Exhibit 99.2
Execution Copy
RECEIVABLES TRANSFER AGREEMENT
BY AND AMONG
MRFC, INC.,
AS TRANSFEROR,
METALDYNE CORPORATION,
INDIVIDUALLY,
AS COLLECTION AGENT AND AS GUARANTOR,
THE PERSONS PARTIES HERETO AS
PURCHASERS
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT
DATED AS OF APRIL 29, 2005
TABLE OF CONTENTS
Page
ARTICLE I Definitions .......................................1
SECTION 1.01. Certain Defined Terms ...................................1
SECTION 1.02. Other Terms .............................................1
SECTION 1.03. Computation of Time Periods .............................1
ARTICLE II Purchases and Settlements .........................1
SECTION 2.01. Facility ................................................1
SECTION 2.02. Transfers; Certificates; Eligible Receivables. ..........2
SECTION 2.03. Selection of Tranche Periods and Tranche Rates. .........4
SECTION 2.04. Discount, Fees and Other Costs and Expenses .............4
SECTION 2.05. Non-Liquidation Settlement and Reinvestment Procedures ..5
SECTION 2.06. Liquidation Settlement Procedures .......................5
SECTION 2.07. Reduction of Commitments ................................7
SECTION 2.08. Fees ....................................................7
SECTION 2.09. Protection of Ownership Interest of the Purchasers. .....7
SECTION 2.10. Deemed Collections; Application of Payments. ............9
SECTION 2.11. Payments and Computations, etc ..........................9
SECTION 2.12. Reports ................................................10
SECTION 2.13. Collection Account .....................................10
SECTION 2.14. Right of Setoff ........................................11
SECTION 2.15. Sharing of Payments, etc ...............................11
SECTION 2.16. Broken Funding .........................................11
SECTION 2.17. Conversion and Continuation of Outstanding Tranches ....12
SECTION 2.18. Illegality. ............................................12
SECTION 2.19. Inability to Determine Eurodollar Rate .................13
SECTION 2.20. Indemnities by the Transferor ..........................14
SECTION 2.21. Indemnity for Reserves and Expenses ....................16
SECTION 2.22. Indemnity for Taxes ....................................18
SECTION 2.23. Other Costs, Expenses and Related Matters ..............19
SECTION 2.24. Administrative Agent ...................................20
SECTION 2.25. Use of Historical Data .................................20
ARTICLE III Representations and Warranties ...................20
SECTION 3.01. Representations and Warranties of the Transferor .......20
SECTION 3.02. Reaffirmation of Representations and Warranties
by the Transferor ................................24
ARTICLE IV Conditions Precedent .............................24
SECTION 4.01. Conditions to Effectiveness ............................24
ARTICLE V Covenants ........................................26
SECTION 5.01. Affirmative Covenants of the Transferor ................26
SECTION 5.02. Negative Covenants of the Transferor ...................32
ARTICLE VI Administration and Collections ...................34
SECTION 6.01. Appointment of Collection Agent ........................34
SECTION 6.02. Duties of Collection Agent. ............................34
SECTION 6.03. Rights After Designation of New Collection Agent .......37
SECTION 6.04. Representations and Warranties of the Collection Agent .37
SECTION 6.05. Covenants of the Collection Agent ......................38
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SECTION 6.06. Negative Covenants of the Collection Agent .............39
SECTION 6.07. Collection Agent Default ...............................40
SECTION 6.08. Responsibilities of the Transferor and the Sellers .....41
ARTICLE VII Termination Events ...............................41
SECTION 7.01. Termination Events .....................................41
SECTION 7.02. Remedies Upon the Occurrence of a Termination Event. ...43
SECTION 7.03. Reconveyance Under Certain Circumstances ...............43
ARTICLE VIII The Administrative Agent .........................43
SECTION 8.01. Appointment ............................................43
SECTION 8.02. Delegation of Duties ...................................44
SECTION 8.03. Exculpatory Provisions .................................44
SECTION 8.04. Reliance by Administrative Agent .......................44
SECTION 8.05. Notice of Collection Agent Default .....................45
SECTION 8.06. Non-Reliance on the Administrative Agent and Other
Purchasers .......................................45
SECTION 8.07. Indemnification ........................................46
SECTION 8.08. The Administrative Agent in Its Individual Capacity ....46
SECTION 8.09. Resignation of Administrative Agent; Successor
Administrative Agent .............................46
ARTICLE IX Limited Guaranty .................................47
SECTION 9.01. Guaranty of Obligations ................................47
SECTION 9.02. Validity of Obligations; Irrevocability ................47
SECTION 9.03. Several Obligations ....................................48
SECTION 9.04. Subrogation Rights .....................................48
SECTION 9.05. Rights of Set-Off ......................................48
SECTION 9.06. Representations and Warranties .........................49
ARTICLE X Miscellaneous ....................................50
SECTION 10.01. Term of Agreement .....................................50
SECTION 10.02. Waivers; Amendments ...................................50
SECTION 10.03. Notices ...............................................50
SECTION 10.04. Governing Law; Submission to Jurisdiction;
Integration. .....................................52
SECTION 10.05. Severability; Counterparts ............................52
SECTION 10.06. Successors and Assigns ................................53
SECTION 10.07. Confidentiality .......................................54
SECTION 10.08. [Reserved]. ...........................................54
SECTION 10.09. [Reserved]. ...........................................54
SECTION 10.10. Characterization of the Transactions Contemplated
by the Agreement .................................55
SECTION 10.11. [Reserved]. ...........................................55
SECTION 10.12. GE Capital Conflict Waiver ............................55
SECTION 10.13. Limitation on the Termination of Sellers ..............55
ARTICLE XI Intercreditor Condition Amendments ...............56
SCHEDULE A Definitions
SCHEDULE B Schedule of Purchasers
SCHEDULE C Schedule of Special Obligors
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EXHIBIT A Credit and Collection Policies and Practices
EXHIBIT B List of Lockbox Banks and Accounts
EXHIBIT C Form of Lockbox Agreement
EXHIBIT D-1 Form of Deposit Report
EXHIBIT D-2 Form of Settlement Statement
EXHIBIT E Form of Transfer Certificate
EXHIBIT F List of Actions and Suits
EXHIBIT G Location of Records
EXHIBIT H Wire Transfer Instructions of Administrative Agent
EXHIBIT I Form of Secretary's Certificate
EXHIBIT J Trade Names of the Sellers
EXHIBIT K Form of Transfer Supplement
EXHIBIT L Form of Credit Default Swaps Assignment
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RECEIVABLES TRANSFER AGREEMENT (as amended,
supplemented or otherwise modified and in effect from time
to time, this "Agreement"), dated as of April 29, 2005, by
and among MRFC, Inc., a Delaware corporation, as transferor
(in such capacity, the "Transferor"), METALDYNE CORPORATION,
a Delaware corporation, individually (the "Parent"), as
collection agent (in such capacity, the "Collection Agent")
and as guarantor under the Limited Guaranty set forth in
Article IX (in such capacity, the "Guarantor"), the
purchasers identified on Schedule B and their respective
permitted successors and assigns (the "Purchasers"; each,
individually, a "Purchaser"), and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation ("GE Capital"), as
administrative agent for the benefit of the Purchasers (in
such capacity, the "Administrative Agent").
PRELIMINARY STATEMENTS
WHEREAS the Transferor may desire to convey, transfer and assign, from time
to time, undivided percentage interests in certain accounts receivable, and
subject to the terms and conditions hereof, shall accept such conveyance,
transfer and assignment of such undivided percentage interests, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Certain Defined Terms. Capitalized terms used herein shall
have the meanings assigned to such terms in, or incorporated by reference into,
Schedule A attached hereto, which Schedule A is incorporated by reference
herein.
SECTION 1.02. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.
SECTION 1.03. 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," the words "to"
and "until" each means "to but excluding," and the word "within" means "from and
excluding a specified date and to and including a later specified date."
ARTICLE II
Purchases and Settlements
SECTION 2.01. Facility. Upon the terms and subject to the conditions set
forth herein and in the other Transaction Documents prior to the Termination
Date, (x) the Transferor may, at its option, convey, transfer and assign to each
Purchaser and (y) each Purchaser shall ac-
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cept such conveyance, transfer and assignment from the Transferor of, without
recourse except as provided herein, undivided percentage ownership interests in
the Receivables, together with Related Security, Collections and Proceeds with
respect thereto, from time to time. Such purchases by the Purchasers from the
Transferor shall be made in accordance with their respective Pro Rata Shares. By
accepting any conveyance, transfer and assignment hereunder, none of the
Purchasers or the Administrative Agent assumes or shall have any obligations or
liability under any of the Contracts, all of which shall remain the obligations
and liabilities of the Sellers.
The Purchasers' several obligations to make purchases from the Transferor
hereunder shall terminate on the Termination Date. Notwithstanding anything to
the contrary contained herein or in the other Transaction Documents, no
Purchaser shall be obligated to provide the Transferor with funds in an amount
that would exceed such Purchaser's unused Commitment then in effect, and the
failure of any Purchaser to make its Pro Rata Share of such purchase available
to the Transferor (subject to the terms and conditions set forth herein) shall
not relieve any other Purchaser of its obligations hereunder.
SECTION 2.01. Transfers; Certificates; Eligible Receivables.
(a) Incremental Transfers. Prior to the Termination Date, upon the terms
and subject to the conditions set forth herein and in the other Transaction
Documents, the Transferor may, at its option from time to time, convey, transfer
and assign to each Purchaser and (y) each Purchaser shall accept such
conveyance, transfer and assignment from the Transferor, without recourse except
as provided herein, undivided percentage ownership interests in the Receivables,
together with Related Security, Collections and Proceeds with respect thereto
(each, an "Incremental Transfer") from time to time prior to the Termination
Date; provided that the representations and warranties set forth in Section 3.01
shall be true and correct as of the date of such Incremental Transfer and the
payment to the Transferor of the Transfer Price related thereto.
The Transferor shall, by notice to the Administrative Agent given by
telecopy, offer to convey, transfer and assign to the Purchasers undivided
percentage ownership interests in the Receivables and Related Security,
Collections and Proceeds with respect thereto at least one (1) Business Day
prior to the proposed date of any Incremental Transfer. Each such notice shall
specify (x) the desired Transfer Price (which shall be at least $1,000,000 per
Purchaser or integral multiples of $100,000 in excess thereof) or such lesser
amount that would not cause the Percentage Factor to exceed the Maximum
Percentage Factor; (y) the desired date of such Incremental Transfer which shall
be a Business Day; and (z) the desired Transfer Period(s) and allocations of the
Net Investment of such Incremental Transfer thereto as required by Section 2.03.
Each Incremental Transfer shall be subject to the condition precedent that the
Collection Agent shall have delivered to the Administrative Agent, in form and
substance satisfactory to the Administrative Agent, a completed Deposit Report
dated within five (5) Business Days prior to the desired date of such
Incremental Transfer, together with such other additional information as the
Administrative Agent may reasonably request. The Administrative Agent will
promptly notify the Purchasers of the Administrative Agent's receipt of any
request for an Incremental Transfer to be made to such Person.
Each notice of proposed Incremental Transfer shall be irrevocable and
binding on the Transferor, and the Transferor shall indemnify the Purchasers
against any loss or expense
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incurred by the Purchasers, either directly or indirectly, as a result of any
failure by the Transferor to complete such Incremental Transfer, including,
without limitation, any loss or expense incurred by the Purchasers by reason of
the liquidation or reemployment of funds acquired by the Purchasers (including,
without limitation, funds obtained by issuing Commercial Paper or promissory
notes, obtaining deposits as loans from third parties and reemployment of funds)
to fund such Incremental Transfer.
On the date of the initial Incremental Transfer, the Administrative Agent,
on behalf of the Purchasers, shall deliver written confirmation to the
Transferor of the Transfer Price, the Tranche Period(s) and the Tranche Rate(s)
relating to such Transfer as required by Section 2.03, and the Transferor shall
deliver to the Administrative Agent the Transfer Certificate in the form of
Exhibit E hereto (the "Transfer Certificate"). The Transfer Price for the
initial Incremental Transfer shall be $107,359,019.71. The Administrative Agent
shall indicate the amount of the initial Incremental Transfer together with the
date thereof on the grid attached to the Transfer Certificate; provided,
however, that the failure by the Administrative Agent to make the foregoing
notations shall not in any way affect the Transferor's obligations hereunder. On
the date of each subsequent Incremental Transfer, the Administrative Agent shall
send written confirmation to the Transferor of the Transfer Price, the Tranche
Period(s), the Transfer Date and the Tranche Rate(s) applicable to such
Incremental Transfer. The Administrative Agent shall indicate the amount of the
Incremental Transfer together with the date thereof as well as any decrease in
the Net Investment on the grid attached to the Transfer Certificate. The
Transfer Certificate shall evidence the Incremental Transfers. On the day of
such Incremental Transfer, each of the Purchasers shall deposit to the
Transferor's account, in immediately available funds, an amount equal to the
Transfer Price for such Incremental Transfer made to the Purchasers.
(b) Reinvestment Transfers. On each Business Day occurring after the
initial Incremental Transfer hereunder and prior to the Termination Date, the
Transferor hereby agrees to convey, transfer and assign to the Purchasers, and
each Purchaser shall purchase from the Transferor, undivided percentage
ownership interests in each and every Receivable, together with Related
Security, Collections and Proceeds with respect thereto, to the extent that
Collections are available for such Transfer in accordance with Section 2.05
hereof. The Transferor agrees to maintain, at all times prior to the Termination
Date, a Net Receivables Balance in an amount at least sufficient to maintain the
Percentage Factor at an amount not greater than the Maximum Percentage Factor.
Accordingly, the maximum amount of funding that the Transferor may obtain on the
Closing Date or at any time thereafter shall be equal to the maximum Net
Investment that would not cause the Percentage Factor to exceed the Maximum
Percentage Factor.
(c) All Transfers. Each Transfer shall constitute a purchase of undivided
percentage ownership interests in each and every Receivable, together with
Related Security, Collections and Proceeds with respect thereto, then existing,
as well as in each and every Receivable, together with Related Security,
Collections and Proceeds with respect thereto, which arises at any time after
the date of such Transfer. The Purchasers' aggregate undivided percentage
ownership interest in the Receivables, together with the Related Security,
Collections and Proceeds with respect thereto, shall equal the Percentage Factor
in effect from time to time.
(d) Percentage Factor. The Percentage Factor shall be initially computed as
of the opening of business of the Collection Agent on the date of the initial
Incremental Transfer
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hereunder. Thereafter, until the Termination Date, the Percentage Factor shall
be automatically recomputed as of the close of business of the Collection Agent
on each day (other than a day after the Termination Date). The Percentage Factor
shall remain constant from the time as of which any such computation or
recomputation is made until the time as of which the next such recomputation, if
any, shall be made. At all times on and after the Termination Date until the
date on which the Net Investment has been reduced to zero and all accrued
Discount, Servicing Fees and all other Aggregate Unpaids have been paid in full,
the Percentage Factor shall equal 100%.
SECTION 2.03. Selection of Tranche Periods and Tranche Rates.
(a) [Reserved].
(b) [Reserved].
(c) Prior to the Termination Date. At all times with respect to any portion
of the Transferred Interest which is owned by or transferred to a Purchaser
pursuant to this Agreement, but prior to the Termination Date, the initial
Tranche Period applicable to such portion of the Net Investment allocable
thereto shall be a period of not greater than three (3) days, and such Tranche
shall be a BR Tranche. Thereafter (but prior to the Termination Date or the
occurrence and continuation of a Potential Termination Event), with respect to
such portion, and with respect to any other portion of the Transferred Interest
held by any Purchaser, the Tranche Period applicable thereto shall be, at the
Transferor's sole option, either a BR Tranche or a Eurodollar Tranche. The
Transferor shall give the Administrative Agent and the Purchasers irrevocable
notice by telephone of the new Tranche Period at least three (3) Business Days
prior to the expiration of any then existing Tranche Period. Any Tranche Period
maintained by the Purchasers which is outstanding on the Termination Date shall
end on the Termination Date.
(d) After the Termination Date. At all times on and after the Termination
Date, subject to Section 2.17 hereof, the Administrative Agent shall select all
Tranche Periods and Tranche Rates applicable thereto upon the expiration of
Tranche Periods in effect on the Termination Date.
SECTION 2.04. Discount, Fees and Other Costs and Expenses. Notwithstanding
the limitation on recourse under Section 2.01 hereof, the Transferor shall pay,
as and when due in accordance with this Agreement and the other Transaction
Documents, all Discount, Servicing Fees, Fees and other Aggregate Unpaids to the
extent not otherwise provided for by the provisions of this Agreement. As
provided in Section 2.05 and 2.06, the Transferor shall pay to the
Administrative Agent, on behalf of the Purchasers, an amount equal to the
accrued and unpaid Discount for such Tranche Period; provided that (i) in the
event of any repayment or prepayment of a BR Tranche or a Eurodollar Tranche,
accrued Discount on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (ii) in the event of any conversion
of a BR Tranche or a Eurodollar Tranche, accrued interest on such BR Tranche or
Eurodollar Tranche shall be payable on the effective date of such conversion.
Discount shall accrue with respect to each Tranche on each day occurring during
the Tranche Period related thereto. Further, the Transferor will reimburse the
Administrative Agent for the actual cost of obtaining once during each calendar
quarter a certificate of good standing (in short-form, if ap-
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plicable, and on an un-expedited basis) for each of the Transferor and each
Seller from its state of incorporation or organization.
Nothing in this Agreement or the other Transaction Documents shall limit in
any way the obligations of the Transferor to pay the amounts set forth in this
Section 2.04.
SECTION 2.05. Non-Liquidation Settlement and Reinvestment Procedures. On
each day after the date of any Incremental Transfer but prior to the Termination
Date, and provided that Section 2.06 shall not be applicable, the Collection
Agent shall, out of the Percentage Factor of Collections received on or prior to
such day and not previously set aside or paid:
(i) set aside and hold in trust for the Purchasers (or deposit into
the Collection Account if so required pursuant to Section 2.13 hereof) an
amount equal to all Discount, Fees and the Servicing Fee accrued through
such day and not so previously set aside or paid;
(ii) apply the balance of such Percentage Factor of Collections
remaining after application of Collections as provided in clause (i) of
this Section 2.05 to the Transferor, for the benefit of the Purchasers, to
the purchase of additional undivided percentage interests in each
Receivable pursuant to Section 2.02(b) hereof; and
(iii) remit the balance, if any, of such Percentage Factor of
Collections remaining after the applications provided in clauses (i) and
(ii) to the Transferor.
On the Settlement Date, from the amounts set aside as described in clause (i) of
the first sentence of this Section 2.05 hereof, the Collection Agent shall
deposit to the Collection Account, for the benefit of the Purchasers, an amount
equal to the accrued and unpaid Discount and Fees for the related Settlement
Period and shall deposit to its own account an amount equal to the accrued and
unpaid Servicing Fee for such Settlement Period. The Administrative Agent, upon
its receipt of such amounts in the Collection Account, shall distribute such
amounts to the Purchasers entitled thereto in accordance with the records
maintained by the Administrative Agent pursuant to Section 2.24; provided
further that if the Administrative Agent shall have insufficient funds to pay
all of the above amounts in full on any such date, the Administrative Agent
shall notify the Transferor and the Transferor shall immediately pay to the
Administrative Agent, from funds previously paid to the Transferor, an amount
equal to such insufficiency. In addition, the Collection Agent shall remit to
the Transferor for its account or apply on behalf of the Transferor as
instructed by the Transferor to other accounts specified herein, on each
Settlement Date, such portion of Collections not allocated to the Purchasers or
applied towards payment of its Servicing Fee so long as all of the above amounts
are paid in full when due. Such Collections remitted to the Transferor shall be
available for the ordinary business purposes of the Transferor or otherwise,
subject to the provisions of the Transaction Documents.
SECTION 2.06. Liquidation Settlement Procedures. If at any time on or prior
to the Termination Date, the Percentage Factor is greater than the Maximum
Percentage Factor, then the Transferor shall immediately pay to the
Administrative Agent, for the benefit of the Purchasers, from previously
received Collections, an amount that, when applied to reduce the Net Investment,
will result in a Percentage Factor less than or equal to the Maximum Percentage
Fac-
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tor. Such amount shall be applied to reduce the Net Investment of Tranche
Periods selected by the Administrative Agent. On the Termination Date and on
each day thereafter, and on each day on which a Potential Termination Event has
occurred and is continuing, the Collection Agent, at the direction of the
Administrative Agent, shall set aside and hold in trust for the Purchasers (or
deposit into the Collection Account if so required pursuant to Section 2.12
hereof), the Percentage Factor of all Collections received on such day and shall
set aside and hold in trust for the Transferor such portion of Collections not
allocated to the Purchasers. On the Termination Date or the day on which a
Potential Termination Event occurs, the Collection Agent shall deposit to the
Collection Account, for the benefit of the Purchasers, any amounts set aside
pursuant to Section 2.05 above.
On the last day of each Tranche Period to occur on or after the Termination
Date or during the continuation of a Potential Termination Event, the Collection
Agent, at the direction of the Administrative Agent, shall deposit to the
Collection Account, for the benefit of the Purchasers, the amounts so set aside
for the Purchasers pursuant to the second preceding sentence, to be applied to
the payment in full of (i) the accrued Discount for such Tranche Period, (ii)
the portion of the Net Investment allocated to such Tranche Period, and (iii)
all other Aggregate Unpaids not covered in clauses (i) and (ii). On such day,
the Collection Agent shall deposit to its account, from the amounts set aside
for the Purchasers pursuant to the preceding sentence which remain after payment
in full of the aforementioned amounts, the accrued Servicing Fee for such
Tranche Period. If there shall be insufficient funds on deposit for the
Collection Agent to distribute funds in payment in full of the aforementioned
amounts, the Collection Agent shall distribute funds in the following order of
priority:
(i) first, in payment of the accrued Discount;
(ii) second, if the Transferor, the Parent or any Affiliate of the
Transferor or the Parent is not then the Collection Agent, to the
Collection Agent's account, in payment of the Servicing Fee payable to the
Collection Agent;
(iii) third, in reduction of the Net Investment allocated to any
Tranche Period ending on such date;
(iv) fourth, in payment of all Fees payable by the Transferor
hereunder;
(v) fifth, in payment of all other Aggregate Unpaids not covered in
clauses (i) through (iv) above; and
(iv) sixth, if the Transferor, any Seller or any Affiliate of the
Transferor or any Seller is the Collection Agent, to its account as
Collection Agent, in payment of the Servicing Fee payable to such Person as
Collection Agent.
The Administrative Agent, upon its receipt of such amounts in the Administrative
Agent's account, shall distribute such amounts to the Purchasers entitled
thereto in accordance with the records maintained by the Administrative Agent
pursuant to Section 2.24; provided that if the Administrative Agent shall have
insufficient funds to pay all of the above amounts in full on any such date, the
Administrative Agent shall pay such amounts in the order of priority set forth
above and, with respect to any such category above for which the Administrative
Agent shall
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have insufficient funds to pay all amounts owing on such date, ratably (based on
the amounts in such categories owing to such Persons) among all such Persons
entitled to payment thereof.
Following the date on which the Net Investment has been reduced to zero and
all accrued Discount, Servicing Fees and all other Aggregate Unpaids have been
paid in full, (i) the Percentage Factor shall equal zero, (ii) the
Administrative Agent, on behalf of the Purchasers, shall be considered to have
reconveyed to the Transferor all of the Purchasers' right, title and interest
in, to and under the Receivables and Related Security, Collections and Proceeds
with respect thereto, (iii) the Collection Agent shall pay to the Transferor any
remaining Collections set aside and held by the Collection Agent pursuant to the
third sentence of this Section 2.06 and (iv) the Administrative Agent, on behalf
of the Purchasers, shall execute and deliver to the Transferor, at the
Transferor's expense, such documents or instruments as are necessary to
terminate the Purchasers' respective interests in the Receivables and Related
Security, Collections and Proceeds with respect thereto. Any such documents
shall be prepared by or on behalf of the Transferor. On the last day of each
Tranche Period, the Collection Agent shall remit to the Transferor such portion
of Collections set aside for the Transferor pursuant to this Section 2.06.
SECTION 2.07. Reduction of Commitments. Upon ten (10) Business Days written
notice to the Administrative Agent, the Transferor may reduce the Commitments of
the Purchasers in an amount equal to $5,000,000 or a whole multiple of $500,000
in excess thereof; provided that no such termination or reduction shall be
permitted if, after giving effect thereto, the Net Investment would exceed the
Aggregate Commitment. Upon any such reduction, the Commitment of each Purchaser
shall be reduced in an amount equal to such Purchaser's Pro Rata Share of the
amount of such reduction. Once reduced, the Commitments shall not be
subsequently reinstated. The Commitment of each Purchaser shall be automatically
reduced to zero on the Commitment Expiry Date.
SECTION 2.01. Fees.
(a) The Transferor agrees to pay to the Administrative Agent an unused
facility fee equal to one half of one percent (0.50%) per annum (the "Unused
Line Fee") calculated daily from the Closing Date until the Commitment Expiry
Date and payable monthly on the Settlement Date, commencing with the first full
month following the Closing Date, on the amount by which the Aggregate
Commitment as in effect on such date exceeds the Net Investment on such date,
which fee shall be fully earned when payable and shall be non-refundable. All
computations of the Unused Line Fee shall be made by Administrative Agent on the
basis of a 365 or 366-day year, as applicable, for the actual number of days
occurring in the period for which the Unused Line Fee is payable.
(b) To the extent not otherwise provided for by the provisions of the
Agreement, the Transferor shall pay to the Administrative Agent, for its own
account and the account of each Purchaser, the Fees specified in the Fee Letter.
SECTION 2.09. Protection of Ownership Interest of the Purchasers; Lockbox
Accounts.
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(a) The Transferor agrees that it will, and will cause each Seller to, from
time to time, at its expense, promptly execute and deliver all instruments and
documents and take all actions as may be necessary or as the Administrative
Agent may reasonably request in order to perfect or protect the Transferred
Interest or to enable the Administrative Agent or the Purchasers to exercise or
enforce any of their respective rights hereunder. Without limiting the
foregoing, the Transferor will, and will cause each Seller to, upon the request
of the Administrative Agent or any of the Purchasers, in order to accurately
reflect this purchase and sale transaction, (x) file (or authorize the filing
of) such financing or continuation statements or amendments thereto or
assignments thereof (as permitted pursuant to Section 10.06 hereof) as may be
requested by the Administrative Agent for the benefit of the Purchasers and (y)
▇▇▇▇ its respective master data processing records and other documents with a
legend describing the conveyance to the Transferor (in the case of the Sellers)
and the Administrative Agent for the benefit of the Purchasers, of the
Transferred Interest. The Transferor shall, and will cause the Sellers to, upon
request of the Administrative Agent, obtain such additional search reports as
the Administrative Agent, for the benefit of the Purchasers, shall reasonably
request. To the fullest extent permitted by applicable law, the Administrative
Agent shall be permitted to file continuation statements and amendments thereto
and assignments thereof without the Transferor's or any Seller's signature. The
Transferor shall not, and shall not permit any Seller to, change its respective
name, identity or corporate structure (within the meaning of Section 9-503 of
the Relevant UCC), change its jurisdiction of incorporation or organization or
relocate its respective chief executive office or any office where Records are
kept unless it shall have: (i) given the Administrative Agent at least thirty
(30) days' prior notice thereof and (ii) prepared at Transferor's expense and
delivered to the Administrative Agent all financing statements, instruments and
other documents necessary to preserve and protect the Transferred Interest or
requested by the Administrative Agent in connection with such change or
relocation. Any filings under the Relevant UCC or otherwise that are occasioned
by such change in name or location shall be made at the expense of Transferor.
(b) The Collection Agent shall instruct, and shall cause the other Sellers
to instruct, all Obligors to cause all Collections to be deposited directly with
a Lockbox Bank. Any Lockbox Account maintained by a Lockbox Bank pursuant to the
related Lockbox Agreement shall be under the exclusive dominion and control of
the Administrative Agent which is hereby granted to the Administrative Agent by
the Transferor. The Collection Agent shall be permitted to give instructions to
the Lockbox Banks except during the occurrence of a Collection Agent Default or
any other Termination Event. The Collection Agent shall not add any bank as a
Lockbox Bank to those listed on Exhibit B attached hereto unless such bank has
entered into a Lockbox Agreement. The Collection Agent shall not terminate any
bank as a Lockbox Bank unless the Administrative Agent shall have received sixty
(60) days' prior notice of such termination. If the Transferor, any Seller or
the Collection Agent receives any Collections, the Transferor or the Collection
Agent, as applicable, shall, or shall cause such Seller to, remit such
Collections to a Lockbox Account within one (1) Business Day.
(c) The Collection Agent hereby transfers and assigns all of its rights,
titles and interests in each Lockbox Account and all cash, checks and other
negotiable instruments, funds and other evidences of payment held therein to the
Transferor, and the Transferor hereby pledges, assigns and transfers to the
Administrative Agent, for the benefit of the Purchasers, and hereby creates and
grants to the Administrative Agent, for the benefit of the Purchasers, a
secu-
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rity interest in the Lockbox Accounts and all cash, checks and other negotiable
instruments, funds and other evidences of payment held therein. Administrative
Agent and Transferor shall enter into cash dominion Lockbox Agreements, in form
and substance satisfactory to Administrative Agent; provided, however, that so
long as no Termination Event or Potential Termination Event has occurred and is
continuing, Administrative Agent shall return to Transferor on each business day
the cash swept from the Lockbox Accounts to Administrative Agent on such day.
SECTION 2.10. Deemed Collections; Application of Payments.
(a) If on any day a Receivable becomes a Diluted Receivable, the Transferor
shall be deemed to have received on such day a Collection of such Receivable in
the amount of such reduction or cancellation, and the Transferor shall pay to
the Collection Agent an amount equal to such reduction or cancellation. Any such
amount shall be applied by the Collection Agent as a Collection in accordance
with Section 2.05 or 2.06 hereof, as applicable. The Net Investment shall be
reduced by the amount of such payment actually received by the Administrative
Agent.
(b) If on any day any of the representations or warranties in Article III
was or becomes untrue with respect to a Receivable or the nature of the
Administrative Agent's interest therein (whether on or after the date of any
transfer of an interest therein to the Purchasers), the Transferor shall be
deemed to have received on such day a Collection of such Receivable in full and
the Transferor shall, on such day, pay to the Collection Agent an amount equal
to the Outstanding Balance of such Receivable and such amount shall be allocated
and applied by the Collection Agent as a Collection allocable to the Transferred
Interest in accordance with Section 2.05 or 2.06 hereof, as applicable. The Net
Investment shall be reduced by the amount of such payment actually received by
the Administrative Agent. Simultaneously with any such payment by the
Transferor, each of the Purchasers shall convey all of its right, title and
interest in such Receivable and Related Security to the Transferor, and the
Administrative Agent, on behalf of the Purchasers, shall take all action
reasonably requested by the Transferor to effectuate such conveyance.
(c) Any payment by an Obligor in respect of any indebtedness owed by it to
the Transferor or any Seller shall, except as provided in paragraphs (a) and (b)
of this Section 2.10 or as otherwise specified by such Obligor or otherwise
required by contract or law and unless otherwise instructed by the Required
Purchasers, be applied as a Collection of any Receivable of such Obligor
included in the Transferred Interest (in order of the age of such Receivable,
starting with the oldest such Receivable) to the extent of any amounts then due
and payable thereunder before being applied to any other receivable or other
indebtedness of such Obligor.
SECTION 2.11. Payments and Computations, etc. All amounts to be paid or
deposited by the Transferor or the Collection Agent hereunder shall be paid or
deposited in accordance with the terms hereof (including without limitation in
accordance with the wire transfer instructions set forth as Exhibit H hereto) no
later than 12:00 p.m. (New York time) on the day when due in immediately
available funds; if such amounts are payable to any Purchaser, they shall be
paid or deposited to the Collection Account, until otherwise notified by the
Administrative Agent. No later than 3:00 p.m. (New York time) on the date of any
Incremental Transfer hereunder, the Purchasers, will make available to the
Transferor, in immediately available funds,
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the amount of such Incremental Transfer on such day by remitting such amount to
an account of the Transferor specified in the related notice of Transfer. The
Transferor shall, to the extent permitted by law, pay to the Administrative
Agent, for the benefit of the Purchasers upon demand, interest on all amounts
not paid or deposited by it when due hereunder at a rate equal to 1.5% per annum
plus the Base Rate. All computations of interest hereunder shall be made on the
basis of a year of 365 or 366 days, as applicable for the actual number of days
(including the first but excluding the last day) elapsed. Whenever any payment
or deposit to be made hereunder shall be due on a day other than a Business Day,
such payment or deposit shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of such payment or
deposit. Any computations by the Administrative Agent of amounts payable by the
Transferor hereunder shall be binding upon the Transferor absent manifest error.
SECTION 2.12. Reports. (a) Deposit Report. The Collection Agent shall
deliver to the Administrative Agent and the Transferor, no later than 1:00 p.m.,
New York City time, on each Weekly Settlement Date (or, after the occurrence of
a Termination Event or after the occurrence and during the continuance of a
Potential Termination Event, on each Business Day), a written report
substantially in the form attached hereto as Exhibit D-1 (the "Deposit Report")
setting forth total Collections received and Receivables originated during the
immediately preceding calendar week, Eligible Receivables balances at the end of
the immediately preceding calendar week, and such other information as the
Administrative Agent may reasonably request. If any Sellers or Seller Divisions
are shut down during any week, the Deposit Report for such week may be prepared
on the basis of the information with respect to the Collections and Receivables
of such Sellers and Seller Divisions for their last week of operations preceding
the shut down. The Deposit Report may be delivered in an electronic format
mutually agreed upon by the Collection Agent and the Administrative Agent, or
pending such agreement, by facsimile.
(b) Settlement Statement. On each Settlement Date, the Collection Agent
shall deliver to the Administrative Agent and the Transferor a monthly report,
substantially in the form of Exhibit D-2 (the "Settlement Statement"), showing
(i) the aggregate Purchase Price of Receivables acquired or generated by the
Sellers in the preceding month, (ii) the aggregate Outstanding Balance of such
Receivables that are Eligible Receivables and (iii) such other information as
the Administrative Agent may reasonably request.
SECTION 2.13. Collection Account. (i) There shall be established on or
before the day of the initial Incremental Transfer hereunder and maintained, for
the benefit of the Administrative Agent on behalf of the Purchasers, a
segregated account (the "Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Purchasers. On and after the occurrence of a Termination Event or a Potential
Termination Event, the Collection Agent, at the direction of the Administrative
Agent, shall remit daily to the Collection Account all Collections received with
respect to any Receivables as provided in Section 2.06. Funds on deposit in the
Collection Account (other than investment earnings) shall be invested by the
Administrative Agent in Permitted Investments that will mature so that such
funds will be available prior to the last day of each successive Tranche Period
or prior to each Settlement Date, as applicable, following such investment. On
the last day of each Tranche Period or on each Settlement Date, as applicable,
all interest and earnings (net of losses and investment expenses) on funds on
deposit in the Collection Account shall be retained in the Collection Account
and be available to make any payments required to be made hereunder (including
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Discount) by the Transferor. On the date on which the Net Investment is zero,
all accrued Discount, Servicing Fees, Fees and all other Aggregate Unpaids have
been paid in full, any funds remaining on deposit in the Collection Account
shall be paid to the Transferor.
(b) For so long as any amounts remain due and owing to the Purchasers
hereunder or under the Transaction Documents, the Administrative Agent shall
distribute all payments received by it in respect of the Transaction Documents
immediately after receipt thereof by (i) transferring to the Purchasers, on a
pro rata basis, based on the amounts thereof owing to each Purchaser and each
Purchaser, respectively, all payments of Discount, (ii) transferring to the
Purchasers, on a pro rata basis, all payments in reduction of the Net Investment
and (iii) transferring to the Purchasers, any other amounts owing to the
Purchasers under this Agreement. Such transfers shall be made by the
Administrative Agent by withdrawing funds on deposit in the Collection Account
and remitting such funds to the accounts of the Purchasers specified by each of
them from time to time. The Administrative Agent shall remit any such funds to
the Purchasers ratably in accordance with their Pro Rata Shares.
SECTION 2.14. Right of Setoff. Each of the Purchasers is hereby authorized
(in addition to any other rights it may have) at any time after the occurrence
of the Termination Date, or during the continuation of a Termination Event, to
set off, appropriate and apply (without presentment, demand, protest or other
notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by such Purchasers to, or for the account of, the
Transferor against the amount of the Aggregate Unpaids owing by the Transferor
to such Person (even if contingent or unmatured).
SECTION 2.15. Sharing of Payments, etc. If any Purchaser(for purposes of
this Section 2.15 only, a "Recipient") shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of any interest in the Transferred Interest owned by it in
excess of its ratable share of payments on account of any interest in the
Transferred Interest obtained by the Purchasers entitled thereto, such Recipient
shall forthwith purchase from the Purchasers entitled to a share of such amount
participations in the percentage interests owned by such Persons as shall be
necessary to cause such Recipient to share the excess payment ratably with each
such other Person entitled thereto; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such Recipient, such
purchase from each such other Person shall be rescinded and each such other
Person shall repay to the Recipient the purchase price paid by such Recipient
for such participation to the extent of such recovery, together with an amount
equal to such other Person's ratable share (according to the proportion of (a)
the amount of such other Person's required payment to (b) the total amount so
recovered from the Recipient) of any interest or other amount paid or payable by
the Recipient in respect of the total amount so recovered.
SECTION 2.16. Broken Funding. In the event of (a) the payment of any
principal of any Eurodollar Tranche other than on the last day of the Eurodollar
Tranche Period applicable thereto (including as a result of the occurrence of
the Termination Date or an optional prepayment of a Eurodollar Tranche), (b) the
conversion of any Eurodollar Tranche other than on the last day of the related
Eurodollar Tranche Period, or (c) any failure to borrow, convert, continue or
prepay any Eurodollar Tranche on the date specified in any notice delivered
pursuant hereto, then, in any such event, the Transferor shall compensate each
of the Purchasers for the
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loss, cost and expense actually incurred by such Purchaser attributable to such
event. Such loss, cost or expense to any Purchaser shall include an amount
determined by such Purchaser to be the excess, if any, of (i) the amount of
Discount which would have accrued on the principal amount of such Eurodollar
Tranche had such event not occurred, at the Eurodollar Rate that would have been
applicable to such Eurodollar Tranche, for the period from the date of such
event to the last day of the Eurodollar Tranche Period (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
related Eurodollar Tranche Period), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Purchaser would bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other banks in the
interbank Eurodollar market. Within forty-five (45) days after any Purchaser
hereunder receives actual knowledge of any of the events specified in this
Section 2.16, a certificate of such Purchaser setting forth any amount or
amounts that such Purchaser is entitled to receive pursuant to this Section 2.16
and the reason(s) therefor shall be delivered to the Transferor (with a copy to
the Administrative Agent) and shall be conclusive absent manifest error. The
Transferor shall pay each such Purchaser the amount shown as due on any such
certificate within ten (10) days after receipt thereof.
SECTION 2.17. Conversion and Continuation of Outstanding Tranches. Prior to
the occurrence of the Termination Date or a Potential Termination Event, (a)
each BR Tranche hereunder may, at the option of the Transferor, be converted to
a Eurodollar Tranche and (b) each Eurodollar Tranche may, at the option of the
Transferor, be continued as a Eurodollar Tranche or converted to a BR Tranche.
If the Termination Date has occurred or a Potential Termination Event has been
declared by the Administrative Agent and is continuing, then (i) no outstanding
Tranche funded by the Purchasers may be converted to, or continued as, a
Eurodollar Tranche and (ii) unless repaid, each Eurodollar Tranche shall be
converted to a BR Tranche on the last day of the Tranche Period related thereto.
For any such conversion or continuation, the Transferor shall give the
Administrative Agent irrevocable notice (each, a "Conversion/Continuation
Notice") of such request not later than 12:30 p.m. (New York City time) (i) in
the case of a conversion of a BR Tranche into a Eurodollar Tranche, or a
continuation of a Eurodollar Tranche as a Eurodollar Tranche, three (3) Business
Days before the date of such conversion or continuation, as applicable, and (ii)
following the Termination Date or the declaration by the Administrative Agent
and continuation of a Potential Termination Event, in the case of a conversion
of a Eurodollar Tranche into a BR Tranche or a continuation of a BR Tranche as a
BR Tranche, on the Business Day of such conversion. If a Conversion/Continuation
Notice has not been timely delivered with respect to any BR Tranche or
Eurodollar Tranche, such Tranche shall be automatically continued as, or
converted to, a BR Tranche. Each Conversion/Continuation Notice shall specify
(a) the requested date (which shall be a Business Day) of such conversion or
continuation, (b) the aggregate amount and rate option applicable to the Tranche
which is to be converted or continued and (c) the amount and rate option(s) of
Tranche(s) into which such Tranche is to be converted or continued.
SECTION 2.18. Illegality.
(a) Notwithstanding any other provision herein, if, after the Closing Date,
the adoption of any Law or bank regulatory guideline or any amendment or change
in the interpretation of any existing or future Law or bank regulatory guideline
by any Official Body charged with the administration, interpretation or
application thereof, or the compliance with any direc-
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tive of any Official Body (in the case of any bank regulatory guideline, whether
or not having the force of Law), shall make it unlawful for any Purchaser to
acquire or maintain a Eurodollar Tranche as contemplated by this Agreement, (i)
such Purchaser shall, within forty-five (45) days after receiving actual
knowledge thereof, deliver a certificate to the Transferor (with a copy to the
Administrative Agent) setting forth the basis for such illegality, which
certificate shall be conclusive absent manifest error, (ii) the commitment of
such Purchaser hereunder to make a portion of a Eurodollar Tranche, continue any
portion of a Eurodollar Tranche as such and convert a BR Tranche to a Eurodollar
Tranche shall forthwith be canceled, and such cancelation shall remain in effect
so long as the circumstance described above exists, and (iii) such Purchaser's
portion of any Eurodollar Tranche then outstanding shall be converted
automatically to a BR Tranche on the last day of the related Eurodollar Tranche
Period, or within such earlier period as required by law.
If any such conversion of a portion of a Eurodollar Tranche occurs on a day
which is not the last day of the related Eurodollar Tranche Period, then
pursuant to Section 2.16 the Transferor shall pay to such Purchaser such
amounts, if any, as may be required to compensate such Purchaser. If
circumstances subsequently change so that it is no longer unlawful for an
affected Purchaser to acquire or to maintain a portion of a Eurodollar Tranche
as contemplated hereunder, such Purchaser will, as soon as reasonably
practicable after such Purchaser knows of such change in circumstances, notify
the Transferor and the Administrative Agent, and upon receipt of such notice,
the obligations of such Purchaser to acquire or maintain its acquisition of
portions of Eurodollar Tranches or to convert its portion of a BR Tranche into
portions of Eurodollar Tranches shall be reinstated.
(b) Each Purchaser agrees that, upon the occurrence of any event giving
rise to the operation of Section 2.18(a) with respect to such Purchaser, it
will, if requested by the Transferor and to the extent permitted by law or by
the relevant Official Body, endeavor in good faith to change the office at which
it books its portions of Eurodollar Tranches hereunder if such change would make
it lawful for such Purchasers to continue to acquire or to maintain its
acquisition of portions of Eurodollar Tranches hereunder; provided, however,
that such change may be made in such manner that such Purchaser, in its sole
determination, suffers no unreimbursed cost or expense or any other disadvantage
whatsoever.
SECTION 2.19. Inability to Determine Eurodollar Rate. If, prior to the
first day of any Eurodollar Tranche Period:
(i) the Administrative Agent shall have determined (which
determination in the absence of manifest error shall be conclusive and
binding upon the Transferor) that, by reason of circumstances affecting the
interbank Eurodollar market, either (a) dollar deposits in the relevant
amounts and for the relevant Tranche Period are not available, or (b)
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Eurodollar Tranche Period; or
(ii) the Administrative Agent shall have received notice from the
Required Purchasers that the Eurodollar Rate determined or to be determined
for such Eurodollar Tranche Period will not adequately and fairly reflect
the cost to such Purchasers (as
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conclusively certified by such Purchasers) of purchasing or maintaining
their affected portions of Eurodollar Tranches during such Eurodollar
Tranche Period;
then, in either such event, the Administrative Agent shall give telecopy or
telephonic notice thereof (confirmed in writing) to the Transferor and the
Purchasers as soon as practicable (but, in any event, within ten (10) days after
such determination or notice, as applicable) thereafter. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Tranches shall
be made. The Administrative Agent agrees to withdraw any such notice as soon as
reasonably practicable after the Administrative Agent is notified of a change in
circumstances which makes such notice inapplicable.
SECTION 2.20. Indemnities by the Transferor. Without limiting any other
rights which the Administrative Agent may have hereunder or under applicable
law, the Transferor hereby agrees to indemnify the Purchasers and the
Administrative Agent and any successors and permitted assigns and their
respective officers, directors, agents and employees (collectively, "Indemnified
Parties") from and against any and all damages, losses, claims, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
(which such attorneys may be employees of the Administrative Agent) and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them in any action
or proceeding between the Transferor, the Collection Agent in such capacity or
the Sellers and any of the Indemnified Parties or between any of the Indemnified
Parties and any third party or otherwise arising out of or as a result of this
Agreement, the other Transaction Documents, the ownership or maintenance, either
directly or indirectly, by the Administrative Agent or any Purchaser of the
Transferred Interest or any of the other transactions contemplated hereby or
thereby, excluding, however, (i) Indemnified Amounts to the extent relating to
or resulting from (x) gross negligence or willful misconduct on the part of an
Indemnified Party as finally determined pursuant to a nonappealable order or
judgment issued by a court of competent jurisdiction or (y) recourse (except as
otherwise specifically provided in this Agreement) for uncollectible Receivables
or (ii) all taxes (other than Indemnified Taxes). Without limiting the
generality of the foregoing, the Transferor shall indemnify each Indemnified
Party for Indemnified Amounts (without duplication of amounts for which any
Indemnified Party is effectively held harmless under any other provision hereof)
relating to or resulting from:
(a) any representation or warranty made in writing by the Transferor, the
Collection Agent or the Sellers or any officers of the Transferor, the
Collection Agent or the Sellers under or in connection with this Agreement, any
of the other Transaction Documents, any Deposit Report, any Settlement Report or
any other information or report delivered by any of them pursuant hereto or
thereto, which shall have been false or incorrect in any material respect when
made or deemed made;
(b) the failure by the Transferor, the Collection Agent or the Sellers to
comply with any applicable law, rule or regulation with respect to any
Receivable or the related Contract, or the nonconformity of any Receivable or
the related Contract with any such applicable law, rule or regulation;
(c) the failure to either (x) vest and maintain vested in the
Administrative Agent, for the benefit of the Purchasers, an undivided first
priority, perfected percentage owner-
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ship interest, to the extent of the Transferred Interest, in the Receivables and
Related Security, Collections and Proceeds with respect thereto, free and clear
of any Adverse Claim or (y) to create or maintain a valid and perfected first
priority security interest in favor of the Administrative Agent, for the benefit
of the Purchasers, in the Transferor's interest in the Receivables and Related
Security, Collections and Proceeds with respect thereto, free and clear of any
Adverse Claim (other than any Adverse Claim created by or through the
Purchasers);
(d) the failure to file, or any delay in filing, financing statements,
continuation statements, or other similar instruments or documents under the
Relevant UCC or other applicable laws with respect to any of the Receivables or
Related Security, Collections and Proceeds with respect thereto;
(e) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Contract not being 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 merchandise or services related to such Receivable or
the furnishing or failure to furnish such merchandise or services (if such
collection activities were performed by the Transferor or any of its Affiliates
acting as the Collection Agent);
(f) any products liability claim or personal injury or property damage suit
or other similar or related claim or action of whatever sort arising out of or
in connection with merchandise or services which are the subject of any
Receivable;
(g) the transfer of an ownership interest in any Receivable other than an
Eligible Receivable;
(h) the failure by any of the Transferor, the Collection Agent or the
Sellers to comply with any term, provision or covenant contained in this
Agreement or any of the other Transaction Documents to which it is a party or to
perform any duty or obligation in accordance with the provisions hereof or
thereof or to perform any of its duties or obligations under the Contracts;
(i) the Percentage Factor exceeding the Maximum Percentage Factor at any
time on or prior to the Termination Date;
(j) the failure of the Sellers to pay when due any taxes, including without
limitation, sales, excise or personal property taxes payable in connection with
any of the Receivables with respect to which an Indemnified Party may be held
liable as a transferee of such Receivables;
(k) any repayment by any Indemnified Party of any amount previously
distributed in reduction of Net Investment which such Indemnified Party believes
in good faith is required to be made;
(l) the commingling by the Transferor, the Sellers or the Collection Agent
of Collections of Receivables at any time with other funds;
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(m) any investigation, litigation or proceeding related to this Agreement,
any of the other Transaction Documents, the use of proceeds of Transfers by the
Transferor or the Sellers, the ownership of Transferred Interests, or any
Receivable, Related Security or Contract;
(n) the failure of any Lockbox Bank to remit any amounts held in the
Lockbox Accounts pursuant to the instructions of the Collection Agent, the
Transferor, the Sellers or the Administrative Agent (to the extent such Person
is entitled to give such instructions in accordance with the terms hereof and of
any applicable Lockbox Agreement) whether by reason of the exercise of set-off
rights or otherwise;
(o) any inability to obtain any judgment in or utilize the court or other
adjudication system of, any state in which an Obligor may be located as a result
of the failure of the Transferor or the Sellers to qualify to do business or
file any notice of business activity report or any similar report;
(p) any failure of the Transferor to give reasonably equivalent value to
the Sellers in consideration of the purchase by the Transferor from the Sellers
of any Receivable, or any attempt by any Person to void, rescind or set aside
any such transfer under statutory provisions or common law or equitable action,
including, without limitation, any provision of the Bankruptcy Code; or
(q) any action taken by the Transferor, the Sellers or the Collection Agent
in the enforcement or collection of any Receivable;
provided, however, that the Transferor shall not be liable for Indemnified
Amounts attributable to the fraud, gross negligence, breach of fiduciary duty or
willful misconduct of any Collection Agent in the enforcement or collection of
any Receivable if such Collection Agent is not the Parent or an Affiliate of the
Parent; and provided, further, that if such Indemnified Amounts are attributable
solely to the Transferor, the Transferor shall be solely liable for such
Indemnified Amounts, and if such Indemnified Amounts are attributable solely to
Other Transferors, such Other Transferors shall be solely liable for such
Indemnified Amounts.
SECTION 2.21. Indemnity for Reserves and Expenses. (a) If after the date
hereof, the adoption of any Law or bank regulation or regulatory guideline or
any amendment or change in the interpretation of any existing or future Law or
bank regulation or regulatory guideline by any Official Body charged with the
administration, interpretation or application thereof, or the compliance with
any directive of any Official Body (in the case of any bank regulation or
regulatory guideline, whether or not having the force of Law), other than Laws,
interpretations, guidelines or directives relating to Taxes:
(i) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System) against assets of, deposits with or for the account of, or credit
extended by, any Indemnified Party or shall impose on any Indemnified Party
or on the United States market for certificates of deposit or the London
interbank market any other condition affecting this Agreement, the other
Transaction Documents, the ownership, maintenance or financing of the
Transferred Interest,
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the Receivables or payments of amounts due hereunder or its obligation to
advance funds hereunder or under the other Transaction Documents; or
(ii) imposes upon any Indemnified Party any other expense (including,
without limitation, reasonable attorneys' fees and expenses, and expenses
of litigation or preparation therefor in contesting any of the foregoing)
with respect to this Agreement, the other Transaction Documents, the
ownership, maintenance or financing of the Transferred Interest, the
Receivables or payments of amounts due hereunder or its obligation to
advance funds hereunder or otherwise in respect of this Agreement, the
other Transaction Documents, the ownership, maintenance or financing of the
Transferred Interests or the Receivables;
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Transaction
Documents, the ownership, maintenance or financing of the Transferred Interest,
the Receivables, the obligations hereunder, the funding of any Purchases
hereunder or under the other Transaction Documents, by an amount deemed by such
Indemnified Party to be material, then, within ten (10) Business Days after
demand by such Indemnified Party through the Administrative Agent, the
Transferor shall pay to the Administrative Agent, for the benefit of such
Indemnified Party, such additional amount or amounts (other than with respect to
taxes) as will compensate such Indemnified Party for such increased cost or
reduction; provided that no such amount shall be payable with respect to any
period commencing more than two hundred seventy (270) days prior to the date the
Administrative Agent first notifies the Transferor of its intention to demand
compensation therefor under this Section 2.21; provided further that if such
change in Law, rule or regulation giving rise to such increased costs or
reductions is retroactive, then such 270-day period shall be extended to include
the period of retroactive effect thereof. In making demand hereunder, the
applicable Indemnified Party shall submit to the Transferor a certificate as to
such increased costs incurred which shall provide in reasonable detail the basis
for such claim.
(b) If any Indemnified Party shall have determined that after the date
hereof, the adoption of any applicable Law or bank regulation or regulatory
guideline regarding capital adequacy, or any change therein, or any change in
the interpretation thereof by any Official Body, or any directive regarding
capital adequacy (in the case of any bank regulatory guideline, whether or not
having the force of law) of any such Official Body, has or would have the effect
of reducing the rate of return on capital of such Indemnified Party (or its
parent) as a consequence of such Indemnified Party's obligations hereunder or
with respect hereto to a level below that which such Indemnified Party (or its
parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Indemnified Party to be material, then from time to time,
within ten (10) Business Days after demand by such Indemnified Party through the
Administrative Agent, the Transferor shall pay to the Administrative Agent, for
the benefit of such Indemnified Party, such additional amount or amounts (other
than with respect to taxes) as will compensate such Indemnified Party (or its
parent) for such reduction; provided that no such amount shall be payable with
respect to any period commencing more than two hundred seventy (270) days prior
to the date the Administrative Agent first notifies the Transferor of its
intention to demand compensation therefor under this Section 2.21(b); provided
further that if such change in Law, rule or regulation giving rise to such
increased costs or reductions is retroactive, then such 270-
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day period shall be extended to include the period of retroactive effect
thereof. In making demand hereunder, the applicable Indemnified Party shall
submit to the Transferor a certificate as to such increased costs incurred which
shall provide in reasonable detail the basis for such claim.
SECTION 2.22. Indemnity for Taxes. (a) All payments made by the Transferor
or the Collection Agent to the Administrative Agent for the benefit of the
Purchasers under this Agreement and any other Transaction Document shall be made
free and clear of, and without deduction or withholding for or on account of any
Indemnified Taxes. If any such Indemnified Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Indemnified Party
hereunder, (i) the amounts so payable to the Administrative Agent or such
Indemnified Party shall be increased to the extent necessary to yield to the
Administrative Agent or such Indemnified Party (after payment of all Indemnified
Taxes) all amounts payable hereunder at the rates or in the amounts specified in
this Agreement and the other Transaction Documents and (ii) the Transferor or
the Collection Agent, as the case may be, shall make such deductions or
withholdings and shall pay the amount so deducted or withheld to the applicable
Official Body in accordance with the applicable law. The Transferor shall
indemnify the Administrative Agent or any Indemnified Party for the full amount
of any Indemnified Taxes paid by the Administrative Agent or the Indemnified
Party within ten (10) Business Days after the date of written demand therefor by
the Administrative Agent or such Indemnified Party if the Administrative Agent
or such Indemnified Party, as the case may be, has delivered to the Transferor a
certificate signed by an officer of the Administrative Agent or such Indemnified
Party, as the case may be, setting forth in reasonable detail the amount so paid
and the computations made to determine such amount. Such certificate shall be
conclusive absent manifest error.
(b) Each Indemnified Party that is not a United States person (within the
meaning of Section 7701(a)(30) of the Code) (a "United States Person") shall:
(i) at the time such Indemnified Party becomes a party to this
Agreement or the Transaction Documents, deliver to the Transferor and the
Administrative Agent (A) two duly completed copies of IRS Form 4224, or
successor applicable form, as the case may be, and (B) an IRS Form W-8 or
W-9, or successor applicable form, as the case may be;
(ii) deliver to the Transferor and the Administrative Agent two (2)
further copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Transferor or the Administrative Agent;
and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Transferor or
the Administrative Agent;
unless, in the case of (ii) and (iii) above, any change in treaty, law
regulation, governmental rule, guideline order, or official application or
official interpretation thereof has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Indemnified Party from duly completing and
delivering
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any such form with respect to it, and such Indemnified Party so advises the
Transferor and the Administrative Agent. Each such Indemnified Party that is not
a United States person (A) shall certify (i) in the case of an IRS Form 4224, or
successor applicable form, that it is entitled to receive payments under this
Agreement and the other Transaction Documents without deduction or withholding
of any United States federal income taxes and (ii) in the case of an IRS Form
W-8 or IRS Form W-9, or successor applicable form, that it is entitled to an
exemption from United States backup withholding tax and (B) shall agree to
provide any other certification and documentation as required by the applicable
law that is reasonably requested by the Transferor, the Sellers or the
Collection Agent. Each Person that is a Purchaser or Participant hereunder, or
which otherwise becomes a party to this Agreement and the other Transaction
Documents as a Purchaser, shall, prior to the effectiveness of such assignment,
participation or addition, as applicable, be required to provide all of the
forms and statements required pursuant to this Section 2.22.
SECTION 2.23. Other Costs, Expenses and Related Matters. (a) The Transferor
agrees, upon receipt of a written invoice, to pay or cause to be paid, and to
save the Administrative Agent and the Purchasers harmless against liability for
the payment of, all reasonable out-of-pocket expenses (including, without
limitation, reasonable attorneys', accountants' and other third parties' fees
and expenses, any filing fees and expenses incurred by officers or employees of
the Administrative Agent and/or the Purchasers) or intangible, documentary or
recording taxes incurred by or on behalf of the Administrative Agent or any of
the Purchasers (i) in connection with the negotiation, execution, delivery and
preparation of this Agreement, the other Transaction Documents and any documents
or instruments delivered pursuant hereto and thereto and the transactions
contemplated hereby or thereby (including, without limitation, the perfection or
protection of the Transferred Interest) and (ii) (A) relating to any amendments,
waivers or consents under this Agreement and the other Transaction Documents,
(B) arising in connection with the Administrative Agent's, or any Purchasers'
enforcement or preservation of rights (including, without limitation, the
perfection and protection of the Transferred Interest under this Agreement), or
(C) arising in connection with any audit, dispute, disagreement, litigation or
preparation for litigation involving this Agreement or any of the other
Transaction Documents (all of such amounts, collectively, "Transaction Costs").
All Transaction Costs owed by the Transferor pursuant to this subsection 2.23(a)
shall be payable in accordance with Section 2.05 and 2.06.
(b) The Transferor shall pay the Administrative Agent, for the account of
the Purchasers, on demand any Early Collection Fee due on account of the
reduction of a Tranche on any day prior to the last day of its Tranche Period.
(c) The Administrative Agent will within forty-five (45) days after receipt
of notice of any event occurring after the date hereof which will entitle an
Indemnified Party to compensation pursuant to this Article II, notify the
Transferor in writing of such event. Any notice by the Administrative Agent
claiming compensation under this Article II and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error, provided that such claim is made in good faith and on a
reasonable basis. In determining such amount, the Administrative Agent or any
applicable Indemnified Party may use any reasonable averaging and attributing
methods.
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(d) If the Transferor is required to pay any additional amount to any
Purchaser pursuant to Sections 2.21 or 2.22, then such Purchaser shall use
reasonable efforts (which shall not require such Purchaser to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory restrictions or
suffer any disadvantage or burden reasonably deemed by it to be significant) (A)
to file any certificate or document reasonably requested in writing by the
Transferor or (B) to assign its rights and delegate and transfer its obligations
hereunder to another of its offices, branches or affiliates, if such filing or
assignment would reduce amounts payable pursuant to Sections 2.21 or 2.22, as
the case may be, in the future.
SECTION 2.24. Administrative Agent. (a) The Administrative Agent is hereby
authorized to record on each Business Day the Funded Amount with respect to each
Purchaser and the aggregate amount of Discount and Fees accruing with respect
thereto on such Business Day. Any such recordations by the Administrative Agent,
absent manifest error, shall constitute prima facie evidence of the accuracy of
the information so recorded. The Administrative Agent will report the aggregate
amounts due to the Purchasers for the prior calendar month to the Transferor and
the Collection Agent not later than two (2) Business Days prior to the related
Settlement Date. Furthermore, the Administrative Agent will maintain records
sufficient to identify the percentage interest of each Purchaser in the
Receivables and any amounts owing thereunder.
(b) Upon receipt of funds from the Administrative Agent on each Settlement
Date pursuant to Sections 2.05 and 2.06, the Administrative Agent shall pay such
funds to the Purchasers owed such funds in accordance with the recordations
maintained by it in accordance with Section 2.24(a). If the Administrative Agent
shall have paid to any Purchaser any funds that (i) must be returned for any
reason (including bankruptcy) or (ii) exceeds that which such Purchaser was
entitled to receive, such amount shall be promptly repaid to the Administrative
Agent by such Purchaser.
SECTION 2.25. Use of Historical Data. Where necessary to calculate any
ratios or other amounts under this Agreement with reference to periods prior to
the Closing Date, historical data shall be used.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to the Administrative Agent and the
Purchasers that:
(a) Corporate Existence and Power. The Transferor is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all corporate power and all material governmental licenses,
authorizations, consents and approvals required to carry on its business in each
jurisdiction in which its business is now conducted. The Transferor is duly
qualified (or has duly applied for such qualification) to do business in, and is
in good standing in, every other jurisdiction in which the nature of its
business requires it to be so qualified, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect.
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(b) Corporate and Governmental Authorization; Contravention. The execution,
delivery and performance by the Transferor of this Agreement and the other
Transaction Documents to which the Transferor is a party are within the
Transferor's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
Official Body or official thereof, and do not contravene any provision of
applicable law, rule or regulation or of the Certificate of Incorporation or
Bylaws of the Transferor or constitute a default under any agreement or any
judgment, injunction, order, writ, decree or other instrument binding upon the
Transferor or result in the creation or imposition of any Adverse Claim on the
assets of the Transferor (except as contemplated by Section 2.09 hereof).
(c) Binding Effect. Each of this Agreement and the other Transaction
Documents to which the Transferor is a party constitutes, and the Transfer
Certificate, upon payment of the Transfer Price set forth therein, will
constitute the legal, valid and binding obligation of the Transferor,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws affecting the rights of creditors generally and general
equitable principles (whether considered in a proceeding at law or in equity).
(d) Perfection. Immediately preceding each Transfer hereunder, the
Transferor shall be the owner of all of the Receivables, free and clear of all
Adverse Claims. On or prior to each Transfer and each recomputation of the
Transferred Interest, all financing statements and other documents required to
be recorded or filed in order to perfect and protect the Transferred Interest
against all creditors of, and purchasers from, the Transferor and the Sellers
will have been duly filed in each filing office necessary for such purpose, and
all filing fees and taxes, if any, payable in connection with such filings shall
have been paid in full.
(e) Accuracy of Information. All information heretofore furnished by or on
behalf of the Transferor or the Collection Agent on its behalf (including,
without limitation, the Deposit Reports, the Settlement Statements, any other
reports delivered pursuant to the terms of this Agreement and the Transferor's
financial statements) to any Purchaser or the Administrative Agent for purposes
of, or in connection with, this Agreement and the other Transaction Documents
are, and all such information hereafter furnished by or on behalf of the
Transferor to any Purchaser or the Administrative Agent will be, true and
accurate in every material respect, on the date such information is stated or
certified.
(f) Tax Status. The Transferor has filed all material tax returns (Federal,
state and local) required to be filed and has paid or made adequate provision
for the payment of all material taxes, assessments and other governmental
charges other than taxes or filings contested in good faith or taxes which are
not yet due and payable, and for which adequate reserves have been established
in accordance with GAAP.
(g) Action, Suits. There are no actions, suits or proceedings pending or,
to the knowledge of the Transferor threatened, against or affecting the
Transferor or its properties, in or before any court, arbitrator or other
Official Body, which could reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect on the performance by the Transferor
of its obligations under the Agreement or the validity and enforceability of
this Agreement,
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the Receivables, the Contracts or any other Transaction Document, except as set
forth in Exhibit F concerning Affiliates of the Transferor.
(h) Use of Proceeds. No proceeds of any Transfer will be used by the
Transferor to acquire any security in any transaction which violates Regulation
T, U or X of the Federal Reserve Board.
(i) Place of Business; Jurisdiction of Organization. The principal place of
business and chief executive office of the Transferor are located at the address
of the Transferor indicated in Section 10.03 hereof, and the offices where the
Transferor keeps all its Records, are located at the address(es) described on
Exhibit G or such other locations notified to the Administrative Agent in
accordance with Section 2.09 hereof in jurisdictions where all action required
by Section 2.09 hereof has been taken and completed. The Transferor is a
corporation organized under the laws of the state of Delaware.
(j) Good Title. Upon each Transfer and each recomputation of the
Transferred Interest, the Administrative Agent, on behalf of the Purchasers,
shall acquire (A) a valid and perfected first priority undivided percentage
ownership interest to the extent of the Transferred Interest or (B) a first
priority perfected security interest in each Receivable that exists on the date
of such Transfer and recomputation and in the Related Security, Collections and
Proceeds with respect thereto, in either case free and clear of any Adverse
Claim.
(k) Trade Names, etc. As of the date hereof: (i) the Transferor's chief
executive office is located at the address for notices set forth in Section
10.03 hereof; (ii) the Transferor has no subsidiaries or divisions; and (iii)
the Transferor has not operated under any trade name within the last five (5)
years, and, within the last five (5) years, has not changed its name, changed
its organizational or corporate form, changed its jurisdiction of incorporation
or organization, merged with or into or consolidated with any other corporation
or been the subject of any proceeding under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code
(Bankruptcy).
(l) Nature of Receivables. Each Receivable (x) represented by the
Transferor or the Collection Agent to be an Eligible Receivable (including in
any Settlement Statement or other report delivered pursuant to Section 2.12
hereof) or (y) included in the calculation of the Net Receivables Balance in
fact satisfies at such time the definition of "Eligible Receivable."
(m) Coverage Requirement; Amount of Receivables. The Percentage Factor does
not exceed the Maximum Percentage Factor. As of April 29, 2005, the aggregate
Outstanding Balance of the Receivables in existence was $248,493,000, and the
Net Receivables Balance was $156,185,000.
(n) Credit and Collection Policy. Since the Closing Date, there have been
no material changes in the Credit and Collection Policy, other than as permitted
hereunder. Since such date, no material adverse change has occurred in the
overall rate of collection of the Receivables.
(o) Collections and Servicing. Since January 2, 2005, there has been no
material adverse change in the ability of the Collection Agent, the Sellers, the
Transferor or any Subsidiary or Affiliate of any of the foregoing to service and
collect the Receivables.
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(p) No Termination Event. No event has occurred and is continuing and no
condition exists which constitutes a Termination Event or a Potential
Termination Event.
(q) Not an Investment Company. The Transferor is not, and is not controlled
by, an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or is exempt from all provisions of such Act.
(r) ERISA. Each of the Transferor and its ERISA Affiliates is in compliance
in all material respects with ERISA, and no lien exists in favor of the Pension
Benefit Guaranty Corporation on any of the Receivables.
(s) Lockbox Accounts. The names and addresses of all the Lockbox Banks,
together with the account numbers of the Lockbox Accounts at such Lockbox Banks,
are specified in Exhibit B hereto (or at such other Lockbox Banks and/or with
such other Lockbox Accounts as have been notified to the Administrative Agent
and for which Lockbox Agreements have been executed in accordance with Section
2.09(b) hereof and delivered to the Collection Agent). All Obligors have been
instructed to make payment to a Lockbox Account, and only Collections are
deposited into a Lockbox Account.
(t) Bulk Sales. No transaction contemplated hereby or by the Receivables
Purchase Agreement requires compliance with any "bulk sales" act or similar law.
(u) Transfers Under Receivables Purchase Agreement. Each Receivable which
has been transferred to the Transferor by any Seller has been purchased by the
Transferor from such Seller pursuant to, and in accordance with, the terms of
the Receivables Purchase Agreement.
(v) Preference; Voidability. The Transferor shall have given reasonably
equivalent value to each Seller in consideration for the transfer to the
Transferor of the Receivables and Related Security, Collections and Proceeds
with respect thereto from such Seller, and each such transfer shall not have
been made for or on account of an antecedent debt owed by any Seller to the
Transferor, and no such transfer is or may be voidable under any Section of the
Bankruptcy Reform Act of 1978 (11 U.S.C. ▇▇.▇▇. 101 et seq.), as amended (the
"Bankruptcy Code").
(w) Subsidiaries. The Transferor shall not have any subsidiaries.
(x) Material Adverse Effect. Between the date of its formation and the
Closing Date, (i) the Transferor has not incurred any obligations, contingent or
non-contingent liabilities, liabilities for charges, long-term leases or unusual
forward or long-term commitments except with respect to receivables financing
and that, alone or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, (ii) no contract, lease or other agreement or
instrument has been entered into by the Transferor or has become binding upon
the Transferor's assets except with respect to receivables financing and no law
or regulation applicable to the Transferor has been adopted, in each case that
has had or could reasonably be expected to have a Material Adverse Effect, and
(iii) the Transferor has not, except with respect to receivables financing,
entered into, and is not in default, and no third party is in default under any
material contract, lease or other agreement or instrument to which the
Transferor is a party that alone or in the aggregate
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could reasonably be expected to have a Material Adverse Effect. Between the date
of the formation of the Transferor and the Closing Date, no event has occurred
that alone or together with other events could reasonably be expected to have a
Material Adverse Effect.
Any document, instrument, certificate or notice delivered to the
Administrative Agent or any Purchaser by the Transferor or any agent of the
Transferor hereunder shall be deemed a representation and warranty by the
Transferor.
SECTION 3.02. Reaffirmation of Representations and Warranties by the
Transferor. On each day that a Transfer is made hereunder, the Transferor, by
accepting the proceeds of such Transfer, whether delivered to the Transferor
pursuant to Section 2.02(a) or Section 2.05 hereof, shall be deemed to have
certified that all representations and warranties described in Section 3.01
hereof are true and correct on and as of such day as though made on and as of
such day.
ARTICLE IV
Conditions Precedent
SECTION 4.01. Conditions to Effectiveness. This Agreement shall become
effective on the first day on which the Administrative Agent shall have received
the following documents, instruments and Fees, all of which shall be in a form
and substance acceptable to the Administrative Agent:
(a) A Certificate of the Secretary or Assistant Secretary of the Transferor
in substantially the form of Exhibit I hereto certifying (i) the names and
signatures of the officers and employees authorized on its behalf to execute
this Agreement and any other documents to be delivered by it hereunder (on which
Certificate the Administrative Agent and the Purchasers may conclusively rely
until such time as the Administrative Agent shall receive from the Transferor a
revised Certificate meeting the requirements of this clause (a)(i)), (ii) a copy
of the Transferor's Certificate of Incorporation, certified by the Secretary of
State of the State of Delaware, (iii) a copy of the Transferor's By-Laws, (iv) a
copy of resolutions of the Board of Directors of the Transferor approving this
transaction and (v) certificates of the Secretary of State of the State of
Delaware certifying the Transferor's good standing under the laws of the State
of Delaware.
(b) A Certificate of the Secretary or Assistant Secretary of each Seller in
substantially the form of Exhibit I hereto certifying (i) the names and
signatures of the officers and employees authorized on its behalf to execute the
Receivables Purchase Agreement and any other documents to be delivered by it (on
which Certificate the Administrative Agent and the Purchasers may conclusively
rely until such time as the Administrative Agent shall receive from any Seller a
revised Certificate meeting the requirements of this clause (b)(i)), (ii) a copy
of such Seller's certificate of incorporation, certified by the Secretary of
State of the state of such Seller's incorporation, (iii) a copy of such Seller's
By-Laws, (iv) a copy of resolutions of the Board of Directors of such Seller
approving this transaction and (v) certificates of the Secretary of State of the
state of such Seller's incorporation, certifying such Seller's good standing
under the laws of such state.
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(c) Evidence satisfactory to the Administrative Agent of the filing in the
appropriate filing offices of proper financing statements (Form UCC-1), naming
the Transferor as the debtor, the Administrative Agent, as secured party, and of
such other similar instruments or documents as may be necessary or, in the
reasonable opinion of the Administrative Agent, desirable under the Relevant UCC
of all appropriate jurisdictions or any comparable law to perfect the
Administrative Agent's security interest in all Receivables, Related Security,
Proceeds and Collections.
(d) Evidence satisfactory to the Administrative Agent of the filing in the
appropriate filing offices of proper financing statements (Form UCC-1), naming
each Seller as debtor, the Transferor as secured party, and the Administrative
Agent, as assignee of the secured party, and of such other similar instruments
or documents as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable under the Relevant UCC of all appropriate
jurisdictions or any comparable law to perfect the Transferor's ownership or
security interest in all Receivables, Related Security and Collections.
(e) Evidence satisfactory to the Administrative Agent of the filing in the
appropriate filing offices of proper financing statements (Form UCC-3), if any,
necessary to terminate or assign to the Administrative Agent all security
interests and other rights of any person in Receivables previously granted by
the Transferor.
(f) Evidence satisfactory to the Administrative Agent of the filing in the
appropriate filing offices of proper financing statements (Form UCC-3), if any,
necessary to terminate or assign to the Administrative Agent all security
interests and other rights of any person in Receivables, Related Security or
Proceeds previously granted by the Sellers.
(g) Certified copies of request for information or copies (Form UCC-11) (or
a similar search report certified by parties acceptable to the Administrative
Agent), dated a date reasonably near the Closing Date, listing all effective
financing statements which name the Transferor and any Seller (under their
respective present names and any previous names) as debtor and which are filed
in jurisdictions in which the filings were made pursuant to item (c), (d), (e)
or (f) above together with copies of such financing statements (none of which,
except for those filed pursuant to item (c) or (d) or those terminated pursuant
to item (e) or (f), shall cover any Receivables, Related Security or Contracts).
(h) Executed copies of the Lockbox Agreements relating to each of the
Lockbox Banks and the Lockbox Accounts.
(i) An opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel to the
Transferor and the Sellers, addressed to the Administrative Agent and the
Purchasers, regarding (x) substantive consolidation in the event of a bankruptcy
of Metaldyne or any Seller and true sale between each Seller and the Transferor
and (y) enforceability of the Transaction Documents to which the Transferor and
each Seller is a party, certain corporate matters and perfection of the interest
granted by the Sellers incorporated or organized in the state of Delaware to the
Transferor and the security interest granted by the Transferor to the
Administrative Agent.
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(j) Opinions of special counsel to the Sellers and the Transferor in the
states of Illinois, Indiana, Michigan and Pennsylvania, respectively, addressed
to the Administrative Agent and the Purchasers, regarding perfection and
priority of the interest granted by the Sellers to the Transferor and the
security interest granted by the Transferor to the Administrative Agent.
(k) An executed copy of this Agreement and each other Transaction Document
to be executed by the Transferor and the Sellers.
(l) A Settlement Statement for 2005 and a Deposit Report for the week
ending April 22, 2005.
(m) The most recent audited and unaudited consolidated financial statements
of the Parent and a balance sheet of the Transferor certified by its chief
financial officer.
(n) All Fees required to be paid on or prior to the Closing Date in
accordance with the Fee Letter shall have been paid.
(o) A certificate of a Responsible Officer of the Transferor to the effect
that no Termination Event or Potential Termination Event shall have occurred and
be continuing as of the Closing Date.
(p) Such other documents, instruments, certificates and opinions as the
Administrative Agent shall reasonably request.
ARTICLE V
Covenants
SECTION 5.01. Affirmative Covenants of the Transferor. At all times from
the date hereof to the later to occur of (i) the Termination Date or (ii) the
date on which the Net Investment has been reduced to zero, all accrued Discount,
Servicing Fees and all other Aggregate Unpaids shall have been paid in full, in
cash, unless the Administrative Agent shall otherwise consent in writing:
(a) Financial Reporting. The Transferor will maintain a system of
accounting established and administered in accordance with GAAP, and furnish to
the Administrative Agent:
(i) Annual Reporting. Within ninety-five (95) days after the close of
the Transferor's fiscal year, audited financial statements of the Parent
and unaudited financial statements of the Transferor, prepared in
accordance with GAAP consistently applied, in the case of the Parent on a
consolidated basis for the Parent and its Subsidiaries, including balance
sheets as of the end of such period, related statements of operations,
shareholders' equity and cash flows, accompanied by (in the case of the
Parent) an audit report certified by PriceWaterhouseCoopers LLC or other
nationally recognized independent certified public accountants (without a
"going concern" or like qualification or exception and without any
qualification or exception as to the scope of the audit), accept-
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able to the Administrative Agent, prepared in accordance with generally
accepted auditing standards and any management letter prepared by said
accountants.
(ii) Quarterly Reporting. Within fifty (50) days after the close of
the first three (3) quarterly periods of the Transferor's fiscal year, for
(x) the Transferor and (y) for the Parent and its Subsidiaries, on a
consolidated basis, unaudited balance sheets as at the close of each such
period and related statements of operations, shareholders' equity and cash
flows in each case for the period from the beginning of such fiscal year to
the end of such quarter, in each case certified by its senior financial
officer.
(iii) Compliance Certificate. Together with the financial statements
required hereunder, a compliance certificate signed by the Transferor's
chief financial officer stating that (x) the attached financial statements
have been prepared in accordance with GAAP and accurately reflect the
financial condition of the Transferor or the Parent, as applicable, and (y)
to the best of such Person's knowledge, no Termination Event or Potential
Termination Event exists, or if any Termination Event or Potential
Termination Event exists, stating the nature and status thereof.
(iv) Notice of Termination Events or Potential Termination Events. As
soon as possible and in any event within two Business Days after the actual
knowledge of a Responsible Officer of the Transferor of the occurrence of
each Termination Event or each Potential Termination Event, a statement of
the chief financial officer of the Transferor setting forth details of such
Termination Event or Potential Termination Event and the action which the
Transferor has taken or proposes to take with respect thereto.
(v) Change in Credit and Collection Policy. Within ten (10) Business
Days after the date any material change in or amendment to the Credit and
Collection Policy is made, a copy of the Credit and Collection Policy then
in effect indicating such change or amendment.
(vi) Credit and Collection Policy. Within ninety (90) days after the
close of each Seller's and the Transferor's fiscal years, a complete copy
of the Credit and Collection Policy then in effect.
(vii) ERISA. Promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any reportable event (as defined in
Article IV of ERISA) which the Transferor, any of the Sellers or any ERISA
Affiliate of the Transferor or the Sellers files under ERISA with the
Internal Revenue Service, the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or which the Transferor, any of the Sellers or any
ERISA Affiliates of the Transferor or the Sellers receives from the
Internal Revenue Service, the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor.
(viii) Other Information. Such other information (including
non-financial information) as the Administrative Agent or any Purchaser may
from time to time reasonably request with respect to the Sellers, the
Transferor or any Subsidiary of any of the foregoing.
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(b) Conduct of Business. The Transferor will carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted and do all things necessary to remain
duly incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted except any jurisdictions where the failure to maintain such authority
could not reasonably be expected to have a Material Adverse Effect.
(c) Compliance with Laws. The Transferor will, and will cause each Seller
and each of the Transferor's and such Seller's Affiliates to, comply with all
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it or its respective properties may be subject, except to the
extent that the failure to so comply with such laws, rules, regulations, writs,
judgments, injunctions, decrees or awards would not materially adversely affect
the ability of the Transferor to perform its obligations under the Agreement.
(d) Furnishing of Information and Inspection of Records. The Transferor
will, and will cause each Seller to, furnish to the Administrative Agent from
time to time such information with respect to the Receivables as the
Administrative Agent may reasonably request, including, without limitation,
listings identifying the Obligor and the Outstanding Balance for each
Receivable, together with an aging of Receivables. The Transferor will, and will
cause each Seller to, at any time and from time to time during regular business
hours and upon reasonable notice and permit the Administrative Agent or any
Purchaser, or their agents or representatives, (i) to examine and make copies of
and abstracts from all Records and (ii) to visit the offices and properties of
the Transferor and the Sellers for the purpose of examining such Records, and to
discuss matters relating to Receivables or the Transferor's and the Sellers'
performance hereunder and under the other Transaction Documents to which such
Person is a party with any of the officers or employees of the Transferor and
the Sellers having knowledge of such matters.
(e) Keeping of Records and Books of Account. The Transferor will, and will
cause each Seller to, maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate records
evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain, all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit the daily
identification of each new Receivable and all Collections of and adjustments to
each existing Receivable). The Transferor will, and will cause each Seller to,
give the Administrative Agent and each Purchaser prompt notice of any change in
the administrative and operating procedures of the Transferor or such Seller, as
applicable, referred to in the previous sentence to the extent such change may
have a Material Adverse Effect.
(f) Performance and Compliance with Contracts. The Transferor, at its
expense, will instruct the Collection Agent to, and to the extent applicable,
timely and fully perform and comply with all material provisions, covenants and
other promises required to be observed by the Transferor under the Contracts
related to the Receivables.
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(g) Credit and Collection Policies. The Transferor will instruct the
Collection Agent and the Sellers to comply in all material respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract.
(h) Collections. The Transferor shall instruct the Collection Agent and the
Sellers to instruct all Obligors to cause all Collections (other than
Collections remitted directly) to be deposited directly to a Lockbox Account.
(i) Collections Received. The Transferor shall, and shall instruct the
Collection Agent and the Sellers to, hold in trust, and deposit immediately (but
in any event no later than one (1) Business Day following receipt thereof) to a
Lockbox Account all Collections received from time to time by the Transferor,
the Collection Agent and the Sellers.
(j) Sale Treatment. The Transferor will not (i) account for (including for
accounting purposes), or otherwise treat, the transactions contemplated by the
Receivables Purchase Agreement in any manner other than as a sale of Receivables
by the Sellers to the Transferor, or (ii) account for (other than for tax
purposes) or otherwise treat the transactions contemplated hereby in any manner
other than as a sale of Receivables by the Transferor to the Purchasers. In
addition, the Transferor shall disclose (in a footnote or otherwise) in all of
its financial statements (including any such financial statements consolidated
with any other Persons' financial statements) the existence and nature of the
transaction contemplated hereby and by the Receivables Purchase Agreement and
the interest of the Transferor and the Purchasers in the Receivables and Related
Security, Collections and Proceeds with respect thereto.
(k) Separate Business. The Transferor shall not engage in any business not
permitted by its Certificate of Incorporation as in effect on the Closing Date.
(l) Corporate Documents. The Transferor shall only amend, alter, change or
repeal its Certificate of Incorporation or the By-laws or change its
jurisdiction of incorporation or organization with the prior written consent of
the Administrative Agent which shall not be unreasonably withheld.
(m) Net Worth. The Transferor on the Closing Date has a net worth, and
thereafter maintain at all times a net worth (as defined in accordance with
GAAP), of at least $25,000,000.
(n) Separate Corporate Existence. The Transferor shall:
(i) Maintain its own deposit account or accounts, separate from those
of any Affiliate, with commercial banking institutions and use its
commercially reasonable efforts to ensure that the funds of the Transferor
will not be diverted to any other Person or for other than corporate uses
of the Transferor and that, except as contemplated by Section 6.02(b) such
funds will not be commingled with the funds of any Seller or any Subsidiary
or Affiliate of the Sellers;
(ii) To the extent that it shares the same officers or other employees
as any of its stockholders or Affiliates, fairly allocate among such
entities the salaries of and the expenses related to providing benefits to
such officers and other employees, and each
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such entity shall bear its fair share of the salary and benefit costs
associated with all such common officers and employees;
(iii) To the extent that it jointly contracts with any of its
stockholders or Affiliates to do business with vendors or service providers
or to share overhead expenses, fairly allocate among such entities the
costs incurred in so doing, and each such entity shall bear its fair share
of such costs. To the extent that the Transferor contracts or does business
with vendors or service providers where the goods and services provided are
partially for the benefit of any other Person, the costs incurred in so
doing shall be fairly allocated to or among such entities for whose benefit
the goods or services are provided, and each such entity shall bear its
fair share of such costs;
(iv) Enter into all material transactions between the Transferor and
any of its Affiliates, whether currently existing or hereafter entered
into, only on an arm's length basis, it being understood and agreed that
the transactions contemplated in the Transaction Documents meet the
requirements of this clause (iv);
(v) Maintain office space separate from the office space of the
Sellers and any Affiliates of the Sellers. To the extent that the
Transferor and any of its stockholders or Affiliates have offices in the
same location, there shall be a fair and appropriate allocation of overhead
costs among them, and each such entity shall bear its fair share of such
expenses;
(vi) Issue separate financial statements prepared not less frequently
than quarterly and prepared in accordance with GAAP;
(vii) Conduct its affairs strictly in accordance with its certificate
of incorporation and observe all necessary, appropriate and customary
corporate formalities, including, but not limited to, holding all regular
and special stockholders' and directors' meetings appropriate to authorize
all corporate action, keeping separate and accurate minutes of its
meetings, passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and separate books,
records and accounts, including, but not limited to, payroll and
intercompany transaction accounts;
(viii) Not assume or guarantee any of the liabilities of the Sellers
or any Affiliate thereof;
(ix) Take, or refrain from taking, as the case may be, all other
actions that are necessary to be taken or not to be taken in order to (x)
ensure that the assumptions and factual recitations set forth in the
Specified Bankruptcy Opinion Provisions remain true and correct with
respect to the Transferor and (y) comply with those procedures described in
such provisions which are applicable to the Transferor;
(x) Take such actions as are necessary to ensure that not less than
one member of Transferor's Board of Directors shall be an individual who is
not, and never has been, a direct, indirect or beneficial stockholder,
officer, director, employee, affiliate, associate, material supplier or
material customer of the Collection Agent or any of its Affiliates (other
than an Independent Director of MTSPC, Inc.) (the "Independent Direc-
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tors"). The certificate of incorporation of the Transferor shall provide
that (i) at least one member of the Transferor's Board of Directors shall
be an Independent Director, (ii) the Transferor's Board of Directors shall
not approve, or take any other action to cause the filing of, a voluntary
bankruptcy petition with respect to the Transferor unless a unanimous vote
of the Transferor's Board of Directors (which vote shall include the
affirmative vote of each Independent Director) shall approve the taking of
such action in writing prior to the taking of such action and (iii) the
provisions requiring an independent director and the provision described in
clauses (i) and (ii) of this paragraph (b) cannot be amended without the
prior written consent of each Independent Director;
(xi) Take such actions as are necessary to ensure that no Independent
Director shall at any time serve as a trustee in bankruptcy for the
Transferor or any Affiliate thereof;
(xii) Take such actions as are necessary to ensure that the books of
account, financial reports and corporate records of the Transferor will be
maintained separately from those of the Parent and each other Affiliate of
the Transferor;
(xiii) Take such actions as are necessary to ensure that any financial
statements of Parent or Affiliate thereof which are consolidated to include
the Transferor will contain detailed notes clearly stating that (A) all of
the Transferor's assets are owned by the Transferor, and (B) the Transferor
is a separate corporate entity with its own separate creditors that will be
entitled to be satisfied out of the Transferor's assets prior to any value
in the Transferor becoming available to the Transferor's equity holders;
and the accounting records and the published financial statements of the
Sellers will clearly show that, for accounting purposes, the Receivables
and Related Security have been sold to the Transferor;
(xiv) Take such actions as are necessary to ensure that the
Transferor's assets will be maintained in a manner that facilitates their
identification and segregation from those of the Parent, the Sellers and
other Affiliates of the Parent;
(xv) Take such actions as are necessary to ensure that no Affiliates
of the Transferor shall, directly or indirectly, name the Transferor or
enter into any agreement to name the Transferor a direct or contingent
beneficiary or loss payee or any insurance policy covering the property of
any such Affiliate; and
(xvi) Take such actions as are necessary to ensure that no Affiliate
of the Transferor will be, nor will hold itself out to be, responsible for
the debts of the Transferor or the decisions or actions in respect of the
daily business and affairs of the Transferor. The Transferor will
immediately correct any known misrepresentation with respect to the
foregoing, and the Transferor and its Affiliates 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.
(o) Enforcement of Receivables Purchase Agreement. The Transferor shall use
its best efforts to enforce all rights held by it under the Receivables Purchase
Agreement and
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shall not waive any breach of any covenant contained in Section 5.01 thereunder
without the written consent of the Administrative Agent.
(p) Credit Default Swaps. The Transferor agrees that at any time that it
enters into any Credit Default Swap (or such Credit Default Swap is contributed
to the Transferor as an equity contribution), it shall execute and deliver to
the Administrative Agent, for the benefit of the Purchasers, an assignment of
all amounts payable to the Transferor under such Credit Default Swap,
substantially in the form of Exhibit L attached hereto. Any counterparty that
enters into a Credit Default Swap with the Transferor shall expressly
acknowledge that the amounts payable to the Transferor under such Credit Default
Swap will be assigned to the Administrative Agent, for the benefit of the
Purchasers.
SECTION 5.02. Negative Covenants of the Transferor. During the term of this
Agreement, unless the Administrative Agent shall otherwise consent in writing:
(a) No Sales, Liens, etc. Except as otherwise provided herein and in the
Receivables Purchase Agreement, the Transferor will not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon (or the filing of any financing statement) or with
respect to (x) any of the Receivables or Related Security, or (y) any Lockbox
Account.
(b) No Extension or Amendment of Receivables. Except as otherwise permitted
in Section 6.02 hereof, the Transferor will not, and will not permit any Seller
to, extend, amend or otherwise modify the terms of any Receivable, or amend,
modify or waive any term or condition of any Contract related thereto.
(c) No Change in Business or Credit and Collection Policy. The Transferor
will not, and will not permit any Seller to, make any change in the character of
its business or in the Credit and Collection Policy, which change would have a
Material Adverse Effect.
(d) No Mergers, etc. The Transferor will not without the prior written
consent of the Administrative Agent, and except as otherwise permitted pursuant
to the Receivables Purchase Agreement, will not permit any Seller to, (i)
consolidate or merge with or into any other Person, or (ii) sell, lease or
transfer all or substantially all of its assets to any other Person, provided,
that any Seller may merge with or into another Seller or with another Person if
(A)(1) such Seller is the corporation surviving such consolidation or merger or
(2) the Person into or with whom the Seller is merged or consolidated is an
Affiliate and the surviving corporation assumes in writing all duties and
liabilities of the Seller under the Transaction Documents, and (B) immediately
after and giving effect to such consolidation or merger, no Termination Event or
Potential Termination Event shall have occurred and be continuing.
(e) Change in Payment Instructions to Obligors; Deposits to Lockbox
Accounts. The Transferor will not, and will not permit any Seller to, add or
terminate any bank as a Lockbox Bank or any account as a Lockbox Account to or
from those listed in Exhibit B hereto or make any change in its instructions to
Obligors regarding payments to be made to any Lockbox Account, unless (i) such
instructions are to deposit such payments to another existing Lockbox Account or
(ii) the Administrative Agent shall have received written notice of such
addition,
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termination or change at least thirty (30) days prior thereto and the
Administrative Agent shall have received a Lockbox Agreement executed by each
new Lockbox Bank or an existing Lockbox Bank with respect to each new Lockbox
Account, as applicable. The Transferor will not deposit or otherwise credit, or
cause or permit to be so deposited or credited, to any Lockbox Account cash or
cash proceeds other than Collections of Receivables. However, in the event any
Seller deposits or otherwise credits, or cause or permits to be so deposited or
credited, to any Lockbox Account, cash or cash proceeds other than Collections
of Receivables, the Transferor shall, or shall cause such Seller to, segregate
or cause to be segregated any such cash or cash proceeds from Collections within
one (1) Business Day following the deposit or credit to any Lockbox Account.
(f) Change of Name, etc. The Transferor will not, and will not permit any
Seller to, change its name or its jurisdiction of incorporation, unless at least
ten (10) days prior to the effective date of any such change the Transferor
delivers to the Administrative Agent (i) such documents, instruments or
agreements, executed by the Transferor as are necessary to reflect such change
and to continue the perfection of the Administrative Agent's and the Purchasers'
ownership interests or security interests in the Receivables and Related
Security, Collections and Proceeds with respect thereto and (ii) new or revised
Lockbox Agreements executed by the Lockbox Banks which reflect such change and
enable the Administrative Agent to continue to exercise its rights contained in
Section 2.08 hereof.
(g) Amendment to Receivables Purchase Agreement. The Transferor will not,
and will not permit any of the Sellers to, amend, modify, or supplement the
Receivables Purchase Agreement, except with the prior written consent of the
Administrative Agent; nor shall the Transferor take, or permit any of the
Sellers to take, any other action under the Receivables Purchase Agreement that
shall have a material adverse affect on the Administrative Agent or any
Purchaser or which is inconsistent with the terms of this Agreement.
(h) Other Debt. Except as provided for herein or in the Receivables
Purchase Agreement, the Transferor will not create, incur, assume or suffer to
exist any indebtedness whether current or funded, or any other liability other
than (i) indebtedness of the Transferor representing fees, expenses and
indemnities arising hereunder or under the Receivables Purchase Agreement
(including the Subordinated Note) for the purchase price of the Receivables
under the Receivables Purchase Agreement; (ii) other indebtedness incurred in
the ordinary course of its business to the extent permitted by or required under
any other Transaction Document and (iii) additional indebtedness in an amount
not to exceed $9,850 at any time outstanding.
(i) ERISA Matters. The Transferor will not, and will not permit any Seller
to, (i) engage or permit any of its ERISA Affiliates to engage in any prohibited
transaction (as defined in Section 4975 of the Code and Section 406 of ERISA)
for which an exemption is not available or has not previously been obtained from
the U.S. Department of Labor; (ii) permit to exist any accumulated funding
deficiency (as defined in Section 302(a) of ERISA and Section 412(a) of the
Code) or funding deficiency with respect to any Benefit Plan other than a
Multiemployer Plan; (iii) fail to make any payments to any Multiemployer Plan
that the Transferor or any ERISA Affiliate of the Transferor is required to make
under the agreement relating to such Multiemployer Plan or any law pertaining
thereto; (iv) terminate any Benefit Plan so as to result in any liability; or
(v) permit to exist any occurrence of any reportable event described in Title
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IV of ERISA which represents a material risk of a liability to the Transferor or
any ERISA Affiliate of the Transferor under ERISA or the Code, if such
prohibited transactions, accumulated funding deficiencies, failure to make
payments, terminations and reportable events occurring within any fiscal year of
the Transferor in the aggregate, involve a payment of money or an incurrence of
liability by the Transferor or any ERISA Affiliate of the Transferor in an
amount which would be expected to have a Material Adverse Effect.
(j) Payment to the Sellers. With respect to any Receivable sold by the
Sellers to the Transferor, the Transferor shall, and shall cause the Sellers to,
effect such sale under, and pursuant to the terms of, the Receivables Purchase
Agreement, including, without limitation, the payment by the Transferor either
in cash or by increase in the amount of the Subordinated Note of an amount equal
to the purchase price for such Receivable as required by the terms of the
Receivables Purchase Agreement.
ARTICLE VI
Administration and Collections
SECTION 6.01. Appointment of Collection Agent. The servicing, administering
and collection of the Receivables shall be conducted by such Person (the
"Collection Agent") so designated from time to time in accordance with this
Section 6.01. Until the Administrative Agent gives notice to the Parent of the
designation of a new Collection Agent pursuant to this Section 6.01, the Parent
is hereby designated as, and hereby agrees to perform the duties and obligations
of, the Collection Agent pursuant to the terms hereof. The Collection Agent may
not delegate any of its rights, duties or obligations hereunder, or designate a
substitute Collection Agent, without the prior written consent of the
Administrative Agent; provided that the Parent shall be permitted to delegate
its duties and obligations as Collection Agent hereunder to the Sellers or any
of the Parent's Affiliates, but such delegation shall not relieve the Parent of
its duties and obligations as Collection Agent hereunder. The Administrative
Agent may, and upon the direction of the Required Purchasers the Administrative
Agent shall, but only after the occurrence of a Collection Agent Default or any
other Termination Event, designate as Collection Agent any Person (including
itself) to succeed the Parent or any successor Collection Agent, on the
condition in each case that any such Person so designated shall agree to perform
the duties and obligations of the Collection Agent pursuant to the terms hereof.
Following a Collection Agent Default or a Termination Event, the Administrative
Agent may notify any Obligor of the designation of a successor Collection Agent.
SECTION 6.02. Duties of Collection Agent.
(a) The Collection Agent shall take or cause to be taken all such action as
may be necessary or advisable to collect each Receivable from time to time, all
in accordance with applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy. Each of
the Transferor, the Purchasers and the Administrative Agent hereby appoints as
its agent the Collection Agent, from time to time designated pursuant to Section
6.01 hereof, to enforce its respective rights and interests in and under the
Receivables and Related Security, Collections and Proceeds with respect thereto.
To the extent permitted by applicable law, the Transferor hereby grants to any
Collection Agent appointed
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hereunder an irrevocable power of attorney to take in the Transferor's name and
on behalf of the Transferor any and all steps necessary or desirable, in the
reasonable determination of the Collection Agent, to collect all amounts due
under any and all Receivables, including, without limitation, endorsing the
Transferor's name on checks and other instruments representing Collections and
enforcing such Receivables and the related Contracts. The Collection Agent shall
set aside for the account of the Transferor and the Purchasers their respective
allocable shares of the Collections of Receivables in accordance with Sections
2.05 and 2.06 hereof. The Collection Agent shall segregate and deposit to the
Collection Account each Purchaser's allocable share of Collections of
Receivables when required pursuant to Article II hereof. The Transferor shall
deliver to the Collection Agent and the Collection Agent shall hold in trust for
the Transferor, the Purchasers and the Administrative Agent, in accordance with
their respective interests, all Records which evidence or relate to Receivables,
Related Security or Collections. Notwithstanding anything to the contrary
contained herein, the Administrative Agent shall have the absolute and unlimited
right to direct the Collection Agent (whether the Collection Agent is the Parent
or any other Person) to commence or settle any legal action to enforce
collection of any Receivable or to foreclose upon or repossess any Related
Security. The Collection Agent shall not make the Administrative Agent or any of
the Purchasers a party to any litigation without the prior written consent of
such Person.
(b) The Collection Agent shall, as soon as practicable following receipt
thereof, segregate any funds deposited in a Lockbox Account or otherwise
commingled and not attributable to a Receivable within one (1) Business Day of
receipt thereof and remit such funds to the appropriate Person. If the
Collection Agent is not the Transferor, the Parent, any Seller or an Affiliate
of the Transferor or the Sellers, the Collection Agent, by giving three (3)
Business Days' prior written notice to the Administrative Agent, may revise the
Servicing Fee; provided that such revised Servicing Fee shall be a reasonable
fee agreed upon by the Collection Agent and the Administrative Agent reflecting
rates and terms prevailing at such time as would be negotiated on an
arm's-length basis. The Collection Agent, if other than the Transferor, the
Parent, any Seller or an Affiliate of the Transferor or the Sellers, shall as
soon as practicable upon demand, deliver to the applicable Seller all Records in
its possession which evidence or relate to indebtedness of an Obligor which is
not a Receivable.
(c) On or before ninety-five (95) days after the end of each fiscal year of
the Collection Agent, beginning with the fiscal year ending December 31, 2005,
the Collection Agent shall cause a firm of nationally recognized independent
public accountants reasonably acceptable to the Administrative Agent (who may
also render other services to the Collection Agent, the Transferor, the Sellers
or any Affiliates of any of the foregoing), at the expense of the Transferor, to
furnish a report to the Administrative Agent and the Transferor to the effect
that they have:
(i) selected at least one Settlement Statement for each fiscal quarter
delivered during the fiscal year then ended and verified that the amounts
presented on such Settlement Statement relating to sales, total dilution,
net sales, collections, write-offs, concentrations and aging of Receivables
agreed with the information provided to the Collection Agent by each
Seller;
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(ii) for six (6) Sellers selected by the Administrative Agent,
verified that the amounts presented on each of such Sellers' reports to the
Collection Agent for the periods selected in (i) above relating to sales,
total dilution, net sales, collections, write-offs, concentrations and
aging of Receivables agreed with the information contained within such
Sellers' underlying accounting records for such Settlement Period;
(iii) selected at least one Deposit Report for each fiscal quarter
delivered during the fiscal year then ended and verified that the amounts
presented on such Deposit Report relating to sales, collections,
concentrations and aging of Receivables agreed with the information
provided to the Collection Agent by each Seller;
(iv) for six (6) Sellers selected by the Administrative Agent (which
may be the same Sellers selected in (ii) above), verified that the amounts
presented on each of such Sellers' reports to the Collection Agent for the
periods selected in (iii) above relating to sales, collections,
concentrations and aging of Receivables agreed with the information
contained within such Sellers' underlying accounting records for such
period;
(v) recalculated the Net Receivables Balance as of the end of at least
one Settlement Period and one Deposit Report for each fiscal quarter;
(vi) selected a sample of fifteen (15) Receivables for each of the six
(6) Sellers selected in (ii) above and verified that the Receivables
treated by the Collection Agent as Eligible Receivables in fact satisfied
the requirements of clauses (iii), (iv) and (viii) of the definition of
such term;
(vii) selected at least one Settlement Statement for each fiscal
quarter and conducted a "negative confirmation" or other alternative
procedures of a sample of fifteen (15) Receivables for each of the six (6)
Sellers selected in (ii) above (which can be the same Receivables selected
in clause (vi) above) and verified that each Seller's records and computer
system used in servicing the Receivables contained correct information with
regard to outstanding balances; and
(viii) selected at least one Settlement Statement for each fiscal
quarter and selected a sample of fifteen (15) Receivables for each of the
six (6) Sellers selected in (ii) above (which can be the same Receivables
selected in clause (vi) above) and verified that such Receivables were
included in the proper aging category on such Settlement Statement based on
the dates listed on the original invoices for such Receivables;
except, in each case for (a) such exceptions as such firm shall believe to be
immaterial (which exceptions need not be enumerated) and (b) such other
exceptions as shall be set forth in such statement.
(d) Notwithstanding anything to the contrary contained in this Article VI,
the Collection Agent, if not the Transferor, the Parent, any Seller or any
Affiliate of the Transferor or the Sellers, shall have no obligation to collect,
enforce or take any other action described in this Article VI with respect to
any indebtedness that is not included in the Transferred Interest other than to
deliver to the Transferor the collections and documents with respect to any such
indebtedness as described in Section 6.02(b) hereof.
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SECTION 6.03. Rights After Designation of New Collection Agent. At any time
following the designation of a Collection Agent other than the Parent, any
Seller or the Transferor pursuant to the penultimate sentence of Section 6.01
hereof:
(i) The Administrative Agent may, at its option, or shall, at the
direction of the Required Purchasers, direct that payment of all amounts
payable under any Receivable be made directly to the Administrative Agent
or its designee for the benefit of the Purchasers.
(ii) The Transferor shall, at the Administrative Agent's request and
at the Transferor's expense, give notice of the Transferor's and/or the
Purchasers' ownership of Receivables to each Obligor and direct that
payments be made directly to the Administrative Agent or its designee.
(iii) The Transferor shall, at the Administrative Agent's request, (A)
assemble all of the Records, and shall make the same available to the
Administrative Agent or its designee at a place selected by the
Administrative Agent or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to the Administrative
Agent and shall, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer,
to the Administrative Agent or its designee.
(iv) The Transferor hereby authorizes the Administrative Agent to take
any and all steps in the Transferor's name and on behalf of the Transferor
necessary or desirable, in the determination of the Administrative Agent,
to collect all amounts due under any and all Receivables, including,
without limitation, endorsing the Transferor's name on checks and other
instruments representing Collections and enforcing such Receivables and the
related Contracts.
SECTION 6.04. Representations and Warranties of the Collection Agent. The
Collection Agent represents and warrants (solely as to itself) to the
Administrative Agent and each Purchaser as of the date it becomes a Collection
Agent hereunder that:
(a) Corporate Existence and Power. The Collection Agent is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation and has all corporate power and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business in each jurisdiction in which its business is now
conducted, except where the failure to obtain such licenses, authorizations,
consents and approvals would not have a Material Adverse Effect. The Collection
Agent is duly qualified to do business in, and is in good standing in, every
other jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified or in good standing would
not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization, Contravention. The execution,
delivery and performance by the Collection Agent of this Agreement (i) are
within the Collection Agent's corporate powers, (ii) have been duly authorized
by all necessary corporate ac-
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tion on the Collection Agent's part, (iii) require no action by or in respect
of, or filing with, any Official Body or official thereof (except for the filing
of UCC financing statements as required by this Agreement or as have been taken
or filed and, with respect to filings other than UCC financing statements,
filings where the failure to file will not have a Material Adverse Effect), (iv)
do not contravene, or constitute a default under, any provision of applicable
Law or of the organizational documents of the Collection Agent or of any
agreement or other material instrument binding upon the Collection Agent, except
where such contravention or default would not have a Material Adverse Effect, or
(v) result in the creation or imposition of any Adverse Claim on the assets of
the Collection Agent or any of its Affiliates (except those created by the
Transaction Documents).
(c) Binding Effect. This Agreement constitutes the legal, valid and binding
obligations of the Collection Agent, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and general equitable principles
(whether considered in a proceeding at law or in equity).
(d) Action, Suits. Except as set forth in Exhibit F hereto, there are no
actions, suits or proceedings pending, or to the knowledge of the Collection
Agent, threatened, against the Collection Agent, or any Affiliate of the
Collection Agent, or its respective properties, in or before any court,
arbitrator or other body, which may, individually or in the aggregate, have a
Material Adverse Effect.
SECTION 6.05. Covenants of the Collection Agent. At all times from the date
hereof to the date on which the Aggregate Unpaids shall be equal to zero, unless
the Administrative Agent shall otherwise consent in writing:
(a) Credit and Collection Policy. The Collection Agent will comply in all
material respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.
(b) Collections Received. The Collection Agent shall hold in trust, and
deposit as soon as reasonably practicable (but in any event no later than one
Business Day following its receipt thereof) to a Lockbox Account all Collections
received from time to time by the Collection Agent.
(c) Notice of Termination Events, Potential Termination Events or
Collection Agent Defaults. Immediately, and in any event within one (1) Business
Day after the Collection Agent obtains knowledge of the occurrence of each
Termination Event, Potential Termination Event or Collection Agent Default, the
Collection Agent will furnish to the Administrative Agent and each Purchaser a
statement of a Responsible Officer of the Collection Agent setting forth details
of such Termination Event, Potential Termination Event or Collection Agent
Default, and the action which the Collection Agent, the Transferor or any Seller
proposes to take with respect thereto.
(d) Conduct of Business. The Collection Agent will do all things necessary
to remain duly incorporated, validly existing and in good standing as a domestic
corporation in its
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jurisdiction of incorporation and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted to the
extent that the failure to maintain such would have a Material Adverse Effect.
(e) Compliance with Laws. The Collection Agent will comply in all respects
with all Laws with respect to the Receivables to the extent that any
non-compliance would have a Material Adverse Effect.
(f) Further Information. The Collection Agent shall furnish or cause to be
furnished to the Administrative Agent and, after a Termination Event or a
Potential Termination Event, each Purchaser such other information relating to
the Receivables and readily available public information regarding the financial
condition of the Collection Agent, as soon as reasonably practicable, and in
such form and detail, as the Administrative Agent may reasonably request and,
after a Termination Event or a Potential Termination Event, as any Purchaser may
reasonably request.
SECTION 6.06. Negative Covenants of the Collection Agent. At all times from
the date hereof to the date on which the Aggregate Unpaids shall be equal to
zero, unless the Administrative Agent shall otherwise consent in writing:
(a) No Sales, Liens, Etc. Except as otherwise provided herein, in the
Receivables Purchase Agreement and in the Credit Agreement, the Collection Agent
will not sell, assign (by operation of law or otherwise) or otherwise dispose
of, or create any Adverse Claim upon (or file any financing statement) or with
respect to (x) any of the Receivables, Related Security, Collections or Proceeds
with respect thereto, (y) any inventory or goods, the sale of which may give
rise to a Collection, or (z) any Lockbox Account to which any Collections of any
Receivable are sent, or assign any right to receive income in respect thereof.
(b) Consolidations, Mergers and Sales of Assets. The Collection Agent shall
not without the prior written consent of the Administrative Agent, (i)
consolidate or merge with or into any other Person or (ii) sell, lease or
otherwise transfer all or substantially all of its assets to any other Person;
provided that the Collection Agent may consolidate or merge with another Person
if (A)(1) the Collection Agent is the corporation surviving such consolidation
or merger or (2) the Person into or with whom the Collection Agent is merged or
consolidated is an Affiliate and the surviving corporation assumes in writing
all duties and liabilities of the Collection Agent hereunder and (B) immediately
after and giving effect to such consolidation or merger, no Termination Event or
Potential Termination Event shall have occurred and be continuing.
(c) Lockbox Accounts. Except as permitted pursuant to Section 2.09(b) of
this Agreement or as otherwise permitted under or required by the Transaction
Documents, the Collection Agent shall not make, or cause or permit any other
Person to make any transfer of funds on deposit in a Lockbox Account.
(d) Modifications of Receivables or Contracts. The Collection Agent shall
not extend, amend, forgive, discharge, compromise, waive, cancel or otherwise
modify the terms of any Receivable or amend, modify or waive any term or
condition of any Contract related
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thereto; provided, that the Collection Agent may take such actions as are
expressly permitted by the terms of any Transaction Document.
SECTION 6.07. Collection Agent Default. The occurrence of any one or more
of the following events shall constitute a Collection Agent default (each, a
"Collection Agent Default"):
(a) (i) the Collection Agent or, to the extent that the Transferor, the
Parent, any Seller or any Affiliate of the Transferor or the Sellers is then
acting as Collection Agent, the Transferor, the Parent, such Seller or such
Affiliate, as applicable, shall fail to observe or perform any material term,
covenant or agreement hereunder (other than as referred to in clauses (ii) and
(iii) of this Section 6.07(a)), and such failure shall remain unremedied for ten
(10) days, after a Responsible Officer of the Collection Agent has knowledge
thereof or (ii) the Collection Agent or, to the extent that the Transferor, the
Parent, any Seller or any Affiliate of the Transferor or the Sellers is then
acting as Collection Agent, the Transferor, the Parent, such Seller or such
Affiliate, as applicable, shall fail to make any payment or deposit required to
be made by it hereunder when due and such failure remains uncured for one (1)
Business Day or the Collection Agent shall fail to observe or perform in any
material respect any term, covenant or agreement on the Collection Agent's part
to be performed under Section 2.09(b) hereof, or (iii) the Collection Agent
fails to deliver any Deposit Report within two (2) Business Days of the date
when due or Settlement Statement within one (1) Business Day of the date when
due; or
(b) any representation, warranty, certification or statement made by the
Collection Agent in this Agreement, any other Transaction Document or in any
other document delivered pursuant hereto or thereto shall prove to have been
incorrect in any material respect when made or deemed made; provided that no
such event shall constitute a Collection Agent Default unless such event shall
continue unremedied for a period of ten (10) days from the date a Responsible
Officer of the Collection Agent obtains knowledge thereof; or
(c) the Collection Agent or any of its Subsidiaries shall fail to make any
payment of principal or interest in respect of any Indebtedness evidencing an
aggregate outstanding principal amount exceeding $15,000,000, when and as the
same shall become due and payable after giving effect to any applicable grace
period with respect thereto; or any event or condition occurs that results in
any such Indebtedness becoming due prior to its scheduled maturity or that
enables or permits the holder or holders of any such Indebtedness or any trustee
or agent on its or their behalf to cause any such Indebtedness to become due, or
to require the prepayment, repurchase, redemption or defeasance thereof, prior
to its scheduled maturity; provided that this clause (c) shall not apply to
secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness; or
(d) any Event of Bankruptcy shall occur and be continuing for sixty (60)
days with respect to the Collection Agent or any of its Subsidiaries; or
(e) there shall have occurred any event which, in the commercially
reasonable judgment of the Administrative Agent, materially and adversely
affects the Collection Agent's ability to collect the Receivables under this
Agreement.
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SECTION 6.08. Responsibilities of the Transferor and the Sellers. Anything
herein to the contrary notwithstanding, the Transferor shall, and/or shall cause
each Seller to, (i) perform all of such Seller's obligations under the Contracts
related to the Receivables to the same extent as if interests in such
Receivables had not been sold hereunder and under the Receivables Purchase
Agreement and the exercise by the Administrative Agent, the Purchasers of their
rights hereunder and under the Receivables Purchase Agreement shall not relieve
the Transferor or any Seller from such obligations and (ii) pay when due any
taxes, including without limitation, any sales taxes payable in connection with
the Receivables and their creation and satisfaction. Neither the Administrative
Agent nor any of the Purchasers shall have any obligation or liability with
respect to any Receivable or related Contracts, nor shall it be obligated to
perform any of the obligations of any Seller thereunder.
ARTICLE VII
Termination Events
SECTION 7.01. Termination Events. The occurrence of any one or more of the
following events shall constitute a Termination Event:
(a) the Transferor, any Seller or the Collection Agent shall fail to make
any payment or deposit to be made by it hereunder or under any of the
Transaction Documents when due hereunder or thereunder and such failure
continues for one (1) Business Day; or
(b) any representation, warranty, certification or statement made by the
Transferor, the Collection Agent or any Seller in this Agreement, any other
Transaction Document to which it is a party or in any other document delivered
pursuant hereto or thereto shall prove to have been incorrect in any material
respect when made or deemed made; provided that no such event shall constitute a
Termination Event unless such event shall continue unremedied for a period of
ten (10) days from the date a Responsible Officer of the Transferor obtains
knowledge thereof; provided further that no grace period shall apply to Sections
3.01(c), 3.01(d), 3.01(j), 3.01(q) and 3.01(r) of this Agreement (and, for the
avoidance of doubt, the cure period described in the first proviso of this
Section 7.01(b) shall not apply to payments required to be made pursuant to
Section 2.10(b)); and provided further that no such event shall constitute a
Termination Event if the Transferor shall have timely paid to the Collection
Agent the Deemed Collection required to be paid as a result of such event in
accordance with Section 2.10(b); or
(c) the Transferor, any Seller or the Collection Agent shall default in the
performance of any undertaking (other than those covered by clause (a) above)
under any Transaction Document and such default shall continue for ten (10) days
after a Responsible Officer of such party has knowledge thereof; or
(d) the Transferor shall fail to make any payment of principal or interest
in respect of any Indebtedness when and as the same shall become due and payable
after giving effect to any applicable grace period with respect thereto; or any
event or condition occurs that results in any such Indebtedness becoming due
prior to its scheduled maturity or that enables or permits the holder or holders
of any such Indebtedness or any trustee or agent on its or their behalf to
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cause any such Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
or
(e) any Event of Bankruptcy shall occur with respect to the Transferor, the
Collection Agent, any Seller, the Parent or any of its Subsidiaries; or
(f) after the filing in the appropriate offices of the financing statements
described in Sections 4.01(c), 4.01(d), 4.01(e) and 4.01(f), the Administrative
Agent, on behalf of the Purchasers, shall, for any reason, fail or cease to have
a valid and perfected first priority ownership or security interest in the
Receivables and Related Security, Collections and Proceeds with respect thereto,
free and clear of any Adverse Claims; or
(g) a Collection Agent Default shall have occurred; or
(h) the Transferor, the Parent or any Seller shall enter into any corporate
transaction or merger whereby it is not the surviving entity (other than, in the
case of any Seller, a merger or consolidation which does not, in the reasonable
opinion of the Administrative Agent, materially adversely affect the
collectibility of the Receivables sold by such Seller or the performance of such
Seller's obligations under the transaction documents); or
(i) there shall have occurred any event or condition which would have
material adverse effect on either the collectibility of the Receivables or the
ability of the Transferor or any Seller to perform its respective obligations
under the Transaction Documents to which it is a party since the Closing Date;
or
(j) the Percentage Factor exceeds the Maximum Percentage Factor unless the
Transferor reduces the Net Investment from previously received Collections or
other funds available to the Transferor or increases the balance of the
Receivables on the next Business Day following such breach so as to reduce the
Percentage Factor to less than or equal to 100%; or
(k) the average Dilution Ratio for the three preceding Settlement Periods
exceeds 3.0%; provided that if the Intercreditor Condition is not satisfied on
or before June 29, 2005, then on and after such date the average Dilution Ratio
for the three preceding Settlement Periods may not exceed 2.5%; or
(l) the average Default Ratio for the three preceding Settlement Periods
exceeds 3%; or
(m) the Parent or any of its Subsidiaries default in the observance or
performance of Section 6.13 or 6.14 of the Credit Agreement or an Event of
Default (as such term is defined in the Credit Agreement) described in Section
7.01(r) of the Credit Agreement shall have occurred; or
(n) a Responsible Officer of the Transferor receives notice or becomes
aware that a notice of Lien has been filed against the Transferor or the
Collection Agent under Section 412(n) of the Code or Section 302(f) of ERISA for
a failure to make a required installment or other payment to a plan to which
Section 412(n) of the Code or Section 302(f) of ERISA applies; or
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(o) the Receivables Purchase Agreement is terminated; or
(p) the Parent and the Sellers (in the aggregate) shall fail to maintain
100% ownership of the Transferor.
SECTION 7.02. Remedies Upon the Occurrence of a Termination Event.
(a) Upon the occurrence of any Termination Event, the Administrative Agent
may, or at the direction of the Required Purchasers shall, by notice to the
Transferor and the Collection Agent, declare the Termination Date to have
occurred; provided, however, that in the case of any event described in Sections
7.01(e), 7.01(f), 7.01(j)(i), 7.01(j)(ii) and 7.01(n) above, the Termination
Date shall be deemed to have occurred automatically upon the occurrence of such
event. At all times after the declaration or automatic occurrence of the
Termination Date pursuant to this Section 7.02(a), the Base Rate plus 2.00%
shall be the Tranche Rate applicable to the Net Investment for all existing and
future Tranches. If an event or condition shall have occurred which constitutes
a Potential Termination Event, the Administrative Agent may, by notice to the
Transferor, declare such event or condition a Potential Termination Event.
(b) In addition, if any Termination Event occurs hereunder, (i) the
Administrative Agent shall promptly notify the Transferor in writing whether it
has declared the Termination Date to have occurred and whether it will be
exercising the remedies specified in this Section 7.02, (ii) the Administrative
Agent, on behalf of the Purchasers, shall have all of the rights and remedies
provided to a secured creditor or a purchaser of accounts under the Relevant UCC
by applicable law in respect thereto and (iii) if the Administrative Agent so
elects, the Percentage Factor shall be increased to 100%.
SECTION 7.03. Reconveyance Under Certain Circumstances. The Transferor
agrees to accept the reconveyance from the Administrative Agent, on behalf of
the Purchasers, of the Transferred Interest if any Termination Event occurs
hereunder and the Administrative Agent notifies the Transferor of a material
breach of any representation or warranty made or deemed made pursuant to
Sections 3.01(a), 3.01(b), 3.01(c), 3.01(d), 3.01(g) and 3.01(j) of this
Agreement. The reconveyance price shall be paid by the Transferor to the
Administrative Agent, for the account of the Purchasers, in immediately
available funds on demand in an amount equal to the Aggregate Unpaids.
ARTICLE VIII
The Administrative Agent
SECTION 8.01. Appointment. Each of the Purchasers hereby irrevocably
designates and appoints the Administrative Agent as the agent of such Person
under this Agreement and irrevocably authorizes the Administrative Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement, together
with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, (i) the Administrative
Agent shall not have any duties or responsibilities except those expressly set
forth herein, or any fiduciary relationship
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with any Purchaser, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or
otherwise exist against the Administrative Agent; and (ii) in no event shall the
Administrative Agent be liable under or in connection with this Agreement for
indirect, special, or consequential losses or damages of any kind, including
lost profits, even if advised of the possibility thereof and regardless of the
form of action by which such losses or damages may be claimed. In performing its
functions and duties hereunder, the Administrative Agent shall act solely as the
agent of the Purchasers, and the Administrative Agent does not assume, nor shall
be deemed to have assumed, any obligation or relationship of trust or agency
with or for any such Person.
SECTION 8.02. Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel (who may be counsel for the
Transferor or the Collection Agent), independent public accountants and other
experts selected by it concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys in-fact selected by it with reasonable care.
SECTION 8.03. Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (x) with
the consent or at the request of the Required Purchasers or all affected
Purchasers, as applicable, or (y) in the absence of its own gross negligence or
willful misconduct as finally determined pursuant to a nonappealable order or
judgment issued by a court of competent jurisdiction or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by the Transferor, the Collection Agent, the Sellers or any
officer thereof contained in this Agreement or any other Transaction Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
other Transaction Document, the Receivables (or any Related Security,
Collections and Proceeds with respect thereto) or any Transferred Interest or
for any failure of any of the Transferor, the Collection Agent, the Sellers or
the Obligors to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Purchaser to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other
Transaction Document or to inspect the properties, books or records of the
Transferor, the Collection Agent or any Seller.
SECTION 8.04. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, fax,
e-mail, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Transferor or the Collection Agent), independent
accountants and other experts selected by the Administrative Agent and shall not
be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Transaction Document unless it shall
first receive such advice
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or concurrence of the Required Purchasers or all affected Purchasers as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Purchasers against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Transaction Documents in accordance
with a request of the Required Purchasers (unless, in the case of any action
relating to the giving of consent hereunder, the giving of such consent requires
the consent of all the Purchasers), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Purchasers. The
Administrative Agent shall not be bound to make any investigation into the facts
or matters stated in any notice or other communication hereunder and may rely on
the accuracy of such facts or matters.
SECTION 8.05. Notice of Collection Agent Default. The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Collection Agent Default or any Termination Event unless the Administrative
Agent has received notice from a Purchaser, the Transferor or the Collection
Agent referring to this Agreement, describing such Collection Agent Default or
Termination Event and stating that such notice is a "notice of a Collection
Agent Default" or "notice of a Termination Event", as the case may be. In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Purchasers, the Transferor and the
Collection Agent. The Administrative Agent shall take such action with respect
to such event as shall be reasonably directed by the Required Purchasers,
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such event as
it shall deem advisable in the best interests of the Purchasers.
SECTION 8.06. Non-Reliance on the Administrative Agent and Other
Purchasers. Each of the Purchasers expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Transferor, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any such Person. Each
of the Purchasers represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Purchaser, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Transferor and the Collection Agent and made its own decision to enter into this
Agreement. Each of the Purchasers also represents that it will, independently
and without reliance upon the Administrative Agent or any other Purchaser, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Transaction
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Transferor, the Collection Agent and the Sellers. Except
for notices, reports and other documents expressly required to be furnished to
the Purchasers by the Administrative Agent hereunder, the Administrative Agent
shall have no duty or responsibility to provide any Purchaser with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness
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of the Transferor, the Collection Agent or the Sellers which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
SECTION 8.07. Indemnification. Each of the Purchasers agrees to indemnify
the Administrative Agent in its capacity as such (to the extent not reimbursed
by the Transferor, the Collection Agent and the Sellers and without limiting the
obligation of the Transferor, the Collection Agent and the Sellers to do so),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement, any of the other Transaction Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Purchaser shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Administrative Agent's gross negligence or willful
misconduct as finally determined pursuant to a nonappealable order or judgment
issued by a court of competent jurisdiction. The agreements in this Section
shall survive the payment of all amounts payable hereunder.
SECTION 8.08. The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Transferor, the Collection
Agent or any of their Affiliates as though the Administrative Agent were not the
Administrative Agent hereunder. With respect to any Transferred Interest held by
the Administrative Agent, the Administrative Agent shall have the same rights
and powers under this Agreement and the other Transaction Documents as any
Purchaser and may exercise the same as though it were not the Administrative
Agent, and the term "Purchaser" shall include the Administrative Agent in its
individual capacity.
SECTION 8.09. Resignation of Administrative Agent; Successor Administrative
Agent. The Administrative Agent may resign as Administrative Agent at any time
by giving 30 days' notice to the Purchasers, the Transferor and the Collection
Agent. The Administrative Agent may be removed at any time by a resolution of
the Required Purchasers, removing the Administrative Agent and appointing from
among the Purchasers a successor administrative agent, which successor
administrative agent shall be approved by the Transferor and the Collection
Agent (which approval shall not be unreasonably withheld), delivered to the
Administrative Agent and the Collection Agent. If GE Capital shall resign as
Administrative Agent under this Agreement, then the Required Purchasers, shall
promptly appoint a successor administrative agent from among the Purchasers,
which successor administrative agent shall be approved by the Transferor and the
Collection Agent (which approval shall not be unreasonably withheld). If no
successor administrative agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Purchasers, the Transferor and the Collection Agent, a
successor agent from among the Purchasers. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Collection Agent shall assume and perform all of the duties of the
Administrative Agent hereunder
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until such time, if any, as the Required Purchasers appoint a successor agent as
provided for above. Effective upon the appointment of a successor administrative
agent, such successor administrative agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term "Administrative Agent"
shall mean such successor administrative agent effective upon such appointment
and approval, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Article VIII, Section 2.20, Section
2.21, Section 2.22 and Section 2.23 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE IX
Limited Guaranty
SECTION 9.01. Guaranty of Obligations. The Guarantor unconditionally
guarantees the full and prompt payment when due of all of the payment
obligations and the timely performance of all of the performance obligations of
the Sellers of every kind and nature now or hereafter existing, or due or to
become due, under the Transaction Documents (collectively, the "Obligations");
provided that, such Obligations shall not include amounts not collected in
respect of any Receivable as a result of the creditworthiness of an Obligor,
including, but not limited to, amounts required to be returned to an Obligor as
a voidable preference. The Guarantor shall pay all reasonable costs and expenses
including, without limitation, all court costs and reasonable attorney's fees
and expenses paid or incurred by the Administrative Agent and the other
Beneficiaries in connection with (a) the collection of all or any part of the
Obligations from the Guarantor and (b) the prosecution or defense of any action
by or against the Administrative Agent, the other Beneficiaries or the
Transferor in connection with, or relating to, the Obligations, whether
involving the Sellers, the Collection Agent, the Guarantor, the Transferor or
any other party (including, but not limited to, a trustee in a bankruptcy or a
debtor-in-possession).
SECTION 9.02. Validity of Obligations; Irrevocability. The Guarantor agrees
that subject to the proviso set forth in Section 9.01 above its obligations
under this Guaranty shall be unconditional, irrespective of (i) the validity,
enforceability, discharge, disaffirmance, settlement or compromise (by any
Person, including a trustee in a bankruptcy or a debtor-in-possession) of the
Obligations or of the Transaction Documents or any Contract, (ii) the absence of
any attempt to collect the Obligations from a Seller or the Collection Agent or
any other party, (iii) the waiver or consent by any Person with respect to any
provision of any instrument evidencing the Obligations, (iv) any change of the
time, manner or place of payment or performance, or any other term of any of the
Obligations, (v) any law, regulation or order of any jurisdiction affecting any
term of any of the Obligations or rights of any Person with respect thereto,
(vi) the failure by any Person to take any steps to perfect and maintain
perfected its interest in the Receivables or any security or collateral related
to the Obligations or (vii) any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a guarantor or surety.
The Guarantor agrees that the Administrative Agent and the Beneficiaries shall
be under no obligation to marshal any assets in favor of or against or in
payment of any or all of the Obligations. The Guarantor further agrees that, to
the extent a payment is made by a Seller or the Collection Agent under the
Transaction Documents, which payment or payments or any part
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thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to such Seller or the Collection Agent,
its estate, trustee, receiver or any other party, under any bankruptcy,
insolvency or similar state or federal law, common law or equitable cause, then
to the extent of such payment or repayment, the Obligation or part thereof which
has been paid, reduced or satisfied by such amount shall be reinstated and
continued in full force and effect as of the date such initial payment,
reduction or satisfaction occurred. The Guarantor waives all set-offs, defenses
and counterclaims and all presentments, demands for performance, notices of
dishonor and notice of acceptance of this Guaranty. The Guarantor agrees that
its obligations under this Guaranty shall be irrevocable.
SECTION 9.03. Several Obligations. The obligations of the Guarantor
hereunder are separate and apart from the Sellers or any other Person, and are
primary obligations concerning which the Guarantor is the principal obligor. The
Guarantor agrees that this Guaranty shall not be discharged except by payment in
full of the Obligations and complete performance of the obligations of the
Guarantor hereunder. The obligations of the Guarantor hereunder shall not be
affected in any way by the release or discharge of a Seller from the performance
of any of the Obligations (other than the full and final payment of all of the
Obligations), whether occurring by reason of law or any other cause, whether
similar or dissimilar to the foregoing.
SECTION 9.04. Subrogation Rights. If any amount shall be paid to the
Guarantor on account of subrogation rights at any time when all the Obligations
shall not have been paid in full, such amount shall be held in trust for the
benefit of the Administrative Agent, on behalf of the Beneficiaries, and shall
forthwith be paid to the Administrative Agent to be applied to the Obligations.
If (a) the Guarantor shall make payment to the Administrative Agent of or
perform all or any part of the Obligations and (b) all the Obligations shall be
paid and performed in full, the Administrative Agent will, at the Guarantor's
request, execute and deliver to the Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to the Guarantor of any interest in the Obligations
resulting from such payment or performance by the Guarantor. The Guarantor
hereby agrees that it shall have no rights of subrogation with respect to
amounts due to the Administrative Agent or the Beneficiaries until such time as
all obligations of the Sellers to the Transferor, the Administrative Agent and
the Beneficiaries have been paid or performed in full and the Receivables
Transfer Agreement has been terminated.
SECTION 9.05. Rights of Set-Off. The Guarantor hereby authorizes the
Administrative Agent, on behalf of the Beneficiaries, at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (whether general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the Administrative
Agent or the Beneficiaries to or for the credit or the account of the Guarantor
against any and all of the obligations of the Guarantor now or hereafter
existing under this Guaranty (even if contingent or unmatured). The Guarantor
hereby acknowledges that rights of the Administrative Agent, on behalf of the
Beneficiaries, described in this Section 9.05 are in addition to all other
rights and remedies (including, without limitation, other rights of set-off) the
Administrative Agent and the Beneficiaries may have.
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SECTION 9.06. Representations and Warranties. The Guarantor hereby
represents and warrants to the Administrative Agent, for the benefit of the
Beneficiaries, as of the date hereof, as follows:
(a) Corporate Existence and Power. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is now conducted. The
Guarantor is duly qualified to do business in, and is in good standing in, every
other jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified or in good standing would
not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention. The execution,
delivery and performance by the Guarantor of this Guaranty and the other
Transaction Documents to which the Guarantor is a party are within the
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
Official Body or official thereof, and do not contravene, or constitute a
default under, any provision of applicable law, rule or regulation or of the
Certificate of Incorporation or By-laws of the Guarantor or of any material
agreement, judgment, injunction, order, writ, decree or other instrument binding
upon the Guarantor or result in the creation or imposition of any Adverse Claim
on the assets of the Guarantor or any of its Subsidiaries.
(c) Binding Effect. Each of this Guaranty and the other Transaction
Documents to which the Guarantor is a party constitutes the legal, valid and
binding obligation of the Guarantor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors and general equitable principles (whether
considered in a proceeding at law or in equity).
(d) Accuracy of Information. All written information heretofore furnished
by the Guarantor to the Administrative Agent or the Beneficiaries for purposes
of or in connection with this Guaranty, the other Transaction Documents or any
transaction contemplated hereby or thereby is, and all such written information
hereafter furnished by the Guarantor to the Administrative Agent or the
Beneficiaries will be, true and accurate in every material respect on the date
such information is stated or certified.
(e) Tax Status. The Guarantor has filed all tax returns (Federal, state and
local) required to be filed and has paid prior to delinquency or made adequate
provision for the payment of all taxes, assessments and other governmental
charges (including for such purposes, the setting aside of appropriate reserves
for taxes, assessments and other governmental charges being contested in good
faith).
(f) Action, Suits. There are no actions, suits or proceedings pending, or
to the knowledge of the Guarantor threatened, against or affecting the Guarantor
or any Affiliate of the Guarantor or their respective properties, in or before
any court, arbitrator or other body, which may, individually or in the
aggregate, have a Material Adverse Effect.
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(g) Not an Investment Company. The Guarantor is not, nor is it controlled
by, an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or is exempt from all provisions of such Act.
ARTICLE X
Miscellaneous
SECTION 10.01. Term of Agreement. This Agreement shall terminate on the
date following the Termination Date upon which the Net Investment has been
reduced to zero, and all accrued Discount, Servicing Fees and all other
Aggregate Unpaids have been paid in full, in each case, in cash; provided,
however, that (i) the rights and remedies of the Administrative Agent and the
Purchasers with respect to any representation and warranty made or deemed to be
made by the Transferor or any Seller pursuant to this Agreement and (ii) the
agreements set forth in Sections 10.08 and 10.09 hereof, shall be continuing and
shall survive any termination of this Agreement.
SECTION 10.02. Waivers; Amendments. No failure or delay on the part of the
Administrative Agent or any Purchaser in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The rights
and remedies herein provided shall be cumulative and nonexclusive of any rights
or remedies provided by law. Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
the parties hereto and the Required Purchasers; provided, however, that no such
amendment or waiver shall, without the consent of each affected Purchaser, (A)
extend the Commitment Expiry Date or the date of any payment or deposit of
Collections by the Transferor or Collection Agent, (B) reduce the rate or extend
the time of payment of any interest or fees hereunder, (C) change the amount of
any Purchaser's Pro Rata Share or Commitment, (D) consent to or permit the
assignment or transfer by the Transferor of any of its rights or obligations
under this Agreement, or (E) amend or modify this Section 10.02 or the
definition of "Required Purchasers".
SECTION 10.03. Notices. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy number set forth below or at such other
address or telecopy number as such party may hereafter specify for the purposes
of notice to such party. Each such notice or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section 10.03 and confirmation is received,
(ii) if given by mail three (3) Business Days following such posting, postage
prepaid, U.S. certified or registered, (iii) if given by overnight courier, one
(1) Business Day after deposit thereof with a national overnight courier
service, or (iv) if given by any other means, when received at the address
specified in this Section 10.03. However, anything in this Section 10.03 to the
contrary notwithstanding, the Transferor hereby authorizes the Administrative
Agent to effect Transfers, Tranche Period and Tranche Rate selections based on
telephonic notices made by any Person which the Administrative Agent in good
faith believes to be acting on behalf of the Transferor. The Transferor agrees
to deliver promptly to the Administrative Agent a written confirmation of each
telephonic notice
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signed by an authorized officer of Transferor. However, the absence of such
confirmation shall not affect the validity of such notice. If the written
confirmation differs in any material respect from the action taken by the
Administrative Agent, the records of the Administrative Agent shall govern
absent manifest error.
If to the Purchasers, to the address set forth on Schedule B (with a copy
to the Administrative Agent).
If to the Transferor:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Sellers, to the address set forth on Schedule I to the
Receivables Purchase Agreement.
If to the Administrative Agent:
GENERAL ELECTRIC CAPITAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Metaldyne/MRFC, Inc. Account Manager
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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and:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Counsel - Commercial Finance / CLG-East
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Purchasers, at their respective addresses set forth on Schedule B.
SECTION 10.04. Governing Law; Submission to Jurisdiction; Integration.
(a) This Agreement shall be governed by, and construed in accordance with
the laws of the State of New York. Each of the parties hereto hereby submits to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in The
City of New York for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. Each of the
parties hereto hereby irrevocably waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum. Nothing in this Section 10.04 shall affect the right of any
party hereto to bring any action or proceeding against any party hereto or its
respective properties in the courts of other jurisdictions.
(b) Each of the parties hereto hereby waives any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort or
otherwise among any of them arising out of, connected with, relating to or
incidental to the relationship between them in connection with this Agreement or
the other Transaction Documents.
(c) This Agreement contains the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire Agreement among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.
SECTION 10.05. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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SECTION 10.06. Successors and Assigns. (a) This Agreement shall be binding
on the parties hereto and their respective successors and assigns; provided,
however, that neither the Transferor nor any Seller may assign any of its rights
or delegate any of its duties hereunder or under any of the other Transaction
Documents to which it is a party without the prior written consent of the
Administrative Agent. No provision of this Agreement shall in any manner
restrict the ability of any Purchaser to assign, participate, grant security
interests in, or otherwise transfer any portion of the Transferred Interest as
provided in this Section 10.06.
(b) [Reserved].
(c) Participations. Any Purchaser may, with the consent of the
Administrative Agent and in the ordinary course of its business and its
accordance with applicable law, at any time sell to one or more Persons (each, a
"Participant") participating interest in its rights and obligations hereunder
and under the Transaction Documents; provided, however, that each Participant
shall purchase an identical percentage in such selling Purchaser's Commitment,
and Pro Rata Share of the Funded Amount. Notwithstanding any such sale by a
Purchaser of participating interest to a Participant, such Purchaser's rights
and obligations under this Agreement shall remain unchanged, such Purchaser
shall remain solely responsible for the performance hereof, and each other
Purchaser and the Administrative Agent shall continue to deal solely and
directly with such Purchaser in connection with such Purchaser's rights and
obligations under this Agreement and the other Transaction Documents. Each
Purchaser agrees that any agreement between such Purchaser and any such
Participant in respect of such participating interest shall not restrict such
Purchaser's right to agree to any amendment, supplement, waiver or modification
to this Agreement.
(d) Assignments.
(i) Any Purchaser may at any time and from time to time, upon the
prior written consent of the Administrative Agent, and, if the Purchaser is
not an Affiliate of the selling Purchaser, the prior written consent of the
Transferor (which consent shall not be unreasonably withheld), assign to
one or more accredited investors or other Persons ("Purchaser(s)") all or
any part of its rights and obligations under this Agreement and the other
Transaction Documents pursuant to a supplement to this Agreement,
substantially in the form of Exhibit K hereto (each, a "Transfer
Supplement"), executed by the Purchaser, such selling Purchaser, the
Administrative Agent and, if applicable, the Transferor; and provided,
however, that (A) each Purchaser shall purchase an identical percentage in
such selling Purchaser's Commitment and Pro Rata Share of the Funded
Amount, (B) any such assignment cannot be for an amount less than the
lesser of (1) $5,000,000 and (2) such selling Purchaser's Commitment or Pro
Rata Share of the Funded Amount (calculated at the time of such assignment)
and (C) each Purchaser must be (1) a financial institution incorporated in
an OECD country and (2) a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act of 1933, as amended).
(ii) Upon (A) execution of a Transfer Supplement, (B) delivery of an
executed copy thereof to the Administrative Agent and (C) payment, if
applicable, by the Purchaser to such selling Purchaser of an amount equal
to the purchase price agreed between such selling Purchaser and the
Purchaser, such selling Purchaser shall be released
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from its obligations hereunder to the extent of such assignment and the
Purchasers shall, for all purposes, be a Purchaser party to this Agreement
and shall have all the rights and obligations of a Purchaser under this
Agreement to the same extent as if it were an original party hereto, and no
further consent or action by the Purchasers or the Administrative Agent
shall be required. The amount of the assigned portion of the selling
Purchaser's Pro Rata Share of the Funded Amount allocable to the Purchaser
shall be equal to the Transferred Percentage (as defined in the Transfer
Supplement) of such selling Purchaser's Pro Rata Share of the Funded Amount
which is transferred thereunder regardless of the purchase price paid
therefor. Such Transfer Supplement shall be deemed to amend this Agreement
to the extent, and only to the extent, necessary to reflect the addition of
the Purchaser as a Purchaser and the resulting adjustment of the selling
Purchaser's Commitment arising from the purchase by the Purchaser of all or
a portion of the selling Purchaser's rights, obligations and interest
hereunder.
SECTION 10.07. Confidentiality. (a) Each of the Transferor, the Collection
Agent and the Guarantor shall maintain, and shall cause each officer, employee
and agent of itself and its Affiliates to maintain, the confidentiality of the
Transaction Documents and all other confidential proprietary information with
respect to the Purchasers and the Administrative Agent and each of their
respective businesses obtained by them in connection with the structuring,
negotiation and execution of the transactions contemplated herein and in the
other Transaction Documents, except for information that has become publicly
available or information disclosed (i) to legal counsel, accountants and other
professional advisors to the Transferor, the Collection Agent, the Guarantor and
their respective Affiliates, (ii) as required by law, regulation or legal
process (including in connection with any registration Statement or other filing
made with the SEC) or (iii) in connection with any legal or regulatory
proceeding to which the Transferor, the Collection Agent, the Guarantor or any
of their respective Affiliates is subject. Each of the Transferor, the
Collection Agent and the Guarantor hereby consents to the disclosure of any
nonpublic information with respect to it received by any Purchaser or the
Administrative Agent to (i) any of the Purchasers or the Administrative Agent or
(ii) any Participant or potential Participant.
(b) Each of the Purchasers and the Administrative Agent shall maintain, and
shall cause each officer, employee and agent of itself and its Affiliates to
maintain, the confidentiality of the Transaction Documents and all other
confidential proprietary information with respect to the Transferor, the
Sellers, the Guarantor and their Affiliates and each of their respective
businesses obtained by them in connection with the structuring, negotiation and
execution of the transactions contemplated herein and in the other Transaction
Documents, except for information that has become publicly available or
information disclosed (i) to legal counsel, accountants and other professional
advisors to the Purchasers, the Administrative Agent and their respective
Affiliates, (ii) as required by law, regulation or legal process or (iii) in
connection with any legal or regulatory proceeding to which the Purchasers, the
Administrative Agent or any of their respective Affiliates is subject.
SECTION 10.08. [Reserved].
SECTION 10.09. [Reserved].
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SECTION 10.10. Characterization of the Transactions Contemplated by the
Agreement. (a) It is the intention of the parties that the transactions
contemplated hereby constitute (other than for tax purposes) the sale of the
Transferred Interest, conveying good title thereto free and clear of any Adverse
Claims to the Purchasers, and that the Transferred Interest not be part of the
Transferor's estate in the event of an insolvency. If, notwithstanding the
foregoing, the transactions contemplated hereby should be deemed a financing,
the parties intend that the Transferor shall be deemed to have granted to the
Administrative Agent, on behalf of the Purchasers, and the Transferor hereby
grants to the Administrative Agent, on behalf of the Purchasers, a first
priority perfected and continuing security interest in all of the Transferor's
right, title and interest in, to and under the Receivables, the Related
Security, Collections and Proceeds with respect thereto, the Lockbox Accounts,
and all of the Transferor's rights under the Receivables Purchase Agreement with
respect to the Receivables and with respect to any obligations thereunder of any
Seller with respect to the Receivables, and that this Agreement shall constitute
a security agreement under applicable law. The Transferor hereby assigns to the
Administrative Agent, on behalf of the Purchasers, all of its rights and
remedies under the Receivables Purchase Agreement with respect to the
Receivables and with respect to any obligations thereunder of any Seller with
respect to the Receivables. The Transferor agrees that it shall not give any
consent or waiver required or permitted to be given under the Receivables
Purchase Agreement without the prior consent of the Administrative Agent, such
consent not to be unreasonably withheld.
(b) It is the intention of the parties that the transactions contemplated
by the Receivables Transfer Agreement will create a debt obligation of the
Transferor for United States Federal, state and local income and franchise tax
purposes. Unless otherwise required by law, the parties agree to treat the
transactions accordingly for all such purposes.
SECTION 10.11. [Reserved].
SECTION 10.12. GE Capital Conflict Waiver. GE Capital acts as
Administrative Agent and as a Purchaser and may provide other services or
facilities from time to time (the "GE Capital Roles"). Without limiting the
generality of Section 8.08, each of the parties hereto hereby acknowledges and
consents to any and all GE Capital Roles, waives any objections it may have to
any actual or potential conflict of interest caused by GE Capital's acting as
the Administrative Agent or as a Purchaser and acting as or maintaining any of
the GE Capital Roles, and agrees that in connection with any GE Capital Role, GE
Capital may take, or refrain from taking, any action which it in its discretion
deems appropriate.
SECTION 10.13. Limitation on the Termination of Sellers. Notwithstanding
anything to the contrary contained in the Receivables Purchase Agreement, the
Transferor shall not consent to any request made pursuant to Section 8.03
thereof, nor shall any Seller or Seller Division which is the subject of such
request be terminated under the Receivables Purchase Agreement, in each case
unless (i) no Termination Event or Potential Termination Event (other than with
respect to any Seller or Seller Division to be so terminated) has occurred and
is continuing (both before and after giving effect to such termination) and (ii)
the Administrative Agent shall have received prior notice of such termination.
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ARTICLE XI
Intercreditor Condition Amendments
If (i) the Intercreditor Condition is satisfied on or before June 29, 2005
and (ii) the Administrative Agent has received a certificate of a Responsible
Officer of the Transferor and the Collection Agent, in form and substance
reasonably satisfactory to the Administrative Agent and dated as of the date of
the satisfaction of the Intercreditor Condition, to the effect that (x) no
Termination Event or Potential Termination Event has occurred and is continuing
as of such date and (y) all of the representations and warranties of the
Transferor set forth in Section 3.01 of this Agreement are true and correct as
of such date as if then made (other than representations and warranties which
expressly speak as of a different date, which are true and correct as of such
different date), then this Agreement and Schedule A hereto will be automatically
amended as follows effective as of the date of the satisfaction of the
Intercreditor Condition without any further action on the part of any party
hereto:
(a) Section 2.02(a) of this Agreement shall be amended to delete clause (x)
of the second sentence of the second paragraph thereof and to substitute the
following therefor:
(x) the desired Transfer Price (which shall be at least $1,000,000 per
Purchaser or integral multiples of $100,000 in excess thereof) or such lesser
amount that would not cause the then outstanding Net Investment to exceed the
then applicable Maximum Allowable Investment;
(b) Section 2.02(b) of this Agreement shall be amended to delete the
penultimate and ultimate sentences thereof and to substitute the following
therefor:
The Transferor agrees to maintain, at all times prior to the
Termination Date, a Net Receivables Balance in an amount at least
sufficient such that the then outstanding Net Investment shall not exceed
the then applicable Maximum Allowable Investment. The maximum amount of
funding that the Transferor may obtain at any time shall be equal to the
maximum Net Investment that would not exceed the Maximum Allowable
Investment.
(c) Section 2.02(d) of this Agreement shall be amended and restated in its
entirety as follows:
(d) Maximum Allowable Investment and Percentage Factor. The Maximum
Allowable Investment and the Percentage Factor shall each be initially computed
as of the opening of business of the Collection Agent on the date that the
Intercreditor Condition is satisfied. Thereafter, until the Termination Date,
each of the Maximum Allowable Investment and the Percentage Factor shall be
recomputed upon the date of any Incremental Transfer and (if there is not
otherwise an Incremental Transfer on such day) on the date of delivery of each
Deposit Report, and shall remain constant during any period between
recomputations. At all times on and after the Termination Date until the date on
which the Net Investment has been reduced to zero and all accrued Discount,
Servicing Fees and all
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other Aggregate Unpaids have been paid in full, the Percentage Factor at such
time shall be deemed to be equal to 100%.
(d) Section 2.05 of this Agreement shall be amended to (1) amend the
preamble thereof to delete the phrase "the Percentage Factor of" therefrom, and
(2) amend each of clauses (ii) and (iii) thereof to delete the phrase
"Percentage Factor of" therefrom.
(e) Section 2.06 of this Agreement shall be amended to delete the first
paragraph thereof and substitute the following paragraph therefor:
If at any time on or prior to the Termination Date, the then
outstanding Net Investment is greater than the then applicable Maximum
Allowable Investment, then the Transferor shall immediately pay to the
Administrative Agent, for the benefit of the Purchasers, from previously
received Collections, an amount that, when applied to reduce the Net
Investment, will result in such Net Investment being less than or equal to
the Maximum Allowable Investment. Such amount shall be applied to reduce
the Net Investment of Tranche Periods selected by the Administrative Agent.
On the Termination Date and on each day thereafter, and on each day on
which a Potential Termination Event has occurred and is continuing, the
Collection Agent, at the direction of the Administrative Agent, shall set
aside and hold in trust for the Purchasers (or deposit into the Collection
Account if so required pursuant to Section 2.12 hereof), all Collections
received on such day. On the Termination Date or the day on which a
Potential Termination Event occurs, the Collection Agent shall deposit to
the Collection Account, for the benefit of the Purchasers, any amounts set
aside pursuant to Section 2.05 above.
(f) Section 2.12 of this Agreement shall be amended and restated in its
entirety as follows:
SECTION 2.12. Reports. (a) On the date of each proposed Incremental
Transfer, by 11:00 am, New York time, the Collection Agent will deliver to the
Administrative Agent and the Transferor a written report substantially in the
form attached hereto as Exhibit D-1 (the "Deposit Report") summarizing the
Receivables activity for the preceding day. The Deposit Report will include a
computation of the Dynamic Advance Rate based on the reserve levels determined
as of the prior Month End Report. The Deposit Report will utilize ineligible
Receivables and reserves calculated on the most recent Weekly Report.
(b) The Collection Agent will deliver to the Agent a monthly report in form
and substance satisfactory to the Administrative Agent and the Transferor a
written report summarizing the Receivables portfolio activity (agings,
roll-forwards, ineligible Receivables and computations of the Dynamic Advance
Rate and reserve levels) for the preceding period as of the end of each Fiscal
Month no later than the 15th day (or if the 15th day is not a Business Day, on
the first Business Day prior to such 15th day)
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of the Fiscal Month following such Fiscal Month end (the "Settlement
Statement").
(c) On the third business day of each week the Collection Agent will
deliver to the Administrative Agent and the Transferor a written report
summarizing the Receivables activity (including agings, roll-forwards,
ineligible Receivables and reserve levels) for the preceding weekly period as of
the end of the prior week substantially in the form attached hereto as Exhibit
D-3 (the "Weekly Report"); provided, however, that the Collection Agent will be
required to deliver the Weekly Report only on the 15th day (or if the 15th day
is not a Business Day, on the first Business Day prior to such 15th day) and
last day (or if the last day is not a Business Day, on the first Business Day
prior to such last day) of each Fiscal Month if and for so long as the
Collection Agent concurrently provides a report on the 15th and last day of each
Fiscal Month demonstrating to the satisfaction of the Administrative Agent that
the Parent and its Subsidiaries have Global Availability of not less than
$30,000,000 as of such date. The Weekly Report will include agings,
roll-forwards, ineligibles and reserve levels.
(g) Section 2.20(i) of this Agreement shall be amended and restated in its
entirety as follows:
(i) the Net Investment exceeding the Maximum Allowable Investment at
any time on or prior to the Termination Date;
(h) Section 3.01(m) of this Agreement shall be amended and restated in its
entirety as follows:
(m) Coverage Requirement. Both before and after giving effect to an
Incremental Transfer, the then outstanding Net Investment does not exceed the
then applicable Maximum Allowable Investment.
(i) Section 5.01 of this Agreement shall be amended to insert the
following new subparts (r) and (s) thereto:
(r) Required Currency ▇▇▇▇▇▇. (i) On each Transfer Date, the Transferor
shall have the Required Currency Hedge in place for the Required Hedge Notional
Amount. The Transferor agrees that at any time that it enters into any Required
Currency Hedge, it shall have funds available to make payment of fees or other
amounts due in connection with the purchase of such Required Currency Hedge at
the time that such payments are due and payable thereunder. The Transferor
agrees that it will enter into any Required Currency Hedge only on a Weekly
Settlement Date or on the Closing Date.
(ii) The Transferor agrees that at any time that it enters into any
Required Currency Hedge, it shall simultaneously execute and deliver to the
Administrative Agent, for the benefit of the Purchasers, an assignment of
all amounts payable to the Transferor under such Required Currency
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Hedge in form and substance satisfactory to Administrative Agent (each, a
"Required Currency Hedge Assignment").
(s) Counterparties. If at any time the commercial paper or short term
deposit ratings from any rating agency assigned to a counterparty is such that
the counterparty is no longer an Eligible Counterparty, the Transferor shall (x)
require such counterparty to secure its obligations under any Required Currency
Hedge or Credit Default Swap or (y) replace the counterparty with an Eligible
Counterparty within the earlier of (A) 30 days or (B) within 5 days in the event
that such counterparty's commercial paper rating or short-term deposit rating is
withdrawn or downgraded below A-2 or P-2.
(j) Section 7.01(j) of this Agreement shall be amended and restated in its
entirety as follows:
(j) the Net Investment exceeds the Maximum Allowable Investment or the
Facility Limit and the Transferor shall not have, by the next Business Day
thereafter, reduced the Net Investment from previously received Collections
or other funds available to the Transferor so as to reduce the Net
Investment on such Business Day to less than or equal to the Maximum
Allowable Investment (unless on such next Business Day the Net Investment
is otherwise made less than or equal to the Maximum Allowable Investment);
or
(k) Schedule A to this Agreement shall be amended to delete the definitions
of the terms "Carrying Cost Reserve Ratio," "Loss and Dilution Reserve Ratio,"
"Maximum Percentage Factor," "Notional Amount," and "Servicing Fee Reserve
Ratio" in their entirety.
(l) Schedule A to this Agreement shall be amended to delete the definition
of "Applicable Margin" in its entirety and to replace it with the following:
"Applicable Margin" shall mean, for any day: (a) with respect to any BR
Tranche, 0.75% plus (i) on and after the 90th day after the date of the
satisfaction of the Intercreditor Condition, 0.25%, plus (ii) on and after the
180th day following the date of the satisfaction of the Intercreditor Condition,
an additional 0.25%; and (b) with respect to any Eurodollar Tranche, 1.75% plus
(i) on and after the 90th day after the date of the satisfaction of the
Intercreditor Condition, 0.25%, plus (ii) on and after the 180th day following
the date of the satisfaction of the Intercreditor Condition, an additional
0.25%.
(m) Schedule A to this Agreement shall be amended to amend and restate the
definition of "Concentration Factor" as follows:
"Concentration Factor" shall mean, on any day with respect to any
Designated Obligor, except for a Special Obligor (in which case the percentage
may be increased above the percentages set forth below to the extent permitted
in Schedule C), a percentage equal to the following:
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(i) with respect to Receivables of any Obligor with senior unsecured
long-term ratings of at least A- by S&P and at least A3 by ▇▇▇▇▇'▇, 20.0%;
(ii) with respect to Receivables of any Obligor with senior unsecured
long-term ratings of at least BBB- by S&P and at least Baa3 by ▇▇▇▇▇'▇,
15.0%;
(iii) with respect to Receivables of any Obligor with senior unsecured
long-term ratings of at least BB- by S&P and at least Ba3 by ▇▇▇▇▇'▇, 7.5%;
and
(iv) with respect to Receivables of any Obligor with senior unsecured
long-term ratings lower than BB- by S&P, lower than Ba3 by ▇▇▇▇▇'▇ or not
rated, 5.0%;
provided, however, that the aggregate concentration limit permitted for
Ford Motor Company, DaimlerChrysler AG and General Motors shall not exceed
55.0%
(n) Schedule A to this Agreement shall be amended to delete the definition
of "Delinquent Receivable" and to replace it with the following:
"Delinquent Receivable" shall mean a Receivable as to which any payment, or
part thereof, remains unpaid for more than 121 days past its invoice date.
(o) Schedule A to this Agreement shall be amended to delete the definition
of "Eligible Obligor" in its entirety and to insert the following new definition
thereof:
"Eligible Obligor" shall mean any Obligor, of which not more than 25% of
such Obligor's aggregate Receivables are Defaulted Receivables
(p) Schedule A to this Agreement shall be amended to amend the definition
of "Eligible Receivables" as follows:
(i) delete the phrase "(A) a United States resident or a resident of a
U.S. territory" from clause (3) thereof and insert in lieu thereof the
phrase: "(A) a United States resident or a resident of a U.S. territory;
provided, however, that Receivables the Obligors of which are resident in
Canada shall be deemed to be Eligible Receivables (x) if such Receivables
would otherwise be Eligible Receivables and (y) only to the extent the
aggregate principal amount of such Receivables does not exceed 20.0% of the
Outstanding Balance of all Eligible Receivables,"
(ii) delete clause (8) thereof and insert the following new clause
(8):
(8) which is denominated and required to be settled only in United
States dollars or Canadian Dollars in the United States or Canada, provided
that if (A) the Required Currency Hedge is not in place or (B) a
counterparty ceases to be an Eligible Counterparty, then such Receivables
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denominated in Canadian Dollars shall not be Eligible Receivables (except
that if such counterparty is no longer an Eligible Counterparty as a result
of such counterparty's commercial paper or short-term deposit ratings not
being at least A-1 or P-1, but such ratings are not lower than A-2 or P-2,
respectively, and such counterparty is to be replaced with an Eligible
Counterparty in accordance with Section 5.01(s), then such Receivables
shall be Eligible Receivables during the 30-day period referred to in
Section 5.01(s)); and provided further, that if the Required Currency Hedge
is for a notional amount less than the Required Hedge Notional Amount, then
the principal amount of Canadian Dollar Receivables included as Eligible
Receivables will be limited to the actual notional amount of the Required
Currency Hedge calculated using the Valuation Price;
(iii) delete the word "and" at the end of clause (15) thereof;
(iv) delete the final punctuation of clause (16) and replace it with a
semi-colon;
(v) add clauses (17) through (21) and a final sentence thereto as
follows:
(17) that does not represent "billed but not yet shipped," "billed and
hold" or "progress-billed" goods or merchandise, partially performed or
unperformed services, consigned goods or "sale or return" goods, or that
does not arise from a transaction for which any additional performance by
the Seller thereof, or acceptance by or other act of the Obligor
thereunder, including any required submission of documentation, remains to
be performed as a condition to any payments on such Receivable or the
enforceability of such Receivable under applicable law; provided that this
clause (17) shall not cause to be ineligible any Tooling Receivable that
otherwise constitutes an Eligible Receivable, to the extent that such
Tooling Receivable is subject to an Obligor-approved Production Part
Approval Process (P-PAP) document (or to an interim P-PAP in the form of
GP-11 where dimensional tests have been satisfied) and arises under a
Contract that obligates the Obligor thereunder to remit payment under such
Contract with respect to such Tooling Receivable on an as-completed basis;
(18) which is subject to a credit owing to such Obligor with respect
to goods sold or services rendered by such Obligor to the originating
Seller or a Subsidiary thereof, which credit is 60 days past due; provided
that such Receivable shall be excluded only to the extent of such credit;
(19) which does not constitute (a) a rebilled amount arising from a
deduction taken by an Obligor with respect to a previously arising
Receivable or (b) the balance owed on a Receivable with respect to which
one or more partial payments have been made;
(20) which is not subject to or evidenced by a "debit memorandum,"
except to the extent that (i) such Receivable relates to Tooling
Re-
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ceivables, prototype inventory or steel surcharges (to the extent such
steel surcharges are made pursuant to written master agreements authorizing
the respective Obligor to invoice for such surcharges), (ii) the aggregate
amount of all Receivables (whether or not evidenced by a "debit
memorandum") relating to Tooling Receivables or prototype inventory does
not exceed $25,000,000 at any time and (iii) any such Receivable relating
to Tooling Receivables, prototype inventory or steel surcharges will become
ineligible if the Transferor does not provide reporting of the "debit
memorandum" relating to such Receivable in form and substance satisfactory
to Agent during any audit or inspection of the Records relating to the
Receivables; and
(21) which does not constitute a Receivable arising from accounts that
are from time to time indicated on the Transferor's records as
"miscellaneous accounts receivable."
(vi) add the following language at the end of the definition of
"Eligible Receivable":
Notwithstanding the foregoing, a portion of any Receivable will not be
eligible to the extent there is a warranty reserve arising from a
contractual warranty obligation with respect to such Receivable.
(q) Schedule A to this Agreement shall be amended to delete the defined
term "Percentage Factor" and substitute the following therefor:
"Percentage Factor" means the undivided percentage ownership interest of
the Purchasers in the Receivables which are purchased under the Receivables
Transfer Agreement, which undivided percentage ownership interest shall be
expressed as a fraction (expressed as a percentage) computed on any date of
determination as follows:
Percentage Factor = Net Investment
---------------------------------------
Maximum Allowable Investment
The Percentage Factor shall equal 100% from and after the Termination Date.
(r) Schedule A to this Agreement shall be amended to amend subpart (c) of
the definition of "Related Security" to delete the language "each Credit Default
Swap" and substitute the language "each Credit Default Swap and each Required
Currency Hedge."
(s) Schedule A to this Agreement shall be amended to add the following
definitions in the proper alphabetical order:
"Availability Block" shall mean $5 million less an amount, if any, by which
(A) clause (i) of the definition of "Maximum Allowable Investment" minus clauses
(ii) and (iii) of the definition of "Maximum Allowable Investment" exceeds (B)
the maximum aggregate Commitment of all Purchasers set forth on Schedule B as of
the applicable date of determination.
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"Canadian Dollars" shall mean dollars in lawful currency of Canada.
"Credit Memo Lag" shall mean, as of any date of determination thereof and
as determined by the Agent during the most recent Collateral audit conducted by
or on behalf of the Agent and based on a sample of credit memoranda,
representative of the whole, issued during such sampling period of three months
or more as may be selected by the Agent, the average number of days from (a) the
original invoice date of each Receivable corresponding to such representative
credit memoranda to (b) the date on which each representative credit memorandum
is applied to such corresponding Receivable.
"Credit Memo Lag Reserve" shall mean, as of any date of determination
thereof, an amount determined by the Agent during the most recent Collateral
audit conducted by or on behalf of the Agent equal to the product of (a) the sum
of (i) the Credit Memo Lag as determined during such audit minus (ii) 75,
multiplied by (b) the average daily aggregate dollar amount of credit memoranda
issued during the sampling period used to determine such Credit Memo Lag.
"Dilution Factors" shall mean the portion of any Receivable which (a) was
reduced or canceled as a result of (i) any defective, rejected or returned
merchandise or services, or any failure by any Seller to deliver any merchandise
or services or otherwise perform under the underlying contract or invoice, (ii)
any change in or cancellation of any of the terms of such contract or invoice or
any cash discount, rebate, retroactive price adjustment or any other adjustment
by the Sellers which reduces the amount payable by the Obligor on the related
Receivable, (iii) any written-off amounts or (iv) any setoff in respect of any
claim by the Obligor thereof (whether such claim arises out of the same or a
related transaction or an unrelated transaction) or (b) is subject to any
specific dispute, offset, counterclaim or defense whatsoever.
"Dynamic Advance Rate" shall mean, at any time, the lesser of (i) 75% and
(ii) a percentage equal to 100% minus the sum of (A) 2 times the Monthly
Dilution Ratio as of such date plus (B) 5%.
"Global Availability" shall mean, at any time, the sum of (1) cash (or Cash
Equivalents, as such term is defined in the Credit Agreement) on the balance
sheet of the Parent and any of its Subsidiaries at such time net of any
outstanding checks or instruments, to the extent such cash (or Cash Equivalents,
as such term is defined in the Credit Agreement) can be wire transferred within
one Business Day into a deposit account of Parent located in the United States,
and (2) the Parent's and its Subsidiaries' aggregate borrowing or other drawing
availability at such time with respect to (i) the Credit Agreement, to the
extent that funds can be drawn thereunder and wired within one Business Day into
a deposit account of Parent located in the United States, (ii) any other credit
facility provided to Subsidiaries of the Parent located outside of the United
States, to the extent
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that funds can be drawn thereunder and wired within one Business Day into a
deposit account of Parent located in the United States, and (iii) the
Receivables Purchase Agreement and this Agreement.
"Maximum Allowable Investment" means, at any time, an amount equal to the
positive difference, if any, of: (i) the product of (1) the Dynamic Advance Rate
multiplied by (2) the Net Receivables Balance; minus (ii) the lesser of (X) such
other reserves as the Agent (using its reasonable credit judgment and based on
information regarding the Transferor, the Sellers, the Obligors or the
Receivables, whether as a result of an audit or otherwise) may from time to time
specify to the Transferors and the Collection Agent, which reserves shall be
determined as a percentage of the Net Receivables Balance (and which reserves
shall include, without limitation, reserves with respect to servicing fees and
discount that would be instituted upon the occurrence and during the continuance
of any Termination Event or incipient Termination Event) and (Y) so long as no
Termination Event or Potential Termination Event has occurred and is continuing,
5.0% of the Net Receivables Balance; minus (iii) if the Credit Memo Lag is
greater than 75 days at such time, an amount equal to the Credit Memo Lag
Reserve; minus (iv) an amount equal to the Availability Block.
"Monthly Dilution Ratio" shall mean, as of the date of any determination,
the quotient of: (a) the aggregate Dilution Factors for all Receivables during
the month most recently ended divided by (b) the aggregate billed amount of all
Receivables originated during the month that is two months prior to the most
recently ended month.
"Required Currency Hedge" shall mean one or more foreign currency
instruments including currency options, currency ▇▇▇▇▇▇ and similar items,
acceptable to the Administrative Agent, exercisable at any time, with an
Eligible Counterparty providing for the delivery by such Eligible Counterparty
of United States dollars in exchange for the receipt of Canadian Dollars, in
each case having a remaining term at any time of not less than five (5) months.
"Required Currency Hedge Assignment" shall have the meaning specified in
Section 5.01(r)(ii) of the Receivables Transfer Agreement.
"Required Hedge Notional Amount" shall mean for each Settlement Period an
amount denominated in U.S. Dollars, which represents the portion of the
Investment Base payable in Canadian Dollar Receivables, as calculated in the
Settlement Statement delivered for the immediately preceding Settlement Period.
"Tooling Receivable" shall mean an obligation of an Obligor to pay for (i)
tooling or equipment purchased or built by a Seller for the purpose of
manufacturing products for such Obligor or (ii) services rendered in connection
with building tooling for the purposes of manufacturing products for such
Obligor.
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"Valuation Price" shall mean as of any date of determination, the strike
price of any outstanding Required Currency Hedge that would require the highest
amount of Canadian Dollars to purchase one U.S. Dollar.
"Weekly Report" shall have the meaning specified in Section 2.12(c) of the
Receivables Transfer Agreement.
(t) Schedule C to this Agreement shall be amended to delete the contents
thereof in their entirety and to replace them with the following:
Schedule of Special Obligors
For each Special Obligor, the concentration limit shall be as set forth in
the definition of "Concentration Factor"; provided, however, that if the
Transferor has purchased a Credit Default Swap with respect to such
Obligor, which Credit Default Swap is in full force and effect and in the
amount and otherwise on terms and in form and substance acceptable to the
Agent, and which such Credit Default Swap has been assigned to the
Administrative Agent in the manner required under this Agreement, the
concentration limit with respect to such Obligor shall be a percentage
equal to the lesser of (a) the Maximum Concentration applicable to such
Obligor set forth in the table below adjacent to such Obligor's senior
unsecured long-term debt rating by Standard & Poor's and Moody's (but
applying the lower of the two ratings) and (b) a percentage equal to (A)
the applicable concentration limit applicable to such Obligor as set forth
in the definition of "Concentration Factor" plus (B) the product of (i) the
face value of the applicable Credit Default Swap relating to such Obligor
multiplied by (ii) 1.0 minus the Discount Factor set forth in the table
below adjacent to such Obligor's senior unsecured long-term debt rating),
divided by the outstanding balance of the Eligible Receivables at such
time; provided, that the aggregate concentration limit permitted for Ford
Motor Company, DaimlerChrysler AG and General Motors shall not exceed
55.0%.
--------------------------------------------------------------------------
Rating of applicable Special Obligor Maximum Discount Factor
Concentration
--------------------------------------------------------------------------
A-/A3 or Better 30.00% 0%
--------------------------------------------------------------------------
BBB-/Baa3 to BBB+/Baa1 25.00% 0%
--------------------------------------------------------------------------
BB-/Ba3 to BB+/Ba1 15.00% 20%
--------------------------------------------------------------------------
(u) Exhibits D-1 and D-2 to this Agreement shall be amended to delete the
contents thereof in their entirety and to replace them with replacement Exhibits
▇-▇, ▇-▇ and D-3 in form and substance acceptable to the Administrative Agent.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Receivables Transfer Agreement as of the date first written above.
MRFC, INC., as Transferor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
METALDYNE CORPORATION, individually, as
Collection Agent and as Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
GENERAL ELECTRIC CAPITAL
CORPORATION, as a Purchaser
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
GENERAL ELECTRIC CAPITAL CORPORATION, as
Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
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SCHEDULE A
"Administrative Agent" shall mean General Electric Capital Corporation, as
administrative agent on behalf of the Purchasers.
"Advance" shall have the meaning specified in Section 3.02(b) of the
Receivables Purchase Agreement.
"Advance Limit" shall have the meaning specified in Section 3.02(b) of the
Receivables Purchase Agreement.
"Adverse Claim" shall mean a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person (including any UCC financing statement
or any similar instrument filed against such Person's assets or properties).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of voting stock, by contract or otherwise;
provided, however, that a Person shall not be deemed an Affiliate of another
Person solely by reason of an individual serving as an officer or director of
any Person and provided further that any Person other than the Parent and its
Subsidiaries which, directly or indirectly, is controlled by Heartland
Industrial Partners shall not be deemed an Affiliate of the Parent or any of its
Subsidiaries.
"Aggregate Commitment" shall mean, at any time, the sum of the Commitments
then in effect.
"Aggregate Unpaids" shall mean, at any time, an amount equal to the sum of
(i) the aggregate accrued and unpaid Discount at such time, (ii) the Net
Investment at such time, (iii) all Fees, (iv) all Indemnified Amounts, amounts
payable pursuant to Section 2.21 and Indemnified Taxes and (v) all other amounts
owed (whether due or accrued) by the Transferor to the Purchasers at such time.
"Applicable Margin" shall mean (a) in the case of any BR Tranche, 1.50% and
(b) in the case of any Eurodollar Tranche, 1.50%.
"Bankruptcy Code" shall have the meaning assigned to that term in Section
3.01(v) of the Receivables Transfer Agreement.
"Base Rate" or "BR" shall mean, for any day, a floating rate equal to the
higher of (a) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the bank prime loan rate or its equivalent), and
(b) the Federal Funds Rate plus fifty (50) basis points per annum. Each change
in any interest rate provided for in the Agreement
based upon the Base Rate shall take effect at the time such change in the Base
Rate is publicly announced as being effective.
"Beneficiaries" shall mean the Purchasers and the Administrative Agent,
collectively.
"Benefit Plan" shall mean any employee benefit plan as defined in Section
3(3) of ERISA in respect of which the Transferor, any Seller or any ERISA
Affiliate of the Transferor, or any Seller is, or at any time during the
immediately preceding six (6) years was, an "employer"as defined in Section 3(5)
of ERISA.
"BR Tranche" shall mean a Tranche as to which Discount is calculated at the
Base Rate plus the Applicable Margin.
"BR Tranche Period" shall mean, with respect to a BR Tranche, either (i)
prior to the Termination Date, a period of up to thirty (30) days requested by
the Transferor and agreed to by the Administrative Agent, commencing on a
Business Day requested by the Transferor and agreed to by the Purchaser, or (ii)
after the Termination Date, a period of one (1) day. If such BR Tranche Period
would end on a day which is not a Business Day, such BR Tranche Period shall end
on the next succeeding Business Day.
"Business Day" shall mean any day excluding Saturday, Sunday and any day on
which banks in The City of New York are authorized or required by law to close,
and, when used with respect to the determination of any Eurodollar Rate or any
notice with respect thereto, any such day which is also a day for trading by and
between banks in the London interbank market in United States dollar deposits.
"Capitalized Lease" of a Person shall mean any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Carrying Cost Reserve Ratio" shall mean, on any day, an amount, expressed
as a percentage, equal to (a) the product of (i) 2 times DSO as of such day and
(ii) the Base Rate in effect as of such day plus 2%, divided by (b) 365.
"Charged-Off Receivables" shall mean, with respect to any Settlement
Period, all Receivables (or portions thereof) which, in accordance with the
Credit and Collection Policy, have or should have been written off during such
Settlement Period as uncollectible, including, without limitation, the
Receivables of any Obligor which becomes the subject of any voluntary or
involuntary bankruptcy proceeding.
"Closing Date" shall mean April 29, 2005.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Collection Account" shall mean the account, established by the
Administrative Agent, for the benefit of the Purchasers, pursuant to Section
2.13(a) of the Receivables Transfer Agreement. The wire transfer instructions
for the Collection Account are set forth on Exhibit H to the Receivables
Transfer Agreement.
"Collection Agent" shall mean, at any time, the Person then authorized
pursuant to Section 6.01 of the Receivables Transfer Agreement to service,
administer and collect Receivables. The initial Collection Agent shall be the
Parent.
"Collection Agent Default" shall have the meaning specified in Section 6.07
of the Receivables Transfer Agreement.
"Collections" shall mean, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all Finance Charges, if any, and cash proceeds of Related Security
with respect to such Receivable.
"Commitment" shall mean, with respect to any Purchaser, the amount
specified as such on Schedule B to the Receivables Transfer Agreement for such
Purchaser, as the same may be reduced from time to time as provided in Section
2.07 of the Receivables Transfer Agreement.
"Commitment Expiry Date" shall mean the earliest to occur of (i) the date
on which all amounts due and owing to the Purchasers under the Receivables
Transfer Agreement and the other Transaction Documents have been paid in full,
(ii) the date on which the Aggregate Commitment has been reduced to zero
pursuant to the Receivables Transfer Agreement, (iii) the Termination Date, and
(iv) January 1, 2007.
"Concentration Factor" shall mean, on any day with respect to any
Designated Obligor, except for a Special Obligor, a percentage equal to the
following:
(i) with respect to Receivables of any Obligor with short-term or
long-term ratings of at least A-1 or A by S&P, respectively, and at least
P-1 or A2 by Moody's, respectively, 12.0%;
(ii) with respect to Receivables of any Obligor with short-term or
long-term ratings of at least A-2 or BBB by S&P, respectively, and at least
P-2 or Baa2 by Moody's, respectively, 6.0%;
(iii) with respect to Receivables of any Obligor with short-term or
long-term ratings of at or below A-3 or BBB- by S&P, respectively, and at
or below P-3 or Baa3 by Moody's, respectively, 3.0%; and
(iv) with respect to Receivables of any Obligor with no short-term or
long-term ratings by S&P and Moody's, 3.0%. The Concentration Factor for
Obligors with split ratings shall be determined based upon the lower of the
two ratings.
"Contract" shall mean a written agreement or invoice, pursuant to or under
which an Obligor shall be obligated to pay for merchandise purchased or services
rendered and including all items and provisions incorporated or implied by
applicable law, including, without limitation, the Relevant UCC.
"Conversion/Continuation Notice" shall have the meaning specified in
Section 2.17 of the Receivables Transfer Agreement.
"Credit Agreement" shall mean that certain Credit Agreement, dated as of
November 28, 2000, by and among the Parent, certain subsidiaries of the Parent,
The Chase Manhattan Bank, as administrative agent, Chase Securities Inc., as
arranger and the various lending institutions party thereto, as amended,
supplemented or otherwise modified and in effect from time to time.
"Credit and Collection Policy" shall mean the Sellers' credit and
collection policy or policies relating to Contracts and Receivables existing on
the Closing Date and referred to in Exhibit A attached to the Receivables
Transfer Agreement, as amended, supplemented or otherwise
modified and in effect from time to time in compliance with Section 5.02(c) of
the Receivables Transfer Agreement.
"Credit Default Swap" shall mean any credit default swap between the
Transferor (as assignee or otherwise) and an Eligible Counterparty with respect
to the payment obligations of DaimlerChrysler AG, Ford Motor Company, General
Motors, ▇▇▇▇ Corporation or any other Obligor acceptable to the Administrative
Agent in its sole discretion, in each case which credit default swap shall be
satisfactory in form, substance, amount and in all other respects to the
Administrative Agent and each Purchaser, as the same may from time to time be
modified, supplemented, amended, extended or replaced as consented to by the
Administrative Agent and each Purchaser. The Credit Default Swaps in existence
on the Closing Date are:
(i) the credit default swap dated as of April 13, 2005, Trade ID
number 0900000748849, between MTSPC, Inc. and an Eligible Counterparty with
respect to the payment obligations of DaimlerChrysler AG, as assigned as of
the Closing Date by MTSPC, Inc. to the Transferor,
(ii) the credit default swap dated as of April 7, 2005, Trade ID
number 0900000747777, between MTSPC, Inc. and an Eligible Counterparty with
respect to the payment obligations of Ford Motor Company, as assigned as of
the Closing Date by MTSPC, Inc. to the Transferor, and
(iii) the credit default swap dated as of April 7, 2005, Trade ID
number 0900000747776, between MTSPC, Inc. and an Eligible Counterparty with
respect to the payment obligations of General Motors Corporation, as
assigned as of the Closing Date by MTSPC, Inc. to the Transferor.
"Deemed Collections" shall mean any Collections on any Receivable deemed to
have been received pursuant to Section 2.10(a) or (b) of the Receivables
Transfer Agreement.
"Default Ratio" shall mean, on any day, a fraction, the numerator of which
is the sum of (a) the Outstanding Balance of all Receivables which are 91-120
days past their original due date as of the end of the preceding Settlement
Period plus (b) the Outstanding Balance of all Receivables which were written
off as uncollectible by the Collection Agent in accordance with the Credit and
Collection Policy during the preceding Settlement Period prior to 121 days after
their original due dates and the denominator of which is the balance of all
Receivables which arose during the Settlement Period four Settlement Periods
prior to such day.
"Defaulted Receivable" shall mean a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for more than 121 days from the
original due date for such Receivable; (ii) as to which an Event of Bankruptcy
has occurred and is continuing with respect to the Obligor thereof; (iii) which
has been identified by the Transferor, the Seller or the Collection Agent as
uncollectible; or (iv) which, in accordance with the Credit and Collection
Policy, should be written off as uncollectible.
"Delinquent Receivable" shall mean a Receivable as to which any payment, or
part thereof, remains unpaid for more than 91 days past its original due date.
"Deposit Report" shall have the meaning specified in Section 2.12(a) of the
Receivables Transfer Agreement.
"Designated Obligor" shall mean, at any time, each Obligor; provided,
however, that any Obligor shall cease to be a Designated Obligor upon notice to
the Transferor from the Administrative Agent, delivered at any time.
"Diluted Receivable" shall mean, any Receivable which is the subject of a
reduction or cancellation as a result of any defective, rejected or returned
merchandise or services and all credits, rebates, discounts, disputes, warranty
claims, repossessed or returned goods, charge backs, allowances, other dilutive
factors and any other billing or other adjustment (whether effected through the
granting of credits against the applicable Receivables or by the issuance of a
check or other payment in respect of (and as payment for) such reduction but
excluding adjustments, reductions, or cancellations in respect of the Obligor's
bankruptcy or insolvency.
"Dilution Period" shall mean, on any day, a number equal to a fraction, the
numerator of which is the product of (i) the sum of all Receivables which arose
during the Settlement Period immediately preceding such day and (ii) DSO divided
by 30 and the denominator of which is the Net Receivables Balance.
"Dilution Ratio" shall mean, as of the last day of each Settlement Period,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Diluted Receivables arising during such Settlement Period and the
denominator of which is the aggregate principal amount of all Receivables
originated by the Sellers during the Settlement Period immediately preceding the
Settlement Period ended on such day.
"Dilution Reserve Ratio" shall mean, as of any Settlement Date, and
continuing until (but not including) the next Settlement Date, an amount
(expressed as a percentage) that is calculated as follows:
DRR = [(c*d)+[(e-d)*(e/d)]]*f
Where:
DRR = Dilution Reserve Ratio;
c = 2 . 0
d = the twelve-month rolling average
of the Dilution Ratio that occurred
during the period of twelve
consecutive Settlement Periods
ending immediately prior to such
earlier Settlement Date;
e = the highest Dilution Ratio that
occurred during the period of twelve
consecutive Settlement Periods
ending prior to such earlier
Settlement Date
f = the Dilution Period
"Discount" means, with respect to any Tranche Period:
(TR x TNI x AD)
--
YD
Where:
TR = the Tranche Rate applicable to such
Tranche Period;
TNI = the portion of the Net Investment
allocated to such Tranche Period;
AD = the actual number of days during
such Tranche Period; and YD= either
(i) if the Tranche Rate is the
Eurodollar Rate, 360 or (ii) if the
Tranche Rate is the Base Rate, 365
or 366, as applicable.
provided, however, that no provision of the Receivables Transfer Agreement shall
require the payment or permit the collection of Discount in excess of the
maximum amount permitted by applicable law; and provided, further, that Discount
shall not be considered paid by any distribution if, at any time, such
distribution is rescinded or must be returned for any reason.
"Discount Percentage" shall mean, on any date, the percentage obtained from
the following formula:
100% - (A + B + C + D)
all determined by the Transferor as of the related Transfer Date,
Where
A = Adjusted Loss Reserve Percentage, which as
of such Transfer Date will equal the ratio
obtained by dividing (a) Charged-Off
Receivables (net of recoveries in respect of
Charged-Off Receivables) during the six-
fiscal month period immediately preceding
the Settlement Date most recently preceding
such Transfer Payment Date by (b) the
aggregate amount of Collections during the
six-fiscal month period immediately
preceding the Settlement Date most recent to
such Transfer Date.
B = Adjusted Carrying Cost Reserve Percentage,
which as of such Transfer Date will equal
the amount obtained by dividing (a) the
product of (i) 1.3, (ii) the average of the
DSO for the three Settlement Dates most
recent to such Transfer Date and (iii) the
Base Rate as of the Settlement Date most
recent to such Transfer Date by (b) 365.
C = The Servicing Fee Percentage divided by 360.
D = Processing Expense Reserve Percentage,
which will equal 1/10 of 1% and reflects the
cost of the Transferor's overhead, including
costs of processing the purchase of
Receivables and other normal operation costs
and a reasonable profit margin.
None of the elements of the above-referenced formula, in respect of any
purchase of Receivables, will be adjusted following the related Transfer Date.
With respect to each calculation set forth above with respect to a
Settlement Date, such calculation as calculated on such Settlement Date and
included in the applicable Settlement Statement shall remain in effect from and
including the related Settlement Date to but excluding the following Settlement
Date.
For the initial Settlement Period, the Discount Percentage will be 98.5%.
"DSO" shall mean, on any Settlement Date, the number of calendar days equal
to the product of (a) 91 and (b) the amount obtained by dividing (i) the Net
Receivables Balance as of the last day of the immediately preceding Settlement
Period by (ii) the aggregate balance of Receivables which arose during the three
(3) consecutive Settlement Periods immediately preceding such Settlement Date,
which calculation shall remain in effect until the next succeeding Settlement
Date for all purposes of this Agreement.
"Early Collection Fee" shall mean, for any Tranche Period during which the
portion of the Net Investment that was allocated to such Tranche Period is
reduced for any reason whatsoever, the excess, if any, of (i) the additional
Discount that would have accrued during such Tranche Period if such reductions
had not occurred, minus (ii) the income, if any, received by the recipient of
such reductions from investing the proceeds of such reductions.
"Eligible Counterparty" shall mean a counterparty with commercial paper or
short-term deposit ratings of at least A-1 or P-1. If at any time the commercial
paper or short term deposit ratings assigned to a counterparty by any rating
agency is such that the counterparty is no longer an Eligible Counterparty, the
Transferor shall (x) require such counterparty to secure its obligations under
such Credit Default Swap or (y) replace the counterparty with an Eligible
Counterparty within 30 days.
"Eligible Obligor" shall mean any Obligor, of which not more than 35% of
such Obligor's aggregate Receivables are more than 120 days past their original
due date.
"Eligible Receivable" shall mean, at any time, any Receivable:
(1) which has been originated by any Seller and subsequently sold to the
Transferor pursuant to (and in accordance with) the Receivables
Purchase Agreement, and to which the Transferor has good title
thereto, free and clear of all Adverse Claims other than those imposed
in connection with the Transaction Documents;
(2) which (together with the Collections and Related Security related
thereto) has been the subject of either (A) a valid transfer and
assignment from the Transferor to the Administrative Agent, on behalf
of the Purchasers, of all of the Transferor's right, title and
interest therein or (B) the grant of a first priority perfected
security interest therein (and in the Collections and Related Security
related thereto), in each case effective until the termination of the
Receivables Transfer Agreement.
(3) the Obligor of which is (A) a United States resident or a resident of
a U.S. territory, provided, however, that Receivables of an Obligor
which is resident in Canada shall be deemed to be Eligible Receivables
(x) if such Receivables would otherwise be Eligible Receivables except
for the fact that such Obligor is not a United States resident or a
resident of a U.S. territory, (y) only to the extent the aggregate
principal amount of such Receivables does not exceed 5.0% of the
Outstanding Balance of all Receivables and (z) Administrative Agent
has confirmed to the Transferor in writing that the Administrative
Agent has perfected its security interest in such Receivables, (B) a
Designated Obligor at the time of the initial creation of an interest
therein hereunder, (C) not an Official Body or an Affiliate of any of
the parties to the Receivables Transfer Agreement, (D) not the subject
of an Event of Bankruptcy, and (E) an Eligible Obligor; provided,
how-
ever, that if the Intercreditor Condition is not satisfied on or
before June 29, 2005, the proviso in clause (A) above shall be deleted
in its entirety effective from and after June 29, 2005;
(4) which is not a Delinquent Receivable or a Defaulted Receivable;
(5) which (A) arises pursuant to a Contract with respect to which the
Seller has performed all obligations required to be performed by it
thereunder, including, without limitation, shipment of the merchandise
and/or the performance of the services purchased thereunder; and (B)
according to the Contract related thereto, has been billed and is
required to be paid in full within 120 days of the original billing
date therefor;
(6) which is an "eligible asset" as defined in Rule 3a-7 under the
Investment Company Act of 1940, as amended;
(7) which is (A) an "account" within the meaning of Article 9 of the
Relevant UCC, (B) chattel paper within the meaning of Section 9-105 of
such UCC (provided that, in order for such chattel paper to be
eligible, the Collection Agent shall have certified to the
Administrative Agent in the related Deposit Report that the terms of
the contract or contracts giving rise to such chattel paper do not
prohibit the assignment thereof) or (C) a "general intangible"(to the
extent that such Receivables include interest, finance charges,
returned check or late charges or sales or similar taxes) within the
meaning of Section 9-106 of such UCC;
(8) which is denominated and payable only in United States dollars in the
United States;
(9) which arises under a Contract that, together with the Receivable
related thereto, is in full force and effect and constitutes the
legal, valid and binding obligation of the related Obligor,
enforceable against such Obligor in accordance with its terms and is
not subject to any litigation, dispute, offset, counterclaim or other
defense other than unexpired volume or pricing discounts or rebates to
which the obligor thereon may be entitled, provided that only such
portion of such receivable subject to any such dispute, offset,
counterclaim or defense shall be deemed ineligible under this
criterion;
(10) which, together with the Contract related thereto, does not contravene
in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations
relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices
and privacy) and with respect to which no part of the Contract related
thereto is in violation of any such law, rule or regulation in any
material respect;
(11) which (A) satisfies all applicable requirements of the Credit and
Collection Policy, (B) is assignable without the consent of, or notice
to, the Obligor thereunder and (C) complies with such other reasonable
criteria and requirements as the Administrative Agent may from time to
time specify to the Transferor following five (5) days' notice;
(12) which was originated in the ordinary course of the Seller's business;
(13) the Obligor of which has been directed to make all payments to a
specified account of the Collection Agent with respect to which there
shall be a LockBox Account Agreement in effect;
(14) the assignment of which under the Receivables Purchase Agreement by
the Seller to the Transferor and the assignment of which under the
Receivables Transfer Agreement by the Transferor to the Purchasers
does not violate, conflict with or contravene any applicable laws,
rules, regulations, orders or writs or any contractual or other
restriction, limitation or encumbrance and does not require the
consent of any person;
(15) which has not been compromised, adjusted or modified (including by the
extension of time for payment or the granting of any discounts,
allowances or credits), provided that only such portion of such
receivable that has been so compromised, adjusted or modified shall be
deemed ineligible pursuant to this criterion; and
(16) which, if purchased with proceeds of Commercial Paper, would
constitute a "current transaction"within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, supplemented or otherwise modified and in effect from time to time, and
the rules and regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code (as in effect from time to
time, the "Code")) as such Person; (ii) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with such Person; or (iii) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Code) as such Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above.
"Eurodollar Rate" shall mean, for any Eurodollar Tranche Period, an
interest rate per annum equal to the rate per annum appearing on Page 3750 of
the Telerate Service (or on any successor or substitute page of such Telerate
Service, or any successor to or substitute for such Telerate Service, providing
rate quotations comparable to those currently provided on such page of such
Telerate Service, as determined by the Administrative Agent from time to time
for purpose of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 A.M., London
time, two Business Days prior to the commencement of such Eurodollar Tranche
Period, as the rate for dollar purchases with a maturity comparable to such
Eurodollar Tranche Period.
"Eurodollar Tranche" shall mean a Tranche as to which Discount is
calculated at the Eurodollar Rate plus the Applicable Margin.
"Eurodollar Tranche Period" shall mean, with respect to a Eurodollar
Tranche, prior to the Termination Date, a period commencing on the first day of
each calendar month and ending on the last day of such calendar month (it being
understood that a Eurodollar Tranche may be commenced on any day of a calendar
month to the extent not otherwise prohibited hereunder).
"Event of Bankruptcy" shall mean, with respect to any Person, (i) that such
Person (a) shall generally not pay its debts as such debts become due or (b)
shall admit in writing its inabil-
ity to pay its debts generally or (c) shall make a general assignment for the
benefit of creditors; (ii) any proceeding shall be instituted by or against such
Person seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property or (iii) if such Person
is a corporation, such Person or any Subsidiary shall take any corporate action
to authorize any of the actions set forth in the preceding clauses (i) or (ii).
"Federal Funds Rate" shall mean, for any day, an interest rate per annum
equal to (a) the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or (b) if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 11:00 A.M. (New
York time) on such day on such transactions received by the Administrative Agent
from three (3) federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Fee Letter" shall mean the letter agreement, dated the Closing Date,
between the Transferor and the Administrative Agent, for the benefit of the
Purchasers, with respect to the fees to be paid by the Transferor under the
Transaction Documents, as amended, supplemented or otherwise modified and in
effect from time to time.
"Fees" shall mean the fees payable pursuant to the Fee Letter.
"Finance Charges" shall mean, with respect to a Contract, any finance,
interest, late or similar charges owing by an Obligor pursuant to such Contract.
"Fiscal Month" shall mean any of the monthly accounting periods of the
Transferor.
"Funded Amount" shall mean, with respect to any Purchaser for any day, the
aggregate portion of the Net Investment funded by such Purchaser.
"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 in effect as of the date of the Receivables
Transfer Agreement.
"GE Capital" shall mean General Electric Capital Corporation, a Delaware
corporation, in its individual capacity, and its successors.
"GE Capital Roles" shall have the meaning specified in Section 10.12 of the
Receivables Transfer Agreement.
"Guarantor" shall mean the Parent in its capacity as Guarantor under the
Limited Guaranty set forth in Article IX of the Receivables Transfer Agreement.
"Guaranty" shall mean, with respect to any Person, any agreement by which
such Person assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the
obligation of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person or otherwise assures
any other creditor of such other Person against loss, including, without
limitation, any
comfort letter, operating agreement or take-or-pay contract and shall include,
without limitation, the contingent liability of such Person in connection with
any application for a letter of credit; provided, however, that the term
"Guaranty" shall not mean or include the endorsements by such Person of
Instruments for deposit or collection in the ordinary course of business.
"Incremental Transfer" shall mean a Transfer which is made pursuant to
Section 2.02(a) of the Receivables Transfer Agreement.
"Indebtedness" shall mean, with respect to any Person, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) Guaranty obligations.
"Indemnified Amounts" shall have the meaning specified in Section 2.20 of
the Receivables Transfer Agreement.
"Indemnified Taxes" shall mean any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any Official
Body, excluding (A) all franchise taxes, all taxes, levies, imposts, duties,
charges, fees, deductions and withholdings imposed on or measured by the net
income, capital or net worth or all taxes, levies, imposts, duties, charges,
fees, deductions and withholdings on doing business, in each case, imposed:
(i) by the United States or any political subdivision or taxing
authority thereof or therein;
(ii) by any jurisdiction under the laws of which the Administrative
Agent, any Purchaser or an Indemnified Party or lending office is organized
or in which its lending office is located, managed or controlled or in
which its principal office is located or any political subdivision or
taxing authority thereof or therein; or
(iii) by reason of any connection between the jurisdiction imposing
such tax and the Administrative Agent, any Purchaser, such Indemnified
Party or such lending office other than a connection arising solely from
this Agreement or any other Transaction Document or any transaction
hereunder or thereunder,
(B) all penalties, interests, additions to taxes and expenses resulting
from gross negligence or willful misconduct on the part of the Administrative
Agent, any Purchaser, or an Indemnified Party, as the case may be, and (Q) all
taxes, levies, imposts, duties, charges, fees, deductions and withholdings
imposed by reason of the failure of any Indemnified Party to comply with its
obligations, if any, under Section 2.22(b) of the Receivables Transfer Agreement
(including, without limitation, its inability to comply with Section 2.22(b)(i)
of the Receivables Transfer Agreement.
"Intercreditor Agreement" means an intercreditor agreement, in form and
substance satisfactory to the Administrative Agent, by and among JPMorgan Chase
Bank, N.A., as agent under the Credit Agreement, the Administrative Agent, the
Parent, the Transferor, Metaldyne Company LLC, a Delaware limited liability
company, and each Seller.
"Intercreditor Condition" means the receipt by the Administrative Agent of
the fully executed, delivered and effective Intercreditor Agreement.
"Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.
"Lockbox Account" shall mean an account maintained by the Collection Agent
at a Lockbox Bank for the purpose of receiving Collections from Receivables.
"Lockbox Agreement" shall mean an agreement between the Collection Agent
and a Lockbox Bank in substantially the form of Exhibit C to the Receivables
Transfer Agreement.
"Lockbox Bank" shall mean each of the banks set forth in Exhibit B to the
Receivables Transfer Agreement, and such banks as may be added thereto or
deleted therefrom pursuant to Section 2.09 of the Receivables Transfer
Agreement.
"Loss and Dilution Reserve Ratio" shall mean, on any day, the greater of
(a) the sum of (i) 16% plus (ii) the product of (x) the average Dilution Ratio
over the immediately preceding fiscal 12-month period and (y) DSO divided by 30
and (b) the sum of the Loss Reserve Ratio plus the Dilution Reserve Ratio.
"Loss Horizon" shall mean, on any day, the amount obtained by dividing (i)
the sum of all Receivables which arose during the four Settlement Periods
immediately preceding such day plus 0.25 times the sum of all Receivables which
arose during the fifth Settlement Period immediately preceding such day by (ii)
the Net Receivables Balance as of the end of the preceding Settlement Period.
"Loss Reserve Ratio" shall mean, on any day, the product of (a) 2, and (b)
the highest three-month average Default Ratio that occurred during the twelve
(12) most recent Settlement Periods, (c) the Loss Horizon and (d) the Payment
Terms Factor.
"Material Adverse Effect" shall mean any event or condition which would
have a material adverse effect on (i) the collectibility of the Receivables,
(ii) the condition (financial or otherwise), businesses or properties of the
Transferor or any Seller, (iii) the ability of the Transferor or any Seller to
perform its respective obligations under the Transaction Documents to which it
is a party or (iv) the interests of the Administrative Agent or the Purchasers
under the Transaction Documents; provided, however, that for purposes of clause
(ii) an event or condition resulting in a material adverse change in the
condition (financial or otherwise) of any Seller will not be deemed to have a
Material Adverse Effect unless such event or condition, in the Administrative
Agent's reasonable discretion, is reasonably likely to have a material adverse
effect on the condition (financial or otherwise) of the Parent on a consolidated
basis or on the Transferor.
"Maximum Percentage Factor" means 100%.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., and its successors
and assigns.
"MTSPC" shall mean MTSPC, Inc., a Delaware corporation.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding five years contributed to by the Transferor, the
Seller or any ERISA Affiliate of the Transferor or the Seller on behalf of its
employees.
"Net Investment" shall mean the sum of the cash amounts paid to the
Transferor by the Purchasers for all Incremental Transfers minus the aggregate
amount of Collections received and applied by the Administrative Agent to reduce
such Net Investment pursuant to Section 2.05, 2.06 or 2.10 of the Receivables
Transfer Agreement; provided that the Net Investment shall be restored and
reinstated in the amount of any Collections so received and applied if, at any
time, the distribution of such Collections is rescinded or must otherwise be
returned for any reason.
"Net Receivables Balance" shall mean, at any time, the aggregate
Outstanding Balance of the Eligible Receivables at such time, as reduced by the
aggregate amount for all Designated Obligors by which the Outstanding Balance of
all Eligible Receivables of each Designated Obligor exceeds the product of the
Concentration Factor for such Designated Obligor multiplied by the Outstanding
Balance of all Eligible Receivables.
"Notional Amount" shall mean (i) with respect to DaimlerChrysler AG, an
amount up to $12,500,000, (ii) with respect to General Motors Corporation, an
amount up to $7,500,000, (iii) with respect to Ford Motor Company, an amount up
to $20,000,000, and (iv) with respect to ▇▇▇▇ Corporation, an amount up to
$5,000,000.
"Obligor" shall mean a Person obligated to make payments for the provision
of goods and services pursuant to a Contract.
"Official Body" shall mean any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Other Transferor" shall mean any Person, other than the Transferor, that
has entered into a receivables purchase agreement, receivables transfer
agreement, loan agreement or funding agreement with the Purchasers.
"Outstanding Balance" shall mean, with respect to any Receivable at any
time, the then outstanding principal amount thereof, excluding any accrued and
outstanding Finance Charges related thereto.
"Parent" shall mean Metaldyne Corporation, a Delaware corporation.
"Payment Terms Factor" shall mean (i) for the period from the Closing Date
until the third Settlement Date, 1.08 and (ii) for each three-month period to
occur thereafter, a fraction, the numerator of which is the sum of (A) the
weighted average payment terms (based upon the principal amount of the
Receivables and expressed as a number of days) for the Receivables generated or
acquired by the Sellers during such period and (B) 90, and the denominator of
which is 120; provided, however, that if the Payment Terms Factor for any period
is less than the Payment Terms Factor for the immediately preceding periods,
then the actual Payment Terms Factor for such current period shall be
recalculated to equal a fraction, the numerator of which is equal to the average
of the numerators used to calculate the Payment Terms Factor for such current
period and the three immediately preceding periods (without giving effect to
this proviso) and the denominator of which is 120; provided, further, the
Payment Terms Factor shall never be less than 1.0.
"Percentage Factor" shall mean the fraction (expressed as a percentage)
computed on any date of determination as follows:
NI x [1 + (LDRR + CCRR)] + (SFRR x OBR)
----------- ------------
1 - LDRR 1-LDRR
----------------------------------------------
NRB
Where:
NI = the Net Investment on the date of such
computation;
LDRR = the Loss and Dilution Reserve Ratio on the
date of such computation;
CCRR = the Carrying Cost Reserve Ratio on the date
of such computation;
SFRR = the Servicing Fee Reserve Ratio on the date
of such computation;
OBR = the Outstanding Balance of all Receivables
on the date of such computation; and
NRB = the Net Receivables Balance on the date of such computation.
The Percentage Factor shall be calculated by the Collection Agent on the
day of the initial Incremental Transfer hereunder. Thereafter, until the
Termination Date, the Collection Agent shall recompute the Percentage Factor at
the time of each Incremental Purchase pursuant to Section 2.02(a) of the
Receivables Transfer Agreement and as of the close of business on each Business
Day and report such recomputations to the Administrative Agent in the Settlement
Statement and as otherwise requested by the Administrative Agent. The Percentage
Factor shall remain constant from the time as of which any such computation or
recomputations is made until the time as of which the next such recomputations
shall be made, notwithstanding any additional Receivables arising, any
Incremental Transfer made pursuant to such Section 2.02(a) or any reinvestment
Transfer made pursuant to Section 2.02(b) and 2.05 of the Receivables Transfer
Agreement during any period between computations of the Percentage Factor. The
Percentage Factor shall remain constant at 100% at all times on and after the
Termination Date until such time as the Administrative Agent, on behalf of the
Purchasers, shall have received the Aggregate Unpaids, in cash, at which time
the Percentage Factor shall be recomputed in accordance with Section 2.06 of the
Receivables Transfer Agreement at which point it shall equal zero.
"Permitted Investments" shall mean any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) time deposits in, or bankers acceptances issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities;
provided, however, that at the time of investment or contractual commitment to
invest therein, the certificates of deposit or short-term deposits, if any, or
long-term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depositary institution or trust company shall have a
credit rating from Moody's and S&P of at least "P-1"and "A-1", respectively, in
the case of the certificates of deposit or short-term deposits, or a rating not
lower than one of the two highest investment categories granted by Moody's and
by SP (iii) certificates of deposit having, at the time of investment or
contractual commitment to invest therein, a rating from Moody's and S&P of at
least "P-
1"and "A-1", respectively; or (iv) investments in money market funds rated in
the highest investment category or otherwise approved in writing by the
applicable rating agencies; (b) demand deposits and cash escrows in any
depositary institution or trust company referred to in (a)(ii) above; (c)
commercial paper (having original or remaining maturities of no more than 30
days) having, at the time of investment or contractual commitment to invest
therein, a credit rating from Moody's and S&P of at least "P-1"and "A-l",
respectively; (d) Eurodollar time deposits having a credit rating from Moody's
and S&P of at least "P-1"and "A-l", respectively; and (e) repurchase agreements
involving any of the Permitted Investments described in clauses (a)(i), (a)(iii)
and (d) of this definition so long as the other party to the repurchase
agreement has at the time of investment therein, a rating from Moody's and S&P
of at least "P-l" and "A-1", respectively.
"Person" shall mean any corporation, limited liability company, natural
person, firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Potential Termination Event" shall mean an event which but for the lapse
of time or the giving of notice, or both, would constitute a Termination Event.
"Proceeds" shall mean "proceeds" as defined in Section 9-102(a) of the
Relevant UCC.
"Pro Rata Share" shall mean, on any date of determination, (a) with respect
to any Purchaser, prior to the Commitment Expiry Date, the ratio (expressed as a
percentage) of such Purchaser's Commitment to the Aggregate Commitment at such
time and (b) with respect to any Purchaser after the Commitment Expiry Date, the
ratio (expressed as a percentage) of such Purchaser's Funded Amount to the
aggregate Net Investment at such time.
"Purchase Price", as used in any Receivables Purchase Agreement, shall have
the meaning set forth in Section 3.01 of the Receivables Purchase Agreement.
"Purchase Termination Date" shall have the meaning specified in Section
8.01 of the Receivables Purchase Agreement.
"Purchased Receivables Percentage" means, with respect to any Seller (or
Seller Division) as to which Parent has submitted a Seller Termination Request,
the percentage equivalent of a fraction, the numerator of which is an amount
equal to the aggregate Outstanding Balance of Receivables sold by such Seller
(or Seller Division) as of the applicable Seller Termination Request Date, and
the denominator of which is an amount equal to the aggregate Outstanding Balance
of all Receivables as of such date.
"Purchasers" shall mean the financial institutions and other purchasers
identified as such on Schedule B to the Receivables Transfer Agreement, as the
same may be amended, supplemented or otherwise modified and in effect from time
to time.
"Receivable" shall mean, the indebtedness owed to a Seller by an Obligor
under a Contract and rights of payment and other payment obligations, whether
constituting an account, chattel paper, instrument, investment property or
general intangible, arising in connection with the sale or lease of merchandise
or the rendering of services by the Seller, in its ordinary course of business
and includes the right to payment of any Finance Charges and other obligations
of such Obligor with respect thereto; provided that any obligation of any Person
to pay for tooling or equipment purchased or built by DuPage Die Casting
Corporation for the purpose of manufacturing products for such Person, including
the right to payment of any interest, sales taxes, finance
charges, returned check or late charges and other obligations of such Person
with respect thereto shall not constitute a "Receivable". Notwithstanding the
foregoing, once a Receivable has been deemed collected pursuant to Section 2.10
of the Receivables Transfer Agreement, it shall no longer constitute a
Receivable under the Receivables Transfer Agreement.
"Receivables Purchase Agreement" shall mean the Receivables Purchase
Agreement, dated as of April 29, 2005, by and between the Sellers, as sellers,
and the Transferor, as purchaser, as such agreement may be amended, supplemented
or otherwise modified and in effect from time to time.
"Receivables Transfer Agreement" shall mean the Receivables Transfer
Agreement, dated as of April 29, 2005, by and between the Transferor, the
Parent, individually, as Collection Agent and as Guarantor, the Purchasers and
the Administrative Agent, as such agreement may be amended, supplemented or
otherwise modified and in effect from time to time.
"Recipient" shall have the meaning specified in Section 2.15 of the
Receivables Transfer Agreement.
"Records" shall mean all Contracts and other documents, books, records and
other writings and information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) maintained with respect to Receivables and the related
Obligors.
"Related Security" shall mean, with respect to any Receivable, all of a
Seller's or Transferor's right, title and interest in, to and under:
(a) the merchandise (including returned or repossessed merchandise), if
any, the sale of which by the Seller gave rise to such Receivable;
(b) all other security interests or liens and property subject thereto from
time to time, if any, purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together with
all financing statements signed by an Obligor describing any collateral securing
such Receivable;
(c) all guarantees, indemnities, warranties, insurance (and proceeds
thereof) or other agreements, arrangements, letter-of-credit rights or
supporting obligations of any kind (including, but not limited to, each Credit
Default Swap) from time to time supporting or securing payment of such
Receivable whether pursuant to the Contract related to such Receivable or
otherwise;
(d) all Records related to such Receivable;
(e) in the case of the Administrative Agent for the benefit of the
Purchasers, all rights and remedies of the Transferor under the Receivables
Purchase Agreement, together with all financing statements naming any Seller as
debtor or seller and the Transferor as secured party or buyer filed in
connection therewith; and
(f) all Proceeds of any of the foregoing.
"Relevant UCC" shall mean, with respect to any state, the Uniform
Commercial Code as from time to time in effect in such state.
"Required Purchasers" shall mean Purchasers having Pro Rata Shares in the
aggregate equal to more than 50% or, if the Commitments have been terminated,
having more than 50% of
the Net Investment; provided that the Commitment of any Defaulting Purchaser
that has not paid all amounts due and owing by it in respect of Purchases it was
obliged to make shall not be included in the Commitments for purposes of this
definition.
"Responsible Officer" shall mean with respect to any Seller or the
Transferor, any officer directly or indirectly responsible for the execution of
the transactions contemplated by the Transaction Documents.
"Sale Notice" shall mean an irrevocable written notice given by an
authorized signer or authorized officer of a Purchaser (or on behalf of the
Purchaser by the Administrative Agent) to the Purchaser with respect to such
Purchaser committing to sell, assign and transfer to such Purchaser, the
Purchaser's Interest, which notice shall designate (a) the applicable Purchase
Date, (b) the Purchaser's Interest and the Net Investment, (c) the Purchase
Price (including a calculation of the Purchase Price) and (d) that no
Purchaser's Insolvency Event has occurred.
"Seller Addition Date" shall have the meaning specified in Section 7.02 of
the Receivables Purchase Agreement.
"Seller Division" shall mean any business unit or operating assets acquired
by a Seller which is made part of an existing division of a Seller or made a new
division (but not a subsidiary) of a Seller.
"Seller Termination Request" shall have the meaning specified in Section
8.03(b) of the Receivables Purchase Agreement.
"Seller Termination Request Date" shall have the meaning specified in
Section 8.03(b) of the Receivables Purchase Agreement.
"Sellers" shall have the meaning specified in the recitals to the
Receivables Purchase Agreement.
"Servicing Fee" shall mean the fees payable by the Transferor to the
Collection Agent in an amount equal to the Servicing Fee Percentage multiplied
by the amount of the aggregate Outstanding Balance of the Receivables. Such fee
shall accrue from the date of the initial purchase of an interest by a Purchaser
in the Receivables to the later of the Termination Date or the date on which the
Percentage Factor is reduced to zero. On or prior to the Termination Date, and
provided that no Potential Termination Event shall have occurred and be
continuing, such fee shall be payable only from Collections pursuant to, and
subject to the priority of payments set forth in, Section 2.05 of the
Receivables Transfer Agreement. After the Termination Date or during the
continuation of a Potential Termination Event, such fee shall be payable only
from Collections pursuant to, and subject to the priority of payments set forth
in, Section 2.06 of the Receivables Transfer Agreement.
"Servicing Fee Percentage" shall mean 1.0% per annum.
"Servicing Fee Reserve Ratio" shall mean, at any time, an amount equal to
the product of (i) the Servicing Fee Percentage and (ii) a fraction having as
the numerator, the product of (a) 2 and (b) the DSO, and as the denominator,
360.
"Settlement Date" shall mean the fifteenth day immediately succeeding each
Settlement Period or, if such day is not a Business Day, the next succeeding
Business Day.
"Settlement Period" shall mean the period of days from and including the
first day of a fiscal month of the Parent to and including the last day of such
fiscal month.
"Settlement Statement" shall mean a report, in substantially the form
attached to the Receivables Transfer Agreement as Exhibit D-2 or in such other
form as is mutually agreed to by the Transferor and the Administrative Agent,
delivered by the Collection Agent to the Administrative Agent on each Settlement
Date pursuant to Section 2.12 of the Receivables Transfer Agreement or prior to
an Incremental Transfer pursuant to Section 2.02(a) of the Receivables Transfer
Agreement.
"Special Obligors" are Obligors designated by the Administrative Agent (in
its sole discretion upon the Parent's request) that may be permitted to exceed
the Concentration Factor as specified, if at all, on Schedule C to the
Receivables Transfer Agreement, as such Schedule may be amended or modified by
the Administrative Agent from time to time to add or delete Obligors or to
change the percentages applicable to Special Obligors. The initial Special
Obligors and the applicable percentages will be specified on Schedule C as of
the Closing Date. At such time as the requirements in Schedule C are not met by
any Obligor, the Concentration Factor for such Obligor will be calculated as
specified in the definition of Concentration Factor for Obligors generally.
"Specified Bankruptcy Opinion Provisions" shall mean the factual
assumptions (including those contained in the factual certificate referred to
therein) and the actions to be taken by the Sellers or the Transferor, in each
case as specified in the legal opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP relating
to certain bankruptcy matters delivered on the Closing Date.
"Standard & Poor's"or "S&P" shall mean Standard & Poor's Ratings Services,
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors and assigns.
"Subordinated Note" shall have the meaning specified in Section 3.02(b) of
the Receivables Purchase Agreement.
"Subsidiary" of a Person shall mean any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"Termination Date" shall mean the earliest of (i) the Business Day
designated by the Transferor to the Purchasers as the Termination Date at any
time following thirty (30) Business Days' written notice to the Purchasers, (ii)
the day upon which a Termination Date is declared or automatically occurs
relating to a Termination Event pursuant to Section 7.02(a) of the Receivables
Transfer Agreement, (iii) two (2) Business Days prior to the Commitment Expiry
Date or (iv) the Purchase Termination Date shall occur with respect to all the
Sellers under the Receivables Purchase Agreement.
"Termination Event" shall mean an event described in Section 7.01 of the
Receivables Transfer Agreement.
"Tranche" shall mean a portion of the Net Investment allocated to a Tranche
Period pursuant to Section 2.03 of the Receivables Transfer Agreement.
"Tranche Period" shall mean a BR Tranche Period or a Eurodollar Tranche
Period, as applicable.
"Tranche Rate" shall mean the Base Rate or the Eurodollar Rate, as
applicable, plus the Applicable Margin.
"Transaction Documents" shall mean, collectively, the Receivables Transfer
Agreement, the Receivables Purchase Agreement, the Fee Letter, the Lockbox
Agreements, the Subordinated Note and all of the other instruments, documents,
certificates and other agreements executed and delivered by the Sellers or the
Transferor in connection with any of the foregoing, in each case, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
"Transfer" shall mean a conveyance, transfer and assignment by the
Transferor to the Purchasers of an undivided percentage ownership interest in
Receivables and Related Security pursuant to, and in accordance with, the
Receivables Transfer Agreement (including, without limitation, as a result of
any reinvestment of Collections in Transferred Interests pursuant to Section
2.02(b) and 2.05 of the Receivables Transfer Agreement).
"Transfer Certificate" shall have the meaning specified in Section 2.02(a)
of the Receivables Transfer Agreement.
"Transfer Date" shall mean, with respect to each Transfer, the Business Day
on which such Transfer is made.
"Transfer Price" shall mean, with respect to any Incremental Transfer, the
amount paid to the Transferor by the Purchasers as described in the applicable
Transfer Certificate. The Transfer Price for any Incremental Transfer shall be
equal to the aggregate Net Investment (including such Incremental Transfer)
minus the aggregate portion of the Net Investment paid in connection with all
prior Transfers.
"Transferor" shall mean MRFC, Inc., a Delaware corporation, and its
successors and permitted assigns.
"Transferred Interest" shall mean, on any date of determination, an
undivided percentage ownership interest of the Purchasers in (i) each and every
then outstanding Receivable, (ii) all Related Security with respect to each such
Receivable, (iii) all Collections with respect thereto, and (iv) other Proceeds
of the foregoing, which undivided ownership interest shall be equal to the
Percentage Factor at such time, and only at such time (without regard to prior
calculations). The Transferred Interest in each Receivable, together with
Related Security, Collections and Proceeds with respect thereto, shall at all
times be equal to the Transferred Interest in each other Receivable, together
with Related Security, Collections and Proceeds with respect thereto. To the
extent that the Transferred Interest shall decrease as a result of a
recalculation of the Percentage Factor, the Purchasers shall be considered to
have reconveyed to the Transferor an undivided percentage ownership interest in
each Receivable, together with Related Security, Collections and Proceeds with
respect thereto, in an amount equal to such decrease such that, in each case,
the Transferred Interest in each Receivable shall be equal to the Transferred
Interest in each other Receivable.
"U.S." or "United States" means the United States of America and its
territories.
"Weekly Settlement Date" shall mean the third Business Day of each calendar
week.