiting the foregoing, Lennox agrees, at its expense, to take all
actions necessary to provide the new Master Servicer with access to all computer
software necessary or useful in collecting, billing or maintaining records with
respect to the Receivables. The Administrative Agent agrees not to give Lennox a
Successor Notice until after the occurrence and during the continuance of any
Liquidation Event or a Credit Event (any such event being herein called a
"Servicer Transfer Event"), in which case such Successor Notice may be given at
any time in the Administrative Agent's discretion. If Lennox disputes the
occurrence of a Servicer Transfer Event, Lennox may take appropriate action to
resolve such dispute; provided that Lennox must terminate its activities
hereunder as Master Servicer and allow the newly designated Master Servicer to
perform such activities on the date provided by the Administrative Agent as
described above, notwithstanding the commencement or continuation of any
proceeding to resolve the aforementioned dispute, if the Administrative Agent,
on the Purchaser's behalf, reasonably determines, in good faith, that such
termination is necessary or advisable to protect the Purchaser's interests
hereunder.
(c) Subcontracts. The Master Servicer may, with the prior consent of
the Administrative Agent, subcontract with any other Person for servicing,
administering or collecting the Pool Receivables, provided that the Master
Servicer shall remain liable for the performance of the duties and obligations
of the Master Servicer pursuant to the terms hereof and such subservicing
arrangement may be terminated at the Administrative Agent's request, on the
Purchaser's behalf, at anytime after a Successor Notice has been given.
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SECTION 8.2 DUTIES OF MASTER SERVICER.
(a) Appointment; Duties in General. Each of the Seller, the Purchaser
and the Administrative Agent hereby appoints as its agent the Master Servicer,
as from time to time designated pursuant to Section 8.1, to enforce its rights
and interests in and under the Pool Receivables, the Related Security and the
related Contracts. The Master Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool Receivable from
time to time, all in accordance with applicable laws, rules and regulations,
with reasonable care and diligence, and in accordance with the Credit and
Collection Policy.
(b) Allocation of Collections; Segregation. The Master Servicer shall
identify for the account of the Seller and Purchaser their respective allocable
shares of the Collections of Pool Receivables in accordance with Section 1.3 but
shall not be required (unless otherwise requested by the Administrative Agent,
on the Purchaser's behalf, after the occurrence of a Credit Event) to segregate
the funds constituting such portions of such Collections prior to the remittance
thereof in accordance with said Section. If instructed by the Administrative
Agent, on the Purchaser's behalf, after the occurrence of a Credit Event, the
Master Servicer shall segregate and deposit into the Collection Account, the
Purchaser's share of Collections of Pool Receivables, on the second Business Day
following receipt by the Master Servicer of such Collections in immediately
available funds.
(c) Modification of Receivables. So long as no Liquidation Event and no
Unmatured Liquidation Event shall have occurred and be continuing, Lennox, while
it is Master Servicer, may, in accordance with the applicable Credit and
Collection Policy, (i) extend the maturity or adjust the Unpaid Balance of any
Defaulted Receivable as the Master Servicer may reasonably determine to be
appropriate to maximize Collections thereof, and (ii) adjust the Unpaid Balance
of any Receivable to reflect the reductions or cancellations described in the
first sentence of Section 3.2(a).
(d) Documents and Records. Each Seller Party shall deliver to the
Master Servicer, and the Master Servicer shall hold in trust for the Seller and
the Purchaser in accordance with their respective interests, all documents,
instruments and records (including, without limitation, computer tapes or disks)
that evidence or relate to Pool Receivables.
(e) Certain Duties to the Seller. The Master Servicer shall, as soon as
practicable following receipt, turn over to the Seller (i) that portion of
Collections of Pool Receivables representing its undivided percentage interest
therein, less the Seller's Share of the Servicing Fee, and, in the event that
neither Lennox nor any other Seller Party or Affiliate thereof is the Master
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of the
Master Servicer of servicing, collecting and administering the Pool Receivables
to the extent not covered by the Servicing Fee received by it, and (ii) the
Collections of any Receivable which is not a Pool Receivable. The Master
Servicer, if other than Lennox or any other Seller Party or Affiliate thereof,
shall, as soon as practicable upon demand, deliver to the Seller all documents,
instruments and records in its possession that evidence or relate to Receivables
of the Seller other
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than Pool Receivables, and copies of documents, instruments and records in its
possession that evidence or relate to Pool Receivables.
(f) Termination. The Master Servicer's authorization under this
Agreement shall terminate upon the Final Payout Date.
(g) Power of Attorney. The Seller hereby grants to the Master Servicer
an irrevocable power of attorney, with full power of substitution, coupled with
an interest, to take in the name of the Seller all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by the Seller or transmitted or received
by the Purchaser (whether or not from the Seller) in connection with any
Receivable.
SECTION 8.3 [RESERVED].
SECTION 8.4 SERVICER DEFAULTS.
If any one of the following events (a "Servicer Default") shall occur
and be continuing:
(a) any failure by the Master Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Administrative Agent as
required by this Agreement including, without limitation, delivery of any
Information Package and, (i) in the case of failure to deliver an Information
Package such failure shall remain unremedied for two (2) Business Days after the
earliest to occur of (A) written notice thereof shall have been given by the
Administrative Agent to the Master Servicer or (B) the Master Servicer shall
have otherwise become aware of such failure and (ii) in the case of failure to
make any payment or deposit to be made by the Master Servicer such failure shall
remain unremedied for three (3) Business Days after the due date thereof;
(b) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other covenants or agreements of the Master
Servicer set forth in this Agreement or any other Transaction Document to which
the Master Servicer is a party, which failure continues unremedied for a period
of 30 days after the first to occur of (i) the date on which written notice of
such failure requiring the same to be remedied shall have been given to the
Master Servicer by the Administrative Agent and (ii) the date on which the
Master Servicer becomes aware thereof;
(c) any representation, warranty or certification made by the Master
Servicer in this Agreement or in any certificate delivered pursuant to this
Agreement shall prove to have been incorrect when made, which continues to be
unremedied for a period of 30 days after the first to occur of (i) the date on
which written notice of such incorrectness requiring the same to be remedied
shall have been given to the Master Servicer by the Administrative Agent and
(ii) the date on which the Master Servicer becomes aware thereof; provided,
however, that in the case of any representation, warranty or certification that
was not made in writing, a Servicer Default shall occur hereunder only if such
representation, warranty or certification was reasonably relied upon by the
Administrative Agent and/or the Purchaser;
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(d) a Credit Event shall occur or any bankruptcy, insolvency or similar
event occurs with respect to the Master Servicer; or
(e) any change in the control of the Master Servicer which takes the
form of either a merger or consolidation in which the Master Servicer is not the
surviving entity.
Notwithstanding anything herein to the contrary, so long as any such Servicer
Default shall not have been remedied, the Administrative Agent, by written
notice to the Master Servicer (a "Termination Notice"), may terminate all of the
rights and obligations of the Master Servicer as Master Servicer under this
Agreement and appoint a successor Master Servicer satisfactory to the
Administrative Agent (in the Administrative Agent's sole discretion).
SECTION 8.5 RIGHTS OF THE ADMINISTRATIVE AGENT.
(a) Notice to Obligors. At any time when a Liquidation Event has
occurred and is continuing, the Administrative Agent may notify the Obligors of
Pool Receivables, or any of them, of the ownership of the Asset Interest by the
Purchaser.
(b) Notice to Lockbox Banks. At any time following the occurrence of a
Liquidation Event, if Lockbox Agreements have been executed, the Administrative
Agent is hereby authorized to give notice to the Lockbox Banks, as provided in
the Lockbox Agreements, of the transfer to the Administrative Agent of dominion
and control over the lockboxes and related accounts to which the Obligors of
Pool Receivables make payments. The Seller and the Master Servicer hereby
transfer to the Administrative Agent, effective when the Administrative Agent
shall give notice to the Lockbox Banks as provided in the Lockbox Agreements,
the exclusive dominion and control over such lockboxes and accounts, and shall
take any further action that the Administrative Agent may reasonably request to
effect such transfer.
(c) Rights on Servicer Transfer Event. At any time following the
designation of a Master Servicer other than Lennox pursuant to Section 8.1:
(i) The Administrative Agent may direct the Obligors of Pool
Receivables, or any of them, to pay all amounts payable under any Pool
Receivable directly to the Administrative Agent or its designee.
(ii) Any Seller Party shall, at the Administrative Agent's
request and at such Seller Party's expense, give notice of the
Purchaser's ownership and security interests in the Pool Receivables to
each Obligor of Pool Receivables and direct that payments be made
directly to the Administrative Agent or its designee.
(iii) Each Seller Party shall, at the Administrative Agent's
request, (A) assemble all of the documents, instruments and other
records (including, without limitation, computer programs, tapes and
disks) which evidence the Pool Receivables, and the related Contracts
and Related Security, or which are otherwise necessary or
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desirable to collect such Pool Receivables, and make the same available
to the successor Master Servicer at a place selected by the
Administrative Agent, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting Collections
of Pool Receivables in a manner acceptable to the Administrative Agent
and promptly upon receipt, remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to the
successor Master Servicer.
(iv) Each Seller Party and Purchaser hereby authorizes the
Administrative Agent, on the Purchaser's behalf, and grants to the
Administrative Agent an irrevocable power of attorney (which shall
terminate on the Final Payout Date), to take any and all steps in such
Seller Party's name and on behalf of the Seller Parties and Purchaser
which are necessary or desirable, in the determination of the
Administrative Agent, to collect all amounts due under any and all Pool
Receivables, including, without limitation, endorsing any Seller
Party's name on checks and other instruments representing Collections
and enforcing such Pool Receivables and the related Contracts.
SECTION 8.6 RESPONSIBILITIES OF THE SELLER PARTIES.
Anything herein to the contrary notwithstanding:
(a) Contracts. Each Seller Party shall remain responsible for
performing all of its obligations (if any) under the Contracts related to the
Pool Receivables and under the related agreements to the same extent as if the
Asset Interest had not been sold hereunder, and the exercise by the
Administrative Agent or its designee of its rights hereunder shall not relieve
any Seller Party from such obligations.
(b) Limitation of Liability. The Administrative Agent and Purchaser
shall not have any obligation or liability with respect to any Pool Receivables,
Contracts related thereto or any other related agreements, nor shall any of them
be obligated to perform any of the obligations of any Seller Party or any
Originator thereunder.
SECTION 8.7 FURTHER ACTION EVIDENCING PURCHASES AND REINVESTMENTS.
(a) Further Assurances. Each Seller Party 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 the Administrative
Agent or its designee may reasonably request in order to perfect, protect or
more fully evidence the Purchases hereunder and the resulting Asset Interest, or
to enable Purchaser or the Administrative Agent or its designee to exercise or
enforce any of their respective rights hereunder or under any Transaction
Document in respect thereof. Without limiting the generality of the foregoing,
each Seller Party will:
(i) upon the request of the Administrative Agent, execute and
file such financing or continuation statements, or amendments thereto
or assignments thereof, and such other instruments or notices, as may
be necessary or appropriate, in accordance with the terms of this
Agreement;
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(ii) upon the request of the Administrative Agent after the
occurrence and during the continuance of a Liquidation Event, ▇▇▇▇
conspicuously each Contract evidencing each Pool Receivable with a
legend, acceptable to the Administrative Agent, evidencing that the
Asset Interest has been sold in accordance with this Agreement; and
(iii) ▇▇▇▇ its master data processing records evidencing such
Pool Receivables and related Contracts with a legend, acceptable to the
Administrative Agent, evidencing that the Asset Interest has been sold
in accordance with this Agreement.
(b) Additional Financing Statements; Performance by Administrative
Agent. Each Seller Party hereby authorizes the Administrative Agent, on the
Purchaser's behalf, or its designee to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Pool Receivables and the Related Assets now
existing or hereafter arising in the name of any Seller Party. If any Seller
Party fails to promptly execute and deliver to the Administrative Agent, on the
Purchaser's behalf, any financing statement or continuation statement or
amendment thereto or assignment thereof requested by the Administrative Agent,
on the Purchaser's behalf, each Seller Party hereby authorizes the
Administrative Agent, on the Purchaser's behalf, to execute such statement on
behalf of such Seller Party. If any Seller Party fails to perform any of its
agreements or obligations under this Agreement, the Administrative Agent or its
designee may (but shall not be required to) itself perform, or cause performance
of, such agreement or obligation, and the reasonable expenses of the
Administrative Agent or its designee incurred in connection therewith shall be
payable by the Seller Parties as provided in Section 14.5.
(c) Continuation Statements; Opinion. Without limiting the generality
of subsection (a), the Seller will, not earlier than six (6) months and not
later than three (3) months prior to the fifth anniversary of the date of filing
of the financing statements referred to in Section 5.1(a) or any other financing
statement filed pursuant to this Agreement or in connection with any Purchase
hereunder, if the Final Payout Date shall not have occurred:
(i) if necessary, execute and deliver and file or cause to be
filed an appropriate continuation statement with respect to such
financing statement; and
(ii) deliver or cause to be delivered to the Administrative
Agent an opinion of the counsel for the Seller Parties (which may be an
opinion of in-house counsel for the Seller Parties), in form and
substance reasonably satisfactory to the Administrative Agent,
confirming and updating the opinion delivered pursuant to Section
5.1(a) to the effect that the Asset Interest hereunder continues to be
a valid and perfected ownership or security interest, subject to no
other Liens of record except as provided herein or otherwise permitted
hereunder.
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SECTION 8.8 APPLICATION OF COLLECTIONS.
Any payment by an Obligor in respect of any indebtedness owed by it to
any Originator or Seller shall, except as otherwise specified by such Obligor or
required by the underlying Contract or law, be applied, first, as a Collection
of any Pool Receivable or Receivables then outstanding of such Obligor in the
order of the age of such Pool Receivables, starting with the oldest of such Pool
Receivables and, second, to any other indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.1 GRANT OF SECURITY INTEREST.
To secure all obligations of the Seller arising in connection with this
Agreement and each other Transaction Document, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute or contingent,
including, without limitation, all Indemnified Amounts, payments on account of
Collections received or deemed to be received and fees, in each case pro rata
according to the respective amounts thereof, the Seller hereby assigns and
pledges to the Administrative Agent, as agent for the Purchaser and its
successors and assigns, for the benefit of the Secured Parties, and hereby
grants to the Administrative Agent, as agent for the Purchaser, for the benefit
of the Secured Parties, a security interest in, all of the Seller's right, title
and interest now or hereafter existing in, to and under (a) all the Pool
Receivables and Related Assets (and including specifically any undivided
interest therein retained by the Seller hereunder), (b) the Sale Agreement and
the other Transaction Documents and (c) all proceeds of any of the foregoing.
SECTION 9.2 FURTHER ASSURANCES.
The provisions of Section 8.7 shall apply to the security interest
granted under Section 9.1 as well as to the Purchases, Reinvestments and all the
Asset Interests hereunder.
SECTION 9.3 REMEDIES.
Upon the occurrence of a Liquidation Event, the Purchaser shall have,
with respect to the collateral granted pursuant to Section 9.1, and in addition
to all other rights and remedies available to the Purchaser or the
Administrative Agent under this Agreement and the other Transaction Documents or
other applicable law, all the rights and remedies of a secured party upon
default under the UCC.
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.1 LIQUIDATION EVENTS.
The following events shall be "Liquidation Events" hereunder:
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(a) The Master Servicer (if any Seller Party or Affiliate thereof is
the Master Servicer) or the Seller (in the case of clause (ii) below) (i) shall
fail to perform or observe any term, covenant or agreement that is an obligation
of the Master Servicer hereunder (other than as referred to in clause (ii) below
or in other paragraphs of this Section 10.1), and such failure shall remain
unremedied for thirty (30) days after written notice thereof shall have been
given by the Administrative Agent to the Master Servicer or the Master Servicer
shall have otherwise become aware, or (ii) shall fail to make any payment or
deposit to be made by it hereunder when due which failure shall continue for
three (3) Business Days; or
(b) Any representation or warranty made or deemed to be made by any
Seller Party or Lennox International (or any of its officers) under this
Agreement or any other Transaction Document or any Information Package or other
information or report delivered pursuant hereto shall prove to have been false
or incorrect in any material respect when made provided, however, that in the
case of any representation, warranty or information that was not made or
provided in writing, a Liquidation Event shall occur hereunder only if such
representation, warranty or information was reasonably relied upon by the
Administrative Agent and/or the Purchaser; or
(c) Any Seller Party shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or any of the other
Transaction Documents on its part to be performed or observed and any such
failure shall remain unremedied for thirty (30) days after written notice
thereof shall have been given by the Administrative Agent to any Seller Party or
such Seller Party shall have otherwise become aware; or
(d) (i) Any Seller Party or Lennox International shall (A) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness when the aggregate unpaid principal amount is in excess of in the
case of the Seller, $10,000, or in the case of Lennox International or the
Master Servicer $7,500,000 when and as the same shall become due and payable
(after expiration of any applicable grace period) or (B) fail to observe or
perform any other term, covenant, condition or agreement (after expiration of
any applicable grace period) contained in any agreement or instrument evidencing
or governing any such Indebtedness if the effect of any failure referred to in
this clause (B) is to cause such Indebtedness to become due prior to its stated
maturity; (ii) any default under any other agreement or instrument of the
Seller, Master Servicer or Lennox International relating to the purchase of
receivables in an aggregate amount in excess of in the case of the Seller,
$10,000, or in the case of the Master Servicer or Lennox International
$50,000,000, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default is to terminate the commitment of any party to such
agreement or instrument to purchase receivables or the right of such Seller
Party to reinvest in receivables the principal amount paid by any party to such
agreement or instrument for its interest in receivables; or (iii) a default or
trigger event shall occur under any asset securitization agreement or
arrangement entered into by any Seller Party for the sale of receivables or an
interest therein in excess of $10,000,000, if the effect of such default or
trigger event is to cause the amounts owing in connection therewith to become
payable prior to the stated maturity; or
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(e) An Event of Bankruptcy shall have occurred and remain continuing
with respect to Lennox International or any Seller Party; or
(f) The Seller shall become an "investment company" within the meaning
of the Investment Company Act of 1940; or
(g) The rolling 3 month average Dilution Ratio at any Cut-Off Date
exceeds 12.00%; or
(h) The rolling 3 month average Default Ratio at any Cut-Off Date
exceeds 2.65%; or
(i) The rolling 3 month average Delinquency Ratio at any Cut-Off Date
exceeds 3.95%; or
(j) On any Settlement Date, after giving effect to the payments made
under Section 3.1(c), (i) the Asset Interest exceeds 100% or (ii) the
Purchaser's Total Investment and aggregate CP Discount exceeds the Purchase
Limit; or
(k) There shall have occurred any event which materially adversely
impairs the ability of the Originators to originate Receivables of a credit
quality which are at least of the credit quality of the Receivables included in
the first Purchase, or any other event occurs that is reasonably likely to have
a Material Adverse Effect; or
(l) Any Seller Party, Originator or Lennox International is subject to
a Change in Control; or
(m) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the
Receivables or Related Assets and such lien shall not have been released within
seven (7) days, or the Pension Benefit Guaranty Corporation shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068 of the
Employee Retirement Income Security Act of 1974 with regard to any of the
Receivables or Related Assets; or
(n) Any Seller Party or any Originator shall make any material change
in the policies as to origination of Receivables or in its Credit and Collection
Policy without prior written notice to and consent of the Administrative Agent;
or
(o) The Purchaser, for any reason, does not have a valid, perfected
first priority interest in the Pool Receivables and the Related Assets; or
(p) A final judgment or judgments shall be rendered against Lennox
International, the Master Servicer, the Seller or any combination thereof for
the payment of money with respect to which an aggregate amount in excess of
$10,000 with respect to the Seller and $7,500,000 with respect to Lennox
International or the Master Servicer is not covered by insurance and the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall
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not be effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of Lennox International, the Master
Servicer or the Seller to enforce any such judgment; or
(q) A Reportable Event or Reportable Events, or a failure to make a
required installment or other payment (within the meaning of Section 412(n)(1)
of the Code), shall have occurred with respect to any Plan or Plans that
reasonably could be expected to result in liability of any Master Servicer or
any ERISA Affiliate to the Pension Benefit Guaranty Corporation ("PBGC") or to a
Plan in an aggregate amount exceeding $5,000,000 and, within 30 days after the
reporting of any such Reportable Event to the Administrative Agent, on the
Purchaser's behalf, the Administrative Agent shall have notified the Master
Servicer in writing that (i) the Administrative Agent, on the Purchaser's
behalf, has made a determination that, on the basis of such Reportable Event or
Reportable Events or the failure to make a required payment, there are
reasonable grounds (A) for the termination of such Plan or Plans by the PBGC,
(B) for the appointment by the appropriate United States District Court of a
trustee to administer such Plan or Plans or (C) for the imposition of a lien in
favor of a Plan and (ii) as a result thereof a Liquidation Event exists
hereunder; or a trustee shall be appointed by a United States District Court to
administer any such Plan or Plans; or the PBGC shall institute proceedings to
terminate any Plan or Plans;
(r) The occurrence of a Servicer Default; or
(s) The Seller's Net Worth shall be less than the Threshold Amount.
SECTION 10.2 REMEDIES.
(a) Optional Liquidation. Upon the occurrence of a Liquidation Event
(other than a Liquidation Event described in subsection (e) of Section 10.1),
the Administrative Agent shall, at the request, or may with the consent, of the
Purchaser, by notice to the Seller declare the Funding Termination Date to have
occurred and the Liquidation Period to have commenced.
(b) Automatic Liquidation. Upon the occurrence of a Liquidation Event
described in subsection (e) of Section 10.1, the Funding Termination Date shall
occur and the Liquidation Period shall commence automatically.
(c) Additional Remedies. Upon any Funding Termination Date pursuant to
this Section 10.2, no Purchases or Reinvestments thereafter will be made, and
the Administrative Agent, the Purchaser and Wachovia shall have, in addition to
all other rights and remedies under this Agreement or otherwise, all other
rights and remedies provided under the UCC of each applicable jurisdiction and
other applicable laws, which rights shall be cumulative.
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ARTICLE XI
THE ADMINISTRATIVE AGENT
SECTION 11.1 AUTHORIZATION AND ACTION.
Pursuant to agreements entered into with the Administrative Agent, the
Purchaser has appointed and authorized the Administrative Agent (or its
designees) to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.
SECTION 11.2 ADMINISTRATIVE AGENT'S RELIANCE, ETC.
The Administrative Agent and its directors, officers, agents or
employees shall not be liable for any action taken or omitted to be taken by it
or them in good faith under or in connection with the Transaction Documents
(including, without limitation, the servicing, administering or collecting Pool
Receivables as Master Servicer pursuant to Section 8.1), except for its or their
own breach of the terms of the applicable terms of the Transaction Documents or
its or their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Administrative Agent: (a) may consult with
legal counsel (including counsel for the Seller), independent certified public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (b) makes no warranty or
representation to the Purchaser or any other holder of any interest in Pool
Receivables and shall not be responsible to the Purchaser or any such other
holder for any statements, warranties or representations made by any Seller
Party in or in connection with any Transaction Document; (c) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Transaction Document on the part of
any Seller Party or to inspect the property (including the books and records) of
any Seller Party; (d) shall not be responsible to the Purchaser or any other
holder of any interest in Pool Receivables for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Transaction
Document; and (e) shall incur no liability under or in respect of this Agreement
by acting upon any notice (including notice by telephone where permitted
herein), consent, certificate or other instrument or writing (which may be by
facsimile or telex) in good faith believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 11.3 WACHOVIA AND AFFILIATES.
Wachovia and any of its Affiliates may generally engage in any kind of
business with any Seller Party or any Obligor, any of their respective
Affiliates and any Person who may do business with or own securities of any
Seller Party or any Obligor or any of their respective Affiliates, all as if
Wachovia was not the Administrative Agent, and without any duty to account
therefor to the Purchaser or any other holder of an interest in Pool
Receivables, but in any event subject to Section 14.7.
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ARTICLE XII
ASSIGNMENT OF THE PURCHASER'S INTEREST
SECTION 12.1 RESTRICTIONS ON ASSIGNMENTS.
(a) No Seller Party may assign its rights, or delegate its duties
hereunder or any interest herein without the prior written consent of the
Administrative Agent (except a Seller Party may delegate certain administrative
duties to an Affiliate, such as payroll, financial reporting, tax and the like,
so long as such Seller Party remains liable for performance of such duties). The
Purchaser may not assign its rights hereunder (although it may delegate its
duties hereunder as expressly indicated herein) or the Asset Interest (or any
portion thereof) to any Person without the prior written consent of the Seller,
which consent shall not be unreasonably withheld; provided, however, that
(i) The Purchaser may assign all of its rights and interests
in the Transaction Documents, together with all its interest in the
Asset Interest, to any Liquidity Bank, Wachovia, or any Affiliate
thereof, or to any "bankruptcy remote" special purpose entity, the
business of which is administered by Wachovia or any Affiliate thereof
(which assignee shall then be subject to this Article XII); and
(ii) The Purchaser may assign and grant a security interest in
all of its rights in the Transaction Documents, together with all of
its rights and interest in the Asset Interest, to secure the
Purchaser's obligations under or in connection with the Commercial
Paper Notes, the Liquidity Agreement, and certain other obligations of
the Purchaser incurred in connection with the funding of the Purchases
and Reinvestments hereunder, which assignment and grant of a security
interest shall not be considered an "assignment" for purposes of
Section 12.1(b) or, prior to the enforcement of such security interest,
for purposes of any other provision of this Agreement (other than
Section 12.3).
(b) The Seller agrees to advise the Administrative Agent within five
(5) Business Days after notice to the Seller of any proposed assignment by the
Purchaser of the Asset Interest (or any portion thereof), not otherwise
permitted under subsection (a), of the Seller's consent or non-consent to such
assignment, and if it does not consent, the reasons therefor. If Seller does not
consent to such assignment, the Purchaser may immediately or at any time
thereafter assign such Asset Interest (or portion thereof) to any Person or
Persons permitted under clause (i) of Section 12.1(a).
SECTION 12.2 RIGHTS OF ASSIGNEE.
Upon the assignment by the Purchaser in accordance with this Article
XII, the assignee receiving such assignment shall have all of the rights of the
Purchaser with respect to the Transaction Documents and the Asset Interest (or
such portion thereof as has been assigned).
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SECTION 12.3 TERMS AND EVIDENCE OF ASSIGNMENT.
Any assignment of the Asset Interest (or any portion thereof) to any
Person which is otherwise permitted under this Article XII shall be upon such
terms and conditions as Purchaser and the assignee may mutually agree, and may
be evidenced by such instrument(s) or document(s) as may be satisfactory to the
Purchaser, the Administrative Agent and the assignee.
SECTION 12.4 RIGHTS OF LIQUIDITY BANKS.
The Seller hereby agrees that, upon notice to the Seller, the Liquidity
Banks may exercise all the rights of the Administrative Agent and Purchaser
hereunder, with respect to the Asset Interest (or any portions thereof), and
Collections with respect thereto, which are owned by the Purchaser, and all
other rights and interests of the Purchaser in, to or under this Agreement or
any other Transaction Document. Without limiting the foregoing, upon such notice
or at any time thereafter (but subject to any conditions applicable to the
exercise of such rights by the Administrative Agent), the Liquidity Banks may
request the Master Servicer to segregate Purchaser's allocable shares of
Collections from the Seller's allocable share, may give a Successor Notice
pursuant to and in accordance with Section 8.1(b), may give or require the
Administrative Agent to give notice to the Lockbox Banks as referred to in
Section 8.5(b) and may direct the Obligors of Pool Receivables to make payments
in respect thereof directly to an account designated by them, in each case, to
the same extent as the Administrative Agent might have done.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.1 INDEMNITIES BY THE SELLER.
(a) General Indemnity. Without limiting any other rights which any such
Person may have hereunder or under applicable law, the Seller hereby agrees to
indemnify each of Wachovia, both individually and as the Administrative Agent,
the Purchaser, the Liquidity Banks, the Liquidity Agent, each of their
respective Affiliates, and all successors, transferees, participants and assigns
and all officers, directors, shareholders, controlling persons, and employees of
any of the foregoing, and any successor servicer and subservicer not affiliated
with Lennox (each an "Indemnified Party"), forthwith on demand, from and against
any and all damages, losses, claims, liabilities and related costs and expenses,
including attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or incurred
by any of them arising out of or relating to the Transaction Documents or the
ownership or funding of the Asset Interest or in respect of any Receivable or
any Contract, excluding, however, (a) Indemnified Amounts to the extent
determined by a court of competent jurisdiction to have resulted from gross
negligence or willful misconduct on the part of such Indemnified Party or (b)
recourse (except as otherwise specifically provided in this Agreement) for
Defaulted Receivables; the Seller further agrees to indemnify any agent (which
is not otherwise an Indemnified Party) of any of Wachovia, the Administrative
Agent, the Purchaser, the Liquidity
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Banks, and the Liquidity Agent forthwith on demand, from and against any and all
Indemnified Amounts awarded against or incurred by any of them arising out of or
caused by the gross negligence or willful misconduct of the Seller (unless
otherwise expressly agreed to in writing by the Seller). Without limiting the
foregoing, the Seller shall indemnify each Indemnified Party for Indemnified
Amounts arising out of or relating to:
(i) the transfer by any Seller Party of any interest in any
Receivable other than the transfer of Receivables and related property
by the Originators to the Seller pursuant to the Sale Agreement, the
transfer of an Asset Interest to the Purchaser pursuant to this
Agreement and the grant of a security interest to the Purchaser
pursuant to Section 9.1;
(ii) any representation or warranty made in writing by any
Seller Party (or any of its officers) under or in connection with any
Transaction Document, any Information Package or any other information
or report delivered by or on behalf of any Seller Party pursuant
hereto, which shall have been false, incorrect or misleading in any
material respect when made or deemed made or delivered, as the case may
be; provided, however, that in the case of any representation, warranty
or information that was not made or delivered in writing,
indemnification shall be available to an Indemnified Party hereunder
only if such representation, warranty or information was reasonably
relied upon by such Indemnified Party;
(iii) the failure by any Seller Party to comply with any
applicable law, rule or regulation with respect to any Pool Receivable
or the related Contract, or the nonconformity of any Pool Receivable or
the related Contract with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in Purchaser an
undivided percentage ownership interest, to the extent of the Asset
Interest, in the Receivables in, or purporting to be in, the
Receivables Pool, free and clear of any Lien, other than a Lien arising
solely as a result of an act of the Purchaser or the Administrative
Agent, whether existing at the time of any Purchase or Reinvestment of
such Asset Interest or at any time thereafter;
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any Receivables in, or purporting to be in, the Receivables Pool,
whether at the time of any Purchase or Reinvestment or at any time
thereafter;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool (including,
without limitation, a defense based on such Receivables or the related
Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise or services
related to such Receivable or the furnishing or failure to furnish such
merchandise or services;
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(vii) any matter described in clause (i) or (ii) of Section
3.2(a);
(viii) any failure of any Seller Party, as the Master Servicer
or otherwise, to perform its duties or obligations in accordance with
the provisions of Article III or Article VIII;
(ix) any product liability claim arising out of or in
connection with merchandise or services that are the subject of any
Pool Receivable;
(x) any claim of breach by any Seller Party of any related
Contract with respect to any Pool Receivable; or
(xi) any tax or governmental fee or charge (but not including
franchise taxes or taxes upon or measured by net income), all interest
and penalties thereon or with respect thereto, and all out-of-pocket
costs and expenses, including the reasonable fees and expenses of
counsel in defending against the same, which may arise by reason of the
purchase or ownership of any Asset Interest, or any other interest in
the Pool Receivables or in any goods which secure any such Pool
Receivables.
(c) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party
shall have notice of any attempt to impose or collect any tax or governmental
fee or charge for which indemnification will be sought from any Seller Party
under Section 13.1(a)(xi), such Indemnified Party shall give prompt and timely
notice of such attempt to the Seller and the Seller shall have the right, at its
expense, to participate in any proceedings resisting or objecting to the
imposition or collection of any such tax, governmental fee or charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes (including any
deduction) and the receipt of the indemnity provided hereunder or of any refund
of any such tax previously indemnified hereunder, including the effect of such
tax, deduction or refund on the amount of tax measured by net income or profits
which is or was payable by the Indemnified Party.
(d) Contribution. If for any reason the indemnification provided above
in this Section 13.1 (and subject to the exceptions set forth therein) is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Seller shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and the Seller on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
SECTION 13.2 INDEMNITIES BY MASTER SERVICER.
Without limiting any other rights which any Indemnified Party may have
hereunder or under applicable law, the Master Servicer hereby agrees to
indemnify each of the Indemnified
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Parties forthwith on demand, from and against any and all Indemnified Amounts
awarded against or incurred by any of them arising out of or relating to the
Master Servicer's performance of, or failure to perform, any of its obligations
under or in connection with any Transaction Document, or any representation or
warranty made by the Master Servicer (or any of its officers) under or in
connection with any Transaction Document, any Information Package or any other
information or report delivered by or on behalf of the Master Servicer, which
shall have been false, incorrect or misleading in any material respect when made
or deemed made or delivered, as the case may be, or the failure of the Master
Servicer to comply with any applicable law, rule or regulation with respect to
any Pool Receivable or the related Contract; provided, however, that in the case
of any representation, warranty or information that was not made or delivered in
writing, indemnification shall be available to an Indemnified Party hereunder
only if such representation, warranty or information was reasonably relied upon
by such Indemnified Party. Notwithstanding the foregoing, in no event shall any
Indemnified Party be awarded any Indemnified Amounts (a) to the extent
determined by a court of competent jurisdiction to have resulted from gross
negligence or willful misconduct on the part of such Indemnified Party or (b)
recourse for Defaulted Receivables. The Master Servicer further agrees to
indemnify any agent (which is not otherwise an Indemnified Party) of any of
Wachovia, the Administrative Agent, the Purchaser, the Liquidity Banks, and the
Liquidity Agent forthwith on demand, from and against any and all Indemnified
Amounts awarded against or incurred by any of them arising out of or caused by
the gross negligence or willful misconduct of the Master Servicer (unless
otherwise expressly agreed to in writing by the Master Servicer).
If for any reason the indemnification provided above in this Section
13.2 (and subject to the exceptions set forth therein) is unavailable to an
Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
the Master Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnified Party on the one hand and the Master Servicer on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement nor consent
to any departure by any Seller Party therefrom shall in any event be effective
unless the same shall be in writing and signed by (a) each Seller Party, the
Administrative Agent and the Purchaser (with respect to an amendment), or (b)
the Administrative Agent and the Purchaser (with respect to a waiver or consent
by them) or any Seller Party (with respect to a waiver or consent by it), as the
case may be, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. The parties
acknowledge that, before entering into such an amendment or granting such a
waiver or consent, the Purchaser may also be required to obtain the approval of
some or all of the Liquidity Banks or to obtain confirmation from certain rating
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agencies that such amendment, waiver or consent will not result in a withdrawal
or reduction of the ratings of the Commercial Paper Notes.
SECTION 14.2 NOTICES, ETC.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by express mail or
courier or by certified mail, postage prepaid, or by facsimile, to the intended
party at the address or facsimile number of such party set forth on Schedule
14.2 or at such other address or facsimile number as shall be designated by such
party in a written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered or sent by
express mail or courier or if sent by certified mail, when received, and (b) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means; provided, however, that the financial statements required to
be delivered by Sections 7.2(a), 7.2(b), 7.2(c) and 7.2(d) shall be deemed
delivered on the date such financial statements are deposited in the United
States mail with first class postage prepaid, addressed to the intended party at
the address as set forth on Schedule 14.2 or at such other address as shall be
designated by such party in a written notice to the other parties hereto.
SECTION 14.3 NO WAIVER; REMEDIES.
No failure on the part of the Administrative Agent, any Affected Party,
any Indemnified Party, the Purchaser or any other holder of the Asset Interest
(or any portion thereof) to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. Without limiting the
foregoing, each of Wachovia, individually, and as Administrative Agent and each
Liquidity Bank is hereby authorized by the Seller at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand provisional or final) at any time
held and other indebtedness at any time owing by Wachovia and such Liquidity
Bank to or for the credit or the account of the Seller, against any and all of
the obligations of the Seller now or hereafter existing under this Agreement, to
the Administrative Agent, any Affected Party, any Indemnified Party or
Purchaser, or their respective successors and assigns.
SECTION 14.4 BINDING EFFECT; SURVIVAL.
This Agreement shall be binding upon and inure to the benefit of each
Seller Party, the Administrative Agent, the Purchaser and their respective
successors and assigns, and the provisions of Section 4.2 and Article XIII shall
inure to the benefit of the Affected Parties and the Indemnified Parties,
respectively, and their respective successors and assigns; provided, however,
nothing in the foregoing shall be deemed to authorize any assignment not
permitted by Section 12.1. This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms, and
shall remain in full force and effect until the Final Payout Date. The rights
and remedies with respect to any breach of any representation and warranty made
by
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the Seller pursuant to Article VI and the indemnification and payment provisions
of Article XIII and Sections 4.2, 14.5, 14.6, 14.7 and 14.15 shall be continuing
and shall survive any termination of this Agreement.
SECTION 14.5 COSTS, EXPENSES AND TAXES.
In addition to its obligations under Article XIII, the Seller Parties
jointly and severally agree to pay on demand:
(a) all costs and expenses incurred by the Administrative Agent, any
Liquidity Bank, the Purchaser and their respective Affiliates in connection
with:
(i) the negotiation, preparation, execution and delivery of
this Agreement, the other Transaction Documents or the Liquidity
Agreement (except as otherwise provided in the Mandate Letter), any
amendment of or consent or waiver under any of the Transaction
Documents which is requested or proposed by any Seller Party (whether
or not consummated), or the enforcement by any of the foregoing Persons
of, or any actual or claimed breach of, this Agreement or any of the
other Transaction Documents, including, without limitation, the
reasonable fees and expenses of counsel to any of such Persons incurred
in connection with any of the foregoing or in advising such Persons as
to their respective rights and remedies under any of the Transaction
Documents in connection with any of the foregoing, and
(ii) the administration (including periodic auditing as
provided for herein) of this Agreement and the other Transaction
Documents, including, without limitation, all reasonable out-of-pocket
expenses (including reasonable fees and expenses of independent
accountants), incurred in connection with any review of any Seller
Party's books and records either prior to the execution and delivery
hereof but subject to the provisions of the Fee Letter or pursuant to
Section 7.1(c), subject to the limitations set forth in such Section
7.1(c); and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents (and the Seller Parties, jointly
and severally agree to indemnify each Indemnified Party against any liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees).
SECTION 14.6 NO PROCEEDINGS.
The Master Servicer hereby agrees that it will not institute against
the Seller, or join any Person in instituting against the Seller, and each
Seller Party, the Master Servicer and Wachovia (individually or as
Administrative Agent) hereby agrees that it will not institute against the
Purchaser, or join any other Person in instituting against the Purchaser, any
insolvency proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Commercial Paper Notes issued
by the Purchaser shall be outstanding
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or there shall not have elapsed one year plus one day since the last day on
which any such Commercial Paper Notes shall have been outstanding.
SECTION 14.7 CONFIDENTIALITY OF SELLER INFORMATION.
(a) Confidential Seller Information. Each party hereto (other than
Seller Parties) acknowledges that certain of the information provided to such
party by or on behalf of the Seller Parties in connection with this Agreement
and the transactions contemplated hereby is or may be confidential, and each
such party severally agrees that, unless the Master Servicer shall otherwise
agree in writing, and except as provided in subsection (b), such party will not
disclose to any other person or entity:
(i) any information regarding, or copies of, any nonpublic
financial statements, reports, schedules and other information
furnished by any Seller Party to the Purchaser or the Administrative
Agent (A) prior to the date hereof in connection with such party's due
diligence relating to the Seller Parties and the transactions
contemplated hereby, or (B) pursuant to this Agreement, including
without limitation, Section 3.1, 5.1, 6.1(i), 7.1(c) or 7.2, or
(ii) any other information regarding any Seller Party which is
designated by any Seller Party to such party in writing as confidential
(the information referred to in clauses (i) and (ii) above, whether furnished by
any Seller Party or any attorney for or other representative thereof (each a
"Seller Information Provider"), is collectively referred to as the "Seller
Information"); provided, however, Seller Information shall not include any
information which is or becomes generally available to the general public or to
such party on a nonconfidential basis from a source other than any Seller
Information Provider, or which was known to such party on a nonconfidential
basis prior to its disclosure by any Seller Information Provider.
(b) Disclosure. Notwithstanding subsection (a), each party may disclose
any Seller Information:
(i) to any of such party's independent attorneys, consultants
and auditors, and to any dealer or placement agent for the Purchaser's
commercial paper, who (A) in the good faith belief of such party, have
a need to know such Seller Information, and (B) are informed by such
party of the confidential nature of the Seller Information and the
terms of this Section 14.7 and has agreed, verbally or otherwise, to be
bound by the provisions of this Section 14.7,
(ii) to any Liquidity Bank, any actual or potential assignees
of, or participants in, any rights or obligations of the Purchaser, any
Liquidity Bank or the Administrative Agent under or in connection with
this Agreement who has agreed to be bound by the provisions of this
Section 14.7,
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(iii) to any rating agency that maintains a rating for the
Purchaser's commercial paper or is considering the issuance of such a
rating, for the purposes of reviewing the credit of the Purchaser in
connection with such rating,
(iv) to any other party to this Agreement (and any independent
attorneys, consultants and auditors of such party), for the purposes
contemplated hereby,
(v) as may be required by any municipal, state, federal or
other regulatory body having or claiming to have jurisdiction over such
party, in order to comply with any law, order, regulation, regulatory
request or ruling applicable to such party,
(vi) subject to subsection (c), in the event such party is
legally compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar process) to
disclose such Seller Information, or
(vii) in connection with the enforcement of this Agreement or
any other Transaction Document.
In addition, the Purchaser and the Administrative Agent may disclose on a "no
name" basis to any actual or potential investor in Purchaser's Commercial Paper
Notes information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of the Purchaser's
commitment and Purchaser's Total Investment with respect to the Asset Interest
and any other credit enhancement provided by any Seller Party hereunder), the
nature, amount and status of the Pool Receivables, and the current and/or
historical ratios of losses to liquidations and/or outstandings with respect to
the Receivables Pool.
(c) Legal Compulsion. In the event that any party hereto (other than
any Seller Party) or any of its representatives is requested or becomes legally
compelled (by interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of the Seller
Information, such party will (or will cause its representative to):
(i) provide the Master Servicer with prompt written notice so
that (A) the Master Servicer may seek a protective order or other
appropriate remedy, or (B) the Master Servicer may, if it so chooses,
agree that such party (or its representatives) may disclose such Seller
Information pursuant to such request or legal compulsion; and
(ii) unless the Master Servicer agrees that such Seller
Information may be disclosed, make a timely objection to the request or
compulsion to provide such Seller Information on the basis that such
Seller Information is confidential and subject to the agreements
contained in this Section 14.7.
In the event such protective order or remedy is not obtained, or the Master
Servicer agrees that such Seller Information may be disclosed, such party will
furnish only that portion of the Seller Information which (in such party's good
faith judgment) is legally required to be furnished and
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will exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be afforded the Seller Information.
(d) This Section 14.7 shall survive termination of this Agreement.
SECTION 14.8 [RESERVED].
SECTION 14.9 CAPTIONS AND CROSS REFERENCES.
The various captions (including, without limitation, the table of
contents) in this Agreement are provided solely for convenience of reference and
shall not affect the meaning or interpretation of any provision of this
Agreement. Unless otherwise indicated, references in this Agreement to any
Section, Appendix, Schedule or Exhibit are to such Section of or Appendix,
Schedule or Exhibit to this Agreement, as the case may be, and references in any
Section, subsection, or clause to any subsection, clause or subclause are to
such subsection, clause or subclause of such Section, subsection or clause.
SECTION 14.10 INTEGRATION.
This Agreement and the other Transaction Documents contain a final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire understanding among
the parties hereto with respect to the subject matter hereof, superseding all
prior oral or written understandings.
SECTION 14.11 GOVERNING LAW.
THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK. WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW, EXCEPT
TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF THE PURCHASER IN THE
RECEIVABLES OR RELATED PROPERTY IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
SECTION 14.12 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR
DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL NOT BE TRIED BEFORE A JURY.
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SECTION 14.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.
EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY
UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT
AVAILABLE, OF ANY NEW YORK STATE COURT, AS APPROPRIATE, IN EITHER CASE SITTING
IN NEW YORK COUNTY, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR
FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN
CONNECTION WITH THIS AGREEMENT.
SECTION 14.14 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement. Delivery of an executed counterpart
of a signature page to this Agreement by telecopier shall be as effective as
delivery of a manually executed counterpart of a signature page of this
Agreement.
SECTION 14.15 NO RECOURSE AGAINST OTHER PARTIES.
The obligations of the Purchaser under this Agreement are solely the
corporate obligations of the Purchaser. No recourse shall be had for the payment
of any amount owing by the Purchaser under this Agreement or for the payment by
the Purchaser of any fee in respect hereof or any other obligation or claim of
or against the Purchaser arising out of or based upon this Agreement, against
Wachovia or against any employee, officer, director, incorporator or stockholder
of the Purchaser. For purposes of this Section 14.15, the term "Wachovia" shall
mean and include Wachovia Bank, N.A. and all affiliates thereof and any
employee, officer, director, incorporator, stockholder or beneficial owner of
any of them; provided, however, that the Purchaser shall not be considered to be
an affiliate of Wachovia for purposes of this paragraph. Each of the Seller, the
Master Servicer and the Administrative Agent agree that the Purchaser shall be
liable for any claims that such party may have against the Purchaser only to the
extent the Purchaser has excess funds and to the extent such assets are
insufficient to satisfy
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the obligations of the Purchaser hereunder, the Purchaser shall have no
liability with respect to any amount of such obligations remaining unpaid and
such unpaid amount shall not constitute a claim against the Purchaser. Any and
all claims against the Purchaser or the Administrative Agent shall be
subordinate to the claims of the holders of Commercial Paper and the Liquidity
Banks.
SECTION 14.16 SEVERABILITY OF PROVISIONS.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction, shall as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability, without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provisions
in any other jurisdiction.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
LPAC CORP., as Seller
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Vice President and Treasurer
----------------------------
LENNOX INDUSTRIES INC., as Master Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Vice President and Treasurer
----------------------------
BLUE RIDGE ASSET FUNDING CORPORATION,
as Purchaser
By: Wachovia Bank, N.A. as Attorney-in-Fact
By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: Vice President
----------------------------
WACHOVIA BANK, N.A., as Administrative Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Title: Senior Vice President
----------------------------
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APPENDIX A
DEFINITIONS
This is Appendix A to the Receivables Purchase Agreement dated as of
June 19, 2000 among LPAC Corp., as the Seller, Lennox Industries, Inc., as the
Master Servicer, Blue Ridge Asset Funding Corporation, as the Purchaser, and
Wachovia Bank, N.A., as the Administrative Agent (as amended, supplemented or
otherwise modified from time to time, this "Agreement"). Each reference in this
Appendix A to any Section, Appendix or Exhibit refers to such Section of or
Appendix or Exhibit to this Agreement.
A. Defined Terms. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated
below:
Adjusted Dilution Ratio: The 12-month rolling average of the Dilution Ratio.
Administrative Agent: As defined in the preamble.
Affected Party: Each of the Purchaser, each Liquidity Bank, any assignee or
participant of the Purchaser or any Liquidity Bank, Wachovia, any successor to
Wachovia, as Administrative Agent, or any sub-agent of the Administrative Agent.
Affiliate: With respect to any other Person controlling, controlled by, or under
common control with, such Person.
Affiliated Obligor: In relation to any Obligor, an Obligor that is an Affiliate
of such Obligor.
Allocation Limit: As defined in Section 1.1.
Alternate Base Rate: For any day, the rate per annum equal to the higher as of
such day of (a) the Prime Rate, or (b) one-half of one percent above the Federal
Funds Rate. For purposes of determining the Alternate Base Rate for any day,
changes in the Prime Rate or the Federal Funds Rate shall be effective on the
date of each such change. The Alternate Base Rate is not necessarily intended to
be the lowest rate of interest determined by Wachovia in connection with
extensions of credit.
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇▇ Air Conditioning Inc., an Ohio corporation.
▇▇▇▇▇▇▇▇▇ Commencement Date: As defined in the Sale Agreement.
Asset Interest: An undivided percentage ownership interest, determined from time
to time as provided in Section 1.4(b), in (i) all then outstanding Pool
Receivables and (ii) all Related Assets.
▇-▇
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇: At any time, a portion of the Asset Interest selected by the
Administrative Agent pursuant to Section 2.1.
Assurance Agreement: The Assurance Agreement dated as of June 19, 2000 made by
Lennox International, as the same may be amended, restated, supplemented or
modified from time to time.
Bank Rate: For any Yield Period with respect to any Asset Tranche:
(a) in the case of any Yield Period other than a Yield Period described
in clause (b) below, an interest rate per annum equal to the sum of (i) the Bank
Rate Spread per annum, plus (ii) Eurodollar Rate (Reserve Adjusted) for such
Yield Period;
(b) in the case of
(i) any Yield Period commencing on or prior to the first day
of which the Purchaser or any Liquidity Bank shall have notified the
Administrative Agent that (A) the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful, or
any central bank or other Governmental Authority asserts that it is
unlawful, for such Person to fund such Asset Tranche at the rate
described in clause (a) above, or (B) due to market conditions
affecting the interbank eurodollar market, funds are not reasonably
available to such Person in such market in order to enable it to fund
such Asset Tranche at the rate described in clause (a) above (and in
the case of subclause (A) or (B) above, such Person shall not have
subsequently notified the Administrative Agent that such circumstances
no longer exist), or
(ii) any Yield Period as to which the Administrative Agent
does not receive notice or determine, by no later than 12:00 noon
(Atlanta, Georgia time) on the third Business Day preceding the first
day of such Yield Period, that the related Asset Tranche will be funded
by Liquidity Fundings and not by the issuance of Commercial Paper
Notes,
an interest rate per annum equal to the Alternate Base Rate in effect
from time to time during such Yield Period; it being understood that,
in the case of paragraph (b)(i) above, such rate shall only apply to
the Person affected by the circumstances described in such paragraph
(b)(i).
Bank Rate Spread: As defined in the Fee Letter.
Business Day: (i) with respect to any matters relating to the Eurodollar Rate, a
day on which banks are open for business in New York, New York, and in Atlanta,
Georgia and on which dealings in Dollars are carried on in the London interbank
market and (ii) for all other purposes, any day other than a Saturday, Sunday or
other day on which banking institutions or trust companies in New York, New
York, or Atlanta, Georgia are authorized or obligated by law, executive order or
governmental decree to be closed.
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇: At any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a
liability in accordance with GAAP.
Change in Control:
(a) in relation to either of the Master Servicer or Lennox
International, the acquisition after the date hereof by any person or group of
persons (within the meaning of Section 13 or 14 of the Exchange Act), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act) of issued and
outstanding shares of the capital stock of such Person entitled (without regard
to the occurrence of any contingency) to vote for the election of members of the
board of directors of such Person and having a then present right to exercise
50% or more of the voting power for the election of members of the board of
directors of such Person attached to all such outstanding shares of capital
stock of such Person, unless otherwise agreed in writing by the Administrative
Agent; and
(b) in relation to the Seller, the failure of Lennox International to
own (directly or through wholly-owned Subsidiaries of Lennox International) 100%
of the issued and outstanding shares of the capital stock (including all
warrants, options, conversion rights, and other rights to purchase or convert
into such stock) of the Seller on a fully diluted basis.
Code: The Internal Revenue Code of 1986, as the same may be amended from time to
time.
Collection Account: The segregated account that may be established and
maintained with Wachovia in the name of the Seller.
Collection Period:
(a) the period from the date of the initial Purchase to the last day of
the calendar month in which such date occurs; and
(b) thereafter, each period from the last day of the next preceding
Collection Period to the last day of the next following calendar month;
provided, however, that the last Collection Period shall end on the Final Payout
Date.
Collections: With respect to any Receivable, all funds which either (a) are
received by the Seller, the Originators or the Master Servicer from or on behalf
of the related Obligor in payment of any amounts owed (including, without
limitation, purchase prices, finance charges, interest and all other charges) in
respect of such Receivable, or applied to such amounts owed by such Obligor
(including, without limitation, insurance payments that the Seller, the
Originator or the Master Servicer applies in the ordinary course of its business
to amounts owed in respect of such Receivable and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligor
or any other party directly or indirectly liable for payment of such Receivable
and available to be applied thereon), or (b) are Deemed Collections; provided
that,
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prior to such time as Lennox shall cease to be the Master Servicer, late
payment charges, collection fees, extension fees and any other similar fees or
expenses billed to and collected from an Obligor shall not be deemed to be
Collections.
Commercial Paper Notes: The commercial paper promissory notes, if any, issued by
or on behalf of the Purchaser or that fund, the Purchase by the Purchaser of an
Asset Tranche funded at the CP Rate.
Contract: A contract between the Seller or the Originator and any Person, or an
invoice sent or to be sent by the Seller or the Originator, pursuant to or under
which a Receivable shall arise or be created, or which evidences a Receivable. A
`related Contract' or similar reference means rights to payment, collection and
enforcement, and other rights under a Contract to the extent directly related to
a Receivable in the Receivables Pool, but not any other rights under such
Contract.
CP Discount: The difference between (i) the Face Amount of any Commercial Paper
Note and (ii) the proceeds received by the Purchaser with respect to such
Commercial Paper Note.
CP Rate: With respect to any CP Tranche Period, the rate equivalent to the rate
(or if more than one rate, the weighted average of the rates) at which
Commercial Paper Notes having a term equal to such CP Tranche Period are sold
plus the amount of any placement agent or commercial paper dealer fees incurred
in connection with such sale; provided, however, if the rate (or rates) is a
discounted rate (or rates), the CP Rate for such CP Tranche Period shall be the
rate (or, if more than one rate, the weighted average of the rates) resulting
from converting such discount rate (or rates) to an interest bearing equivalent
rate.
CP Tranche Period: A period of up to 270 days commencing on a Business Day
determined by the Administrative Agent in consultation with the Seller pursuant
to Section 1.2. If such CP Tranche Period would end on a day which is not a
Business Day, such CP Tranche Period shall end on the preceding Business Day.
Credit Agreement: That certain 364 Day Revolving Credit Facility Agreement dated
as of January 25, 2000 by and among Lennox International as the borrower,
certain financial institutions, as the lenders, and Chase Bank of Texas,
National Association ("Chase"), as administrative agent for the lenders, as such
agreement may be amended, restated, substituted or replaced from time to time.
Credit and Collection Policy: Collectively, those credit and collection policies
and practices of the Originators and the Master Servicer relating to Contracts
and Receivables as in effect on the date of this Agreement in the forms of
Exhibit C-1 and C-2 hereto, as may hereafter be modified without violating
Section 7.3(c), but subject to compliance with applicable tariffs or state
regulations in effect from time to time.
Credit Event: The earliest of (i) an Event of Bankruptcy with respect to Lennox
International, (ii) an Event of Bankruptcy with respect to Lennox or (iii) any
event described in subsection (d) of Section 10.1 hereof.
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Cut-Off Date: The last day of each Collection Period.
Days Sales Outstanding or DSO: As of any day, an amount equal to the product of
(a) 91 and (b) a fraction the numerator of which is the aggregate Unpaid Balance
of Pool Receivables as of the most recent Cut-Off Date and the denominator of
which is the aggregate dollar amount of Receivables generated by the Originators
during the three Collection Periods including and immediately preceding such
Cut-Off Date.
Deemed Collections: As defined in Section 3.2(a).
Default Horizon Ratio: As of any Cut-Off Date, the ratio (expressed as a
percentage) of (i) the aggregate sales of the Originators during the immediately
preceding six Collection Periods ending on such Cut-Off Date divided by (ii) the
Net Pool Balance on such Cut-Off Date.
Default Ratio: Means at any time, an amount (expressed as a percentage) equal to
a fraction the numerator of which is equal to the sum of Eligible Receivables
that became Defaulted Receivables during the immediately preceding Collection
Period, and the denominator of which is the amount of sales generated during the
Collection Period six months prior to the immediately preceding Collection
Period.
Defaulted Receivable: Means a Receivable: (a) as to which any payment, or part
thereof, remains unpaid for more than 120 days from the original due date for
such payment, (b) as to which an Event of Bankruptcy has occurred and remains
continuing with respect to the Obligor thereof.
Delinquency Ratio: At any time, the ratio (expressed as a percentage) computed
as of the Cut-Off Date for the next preceding Collection Period by dividing (x)
the aggregate Unpaid Balance of all Pool Receivables that are Delinquent
Receivables on such Cut-Off Date by (y) the aggregate Unpaid Balance of Pool
Receivables on such Cut-Off Date.
Delinquent Receivable: A Pool Receivable (a) that is not a Defaulted Receivable
and (b) as to which any payment, or part thereof, remains unpaid for 91 days or
more from the original due date for such payment.
Dilution: The amount of any reduction or cancellation of the Unpaid Balance of a
Pool Receivable as described in Section 3.2(a).
Dilution Horizon Ratio: As of any date, the percentage equivalent of a fraction,
the numerator of which is the aggregate dollar amount of all Receivables
generated by the Originators during the most recent Collection Period and the
denominator of which is the Net Pool Balance as of the most recent Cut-Off Date.
Dilution Ratio: As of any Cut-Off Date, the percentage equivalent of a fraction,
the numerator of which is the aggregate dollar amount of Dilutions that occurred
during the Collection Period
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ending on such date and the denominator of which is the aggregate dollar amount
of all Receivables originated by the Originators during such Collection Period.
Dilution Reserve: The product of (a) the sum of (i) the product of (A) 2 and (B)
the Adjusted Dilution Ratio and (ii) the Dilution Volatility Component and (b)
the Dilution Horizon Ratio.
Dilution Volatility Component: The product of (a) the positive excess, if any,
of (i) the highest three month rolling average Dilution Ratio over the past 12
months over (ii) the Adjusted Dilution Ratio and (b) a fraction, the numerator
of which is the highest three month rolling average Dilution Ratio over the past
12 months and the denominator of which is the Adjusted Dilution Ratio.
Dollars: Means dollars in lawful money of the United States of America.
Downgrading Event: With respect to any Person means the lowering of the rating
with regard to the short-term securities of such Person to below (i) A-1 by
Standard & Poor's Ratings Group, or (ii) P-1 by Moody's.
Downgraded Liquidity Bank: A Liquidity Bank with respect to which a Downgrading
Event shall have occurred.
Earned Discount: For any Yield Period or CP Tranche Period, as applicable, for
any Asset Tranche:
PTI x ER x ED
------------- + LF
360
where:
PTI = the daily average (calculated at the close of
business each day) of the Purchaser's Tranche
Investment in such Asset Tranche during such
Yield Period or CP Tranche Period, as applicable,
ER = the Earned Discount Rate for such Yield Period
or CP Tranche Period,
ED = the actual number of days elapsed during such
Yield Period or CP Tranche Period, and
LF = the Liquidation Fee, if any, during such Yield
Period or CP Tranche Period.
Earned Discount Rate: For any Yield Period or any CP Tranche Period, as
applicable, for any Asset Tranche:
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(a) in the case of an Asset Tranche funded by a Liquidity Funding, the
Bank Rate for such Asset Tranche and such Yield Period; and
(b) in the case of an Asset Tranche funded by Commercial Paper Notes,
the CP Rate for such CP Tranche Period;
provided, however, that on any day when any Liquidation Event or an Unmatured
Liquidation Event shall have occurred and be continuing, the Earned Discount
Rate for each Asset Tranche shall mean a rate per annum equal to the Alternate
Base Rate plus 2% per annum.
Eligible Receivable: At any time, a Receivable:
(a) which is a Pool Receivable arising out of the sale by an Originator
in the ordinary course of its business that has been sold or contributed to the
Seller pursuant to the Sale Agreement in a "true sale" transaction;
(b) as to which the perfection of the Purchaser's undivided ownership
interest therein is governed by the laws of a jurisdiction where the Uniform
Commercial Code - Secured Transactions is in force, and which constitutes an
"account" as defined in the Uniform Commercial Code as in effect in such
jurisdiction;
(c) the Obligor of which is a resident of the United States, or any of
its possessions or territories and is not an Affiliate or employee of any Seller
Party;
(d) which is not a Defaulted Receivable;
(e) with regard to which the representations and warranties of the
Seller set forth in Section 6.1(l) are true and correct;
(f) the sale of an undivided interest in which does not contravene or
conflict with any law;
(g) which is denominated and payable only in Dollars in the United
States;
(h) which arises under a Contract that has been duly authorized and
that, together with such Receivable, is in full force and effect and constitutes
the legal, valid and binding obligation of the Obligor of such Receivable
enforceable against such Obligor in accordance with its terms and is not subject
to any dispute, offset, counterclaim or defense whatsoever, provided, however,
that if such dispute, offset, counterclaim or defense affects only a portion of
the Unpaid Balance of such Receivable then such Receivable may be deemed an
Eligible Receivable to the extent of the portion of such Unpaid Balance which is
not so affected;
(i) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
usury, truth in lending, fair credit billing, fair credit
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reporting, equal credit opportunity, fair debt collection practices and privacy)
and with respect to which no party to the Contract related thereto is in
violation of any such law, rule or regulation in any material respect if such
violation would impair the collectibility of such Receivable;
(j) which satisfies in all material respects all applicable
requirements of the applicable Originator's Credit and Collection Policy;
(k) which, according to the Contract related thereto, is due and
payable within 120 days from the invoice date of such Receivable;
(l) not more than 35% of the aggregate Unpaid Balance of all
Receivables of the Obligor of which are Defaulted Receivables;
(m) the original term of which has not been extended and the Unpaid
Balance of which has not been adjusted more than one time;
(n) the Obligor of which is not a Governmental Authority as to which
the assignment of receivables owing therefrom requires compliance with the
Federal Assignment of Claims Act or other similar Legislation (unless the Seller
has complied therewith); and
(o) which is not classified by the "Terms Description" of the related
Originator's Credit and Collection Policy or any other internal classification
procedures utilized by such Originator as (i) "Authorizer," (ii) "Cash
Application," (iii) "Check in Progress," (iv) "COD-Certified Check," (v)
"COD-Company Check," (vi) "Consignment Shipment," (vii) "Direct Pay," (viii)
"Due Immediately," (ix) "Gratis," (x) "Invoice to be Considered," (xi) "Paid in
Advance," (xii) "Payroll Deduction," (xiii) "Warrant Gratis," (xiv) "Warranty
Parts," or (xv) any other classification now existing or hereinafter created
that has the same or any similar definition as any of the foregoing;
provided, however, that Receivables originated by ▇▇▇▇▇▇▇▇▇ shall not become
Eligible Receivables until the ▇▇▇▇▇▇▇▇▇ Commencement Date.
ERISA: The U.S. Employee Retirement Income Security Act of 1974, as amended from
time to time.
ERISA Affiliate: Any trade or business (whether or not incorporated) that is a
member of a group of which the Master Servicer is a member and which is treated
as a single employer under Section 414 of the Code.
Eurodollar Business Day: A day of the year as defined in clause (i) of the
definition of Business Day.
Eurodollar Rate: For any Yield Period, the rate per annum determined on the
basis of the offered rate for deposits in Dollars of amounts equal or comparable
to the principal amount of the related Liquidity Funding offered for a term
comparable to such Yield Period, which rates appear on the
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Telerate Page 3750 effective as of 11:00 A.M., London time, two Eurodollar
Business Days prior to the first day of such Yield Period, provided that if no
such offered rates appear on such page, the Eurodollar Rate for such Yield
Period will be the arithmetic average (rounded upwards, if necessary, to the
next higher 1/100th of 1%) of rates quoted by not less than two major banks in
New York City, selected by the Administrative Agent, at approximately 10:00
A.M., New York City time, two Eurodollar Business Days prior to the first day of
such Yield Period, for deposits in Dollars offered by leading European banks for
a period comparable to such Yield Period in an amount comparable to the
principal amount of such Liquidity Funding.
Eurodollar Rate (Reserve Adjusted): With respect to any Yield Period means a
rate per annum equal to the quotient obtained (rounded upwards, if necessary, to
the next higher 1/100th of 1%) by dividing (i) the applicable Eurodollar Rate
for such Yield Period by (ii) 1.0 minus the Eurodollar Reserve Percentage.
Eurodollar Reserve Percentage: With respect to any Yield Period, the maximum
reserve percentage, if any, applicable to the Liquidity Bank under Regulation D
during such Yield Period (or if more than one percentage shall be applicable,
the daily average of such percentages for those days in such Yield Period during
which any such percentage shall be applicable) for determining the Liquidity
Bank's reserve requirement (including any marginal, supplemental or emergency
reserves) with respect to liabilities or assets having a term comparable to such
Yield Period consisting or included in the computation of "Eurocurrency
Liabilities" pursuant to Regulation D. Without limiting the effect of the
foregoing, the Eurodollar Reserve Percentage shall reflect any other reserves
required to be maintained by the Liquidity Bank by reason of any Regulatory
Change against (a) any category of liabilities which includes deposits by
reference to which the "London Interbank Offered Rate" or "LIBOR" is to be
determined or (b) any category of extensions of credit or other assets which
include LIBOR-based credits or assets.
Event of Bankruptcy: With respect to a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or all
or substantially all of its assets, or any similar action with respect to such
Person under any law relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60 consecutive
days; or an order for relief in respect of such Person shall be entered in an
involuntary case under the federal bankruptcy laws or other similar laws now or
hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any general assignment
for the
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benefit of creditors, or shall be adjudicated insolvent, or admit in writing its
inability to, pay its debts generally as they become due, or, if a corporation
or similar entity, its board of directors shall vote to implement any of the
foregoing.
Excess Concentration Amount: As of any date, the sum of the amounts by which the
aggregate Unpaid Balance of Receivables of each Obligor exceeds the Obligor
Concentration Limit for such Obligor.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Excess Weighted Average Term Amount: On any day on which the Weighted Average
Term shall exceed 60 days, the aggregate of the Unpaid Balances, on such day, of
such Eligible Receivables that, were the then Eligible Receivables with the
longest terms (beginning with the Eligible Receivable(s) with the longest term
and working backwards toward the Eligible Receivable(s) with the shortest term)
deemed to not be Eligible Receivables on such day, would cause the Weighted
Average Term not to exceed 60 days on such day.
Face Amount: With respect to any Commercial Paper Note, (i) the face amount
stated thereon in the case of any Commercial Paper Note issued on a discount
basis and (ii) the principal amount stated thereon plus the amount of all
interest scheduled to accrue on such Commercial Paper Note through its stated
maturity date in the case of any Commercial Paper Note issued on an interest
bearing basis.
Federal Funds Rate: For any day, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average rate charged to the
Administrative Agent on such day on such transactions, as reasonably determined
by the Administrative Agent.
Federal Reserve Board: The Board of Governors of the Federal Reserve System, or
any successor thereto or to the functions thereof.
Fee Letter: As defined in Section 4.1.
Final Payout Date: The date following the Termination Date on which the
Purchaser's Total Investment shall have been reduced to zero and all other
amounts payable by the Seller under the Transaction Documents shall have been
paid in full.
Funding Termination Date: The earliest of the following:
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(a) 364 days following the date hereof, or such later date as may, from
time to time, be agreed to in writing by the Administrative Agent;
(b) the Administrative Agent declares a Funding Termination Date in a
notice to the Seller in accordance with Section 10.2(a); or
(c) in accordance with Section 10.2(b), the Funding Termination Date
occurs automatically.
GAAP: Generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such accounting
profession, which are applicable to the circumstances as of the date of
determination.
Governmental Authority: Any Federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory body.
Guaranty: With respect to any Person, any obligation (except the endorsement in
the ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
Indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase of payment of such
Indebtedness or obligation;
(c) to lease properties or to purchase properties or services primarily
for the purpose of assuring the owner of such Indebtedness or obligation of the
ability of any other Person to make payment of the Indebtedness or obligation;
or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect of thereof. In any computation of the Indebtedness or
other liabilities of the obligor under any Guaranty, the Indebtedness or other
obligations that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
Heatcraft: Heatcraft Inc., a Mississippi corporation.
Heatcraft Technologies: Heatcraft Technologies Inc., a Delaware corporation
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72
Indebtedness: With respect to any Person shall mean, at any time, without
duplication:
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property);
(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with respect
to any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed
money, but excluding in any event obligations in respect of (i) trade or
commercial letters of credit issued for the account of such Person in the
ordinary course of its business and (ii) stand-by letters of credit issued to
support obligations of such Person that are not of a type described in any of
clauses (a), (b), (c), (d), (f) or (g);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person
of the character described in clauses (a) through (g) above to the extent such
Person remains legally liable in respect hereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
Indemnified Amounts: As defined in Section 13.1.
Indemnified Party: As defined in Section 13.1.
Independent Director: As defined in Section 7.4.
Information Package: As defined in Section 3.1(a).
Initial Cut-Off Date: May 31, 2000.
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73
Initial Due Diligence Auditor: Such person designated by the Administrative
Agent as the initial due diligence auditor.
Initial Seller Note: As defined in the Sale Agreement.
Lennox: As defined in the preamble.
Lennox International: Lennox International Inc., a Delaware corporation.
Lien: With respect to any Person, any mortgage, lien, pledge, charge, security
interest, or other encumbrance, or any interest or title of any vendor, lessor,
lender or other secured party to or of such Person under any conditional sale or
other title retention agreement or Capital Lease, upon or with respect to any
property or asset of such Person (including in the case of stock, stockholder
agreements, voting trust agreements and all similar arrangements).
Liquidation Event: As defined in Section 10.1.
Liquidation Fee: For each Asset Tranche (or portion thereof) for each day in any
Yield Period or CP Tranche Period (computed without regard to clause (iii) of
the proviso of the definition of "Yield Period"), the amount, if any, by which:
(a) the additional Earned Discount (calculated without taking into
account any Liquidation Fee) which would have accrued on the reductions of the
Purchaser's Tranche Investment with respect to such Asset Tranche during such
Yield Period or CP Tranche Period (as so computed) if such reductions had not
been made, exceeds
(b) the income, if any, received by the Purchaser from investing the
proceeds of such reductions of the Purchaser's Tranche Investment.
Liquidation Period: The period commencing on the date on which the conditions
precedent to Purchases and Reinvestment set forth in Section 5.2 are not
satisfied (or expressly waived by the Purchaser) and the Administrative Agent
shall have notified Seller and the Master Servicer in writing that the
Liquidation Period has commenced, and ending on the Final Payout Date.
Liquidity Agent: Wachovia, as agent for the Liquidity Banks under the Liquidity
Agreement, or any successor to Wachovia in such capacity.
Liquidity Agreement: The Liquidity Asset Purchase Agreement dated as of the date
hereof among Purchaser, Wachovia, as Administrative Agent, Wachovia, as
Liquidity Agent, and Wachovia and/or one or more other banks or other financial
institutions, as Liquidity Banks, and any other agreement hereafter entered into
by the Purchaser providing for the making of loans, purchase of assets or other
extensions of credit to the Purchaser secured by a direct or indirect security
interest in the Asset Interest (or any portion thereof), to support all or part
of the Purchaser's payment obligations under the Commercial Paper Notes or to
provide an alternate means of funding Purchaser's investments in accounts
receivable or other financial assets, and
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74
under which the amount available from such extensions of credit is limited to an
amount calculated by reference to the value or eligible unpaid balance of such
accounts receivable or other financial assets or any portion thereof or the
level of deal-specific credit enhancement available with respect thereto, as
such Liquidity Agreement or other agreement may be amended, supplemented or
otherwise modified from time to time.
Liquidity Bank: The commercial lending institutions that are at any time parties
to the Liquidity Agreement as liquidity providers thereunder.
Liquidity Funding: A purchase made by the Liquidity Bank (or simultaneous
purchases made by the Liquidity Banks) pursuant to the Liquidity Agreement.
Lockbox Account: Any bank account into which Collections are deposited or
transferred.
Lockbox Agreement: A letter agreement, in substantially the form of Exhibit A-1,
among the Master Servicer, the Purchaser, the Administrative Agent, the Seller
and any Lockbox Bank.
Lockbox Bank: Any of the banks holding one or more lockboxes or Lockbox Accounts
receiving Collections from Pool Receivables.
Loss Reserve: At any time, means the product of (a) two and (b) the highest
rolling three month average Default Ratio during the immediately preceding
twelve (12) months and (b) the most recently calculated Default Horizon Ratio.
Mandate Letter: As defined in Section 4.1.
Master Servicer: As defined in the preamble.
Material Adverse Effect: With respect to any event or circumstance, a material
adverse effect on:
(a) (i) the assets, operations, business or financial condition of the
Seller or (ii) the business, assets, operations or financial condition of Lennox
International and its Subsidiaries, taken as a whole, which could reasonably be
expected to have a material adverse effect on the creditworthiness of any
Originator;
(b) the ability of the Seller, the Master Servicer, any Originator or
any Affiliate thereof to perform in all material respects its obligations under
this Agreement or any other Transaction Document; or
(c) the validity or enforceability of this Agreement or any other
Transaction Document, or the validity, enforceability or collectibility of a
material portion of the Receivables Pool; or
(d) the status, existence, perfection, priority or enforceability of
the Secured Parties' and the Administrative Agent's interest in the Receivables
Pool.
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Material Indebtedness: Indebtedness, the aggregate principal amount of which is
greater than $25,000,000.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc.
Net Pool Balance: On any date, an amount equal to (i) the aggregate Unpaid
Balance of all Eligible Receivables in the Receivables Pool on such date, minus
(ii) the Excess Concentration Amount on such date, minus (iii) the Excess
Weighted Average Term Amount on such day.
Net Worth: With respect to the Seller on any date, an amount equal to the
aggregate Unpaid Pool Balance of all Pool Receivables minus the sum of (i) the
Unpaid Balance of all Defaulted Receivables on such day, (ii) the aggregate
amount outstanding on the Initial Seller Notes on such day and (iii) an amount
equal to the Net Pool Balance times the Asset Interest on such day.
Obligor: A Person obligated to make payments with respect to a Receivable,
including any guarantor thereof.
Obligor Concentration Limit: At any time, in relation to the aggregate Unpaid
Balance of Receivables owed by any single Obligor and its Affiliated obligors
(if any):
(a) for Obligors who have a short term unsecured debt rating currently
assigned to them by either S&P or Moody's, the applicable concentration limit
shall be determined according to the following table (and, if such Obligor is
rated by both S&P and Moody's and has a split rating, the applicable rating will
be the lower of the two):
Allowable % of
S&P Rating ▇▇▇▇▇'▇ Rating Eligible Receivables
---------- -------------- --------------------
A-1+ P-1 10%
A-1 P-1 8%
A-2 P-2 6%
A-3 P-3 3%
If such Obligor is rated by only S&P, the applicable rating will be deemed to be
one ratings tier below the actual rating by S&P, and, if such Obligor is rated
by only Moody's, the applicable rating will be deemed to be one ratings tier
below the actual rating by Moody's, it being understood that if, for example,
Moody's has assigned a P-1 rating to such Obligor and S&P has not rated it, the
applicable rating will be deemed to be P-2.
(b) for Obligors who do not have a debt rating listed above or who are
not rated, 2% of the aggregate Unpaid Balance of Eligible Receivables at such
time.
provided, however that at the Originator's request and in the Administrative
Agent's sole discretion, the Administrative Agent may permit certain obligors to
have an Obligor Concentration Limit in excess of those described in clauses (a)
and (b) above ("Special
▇-▇▇
▇▇
▇▇▇▇▇▇▇"); provided that any such Special Obligor designation shall not take
effect without the confirmation of approval to the Administrative Agent by each
of Moody's and S&P of such designation.
Originator: Each of Lennox, Heatcraft and ▇▇▇▇▇▇▇▇▇ (provided, that ▇▇▇▇▇▇▇▇▇
shall not become an Originator until the ▇▇▇▇▇▇▇▇▇ Commencement Date) in their
capacity as originators under the Sale Agreement.
Outstanding Balance: With respect to any Receivable, the outstanding balance of
such Receivable in Dollars.
Person: An individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, joint venture,
government or any agency or political subdivision thereof or any other entity.
Plan: Any pension plan subject to the provisions of Title IV of ERISA or Section
412 of the Code which is maintained for employees of Lennox or any ERISA
Affiliate.
Pool Receivable: A Receivable in the Receivables Pool.
Preferred Stock: Any class of capital stock of a corporation that is preferred
over any other class of capital stock of such corporation as to the payment of
dividends or the payment of any amount upon liquidation or dissolution of such
corporation.
Prime Rate: Refers to that interest rate so denominated and set by Wachovia from
time to time as an interest rate basis for borrowings. The Prime Rate is but one
of several interest rate bases used by Wachovia. Wachovia lends at interest
rates above and below the Prime Rate.
Program Fee: As defined in the Fee Letter.
Purchase: As defined in Section 1.1.
Purchase Limit: As defined in Section 1.1.
Purchaser: As defined in the preamble.
Purchaser's Share: With respect to any amount, at any time, the lesser of (i)
the most recently calculated Asset Interest and (ii) 100%.
Purchaser's Total Investment: At any time with respect to the Asset Interest an
amount equal to (a) the aggregate of the amounts theretofore paid to Seller for
Purchases pursuant to Sections 1.1 and 1.2, less (b) the aggregate amount of
Collections theretofore received and actually distributed to Purchaser on
account of such Purchaser's Total Investment pursuant to Section 1.3.
▇-▇▇
▇▇
▇▇▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇ Investment: In relation to any Asset Tranche, the amount of
the Purchaser's Total Investment allocated by the Administrative Agent to that
Asset Tranche pursuant to Section 2.1, provided, that at all times the aggregate
amounts allocated to all Asset Tranches shall equal the Purchaser's Total
Investment.
Qualifying Liquidity Bank: A Liquidity Bank with a rating of its short-term
securities equal to or higher than (i) A-1 by Standard & Poor's and (ii) P-1 by
Moody's.
Receivable: Any right to payment from a Person (other than an Affiliate),
whether constituting an account, chattel paper, instrument or general intangible
and includes the right to payment of any interest or finance charges and other
amounts with respect thereto.
Receivables Pool: At any time all then outstanding Receivables which have been
sold or contributed as capital, or purported to have been sold or contributed as
capital, by an Originator to the Seller, other than those reconveyed to an
Originator pursuant to Section 3.5 of the Sale Agreement.
Regulation D: Regulation D of the Federal Reserve Board, as the same may be
amended or supplemented from time to time.
Regulatory Change: Any change after the date of this Agreement in United States
(federal, state or municipal) or foreign laws or regulations (including
Regulation D) or the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks (including the Liquidity
Bank) of or under any United States (federal, state or municipal) or foreign,
laws, or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
Reinvestment: As defined in Section 1.3(a)(iii).
Related Assets: (a) all rights to, but not any obligations under, all related
Contracts and other Related Security related to any Pool Receivables, (b) all
rights and interests of the Seller hereunder under the Sale Agreement in
relation to any Pool Receivables, (c) all books and records evidencing or
otherwise relating to any Pool Receivables, (d) all Lockbox Accounts and all
cash and investments therein, to the extent constituting or representing the
items in the following clause (e) and (e) all Collections in respect of, and
other proceeds of, any Pool Receivables or any other Related Assets.
Related Security: With respect to any Pool Receivable, all of the Seller's (in
the case of usage in the Receivables Purchase Agreement) or the Originator's (in
the case of usage in the Sale Agreement) right, title and interest in and to:
(a) all Contracts that relate to such Pool Receivable; (b) all merchandise
(including returned merchandise), if any, relating to the sale which gave rise
to such Pool Receivable; (c) all security deposits and other security interests
or liens and property subject thereto from time to time purporting to secure
payment of such Pool Receivable, whether pursuant to the Contract related to
such Pool Receivable or otherwise; (d) all UCC financing statements covering any
collateral securing payment of such Pool Receivable
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78
(but only to the extent of the interest of the Purchaser in the respective Pool
Receivable); (e) all guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Pool
Receivable whether pursuant to the Contract related to such Pool Receivable or
otherwise; and (f) all insurance policies, and all claims thereunder, related to
such Pool Receivable, in each case to the extent directly related to rights to
payment, collection and enforcement, and other rights with respect to such Pool
Receivable. The interest of the Purchaser in any Related Security is only to the
extent of the Purchaser's undivided percentage interest, as more fully described
in the definition of Asset Interest.
Reportable Event: 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 Code).
Reporting Date: As defined in Section 3.1(a).
Required Reserve: On any day during a Collection Period, an amount equal to the
product of (i) the Required Reserve Factor and (ii) the Net Pool Balance.
Required Reserve Factor: On any day during a Collection Period, the greater of
(a) the Required Reserve Factor Floor and (b) the sum of (i) the Loss Reserve,
(ii) the Dilution Reserve, (iii) the Yield Reserve, and (iv) the Servicing
Reserve.
Required Reserve Factor Floor: 13.0%.
Revolving Period: Means the period beginning on the date hereof and ending on
the earlier of (a) June 19, 2003 and (b) the Termination Date.
S&P: Standard & Poor's Ratings Service.
Sale Agreement: The Purchase and Sale Agreement dated as of June 19, 2000 among
the Originators and the Seller as it may be amended, supplemented or otherwise
modified.
SEC: The Securities and Exchange Commission.
Secured Parties: The Purchaser, the Administrative Agent, the Indemnified
Parties and the Affected Parties.
Seller: As defined in the preamble.
Seller Information: As defined in Section 14.7(a).
Seller Information Provider: As defined in Section 14.7(a).
Seller Party: As defined in the preamble.
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Seller's Share: With respect to any amount means 100% minus the lesser of (i)
the most recently calculated Asset Interest and (ii) 100%.
Servicer Default: As defined in Section 8.4.
Servicer Transfer Event: As defined in Section 8.1(b).
Servicing Fee: Accrued for any day in a Collection Period means: (a) an amount
equal to the product of (i) the Servicing Fee rate, (ii) the aggregate Unpaid
Balance of the Pool Receivables at the close of business on the first day of
such Collection Period, and (iii) 1/360; or (b) on and after the Master
Servicer's reasonable request made at any time when Lennox shall no longer be
Master Servicer, an alternative amount specified by Master Servicer not
exceeding (i) 110% of Master Servicer's costs and expenses of performing its
obligations under the Agreement during the Collection Period when such day
occurs divided by (ii) the number of days in such Collection Period.
Servicing Fee Rate: 1.00% per annum.
Servicing Reserve: The product of (a) the Servicing Fee Rate and (b) a fraction,
the numerator of which is the Twelve Month DSO and the denominator of which is
360.
Settlement Date: Two Business Days following each Reporting Date.
Special Obligor: As defined in the definition of Obligor Concentration Limit.
Structuring Fee: As defined in the Fee Letter.
Subsidiary: With respect to any Person means (i) a corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned or controlled by such Person, directly or
indirectly through Subsidiaries, and (ii) any partnership, association, joint
venture or other entity in which such Person, directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time.
Successor Notice: As defined in Section 8.1(b).
Swaps: With respect to any Person, payment obligations with respect to interest
rate swaps, currency swaps and similar obligations obligating such Person to
make payments, whether periodically or upon the happening of a contingency. For
the purpose of this Agreement, the amount of the obligation under any Swap shall
be an amount determined in respect thereof as of the end of the then most
recently ended fiscal quarter of such Person, based on the assumption that such
Swap had terminated at the end of such fiscal quarter, and in making such
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80
determination, if any agreement relating to such Swap provides for the netting
of amounts payable by and to such Person thereunder or if any such agreement
provides for the simultaneous payment of amounts by and to such Person, then in
each such case, the amount of such obligation shall be the net amount so
determined.
Termination Date: The earliest of:
(a) the date of termination (whether by scheduled expiration,
termination on default or otherwise) of the Liquidity Banks' commitments under
the Liquidity Agreement (unless such commitments are renewed, extended or
replaced on or before such date);
(b) the Funding Termination Date;
(c) the date designated by the Seller as the "Termination Date" on not
less than thirty (30) days' notice to the Administrative Agent, provided that on
such date the Purchaser's Total Investment has been reduced to zero, all accrued
Earned Discount and fees have been paid in full and all other amounts due to the
Purchaser and the Administrative Agent have been paid in full; and
(d) the date on which any of the following shall occur:
(i) A Downgrading Event with respect to a Liquidity Bank shall
have occurred and been continuing for not less than 45 days, (x) the
Downgraded Liquidity Bank shall not have been replaced by a Qualifying
Liquidity Bank pursuant to a Liquidity Agreement in form and substance
acceptable to the Purchaser and the Administrative Agent, and (y) the
commitment of such Downgraded Liquidity Bank under the Liquidity
Agreement shall not have been funded or collateralized in such a manner
that such Downgrading Event will not result in a reduction or
withdrawal of the credit rating applied to the Commercial Paper Notes
by any of the rating agencies then rating the Commercial Paper Notes;
or
(ii) Purchaser shall become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
Termination Notice: As defined in Section 8.4.
Threshold Amount: $3,900,000, or such other amount to which the Administrative
Agent may agree in writing from time to time.
Transaction Documents: This Agreement, the Lockbox Agreements, the Sale
Agreement, the Assurance Agreement, the Fee Letter, the Mandate Letter and the
other documents to be executed and delivered in connection herewith.
Transaction Fees: Subject to the limitations set forth in the Fee Letter, all
reasonable expenses of the Administrative Agent incurred in connection with the
consummation of this Agreement and
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81
each other Transaction Document, including but not limited to (i) the legal fees
of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to the Administrative Agent, (ii) expenses
incurred in connection with any due diligence audit and (iii) out-of-pocket
expenses of the Administrative Agent.
Twelve Month DSO: For any day, the highest Days Sales Outstanding that occurred
during the twelve (12) month period ending on such date of calculation.
UCC: The Uniform Commercial Code, as from time to time in effect in the
applicable jurisdiction or jurisdictions.
Unmatured Liquidation Event: Any event which, with the giving of notice or lapse
of time, or both, would become a Liquidation Event.
Unpaid Balance: With respect to any Receivable means at any time the unpaid
amount thereof, but excluding all late payment charges, delinquency charges and
extension or collection fees.
Unused Fee: As defined in the Fee Letter.
Weighted Average Term: On any day, the weighted average of the stated terms of
all Eligible Receivables, weighted on the basis of the Unpaid Balance of each
such Receivable, as of such date of calculation.
Yield Period: With respect to any Asset Tranche funded by a Liquidity Funding,
(a) the period commencing on the date of the initial Purchase of the
Asset Interest, the making of such Liquidity Funding or the creation of such
Asset Tranche pursuant to Section 2.1 (whichever is latest) and ending such
number of days thereafter as the Administrative Agent shall select; and
(b) each period commencing on the last day of the immediately preceding
Yield Period for the related Asset Tranche and ending such number of days
thereafter as the Administrative Agent shall select;
provided, however, that
(i) any such Yield Period (other than a Yield Period
consisting of one day) which would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day
(unless the related Asset Tranche shall be accruing Earned Discount at
a rate determined by reference to Eurodollar Rate (Reserve Adjusted),
in which case if such succeeding Business Day is in a different
calendar month, such Yield Period shall instead be shortened to the
next preceding Business Day);
(ii) in the case of Yield Periods of one day for any Asset
Tranche, (A) the initial Yield Period shall be the date such Yield
Period commences as described in clause (a) above; and (B) any
subsequently occurring Yield Period which is one day shall, if the
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82
immediately preceding Yield Period is more than one day, be the last
day of such immediately preceding Yield Period, and if the immediately
preceding Yield Period is one day, shall be the next day following such
immediately preceding Yield Period; and
(iii) in the case of any Yield Period for any Asset Tranche
which commences before the Termination Date and would otherwise end on
a date occurring after such Termination Date, such Yield Period shall
end on such Termination Date and the duration of each such Yield Period
which commences on or after the Termination Date for such Asset Tranche
shall be of such duration as shall be selected by the Administrative
Agent.
Yield Reserve: On any date of determination, the product of (a) 1.5, (b) the
Alternate Base Rate and c) a fraction the numerator of which is the Twelve Month
DSO and the denominator of which is 360.
B. Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
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83
SCHEDULE 6.1(i)
DESCRIPTIONS OF MATERIAL ADVERSE CHANGES
Seller: None
Originators:
Lennox: None
Heatcraft: None
84
SCHEDULE 6.1(n)
LIST OF OFFICES OF MASTER SERVICER AND SELLER WHERE RECORDS ARE KEPT
Seller
LPAC Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Master Servicer
Lennox Industries Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Heatcraft Inc.
ADP Plant
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Heat Transfer Division
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
HRPD
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Electrical Products Division
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Air Conditioning Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
85
SCHEDULE 6.1(o)
LIST OF LOCKBOX BANKS
MAIN OFFICE ADDRESS & ACCOUNT NUMBER
Chase Bank of Texas, N.A.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Lennox Industries Inc.
Lockbox Account No. 07300186205
The Northern Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lennox Industries Inc.
Lockbox Account No. ▇▇▇▇▇▇▇▇
The Northern Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Heatcraft - Grenada
Lockbox Account No. ▇▇▇▇▇▇▇▇
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Heatcraft - Stone Mountain, Danville, Tifton
Lockbox Account No. 1868075223
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Heatcraft - Grenada
Lockbox Account No. ▇▇▇▇▇▇▇▇▇▇
86
SCHEDULE 14.2
NOTICE ADDRESSES
Seller:
LPAC Corp.
Mail: ▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Physical Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President and Treasurer
Phone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Servicers:
Lennox Industries Inc.
Mail: ▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Physical Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Controller, North American Sales
Phone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Physical Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Heatcraft Inc.
Mail: ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Physical Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇, Group Controller and
HTD Vice President - Administration
Phone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇ Air Conditioning Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Controller
Phone No.: 419-483-4840, extension 2312
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
87
Copies to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., General Counsel
Lennox International Inc.
Mail: ▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Physical Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, Vice President and Treasurer
Lennox International Inc.
Mail: ▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Physical Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Purchaser:
Blue Ridge Asset Funding Corporation
c/o: Wachovia Bank, N.A., as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Administrative Agent:
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
88
EXHIBIT 1.2 (a)
FORM OF PURCHASE REQUEST
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Receivables Purchase Agreement dated as of June 19,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Purchase Agreement") among LPAC Corp., as the Seller, Lennox Industries Inc.,
as the Master Servicer (and together with Seller, collectively referred to as
the "Seller Parties"), Blue Ridge Asset Funding Corporation, as purchaser (the
"Purchaser") and Wachovia Bank N.A., as administrative agent for Purchaser (the
"Administrative Agent"). Capitalized terms defined in the Purchase Agreement are
used herein with the same meanings.
I. Each of the Seller Parties hereby certifies, represents and warrants
to the Purchaser and the Administrative Agent that on and as of the Purchase
Date (as hereinafter defined):
(a) all applicable conditions precedent set forth in Article V of the
Purchase Agreement have been satisfied;
(b) each of its respective representations and warranties contained in
Section 6.1 of the Purchase Agreement will be true and correct, in all material
respects, as if made on and as of the Purchase Date;
(c) no event will have occurred and is continuing, or would result from
the requested Purchase, that constitutes a Liquidation Event or Unmatured
Liquidation Event;
(d) after giving effect to the requested Purchase, Purchaser's Total
Investment and aggregate CP Discount will not exceed the available Purchase
Limit, and the Asset Interest will not exceed the Allocation Limit; and
(e) the Termination Date shall not have occurred.
89
II. The undersigned, as Seller hereby requests that the Purchaser make
a Purchase on ___________, _____ (the "Purchase Date") as follows:
$ - Face value of maturing CP
$ - Principal paydown by Seller
$____________ - Discount to be paid by Seller
$ - Minimum net proceeds needed from rolling CP to effect Purchase in required
amount
$ - Requested face value CP to mature on ____________
$____________ - Requested face value CP to mature on ____________
$ - aggregate requested face value CP to be issued on Purchase Date
IN WITNESS WHEREOF, the Seller and the Master Servicer have caused this
Purchase Request to be executed and delivered as of this ____ day of
___________, _____.
LPAC Corp., as Seller
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Lennox Industries Inc., as Master Servicer
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
90
EXHIBIT 3.1(a)
FORM OF INFORMATION PACKAGE
91
EXHIBIT A-1
FORM OF LOCKBOX AGREEMENT
[LETTERHEAD OF ORIGINATOR]
_______________, ___, 200_
[LOCKBOX BANK]
Ladies and Gentlemen:
Reference is made to our Lockbox account no. _____________ maintained with you
(the "Account") pursuant to a Lockbox agreement between the undersigned and you,
the terms and conditions of which are incorporated herein by reference (the
"Lockbox Agreement"). Pursuant to a Purchase and Sale Agreement, dated as of
June 19, 2000, as amended, supplemented or otherwise modified from time to time,
among the undersigned, as seller, and LPAC Corp., as purchaser, we have sold
and/or may hereafter sell to LPAC Corp. certain of the accounts, chattel paper,
instruments or general intangibles (collectively, "Receivables") with respect to
which payments are or may hereafter be made to the Account. Pursuant to a
Receivables Purchase Agreement, dated as of June 19, 2000 (as amended,
supplemented or otherwise modified from time to time, the "Receivables Purchase
Agreement"), among LPAC Corp., as seller, Lennox Industries Inc., as master
servicer ("Master Servicer") (LPAC Corp. and the Master Servicer being referred
to hereinafter collectively as the "Seller Parties"), Blue Ridge Asset Funding
Corporation ("Blue Ridge"), as purchaser and Wachovia Bank, N.A., as
administrative agent (the "Administrative Agent"), LPAC Corp. has assigned
and/or may hereafter assign to Blue Ridge an undivided percentage interest in
the Receivables.
For purposes of this letter agreement, Wachovia Bank, N.A. is acting as
Administrative Agent for Blue Ridge. We hereby transfer exclusive ownership and
control of the Account to the Administrative Agent, for the benefit of Blue
Ridge, subject only to the condition subsequent that the Administrative Agent
shall have given you notice of its election to assume such ownership and
control, which notice shall be substantially in the form attached hereto as
Annex A.
We hereby irrevocably instruct you, at all times from and after the date of your
receipt of notice from the Administrative Agent of its assumption of control of
the Account as described above, (i) to make all payments to be made by you out
of or in connection with the Account directly to the Administrative Agent in
accordance with the instructions of the Administrative Agent, (ii) to hold all
moneys and instruments delivered to the Account or any Lockbox administered by
you for the order of the Administrative Agent (for the benefit of Blue Ridge),
(iii) to refrain from initiating any transfer from the Account to any Seller
Party and (iv) to change the name of the Account to "Wachovia Bank, N.A., as
Administrative Agent for Blue Ridge Asset Funding Corporation". The
Administrative Agent agrees to execute your standard wire transfer
92
documentation in effect from time to time, or other customary documentation
related to wire transfers, prior to the initiation of any wire transfers.
We also hereby notify you that, at all times from and after the date of your
receipt of notice from the Administrative Agent as described above, the
Administrative Agent shall be irrevocably entitled to exercise in our place and
stead any and all rights in respect of or in connection with the Account,
including, without limitation, (a) the right to specify when payments are to be
made out of or in connection with the Account and (b) the right to require
preparation of duplicate monthly bank statements on the Account for the
Administrative Agent's audit purposes and mailing of such statements directly to
the Administrative Agent at an address specified by the Administrative Agent.
Notices from the Administrative Agent and other notices or communications under
this letter agreement may be personally served or sent by facsimile or by
certified mail, return receipt requested, or by express mail or courier, to the
address or facsimile number set forth under the signature of the relevant party
to this letter agreement (or to such other address or facsimile number as the
relevant party shall have designated by written notice to the party giving the
aforesaid notice or other communication). Notwithstanding the foregoing, any
notice delivered by you may be delivered by regular mail. If notice is given by
facsimile, it will be deemed to have been received when the notice is sent and
receipt is confirmed by telephone or other electronic means. All other notices
will be deemed to have been received when actually received or, in the case of
personal delivery, delivered.
By executing this letter agreement, you acknowledge the existence of the
Administrative Agent's right to ownership and control of the Account and its
ownership (on behalf of Blue Ridge and LPAC Corp. as the parties having
interests in such amounts) of the amounts from time to time on deposit therein,
and agree that from the date hereof the Account shall be maintained by you for
the benefit of, and amounts from time to time therein held by you for, the
Administrative Agent (on behalf of Blue Ridge and LPAC Corp.) on the terms
provided herein. Except as otherwise provided in this letter agreement, payments
to the Account are to be processed in accordance with the standard procedures
currently in effect. All service charges and fees with respect to the Account
shall continue to be payable by us as under the arrangements currently in
effect.
By executing this letter agreement, you irrevocably waive and agree not to
assert, claim or endeavor to exercise, irrevocably bar and estop yourself from
asserting, claiming or exercising, and acknowledge that you have not heretofore
received a notice, writ, order or any form of legal process from any other party
asserting, claiming or exercising, any right of set-off, banker's lien or other
purported form of claim with respect to the Account or any funds from time to
time therein. Except for your right to payment of your service charges and fees
and your right to make deductions for returned items, you shall have no rights
in the Account or funds therein. To the extent you may ever have such rights,
you hereby expressly subordinate all such rights to all rights of the
Administrative Agent.
You may terminate this letter agreement by canceling the Account maintained with
you, which cancellation and termination shall become effective only upon 90
days' prior written notice
93
thereof from you to the Administrative Agent. Incoming mail addressed to the
Account received after such cancellation shall be forwarded in accordance with
the Administrative Agent's instructions. This letter agreement may also be
terminated upon written notice to you by the Administrative Agent stating that
the Receivables Purchase Agreement is no longer in effect. Except as otherwise
provided in this paragraph, this letter agreement may not be terminated or
amended without the prior written consent of the Administrative Agent.
Notwithstanding any other provision of this letter agreement, it is agreed by
the parties hereto that you shall not be liable to Blue Ridge or the
Administrative Agent for any action taken by you or any of your directors,
officers, agents or employees in accordance with this letter agreement at the
request of the Administrative Agent, except for your or such person's own gross
negligence or willful misconduct.
This letter agreement may be executed by the signatories hereto in several
counterparts, each of which shall be deemed to be an original and all of which
shall together constitute but one and the same letter agreement. This letter
agreement shall be governed by and interpreted under the laws of the State of
New York.
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing the six copies of this letter agreement enclosed herewith
in the space provided below and returning each of such signed copies to the
Administrative Agent.
Very truly yours,
[NAME OF ORIGINATOR]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address for notice:
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
94
Accepted and confirmed as of the date first written above:
BLUE RIDGE ASSET FUNDING CORPORATION,
as Purchaser
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address for notice:
c/o Wachovia Bank, N.A., as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
WACHOVIA BANK, N.A.,
as Administrative Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address for notice:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Acknowledged and agreed to as of
the date first written above:
LPAC CORP.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address for notice:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Facsimile No:
--------------------------
95
[LOCKBOX BANK]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address for notice:
------------------------------
------------------------------
------------------------------
Attention:
--------------------
Facsimile No:
-----------------
96
ANNEX A to
Lockbox Agreement
[FORM OF NOTICE OF ASSUMPTION OF CONTROL OF ACCOUNT]
[LETTERHEAD OF WACHOVIA BANK, N.A.]
__________________, 200_
[NAME OF LOCKBOX BANK]
[ADDRESS OF LOCKBOX BANK]
------------------------------
------------------------------
Re: [Name of Originator]
Lockbox Account No.
Ladies and Gentlemen:
Reference is made to the letter agreement dated __________ __, 200_ (as amended,
supplemented or otherwise modified from time to time, the "Letter Agreement")
among LPAC Corp., Lennox Industries Inc., Blue Ridge Asset Funding Corporation
(the "Purchaser"), Wachovia Bank, N.A., as Administrative Agent for the
Purchaser, and you, concerning the above-described Lockbox account (the
"Account").
We hereby give you notice of our assumption of ownership and control of the
Account as provided in the Letter Agreement.
We hereby instruct you to make all payments to be made by you out of or in
connection with the Account [DIRECTLY TO THE UNDERSIGNED, AT [OUR ADDRESS SET
FORTH ABOVE], FOR THE ACCOUNT OF [BLUE RIDGE ASSET FUNDING CORPORATION] (ACCOUNT
NO. ___________)].
[OTHER INSTRUCTIONS]
Very truly yours,
WACHOVIA BANK N.A.,
as Administrative Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
97
EXHIBIT B
[NAME OF COMPANY]
FORM OF CERTIFICATE OF FINANCIAL OFFICER
This Certificate is made pursuant to the provisions of the Receivables Purchase
Agreement dated as of June 19, 2000 (the "Agreement") among LPAC Corp., as
Seller, Lennox Industries Inc., as Master Servicer, Blue Ridge Asset Funding
Corporation, as Purchaser, and Wachovia Bank, N.A., as Administrative Agent. The
capitalized terms used, but not defined, herein have the meanings assigned to
them in the Agreement.
The undersigned [CHIEF FINANCIAL OFFICER/TREASURER] of [NAME OF COMPANY] (the
"Company") hereby certifies that the financial statements being delivered
concurrently herewith fairly present the financial condition and results of
operations of the Company in accordance with generally accepted accounting
principles consistently applied, subject to normal year-end audit adjustments.
[NAME OF COMPANY]
Name:
-------------------------
Title:
------------------------
Dated:
------------------------
98
EXHIBIT C-1
[LENNOX INDUSTRIES INC.]
CREDIT AND COLLECTION POLICY
99
EXHIBIT C-2
[HEATCRAFT INC.]
CREDIT AND COLLECTION POLICY