Exhibit 10.72
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FIRST AMENDED AND RESTATED
ASSET INTEREST TRANSFER AGREEMENT
DATED AS OF OCTOBER 31, 2001
AMONG
WPS RECEIVABLES CORPORATION
AS TRANSFEROR
AND
WESTPOINT ▇▇▇▇▇▇▇ INC.
AS INITIAL SERVICER
AND
BLUE RIDGE ASSET FUNDING CORPORATION
AS TRANSFEREE
AND
NORTH AMERICAN CAPACITY INSURANCE COMPANY,
AS INSURER
AND
WACHOVIA BANK, N.A.
AS ADMINISTRATOR
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TABLE OF CONTENTS
ARTICLE I
TRANSFERS AND REINVESTMENTS
SECTION 1.01 Commitments to Transfer; Limits on Transferee's Obligations..........................-2-
SECTION 1.02 Transfer Procedures; Assignment of Transferee's Interests............................-2-
SECTION 1.03 Collections Prior to the Termination Date; Collections Following the Termination
Date.................................................................................-3-
SECTION 1.04 Asset Interest.......................................................................-5-
SECTION 1.05 Adjustments of Transfer Limit........................................................-6-
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01 Selection of Asset Tranches......................................................... -6-
SECTION 2.02 Computation of Transferee's Total Investment and Transferee's Tranche
Investment.......................................................................... -7-
SECTION 2.03 Computation of Concentration Limits and Unpaid Balance.............................. -7-
SECTION 2.04 Liquidity Fundings; Computation of CP Costs and Earned Discount..................... -7-
SECTION 2.05 Estimates of Earned Discount Rate, Fees, etc........................................ -8-
ARTICLE III
SETTLEMENTS
SECTION 3.01 Settlement Procedures............................................................... -9-
SECTION 3.02 Deemed Collections; Reduction of Transferee's Total Investment, Etc. ...............-13-
SECTION 3.03 Payments and Computations, Etc......................................................-16-
SECTION 3.04 Treatment of Collections and Deemed Collections.....................................-17-
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01 Fees................................................................................-17-
SECTION 4.02 Yield Protection....................................................................-17-
SECTION 4.03 Funding Losses......................................................................-19-
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ARTICLE V
CONDITIONS OF TRANSFERS
SECTION 5.01 Conditions Precedent to Effectiveness of this Agreement.............................-20-
SECTION 5.02 Conditions Precedent to All Transfers and Reinvestments.............................-22-
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01 Representations and Warranties of Transaction Parties...............................-23-
ARTICLE VII
GENERAL COVENANTS OF TRANSACTION PARTIES
SECTION 7.01 Affirmative Covenants of Transaction Parties........................................-28-
SECTION 7.02 Reporting Requirements of Transaction Parties.......................................-31-
SECTION 7.03 Negative Covenants of Transaction Parties...........................................-33-
SECTION 7.04 Separate Corporate Existence of Transferor..........................................-36-
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01 Designation of Servicer.............................................................-39-
SECTION 8.02 Duties of Servicer..................................................................-40-
SECTION 8.03 Rights of the Administrator.........................................................-41-
SECTION 8.04 Responsibilities of Transaction Parties.............................................-43-
SECTION 8.05 Further Action Evidencing Transfers and Reinvestments...............................-43-
SECTION 8.06 Servicer Advances. ................................................................-44-
ARTICLE IX
SECURITY INTEREST
SECTION 9.01 Grant of Security Interest..........................................................-45-
SECTION 9.02 Further Assurances..................................................................-45-
SECTION 9.03 Remedies............................................................................-45-
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01 Liquidation Events..................................................................-45-
SECTION 10.02 Remedies............................................................................-48-
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ARTICLE XI
THE ADMINISTRATOR
SECTION 11.01 Authorization and Action............................................................-48-
SECTION 11.02 Administrator's Reliance, Etc.......................................................-48-
SECTION 11.03 Wachovia and Affiliates.............................................................-49-
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01 Restrictions on Assignments.........................................................-49-
SECTION 12.02 Rights of Assignee..................................................................-50-
SECTION 12.03 Terms and Evidence of Assignment....................................................-50-
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01 Indemnities by Transferor...........................................................-50-
SECTION 13.02 Indemnities by Servicer.............................................................-52-
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01 Amendments, Etc.....................................................................-53-
SECTION 14.02 Notices, Etc........................................................................-54-
SECTION 14.03 No Waiver; Remedies.................................................................-54-
SECTION 14.04 Binding Effect; Survival............................................................-54-
SECTION 14.05 Costs, Expenses and Taxes...........................................................-54-
SECTION 14.06 No Proceedings......................................................................-55-
SECTION 14.07 Confidentiality of Transferor Information...........................................-55-
SECTION 14.08 Confidentiality of Program Information..............................................-58-
SECTION 14.09 Captions and Cross References.......................................................-59-
SECTION 14.10 Integration.........................................................................-59-
SECTION 14.11 GOVERNING LAW.......................................................................-59-
SECTION 14.12 WAIVER OF JURY TRIAL................................................................-60-
SECTION 14.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.......................................-60-
SECTION 14.14 Execution in Counterparts...........................................................-61-
SECTION 14.15 No Recourse Against Other Parties...................................................-61-
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APPENDICES
APPENDIX A Definitions
-iv-
SCHEDULES
SCHEDULE 6.01(m) List of Offices of Servicer and Transferor where
Records Are Kept
SCHEDULE 6.01(n) List of Lock-Box Banks and Concentration Bank
SCHEDULE 14.02 Notice Addresses
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EXHIBITS
EXHIBIT 1.02(a) Form of Transfer Request
EXHIBIT 5.01(i) Form of Opinion of Special Counsel for Transaction Parties
EXHIBIT A Form of Lock Box/Collection Account Agreement
EXHIBIT B Form of Certificate of Financial Officer
EXHIBIT C Form of Monthly Report
EXHIBIT D Form of Interim Report
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FIRST AMENDED AND RESTATED
ASSET INTEREST TRANSFER AGREEMENT
Dated as of October 31, 2001
THIS IS THE FIRST AMENDED AND RESTATED ASSET INTEREST TRANSFER
AGREEMENT, among:
(1) WPS Receivables Corporation, a Delaware corporation
(together with its successors and permitted assigns, "Transferor"),
(2) WestPoint ▇▇▇▇▇▇▇ Inc., a Delaware corporation
(together with its successors, "WestPoint"), as initial servicer hereunder (in
such capacity, together with any successor servicer appointed pursuant to
Section 8.01, "Servicer"; WestPoint, in its capacity as Servicer, together with
Transferor, each a "Transaction Party" and collectively, the "Transaction
Parties"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware
corporation (together with its successors and assigns, "Transferee"),
(4) NORTH AMERICAN CAPACITY INSURANCE COMPANY, a New
Hampshire insurance company (together with its successors, the "Insurer"), and
(4) WACHOVIA BANK, N.A., a national banking association
("Wachovia"), as administrative agent for Transferee (in such capacity, together
with any successors thereto in such capacity, the "Administrator").
Unless otherwise indicated, capitalized terms used in
this Agreement are defined in Appendix A.
Background
1. Transferor and WestPoint are each party to that
certain Receivables Purchase Agreement dated as of December 18, 1998 (the
"Original First Step Agreement"), whereby WestPoint sold, and Transferor
purchased, all of WestPoint's right, title and interest in and to certain
"Receivables" (as defined therein) and certain related property.
2. Transferor, WestPoint, as initial Servicer,
Transferee and Wachovia, as administrative agent for Transferee are each party
to that certain Asset Interest Transfer Agreement dated as of December 18, 1998
(as amended, the "Original Second Step Agreement"), whereby Transferor from time
to time transferred, and Transferee from time to time purchased, undivided
percentage ownership interests in "Pool Receivables" and "Related Assets" (each
as defined in the Original Second Step Agreement) and other proceeds thereof.
3. Transferor and WestPoint are entering into that
certain First Amended and Restated Receivables Purchase Agreement, dated as of
the date hereof, which agreement amends and restates in its entirety the
Original First Step Agreement.
4. The parties hereto have agreed to amend and restate
the Original Second Step Agreement in its entirety, subject to the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the Original Second Step Agreement is hereby
amended and restated in its entirety to read as follows:
ARTICLE I
TRANSFERS AND REINVESTMENTS
SECTION 1.01 Commitments to Transfer; Limits on Transferee's
Obligations.
Upon the terms and subject to the conditions of this Agreement
(including, without limitation, Article V), from time to time prior to the
Termination Date, Transferor may request a transfer to the Administrator, on
Transferee's behalf, and the Administrator, on Transferee's behalf, shall
accept, from Transferor ownership interests in Pool Receivables and Related
Assets (each being a "Transfer"); provided that no Transfer shall be made to the
Administrator, on Transferee's behalf, if, after giving effect thereto, (a) the
transfer price of such Transfer exceeds the lesser of (i) the sum of (x) the
result obtained by multiplying the Net Pool Balance as of the date of such
Transfer by the Advance Rate, plus (y) the Insured Availability and (ii) the
Transfer Limit, (b) the Transferee's Total Investment would exceed the Transfer
Limit, or (c) the Asset Interest would exceed 100%; and provided, further that
each Transfer made pursuant to this Section 1.01 shall have a transfer price
equal to at least $1,000,000 and each such Transfer shall occur on a Settlement
Date relating to a CP Accrual Period.
SECTION 1.02 Transfer Procedures; Assignment of Transferee's Interests.
(a) Transfer Request. Each Transfer from Transferor by
the Administrator, on Transferee's behalf, shall be made on notice from
Transferor to the Administrator received by the Administrator not later than
12:00 noon (New York City time) two (2) Business Days prior to the date of such
proposed Transfer. Each such notice of a proposed Transfer shall be
substantially in the form of Exhibit 1.02(a) and shall specify, among other
items, the desired amount and date of such Transfer. The Administrator shall
promptly upon receipt notify the Transferee of any such notice.
(b) Funding of Transfer. On the date of each Transfer,
Transferee shall, upon satisfaction of the applicable conditions set forth in
Article V, make available to Transferor the amount of the Transfer in same day
funds by wire transfer to an account of Transferor designated in writing by
Transferor.
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(c) Assignment of Asset Interests. Transferor hereby
transfers, assigns and conveys to the Administrator, on Transferee's behalf,
effective on and as of the date of each Transfer and each Reinvestment hereunder
by the Administrator, on Transferee's behalf, the Asset Interest in the Pool
Receivables and Related Assets.
SECTION 1.03 Collections Prior to the Termination Date; Collections
Following the Termination Date.
(a) Collections Prior to the Termination Date.
(i) General. On the close of business on each
day during the period from the date of the first Transfer to the
Termination Date, Servicer will segregate, set aside and hold in trust,
for the benefit of Transferee and the other Secured Parties, all
Collections (including Deemed Collections) received (or deemed
received) on such day to be applied in accordance with Section 3.01 to
the payment of accrued and unpaid CP Costs, Earned Discount, Servicer's
Fee, Fees, accrued and unpaid premium and charges for "Unutilized
Credit Limit Capacity" under the Insurance Policy and other amounts
payable hereunder and, to the extent such Collections exceed such
amounts, to be applied as a Reinvestment as provided in this Section
1.03.
(ii) Accrued Amounts. On the close of business on
each day prior to the Termination Date, out of the Collections set
aside pursuant to subsection (i) above, Servicer will segregate, set
aside and hold in trust for the Transferee and the other Secured
Parties, an amount equal to the sum of the estimated CP Costs, Earned
Discount, Servicer's Fee, Fees, Insurance Obligations (other than
Reimbursement Amounts) and other amounts payable hereunder (in each
case, accrued through such day) and not so previously set aside. On
each Settlement Date prior to the Termination Date, the Servicer shall
remit (A) the Collections set aside pursuant to this Section
1.03(a)(ii) and (B) all Collections set aside pursuant to subsection
(i) above and not applied as a Reinvestment in accordance with
subsection (iii) or (iv) below, to the Administrator to be applied in
accordance with Section 3.01 to accrued and unpaid CP Costs, Earned
Discount, Servicer's Fee, Fees, Insurance Obligations (other than
Reimbursement Amounts) and other amounts payable hereunder.
(iii) Reinvestments. Out of the Collections set
aside pursuant to subsection (i) above and not set aside for the
payment of CP Costs, Earned Discount, Servicer's Fee, Fees, Insurance
Obligations and other amounts payable pursuant to subsection (ii)
above, the Servicer shall apply that portion of the Collections
attributable to the Asset Interest to a transfer to the Administrator,
on Transferee's behalf, by Transferor of additional undivided ownership
interests in Pool Receivables and Related Assets (each such purchase
being a "Reinvestment"), such that after giving effect to such
Reinvestment, the amount of Transferee's Total Investment immediately
after such
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Reinvestment shall be equal to the amount of Transferee's Total
Investment immediately prior to such Reinvestment; provided that:
(A) if after giving effect to such
Reinvestment, (1) the then Asset Interest would exceed 100% or
(2) the Transferee's Total Investment would exceed the
Transfer Limit, then Servicer shall not reinvest, but shall
set aside and hold in trust for the benefit of the Secured
Parties, a portion of such Collections which, together with
other Collections previously so set aside and then so held,
shall equal the amount necessary to reduce the Asset Interest
to not more than 100% and the Transferee's Total Investment to
an amount equal to or less than the Transfer Limit; and
(B) if any of the conditions precedent
to Reinvestment set forth in clauses (a), (b) and (d) of
Section 5.02, subject to the proviso set forth therein, are
not satisfied, then Servicer shall not reinvest any of such
Collections, but shall set them aside and hold them in trust
for the benefit of the Secured Parties.
(iv) Unreinvested Collections. Servicer shall
segregate, set aside and hold in trust for the benefit of the Secured
Parties all Collections which, pursuant to subsection (iii) above, may
not be reinvested in the Pool Receivables and Related Assets and shall
pay all such amounts on each Settlement Date to the Administrator to be
applied in accordance with Section 3.01; provided, however, no payment
shall be made with such amounts to reduce the Transferee's Tranche
Investment of any Asset Tranche funded with Commercial Paper Notes
unless the Transferee's Tranche Investments of all Asset Tranches, if
any, funded by Liquidity Fundings shall have been reduced to zero; and
provided, further, that if, prior to the date when such Collections are
required to be paid to the Administrator for the benefit of the Secured
Parties, the amount of Collections so set aside exceeds the amount, if
any, necessary to reduce the Transferee's Total Investment to an amount
equal to or less than the Transfer Limit and the Asset Interest to not
more than 100%, and the conditions precedent to Reinvestment set forth
in clauses (a), (b) and (d) of Section 5.02, subject to the proviso set
forth therein, are satisfied, then 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.
(b) Collections Following the Termination Date. On the
Termination Date and each day thereafter, the Servicer shall segregate, set
aside and hold in trust, for the benefit of Transferee and the other Secured
Parties, all Collections (including Deemed Collections) received (or deemed
received) on such day, and shall, at any time upon the request from time to time
by (or pursuant to standing instructions from) the Administrator, remit to the
Administrator's account such amounts to be applied in accordance with Section
3.01.
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(c) Funds Under Sale Agreement. Upon the written request
of the Administrator, on Transferee's behalf, given at any time when (i) based
on the most recent Monthly Report or Interim Report, the Asset Interest would
exceed 100% or the Transferee's Total Investment would exceed the Transfer
Limit, or (ii) a Liquidation Event or Unmatured Liquidation Event shall have
occurred and be continuing, Transferor shall set aside all funds that under the
Sale Agreement would be applied either to repay principal of the Subordinated
Notes owing to the Originators or to pay dividends to the Originators.
Transferor may make withdrawals of such funds only for the purposes of (i) at
any time, purchasing Receivables from the Originators in accordance with the
Sale Agreement; (ii) making payments to reduce Transferee's Total Investment in
accordance with the Section 3.01(c)(iii), and (iii) on the Settlement Date for
any Settlement Period, if, on the basis of the most recent Monthly Report, and
after giving effect to any payment made to Servicer to reduce Transferee's Total
Investment on such date pursuant to Section 3.01(c)(iii), the Transferee's Total
Investment does not exceed the Transfer Limit and the Asset Interest does not
exceed 100%, and provided that no Liquidation Event or Unmatured Liquidation
Event shall have occurred and be continuing, repaying principal of the
Subordinated Notes or paying dividends in accordance with this Agreement and the
Sale Agreement.
(d) Notwithstanding subsection (a) above, if (A) a
Liquidation Event has not occurred and is not continuing and (B) the Borrowing
Availability is equal to or greater than $30,000,000, the daily calculations,
allocations, and segregation specified in such subsection shall not be required,
provided that, any amounts otherwise required to be segregated pursuant to such
subsection shall be, notwithstanding this subsection (d), held in trust by the
Servicer for the benefit of the Secured Parties.
SECTION 1.04 Asset Interest
(a) Components of Asset Interest. On any date the Asset
Interest will represent Transferee'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 a percentage, expressed as the following fraction:
TTI+RR+IR
---------
NPB+OCEEC
where:
TTI = the then Transferee's Total Investment;
RR = the then Required Reserve;
IR = the then Insurance Reserve;
NPB = the then Net Pool Balance; and
OCEEC = the lesser of (i) the aggregate amount of Obligor
Coverage then in effect divided by the sum of (x) 1.0
minus (y) the Insurance Dilution Reserve and (ii) the
Eligible Excess Concentrations as of such date;
-5-
provided, however, that the Asset Interest during the Liquidation Period shall
be deemed to equal 100%.
(c) Frequency of Computation. The Asset Interest shall be
computed (i) as provided in Section 3.01(c), as of the Cut-Off Date for each
Settlement Period, and (ii) on each Settlement Date, after giving effect to the
payments made pursuant to Section 3.01. In addition, the Administrator may
require Servicer to provide a Monthly Report, based on the information then
available to Servicer, for purposes of computing the Asset Interest or the
Transfer Limit as of any other date, and Servicer agrees to do so within thirty
(30) days of its receipt of the Administrator's request, provided that Servicer
shall not be required to provide such Monthly Report more frequently than
weekly.
SECTION 1.05 Adjustments of Transfer Limit. Transferor may, upon at
least thirty (30) Business Days' prior written notice to the Administrator,
terminate in whole or reduce in part, the unused portion of the Transfer Limit;
provided that each partial reduction of the Transfer Limit shall be in an amount
equal to $5,000,000 or an integral multiple thereof.
SECTION 1.06 Extension of Scheduled Maturity Date. Not less than 90
days prior to the then existing Scheduled Maturity Date, the Administrator will,
in consultation with Transferor, undertake a review of Transferor to determine
whether the Scheduled Maturity Date may be extended, during which review
Transferor may request such extension. Notwithstanding, the immediately
preceding sentence, neither Transferee nor any Liquidity Bank shall have a
commitment or obligation to extend the Scheduled Maturity Date. If Transferee
and the Liquidity Banks agree, after consultation with the Administrator and in
their sole discretion, to extend the Scheduled Maturity Date, they shall so
advise the Administrator and the Administrator shall notify Transferor in
writing by not later than the date that is 60 days prior to the then existing
Scheduled Maturity Date. In the event the Administrator, on behalf of Transferee
and the Liquidity Banks, shall fail to advise Transferor on or prior to the date
that is 60 days prior to the then existing Scheduled Maturity Date, Transferee's
request to extend the Scheduled Maturity Date shall be deemed to have been
declined. Upon execution by Transferor, the Administrator, Transferee and the
Liquidity Banks of an agreement in writing setting forth the parties agreement
to extend the Scheduled Maturity Date, the "Scheduled Maturity Date" shall
thereupon become the date as specified in such agreement. As of no date during
the term of this Agreement shall the period from such date to the Scheduled
Maturity Date then in effect exceed a period of 364 days.
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01 Selection of Asset Tranches. The Administrator shall, at
the reasonable direction of Transferor, and from time to time for purposes of
computing Earned Discount on that portion of the Asset Interest funded with
Liquidity Fundings, divide the Asset Interest into Asset Tranches, and the
Earned Discount Rate may be different for each Asset Tranche funded by a
Liquidity Funding. Transferee's Total Investment shall be allocated to each
Asset Tranche by the Administrator, on Transferee's behalf to reflect the
funding sources for the Asset Interest, so that:
-6-
(a) there will be one or more Asset Tranches equal to the
excess of Transferee's Total Investment over the aggregate amount allocated at
such time pursuant to clause (b) below, which Asset Tranches shall reflect the
portion of the Asset Interest funded by Commercial Paper Notes; and
(b) there will be one or more Asset Tranches, selected by
the Administrator, on Transferee's behalf, reflecting the portion of the Asset
Interest funded by outstanding Liquidity Fundings.
SECTION 2.02 Computation of Transferee's Total Investment and
Transferee's Tranche Investment. In making any determination of Transferee's
Total Investment and any Transferee's Tranche Investment, the following rules
shall apply:
(a) Transferee'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 Administrator, on Transferee's behalf;
(b) Transferee'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;
(c) Transferee's Total Investment shall not be considered
reduced by any payments made to Transferee under the Insurance Policy; and
(d) if there is any reduction in Transferee's Total
Investment, there shall be a corresponding reduction in a Transferee's Tranche
Investment with respect to one or more Asset Tranches selected by the
Administrator, on Transferee's behalf, in its reasonable discretion.
SECTION 2.03 Computation of Concentration Limits and Unpaid Balance.
The Obligor Concentration Limits, Special 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 2.04 Liquidity Fundings; Computation of CP Costs and Earned
Discount.
(a) It is the intent of Transferee to fund the Asset
Interest by the issuance of Commercial Paper Notes. If Transferee is unable, or
determines that it is undesirable, to issue Commercial Paper Notes to fund the
Asset Interest, or is unable to repay such Commercial Paper Notes upon the
maturity thereof, Transferee will draw on Liquidity Fundings to fund the Asset
Interest to the extent available. The portion of Transferee's Total Investment
funded substantially with Pooled Commercial Paper shall accrue CP Costs each day
on a pro rata basis based upon the percentage share such portion represents in
relation to all assets held by Transferee and funded substantially with Pooled
Commercial Paper. If Transferee funds or refinances its investment in an Asset
Tranche through a Liquidity Funding, in lieu of paying CP Costs on the
Transferee's Total Investment, Transferor will pay Earned Discount
-7-
thereon at the Earned Discount Rate selected in accordance with this Agreement.
Nothing herein shall be deemed to constitute a commitment of Transferee to issue
Commercial Paper Notes.
(b) In making any determination of CP Costs and Earned Discount,
the following rules shall apply:
(i) the Administrator, on Transferee's behalf, shall
determine (A) the CP Costs accrued with respect to each Asset Tranche
funded with Commercial Paper Notes for each CP Accrual Period in
accordance with the definition of CP Costs and (B) the Earned Discount
accrued with respect to each Asset Tranche funded with Liquidity
Fundings for each Yield Period, in accordance with the definition of
Earned Discount;
(ii) no provision of this Agreement shall require the
payment or permit the collection of CP Costs or Earned Discount in
excess of the maximum permitted by applicable law; and
(iii) CP Costs and 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.
SECTION 2.05 Estimates of Earned Discount Rate, Fees, etc. The
Administrator, on Transferee's behalf, shall notify Servicer (and, if WestPoint
is not Servicer, Transferor) from time to time of the Transferee's Tranche
Investment of each Asset Tranche, the Earned Discount Rate applicable to each
Asset Tranche funded by a Liquidity Funding and the rates at which fees and
other amounts are accruing hereunder. It is understood and agreed that (i) CP
Costs for any Asset Tranche funded through the issuance of Commercial Paper are
determined in arrears and may change from one CP Accrual Period to the next,
(ii) the Earned Discount Rate for any Asset Tranche funded through a Liquidity
Funding may change from one applicable Yield Period to the next, (iii) the Bank
Rate used to calculate the Earned Discount Rate may change from time to time
during an applicable Yield Period, (iv) certain rate information provided by the
Administrator to Servicer shall be based upon the Administrator's good faith
estimate, (v) the amount of Earned Discount actually accrued with respect to an
Asset Tranche funded through a Liquidity Funding during any Yield Period may
exceed, or be less than, the amount set aside with respect thereto by Servicer,
and (iv) the amount of fees or other amounts payable which have accrued
hereunder with respect to any Settlement Period may exceed, or be less than, the
amount set aside with respect thereto by Servicer. Failure to set aside any
amount so accrued shall not relieve Servicer of its obligation to remit
Collections to the Administrator, for the benefit of Transferee, with respect to
such accrued amount, as and to the extent provided in Section 3.01.
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ARTICLE III
SETTLEMENTS
SECTION 3.01 Settlement Procedures. The parties hereto will take the
following actions with respect to each Settlement Period:
(a) Reports. Servicer shall deliver to the Insurer and
the Administrator on the 15th day of each month (or if such day is not a
Business Day, the next succeeding Business Day thereafter) (each a "Reporting
Date"), a Monthly Report. In addition, upon 30 days prior notice, the
Administrator may require Servicer to deliver Interim Reports from time to time
in addition to the Monthly Reports, provided, that Servicer shall not be
required to deliver Interim Reports more frequently than weekly. Upon the
Administrator's or the Insurer's request, each such Monthly Report and Interim
Report shall be accompanied by an electronic file in a form satisfactory to the
Administrator or the Insurer, as applicable.
(b) Earned Discount and CP Costs; Other Amounts Due.
(i) (A) On or before 12:00 noon (Atlanta,
Georgia time) on the Business Day before the last day of each Yield
Period, the Administrator shall notify Servicer of the amount of Earned
Discount accrued with respect to any Asset Tranche funded by Liquidity
Fundings and (B) on or before 12:00 noon (Atlanta, Georgia) time five
(5) Business Days before each Reporting Date, the Administrator shall
notify the Servicer of the amount of CP Costs accrued during the CP
Accrual Period then most recently ended with respect to any Asset
Tranche funded with Commercial Paper Notes during all or any portion of
such CP Accrual Period.
(ii) Servicer shall pay to the Administrator, for
the benefit of Transferee, the amount of such Earned Discount before
12:00 noon (Atlanta Georgia time) on the Settlement Date for such Yield
Period and the amount of such CP Costs before 12:00 noon (Atlanta,
Georgia time) on the Settlement Date for such CP Accrual Period.
(iii) On or before 12:00 noon (Atlanta, Georgia
time) on the Business Day before each Reporting Date, the
Administrator, on Transferee's behalf, shall notify Servicer of all
Broken Funding Costs, fees and other amounts accrued and payable by
Transferor under this Agreement during the prior calendar month, (other
than amounts described in subsections (i) and (ii) above and Section
3.01(c) below) and the Insurer will notify the Servicer and the
Administrator of all accrued and unpaid Insurance Obligations. Servicer
shall pay to the Administrator, for the benefit of Transferee and the
Insurer, the amount of such Broken Funding Costs, fees, Insurance
Obligations and other amounts on the next occurring Settlement Date for
CP Accrual Periods. All amounts so paid to the Administrator in respect
of Insurance Obligations shall be promptly remitted to the Insurer by
wire transfer of immediately available funds to the account specified
by
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the Insurer in writing to the Administrator, which notice shall be
provided at least 10 Business Days prior to the date such amounts are
to be remitted.
(iv) Payments required by this Section 3.01(b)
shall be made out of amounts set aside pursuant to Section 1.03;
provided, however, that to the extent amounts set aside pursuant to
Section 1.03 are insufficient to make such payments, the Servicer shall
make a Servicer Advance in the amount of such shortfall in accordance
with and subject to Section 8.06.
(c) Asset Interest Computations.
(i) On the Reporting Date for each Settlement
Period, 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 immediately preceding Cut-Off Date, (C) the
excess (if any) of the Asset Interest over 100%, and (D) the excess (if
any) of the Transferee's Total Investment over the Transfer Limit. Such
calculation shall be based upon the assumptions that (x) the
information in the Monthly Report is correct, and (y) Collections set
aside pursuant to Section 1.03 will be paid to the Administrator, for
the benefit of the Secured Parties, on the Settlement Date for such
Settlement Period.
(ii) On any date on which the Servicer is
required to deliver an Interim Report, Servicer shall compute, as of
the last day of the period covered by such Interim Report 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 immediately preceding Settlement Date, (C) the excess (if
any) of the Asset Interest over 100%, and (D) the excess (if any) of
the Transferee's Total Investment over the Transfer Limit. Such
calculation shall be based upon the assumptions that (x) the
information in the Interim Report is correct, and (y) Collections set
aside pursuant to Section 1.03 will be paid to the Administrator, for
the benefit of the Secured Parties, on the next occurring Settlement
Date.
(iii) If, according to the computations made
pursuant to clause (i) above, the Asset Interest exceeds 100% or the
Transferee's Total Investment exceeds the Transfer Limit, then on the
Settlement Date for such Settlement Period (or, during the Liquidation
Period, on such earlier date or dates as the Administrator shall
require), Servicer shall pay to the Administrator, for the benefit of
the Secured Parties, the amount necessary to reduce the Transferee's
Total Investment to the Transfer Limit or less, and the Asset Interest
to not more than 100%, subject, however, to the first proviso to
Section 1.03(a)(iv). In addition, if, according to the computations
made pursuant to clause (ii) above, the Asset Interest exceeds 100% or
the Transferee's Total Investment exceeds the Transfer Limit, then
within one Business Day of the delivery of such Interim
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Report, Servicer shall pay to the Administrator, for the benefit of the
Secured Parties, the amount necessary to reduce the Transferee's Total
Investment to the Transfer Limit or less and the Asset Interest to not
more than 100%, subject, however, to the first proviso to Section
1.03(a)(iv). Payments required pursuant to this Section 3.01(c)(iii)
shall be made out of amounts set aside pursuant to Section 1.03 for
such purpose and, to the extent such amounts were not so set aside, the
Transferor hereby agrees to pay such amounts to the Servicer to the
extent of Collections applied to Reinvestment under Section 1.03 during
the relevant Settlement Period; provided, that if the Insurer makes any
payment under the Insurance Policy, then until all Insurance
Obligations have been paid in full, from and after the Final Collection
Date (as defined in the Insurance Policy), all Recoveries and other
amounts set aside pursuant to Section 1.03 shall be paid directly to
the Insurer by wire transfer of immediately available funds to the
account specified by the Insurer in writing, which notice shall be
provided at least 10 Business Days prior to the date such amounts are
to be remitted.
(d) Order of Application.
(i) Prior to the Termination Date. On each
Settlement Date prior to the Termination Date the Administrator, on
behalf of the Secured Parties, shall apply the funds received by the
Administrator pursuant to Section 1.03 and this Section 3.01 to the
items specified in the subclauses below, in the order of priority of
such subclauses:
(A) to the Servicer, the amount of any
Servicer Advance made during the CP Accrual Period or Yield
Period (as applicable) for such Settlement Date, to the extent
provided in Section 8.06.
(B) to Earned Discount, CP Costs and
Broken Funding Costs accrued during the Settlement Period for
such Settlement Date, plus any previously accrued Earned
Discount, CP Costs and Broken Funding Costs not paid;
(C) to the accrued and unpaid
Servicer's Fee (if Servicer is not Transferor or its
Affiliate);
(D) to the Program Fee and the Unused
Fee accrued during the Settlement Period for such Settlement
Date, plus any previously accrued Program Fee and the Unused
Fee not paid;
(E) to other accrued and unpaid amounts
owing to Transferee, the Administrator and the other Secured
Parties (other than the Insurer) hereunder (except Earned
Discount on any Asset Tranche funded by a Liquidity Funding
which has accrued but is not yet due under Section
3.01(b)(ii));
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(F) to the purchase price of each
Reinvestment made in accordance with Section 1.03(a);
(G) to the reduction of Transferee's
Total Investment until the Final Collection Date (as defined
in the Insurance Policy), to the extent such reduction is
required under Section 3.01(c);
(H) to the Insurer for payment of any
accrued and unpaid premiums, unutilized charges and fees owed
to the Insurer and payable pursuant to Section 8.01 or 9.03 of
the Insurance Policy;
(I) to the accrued and unpaid
Servicer's Fee (if Servicer is Transferor or its Affiliate);
and
(J) the balance, if any, to Transferor.
(ii) On and After the Termination Date. On and
after the Termination Date, the Administrator shall apply all amounts
received by it pursuant to Section 1.03 and this Section 3.01 (other
than the Insurer's Share of all Recoveries) to the reduction of the
Transferee's Total Investment and the payment of the Insurance
Obligations and any other amounts owed hereunder to Transferee or its
assigns and the other Secured Parties in the following order of
priority:
(A) to the Servicer, the amount of any
Servicer Advance previously made and unpaid to such date;
(B) to Earned Discount, CP Costs and
Broken Funding Costs accrued to such date, plus any previously
accrued Earned Discount, CP Costs and Broken Funding Costs not
paid;
(C) to the accrued and unpaid
Servicer's Fee (if Servicer is not Transferor or its
Affiliate);
(D) to the Program Fee and the Unused
Fee accrued to such date, plus any previously accrued Program
Fee and the Unused Fee not paid;
(E) to other accrued and unpaid amounts
owing to Transferee, the Administrator and the other Secured
Parties (other than the Insurer) hereunder;
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(F) until the Final Collection Date (as
defined in the Insurance Policy), to the reduction of that
portion of Transferee's Total Investment funded by Liquidity
Fundings;
(G) until the Final Collection Date (as
defined in the Insurance Policy), to the reduction of that
portion of Transferee's Total Investment funded by Commercial
Paper Notes;
(H) to the Insurer for payment of any
accrued and unpaid Insurance Obligations;
(I) to the accrued and unpaid
Servicer's Fee (if Servicer is Transferor or its Affiliate);
and
(J) the balance, if any, to Transferor;
provided, however, that (i) amounts received by the Administrator pursuant to
Section 1.03 and this Section 3.01 which constitute the Insurer's Share of
Recoveries of a particular Obligor shall be remitted to the Insurer by wire
transfer of immediately available funds to the account specified by the Insurer
in writing to the Administrator, which notice shall be provided at least 10
Business Days prior to the date such amounts are to be remitted, and (ii)
following the occurrence of the Final Collection Date (as defined in the
Insurance Policy), if the Insurer has made any payment under the Insurance
Policy, all other amounts received by the Administrator up to the amount of the
Insurance Obligation shall be remitted to the Insurer by wire transfer of
immediately available funds to the account specified by the Insurer in writing
to the Administrator, which notice shall be provided at least 10 Business Days
prior to the date such amounts are to be remitted.
(e) Non-Distribution of Servicer's Fee. The Administrator
hereby consents (which consent may be revoked at any time after the occurrence
and during the continuance of a Liquidation Event), to the retention by the
Servicer of the amounts (if any) set aside pursuant to Section 1.03 in respect
of the Servicer's Fee, in which case no distribution shall be made in respect of
Servicer's Fee pursuant to Section 3.01(d).
(f) Delayed Payment. If on any day described in this
Section 3.01, because Collections during the Yield Period or CP Accrual Period
were less than the aggregate amounts payable, 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 3.02 Deemed Collections; Reduction of Transferee'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, incorrect ▇▇▇▇▇▇▇▇, price rollbacks, freight
charge discrepancies or any other adjustment by any
Transaction Party, any Originator 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), or
(C) reduced on account of the
obligation of any Transaction Party, any Originator 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 Monthly
Report (for any reason other than such Receivable becoming a
Defaulted Receivable or Collections being applied to such
Unpaid Balance), or
(ii) any of the representations or warranties of
Transferor set forth in Section 6.01(k) or 6.01(o) were not true when
made with respect to any Pool Receivable, or any of the representations
or warranties of Transferor set forth in Section 6.01(k) or 6.01(o) are
no longer true with respect to any Pool Receivable, or any Pool
Receivable is repurchased by any Originator pursuant to the Sale
Agreement,
then, on such day, Transferor shall be deemed to have received a Collection of
such Pool Receivable:
(x) 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
(y) in the case of clause (ii) above, in the
amount of the Unpaid Balance of such Pool Receivable.
Collections deemed received by Transferor under this Section 3.02(a) are herein
referred to as "Deemed Collections".
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(b) Transferor's Optional Reduction of Transferee's Total
Investment. Subject to subsection (iii) below, Transferor may at any time elect
to reduce the Transferee's Total Investment as follows:
(i) Partial Reductions. If Transferor elects to
reduce the Transferee's Total Investment in part, but not to zero:
(A) Transferor shall give the
Administrator, on Transferee's behalf, at least five (5)
Business Days' prior written notice of such reduction
(including the amount of such proposed reduction and the
proposed date on which such reduction will commence),
(B) the amount of any such reduction
shall be in an amount of $1,000,000 or an integral multiple
thereof,
(C) on the proposed date of
commencement of such reduction and on each day thereafter,
Servicer shall refrain from reinvesting Collections pursuant
to Section 1.03 until the amount thereof not so reinvested
shall equal the desired amount of reduction,
(D) Servicer shall hold such
Collections in trust for Transferee, pending payment to the
Administrator, as provided in Section 1.03, and
(E) after giving effect to such
reduction, Transferee's Total Investment will be at least
equal to $25,000,000.
(ii) Reduction to Zero. If Transferor shall elect
to reduce the Transferee's Total Investment to zero:
(A) Transferor shall give the
Administrator at least 30 days prior written notice of such
reduction, specifying the proposed date on which such
reduction will occur, and
(B) Transferee (and any Liquidity Bank
to the extent any part of the Asset Interest has been assigned
to such Liquidity Bank) shall reassign and reconvey to
Transferor the Asset Interest and Transferor shall pay to
Transferee (or such Liquidity Bank, as applicable) in
consideration thereof, a transfer price equal to the sum of
(i) the then outstanding Transferee's Total Investment, (ii)
all accrued and unpaid CP Costs, Earned Discount, all amounts
owed under the Fee Letter, and all other amounts owed
hereunder (whether or not due or accrued), in each case,
through the date of such reassignment and reconveyance and
payable in immediately available funds. Such reassignment and
reconveyance shall be
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without representation, warranty or recourse of any kind, by,
on the part of, or against the Administrator, Transferee or
any assignee of Transferee. Upon payment of the transfer price
in accordance with this Section 3.02(b)(ii), the interest of
the Administrator, Transferee and, to the extent applicable,
each Liquidity Bank in the Pool Receivables and Related Assets
shall be deemed reassigned and reconveyed to Transferor and,
the Administrator shall execute all agreements and other
documents reasonably requested by Transferor in order to
evidence such reassignment and reconveyance. Notwithstanding
the foregoing, Transferor shall remain liable for all
obligations hereunder which survive termination of this
Agreement.
(iii) Conditions to Reduction. Any reduction of
the Transferee's Total Investment pursuant to this Section 3.02(b)
shall be subject to the following conditions precedent:
(A) Transferor 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 Settlement Period, and
(B) Transferor shall pay all amounts required to
be paid by Transferor pursuant to Section 4.03 in connection
with such reduction.
SECTION 3.03 Payments and Computations, Etc.
(a) Payments. All amounts to be paid or deposited by
Transferor or Servicer to the Administrator or any other Person hereunder (other
than amounts payable under Section 4.02) 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 Administrator in care of Wachovia Bank, N.A., ABA
#▇▇▇▇▇▇▇▇▇, Account #8735-098787, for credit: Blue Ridge Asset Funding
Corporation, Reference: WestPoint ▇▇▇▇▇▇▇ Inc., Attention: ▇▇▇▇ ▇▇▇▇▇▇ (336)
735-6097, or to such other account at the bank named therein or at such other
bank as the Administrator on behalf of the Secured Parties may designate by
written notice to the Person making such payment.
(b) Late Payments. Transferor or 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 equal to the
Default 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, CP Costs, Broken Funding Costs and any fees payable under
Section 4.01 and any other fees payable by Transferor to Transferee or the
Administrator 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.
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SECTION 3.04 Treatment of Collections and Deemed Collections.
Transferor shall forthwith deliver to Servicer all Deemed Collections, and
Servicer shall hold or distribute such Deemed Collections as CP Costs, Earned
Discount, accrued Servicer's Fee, repayment of Transferee'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
Servicer. If Collections are then being paid to the Administrator, on
Transferee's behalf, or its designee, or lock-boxes or accounts directly or
indirectly owned or controlled by the Administrator, Servicer shall forthwith
cause such Deemed Collections to be paid to the Administrator, on Transferee's
behalf, or its designee or to such lock-boxes or accounts, as applicable, or as
the Administrator shall request. So long as Transferor shall hold any
Collections (including Deemed Collections) required to be paid to Servicer or
the Administrator, it shall segregate such Collections and hold such Collections
in trust and shall clearly ▇▇▇▇ its records to reflect such trust.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01 Fees. Transferor shall pay to Transferee certain fees from
time to time in amounts and payable on such dates as are set forth in the letter
dated October 31, 2001 (as amended from time to time, the "Fee Letter") between
Transferor and the Administrator.
SECTION 4.02 Yield Protection.
(a) If any Regulatory Change occurring after the Original
Closing Date:
(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 Transfers or Reinvestments or to provide funding
therefor, or shall change the basis of taxation of payments to
such Affected Party of any Transferee's Total Investment, CP
Costs 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 Transfers 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, in each case, imposed by any
jurisdiction in which the overall net income of such Affected
Party is subject to taxation on the date hereof or the date on
which such Affected Party becomes a party hereto or acquires
an interest hereunder, as applicable 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
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Board, but excluding any reserve included in the determination
of Earned Discount), special deposit, insurance assessment or
similar requirement against any Affected Party in respect of
the assets which are of the type constituting the Asset
Interest, 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 in respect of its assets
which are of the type constituting the Asset Interest; 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 Transfers or Reinvestments or to provide funding
therefor;
and the result of any of the foregoing is or would be
(x) to increase the cost to, or to
impose a cost on, (1) an Affected Party funding or making or
maintaining any Transfers 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 Administrator for
continuing its or Transferor's relationship with Transferee, in each
case, in an amount deemed to be material by such Affected Party,
(y) to reduce the amount of any sum
received or receivable by an Affected Party under this Agreement or
under the Liquidity Agreement, or
(z) 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 obligations hereunder or arising
in connection herewith to a level below that which such Affected Party
could otherwise have achieved,
then, within thirty (30) days after demand by such Affected Party (which demand
shall be accompanied by a certificate setting forth, in such reasonable detail
as shall reasonably be requested by Transferor, the basis of such demand and the
methodology for calculating, and the calculation of, the amounts claimed by the
Affected Party), Transferor 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.
(b) Each Affected Party will promptly notify Transferor
and the Administrator 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
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this Section 4.02. No failure to give or delay in giving such notification
shall adversely affect the rights of any Affected Party to such compensation;
provided that Transferor shall not be required to compensate any Affected Party
pursuant to this Section 4.02 for any increased costs or reductions incurred
more than 60 days prior to the date that such Affected Party notifies Transferor
of the Regulatory Change giving rise to such increased costs or reductions and
of such Affected Party's intention to claim compensation therefor; provided
further that, if the Regulatory Change giving rise to such increased costs or
reductions is retroactive, then the 60-day period referred to above shall be
extended to include the period of retroactive effect thereof.
(c) In determining any amount provided for or referred to
in this Section 4.02, 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 4.02 shall submit to Transferor the
above-referenced certificate as to such additional or 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
Transferor.
(d) If any Affected Party requests compensation under
this Section 4.02, then such Affected Party, to the extent applicable, shall use
reasonable efforts to designate a different lending office for funding its
portion of the Asset Interest if, in the judgement of such Affected Party, such
designation (i) would eliminate or reduce amounts payable pursuant to this
Section 4.02 in the future and (ii) would not subject such Affected Party to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Affected Party. Transferor hereby agrees to pay all reasonable costs and
expenses incurred by any Affected Party in connection with any such designation.
SECTION 4.03 Funding Losses. (a) In the event that Transferee or any
Liquidity Bank shall actually incur any Broken Funding Costs, then, upon written
notice from the Administrator to Transferor and Servicer, Transferor shall pay
to Servicer, and Servicer shall pay to the Administrator for the account of
Transferee or such Liquidity Bank (as applicable), the amount of such Broken
Funding Costs. 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 Transferor and Servicer.
(b) In the event Transferor shall be required to pay any
Broken Funding Costs in connection with any required reduction of the
Transferee's Total Investment or the Asset Interest pursuant to the terms
hereof, Transferor may, in lieu of paying such Broken Funding Costs, deposit an
amount (the "Defeasance Amount") equal to the amount necessary to reduce the
Transferee's Total Investment and the Asset Interest to the level otherwise
required hereunder to an account in the name of the Administrator, maintained at
Wachovia (the "Collateral Account"). The Administrator shall invest the proceeds
in the Collateral Account in one or more Permitted Investments if so directed by
Transferor by written notice to the Administrator, which Permitted Investments
shall have a maturity approximating the time period until the end of the
applicable CP Accrual Period or Yield Period relating to the Asset Tranche
required to be reduced. The sole use of the principal of each Permitted
Investment shall be to satisfy in full the
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Transferee's Total Investment, CP Costs and Earned Discount that will be owing
at the conclusion of the applicable CP Accrual Period or Yield Period, and
Transferor is entitled only to such interest as may be generated by the
Permitted Investments. In addition, (i) the Administrator will select and
purchase each Permitted Investment at the price offered to it in the usual
course of its business; (ii) Transferor shall not be entitled to interest for
any period of time for which the Administrator is unable to invest a Defeasance
Amount in a Permitted Investment; (iii) the Administrator makes no
representation with respect to the nominal or real rate of return associated
with any Permitted Investment to be purchased hereunder; (iv) Transferor shall
bear all risks relating to the real return that each Permitted Investment may
generate; (iv) Transferor may not require the Administrator to sell any
Permitted Investment prior to its date of maturity; (v) the Administrator shall
not make any payments of interest to Transferor prior to the termination of the
applicable CP Accrual Period or Yield Period; and (vi) Transferor shall be
responsible for the payment of all taxes associated with the interest payable on
each Permitted Investment.
ARTICLE V
CONDITIONS OF TRANSFERS
SECTION 5.01 Conditions Precedent to Effectiveness of this Agreement.
The effectiveness of this Agreement is subject to the conditions precedent that,
on or before the date hereof: (i) the Administrator and the Insurer,
respectively, shall have received the Bank Agent's Structuring Fee and the
Insurance Agent's Structuring Fee (each as defined in the New Mandate Letter),
respectively, (ii) the Administrator shall have received all fees required to be
paid by the Transferor on or before the date hereof pursuant to the Fee Letter,
(iii) the Administrator and the Insurer, respectively, shall have been
reimbursed for all costs and expenses incurred by the Administrator or the
Insurer, respectively, in connection with the preparation, execution and
delivery of this Agreement and the Insurance Policy, including the fees and
expenses of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), counsel to the
Administrator and Sidley, Austin, ▇▇▇▇▇ & Wood, counsel to the Insurer, (iv) the
Transferor shall have deposited with the Insurer an amount equal to the Run-Off
Premium Deposit as defined in, and in accordance with the terms of, the
Insurance Policy, and (v) the Administrator shall have received the following,
each dated as of the date hereof (unless otherwise indicated) and in form and
substance reasonably satisfactory to the Administrator:
(a) Executed counterparts to this Agreement, duly
executed by each of the parties hereto;
(b) The Sale Agreement, duly executed by the parties
thereto and a copy of each document delivered pursuant to Section 4.1 thereof;
(c) A certificate of the Secretary or Assistant Secretary
of WestPoint certifying (i) that there have been no changes to its Certificate
of Incorporation since December 18, 1998, or if there have been any changes, a
copy of such Certificate duly certified by the Secretary of State of Delaware as
of a recent date acceptable to the Administrator, (ii) that there have been no
changes to its by-laws since
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December 18, 1998, or if there have been any changes, a copy of such by-laws,
(iii) the names and true signatures of the officers of WestPoint authorized on
its behalf to sign this Agreement and the other Transaction Documents to be
delivered by it hereunder (on which certificate the Administrator and Transferee
may conclusively rely until such time as the Administrator, on Transferee's
behalf, shall receive from WestPoint a revised certificate meeting the
requirements of this subsection (c)(iii)) and (iv) a copy of the resolutions of
the Board of Directors of WestPoint approving the Transaction Documents to be
delivered by it and the transactions contemplated hereby and thereby;
(d) A certificate of the Secretary or Assistant Secretary
of Transferor certifying (i) that there have been no changes to its Certificate
of Incorporation since December 18, 1998, (ii) that there have been no changes
to its by-laws since December 18, 1998, (iii) the names and true signatures of
the officers of Transferor authorized on its behalf to sign this Agreement and
the other Transaction Documents to be delivered by it hereunder (on which
certificate the Administrator and Transferee may conclusively rely until such
time as the Administrator, on Transferee's behalf, shall receive from Transferor
a revised certificate meeting the requirements of this subsection (d)(iii)) and
(iv) a copy of the resolutions of the Board of Directors of Transferor approving
the Transaction Documents to be delivered by it and the transactions
contemplated hereby and thereby;
(e) Copies of good standing certificates for each
Transaction Party, issued as of a recent date acceptable to the Administrator by
the Secretaries of State of the state of incorporation of such Transaction Party
and the state where such Transaction Party's principal place of business is
located;
(f) (i) Proper financing statements (Form UCC-1), in such
form as the Administrator, on Transferee's behalf, may reasonably request,
naming each Originator as the debtor and seller of the Pool Receivables
originated by it and Related Assets, Transferor as the secured party and
purchaser thereof and Transferee as assignee, duly executed by each party and
(ii) proper financing statements (Form UCC-1), in such form as the
Administrator, on Transferee's behalf, may reasonably request, naming Transferor
as the debtor and transferor of an undivided percentage interest in the Pool
Receivables and Related Assets and the Administrator, on behalf of the Secured
Parties, as the secured party and transferee thereof, duly executed by each
party, or other, similar instruments or documents, as may be necessary or, in
the opinion of the Administrator, desirable under the UCC or any comparable law
of all appropriate jurisdictions to perfect or continue the perfection of the
sale by the Originators to Transferor of, and Transferee's undivided percentage
interest in, the Pool Receivables and Related Assets;
(g) Search reports from a Person satisfactory to the
Administrator (i) listing all effective financing statements that name any
Transaction Party and any Originator as debtor and that are filed in the
jurisdictions in which filings were made pursuant to Section 5.01(f) and in such
other jurisdictions that the Administrator shall reasonably request, together
with copies of such financing statements (none of which, except for any of the
financing statements described in Section 5.01(f) shall cover any Pool
Receivables or Related Assets), and (ii) listing all tax liens and judgment
liens (if any) filed against any debtor referred to in clause (i) above in the
jurisdictions described therein and showing no evidence of such liens;
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(h) A copy of the Subordinated Note, duly executed by
Transferor;
(i) Favorable opinions of _________, special New York
counsel to the Transaction Parties and the Originators, in substantially the
form of Exhibit 5.01(i);
(j) A favorable opinion of _________, special New York
counsel to the Transaction Parties and the Originators, as to:
(i) the existence of a "true sale" of the Pool
Receivables from the Originators to Transferor under the Sale
Agreement; and
(ii) the inapplicability of the doctrine of
substantive consolidation to Transferor and WestPoint in connection
with any bankruptcy proceeding involving any Transaction Party;
(k) A pro forma Monthly Report, prepared as of July 31,
2001;
(l) An executed copy of the Fee Letter;
(m) An executed copy of the Insurance Policy;
(n) Confirmation from each of S&P and ▇▇▇▇▇'▇ that the
execution and delivery of this Agreement, the Insurance Policy and the other
Transaction Documents and the consummation of the transactions contemplated
thereby will not result in the downgrade or withdrawal of their respective
ratings of the Commercial Paper Notes;
(o) Executed copies of any third-party consents or
releases (including, without limitation, any UCC-3 termination statements)
necessary or in the Administrator's discretion advisable in connection with any
Transaction Party's or any Originator's execution, delivery and performance of
any Transaction Document to which it is a party; and
(p) Such other agreements, instruments, certificates,
opinions and other documents as the Administrator may reasonably request.
SECTION 5.02 Conditions Precedent to All Transfers and Reinvestments.
Each Transfer (including the initial Transfer) and each Reinvestment shall be
subject to the further conditions precedent that on the date of such Transfer or
Reinvestment the following statements shall be true (and Transferor, by
accepting the proceeds of such Transfer or by receiving the proceeds of such
Reinvestment, and each other Transaction Party, upon such acceptance or receipt
by Transferor, shall be deemed to have certified that):
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(a) the representations and warranties contained in
Section 6.01 are correct 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 Transfer or Reinvestment, that constitutes a Liquidation Event
or Unmatured Liquidation Event,
(c) after giving effect to each proposed Transfer or
Reinvestment, the Transferee's Total Investment will not exceed the Transfer
Limit and the Asset Interest will not exceed 100%;
(d) the Termination Date shall not have occurred,
(e) in the case of a Transfer, the Administrator shall
have timely received an appropriate notice of the proposed Transfer in
accordance with Section 1.02(a), and
(f) the Administrator shall have received such other
documents as it may have reasonably requested in accordance with Section
7.02(k);
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
Transfer on any day which does not cause the Transferee's Total Investment,
after giving effect to such Reinvestment or Transfer, to exceed the Transferee's
Total Investment as of the opening of business on such day.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01 Representations and Warranties of Transaction Parties.
Each Transaction Party represents and warrants as to itself, as of the date
hereof and as of each day throughout the term of this Agreement, as follows:
(a) Organization and Good Standing; Ownership. Each
Transaction Party has been duly organized and is validly existing as a
corporation in good standing under the laws of the state of its incorporation,
with the corporate power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted. Transferor 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.
(b) Due Qualification. Each Transaction Party 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 could not reasonably be expected to
have a Material Adverse Effect.
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(c) Power and Authority; Due Authorization. Each
Transaction Party (i) has all necessary corporate power, authority and legal
right (A) to execute and deliver this Agreement and the other Transaction
Documents to which it is a party and to perform its obligations hereunder and
thereunder, (B) in the case of Servicer, to service the Receivables and the
Related Assets in accordance with the Credit and Collection Policy, this
Agreement and the Sale Agreement, and (C) in the case of Transferor, to
transfer, assign and convey the Asset Interest on the terms and conditions
herein provided, (ii) has duly authorized by all necessary corporate action the
execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party and, in the case of Transferor, the sales and
assignments described in clause (i)(C) above and (iii) has duly executed and
delivered this Agreement and each other Transaction Document to which such
Transaction Party is a party.
(d) Valid Sale; Binding Obligations. (i) This Agreement
constitutes a valid sale, transfer, and assignment of the Asset Interest (or a
valid grant of a security interest in the Receivables and Related Assets) to the
Administrator on Transferee's behalf, enforceable against creditors of, and
purchasers from, Transferor, and (ii) this Agreement and each other Transaction
Document signed by such Transaction Party constitutes, a legal, valid and
binding obligation of such Transaction Party, enforceable against such
Transaction Party 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 consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to which such
Transaction Party is a party and the fulfillment of the terms hereof and thereof
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, the articles or certificate of incorporation or by-laws of such
Transaction Party, or any indenture, loan agreement, receivables purchase
agreement, mortgage, deed of trust, or other agreement or instrument to which
such Transaction Party is a party or by which it or any of its properties is
bound, (ii) result in the creation or imposition of any Lien upon any of such
Transaction Party's properties pursuant to the terms of any such 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 such Transaction Party of any court or of any federal, state or foreign
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over such Transaction Party or any of its properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to such Transaction Party's knowledge, threatened,
before any court, regulatory body, arbitrator, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement or any other Transaction Document to which such Transaction Party is a
party, (ii) seeking to prevent the sale and assignment of the Receivables and
the related rights and other property with respect thereto under the Sale
Agreement or the Reconveyance Agreement or of the Asset Interest under this
Agreement
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or the consummation of any of the other transactions contemplated by this
Agreement or any other Transaction Document to which such Transaction Party is a
party or (iii) that could reasonably be expected to have a Material Adverse
Effect of the type described in clauses (ii), (iii), and (iv) of the definition
of "Material Adverse Effect." There are no proceedings or investigations pending
as of the date hereof, or, to such Transaction Party's knowledge, threatened as
of the date hereof, before any court, regulatory body, arbitrator,
administrative agency, or other tribunal or governmental instrumentality that
could reasonably be expected to have a Material Adverse Effect of the type
described in clause (i) of the definition of "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
such Transaction Party of this Agreement and each other Transaction Document to
which it is a party, except, in the case of Transferor, 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 8.05, all of which, at the time required in
Article V or Section 8.05, as applicable, shall have been duly made (except in
the case of any such UCC statement referred to in Article V, in which case such
UCC statement shall have been duly made within a reasonable time after the date
hereof) and shall be in full force and effect.
(i) Financial Condition. The consolidated balance sheets
of WestPoint and its consolidated Subsidiaries as at December 31, 1997, and the
related statements of income and shareholders' equity of WestPoint and its
consolidated Subsidiaries for the fiscal year then ended, certified by Ernst &
Young, LLP, independent certified public accountants, copies of which have been
furnished to the Administrator, fairly present in all material respects the
consolidated financial condition of WestPoint and its consolidated Subsidiaries
as at such date and the consolidated results of the operations of WestPoint and
its consolidated Subsidiaries for the period ended on such date, all in
accordance with GAAP consistently applied. As of the date hereof, there has been
no material adverse change in the financial condition, business or operations of
WestPoint and its consolidated Subsidiaries since the date of such financial
statements. On the date hereof, Transferor is, and on the date of each Transfer
and Reinvestment (both before and after giving effect to such Transfer or
Reinvestment), Transferor shall be solvent.
(j) Use of Proceeds. No funds obtained by such
Transaction Party under this Agreement or any other Transaction Document will be
used (i) for a purpose that violates or will conflict with or contravene any of
Regulations T, U and X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Securities and Exchange
Act of 1934, as amended.
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(k) Quality of Title.
(i) Each Pool Receivable, together with the
Related Assets, is owned by Transferor free and clear of any Lien
(other than any Lien arising solely as the result of any action taken
by Transferee (or any assignee thereof) or by the Administrator). When
the Administrator, on behalf of Transferee, makes a Transfer 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 and each Related Asset with respect thereto, free
and clear of any Lien (other than any Lien arising as the result of any
action taken by Transferee (or any assignee thereof) or by the
Administrator).
(ii) No currently effective financing statement
or other instrument similar in effect covering any Pool Receivable, any
interest therein or the Related Assets with respect thereto is on file
in any recording office except such as may be filed (1) in favor of the
Originators in accordance with any Contract, (2) in favor of Transferor
in connection with the Sale Agreement or (3) in favor of Transferee or
the Administrator in accordance with this Agreement or in connection
with any Lien arising solely as the result of any action taken by
Transferee (or any assignee thereof) or by the Administrator.
(l) Accuracy of Information. No information
heretofore or contemporaneously furnished in writing (if prepared by such
Transaction Party, or to the extent information therein was supplied by such
Transaction Party) by or on behalf of such Transaction Party to the
Administrator or the Transferee for purposes of, pursuant to, or in connection
with, this Agreement and any other Transaction Document or any transaction
contemplated hereby or thereby was, and no other such written information
furnished by such Transaction Party to the Administrator or Transferee will be,
inaccurate in any material respect as of the date it was furnished or (except as
otherwise disclosed to the Administrator or Transferee at such time) as of the
date as of which such information is dated or certified, or contained or will
contain any material misstatement of fact or omitted or will omit to state any
material fact necessary to make such information not materially misleading, in
light of the circumstances under which such information was furnished.
(m) Offices; Jurisdiction of Organization. The principal
places of business and chief executive offices of Servicer and Transferor are
located at the respective addresses set forth on Schedule 14.02, the offices
where Servicer and Transferor 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 6.01(m) and the jurisdiction of organization of each of
Servicer and Transferor is the State of Delaware (or at such other locations or
jurisdictions, notified to the Administrator, on Transferee's behalf, in
accordance with Section 7.01(f) or 7.01(j), as applicable, in jurisdictions
where all action required by Section 8.05 has been taken and completed).
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(n) Lock-Box Accounts and Concentration Account. The
names and addresses of all the Lock-Box Banks and the Concentration Bank,
together with the account numbers of the Lock-Box Accounts and the Concentration
Account at such Lock-Box Banks or Concentration Bank (as applicable), are
specified in Schedule 6.01(n) (or have been notified to and approved by the
Administrator, on Transferee's behalf, in accordance with Section 7.03(d)).
Transferor or the Servicer has instructed (or has caused the Originators to
instruct) all Obligors to pay all Collections directly to a segregated lock-box
identified on Schedule 6.01(n). All proceeds remitted to any such lock-box will
be deposited directly by the applicable Lock-Box Bank into a Lock-Box Account
and all such funds deposited to the Lock-Box Accounts will be transferred daily
to the Concentration Account. Each lock-box identified on Schedule 6.01(n) and
each Lock-Box Account is maintained in the name of Transferor and subject to a
Lock-Box/Collection Account Agreement that is in full force and effect and
exclusive dominion and control of each such lock-box and Lock-Box Account has
been transferred to Transferor. Transferor has not granted any Person, other
than the Administrator as contemplated by this Agreement, any currently
effective right of dominion and control of any such lock-box or Lock-Box Account
or the Concentration Account, or the right to take dominion and control of any
such lock-box or Lock-Box Account or the Concentration Account at a future time
or upon the occurrence of a future event. Each Transaction Party has and
maintains accounting, administrative and operating procedures that permit
identification of the Collections.
(o) Eligible Receivables. Each Receivable included in the
Net Pool Balance as an Eligible Receivable is an Eligible Receivable on such
date.
(p) [Intentionally Omitted].
(q) Compliance with Credit and Collection Policy. With
respect to each Pool Receivable, each of Transferor, Servicer and each
Originator has complied in all material respects with the Credit and Collection
Policy.
(r) Payments to Originators. With respect to each
Receivable transferred to Transferor by the Originators pursuant to the Sale
Agreement, Transferor has given reasonably equivalent value to each Originator
in consideration for the Receivables originated by it and the Related Assets
with respect thereto and such transfer was not made for or on account of
antecedent debt. No transfer by any Originator of any Receivable is or may be
voided under any section of the Bankruptcy Reform Act of 1978 (11
U.S.C.ss.ss.101 et. seq.), as amended.
(s) Required Asset Level. On each Settlement Date, after
giving effect to the payments made under Section 3.01(c), the Current Asset
Level is at least equal to the Required Asset Level. On each day other than a
Settlement Date, if the Current Asset Level is less than the Required Asset
Level, the Borrowing Availability is at least equal to $30,000,000.
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(t) Names. In the past five years, Transferor 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 Transferor. WestPoint owns, directly or
indirectly, 100% of the issued and outstanding capital stock of Transferor, free
and clear of any Lien (other than the lien created under (i) that certain Third
Amended and Restated Stock Pledge Agreement, dated as of March 26, 2001, by and
between WestPoint and Bank of America, N.A., as Trustee and (ii) that certain
Collateral Security Agreement, dated as of June 29, 2001, among WestPoint,
certain subsidiaries of WestPoint and Bankers Trust Company, as Administrative
Agent). Such capital stock is validly issued, fully paid and nonassessable, and
there are no options, warrants or other rights to acquire securities of
Transferor.
(v) Investment Company. Transferor 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. Such Transaction 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 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 Applicable Laws. Such Transaction
Party is in compliance, in all respects, with the requirements of all applicable
laws, rules, regulations, and orders of all governmental authorities (including,
without limitation, Regulation Z, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy and all other consumer
laws, if any, applicable to the Pool Receivables and related Contracts), except
where such noncompliance, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
ARTICLE VII
GENERAL COVENANTS OF TRANSACTION PARTIES
SECTION 7.01 Affirmative Covenants of Transaction Parties. From the
date hereof until the Final Payout Date, unless the Administrator and the
Insurer shall otherwise consent in writing:
(a) Compliance With Laws, Etc. Each Transaction Party
will comply with all applicable laws, rules, regulations and orders, including
those with respect to the Pool Receivables and related Contracts and other
agreements related thereto, except where the failure to so comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
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(b) Preservation of Corporate Existence. Each Transaction
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 could reasonably be expected to have a Material
Adverse Effect.
(c) Reviews. Each Transaction Party will at any time and
from time to time, at such Transaction Party's expense, upon not less than five
(5) Business Days' notice (unless a Liquidation Event has occurred and is
continuing (or the Insurer or the Administrator, reasonably believes in good
faith that a Liquidation Event has occurred and is continuing), in which case
one (1) Business Days' notice shall be required) during regular business hours,
permit the Administrator, or any of its agents or representatives, (i)(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 Transaction Party relating to Pool Receivables and the
Related Assets, including, without limitation, the Contracts and purchase orders
and other agreements related thereto, and (B) to visit the offices and
properties of such Transaction Party for the purpose of examining such materials
described the foregoing clause (A), and discussing matters relating to Pool
Receivables and the Related Assets or such Transaction Party's financial
condition, performance hereunder or under any other Transaction Document or
performance under any Contract, in each case, with any of the officers or
employees of such Transaction Party having knowledge of such matters; (ii) to
meet with the independent auditors of such Transaction Party to review with such
auditors the books and records of such Transaction 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
Transaction Party, permit certified public accountants or other auditors
acceptable to the Administrator to conduct a review of such Transaction Party's
books and records with respect to the Pool Receivables and Related Assets;
provided, that, so long as no Liquidation Event has occurred and is continuing,
(x) such reviews shall not be done more than four (4) times in any one calendar
year and (y) the Transaction Parties shall only be responsible for the costs and
expenses of (A) two such reviews during the calendar year 2001 and (B) one such
review in any other calendar year.
(d) Keeping of Records and Books of Account. 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 Transaction Party will, at its expense, timely and fully perform
and comply with all provisions, covenants and other promises required to be
observed by it under the Contracts and all other agreements related to the Pool
Receivables and the Related Assets, the breach of which provisions, covenants or
promises could reasonably be expected to have a Material Adverse Effect.
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(f) Location of Records. Each Transaction Party will keep
its principal place of business and chief executive office, and the offices
where it keeps its records concerning or related to the Pool Receivables at the
address(es) of Servicer and Transferor referred to in Section 6.01(m) or, upon
30 days' prior written notice to the Administrator, at such other locations in
jurisdictions where all action required by Section 8.05 shall have been taken
and completed.
(g) Credit and Collection Policies. Each Transaction
Party will comply in all material respects with the Credit and Collection Policy
in regard to each Pool Receivable and all related Contracts.
(h) Sale Agreement. Transferor will (i) perform and
comply with all of its covenants and agreements set forth in the Sale Agreement,
(ii) enforce the rights and remedies accorded to Transferor under the Sale
Agreement, and (iii) enforce the performance by the Originators of their
respective obligations under the Sale Agreement.
(i) Collections. The Servicer shall instruct (or shall
cause Transferor to instruct) all Obligors to pay all Collections directly to a
segregated lock-box identified on Schedule 6.01(n). Transferor shall cause (i)
all proceeds remitted to any such lock-box to be deposited directly by the
applicable Lock-Box Bank into a Lock-Box Account, (ii) all proceeds deposited to
any Lock-Box Account to be transferred daily to the Concentration Account, and
(iii) each such lock-box and Lock-Box Account to be maintained in its name and
to be subject at all times to a Lock-Box/Collection Account Agreement that is in
full force and effect. Transferor shall not grant any Person, other than the
Administrator as contemplated by Section 8.05 of this Agreement, dominion and
control of any such lock-box or Lock-Box Account or the Concentration Account,
or the right to take dominion and control of any such lock-box or Lock-Box
Account or the Concentration Account at a future time or upon the occurrence of
a future event. Transferor shall maintain accounting, administrative and
operating procedures that permit identification of the Collections.
(j) Ownership Interest of Transferor. Transferor shall
take all necessary action to vest legal and equitable title to the Receivables
and the Related Assets purchased under the Sale Agreement irrevocably in
Transferor, free and clear of any Liens other than Liens in favor of the
Administrator on behalf of Transferee and its assigns (including, without
limitation, the filing of all financing statements or other similar instruments
or documents necessary under the UCC of all appropriate jurisdictions (or any
comparable law) to perfect Transferor's interest in such Receivables and Related
Assets and such other action to perfect, protect or more fully evidence the
interest of Transferor as the Administrator may reasonably request).
(k) Ownership Interest of Transferee. Transferor shall
take all necessary action to establish and maintain, in favor of the
Administrator on behalf of Transferee, a valid and perfected first priority
undivided percentage ownership or security interest in all Pool Receivables and
the Related Assets to the full extent contemplated herein, free and clear of any
Liens other than Liens in favor of the
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Administrator on behalf of Transferee and its assigns (including, without
limitation, the filing of all financing statements or other similar instruments
or documents necessary under the UCC of all appropriate jurisdictions (or any
comparable law) to perfect the Administrator's and Transferee's interest in such
Pool Receivables and Related Assets and such other action to perfect, protect or
more fully evidence the interest of the Administrator and Transferee as
Transferee or the Administrator may reasonably request).
(l) Payments under Sale Agreement. With respect to each
Receivable purchased by Transferor from the Originators, such sale shall be
effected under, and in strict compliance with the terms of the Sale Agreement,
including, without limitation, the terms relating to the amount and timing of
payments to be made to the Originators in respect of the purchase price for such
Receivable.
(m) [Intentionally Omitted].
(n) Marking of Data Processing Reports. Transferor will
on or prior to December 24, 1998 (and shall deliver to the Administrator on or
before such date a certificate of an authorized officer certifying compliance
with this subsection (n)) place on its computer systems and records which store
information relating to and which evidence the Pool Receivables, and take all
steps reasonably necessary to ensure that there shall remain on such computer
systems and records the following legend (or the substantive equivalent
thereof): THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO WPS RECEIVABLES
CORPORATION PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED AS OF DECEMBER
18, 1998, AS AMENDED FROM TIME TO TIME, BETWEEN WESTPOINT ▇▇▇▇▇▇▇ INC. AND WPS
RECEIVABLES CORPORATION; AND AN OWNERSHIP AND SECURITY INTEREST IN THE
RECEIVABLES DESCRIBED HEREIN AND IN SUCH RECEIVABLES PURCHASE AGREEMENT HAS BEEN
GRANTED AND ASSIGNED TO WACHOVIA BANK, N.A., AS ADMINISTRATOR ON BEHALF OF BLUE
RIDGE ASSET FUNDING CORPORATION, PURSUANT TO AN ASSET INTEREST TRANSFER
AGREEMENT, DATED AS OF DECEMBER 18, 1998, AMONG WPS RECEIVABLES CORPORATION,
BLUE RIDGE ASSET FUNDING CORPORATION, AND WACHOVIA BANK, N.A., AS THE
ADMINISTRATOR.
SECTION 7.02 Reporting Requirements of Transaction Parties. From the
date hereof until the Final Payout Date, unless the Insurer and the
Administrator, on Transferee's behalf, shall otherwise consent in writing:
(a) Quarterly Financial Statements-WestPoint and
Transferor. Each of WestPoint (whether or not WestPoint is then acting as
Servicer hereunder) and Transferor will furnish to the Administrator and the
Insurer, as soon as available and in any event within 50 days after the end of
each of the first three quarters of each of its fiscal years, copies of its
consolidated balance sheets and related statements of income and statements of
cash flow, showing the financial condition of such Person 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,
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together with an officer's certificate in the form attached hereto as Exhibit B
executed by the controller, chief financial officer or treasurer of WestPoint or
Transferor, as applicable.
(b) Annual Financial Statements-WestPoint. WestPoint will
furnish to the Administrator and the Insurer (whether or not WestPoint is then
acting as Servicer hereunder) as soon as available and in any event within 95
days after the end of each fiscal year of WestPoint, copies of its consolidated
balance sheets and related statements of income and statements of cash flow,
showing the financial condition of WestPoint 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 Ernst & Young,
LLP or other independent public accountants of recognized national standing
reasonably acceptable to the Administrator 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 WestPoint on a consolidated basis (except
as noted therein) in accordance with GAAP consistently applied.
(c) Annual Financial Statements - Transferor. Transferor
will furnish to the Administrator and the Insurer as soon as available and in
any event within 95 days after the end of each fiscal year of Transferor, copies
of its unaudited balance sheets and related statements of income and statements
of cash flow, showing the financial condition of Transferor as of the close of
such fiscal year and the results of its operations, together with an officer's
certificate in the form attached hereto as Exhibit B, executed by the
controller, chief financial officer or treasurer of Transferor.
(d) Reports to Holders and Exchanges. In addition to the
reports required by subsections (a) and (b) above, promptly upon the
Administrator's or the Insurer's request, WestPoint will furnish to the
Administrator and the Insurer, copies of any reports specified in such request
which WestPoint sends to any of its securityholders, and any reports or
registration statements that WestPoint files with the Securities and Exchange
Commission or any national securities exchange other than registration
statements relating to employee benefit plans and to registrations of securities
for selling securities.
(e) ERISA. Promptly after the filing or receiving
thereof, each Transaction Party will furnish to the Administrator and the
Insurer, copies of all reports and notices with respect to any Reportable Event
defined in Article IV of ERISA which any Transaction Party files under ERISA
with the Internal Revenue Service, the Pension Benefit Guaranty Corporation or
the U.S. Department of Labor or which such Transaction Party receives from the
Pension Benefit Guaranty Corporation.
(f) 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 or any Unmatured Liquidation Event that is
not reasonably likely to be cured, each Transaction Party will furnish to the
Administrator and the Insurer, a written statement of the chief financial
officer, controller, treasurer, assistant treasurer or chief accounting officer
of such Transaction Party setting forth details of such event and the action
that such Transaction Party has taken or will take with respect thereto.
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(g) Litigation; Judgements. As soon as possible and in
any event within ten (10) Business Days of any Transaction Party's knowledge
thereof, such Transaction Party will furnish to the Administrator and the
Insurer, 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, (ii) any development in previously disclosed litigation which
development could reasonably be expected to have a Material Adverse Effect,
(iii) as to Servicer, the entry of one or more judgements or decrees against
Servicer for the payment of money in the aggregate amount of $10,000,000 or more
and which is not covered by insurance or as to which the insurance carrier has
denied its responsibility and (iv) as to Transferor the entry of any judgement
or decree against Transferor for the payment of money.
(h) Review of Receivables. As soon as available, each
Transaction Party will furnish to the Administrator and the Insurer copies of
all reports relating to audits or reviews of the Receivables or the credit and
collection policies or practices of Transferor or Servicer, whether prepared by
Transferor or Servicer or by an independent third party.
(i) Change in Business or Credit and Collection Policy.
At least ten (10) Business Days prior to its effective date, each Transaction
Party will furnish to the Administrator and the Insurer notice of (i) any
material change in the character of such Transaction Party's business, and (ii)
any material change in the Credit and Collection Policy.
(j) Ratings. Within one Business Day of obtaining
knowledge thereof, each Transaction Party will furnish to the Administrator and
the Insurer, notice of any downgrading or withdrawal of any rating of
WestPoint's senior secured debt by any rating agency.
(k) Other. Promptly, from time to time, each Transaction
Party will furnish to the Administrator and the Insurer such other information,
documents, records or reports respecting the Pool Receivables or the condition
or operations, financial or otherwise, of such Transaction Party as the
Administrator or the Insurer may from time to time reasonably request in order
to protect the interests of the Administrator and the other Secured Parties or
any Affected Party under or as contemplated by this Agreement.
SECTION 7.03 Negative Covenants of Transaction Parties. From the date
hereof until the Final Payout Date, without the prior written consent of the
Administrator and the Insurer:
(a) Sales, Liens, Etc. (i) No Transaction Party will,
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 and (ii) Servicer will not
assert any interest in the Pool Receivables, except as Servicer.
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(b) Extension or Amendment of Receivables. No Transaction
Party will, except as otherwise permitted in Section 8.02(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
materially adversely affects the collectibility of any Pool Receivable or the
Administrator's and Transferee's rights therein.
(c) Change in Business or Credit and Collection Policy.
No Transaction Party will make or permit to be made any change in the character
of its business or in the Credit and Collection Policy that would, in either
case, impair the collectibility of any significant portion of the Pool
Receivables or otherwise materially adversely affect the interests or remedies
of the Administrator or Transferee under this Agreement or any other Transaction
Document, unless with respect to any material change in accounting policies
relating to Receivables, such change is made in accordance with GAAP.
(d) Change in Payment Instructions to Obligors. No
Transaction Party will add or terminate any bank as a Lock-Box Bank or as the
Concentration Bank from those listed in Schedule 6.01(n) or make any change in
its instructions to Obligors regarding payments to be made to Transferor or
Servicer or payments to be made to any Lock-Box Bank or the Concentration
Account (except for a change in instructions solely for the purpose of directing
Obligors to make such payments to another existing Lock-Box Bank or
Concentration Bank), unless (i) the Administrator shall have received at least
ten (10) days' prior written notice of such addition, termination or change and
(ii) with respect to the addition of a new Lock-Box Account, Lock-Box Bank or
Concentration Account, the Administrator shall have received a duly executed
Lock-Box/Collection Account Agreement with each new Lock-Box Bank or
Concentration Bank.
(e) Deposits to Lock-Box Accounts and Concentration
Account. No Transaction Party will deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any Lock-Box Account or Concentration
Account, any cash or cash proceeds other than Collections of Pool Receivables.
(f) Changes to Other Documents. Transferor will not enter
into any amendment, waiver or modification of, or supplement to, the Sale
Agreement, the Transferor's Certificate of Incorporation or the Transferor's
By-laws.
(g) Issuances of Equity; Restricted Payments by
Transferor. Transferor will not (i) issue or otherwise transfer any of the
capital stock of Transferor to any Person other than WestPoint, (ii) purchase or
redeem any shares of the capital stock of Transferor, (iii) declare or pay any
dividends thereon (other than stock dividends), make any distribution to
stockholders or set aside any funds for any such purpose, except that Transferor
may declare or pay dividends or make distributions to its stockholders if, both
before and after giving effect to such payment, the Transferee's Total
Investment does not exceed the Transfer Limit, the Asset Interest does not
exceed 100% and Transferor's net worth (determined in accordance with GAAP) is
not less than $4,800,000 (iv) pay any principal amount of any Subordinated Note,
except that Transferor may pay all or a portion of such principal amount on the
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Settlement Date for any Settlement Period prior to the Liquidation Period, after
making any payment required to be made by Transferor on such Settlement Date in
accordance with Section 3.01(c)(iii), if after giving effect to such payment the
Transferee's Total Investment does not exceed the Transfer Limit and the Asset
Interest does not exceed 100% and Transferor's net worth (determined in
accordance with GAAP) is not less than $4,800,000.
(h) Transferor Indebtedness. Transferor 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 or in connection with any securitization of receivables, except (A)
indebtedness of Transferor to the Originators incurred in accordance with the
Sale Agreement, (B) indebtedness of Transferor to Transferee and its assigns
pursuant to the terms of this Agreement, (C) current accounts payable arising
under the Transaction Documents and not overdue and (D) 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 $4,500.
(i) Negative Pledges. No Transaction 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; Jurisdiction of Organization.
Transferor will not change its name, any trade name or corporate structure, or
its jurisdiction of organization or commence the use of any new trade name, and
WestPoint will not change its jurisdiction of organization, in each case, unless
Transferor or WestPoint (as applicable) has given the Administrator at least 30
days' prior written notice thereof and has taken all steps necessary to continue
the perfection of the Administrator's and Transferee's interest, including the
filing of amendments to the UCC financing statements filed pursuant to Section
5.01(f).
(k) Mergers, Consolidations, Dispositions and
Acquisitions.
(i) WestPoint 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) or sell,
transfer or otherwise assign (in one transaction or a series of
transactions) all or substantially all of WestPoint's assets (or
capital stock) to any other Person, except, in each case, as and to the
extent permitted under the Credit Agreement.
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(ii) Transferor 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), or sell,
transfer or otherwise assign (in one transaction or a series of
transactions) all or substantially all of Transferor's assets (or
capital stock) to any other Person other than the acquisition of the
Pool Receivables and Related Assets pursuant to the Sale Agreement and
the sale of an interest in the Pool Receivables and Related Assets
hereunder.
(l) Pool Receivables Not to be Evidenced by Promissory
Notes. No Transaction Party will take any action to cause or permit any Pool
Receivable to become evidenced by any "instrument" (as defined in the
applicable UCC) , except in connection with the collection of any such Pool
Receivable which is overdue provided that the original of such instrument is
delivered to the Administrator, duly endorsed.
(m) Required Asset Level. Transferor shall not permit the
Current Asset Level to be less than the Required Asset Level at any time when
the Borrowing Availability is less than $30,000,000.
SECTION 7.04 Separate Corporate Existence of Transferor. Each
Transaction Party hereby acknowledges that Transferee and the Administrator are
entering into the transactions contemplated hereby in reliance upon
Transferor's identity as a legal entity separate from WestPoint and its other
Affiliates. Therefore, each Transaction Party shall take all steps specifically
required by this Agreement or reasonably required by the Administrator to
continue Transferor's identity as a separate legal entity and to make it
apparent to third Persons that Transferor is an entity with assets and
liabilities distinct from those of its WestPoint and Affiliates, and is not a
division of WestPoint or any other Person. Without limiting the foregoing, each
Transaction Party will take such actions as shall be required in order that:
(i) Transferor 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 or transferring and servicing
of the Receivables Pool, and conducting such other activities as it
deems necessary or appropriate to carry out its primary activities;
(ii) Not less than one member of Transferor's
Board of Directors (the "Independent Director") shall be an individual
who is not at such time, and shall not have been at any time during the
preceding three years (and is not an associate, as defined below, of),
(x) a director, officer, employee or affiliate of WestPoint or any of
its subsidiaries or affiliates, or of any major creditor (as
hereinafter defined) thereof, or (y)
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the direct, indirect or beneficial owner at the time of such
individual's appointment as an Independent Director or at any time
thereafter while serving as an Independent Director, of common stock of
WestPoint, or (z) a relative of any person described in the foregoing
clauses (x) or (y). For purposes of this paragraph (ii), (A) the term
"major creditor" shall mean a financial institution to which WestPoint
or any of its subsidiaries or affiliates has outstanding indebtedness
for borrowed money in a sum sufficiently large as would reasonably be
expected to influence the judgment of the Independent Director
adversely to the interest of Transferor when its interests are adverse
to those of WestPoint or any of its subsidiaries or affiliates, (B) the
term "affiliate of a person" means a person that directly, or
indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person specified,
and (C) the term "associate," when used to indicate a relationship with
any person, means (1) a corporation or organization of which such
person is an officer, director or partner or is, directly or
indirectly, the beneficial owner of ten percent or more of any class of
equity securities, (2) any trust or other estate in which such person
serves as trustee or in a similar capacity, and (3) any spouse, parent,
sibling, child, niece, nephew or cousin of such person or any spouse of
any of the foregoing.
(iii) The certificate of incorporation of
Transferor shall provide that (a) at least one member of Transferor's
Board of Directors shall be an Independent Director, (b) Transferor
shall not, without the affirmative vote of 100% of the members of its
Board of Directors, institute proceedings to be adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consent to
reorganization or relief under any applicable federal or state law
relating to bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction
whether now or hereinafter in effect, or consent to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or similar
official) of Transferor or a substantial part of its property, or make
any assignment for the benefit of creditors, or admit in writing its
inability to pay its debts generally as they become due, or take
corporate action in furtherance of any such action, and (c) the
provisions described in clauses (a) and (b) of this paragraph (iii),
cannot be amended without the prior written consent of the Independent
Director;
(iv) The Independent Director shall not at any
time serve as a trustee in bankruptcy for Transferor or any Affiliate
thereof;
(v) Any employee, consultant or agent of
Transferor will be compensated from Transferor's funds for services
provided to Transferor. Transferor 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, which servicer will be fully compensated for its
services by payment
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of the Servicer's Fee, and certain organizational expenses in
connection with the formation of Transferor;
(vi) Transferor will contract with Servicer to
perform for Transferor all operations required on a daily basis to
service the Receivables Pool. Transferor will pay Servicer the
Servicer's Fee pursuant hereto. Transferor will not incur any material
indirect or overhead expenses for items shared with WestPoint (or any
other Affiliate thereof) which are not reflected in the Servicer's Fee.
To the extent, if any, that Transferor (or any other Affiliate
thereof) share items of expenses not reflected in the Servicer's 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 WestPoint shall pay all expenses
relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including, without limitation, legal, rating
agency and other fees;
(vii) Transferor's operating expenses will not be
paid by any other Transaction Party or other Affiliate of Transferor;
(viii) Transferor will have its own stationery;
(ix) The books of account, financial reports and
corporate records of Transferor will be maintained separately from
those of WestPoint and each other Affiliate of Transferor;
(x) Any financial statements of any Transaction
Party or Affiliate thereof which are consolidated to include Transferor
will contain detailed notes clearly stating that (A) all of
Transferor's assets are owned by Transferor, and (B) Transferor is a
separate corporate entity with its own separate creditors that will be
entitled to be satisfied out of Transferor's assets prior to any value
in Transferor becoming available to Transferor's equity holders; and
the accounting records and the published financial statements of
WestPoint or any of its Affiliates will clearly show (which, solely in
the case of published financial statements, may be by footnote) that,
for accounting purposes, the Pool Receivables and Related Assets have
been sold by the Originators to the Transferor;
(xi) Transferor's assets will be maintained in a
manner that facilitates their identification and segregation from those
of WestPoint and the other Affiliates;
(xii) Each Affiliate of Transferor will strictly
observe corporate formalities in its dealings with Transferor, and,
except as permitted pursuant to this
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Agreement with respect to Collections, funds or other assets of
Transferor will not be commingled with those of any of its Affiliates;
(xiii) No Affiliate of Transferor will maintain
joint bank accounts with Transferor or other depository accounts with
Transferor to which any such Affiliate (other than in its capacity as
the Servicer hereunder or under the Sale Agreement) has independent
access;
(xiv) No Affiliate of Transferor shall, directly
or indirectly, name Transferor or enter into any agreement to name
Transferor as a direct or contingent beneficiary or loss payee on any
insurance policy covering the property of any Affiliate of Transferor;
(xv) Each Affiliate of Transferor will maintain
arm's length relationships with Transferor, and each Affiliate of
Transferor that renders or otherwise furnishes services or merchandise
to Transferor will be compensated by Transferor at market rates for
such services or merchandise;
(xvi) No Affiliate of Transferor will be, nor will
it hold itself out to be, responsible for the debts of Transferor or
the decisions or actions in respect of the daily business and affairs
of Transferor. WestPoint and Transferor 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;
(xvii) Transferor 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 Transferor
will be continuously maintained as official records by Transferor; and
(xviii) Each of Transferor, 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; provided that, subject to
Section 8.03(a), Servicer may service the Pool Receivables in its own
name.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01 Designation of Servicer.
(a) WestPoint as Initial Servicer. The servicing,
administering and collection of the Pool Receivables shall be conducted by the
Person designated as Servicer hereunder from time to time in
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accordance with this Section 8.01. Until the Administrator, on Transferee's
behalf, gives to WestPoint a Successor Notice, WestPoint is hereby designated
as, and hereby agrees to perform the duties and obligations of, Servicer
pursuant to the terms hereof.
(b) Successor Notice: Servicer Transfer Events. Upon the
occurrence and during the continuance of a Liquidation Event, the Administrator
may (with the prior written consent of the Insurer, such consent not to be
unreasonably withheld), by written notice to WestPoint (a "Successor Notice"),
designate a new Servicer (a "Servicer Transfer Event"); provided that, unless
otherwise agreed by the Insurer, any such new Servicer shall have agreed to be
bound by the terms of the Insurance Policy. Upon WestPoint's receipt of a
Successor Notice, WestPoint agrees that it will terminate its activities as
Servicer hereunder in a manner that the Administrator believes will facilitate
the transition of the performance of such activities to the new Servicer, and
the Administrator (or its designee) shall assume each and all of WestPoint's
obligations to service and administer the Pool Receivables, on the terms and
subject to the conditions herein set forth, and WestPoint shall use its best
efforts to assist the Administrator (or its designee) in assuming such
obligations. Without limiting the foregoing, each of WestPoint and Transferor
agrees, at its expense, to use its best efforts to provide the new Servicer with
access (including, to the extent necessary licenses, sub-licenses and/or
assignments of contracts), whether or not at the offices and properties of
WestPoint, to all computer software (including its servicing software, NMC, and
its claims software, CHICOR), necessary or useful in collecting or billing
Receivables, solely for use in collecting and billing Pool Receivables.
(c) Subcontracts. Servicer may, without the prior consent
of the Administrator, subcontract with any other Person for servicing,
administering or collecting an immaterial amount of the Pool Receivables,
provided that Servicer shall remain liable for the performance of the duties and
obligations of Servicer pursuant to the terms hereof and such subservicing
arrangement may be terminated at the Administrator's request, on Transferee's
behalf, at anytime after a Successor Notice has been given.
SECTION 8.02 Duties of Servicer.
(a) Appointment; Duties in General. Each of Transferor,
Transferee, the Insurer and the Administrator hereby appoints the Servicer, as
from time to time designated pursuant to Section 8.01, as its agent to enforce
its rights and interests in and under the Pool Receivables, the Related Assets
and the related Contracts. 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. Servicer
shall segregate and set aside for the account of Transferor and the Secured
Parties their respective allocable shares of the Collections of Pool Receivables
in accordance with Section 1.03. If instructed by the Administrator, on
Transferee's behalf, after the occurrence of a Liquidation Event, Servicer shall
segregate and deposit into the
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Concentration Account, Transferee's and the Insurer's share of Collections of
Pool Receivables, on the second Business Day following receipt by 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, WestPoint, while it is Servicer, may, in accordance with the Credit
and Collection Policy, (i) extend the maturity or adjust the Unpaid Balance of
any Defaulted Receivable as WestPoint 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 3.02(a).
(d) Documents and Records. Each Transaction Party shall
deliver to Servicer, and Servicer shall hold in trust for Transferor and
Transferee 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 Transferor. Servicer shall in
accordance with Section 1.03, turn over to Transferor (i) that portion of
Collections of Pool Receivables representing Transferor's undivided percentage
interest therein and (ii) the Collections of any Receivable which is not a Pool
Receivable. Servicer, if other than WestPoint or any other Transaction Party or
Affiliate thereof, shall, as soon as practicable upon demand, deliver to
Transferor all documents, instruments and records in its possession that
evidence or relate to Receivables of Transferor other than Pool Receivables, and
copies of documents, instruments and records in its possession that evidence or
relate to Pool Receivables, whereupon Transferor shall hold such documents,
instruments and records in trust for the benefit of itself and Transferee in
accordance with their respective interests therein.
(f) Termination. Servicer's authorization under this
Agreement shall terminate upon the Final Payout Date.
(g) Power of Attorney. Transferor hereby grants to
Servicer an irrevocable power of attorney, with full power of substitution,
coupled with an interest, to take in the name of Transferor 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 Transferor or transmitted or
received by Transferee (whether or not from Transferor) in connection with any
Pool Receivable.
(h) Obligor Payments. Any payment by an Obligor in
respect of any indebtedness owed by it to an Originator or the Transferor shall,
except as otherwise specified by such Obligor or otherwise required by contract
or law, be applied as a Collection of any Pool Receivable of such Obligor
(starting with the oldest such Pool Receivable) to the extent of any amounts
then due and payable thereunder before being applied to any other receivable or
other obligation of such Obligor.
SECTION 8.03 Rights of the Administrator.
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(a) Notice to Obligors. At any time when a Liquidation
Event or a Servicer Transfer Event has occurred and is continuing, the
Administrator may notify the Obligors of Pool Receivables, or any of them, of
the ownership of the Asset Interest by Transferee.
(b) Notice to Lock-Box Banks and Concentration Bank. The
Administrator is hereby authorized, upon the occurrence of a Liquidation Event
or a Servicer Transfer Event, to give notice to the Lock-Box Banks as provided
in the Lock-Box/Collection Account Agreements, of the transfer to the
Administrator of dominion and control over the lock-boxes and related accounts
to which the Obligors of Pool Receivables make payments. Transferor and Servicer
hereby transfer to the Administrator, effective when the Administrator shall
give such notice, the exclusive dominion and control over such lock-boxes and
accounts, and shall take any further action that the Administrator may
reasonably request to effect such transfer.
(c) Rights on Servicer Transfer Event. At any time
following the designation of a Servicer other than WestPoint pursuant to Section
8.01:
(i) The Administrator may direct the Obligors of
Pool Receivables, or any of them, to pay all amounts payable under any
Pool Receivable directly to the Administrator or its designee.
(ii) Any Transaction Party shall, at the
Administrator's request and at such Transaction Party's expense, give
notice of Transferee's ownership and security interests in the Pool
Receivables to each Obligor of Pool Receivables pursuant to Section
8.03(a) and direct that payments be made directly to the Administrator
or its designee.
(iii) Each Transaction Party shall, at the
Administrator'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, the Related
Assets and the related Contracts, or which are otherwise necessary or
desirable to collect such Pool Receivables, and make the same available
to the successor Servicer at a place selected by the Administrator, and
(B) segregate all cash, checks and other instruments received by it
from time to time constituting Collections in a manner accept able to
the Administrator and promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments
of transfer, to the successor Servicer.
(iv) Each Transaction Party and Transferee hereby
authorizes the Administrator, on Transferee's behalf, and grants to the
Administrator an irrevocable power of attorney (which shall terminate
on the Final Payout Date), to take any and all steps in such
Transaction Party's name and on behalf of such Transaction Party and
Transferee which are necessary or desirable, in the determination of
the Administrator, to collect all amounts due under any and all Pool
Receivables, including, without limitation,
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endorsing any Transaction Party's name on checks and other instruments
representing Collections and enforcing such Pool Receivables and the
related Contracts.
SECTION 8.04 Responsibilities of Transaction Parties. Anything herein
to the contrary notwithstanding:
(a) Contracts. Each Transaction 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 Administrator or its designee of its rights hereunder shall not relieve any
Transaction Party from such obligations.
(b) Limitation of Liability. The Administrator and
Transferee 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
Transaction Party or any Originator or any Affiliate thereof.
SECTION 8.05 Further Action Evidencing Transfers and Reinvestments.
(a) Further Assurances. Each Transaction 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
Administrator or its designee may reasonably request in order to perfect,
protect or more fully evidence the Transfers hereunder and the resulting Asset
Interest, or to enable Transferee or the Administrator 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 Transaction Party will:
(i) upon the reasonable request of the
Administrator, 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; and
(ii) ▇▇▇▇ its computer systems and records which
store information relating to and which evidence such Pool Receivables
and related Contracts with a legend, acceptable to the Administrator,
evidencing that the Asset Interest has been sold in accordance with
this Agreement.
(b) Additional Financing Statements; Performance by
Administrator. Each Transaction Party hereby authorizes the Administrator, on
Transferee's behalf, or its designee to file a record or records, including
without limitation, 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 Transaction Party. If any Transaction Party fails to promptly execute
and deliver within 10 days to the Administrator, on Transferee's behalf,
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any record, financing statement or continuation statement or amendment thereto
or assignment thereof reasonably requested by the Administrator, each
Transaction Party hereby authorizes the Administrator to execute such instrument
on behalf of such Transaction Party. If any Transaction Party fails to perform
any of its agreements or obligations under this Agreement, the Administrator 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
Administrator or its designee incurred in connection therewith shall be payable
by the Transaction Parties as provided in Section 14.05.
(c) Continuation Statements; Opinion. Without limiting
the generality of Section 8.05(a), Transferor 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 5.01(f) or any
other financing statement filed pursuant to this Agreement (or the Original
Second Step Agreement) or in connection with any Transfer hereunder, if the
Final Payout Date shall not have occurred:
(i) 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
Administrator an opinion of the counsel for Transaction Parties, in
form and substance reasonably satisfactory to the Administrator,
confirming and updating the opinions delivered pursuant to Section
5.01(i) of this Agreement or Section 5.01(h) of the Original Second
Step Agreement (to the extent such opinion relates to the validity of
the security interest created hereunder) and Section 5.01(k) 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.
SECTION 8.06 Servicer Advances. If, on any day that any payment of CP
Costs, Earned Discount, Servicer's Fees, Fees and any other amounts payable
hereunder to the Administrator or the other Secured Parties (other than
Transferee's Total Investment) is required to be made, Transferor does not have
sufficient available funds to make any such payment (including from Collections
set aside pursuant to Section 1.03), the Servicer shall make an advance in an
amount up to the amount of such deficiency (any such advance, a "Servicer
Advance"). Notwithstanding the preceding sentence, the Servicer shall not be
required to make a Servicer Advance (i) if the Servicer determines (such
determination to be conclusive and binding) in good faith that such Servicer
Advance will not ultimately be recoverable from future collections on, or the
liquidation of, the Pool Receivables; provided, however, the Servicer shall
provide the Administrator on each relevant Reporting Date with an officer's
certificate describing the Servicer's reasons (in reasonable detail) for making
such determination), or (ii) in respect of any Receivable that becomes a
Defaulted Receivable. The Servicer will deposit any Servicer Advances into the
Concentration Account on or prior to 12:00 p.m. (Atlanta, Georgia time) on the
date necessary to make any payment required to be made under Section 3.01. All
Servicer Advances shall be made by wire transfer in immediately available funds.
The Servicer may recover any Servicer Advance that it has made from Collections
in accordance with Section 3.01.
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ARTICLE IX
SECURITY INTEREST
SECTION 9.01 Grant of Security Interest. To secure all obligations of
Transferor 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, Transferor hereby assigns and pledges to the Administrator and its
successors and assigns, for the benefit of the Secured Parties, and hereby
grants to the Administrator, for the benefit of the Secured Parties, a security
interest in, all of Transferor'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 Transferor
hereunder), (b) the Sale Agreement and the other Transaction Documents and (c)
all proceeds of any of the foregoing.
SECTION 9.02 Further Assurances. The provisions of Section 8.05 shall
apply to the security interest granted under Section 9.01 as well as to the
Transfers, Reinvestments and all the Asset Interests hereunder.
SECTION 9.03 Remedies. Upon the occurrence of a Liquidation Event, the
Administrator shall have, with respect to the collateral granted pursuant to
Section 9.01, and in addition to all other rights and remedies available to the
Administrator 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 10.01 Liquidation Events. The occurrence and continuation of
any of the following events shall be "Liquidation Events" hereunder:
(a) (i) Servicer (if any Transaction Party or Affiliate
thereof is Servicer) shall fail to perform or observe any term, covenant or
agreement that is an obligation of Servicer hereunder (other than as referred to
in clause (ii) below or in other paragraphs of this Section 10.01) and such
failure shall remain unremedied for five (5) Business Days or (ii) Servicer or
Transferor shall fail to make any payment or deposit to be made by it hereunder
when due in respect of CP Costs, Earned Discount or the Transferee's Total
Investment or interest accruing at the Default Rate, or any Transaction Party
shall fail to observe, perform or comply with Section 7.02 or (iii) Servicer or
Transferor shall fail to make any payment or deposit to be made by it hereunder
other than as described in the foregoing clause, (ii) and such failure shall
remain unremedied for three (3) Business Days; or (iv) any Insurance Obligations
shall not be paid when due; or
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(b) (i) Any representation or warranty made or deemed to
be made by any Transaction Party (or any of its officers) under this Agreement
(other than any representation or warranty set forth in Sections 6.01 (k) or
(l)) or any other Transaction Document or other information or report delivered
pursuant hereto or thereto shall prove to have been false or incorrect in any
material respect when made; or (ii) any representation or warranty made or
deemed to be made by any Transaction Party (or any of its officers) in Sections
6.01 (k) or (l) shall prove to have been false or incorrect in any material
respect when made and such inaccuracy remains unremedied for five (5) Business
Days; or
(c) Any Transaction Party shall fail to perform or
observe any term, covenant or agreement contained in this Agreement or any of
the other Transaction Documents (other than as described in Section 10.01(a)) on
its part to be performed or observed and any such failure shall remain
unremedied for five (5) Business Days; or
(d) WestPoint or any other Originator shall (1) 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
$10,000,000, when and as the same shall become due and payable or (2) fail to
observe or perform any term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any Indebtedness (including any
guaranty of such Indebtedness) if the effect of any failure referred to in this
clause (2) is to cause such Indebtedness to become due prior to its stated
maturity; or
(ii) Transferor shall (1) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness when and as the same shall become due and payable or (2)
fail to observe or perform any term, covenant, condition or agreement
contained in any agreement or instrument evidencing or governing any
Indebtedness (including any guaranty of such Indebtedness) if the
effect of any failure referred to in this clause (2) is to cause, or
permit the holder or holders of such Indebtedness or a trustee on its
or their behalf (with or without the giving of notice, the lapse of
time or both) to cause, such Indebtedness to become due prior to its
stated maturity; or
(e) An Event of Bankruptcy shall have occurred with
respect to Servicer, any Originator or any Transaction Party or any Subsidiary
of any of them; or
(f) The Dilution Ratio at any Cut-Off Date exceeds 3.75%;
or
(g) The Default Ratio at any Cut-Off Date exceeds 1.0%;
or
(h) The Delinquency Ratio at any Cut-Off Date exceeds
1.25%; or
(i) On any Settlement Date, after giving effect to the
payments made under Section 3.01(c), (i) the Asset Interest exceeds 100% or (ii)
sum of the Transferee's Total Investment exceeds the Transfer Limit and in each
case, such excess remains unremedied for three (3) Business Days; or
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(j) The Borrowing Availability shall equal less than
$30,000,000 at any time when the Current Asset Level is less than the Required
Asset Level; or
(k) Any Transaction Party is subject to a Change in
Control other than as permitted under the Credit Agreement; or
(l) 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 Pool 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 Pool Receivables or Related Assets; or
(m) the Servicer, any Originator or Transferor shall make
any material and adverse change in the policies as to origination of Receivables
or in the Credit and Collection Policy, except with the prior written consent of
the Administrator and the Insurer; or
(n) the Administrator, on behalf of Transferee, for any
reason, does not have a valid, perfected first priority interest in the Pool
Receivables and the Related Assets; or
(o) (i) a final judgment or judgments shall be rendered
against WestPoint or any other Originator for the payment of money with respect
to which an aggregate amount in excess of $10,000,000 is not covered by
insurance and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or properties of
WestPoint or such Originator to enforce any such judgment; or (ii) a final
judgment or judgments shall be rendered against Transferor for the payment of
money; or
(p) any of the following events or conditions, if such
event or condition could reasonably be expected to have a Material Adverse
Effect: (i) any "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets of any
Consolidated Party or any ERISA Affiliate in favor of the PBGC or a Plan; (ii)
an ERISA Event shall occur with respect to a Single Employer Plan, which is, in
the reasonable opinion of the Administrator, likely to result in the termination
of such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event shall occur
with respect to a Multiemployer Plan or Multiple Employer Plan, which is, in the
reasonable opinion of the Administrator, likely to result in (A) the termination
of such Plan for purposes of Title IV of ERISA, or (B) any Consolidated Party or
any ERISA Affiliate incurring liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or insolvency
or (within the meaning of Section 4245 of ERISA) such Plan; or (iv) any
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) or breach of fiduciary responsibility shall occur which may
subject any Consolidated Party or any ERISA Affiliate to any liability under
Section 406, 409, 502(i), or
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502(l) of ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any person against any such liability; or
(q) an Event of Default shall occur under the Sale
Agreement.
SECTION 10.02 Remedies.
(a) Optional Liquidation. Upon the occurrence of a
Liquidation Event (other than a Liquidation Event described in Section
10.01(e)), the Administrator shall, at the request, or may with the consent, of
Transferee, by notice to Transferor declare the Termination Date to have
occurred and the Liquidation Period to have commenced.
(b) Automatic Liquidation. Upon the occurrence of a
Liquidation Event described in Section 10.01(e), the Termination Date shall
occur and the Liquidation Period shall commence automatically.
(c) Additional Remedies. Upon any Termination Date
pursuant to this Section 10.02, no Transfers or Reinvestments thereafter will be
made, and the Administrator, the Transferee 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.
ARTICLE XI
THE ADMINISTRATOR
SECTION 11.01 Authorization and Action. Pursuant to agreements entered
into with the Administrator, Transferee has appointed and authorized, and the
Insurer hereby appoints and authorizes, the Administrator (or its designees) to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Transaction Documents as are delegated to the
Administrator by the terms hereof, together with such powers as are reasonably
incidental thereto. Without limiting the foregoing or any other provision of
this Article XI, the Insurer acknowledges and agrees that the Administrator
shall act as agent of the Insurer solely for the purpose of holding the lien
granted hereunder for the benefit of the Insurer as well as the other Secured
Parties and for the purpose of collecting and distributing to the Insurer
payments to which the Insurer is entitled hereunder, all in accordance with the
terms hereof. The Insurer agrees that the Administrator has no fiduciary
obligation to the Insurer, whether arising by contract, in tort or otherwise and
the Insurer hereby waives any right that it may now have or hereafter acquire to
make any claim against the Administrator on the basis of any such fiduciary
obligation.
SECTION 11.02 Administrator's Reliance, Etc. The Administrator and its
directors, officers, agents or employees shall not be liable for any action
taken or omitted to be taken by it or them
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in good faith under or in connection with the Transaction Documents (including,
without limitation, the servicing, administering or collecting of Pool
Receivables as Servicer pursuant to Section 8.01), except for its or their own
breach 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 Administrator: (a) may consult with legal counsel (including
counsel for Transferor), 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 Transferee or
the Insurer or any other holder of any interest in Pool Receivables and shall
not be responsible to Transferee or the Insurer or any such other holder for any
statements, warranties or representations made by any Transaction 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
Transaction Party or to inspect the property (including the books and records)
of any Transaction Party; (d) shall not be responsible to Transferee or the
Insurer 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 11.03 Wachovia and Affiliates. Wachovia and any of its
Affiliates may generally engage in any kind of business with any Transaction
Party or any obligor, any of their respective Affiliates and any Person who may
do business with or own securities of any Transaction Party or any Obligor or
any of their respective Affiliates, all as if Wachovia was not the
Administrator, and without any duty to account therefor to Transferee or the
Insurer or any other holder of an interest in Pool Receivables, but in any
event subject to Section 14.07.
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01 Restrictions on Assignments.
(a) No Transaction Party may assign its rights, or
delegate its duties hereunder or any interest herein without the prior written
consent of the Administrator and the Insurer. Transferee may not assign its
rights hereunder (although it may delegate its duties hereunder to the extent
expressly indicated herein) or the Asset Interest (or any portion thereof) to
any Person without the prior written consent of Transferor, which consent shall
not be unreasonably withheld; provided, however, that Transferee may assign all
or any part of its rights and interests in the Transaction Documents, together
with all or any part of its interest in the Asset Interest, to the Insurer, 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
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XII). The Administrator agrees to discuss the addition of any party as a
Liquidity Bank with Transferor prior to such addition.
(b) Transferor agrees to advise the Administrator within
five (5) Business Days after notice to Transferor of any proposed assignment by
Transferee of the Asset Interest (or any portion thereof), not otherwise
permitted under Section 12.01(a), of Transferor's consent or non-consent to such
assignment, and if it does not consent, the reasons therefor. If Transferor does
not consent to such assignment, Transferee may immediately or at any time
thereafter assign such Asset Interest (or portion thereof) to any Person or
Persons permitted under Section 12.01(a).
SECTION 12.02 Rights of Assignee. Upon the assignment by Transferee in
accordance with this Article XII, the assignee receiving such assignment shall
have all of the rights of Transferee with respect to the Transaction Documents
and the Asset Interest (or such portion thereof as has been assigned).
SECTION 12.03 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
Transferee and the assignee may mutually agree, and may be evidenced by such
instrument(s) or document(s) as may be satisfactory to Transferee, the
Administrator and the assignee.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01 Indemnities by Transferor.
(a) General Indemnity. Without limiting any other rights
which any such Person may have hereunder or under applicable law, Transferor
hereby agrees to indemnify each of Wachovia, both individually and as the
Administrator, Transferee, the Liquidity Banks, the Insurer, the Liquidity
Agent, each of their respective Affiliates, and all successors, transferees,
participants and assigns and all officers, directors, shareholders, controlling
persons, employees and agents of any of the foregoing (each an "Indemnified
Party"), forthwith on demand, from and against any and all damages, losses,
claims, liabilities, judgments and related costs and expenses, including
reasonable 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 Pool Receivable
or any Contract, excluding, however, (a) resulting from gross negligence or
willful misconduct on the part of such Indemnified Party or (b) recourse (except
as otherwise specifically provided in this Agreement) to Transferor for
non-payment of the Pool Receivables due to credit problems of the Obligors
thereof. Without limiting the foregoing, Transferor shall indemnify each
Indemnified Party for Indemnified Amounts arising out of or relating to:
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(i) the transfer by any Transaction Party of any
interest in any Receivable other than the transfer of Receivables and
related property by the Originators to Transferor pursuant to the Sale
Agreement, the transfer of an Asset Interest to Transferee pursuant to
this Agreement and the grant of a security interest to Transferee
pursuant to Section 9.01;
(ii) any representation or warranty made by any
Transaction Party (or any of its officers) under or in connection with
this Agreement or any other Transaction Document or any other
information or report delivered by or on behalf of any Transaction
Party pursuant hereto or thereto, which shall have been false,
incorrect or misleading in any material respect when made or deemed
made or delivered, as the case may be;
(iii) the failure by any Transaction 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
Transferee and its assigns (or the Administrator on behalf of
Transferee) an undivided percentage ownership or security 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
any Lien arising solely as a result of an act of Transferee or the
Administrator, whether existing at the time of any Transfer 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 Transfer 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;
(vii) any matter described in clause (i) or (ii)
of Section 3.02(a);
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(viii) any failure of any Transaction Party, as
Servicer or otherwise, to perform its duties or obligations in
accordance with the provisions of Article III or Article VIII;
(ix) any products 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 Transaction Party
of any related Contract with respect to any Pool Receivable;
(xi) any tax or governmental fee or charge (but
not including 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;
and
(xii) amounts in respect of Dilution.
(b) 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
Transaction Party under Section 13.01(a)(xi), such Indemnified Party shall give
prompt and timely notice of such attempt to Transferor and Transferor 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.
(c) Contribution. If for any reason the indemnification
provided above in this Section 13.01 is unavailable to an Indemnified Party or
is insufficient to hold an Indemnified Party harmless, then Transferor 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 Transferor on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable considerations.
SECTION 13.02 Indemnities by Servicer. Without limiting any other
rights which any Indemnified Party may have hereunder or under applicable law,
the Servicer hereby agrees to indemnify each of the Indemnified Parties
forthwith on demand, from and against any and all Indemnified Amounts
(including, without limitation, losses arising from a loss of coverage under the
Insurance Policy) awarded
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against or incurred by any of them arising out of or relating to the Servicer's
performance of, or failure to perform, any of its obligations under or in
connection with any Transaction Document (including, without limitation, the
Insurance Policy), or any representation or warranty made by Servicer (or any of
its officers) under or in connection with any Transaction Document or any other
information or report delivered by or on behalf of 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 Servicer to comply
with any applicable law, rule or regulation with respect to any Pool Receivable
or the related Contract. 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 (except as otherwise specifically provided in this Agreement) to
Servicer for non-payment of the Pool Receivables due to the credit problems of
the Obligors thereof.
If for any reason the indemnification provided above in this
Section 13.02 (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 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 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 14.01 Amendments, Etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by any Transaction Party
therefrom shall in any event be effective unless the same shall be in writing
and signed by (a) each Transaction Party, the Administrator, the Insurer and the
Transferee (with respect to an amendment), or (b) the Administrator, the Insurer
and the Transferee (with respect to a waiver or consent by them) or (c) any
Transaction 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; provided, however, that
the Insurer shall not withhold its consent to any such amendment, waiver or
consent (or in respect of any other provision hereof that requires its consent
or approval) unless it determines, in good faith, that it would be materially
and adversely affected by such amendment, waiver, consent or approval; and
provided, further, that if the Insurer elects not to consent to any proposed
amendment, waiver or other modification, the appropriate parties may nonetheless
make such amendment, waiver or other modification upon further written notice to
the Insurer of their decision to proceed without the consent of the Insurer and,
in such event, the Insurer may terminate the Insurance Policy in accordance with
Article 16 thereof. The parties acknowledge that, before entering into such an
amendment or granting such a waiver or consent, Transferee may also be required
to obtain the approval of some or all of the Liquidity Banks or to obtain
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confirmation from certain rating agencies that such amendment, waiver or consent
will not result in a withdrawal or reduction of the ratings of the Commercial
Paper Notes.
SECTION 14.02 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 14.02 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.
SECTION 14.03 No Waiver; Remedies. No failure on the part of the
Administrator, any Affected Party, any Indemnified Party, Transferee 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, Wachovia, individually, and as
Administrator, and each Liquidity Bank is hereby authorized by Transferor, upon
the occurrence of a Liquidation Event, 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
Transferor, now or hereafter existing under this Agreement, to amounts owed to
the Administrator, any Affected Party, any Indemnified Party or Transferee, or
their respective successors and assigns.
SECTION 14.04 Binding Effect; Survival. This Agreement shall be binding
upon and inure to the benefit of each Transaction Party, the Administrator, the
Insurer, Transferee and their respective successors and assigns, and the
provisions of Section 4.02 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 12.01. 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 Transferor pursuant to Article VI and
the indemnification and payment provisions of Article XIII and Sections 4.02,
14.05, 14.06, 14.07, 14.08 and 14.15 shall be continuing and shall survive any
termination of this Agreement.
SECTION 14.05 Costs, Expenses and Taxes. In addition to its obligations
under Article XIII, Transaction Parties jointly and severally agree to pay on
demand:
(a) all costs and expenses incurred by the Administrator,
any Liquidity Bank, the Insurer, the Transferee and their respective Affiliates
in connection with:
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(i) the negotiation, preparation, execution and
delivery of the Original Second Step Agreement, this Agreement and the
other Transaction Documents, any amendment of or consent or waiver
under any of the Transaction Documents which is requested or proposed
by any Transaction Party (whether or not consummated), or the
enforcement by any of the foregoing Persons of, or any actual 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
Transaction Party's books and records either prior to the execution and
delivery hereof or pursuant to Section 7.01(c)(iii) or 7.02(j) provided
that such amounts shall not include any amount relating to the general
overhead expenses of any party hereto; 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
Transaction 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 14.06 No Proceedings. Servicer hereby agrees that it will not
institute against Transferor, or join any Person in instituting against
Transferor, and each Transaction Party, Servicer, the Insurer and Wachovia
(individually or as Administrator) each hereby agrees that it will not institute
against Transferee, or join any other Person in instituting against Transferee,
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 Transferee shall be outstanding 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 14.07 Confidentiality of Transferor Information.
(a) Confidential Transferor Information. Each party
hereto (other than the Transaction Parties) acknowledges that certain of the
information provided to such party by or on behalf of the Transaction Parties in
connection with this Agreement and the transactions contemplated hereby is or
may be confidential, and each such party severally agrees that, unless WestPoint
shall otherwise agree in writing, and except as provided in Section 14.07(b),
such party will not disclose to any other person or
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entity any nonpublic information provided by any Transaction Party or obtained
by such party in connection herewith, including:
(i) any information regarding, or copies of, any
nonpublic financial statements, reports, schedules and other
information furnished by any Transaction Party to Transferee or the
Administrator (A) prior to the Original Closing Date in connection with
such party's due diligence relating to the Transaction Parties and the
transactions contemplated hereby, or (B) pursuant to Section 3.01,
5.01, 6.01(i), 7.01(c) or 7.02, or
(ii) any other information regarding any
Transaction Party which is designated by any Transaction Party to such
party in writing as confidential,
(the information referred to above, whether furnished by any Transaction Party
or any attorney for or other representative thereof (each a "Transferor
Information Provider"), is collectively referred to as the "Transferor
Information"); provided, however, "Transferor Information" shall not include any
information which is or becomes generally available to the general public or to
such party on a non-confidential basis from a source other than any Transferor
Information Provider, or which was known to such party on a non-confidential
basis prior to its disclosure by any Transferor Information Provider.
(b) Disclosure. Notwithstanding Section 14.07(a), each
party may disclose any Transferor Information:
(i) to any of such party's independent
attorneys, consultants and auditors, and to any dealer or placement
agent for Transferee's commercial paper, who (A) in the good faith
belief of such party, have a need to know such Transferor Information,
and (B) are informed by such party of the confidential nature of the
Transferor Information and the terms of this Section 14.07 and has
agreed, verbally or otherwise, to be bound by the provisions of this
Section 14.07,
(ii) to any Liquidity Bank, any actual or
potential assignees of, or participants in, any rights or obligations
of Transferee, any Liquidity Bank or the Administrator under or in
connection with this Agreement who has agreed to be bound by the
provisions of this Section 14.07,
(iii) to any rating agency that maintains a rating
for Transferee's commercial paper or is considering the issuance of
such a rating, for the purposes of reviewing the credit of Transferee
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,
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(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 Section 14.07(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 Transferor Information, or
(vii) in connection with the enforcement of this
Agreement or any other Transaction Document.
In addition, Transferee and the Administrator may disclose on a "no name" basis
to any actual or potential investor in Transferee's Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of Transferee's commitment
and Transferee's Total Investment with respect to the Asset Interest and any
other credit enhancement provided by any Transaction 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 Transaction 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 Transferor Information, such party will (or will cause its
representative to):
(i) provide WestPoint with prompt written notice so
that (A) WestPoint may seek a protective order or other appropriate
remedy, or (B) WestPoint may, if it so chooses, agree that such party
(or its representatives) may disclose such Transferor Information
pursuant to such request or legal compulsion; and
(ii) unless WestPoint agrees that such Transferor
Information may be disclosed, make a timely objection to the request or
compulsion to provide such Transferor Information on the basis that
such Transferor Information is confidential and subject to the
agreements contained in this Section 14.07.
In the event such protective order or remedy is not obtained, or WestPoint
agrees that such Transferor Information may be disclosed, such party will
furnish only that portion of the Transferor Information which (in such party's
good faith judgment) is legally required to be furnished and will exercise
reasonable efforts to obtain reliable assurance that confidential treatment will
be afforded the Transferor Information.
(d) This Section 14.07 shall survive termination of this
Agreement.
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SECTION 14.08 Confidentiality of Program Information.
(a) Confidential Information. Each party hereto
acknowledges that Wachovia, individually and in its capacity as Administrator,
regards the structure of the transactions contemplated by this Agreement to be
proprietary, and each such party agrees that:
(i) it will not disclose without the prior
consent of Wachovia (other than to the directors, employees, auditors,
counsel or affiliates (collectively, "representatives") of such party,
each of whom shall be informed by such party of the confidential,
nature of the Program Information (as defined below) and of the terms
of this Section 14.08), (A) any information regarding the pricing in,
or copies of, this Agreement, any other Transaction Document or any
transaction contemplated hereby or thereby, (B) any information
regarding the organization, business or operations of Transferee
generally or the services performed by Wachovia as the Administrator
for Transferee, or (C) any information which is furnished by Wachovia
to such party and which is designated by Wachovia to such party in
writing or otherwise as confidential or not otherwise available
to the general public (the information referred to in clauses (A), (B)
and (C) is collectively referred to as the "Program Information");
provided, however, that such party may disclose any such Program
Information (I) to any other party to this Agreement (and any
independent attorneys, consultants and auditors of any such party) for
the purposes contemplated hereby, (II) as may be required by any
municipal, state, federal or other regulatory body having or claiming
to have jurisdiction over such party, including, without limitation,
the Securities and Exchange Commission, (III) in order to comply with
any law, order, regulation, regulatory request or ruling applicable to
such party, (IV) subject to Section 14.08(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 any such Program Information, or (V) in financial statements
as required by GAAP;
(ii) it will use the Program Information solely
for the purposes of evaluating, administering and enforcing the
transactions contemplated by this Agreement and making any necessary
business judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each
of its representatives to return) to Wachovia, all documents or other
written material received from Wachovia in connection with (a)(i)(B) or
(C) above and all copies thereof made by such party which contain the
Program Information.
(b) Availability of Confidential Information. This
Section 14.08 shall be inoperative as to such portions of the Program
Information which are or become generally available to the public or
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such party on a non-confidential basis from a source other than Wachovia or were
known to such party on a non-confidential basis prior to its disclosure by
Wachovia.
(c) Legal Compulsion to Disclose. In the event that any
party or anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) other than in the case of clause (II) of the proviso to Section
14.08(a)(i) to disclose any of the Program Information, such party will
(i) provide Wachovia with prompt written notice
so that Wachovia may seek a protective order or other appropriate
remedy and/or, if it so chooses, agree that such party may disclose
such Program Information pursuant to such request or legal compulsion;
and
(ii) unless Wachovia agrees that such Program
Information may be disclosed, make a timely objection to the request or
confirmation to provide such Program Information on the basis that such
Program Information is confidential and subject to the agreements
contained in this Section 14.08.
In the event that such protective order or other remedy is not obtained, or
Wachovia agrees that such Program Information may be disclosed, such party will
furnish only that portion of the Program Information which (in such party's
good faith judgment) is legally required to be furnished and will exercise
reasonable efforts to obtain reliable assurance that confidential treatment will
be accorded the Program Information.
(d) Survival. This Section 14.08 shall survive
termination of this Agreement.
SECTION 14.09 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
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CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD REQUIRE THE APPLICATION
OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE, EXCEPT TO THE EXTENT THAT
THE PERFECTION OF THE INTERESTS OF 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.
SECTION 14.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. EACH PARTY
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 GEORGIA STATE COURT, IN EITHER CASE SITTING IN ▇▇▇▇▇▇
COUNTY, GEORGIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, (II) AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH
GEORGIA STATE OR FEDERAL COURT AND NOT IN ANY OTHER COURT, (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, (IV) CONSENTS TO THE SERVICE OF
ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF
SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN SECTION 14.02; AND (V)
TO THE EXTENT ALLOWED BY LAW, AGREES THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS SECTION 14.13 SHALL AFFECT PURCHASER'S OR THE ADMINISTRATOR'S
RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
ANY ACTION OR PROCEEDING AGAINST TRANSFEROR OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTIONS.
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(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.
SECTION 14.15 No Recourse Against Other Parties. The obligations of the
Transferee under this Agreement are solely the corporate obligations of the
Transferee. No recourse shall be had for the payment of any amount owing by the
Transferee under this Agreement or for the payment by the Transferee of any fee
in respect hereof or any other obligation or claim of or against the Transferee
arising out of or based upon this Agreement, against Wachovia or against any
employee, officer, director, incorporator or stockholder of the Transferee. 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 Transferee shall not be considered to be an
affiliate of the Wachovia for purposes of this paragraph. Each of the
Transferor, the Servicer and the Administrative Agent agrees that the Transferee
shall be liable for any claims that such party may have against the Transferee
only to the extent the Transferee has excess funds after providing for payment
of the Commercial Paper Notes and to the extent such assets are insufficient to
satisfy the obligations of the Transferee hereunder, the Transferee 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 Transferee. Any and
all claims against the Transferee or the Administrative Agent shall be
subordinate to the claims of the holders of the Commercial Paper Notes and the
Liquidity Banks (other than the Administrator).
SECTION 14.16 Confirmation and Ratification of Terms.
(a) Upon the effectiveness of this Agreement, each
reference to the Original Second Step Agreement in any other Transaction
Document, and any document, instrument or agreement executed and/or delivered in
connection with the Original Second Step Agreement and any Transaction Document,
shall mean and be a reference to this Agreement.
(b) The other Transaction Documents and all agreements,
instruments and documents executed or delivered in connection with the Original
Second Step Agreement and any of the Transaction Documents shall each be deemed
to be amended to the extent necessary, if any, to give effect
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to the provisions of this Agreement, as the same may be amended, modified,
supplemented or restated from time to time.
(c) The effect of this Agreement is to amend and restate
the Original Second Step Agreement, and to the extent that any rights, benefits
or provisions in favor of any of the parties to the Original Second Step
Agreement existed in the Original Second Step Agreement and continue to exist in
this Agreement without any written waiver of any such rights, benefits or
provisions prior to the date hereof, then such rights, benefits or provisions
are acknowledged to be and to continue to be effective from and after the
Original Closing Date. This Agreement is not a novation.
(d) The parties hereto agree and acknowledge that any and
all rights, remedies and payment provisions under the Original Second Step
Agreement, which are continuing and survive any termination of the Original
Second Step Agreement including, without limitation, any and all rights,
remedies and payment provisions with respect to (A) any representation and
warranty made or deemed to be made pursuant to the Original Second Step
Agreement, or (B) any indemnification provision, shall continue and survive the
execution and delivery of this Agreement.
(e) The parties hereto agree and acknowledge that any and
all amounts owing as or for Earned Discount, fees, expenses or otherwise under
or pursuant to the Original Second Step Agreement, immediately prior to the
effectiveness of this Agreement shall be owing as or for Earned Discount, fees,
expenses or otherwise, respectively, under or pursuant to this Agreement.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers, as of the date first
above written.
WPS RECEIVABLES CORPORATION,
as Transferor
By: s/s ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
WESTPOINT ▇▇▇▇▇▇▇ INC.,
as initial Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President and Controller
BLUE RIDGE ASSET FUNDING CORPORATION, as
Transferee
By: Wachovia Bank, N.A., its Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
WACHOVIA BANK, N.A.,
as Administrator
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
S-1
NORTH AMERICAN CAPACITY INSURANCE
COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & COO
S-2
APPENDIX A
DEFINITIONS
This is Appendix A to the FIRST AMENDED AND RESTATED ASSET INTEREST
TRANSFER AGREEMENT, dated as of October 31, 2001, among WPS RECEIVABLES
CORPORATION, as Transferor, WESTPOINT ▇▇▇▇▇▇▇ INC., as initial Servicer, BLUE
RIDGE ASSET FUNDING CORPORATION, as Transferee, NORTH AMERICAN CAPACITY
INSURANCE COMPANY, as Insurer and WACHOVIA BANK, N.A., as Administrator (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"). Unless otherwise indicated, 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
herein below:
"Adjusted Dilution Ratio" means, as of any date of determination, an
amount (expressed as a percentage) equal to the twelve-month rolling average of
the Dilution Ratio.
"Administrator" has the meaning set forth in the preamble.
"Advance Rate" means an amount (expressed as a percentage) equal to 1.0
minus the Required Reserve Factor.
"Advertising Co-op Reserve" means, on any day, aggregate reserves
maintained by the Originators on their respective books with respect to
discounts and price load arrangements negotiated with customers and volume-based
rebates to customers as reimbursement for certain expenses incurred in the
advertising of the Originators' products.
"Affected Party" means each of Transferee, each Liquidity Bank, any
assignee or participant of Transferee or any Liquidity Bank, the Liquidity
Agent, Wachovia, any successor to Wachovia, as Administrator and any sub-agent
of the Administrator.
"Affiliate" when used with respect to a Person means any other Person
controlling, controlled by, or under common control with, such Person. As used
in this definition of "Affiliate," the term "control" means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of a Person, whether through the ownership of such Person's voting securities,
by contract or otherwise, and the terms "affiliated," "controlling" and
"controlled" have meanings correlative to the term "control."
"Affiliated Obligor" in relation to any Obligor means an Obligor that
is an Affiliate of such Obligor.
"Alternate Base Rate" means for any day, the rate per annum equal to
the higher as of such day of (i) the Prime Rate, or (ii) 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.
"Asset Interest" means an undivided percentage ownership interest,
determined from time to time as provided in Section 1.04(b), in (i) all then
outstanding Pool Receivables and (ii) all Related Assets.
"Asset Tranche" means at any time a portion of the Asset Interest
selected by the Administrator pursuant to Section 2.01.
"Bank Rate" has the meaning assigned thereto in the Fee Letter.
"▇▇▇▇ and Hold Receivable" means a Receivable as to which (i) an
Originator, at the written request of the Obligor thereof contained in a written
purchase order and/or similar writing (including any oral communication
confirmed in writing), invoices such Obligor for goods the sale of which gave
rise to such Receivable (the "related goods") but retains possession of such
related goods for a period of time, (ii) the related goods so held are
segregated from such Originator's inventory and (iii) the related invoice is
payable on the normal due date for similar Receivables of such Originator that
are not ▇▇▇▇ and Hold Receivables.
"Borrowing Availability" means, at any time, an amount equal to the sum
of (i) the amount available to WestPoint for borrowing revolving loans under the
Credit Agreement and each other credit agreement or line of credit to which
WestPoint is a party as borrower and pursuant to which WestPoint may borrow
revolving loans and (ii) the aggregate fair market values of all Cash-Equivalent
Investments then owned by WestPoint.
"Broken Funding Costs" means, for any Asset Tranche which: (i) has its
Transferee's Tranche Investment reduced without compliance by Transferor with
the notice requirements hereunder or (ii) does not have its Transferee's Tranche
Investment reduced following the delivery of notice of such reduction in
accordance with the terms hereof or (iii) is assigned by Transferee to the
Liquidity Banks under the Liquidity Agreement or (iv) is terminated prior to the
date on which it was originally scheduled to end; an amount equal to the excess,
if any, of (A) the CP Costs that would have accrued during the remainder of the
tranche periods for Commercial Paper Notes, or (as applicable) the Earned
Discount that would have accrued during the remainder of the Yield Periods,
determined by the Administrator to relate to such Asset Tranche (as
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applicable) subsequent to the date of such reduction, assignment or termination
(or in respect of clause (ii) above, the date such reduction was designated to
occur pursuant to such notice) of the Transferee's Tranche Investment of such
Asset Tranche if such reduction, assignment or termination had not occurred or
such notice of reduction had not been delivered, over (B) the sum of (x) to the
extent all or a portion of such Transferee's Tranche Investment is allocated to
another Asset Tranche, the amount of CP Costs or Earned Discount actually
accrued during the remainder of such period on such Transferee's Tranche
Investment for the new Asset Tranche, and (y) to the extent such Transferee's
Tranche Investment is not allocated to another Asset Tranche, the income, if
any, actually received during the remainder of such period by the holder of such
Asset Tranche from investing the portion of such Transferee's Tranche Investment
not so allocated. All Broken Funding Costs shall be due and payable hereunder
upon demand.
"Business Day" shall mean (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.
"Canadian Receivable" means a Receivable the Obligor of which (i) if a
natural person, is a resident of Canada, (ii) if a corporation or other business
organization, is organized under the laws of Canada or any political subdivision
thereof and has its chief executive office in Canada and, in any case, is
denominated in Dollars.
"Capital Lease Obligations" of any person means the obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such person under GAAP and, for the purposes of
this Agreement and the Sale Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Cash-Equivalent Investment" means (i) securities issued directly or
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) and (ii) deposits and certificates of
deposit with any domestic commercial bank of recognized standing having capital
and surplus in excess of $500 million, and in each case, maturing within one
year after the date of acquisition.
"Change in Control" means:
(a) in relation to WestPoint, the acquisition by any
person or group of persons (within the meaning of Section 13 or 14 of the
Exchange Act), of beneficial ownership
-3-
(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 WestPoint entitled (without regard to the occurrence of any
contingency) to vote for the election of members of the board of directors of
WestPoint 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 WestPoint
attached to all such outstanding shares of capital stock of WestPoint, unless
otherwise agreed in writing by the Administrator; and
(b) in relation to Transferor, the failure of WestPoint
to own (directly or through wholly-owned Subsidiaries of WestPoint) 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 Transferor on a fully diluted basis.
"Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Collections" means, with respect to any Receivable, all funds which
(a) are received by Transferor, any Originator or 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 Transferor, any
Originator or 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), and (b) solely in the case of Pool Receivables, are
Deemed Collections.
"Commercial Paper Notes" shall mean the commercial paper promissory
notes issued by or on behalf of the Transferee in the United Stated commercial
paper market.
"Concentration Account" means Transferor's bank account no.375-023-5546
maintained at the Concentration Bank listed on Schedule 6.01(n) and each other
account maintained by Transferor at a Concentration Bank approved by the
Administrator in accordance with Section 7.03(d).
"Concentration Bank" means the bank listed on Schedule 6.01(n) under
the heading "Concentration Bank" and each other bank approved by the
Administrator in accordance with Section 7.03(d).
"Consolidated Parties" means a collective reference to WestPoint and
its Subsidiaries, and "Consolidated Party" means any one of them.
-4-
"Contract" means a contract between Transferor or an Originator (or in
the case of an Existing Receivable, an Affiliate of an Originator) and any
Person, or an invoice sent or to be sent by Transferor or an Originator (or in
the case of an Existing Receivable, an Affiliate of an 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 Accrual Period" means each Settlement Period during which any Asset
Tranche is funded with Commercial Paper Notes.
"CP Costs" means, for each day, the sum of (i) discount or interest
accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued
commissions in respect of placement agents and Commercial Paper Note dealers,
and issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase or financing facilities
which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual
of income net of expenses received on such day from investment of collections
received under all receivable purchase or financing facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of Broken Funding Costs related to the
prepayment of any investment of Transferee pursuant to the terms of any
receivable purchase or financing facilities funded substantially with Pooled
Commercial Paper. In addition to the foregoing costs, if Transferor shall
request any Transfer during any period of time determined by the Administrator
in its sole discretion to result in incrementally higher CP Costs applicable to
such Transfer, the principal associated with any such Transfer shall, during
such period, be deemed to be funded by Transferee in a special pool (which may
include capital associated with other receivable purchase or financing
facilities) for purposes of determining such additional CP Costs applicable only
to such special pool and charged each day during such period against such
principal. Notwithstanding the foregoing, on any day when any Liquidation Event
or Unmatured Liquidation Event shall have occurred and be continuing, the CP
Costs for each Asset Tranche funded through the issuance of Commercial Paper
Notes shall equal the greater of (a) the amount determined for such day pursuant
to the preceding two sentences, and (b) interest on the Transferee's Total
Investment associated with such Asset Tranche a rate per annum equal to the
Default Rate.
"Credit Agreement" means that certain Second Amended and Restated
Credit Agreement, dated as of June 9, 1998, among WestPoint, as borrower,
certain subsidiaries of WestPoint, the financial institutions parties thereto
and Bank of America, N.A., as administrative agent for said financial
institutions, as such agreement is amended, supplemented or otherwise modified
from time to time.
-5-
"Credit and Collection Policy" means those credit and collection
policies and practices of WestPoint relating to Contracts and Receivables as in
effect on the date of this Agreement, as modified in accordance with the terms
of this Agreement, but subject to compliance with applicable tariffs or state
regulations in effect from time to time.
"Current Asset Level" means, as of any date of determination, the sum
of the Net Pool Balance as of such day, plus OCEEC as of such date.
"Cut-Off Date" means the last day of each Settlement Period.
"Days Sales Outstanding" or "DSO", means, as of any day, an amount
equal to the product of (x) 91, multiplied by (y) the amount obtained by
dividing (i) the aggregate outstanding balance of Pool Receivables as of the
most recent Cut-Off Date, by (ii) the aggregate amount of Pool Receivables
created during the three Settlement Periods including and immediately preceding
such Cut-Off Date.
"Deemed Collections" has the meaning set forth in Section 3.02(a).
"Default Horizon Ratio" as of any Cut-Off Date means the ratio
(expressed as a percentage) of (i) the aggregate sales of the Originators during
the four most recently ended Settlement Periods ending on such Cut-Off Date,
divided by (ii) the aggregate Outstanding Balance of all Eligible Receivables on
such Cut-Off Date.
"Default Rate" means a per annum rate of interest equal to the sum of
(i) the Alternate Base Rate, plus (ii) two percent (2%).
"Default Ratio" at any time means the ratio (expressed as a percentage)
computed as of the Cut-Off Date for the most recently ended Settlement Period by
dividing (x) the aggregate Unpaid Balance of all Pool Receivables that became
Defaulted Receivables during such Settlement Period by (y) the aggregate sales
of the Originators during the Settlement Period occurring four months prior to
the most recently ended Settlement Period.
"Defaulted Receivable" means a Receivable: (a) as to which any payment,
or part thereof, remains unpaid for more than 90 days from the original due date
for such payment; (b) as to which collection proceedings have commenced; (c) as
to which an Event of Bankruptcy has occurred and remains continuing with respect
to the Obligor thereof; (d) as to which payments have been extended, or the
terms of payment thereof rewritten, other than as permitted by Section 8.02(c);
(e) which has been, or, consistent with the Credit and Collection Policy would
be, written off Transferor's, the applicable Originator's or Servicer's books as
uncollectible; or (f) the Obligor of which is an Obligor of other Receivables
more than 50% of which are Defaulted Receivables.
-6-
"Delinquency Ratio" at any time means the ratio (expressed as a
percentage) computed as of the Cut-Off Date for the next preceding Settlement
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" means a Receivable (a) that is not a Defaulted
Receivable and (b) as to which any payment, or part thereof, remains unpaid for
61 days or more from the original due date for such payment.
"Dilution" means the amount of any reduction or cancellation of the
Unpaid Balance of a Pool Receivable (including, without limitation, as described
in Section 3.02(a)) other than as a result of (i) cash Collections on account of
such Pool Receivable or (ii) a write-off of such Pool Receivable as
uncollectible in accordance with the Credit and Collection Policy.
"Dilution Factor" means an amount (expressed as a percentage) equal to
the product of the Dilution Horizon Ratio, multiplied by the Adjusted Dilution
Ratio.
"Dilution Horizon Ratio" means, as of any Cut-Off Date, an amount
(expressed as a percentage) equal to (i) the aggregate sales of the Originators
during the three Settlement Periods most recently ended (including the
Settlement Period ending on such Cut-Off Date), divided by (ii) aggregate
Outstanding Balance of all Eligible Receivables as of such Cut-Off Date.
"Dilution Ratio" means, as of any date of determination, an amount
(expressed as a percentage) equal to a fraction, the numerator of which is the
total amount of Dilution which occurred during the most recently ending
Settlement Period, and the denominator of which is the aggregate amount of sales
of the Originators during the Settlement Period occurring three months prior to
the most recently ended Settlement Period.
"Dilution Reserve" means, as of any date of determination, an amount
(expressed as a percentage) equal to the product of (i) (x) 2.00 multiplied by,
the Adjusted Dilution Ratio, plus (y) the Dilution Volatility Component,
multiplied by, (ii) the Dilution Horizon Ratio.
"Dilution Volatility Component" means, as of any date of determination,
an amount (expressed as a percentage) equal to the product of (i) the difference
between (a) the highest three-month rolling average of the Dilution Ratio for
the most recently ending twelve month period, minus (b) the Adjusted Dilution
Ratio, multiplied by (ii) a fraction, the numerator of which is equal to the
amount calculated in clause (i)(a) of this definition and the denominator of
which is equal to the amount calculated in clause (i)(b) of this definition.
"Dollars" means dollars in lawful money of the United States of
America.
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"Downgraded Liquidity Bank" means a Liquidity Bank which has been the
subject of a Downgrading Event.
"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 S&P, or (ii) P-1 by Moody's.
"Earned Discount" means, for any Yield Period:
PTI x ER x ED
------------- + LF
360
where:
PTI = the daily average (calculated at the close of business each
day) of the Transferee's Tranche Investment in the applicable
Asset Tranche during such Yield Period,
ER = the Earned Discount Rate for such Yield Period,
ED = the actual number of days elapsed during such Yield Period,
and
LF = the Liquidation Fee, if any, during such Yield Period.
"Earned Discount Rate" means, for any Yield Period, the Bank Rate for
such Asset Tranche and such Yield Period; provided, however, that on any day
when any Liquidation Event or Unmatured Liquidation Event shall have occurred
and be continuing, the Earned Discount Rate shall mean a rate per annum equal to
the Default Rate.
"Eligible Excess Concentrations" means, as of any date of determination
for any Obligor Group, an amount equal to the lesser of: (i) the Grossed-Up
Credit Limit then in effect for such Obligor Group (as determined by the
Insurance Policy); or (ii) the aggregate Unpaid Balance of Eligible Receivables
attributable to such Obligor Group as of such date that exceed the Obligor
Concentration Limit then in effect for such Obligor Group.
"Eligible Receivable" means, at any time, a Receivable:
-8-
(a) which arises out of the sale by an Originator of
goods or services in the ordinary course of its business and which has been sold
or contributed to Transferor pursuant to the Sale Agreement in a "true sale" or
"true contribution" transaction free of all Liens;
(b) as to which the perfection of Transferee's (or the
Administrator's on behalf of Transferee) undivided ownership interest therein is
governed by the laws of a jurisdiction where the Uniform Commercial Code -
Secured Transactions is in force, which constitutes an "account" or "general
intangible" as defined in the Uniform Commercial Code as in effect in such
jurisdiction and which is subject to a valid and perfected ownership or security
interest in favor of Transferee (or the Administrator on behalf of Transferee);
(c) the Obligor of which (i) if a natural person, is a
resident of the United States (other than in the case of Canadian Receivables),
(ii) if a corporation or other business organization, is organized under the
laws of the United States or any political subdivision thereof and has its chief
executive office in the United States (other than in the case of Canadian
Receivables) and (iii) is not an Affiliate of any Transaction Party;
(d) which is not a Defaulted Receivable;
(e) with regard to which the warranty of Transferor in
Section 6.01(k) is 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, executed and delivered 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;
(i) which, together with the Contract related thereto,
does not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit 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 if such violation would impair the collectibility of such
Receivable;
(j) which satisfies all applicable requirements of the
Credit and Collection Policy;
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(k) which, according to the Contract related thereto, is
due and payable within 90 days from the invoice date of such Receivable;
(l) the original term of which has not been extended or
rewritten and the Unpaid Balance of which has not been adjusted other than as
permitted under the Credit and Collection Policy;
(m) which arises under a Contract which (a) does not
require the Obligor under such Contract to consent to the transfer, sale or
assignment of the rights of the applicable Originator or any of its assignees
under such Contract and (b) is not subject to a confidentiality provision that
would have the effect of restricting the ability of Transferee or any of its
assignees or the Administrator to exercise its rights under this Agreement; and
(n) as to which the applicable Originator has satisfied
and fully performed all obligations on its part with respect to such Receivable
required to be fulfilled by it (other than in the case of a ▇▇▇▇ and Hold
Receivable, the obligation of such Originator to deliver the related goods to
the Obligor thereof), and no further action is required to be performed by any
Person with respect thereto other than the payment thereon by the Obligor
thereof and in the case of a ▇▇▇▇ and Hold Receivable delivery by such
Originator of the related goods to the Obligor thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with
any Consolidated Party within the meaning of Section 4001(a)(14) of ERISA, or
is a member of a group which includes any Consolidated Party and which is
treated as a single employer under Section 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by any Consolidated Party or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (iii) the distribution
of a notice of intent to terminate or the actual termination of a Plan pursuant
to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section 4042 of
ERISA; (v) any event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (v) the complete or partial withdrawal of any Consolidated
Party or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for
imposition of a lien
-10-
under Section 302(f) of ERISA exist with respect to any Plan; or (viii) the
adoption of an amendment to any Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA.
"Eurodollar Business Day" means a day of the year as defined in clause
(i) of the definition of Business Day.
"Eurodollar Rate" means 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
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 Administrator, 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)" applicable 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) 1.00 minus the Eurodollar Reserve
Percentage.
"Eurodollar Reserve Percentage" shall mean, with respect to any Yield
Period, the maximum reserve percentage, if any, applicable to the Liquidity Bank
or Liquidity Banks 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 such Liquidity Bank's or Liquidity Banks' 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
any 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" shall be deemed to have occurred with respect to
a Person if either:
-11-
(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 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 Obligor Concentration Amount" means, as of any date, the sum of
(i) the amounts by which the aggregate Unpaid Balance of Eligible Receivables of
each Obligor (other than Special Obligors) exceeds the Obligor Concentration
Limit for such Obligor and (ii) the amounts by which the aggregate Unpaid
Balance of Eligible Receivables of each Special Obligor exceeds the Special
Concentration Limit for such Special Obligor.
"Excess Receivables Concentration Amount" means, as of any date, the
sum of the amounts by which the aggregate Unpaid Balance of Pool Receivables
that are ▇▇▇▇ and Hold Receivables, Canadian Receivables or Government
Receivables exceeds the Receivables Concentration Limit for ▇▇▇▇ and Hold
Receivables, Canadian Receivables and Government Receivables, respectively.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Receivable" means each Receivable and the Related Security
with respect thereto that existed as of the Original Closing Date and was unpaid
and as to which the Trustee, on behalf of the Trust, reconveyed to Transferor
all of the right, title and interest of the Trust in such Receivable pursuant to
the Reconveyance Agreement.
"Federal Funds Rate" means, 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
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Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the domestic Business Day next succeeding such day, provided that
(i) if the day for which such rate is to be determined is not a domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding domestic Business Day as so published on the
next succeeding domestic 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 Administrator on such day on such transactions, as determined by
the Administrator.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Fee Letter" has the meaning set forth in Section 4.01.
"Fees" means all fees and other amounts payable pursuant to the Fee
Letter.
"Final Payout Date" means the date following the Termination Date on
which Transferee's Total Investment shall have been reduced to zero and all
other amounts payable by Transferor under the Transaction Documents shall have
been paid in full.
"GAAP" shall mean 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.
"Grossed-Up Credit Limit" means, as of any date of determination, an
amount equal to (a) the amount of any Credit Limit (as defined in the Insurance
Policy) divided by (b) one (1) minus the Insurance Dilution Reserve as of such
date.
"Government Receivable" means a Receivable the Obligor of which is a
government or a governmental subdivision or agency of the United States.
"Guarantee" of or by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay
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such Indebtedness; provided however that the term Guarantee shall not include
endorsements for collection or deposit, in either case, in the ordinary course
of business.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, but limited, if such obligations are without
recourse to such Person, to the lesser of the principal amount of such
Indebtedness or the fair market value of such property, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements (the amount of any such obligation to be the
amount that would be payable upon the acceleration, termination or liquidation
thereof) and (j) all obligations of such Person as an account party in respect
of letters of credit and bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any partnership in which such Person is a
general partner.
"Indemnified Amounts" has the meaning set forth in Section 13.01.
"Indemnified Party" has the meaning set forth in Section 13.01.
"Insurance Dilution Reserve" means, as of any date of determination, an
amount (expressed as a percentage) equal to the product of (i) (x) 3.00
multiplied by, the Adjusted Dilution Ratio, plus (y) the Dilution Volatility
Component, multiplied by, (ii) the Dilution Horizon Ratio.
"Insurance Obligation" means, on any date, the sum of (a) all
Reimbursement Amounts, (b) all accrued and unpaid premium and charges for
"Unutilized Credit Limit Capacity" under the Insurance Policy and (c) all other
accrued and unpaid amounts then due and payable to the Insurer under the
Insurance Policy and any other Transaction Document.
"Insurance Policy" means the Securitization Credit Insurance Policy No.
BHT0000006-00 issued by the Insurer, together with any insurance policy issued
in substitution therefor.
"Insurance Reserve" means, as of any date of determination, an amount
equal to the product of (i) the Insurance Reserve Factor multiplied by (ii)
OCEEC.
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"Insurance Reserve Factor" means, as of any date of determination, an
amount equal to the sum of (a) the Insurance Dilution Reserve as of such date,
(b) the Insurance Yield Reserve as of such date and (c) the Insurance Servicing
Reserve as of such date.
"Insurance Servicing Reserve" means, as of any date of determination,
an amount (expressed as a percentage) equal to (i) the Servicing Fee Rate,
multiplied by (ii) 240, divided by (iii) 360.
"Insurance Yield Reserve", means, as of any date of determination, an
amount (expressed as a percentage) equal to (i) 1.5, multiplied by (ii) the
Alternate Base Rate, multiplied by (iii) 240, divided by (iv) 360.
"Insured Availability" means, as of any date of determination, an
amount equal to the product of (a) the lesser of (i) the aggregate amount of
Obligor Coverage in effect as of such date or (ii) the product of (x) Eligible
Excess Concentrations multiplied by (y) 100% minus the Insurance Dilution
Reserve as of such date and (b) 100% minus the sum of the Insurance Servicing
Reserve and the Insurance Yield Reserve.
"Insurer" has the meaning set forth in the preamble.
"Insurer's Share" means the "Company's Share" as such term is defined
in the Insurance Policy.
"Interim Report" means a report substantially in the form of Exhibit D.
"Lien" means any security interest, lien, encumbrance, pledge,
assignment, title retention, similar claim, right or interest.
"Liquidation Event" has the meaning set forth in Section 10.01.
"Liquidation Fee" means, for each Asset Tranche (or portion thereof)
funded by a Liquidity Funding for each day in any Yield 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 Transferee's Tranche Investment with respect to such Asset
Tranche during such Yield Period (as so computed) if such reductions had not
been made, exceeds
(b) the income, if any, received by Transferee from
investing the proceeds of such reductions of the Transferee's Tranche
Investment.
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"Liquidation Period" means the period commencing on the Termination
Date and ending on the Final Payout Date.
"Liquidity Agent" means Wachovia, as agent for the Liquidity Banks
under the Liquidity Agreement, or any successor to Wachovia in such capacity.
"Liquidity Agreement" means and includes (a) the Amended and Restated
Liquidity Asset Transfer Agreement dated as of October 31, 2001, among
Transferee, Wachovia, as Administrator, Wachovia, as Liquidity Agent, and
Wachovia and/or one or more other banks or other financial institutions, as
Liquidity Banks, and (b) any other agreement hereafter entered into by
Transferee providing for the making of loans, purchase of assets or other
extensions of credit to Transferee secured by a direct or indirect security
interest in the Asset Interest (or any portion thereof), to support all or part
of Transferee's payment obligations under the Commercial Paper Notes or to
provide an alternate means of funding Transferee's investments in accounts
receivable or other financial assets, and 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" means any one of, and "Liquidity Banks" means all of,
the commercial lending institutions that are at any time parties to the
Liquidity Agreement as liquidity providers thereunder.
"Liquidity Funding" means a purchase made by the Liquidity Bank (or
simultaneous purchases made by the Liquidity Banks) pursuant to the Liquidity
Agreement.
"Lock-Box Account" means any bank account into which Collections are
deposited or transferred.
"Lock-Box Bank" means any of the banks holding one or more lock-boxes
or Lock-Box Accounts receiving Collections from Pool Receivables.
"Lock-Box/Collection Account Agreement" means an agreement
substantially in the form of Exhibit A among Transferor, the Administrator and a
Lock-Box Bank or the Concentration Bank (as applicable) with respect to a
Lock-Box Account or the Concentration Account (as applicable).
"Loss Reserve" means, as of any date of determination, an amount
(expressed as a percentage) equal to the product of (i) 2.0 times the highest
3-month rolling average Default
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Ratio for the most recently ended twelve month period, multiplied by (ii) the
Default Horizon Ratio.
"Mandate Letter" means that certain letter agreement, dated October 21,
1998 between WestPoint and Wachovia.
"Material Adverse Effect" with respect to any event or circumstance,
means a material adverse effect on:
(i) (A) the assets, operations, business or financial
condition of Transferor or (B) the business, assets, operations or
financial condition of WestPoint and its Subsidiaries, taken as a
whole, which could reasonably be expected to have a material adverse
effect on the creditworthiness of WestPoint;
(ii) the ability of any Transaction Party or any
Originator to perform its obligations under this Agreement or any other
Transaction Document to which such Transaction Party or such Originator
is a party;
(iii) 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
(iv) the status, existence, perfection, priority or
enforceability of Transferor's, any Originator's or Transferee's
interest in the Receivables Pool.
"Monthly Report" means a report substantially in the form of Exhibit C.
Each such report shall include for each Obligor for which Obligor Coverage has
been established and is continuing under the Insurance Policy, a listing of the
Pool Receivables owing by such Obligor and the aging of such Pool Receivables.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated Party or
any ERISA Affiliate and at least one employer other than the Consolidated
Parties or any ERISA Affiliate are contributing sponsors.
"Net Pool Balance" means, at any time, an amount equal to (i) the
aggregate Unpaid Balance of all Eligible Receivables in the Receivables Pool at
such time, minus (ii) the Excess
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Obligor Concentration Amount at such time, minus (iii) the Excess Receivables
Concentration Amount at such time, minus (iii) the Advertising Co-op Reserve at
such time.
"New Mandate Letter" means that certain letter agreement, dated June
26, 2001, by and among, WestPoint, NCM Americas Inc. and Wachovia Securities,
Inc. and the Term Sheet attached thereto.
"Obligor" means a Person obligated to make payments with respect to a
Receivable, including any guarantor thereof.
"Obligor Concentration Limit" has the meaning assigned thereto in the
Fee Letter.
"Obligor Coverage" has the meaning set forth in the Insurance Policy.
"Obligor Group" has the meaning set forth in the Insurance Policy.
"OCEEC" means an amount equal to the lesser of (i) the aggregate amount
of Obligor Coverage then in effect divided by the sum of (x) 1.0 minus (y) the
Insurance Dilution Reserve and (ii) the Eligible Excess Concentrations as of
such date.
"Originator" means WestPoint, in its capacity as seller under the Sale
Agreement and each Subsidiary of WestPoint that becomes a party to the Sale
Agreement as a seller pursuant to Section 1.8 of the Sale Agreement.
"Original Closing Date" means December 18, 1998.
"Other Excluded Obligors" means any Person designated from time to time
by the Seller and approved by the Administrator as an Other Excluded Obligor;
provided, that such approval shall be deemed to have been given if after five
Business Days' notice of such designation by the Seller, the Administrator has
not disapproved such designation.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Investment" means any one or more of the following types of
investments:
(a) marketable obligations of the United States of
America, the full and timely payment of which are backed by the full
faith and credit of the United States of America and which have a
maturity of not more than 270 days from the date of acquisition;
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(b) marketable obligations, the full and timely payment
of which are directly and fully guaranteed by the full faith and credit
of the United States of America and which have a maturity of not more
than 270 days from the date of acquisition;
(c) bankers' acceptances and certificates of deposit and
other interest-bearing obligations (in each case having a maturity of
not more than 270 days from the date of acquisition) denominated in
dollars and issued by any bank with capital, surplus and undivided
profits aggregating at least $50,000,000, the short-term obligations of
which are rated A-1 by S&P and P-1 by Moody's;
(d) repurchase obligations with a term of not more than
ten days for underlying securities of the types described in clauses
(a), (b) and (c) above entered into with any bank of the type described
in clause (c) above;
(e) commercial paper rated at least A-1 by S&P and P-1 by
Moody's; and
(f) demand deposits, time deposits or certificates of
deposit (having original maturities of no more than 365 days) of
depository institutions or trust companies incorporated under the laws
of the United States of America or any state thereof (or domestic
branches of any foreign bank) and subject to supervision and
examination by federal or state banking or depository institution
authorities; provided, however, that at the time such investment, or
the commitment to make such investment, is entered into, the short-term
debt rating of such depository institution or trust company shall be at
least A-1 by S&P and P-1 by Moody's.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Consolidated
Party or any ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" within the
meaning of Section 3(5) of ERISA.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Pooled Commercial Paper" means the Commercial Paper Notes of
Transferee subject to any particular pooling arrangement by Transferee, but
excluding Commercial Paper Notes issued by Transferee for a tenor and in an
amount specifically requested by any Person in connection with any agreement
effected by Transferee.
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"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" has the meaning set forth in the Fee Letter.
"Program Information" has the meaning set forth in Section 14.08(a)(i).
"Qualifying Liquidity Bank" means 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" means any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general intangible,
arising from the sale of goods (other than scrap sales) or services in the
ordinary course of business by any Originator (or in the case of an Existing
Receivable, by any Originator or an Affiliate thereof), which may be billed or
may be an unbilled Receivable and includes the right to payment of any interest
or finance charges and other amounts with respect thereto, excluding, however,
Receivables (other than Canadian Receivables) of foreign obligors and
Receivables of Other Excluded Obligors in an aggregate amount not to exceed $10
million.
"Receivables Concentration Limit" has the meaning assigned thereto in
the Fee Letter.
"Receivables Pool" means, at any time, all then outstanding Receivables
which have been sold, or purported to have been sold, by the Originators to
Transferor pursuant to the Sale Agreement.
"Reconveyance Agreement" means that certain Sale and Reconveyance
Agreement, dated as of December 18, 1998, between Transferor and the Trustee.
"Recoveries" has the meaning assigned to such term in the Insurance
Policy.
"Regulatory Change" shall mean any change after the date of this
Agreement in United States (federal, state or municipal) or foreign laws or
regulations (including Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be amended or supplemented from time to time)
or the adoption or making after such date of any interpretations, directives or
requests applying to a class of banks (including any 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,
with which, in the case of any request, it is the custom among banks in the
relevant jurisdiction to comply.
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"Reimbursement Amount" means, on any date, the sum of all payments made
by the Insurer pursuant to the Insurance Policy on or prior to such date, to the
extent not previously reimbursed to the Insurer hereunder, plus interest accrued
on each such payment at the Alternate Base Rate from the date such payment was
made until the date on which such payment is reimbursed in full.
"Reinvestment" has the meaning set forth in Section 1.03(a)(iii).
"Related Assets" means (a) all rights to, but not any obligations
under, all related Contracts and Related Security related to any Pool
Receivables, (b) all rights and interests of Transferor 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 Lock-Box Accounts, the
Concentration Account and all cash and investments in any of the foregoing, 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" means, with respect to any Receivable, all of
Transferor's or the applicable Originator's (as applicable) right, title and
interest in and to: (a) all Contracts that relate to such Receivable; (b) all
merchandise (including returned merchandise), if any, relating to the sale which
gave rise to such 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 Receivable, whether pursuant to the Contract related to
such Receivable or otherwise; (d) all UCC financing statements covering any
collateral securing payment of such Receivable (but only to the extent of the
interest of Transferor or Transferee (as applicable) in the respective
Receivable); (e) all guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable or otherwise; (f)
all insurance policies, and all claims thereunder, related to such Receivable,
in each case to the extent directly related to rights to payment, collection and
enforcement, and other rights with respect to such Receivable; (g) all books and
records evidencing or otherwise relating to such Receivable; (h) all bank
accounts into which any Collections are deposited; and (i) all Collections in
respect of, and other proceeds of such Receivable or any Related Security. The
interest of Transferee in any Related Security is only to the extent of
Transferee's undivided percentage interest, as more fully described in the
definition of Asset Interest.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA other than those events as to which the notice requirement has been
waived by regulation.
"Reporting Date" has the meaning set forth in Section 3.01(a).
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"Required Asset Level" means, as of any date of determination, the sum
of (i) the Transferee's Total Investment as of such date, plus (ii) the Required
Reserve as of such date, plus (iii) the Insurance Reserve as of such date.
"Required Reserve" means, as of any date of determination, an amount
equal to the product of (i) the Required Reserve Factor multiplied by (ii) the
Net Pool Balance as of such day.
"Required Reserve Factor" means, as of any date of determination, an
amount equal to the greater of (i) 10% plus the Dilution Factor and (ii) the sum
of (a) the Loss Reserve, (b) the Dilution Reserve, (c) the Yield Reserve and (d)
the Servicing Reserve.
"S&P" means Standard & Poor's Ratings Group.
"Sale Agreement" means that certain Receivables Purchase Agreement,
dated as of December 18, 1998, between WestPoint and Transferor, in its capacity
as purchaser thereunder, as amended and restated by that certain First Amended
and Restated Receivables Purchase Agreement, dated as of October 31, 2001, as it
may be further amended, supplemented or otherwise modified in accordance with
the terms of this Agreement.
"Scheduled Maturity Date" means January 15, 2002, as extended pursuant
to Section 1.06.
"Secured Parties" means Transferee, the Administrator, the Insurer, the
Indemnified Parties and the Affected Parties and their respective successors and
assigns.
"Servicer" has the meaning set forth in the preamble.
"Servicer Advance" has the meaning set forth in Section 8.06.
"Servicer Transfer Event" has the meaning set forth in Section 8.01(b).
"Servicer's Fee" means, with respect to any Settlement Period, (i) an
amount equal to (A) the Servicing Fee Rate times (B) the aggregate Unpaid
Balance of the Pool Receivables at the close of business on the first day of
such Settlement Period, times (C) 30/360; or (ii) on and after Servicer's
reasonable request made at any time when WestPoint shall no longer be Servicer,
an alternative amount specified by Servicer not exceeding (A) 110% of Servicer's
costs and expenses of performing its obligations under this Agreement during the
Settlement Period when such day occurs, divided by (B) the number of days in
such Settlement Period.
"Servicing Fee Rate" means a rate of interest equal to 1% per annum.
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"Servicing Reserve" shall mean the product of (i) the Servicing Fee
Rate, multiplied by (ii) a fraction, the numerator of which is the highest Days
Sales Outstanding calculated for each of the most recent 12 monthly periods and
the denominator of which is 360.
"Settlement Date" means (i) with respect to any CP Accrual Period, the
17th calendar day (or if such day is not a Business Day, the next succeeding
Business Day) of the month following such CP Accrual Period, (ii) with respect
to any Yield Period, the last day of such Yield Period and (iii) following the
Claim Payment Date under (and as defined in) the Insurance Policy, each
additional day specified by the Insurer.
"Settlement Period" means:
(a) the period from the date of the initial Transfer 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 Settlement Period to the last day of the next following calendar
month;
provided, however, that the last Settlement Period shall end
on the Final Payout Date.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Special Concentration Limit" has the meaning assigned thereto in the
Fee Letter.
"Special Obligor" means each of Wal-Mart Stores, Inc., ▇.▇. ▇▇▇▇▇▇ Co.,
Target Corporation, and K-Mart Corp.
"Subordinated Note" means the WPS ▇▇▇▇▇ Note under and as defined in
Section 3.2 of the Sale Agreement.
"Subsidiary" of 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, limited liability company or other entity in which such Person,
directly or indirectly through Subsidiaries, has more than a 50% equity interest
at the time.
"Successor Notice" has the meaning set forth in Section 8.01(b).
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"Termination Date" means 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 date on which an Event of Bankruptcy shall have
occurred with respect to Transferor or WestPoint;
(c) the Scheduled Maturity Date;
(d) the date on which the Administrator shall have given
notice to Transferor of the Termination Date in accordance with Section
10.02(a), following the occurrence of a Liquidation Event other than a
Liquidation Event as described in Section 10.01(e);
(e) the date on which the conditions precedent to
Transfers and Reinvestment set forth in Section 5.02 are not satisfied (or
expressly waived by Transferee) and the Administrator shall have notified
Transferor and Servicer in writing that the Liquidation Period has commenced;
and
(f) that Business Day designated by Transferor by 30
days' prior written notice to the Administrator.
"Transaction Documents" means this Agreement, each Lock-Box/Collection
Account Agreement, the Sale Agreement, the Liquidity Agreement, the Insurance
Policy, the Fee Letter, the Mandate Letter, the New Mandate Letter, each Monthly
Report, each Interim Report and the other documents to be executed and delivered
in connection herewith.
"Transaction Party" and "Transaction Parties" have the meanings set
forth in the preamble.
"Transfer" has the meaning set forth in Section 1.01.
"Transferee" has the meaning set forth in the preamble.
"Transferee's Total Investment" means at any time with respect to the
Asset Interest an amount equal to (a) the aggregate of the amounts theretofore
paid to Transferor for Transfers pursuant to Section 1.01 and 1.03, less (b) the
aggregate amount of Collections theretofore received and actually distributed to
Transferee on account of such Transferee's Total Investment pursuant to Section
1.03.
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"Transferee's Tranche Investment" means in relation to any Asset
Tranche the amount of the Transferee's Total Investment allocated by the
Administrator to that Asset Tranche pursuant to Section 2.01, provided, that at
all times the aggregate amounts allocated to all Asset Tranches shall equal the
Transferee's Total Investment.
"Transfer Limit" means $160,000,000, as such amount may be reduced
pursuant to Section 1.06.
"Transferor" has the meaning set forth in the preamble.
"Transferor Information" has the meaning set forth in Section 14.07(a).
"Transferor Information Provider" has the meaning set forth in Section
14.07(a).
"Trust" means the WestPoint ▇▇▇▇▇▇▇ Receivables Master Trust.
"Trustee" means Chase Manhattan Bank, as trustee for the Trust.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Unmatured Liquidation Event" means any event which, with the giving of
notice or lapse of time, or both, would become a Liquidation Event.
"Unpaid Balance" of 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" has the meaning set forth in the Fee Letter.
"Wachovia" has the meaning set forth in the preamble.
"WestPoint" has the meaning set forth in the preamble.
"Yield Period" with respect to any Asset Tranche funded by a Liquidity
Funding means:
(a) the period commencing on the date of the initial
Transfer of the Asset Interest, the making of such Liquidity Funding or the
creation of such Asset Tranche pursuant to Section 2.01 (whichever is latest)
and ending such number of days thereafter as the Administrator shall select;
and
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(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 Administrator 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
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 Administrator.
"Yield Reserve" shall mean, on any date of determination, 1.5 times the
Alternate Base Rate multiplied by a fraction the numerator of which is the
12-month high Days Sales Outstanding 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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