Exhibit 4.5
EXECUTION COPY
RECEIVABLES FUNDING AGREEMENT
Dated as of August 28, 2001,
by and among
IMPERIAL SUGAR SECURITIZATION, LLC
as Borrower,
IMPERIAL DISTRIBUTING, INC.,
as Servicer,
THE FINANCIAL INSTITUTIONS SIGNATORY HERETO FROM TIME TO TIME,
as Lenders
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender and as Administrative Agent
TABLE OF CONTENTS
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Page
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ARTICLE I. DEFINITIONS AND INTERPRETATION................................................................... 1
Section 1.01. Definitions............................................................................. 1
Section 1.02. Rules of Construction................................................................... 2
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES................................................................... 2
Section 2.01. Advances................................................................................ 2
Section 2.02. Optional Changes in Maximum Facility Amount............................................. 2
Section 2.03. Notices Relating to Increases and Reductions in the Outstanding Principal Amount........ 3
Section 2.04. Making of Advances...................................................................... 6
Section 2.05. Commitment Termination Date............................................................. 7
Section 2.06. Interest................................................................................ 7
Section 2.07. Fees.................................................................................... 8
Section 2.08. Time and Method of Payments............................................................. 9
Section 2.09. Capital Requirements; Additional Costs.................................................. 10
Section 2.10. Breakage Costs.......................................................................... 11
Section 2.11. Funding Excess.......................................................................... 11
ARTICLE III. CONDITIONS PRECEDENT........................................................................... 12
Section 3.01. Conditions to Effectiveness of Agreement................................................ 12
Section 3.02. Conditions Precedent to All Advances.................................................... 13
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.................................................................. 15
Section 4.01. Representations and Warranties of the Borrower.......................................... 15
ARTICLE V. GENERAL COVENANTS OF THE BORROWER................................................................ 22
Section 5.01. Affirmative Covenants of the Borrower................................................... 22
Section 5.02. Reporting Requirements of the Borrower.................................................. 23
Section 5.03. Negative Covenants of the Borrower...................................................... 24
ARTICLE VI. COLLECTIONS AND DISBURSEMENTS................................................................... 26
Section 6.01. Establishment of Accounts............................................................... 26
ARTICLE VII. SERVICER PROVISIONS............................................................................ 29
Section 7.01. Appointment of the Servicer............................................................. 29
Section 7.02. Duties and Responsibilities of the Servicer............................................. 29
Section 7.03. Collections on Receivables.............................................................. 29
Section 7.04. Authorization of the Servicer........................................................... 30
Section 7.05. Servicing Fees.......................................................................... 30
Section 7.06. Representations and Warranties of the Servicer.......................................... 30
Section 7.07. Covenants of the Servicer............................................................... 33
Section 7.08. Reporting Requirements of the Servicer.................................................. 34
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ARTICLE VIII. GRANT OF SECURITY INTERESTS.................................................................. 34
Section 8.01. Borrower's Grant of Security Interest.................................................. 34
Section 8.02. Borrower's Certification............................................................... 35
Section 8.03. Delivery of Collateral................................................................. 36
Section 8.04. Borrower Remains Liable................................................................ 36
Section 8.05. Covenants of the Borrower and the Servicer Regarding the Borrower Collateral........... 36
ARTICLE IX. TERMINATION EVENTS............................................................................. 39
Section 9.01. Termination Events..................................................................... 39
Section 9.02. Events of Servicer Termination......................................................... 43
ARTICLE X. REMEDIES........................................................................................ 45
Section 10.01. Actions Upon Termination Event........................................................ 45
Section 10.02. Exercise of Remedies.................................................................. 47
Section 10.03. Power of Attorney..................................................................... 47
Section 10.04. Continuing Security Interest.......................................................... 47
ARTICLE XI. SUCCESSOR SERVICER PROVISIONS.................................................................. 47
Section 11.01. Servicer Not to Resign................................................................ 48
Section 11.02. Appointment of the Successor Servicer................................................. 48
Section 11.03. Duties of the Servicer................................................................ 48
Section 11.04. Effect of Termination or Resignation.................................................. 49
ARTICLE XII. INDEMNIFICATION............................................................................... 49
Section 12.01. Indemnities by the Borrower........................................................... 49
Section 12.02. Indemnities by the Servicer........................................................... 50
Section 12.03. Limitation of Damages; Indemnified Persons............................................ 51
ARTICLE XIII. ADMINISTRATIVE AGENT......................................................................... 51
Section 13.01. Authorization and Action.............................................................. 51
Section 13.02. Reliance.............................................................................. 52
Section 13.03. GE Capital and Affiliates............................................................. 52
Section 13.04. Lender Credit Decision................................................................ 52
Section 13.05. Indemnification....................................................................... 53
Section 13.06. Successor Administrative Agent........................................................ 53
Section 13.07. Setoff and Sharing of Payments........................................................ 54
ARTICLE XIV. MISCELLANEOUS................................................................................. 54
Section 14.01. Notices............................................................................... 55
Section 14.02. Binding Effect; Assignability......................................................... 55
Section 14.03. Termination; Survival of Borrower Obligations Upon Commitment Termination Date........ 57
Section 14.04. Costs, Expenses and Taxes............................................................. 58
Section 14.05. Confidentiality....................................................................... 59
Section 14.06. Complete Agreement; Modification of Agreement......................................... 60
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Section 14.07. Amendments and Waivers........................................................... 60
Section 14.08. No Waiver; Remedies.............................................................. 62
Section 14.09. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL..................... 62
Section 14.10. Counterparts..................................................................... 64
Section 14.11. Severability..................................................................... 64
Section 14.12. Section Titles................................................................... 64
Section 14.13. Limited Recourse................................................................. 64
Section 14.14. Further Assurances............................................................... 64
EXHIBITS
Exhibit 2.01(b) Form of Revolving Note
Exhibit 2.02(a) Form of Commitment Reduction Notice
Exhibit 2.02(b) Form of Commitment Termination Notice
Exhibit 2.03(a) Form of Borrowing Request
Exhibit 2.06(c) Notice of Continuation/Conversion
Exhibit 2.03(h) Form of Repayment Notice
Exhibit 5.02(a) Form of Borrowing Base Certificate
Exhibit 10.03 Form of Power of Attorney
Exhibit 14.02(b) Form of Assignment Agreement
Exhibit A Credit and Collection Policy
Schedule 4.01(b) Jurisdiction of organization/organizational number Executive
Offices; Collateral Locations; Corporate or Other Names;
Schedule 4.01(d) Litigation
Schedule 4.01(i) Tax Matters/Borrower
Schedule 4.01(q) Deposit and Disbursement Accounts/Borrower
Schedule 5.01(b) Trade Names/Borrower
Schedule 5.03(b) Existing Liens
Schedule 7.06(c) Servicer Litigation
Schedule 7.06(e) Servicer Taxes
Schedule 7.07(b) Servicer Trade Names
Annex 5.02(a) Reporting Requirements of the Borrower (including Form of
Monthly Report)
Annex W Administrative Agent's Account/Lenders' Accounts
Annex X Definitions
Annex Y Schedule of Documents
Annex Z Special Concentration Percentages
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THIS RECEIVABLES FUNDING AGREEMENT (as amended, supplemented or
otherwise modified and in effect from time to time, the "Agreement") is entered
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into as of August 28, 2001 by and among IMPERIAL SUGAR SECURITIZATION, LLC, a
Delaware limited liability company (the "Borrower"), IMPERIAL DISTRIBUTING,
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INC., a Delaware corporation, in its capacity as servicer hereunder (in such
capacity, the "Servicer"), the financial institutions signatory hereto from time
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to time as lenders (the "Lenders"), and GENERAL ELECTRIC CAPITAL CORPORATION, a
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Delaware corporation, as a Lender and as administrative agent for the Lenders
hereunder (in such capacity, the "Administrative Agent").
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RECITALS
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A. The Borrower is a special purpose limited liability company the
sole member of which is Imperial - Savannah LP, a Delaware limited partnership
(the "Member"), the general partner of which is Savannah Molasses & Specialties
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Company, a Delaware corporation which is an indirect wholly-owned subsidiary of
Imperial Sugar Company, a Texas corporation (the "Parent").
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B. The Borrower has been formed for the purpose of purchasing, or
otherwise acquiring by capital contribution, Receivables of the Originators
party to the Sale Agreement.
C. The Borrower intends to fund its purchases of the Receivables, in
part, by borrowing Advances hereunder and pledging all of its right, title and
interest in and to the Receivables as security therefor, and, subject to the
terms and conditions hereof, the Lenders intend to make such Advances, from time
to time, as described herein.
D. The Administrative Agent has been requested and is willing to act
as administrative agent on behalf of each of the Lenders in connection with the
making and financing of such Advances.
E. In order to effectuate the purposes of this Agreement, each of
the Lenders desires to appoint Imperial Distributing, Inc. to service,
administer and collect the Receivables securing the Advances pursuant to this
Agreement and Imperial Distributing, Inc. is willing to act in such capacity as
Servicer hereunder on the terms and conditions set forth herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Capitalized terms used herein and not
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otherwise defined shall have the meanings ascribed to them in Annex X.
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Section 1.02. Rules of Construction. For purposes of this
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Agreement, the rules of construction set forth in Annex X shall govern. All
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Appendices hereto, or expressly identified to this Agreement, are incorporated
herein by reference and, taken together with this Agreement, shall constitute
but a single agreement.
ARTICLE II.
AMOUNTS AND TERMS OF ADVANCES
Section 2.01. Advances.
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(a) From and after the Effective Date and until the Commitment
Termination Date and subject to the terms and conditions hereof, each Lender
severally agrees to make its Pro Rata Share of advances (each such advance
hereunder, an "Advance") to the Borrower from time to time; provided, however,
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that no Advances shall be made from and after the commencement of a case or
proceeding described in Section 9.01(c) until such case or proceeding shall have
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been dismissed, bonded or discharged prior to the end of the 60-day period
described in such Section 9.01(c). The Pro Rata Share of the Outstanding
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Principal Amount of any Lender shall not at any time exceed its separate
Commitment. Under no circumstances shall a Lender make any Advances if, after
giving effect thereto, a Funding Excess would exist. The aggregate amount of
Advances outstanding shall not exceed at any time the Borrowing Base, as
determined by the most recent Borrowing Base Certificate delivered by the
Borrower hereunder. Borrower may from time to time borrow, repay and reborrow
Advances hereunder on the terms and conditions set forth herein.
(b) Borrower shall execute and deliver to each Lender a note to
evidence the Advances which may be made hereunder from time to time by such
Lender. The note shall be in the principal amount of the Commitment of the
applicable Lender, dated the Closing Date and substantially in the form of
Exhibit 2.01(b) (each, a "Revolving Note"). Each Revolving Note shall represent
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the obligation of Borrower to pay the amount of each Lender's Commitment or, if
less, the Lender's Pro Rata Share of the aggregate unpaid principal amount of
all outstanding Advances made to Borrower together with interest thereon as
prescribed in Section 2.06. The Outstanding Principal Amount of Advances and
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all other accrued and unpaid Borrower Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date.
Section 2.02. Optional Changes in Maximum Facility Amount.
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(a) So long as no Incipient Termination Event or Termination Event
shall have occurred and be continuing, the Borrower may, not more than twice
during each calendar year, reduce the Commitment permanently; provided, that (i)
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the Borrower shall give ten Business Days' prior written notice of any such
reduction to the Administrative Agent substantially in the form of Exhibit
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2.02(a) (each such notice, a "Commitment Reduction Notice"), (ii) any partial
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reduction of the Commitment shall be in a minimum amount of $5,000,000 or an
integral multiple thereof, and (iii) no such partial reduction shall reduce the
Commitment below the greater of (x) Outstanding Principal Amount at such time
and (y)
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$50,000,000. Any such reduction in the Commitment shall result in a reduction in
each Lender's Commitment in an amount equal to such Lenders Pro Rata Share of
the amount by which the aggregate Commitment is being reduced.
(b) The Borrower may, at any time, on at least 30 days' prior written
notice, by the Borrower to the Administrative Agent irrevocably terminate the
Commitment; provided, that (i) such notice of termination shall be substantially
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in the form of Exhibit 2.02(b) (the "Commitment Termination Notice") and (ii)
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the Borrower shall reduce the Outstanding Principal Amount to zero and make all
payments required by Section 2.03(h) at the time and in the manner specified
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therein. Upon such termination, the Borrower's right to request that any Lender
make Advances hereunder shall simultaneously terminate and the Commitment
Termination Date shall automatically occur.
(c) Each written notice required to be delivered pursuant to Sections
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2.02(a) and (b) shall be irrevocable and shall be effective (i) on the day of
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receipt if received by the Administrative Agent and the Lenders not later than
4:00 p.m. (New York time) on any Business Day and (ii) on the immediately
succeeding Business Day if received by the Administrative Agent and the Lenders
after such time on such Business Day or if any such notice is received on a day
other than a Business Day (regardless of the time of day such notice is
received). Each such notice of termination or reduction shall specify,
respectively, the amount of, or the amount of the proposed reduction in, the
Commitment.
Section 2.03. Notices Relating to Increases and Reductions in the
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Outstanding Principal Amount.
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(a) Each Advance shall be made upon notice by the Borrower to the
Administrative Agent in the manner provided herein. Any such notice must be
given in writing so that it is received no later than (1) 11:00 a.m. (New York
time) on the Business Day of the proposed Advance Date set forth therein in the
case of an Index Rate Advance or (2) 11:00 a.m. (New York time) on the date
which is three (3) Business Days prior to the proposed Advance Date set forth
therein in the case of a LIBOR Rate Advance. Each such notice (a "Borrowing
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Request") shall (i) be substantially in the form of Exhibit 2.03(a), (ii) be
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irrevocable and (iii) specify the amount of the requested increase in
Outstanding Principal Amount (which shall be in a minimum amount of $250,000)
and the proposed Advance Date (which shall be a Business Day), and shall include
such other information as may be required by the Lenders and the Administrative
Agent. If the Borrower desires LIBOR Rate Advances it must comply with Section
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2.06(c).
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(b) Advances; Payments.
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(i) Except as otherwise provided in Section 2.03(b)(ii) below,
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(A) the Administrative Agent shall notify Lenders, promptly after receipt
of a Borrowing Request and in any event prior to 12:00 noon (New York time)
on the date such Borrowing Request is received, by telecopy, telephone or
other similar form of transmission and (B) each Lender shall make the
amount of such Lender's Pro Rata Share of each Advance available to the
Administrative Agent in same day funds by wire transfer to the
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Administrative Agent's account as set forth in Annex W not later than 2:00
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p.m. (New York time) on the requested Advance Date, in the case of an Index
Rate Advance and not later than 12:00 noon (New York time) on the requested
Advance Date in the case of a LIBOR Rate Advance. After receipt of such
wire transfers (or, in the Administrative Agent's sole discretion, before
receipt of such wire transfers), subject to the terms hereof, the
Administrative Agent shall make available to the Borrower the proceeds of
the requested Advance. All payments by each Lender shall be made without
setoff, counterclaim or deduction of any kind.
(ii) On each Interest Payment Date, the Administrative Agent will
advise each Lender by telephone or telecopy of the amount of such Lender's
Pro Rata Share of principal, interest and Fees paid for the benefit of
Lenders with respect to each applicable Advance. Provided that such Lender
has made all payments required to be made by it and purchased all
participations required to be purchased by it under this Agreement and the
other Related Documents as of such Interest Payment Date, the
Administrative Agent will pay to each Lender such Lender's Pro Rata Share
of principal, interest and Fees paid by the Borrower since the previous
Interest Payment Date for the benefit of that Lender on the portion of the
Outstanding Principal Amount held by it. Such payments shall be made by
wire transfer to such Lender's account (as specified by such Lender in
Annex W or the applicable Assignment Agreement) not later than 2:00 p.m.
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(New York time on each Interest Payment Date).
(c) Availability of Lender's Pro Rata Share. The Administrative
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Agent may assume that each Lender will make its Pro Rata Share of each Advance
available to the Administrative Agent on each Advance Date. If the
Administrative Agent has made available to the Borrower such Lender's Pro Rata
Share of an Advance but such Pro Rata Share is not, in fact, paid to the
Administrative Agent by such Lender when due, the Administrative Agent will be
entitled to recover such amount on demand from such Lender without set-off,
counterclaim or deduction of any kind. If any Lender fails to pay the amount of
its Pro Rata Share forthwith upon the Administrative Agent's demand, the
Administrative Agent shall promptly notify the Borrower and the Borrower shall
immediately repay such amount to the Administrative Agent; any such prepayment
shall be without any prepayment or penalty, including any payment of Breakage
Costs described in Section 2.10. Nothing in this Section 2.03(c) or elsewhere
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in this Agreement or the other Related Documents shall be deemed to require the
Administrative Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to prejudice
any rights that the Borrower may have against any Lender as a result of any
default by such Lender hereunder. To the extent that the Administrative Agent
advances funds to the Borrower on behalf of any Lender and is not reimbursed
therefor on the same Business Day as such Advance is made, the Administrative
Agent shall be entitled to retain for its account all interest accrued on such
Advance from the date of such Advance to the date such Advance is reimbursed by
the applicable Lender.
(d) Return of Payments. (i) If the Administrative Agent pays an
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amount to a Lender under this Agreement in the belief or expectation that a
related payment has been or will be received by the Administrative Agent from
the Borrower and such related payment is not received by the Administrative
Agent, then the Administrative Agent will be entitled to recover
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such amount from such Lender on demand without set-off, counterclaim or
deduction of any kind.
(ii) If the Administrative Agent determines at any time that any
amount received by the Administrative Agent under this Agreement must be
returned to the Borrower or paid to any other Person pursuant to any
insolvency law or otherwise, then, notwithstanding any other term or
condition of this Agreement or any other Related Document, the
Administrative Agent will not be required to distribute any portion thereof
to any Lender. In addition, each Lender will repay to the Administrative
Agent on demand any portion of such amount that the Administrative Agent
has distributed to such Lender, together with interest at such rate, if
any, as the Administrative Agent is required to pay to the Borrower or such
other Person, without set-off, counterclaim or deduction of any kind.
(e) Non-Funding Lenders. The failure of any Lender (such Lender, a
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"Non-Funding Lender") to make any Advance to be made by it on the date specified
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therefor shall not relieve any other Lender (each such other Lender, an "Other
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Lender") of its obligations to make such Advance, but neither any Other Lender
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nor the Administrative Agent shall be responsible for the failure of any Non-
Funding Lender to make a Advance to be made by such Non-Funding Lender.
Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender
shall not have any voting or consent rights under or with respect to any Related
Document or constitute a "Lender" (or be included in the calculation of
"Requisite Lenders" hereunder) for any voting or consent rights under or with
respect to any Related Document.
(f) Dissemination of Information. The Administrative Agent will use
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reasonable efforts to provide Lenders with (i) copies of all notices and other
documents provided to the Administrative Agent pursuant to Section 5.02, (ii)
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any notice of an Incipient Termination Event or Termination Event received by
the Administrative Agent from, or delivered by the Administrative Agent to, the
Borrower, (iii) notice of any Termination Event of which the Administrative
Agent has actually become aware and (iv) notice of any action taken by the
Administrative Agent following any Termination Event; provided, however, that
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the Administrative Agent shall not be liable to any Lender for any failure to do
so, except to the extent that such failure is attributable solely to the
Administrative Agent's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(g) Actions in Concert. Anything in this Agreement to the contrary
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notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Revolving Notes (including exercising any rights of set-off)
without first obtaining the prior written consent of the Administrative Agent or
Requisite Lenders, it being the intent of Lenders that any such action to
protect or enforce rights under this Agreement and the Revolving Notes shall be
taken in concert and at the direction or with the consent of the Administrative
Agent.
(h) Principal Repayments. Pursuant to a request by the Member, the
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Borrower may at any time reduce the Outstanding Principal Amount; provided, that
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(i) the Borrower shall give one Business Day's prior written notice of any such
reduction to the
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Administrative Agent substantially in the form of Exhibit 2.03(h) (each such
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notice, a "Repayment Notice"), (ii) each such notice shall be irrevocable, (iii)
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each such notice shall specify the amount of the requested reduction in the
Outstanding Principal Amount and the proposed date of such reduction (which
shall be a Business Day) and (iv) any such reduction must be accompanied by
payment of (A) all interest accrued and unpaid on the Outstanding Principal
Amount being reduced through but excluding the date of such reduction and (B)
any amounts required to be paid in accordance with Section 2.10, if any. Any
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such notice of reduction must be received by the Administrative Agent no later
than 4:00 p.m. (New York time) on the Business Day immediately preceding the
date of the proposed reduction in the Outstanding Principal Amount; provided,
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further, that the foregoing requirements shall not apply to reductions of the
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Outstanding Principal Amount as a result of the application of amounts on
deposit in the Collection Account pursuant to Section 2.06(d).
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Section 2.04. Making of Advances.
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(a) Increases in Outstanding Principal Amount.
(i) Funding of Borrower Account. Following receipt of any
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Borrowing Request, and subject to Section 2.03(c) and satisfaction of the
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conditions set forth in Section 3.02, the Administrative Agent shall make
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available to or on behalf of the Borrower on the Advance Date specified
therein the lesser of (x) the requested increase in the Outstanding
Principal Amount specified in such Borrowing Request and (y) the Funding
Availability, by depositing such amount in same day funds into the Borrower
Account.
(ii) Recordation of Advances. The Borrower shall indicate in its
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Records that interests in the Transferred Receivables have been pledged
hereunder and that the Administrative Agent has a lien on and security
interest in all such Transferred Receivables for the benefit of the
Lenders. The Borrower and the Servicer shall hold all Contracts and other
documents and incidents relating to such Transferred Receivables in trust
for the benefit of the Administrative Agent on behalf of the Lenders in
accordance with their interests hereunder. The Borrower and the Servicer
hereby acknowledge that their retention and possession of such Contracts
and documents shall at all times be at the sole discretion of the
Administrative Agent and in a custodial capacity for the Administrative
Agent's (on behalf of the Lenders) benefit only.
(b) Repurchases of Transferred Receivables. If an Originator is
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required to repurchase Transferred Receivables from the Borrower pursuant to
Section 4.04 of the Sale Agreement, upon payment from such Originator of the
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applicable repurchase price thereof (which repurchase price shall not be less
than an amount equal to the Billed Amount of such Transferred Receivable minus
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the sum of (A) Collections received in respect thereof and (B) the amount of any
Dilution Factors taken into account in the calculation of the Sale Price
therefor), the Administrative Agent and the Lenders shall release their liens on
and security interests in the Transferred Receivables being so repurchased.
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Section 2.05. Commitment Termination Date. Notwithstanding
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anything to the contrary set forth herein, no Lender shall have any obligation
to make any Advances from and after the Commitment Termination Date.
Section 2.06. Interest.
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(a) The Borrower shall pay interest to the Administrative Agent, for
the ratable benefit of Lenders in accordance with the various Advances being
made by each Lender, in arrears on each applicable Interest Payment Date, (i)
for each LIBOR Rate Advance, at the applicable LIBOR Rate for the relevant LIBOR
Period then ending, and (ii) for all of the Index Rate Advances outstanding from
time to time, at the applicable Index Rate as in effect from time to time during
the immediately preceding calendar month, based on the aggregate outstanding
amount of Index Rate Advances outstanding from time to time during such month.
Interest for each LIBOR Rate Advance shall be calculated based upon actual days
elapsed during the related LIBOR Period for a 360 day year based upon actual
days elapsed since the last Interest Payment Date and interest for each Index
Rate Advance shall be calculated for a 365 day year.
(b) So long as any Termination Event shall have occurred and be
continuing, the interest rates applicable to each Advance hereunder shall be
increased by two percentage points (2.0%) per annum (such increased rate, the
"Default Rate"), and all outstanding Advances shall bear interest at the
applicable Default Rate from the date of such Termination Event until such
Termination Event is waived.
(c) So long as no Incipient Termination Event or Termination Event
shall have occurred and be continuing, and subject to the additional conditions
precedent set forth in Section 3.02, the Borrower shall have the option to (i)
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request that any Advances be made as Index Rate Advances or as LIBOR Rate
Advances, (ii) convert at any time all or any part of the outstanding Advances
from Index Rate Advances to LIBOR Rate Advances, (iii) convert any LIBOR Rate
Advance to an Index Rate Advance, subject to payment of Breakage Rate costs in
accordance with Section 2.10 if such conversion is made prior to the expiration
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of the LIBOR Period applicable thereto, or (iv) continue all or any portion of
any part of a LIBOR Rate Advance upon the expiration of the applicable LIBOR
Period and the succeeding LIBOR Period of that continued LIBOR Rate Advance
shall commence on the last day of the LIBOR Period of the LIBOR Rate Advance to
be continued. Any Advances to be made or continued as, or converted into, a
LIBOR Rate Advance must be in a minimum amount of $1,000,000 and integral
multiples of $500,000 in excess of such amount. Any such election must be made
by 11:00 a.m. (New York time) on (A) the third (3rd) Business Day prior to (1)
the date of any proposed LIBOR Rate Advance (2) the end of each LIBOR Period
with respect to any LIBOR Rate Advances to be continued as such, or (3) the date
on which Borrower wishes to convert any Index Rate Advance to a LIBOR Rate
Advance for a LIBOR Period designated by Borrower in such election, or (B) the
Business Day of any proposed Advance which is to bear interest at the Index
Rate. If no election is received with respect to a LIBOR Rate Advance by 11:00
a.m. (New York time) on the third (3rd) Business Day prior to the end of the
LIBOR Period with respect thereto (or if an Incipient Termination Event or a
Termination Event shall have occurred and be continuing or the additional
conditions precedent set forth in Section 3.02 shall not have been satisfied),
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that LIBOR Rate Advance shall be converted to an Index Rate Advance at the
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end of its LIBOR Period. Borrower must make such election by notice to the
Administrative Agent in writing, by telecopy or overnight courier. In the case
of any conversion or continuation, such election must be made pursuant to a
written notice (a "Notice of Conversion/Continuation") in the form of Exhibit
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2.06(c).
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(d) On each Business Day, the Administrative Agent shall apply amounts
on deposit in the Collection Account on such day to amounts then due and payable
in the following order: (1) to Fees and Administrative Agent's expenses
reimbursable hereunder; (2) to interest on the Advances; (3) to principal
payments on the Advances which are Index Rate Loans; (4) to principal payments
on Advances which are LIBOR Rate Advances; (5) to all other obligations of the
Borrower hereunder, including, without limitation, the expenses of Lenders to
the extent reimbursable under Section 14.04, and (6) deposit in the Borrower
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Account remaining funds after payment of the amounts described in clauses (1)
through (5) above. The Borrower hereby irrevocably waives the right to direct
the application of any and all payments received from or on behalf of the
Borrower, and the Borrower hereby irrevocably agrees that any and all such
payments shall be applied by the Administrative Agent in accordance with this
Section 2.06(d). The Administrative Agent will, at least as frequently as
---------------
monthly, and otherwise upon the Borrower's written request, give an accounting
as to any applications of funds made pursuant to this Section 2.06(d).
---------------
(e) The Administrative Agent is authorized to, and at its sole
election may, charge to the Outstanding Principal Amount on behalf of the
Borrower and cause to be paid all Fees, expenses, charges, costs, interest and
principal, other than principal of the Advances, owing by the Borrower under
this Agreement or any of the other Related Documents if and to the extent the
Borrower fails to pay any such amounts as and when due, even if such charges
would cause the aggregate balance of the Outstanding Principal Amount to exceed
the Borrowing Base. At Agent's option and to the extent permitted by law, any
charges so made shall constitute part of the Outstanding Principal Amount
hereunder.
Section 2.07. Fees.
----
(a) On the Effective Date, the Borrower shall pay to the
Administrative Agent, for the account of itself and the Lenders, the fees set
forth in the Fee Letter that are payable on the Effective Date.
(b) From and after the Closing Date, as additional compensation for
the Lenders, the Borrower agrees to pay to Administrative Agent, for the ratable
benefit of such Lenders, monthly in arrears, on the first Business Day of each
month prior to the Commitment Termination Date and on the Commitment Termination
Date, the Unused Commitment Fee.
(c) From and after the Closing Date, the Borrower agrees to pay to the
Administrative Agent, for the ratable benefit of the Lenders, monthly in
arrears, on the first Business Day of each month, a fee equal to the product of
(i) the average daily amount of Collections swept from the Lockbox Account to
the Collection Account during such month, (ii) the average daily Index Rate
during such month, and (iii) a fraction equal to the actual number of days
elapsed during such month divided by 365 days.
8
(d) On each Settlement Date, the Borrower shall pay to the Servicer or
to the Successor Servicer, as applicable, the Servicing Fee or the Successor
Servicing Fees and Expenses, respectively, in each case to the extent of
available funds therefor.
Section 2.08. Time and Method of Payments.
---------------------------
(a) All payments in reduction of Outstanding Principal Amount and all
payments of interest, Fees and other amounts payable by the Borrower hereunder
shall be made in Dollars, in immediately available funds, by application of
amounts on deposit in the Collection Account in accordance with Section 2.06(d)
---------------
hereof; provided, that to the extent that amounts on deposit in the Collection
--------
Account on any day are insufficient to pay amounts due on such day in respect of
reductions to the Outstanding Principal Amount, interest, Fees or any other
amounts payable by the Borrower hereunder, the Borrower shall pay, upon notice
from the Administrative Agent, the amount of such insufficiency to the
Administrative Agent in Dollars, in immediately available funds (for the account
of the Administrative Agent, the applicable Lenders, Affected Parties or
Indemnified Persons) not later than 11:00 a.m. (New York time) on such day. Any
such payment made on such date but after such time shall be deemed to have been
made on, and interest shall continue to accrue and be payable thereon at the
LIBOR Rate (in the case of LIBOR Rate Advances) or the Index Rate (in all other
cases), until the next succeeding Business Day. If any such payment becomes due
on a day other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day (except as set forth in the definition of LIBOR
Period) and interest thereon at the LIBOR Rate (in the case of LIBOR Rate
Advances) or Index Rate (in all other cases) shall be payable during such
extension. Payments received after 11:00 a.m. (New York time) on any Business
Day or on a day that is not a Business Day shall be deemed to have been received
on the following Business Day.
(b) Any and all payments by the Borrower hereunder shall be made in
accordance with this Section 2.08 without setoff or counterclaim and free and
------------
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, excluding taxes imposed on or
measured by the net income of any Affected Party by the jurisdictions under the
laws of which such Affected Party is organized or by any political subdivisions
thereof (such non-excluded taxes, levies, imposts, deductions, charges and
withholdings being "Indemnified Taxes"). If the Borrower shall be required by
-----------------
law to deduct any Indemnified Taxes from or in respect of any sum payable
hereunder, (i) the sum payable shall be increased as much as shall be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.08) the Affected Party entitled to
------------
receive any such payment receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions, and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law. Within 30
days after the date of any payment of Indemnified Taxes, the Borrower shall
furnish to the Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof. The Borrower shall indemnify any Affected
Party from and against, and, within ten days of demand therefor, pay any
Affected Party for, the full amount of Indemnified Taxes (together with any
taxes imposed by any jurisdiction on amounts payable under this Section 2.08)
------------
paid by such Affected Party and any
9
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
asserted.
Section 2.09. Capital Requirements; Additional Costs.
--------------------------------------
(a) If the Administrative Agent on behalf of any Affected Party shall
have determined that the adoption after the date hereof of any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by such Affected Party with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law) from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Affected Party against
commitments made by it under this Agreement or any other Related Document and
thereby reducing the rate of return on such Affected Party's capital as a
consequence of its commitments hereunder or thereunder, then the Borrower shall
from time to time upon demand by the Administrative Agent pay to the
Administrative Agent on behalf of such Affected Party additional amounts
sufficient to compensate such Affected Party for such reduction together with
interest thereon from the date of any such demand until payment in full at the
applicable Index Rate. A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by the Administrative
Agent to the Borrower shall be final, binding and conclusive on the parties
hereto (absent manifest error) for all purposes.
(b) If, due to any Regulatory Change, there shall be any increase in
the cost to any Affected Party of agreeing to make or making, funding or
maintaining any commitment hereunder or under any other Related Document,
including with respect to any Advances or Outstanding Principal Amount, or any
reduction in any amount receivable by such Affected Party hereunder or
thereunder, including with respect to any Advances or Outstanding Principal
Amount (any such increase in cost or reduction in amounts receivable are
hereinafter referred to as "Additional Costs"), then the Borrower shall, from
----------------
time to time upon demand by the Administrative Agent, pay to the Administrative
Agent on behalf of such Affected Party additional amounts sufficient to
compensate such Affected Party such Additional Costs together with interest
thereon from the date demanded until payment in full thereof at the applicable
Index Rate. Each Affected Party agrees that, as promptly as practicable after
it becomes aware of any circumstance referred to above that would result in any
such Additional Costs, it shall, to the extent not inconsistent with its
internal policies of general application, use reasonable commercial efforts to
minimize costs and expenses incurred by it and payable to it by the Borrower
pursuant to this Section 2.09(b).
---------------
(c) Determinations by any Affected Party for purposes of this Section
-------
2.09 of the effect of any Regulatory Change on its costs of making, funding or
----
maintaining any commitments hereunder or under any other Related Document or on
amounts payable to it hereunder or thereunder or of the additional amounts
required to compensate such Affected Party in respect of any Additional Costs
shall be set forth in a written notice to the Borrower in reasonable detail and
which is calculated the same as for comparable claims with respect to similarly
situated sellers or borrowers of the Affected Party and shall be final, binding
and conclusive on the Borrower (absent manifest error) for all purposes.
10
(d) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Rate Advance,
then, unless that Lender is able to make or to continue to fund or to maintain
such LIBOR Rate Advance at another branch or office of that Lender without, in
that Lender's opinion, adversely affecting it or its Advances or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to
Borrower through Administrative Agent, (i) the obligation of such Lender to
agree to make or to make or to continue to fund or maintain LIBOR Rate Advances
shall terminate and (ii) Borrower shall forthwith prepay in full all outstanding
LIBOR Rate Advances owing to such Lender, together with interest accrued
thereon, unless Borrower, within five (5) Business Days after the delivery of
such notice and demand, converts all such LIBOR Rate Advances into Index Rate
Loans.
Section 2.10. Breakage Costs. To induce Lenders to provide the
--------------
LIBOR Rate option on the terms provided herein, if (i) any LIBOR Rate Advances
are, except by reason of the requirements in Section 2.03(c), repaid in whole or
---------------
in part prior to the last day of any applicable LIBOR Period (whether that
repayment is made pursuant to any other provision of this Agreement or any other
Related Document or is the result of acceleration, by operation of law or
otherwise); (ii) the Borrower shall default in payment when due of the principal
amount of or interest on any LIBOR Rate Advance; (iii) the Borrower shall
default in making any borrowing of, conversion into or continuation of LIBOR
Rate Advances after the Borrower has given notice requesting the same in
accordance herewith (including any failure to satisfy conditions precedent to
the making of any LIBOR Rate Advances); or (iv) the Borrower shall fail to make
any prepayment of a LIBOR Rate Advance after the Borrower has given a notice
thereof in accordance herewith, then, in any such case, the Borrower shall
indemnify and hold harmless each Lender from and against all losses, costs and
expenses resulting from or arising from any of the foregoing (any such loss,
cost or expense, "Breakage Costs"). Such indemnification shall include any loss
--------------
(including loss of margin) or expense arising from the reemployment of funds
obtained by it or from fees payable to terminate deposits from which such funds
were obtained. Each Lender shall make a good faith effort to reinvest any
repayment proceeds received from the Borrower in order to mitigate the losses
which would otherwise be reimbursable under this Section 2.10. For the purpose
------------
of calculating amounts payable to a Lender under this subsection, each Lender
shall be deemed to have actually funded its relevant LIBOR Rate Advance through
the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal
to the amount of that LIBOR Rate Advance and having a maturity comparable to the
relevant LIBOR Period; provided, however, that each Lender may fund each of its
-------- -------
LIBOR Rate Advances in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
subsection. This covenant shall survive the termination of this Agreement and
the payment of the Revolving Notes and all other amounts payable hereunder. The
determination by such Lender of the amount of any such loss or expense shall be
set forth in a written notice to the Borrower in reasonable detail and shall be
final, binding and conclusive on the Borrower (absent manifest error) for all
purposes.
Section 2.11. Funding Excess. On each Business Day during the
--------------
Revolving Period, the Administrative Agent shall notify the Borrower and the
Servicer of any Funding
11
Excess on such day, and the Borrower shall deposit the amount of such Funding
Excess in the Collection Account by 11:00 a.m. (New York time) on the
immediately succeeding Business Day.
ARTICLE III.
CONDITIONS PRECEDENT
Section 3.01. Conditions to Effectiveness of Agreement. This
----------------------------------------
Agreement shall not be effective until the date on which each of the following
conditions have been satisfied, in the sole discretion of, or waived in writing
by, the Lenders and the Administrative Agent (such date, the "Effective Date"):
--------------
(a) Funding Agreement; Other Related Documents. This Agreement and
------------------------------------------
the Revolving Notes shall have been duly executed by, and delivered to, the
parties hereto and the Lenders and the Administrative Agent shall have received
such other documents, instruments, agreements and legal opinions as each Lender
and the Administrative Agent shall request in connection with the transactions
contemplated by this Agreement, including all those listed in the Schedule of
Documents, each in form and substance satisfactory to each Lender and the
Administrative Agent.
(b) Governmental Approvals. The Lenders and the Administrative Agent
----------------------
shall have received (i) satisfactory evidence that the Borrower and the Servicer
have obtained all required consents and approvals of all Persons, including all
requisite Governmental Authorities, to the execution, delivery and performance
of this Agreement and the other Related Documents and the consummation of the
transactions contemplated hereby or thereby or (ii) an Officer's Certificate
from each of the Borrower and the Servicer in form and substance satisfactory to
the Lenders and the Administrative Agent affirming that no such consents or
approvals are required.
(c) Compliance with Laws. The Borrower and the Servicer shall be in
--------------------
compliance in all material respects with all applicable foreign, federal, state
and local laws and regulations, including those specifically referenced in
Section 5.01(a).
---------------
(d) Payment of Fees. The Borrower shall have paid all fees required
---------------
to be paid by it on the Effective Date, including all fees required hereunder
and under the Fee Letter, and shall have reimbursed each Lender for all fees,
costs and expenses of closing the transactions contemplated hereunder and under
the other Related Documents, including each Lender's legal and audit expenses,
and other document preparation costs.
(e) Representations and Warranties. Each representation and warranty
------------------------------
by the Borrower contained herein and in each other Related Document shall be
true and correct as of the Effective Date, except to the extent that such
representation or warranty expressly relates solely to an earlier date.
(f) No Termination Event. No Incipient Termination Event or
--------------------
Termination Event hereunder or any "Event of Default" or "Default" (each as
defined in the Credit
12
Agreement) shall have occurred and be continuing or would result after giving
effect to any of the transactions contemplated on the Closing Date.
(g) Audit. The Administrative Agent shall have completed a
-----
satisfactory prefunding audit of the Receivables as of the Closing Date.
(h) Credit Agreement. The Parent shall have commitments under the
----------------
Credit Agreement of no less than $256,108,000.
(i) Combined Availability. After giving effect to the initial
---------------------
Advance hereunder and the initial loans to be made to the Parent under the
Credit Agreement, the Combined Availability is at least $20,000,000.
(j) Material Adverse Change. There will have been (i) except for
-----------------------
matters disclosed in reports publicly filed with the SEC under the Securities
Act of 1934 on or prior to May 15, 2001, no material adverse change,
individually or in the aggregate, (x) in the business, the industry which the
Parent or any Originator operates, the financial or other condition or prospects
of the Parent, the Servicer, or any Originator, (y) in the prices at which Sugar
Contracts are repriced by any of the Originators or the Parent, or (z) in the
Receivables, (ii) no litigation commenced which, if successful, would have a
material adverse impact on the Parent, the Servicer, the Originators, their
business, or which would challenge the transactions contemplated under this
Agreement, the Funding Agreement and the other Related Documents, and (iii)
since the Parent's last audited financial statements and as otherwise disclosed
in the financial projections provided to the Administrative Agent in the revised
business plan delivered on May 24, 2001, no material increase in the
liabilities, liquidated or contingent, of the Parent or the Originators, or
material decrease in the assets of the Parent or the Originators (other than
such reductions provided for under accounting treatment solely as a result of
fresh-start accounting).
Section 3.02. Conditions Precedent to All Advances. No Lender
------------------------------------
shall be obligated to make any Advances hereunder (including the initial
Advance) on any date if, as of the date thereof:
(a) solely with respect to the initial Advance made hereunder, the
plan of reorganization with respect to the Imperial Bankruptcy Proceeding (the
"Plan of Reorganization") shall not have been confirmed by a final order entered
by the bankruptcy court (the "Confirmation Order"), which Plan of Reorganization
------------------
(i) is acceptable to the Administrative Agent and the Lenders, (ii) approves
this Agreement and the other Related Documents, (iii) shall not have been stayed
by the bankruptcy court, and (iv) shall be effective and not subject to any
appeals, review, rehearing or certiorari; provided; that, without limiting the
--------
general applicability of the foregoing, the Confirmation Order shall be in full
force and effect and shall specifically provide that (1) the terms of each of
the Related Documents are approved and ratified as being entered into in good
faith, providing the most favorable financing terms and being critical to the
success and feasibility of the Plan of Reorganization, and (2) each of the
Related Agreements, including, without limitation, UCC financing statements and
mortgages signed by the Parent's predecessor debtor as debtor-in-possession,
shall be binding upon and enforceable against each
13
Originator, the Parent and the Borrower upon and after the effective date of
Confirmation Order as if executed and delivered by each Originator, the Parent
and the Borrower as reorganized debtors, notwithstanding any provision in the
Plan of Reorganization or the Confirmation Order to the contrary;
(b) any representation or warranty of the Borrower or the Servicer
contained herein or in any of the other Related Documents shall be untrue or
incorrect as of such date, either before or after giving effect to the Advances
on such date and to the application of the proceeds therefrom, except to the
extent that such representation or warranty expressly relates to an earlier date
and except for changes therein expressly permitted by this Agreement;
(c) any event shall have occurred, or would result from such Advances
or from the application of the proceeds therefrom, that constitutes an Incipient
Termination Event, a Termination Event, an Incipient Servicer Termination Event
or an Event of Servicer Termination;
(d) the Borrower shall not be in compliance with any of its covenants
or other agreements set forth herein;
(e) the Commitment Termination Date shall have occurred;
(f) either before or after giving effect to such Advance and to the
application of the proceeds therefrom, a Funding Excess would exist;
(g) any Originator, the Borrower or the Servicer shall fail to have
taken such other action, including delivery of approvals, consents, opinions,
documents and instruments to the Lenders and the Administrative Agent, as any
Lender or the Administrative Agent may reasonably request;
(h) on or prior to such date, the Borrower or the Servicer shall have
delivered all Monthly Reports and Borrowing Base Certificates required to be
delivered in accordance with Section 5.02 hereof; or
------------
(i) the Administrative Agent shall have determined that any event or
condition has occurred that has had, or could reasonably be expected to have or
result in, a Material Adverse Effect.
The delivery by the Borrower of a Borrowing Request and the acceptance by the
Borrower of the funds from such Advance on any Advance Date shall be deemed to
constitute, as of any such Advance Date, a representation and warranty by the
Borrower that the conditions in this Section 3.02 have been satisfied.
------------
14
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Borrower. To
----------------------------------------------
induce each Lender to make Advances from time to time and the Administrative
Agent to take any action required to be performed by it hereunder, the Borrower
makes the following representations and warranties to each Lender and the
Administrative Agent on the Effective Date and each Advance Date, each and all
of which shall survive the execution and delivery of this Agreement.
(a) Existence; Compliance with Law. The Borrower (i) is a limited
------------------------------
liability company duly formed, validly existing and in good standing under the
laws of its jurisdiction of incorporation; (ii) is duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification,
except where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect; (iii) has the
requisite power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it operates
under lease, and to conduct its business, in each case, as now, heretofore and
proposed to be conducted; (iv) has all licenses, permits, consents or approvals
from or by, and has made all filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct, except where the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; (v) is in compliance with its limited liability company
agreement; and (vi) subject to specific representations set forth herein
regarding ERISA, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(b) Executive Offices; Collateral Locations; Corporate or Other Names;
------------------------------------------------------------------
FEIN. The state of organization and the organization identification number of
----
the Borrower and current location of the Borrower's chief executive office,
principal place of business, other offices, the premises within which any
Borrower Collateral is stored or located, and the locations of its records
concerning the Borrower Collateral (including originals of the Borrower Assigned
Agreements) are set forth in Schedule 4.01(b) and none of such locations has
----------------
changed within the past 12 months (or such shorter time as the Borrower has been
in existence). During the prior five years (or such shorter time as the
Borrower has been in existence), except as set forth in Schedule 4.01(b), the
----------------
Borrower has not been known as or used any fictitious or trade name. In
addition, Schedule 4.01(b) lists the federal employer identification number of
----------------
the Borrower.
(c) Power, Authorization, Enforceable Obligations. The execution,
---------------------------------------------
delivery and performance by the Borrower of this Agreement and the other Related
Documents to which it is a party, the creation and perfection of all Liens and
ownership interests provided for therein: (i) are within the Borrower's limited
liability company power; (ii) have been duly authorized by all necessary or
proper actions; (iii) do not contravene any provision of the Borrower's limited
liability company agreement; (iv) do not violate any law or regulation, or any
order or decree of any court or Governmental Authority; (v) do not conflict with
or result in the breach or
15
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which the Borrower or any
Originator is a party or by which the Borrower or any Originator or any of the
property of the Borrower or any Originator is bound; (vi) do not result in the
creation or imposition of any Adverse Claim upon any of the property of the
Borrower or any Originator; and (vii) do not require the consent or approval of
any Governmental Authority or any other Person, except those which have been
duly obtained, made or complied with prior to the Effective Date as provided in
Section 3.01(b). The exercise by each of the Borrower, the Lenders or the
---------------
Administrative Agent of any of its rights and remedies under any Related
Document to which it is a party, do not require the consent or approval of any
Governmental Authority or any other Person (other than consents or approvals
solely relating to or required to be obtained by a Lender or the Administrative
Agent, and subject to the Bankruptcy Code), except those which will have been
duly obtained, made or complied with prior to the Closing Date as provided in
Section 3.01(b). On or prior to the Effective Date, each of the Related
---------------
Documents to which the Borrower is a party shall have been duly executed and
delivered by the Borrower and each such Related Document shall then constitute a
legal, valid and binding obligation of the Borrower enforceable against it in
accordance with its terms.
(d) No Litigation. Other than the Imperial Bankruptcy Proceeding no
-------------
Litigation is now pending or, to the knowledge of the Borrower, threatened
against the Borrower that (i) challenges the Borrower's right or power to enter
into or perform any of its obligations under the Related Documents to which it
is a party, or the validity or enforceability of any Related Document or any
action taken thereunder, (ii) seeks to prevent the transfer, sale, pledge or
contribution of any Receivable or the consummation of any of the transactions
contemplated under this Agreement or the other Related Documents, or (iii)
except as set forth on Schedule 4.01(d), has a reasonable risk of being
----------------
determined adversely to the Borrower and that, if so determined, could have a
Material Adverse Effect. Except as set forth on Schedule 4.01(d), as of the
----------------
Effective Date there is no Litigation pending or threatened that seeks damages
or injunctive relief against, or alleges criminal misconduct by, the Borrower.
(e) Solvency. After giving effect to (i) the transactions
--------
contemplated by this Agreement and the other Related Documents and (ii) the
payment and accrual of all transaction costs in connection with the foregoing,
the Borrower is and will be Solvent.
(f) Material Adverse Effect. Since the date of the Borrower's
-----------------------
organization, (i) the Borrower has not incurred any obligations, contingent or
non-contingent liabilities, liabilities for charges, long-term leases or unusual
forward or long-term commitments 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 Borrower or
has become binding upon the Borrower's assets and no law or regulation
applicable to the Borrower has been adopted that has had or could reasonably be
expected to have a Material Adverse Effect and (iii) the Borrower is not in
default and no third party is in default under any material contract, lease or
other agreement or instrument to which the Borrower is a party that alone or in
the aggregate could reasonably be expected to have a Material Adverse Effect.
Since the date of the Borrower's organization, no event has occurred with
respect to the Borrower that alone or together with other events could
reasonably be expected to have a Material Adverse Effect.
16
(g) Ownership of Property; Liens. None of the properties and assets
----------------------------
(including the Transferred Receivables) of the Borrower are subject to any
Adverse Claims other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to the Borrower that may result in (i) with
respect to the Transferred Receivables, any Adverse Claims (including Adverse
Claims arising under environmental laws) other than Permitted Encumbrances and
(ii) with respect to its other properties and assets, any Adverse Claims
(including Adverse Claims arising under environmental laws). The Borrower has
received all assignments, bills of sale and other documents, and has duly
effected all recordings, filings and other actions necessary to establish,
protect and perfect the Borrower's right, title and interest in and to the
Transferred Receivables and its other properties and assets. The Liens granted
to the Lender pursuant to Section 8.01 will at all times be fully perfected
------------
first priority Liens in and to the Borrower Collateral.
(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock and
------------------------------------------------------------
Indebtedness. The Borrower has no Subsidiaries, and is not engaged in any joint
------------
venture or partnership with any other Person. The Member is the sole member of
the Borrower. There are no outstanding rights to purchase, options, warrants or
similar rights or agreements pursuant to which the Borrower may be required to
issue, sell, repurchase or redeem some or all of the membership interest of the
Member. All outstanding Debt of the Borrower as of the Effective Date is
described in Section 5.03(i).
---------------
(i) Taxes. All tax returns, reports and statements, including
-----
information returns, required by any Governmental Authority to be filed by the
Borrower and each of its Affiliates included in the Parent Group have been filed
with the appropriate Governmental Authority and all charges have been paid prior
to the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof (or any such fine, penalty, interest, late charge
or loss has been paid), excluding charges or other amounts being contested in
accordance with Section 5.01(e). Proper and accurate amounts have been withheld
---------------
by the Borrower or such Affiliate from its respective employees for all periods
in full and complete compliance with all applicable federal, state, local and
foreign laws and such withholdings have been timely paid to the respective
Governmental Authorities. Schedule 4.01(i) sets forth as of the Effective Date
----------------
(i) those taxable years for which the Borrower's or such Affiliates' tax returns
are currently being audited by the IRS or any other applicable Governmental
Authority and (ii) any assessments or threatened assessments in connection with
any such audit or otherwise currently outstanding. Except as described on
Schedule 4.01(i), neither the Borrower nor any such Affiliate has executed or
----------------
filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for assessment
or collection of any charges. The Borrower is not liable for any charges: (A)
under any agreement (including any tax sharing agreements) or (B) to the best of
the Borrower's knowledge, as a transferee. As of the Effective Date, neither
the Borrower nor any of its Affiliates included in the Parent Group has agreed
or been requested to make any adjustment under IRC Section 481(a), by reason of
a change in accounting method or otherwise, that would have a Material Adverse
Effect.
(j) Full Disclosure. All information contained in this Agreement,
---------------
any Borrowing Base Certificate or any of the other Related Documents, or any
written statement furnished by or on behalf of the Borrower to any Lender or the
Administrative Agent pursuant to
17
the terms of this Agreement or any of the other Related Documents is true and
accurate in every material respect, and none of this Agreement, any Borrowing
Base Certificate or any of the other Related Documents, or any written statement
furnished by or on behalf of the Borrower to any Lender or the Administrative
Agent pursuant to the terms of this Agreement or any of the other Related
Documents is misleading as a result of the failure to include therein a material
fact (it being understood that the foregoing shall not apply to projections of
(i) future financial information or (ii) information related to Receivables
which information shall be based upon the Parent's reasonable good faith
estimates).
(k) ERISA. The Borrower is in compliance with ERISA and has not
-----
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC under
ERISA.
(l) Brokers. No broker or finder acting on behalf of the Borrower
-------
was employed or utilized in connection with this Agreement or the other Related
Documents or the transactions contemplated hereby or thereby and the Borrower
has no obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
(m) Margin Regulations. The Borrower is not engaged in the business
------------------
of extending credit for the purpose of "purchasing" or "carrying" any "margin
security," as such terms are defined in Regulation U of the Federal Reserve
Board as now and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). The Borrower owns no Margin Stock, and
------------
no portion of the proceeds of the Advances made hereunder will be used, directly
or indirectly, for the purpose of purchasing or carrying any Margin Stock, for
the purpose of reducing or retiring any Debt that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that might cause any
portion of such proceeds to be considered a "purpose credit" within the meaning
of Regulations T, U or X of the Federal Reserve Board. The Borrower will not
take or permit to be taken any action that might cause any Related Document to
violate any regulation of the Federal Reserve Board.
(n) Nonapplicability of Bulk Sales Laws. No transaction contemplated
-----------------------------------
by this Agreement or any of the Related Documents requires compliance with any
bulk sales act or similar law.
(o) Government Regulation. The Borrower is not an "investment
---------------------
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act. The making of Advances by the Lenders hereunder, the application
of the proceeds thereof and the consummation of the transactions contemplated by
this Agreement and the other Related Documents will not violate any provision of
any such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
(p) Nonconsolidation. The Borrower is operated in such a manner that
----------------
the separate corporate existence of the Borrower, on the one hand, and any
member of the Parent Group, on the other hand, would not be disregarded in the
event of the bankruptcy or insolvency of any member of the Parent Group and,
without limiting the generality of the foregoing:
18
(i) the Borrower is a limited purpose limited liability company
whose activities are restricted in its limited liability company agreement to
those activities expressly permitted hereunder and under the other Related
Documents and the Borrower has not engaged, and does not presently engage, in
any activity other than those activities expressly permitted hereunder and under
the other Related Documents, nor has the Borrower entered into any agreement
other than this Agreement, the other Related Documents to which it is a party
and, with the prior written consent of the Lenders and the Administrative Agent,
any other agreement necessary to carry out more effectively the provisions and
purposes hereof or thereof;
(ii) Borrower shall compensate all employees, consultants and agents
directly or indirectly through reimbursement of the Parent, from the Borrower's
bank accounts, for services provided to the Borrower by such employees,
consultants and agents and, to the extent any employee, consultant or agent of
the Borrower is also an employee, consultant or agent of Parent on a basis which
reflects the respective services rendered to the Borrower and Parent and in
accordance with the terms of the Administrative Services Agreement;
(iii) Borrower shall pay its own incidental administrative costs and
expenses not covered under the terms of the Administrative Services Agreement,
from its own funds and allocate all other shared overhead expenses (including,
without limitation, telephone and other utility charges, the services of shared
employees, consultants and agents, and reasonable legal and auditing expenses)
which are not reflected in the Servicing Fee, and other items of cost and
expense shared between the Borrower and the Parent, pursuant to the terms of the
Administrative Services Agreement, on the basis of actual use to the extent
practicable and, to the extent such allocation is not practicable, on a basis
reasonably related to actual use or the value of services rendered;
(iv) other than the purchase and acceptance through capital
contribution of Transferred Receivables, the acceptance of Subordinated Loans
pursuant to the Subordinated Notes, the payment of distributions and the return
of capital to the Member, the payment of Servicing Fees to the Servicer under
this Agreement and the transactions contemplated under the Administrative
Services Agreement, the Borrower engages and has engaged in no intercorporate
transactions with any member of the Parent Group;
(v) the Borrower maintains records and books of account separate
from that of each member of the Parent Group, holds regular meetings and
otherwise observes limited liability company formalities and has a business
office separate from that of each member of the Parent Group;
(vi) the financial statements (other than consolidated financial
statements) and books and records of the Borrower and each member of the Parent
Group reflect the separate existence of the Borrower and the consolidated
financial statements of the Parent Group shall contain a footnote to the effect
that the Borrower's assets are not available to the creditors of any other
member of the Parent Group;
19
(vii) (A) the Borrower maintains its assets separately from the
assets of each member of the Parent Group (including through the maintenance of
separate bank accounts and except for any Records to the extent necessary to
assist the Servicer in connection with the servicing of the Transferred
Receivables), (B) except as contemplated by the Administrative Services
Agreement the Borrower's funds (including all money, checks and other cash
proceeds) and assets, and records relating thereto, have not been and are not
commingled with those of any member of the Parent Group and (C) the separate
creditors of the Borrower will be entitled to be satisfied out of the Borrower's
assets prior to any value in the Borrower becoming available to the Member;
(viii) except as otherwise expressly permitted hereunder, under the
other Related Documents and under the Borrower's organizational documents, no
member of the Parent Group (A) pays the Borrower's expenses, (B) guarantees the
Borrower's obligations, or (C) advances funds to the Borrower for the payment of
expenses or otherwise;
(ix) all business correspondence and other communications of the
Borrower are conducted in the Borrower's own name, on its own stationery and
through a separately-listed telephone number;
(x) Borrower shall maintain separate office space from the offices
of any member of the Parent Group and identify such office by a sign in its own
name;
(xi) Borrower shall respond to any inquiries with respect to
ownership of a Transferred Receivable by stating that it is the owner of such
Transferred Receivable, and that such Transferred Receivable is pledged to the
Administrative Agent for the benefit of the Lenders;
(xii) the Borrower does not act as agent for any member of the Parent
Group, but instead presents itself to the public as a legal entity separate from
each such member and independently engaged in the business of purchasing and
financing Receivables;
(xiii) the Borrower maintains at least two independent directors each
of whom (A) is not a Stockholder, director, officer, employee or associate, or
any relative of the foregoing, of any member of the Parent Group (other than the
Borrower), all as provided in its limited liability company agreement, (B) has
(1) prior experience as an independent director for a corporation whose charter
documents required the unanimous consent of all independent directors thereof
before such corporation could consent to the institution of bankruptcy or
insolvency proceedings against it or could file a petition seeking relief under
any applicable federal or state law relating to bankruptcy and (2) at least
three years of employment experience with one or more entities that provide, in
the ordinary course of their respective businesses, advisory, management,
independent director services or placement services to issuers of securitization
or structured finance instruments, agreements or securities, and (C) is
otherwise acceptable to the Lenders and the Administrative Agent; and
20
(xiv) the limited liability company agreement of the Borrower
requires (A) the affirmative vote of each independent director before a
voluntary petition under Section 301 of the Bankruptcy Code may be filed by
the Borrower, and (B) the Borrower to maintain (1) correct and complete
books and records of account and (2) minutes of the meetings and other
proceedings of its members and board of directors.
(q) Deposit and Disbursement Accounts. Schedule 4.01(q) lists all
--------------------------------- ----------------
banks and other financial institutions at which the Borrower maintains deposit
or other bank accounts as of the Closing Date, including any Lockbox Accounts
and the Borrower Account, and such schedule correctly identifies the name,
address and telephone number of each depository, the name in which the account
is held, a description of the purpose of the account, and the complete account
number therefor. The Borrower Account and each Lockbox Account constitute
deposit accounts within the meaning of the UCC. The Borrower (or the Servicer on
its behalf) has delivered to the Administrative Agent a fully executed agreement
pursuant to which the Borrower Account Bank (with respect to the Borrower
Account) and each Lockbox Account Bank (with respect to each Lockbox Account)
has agreed to comply with all instructions originated by the Administrative
Agent directing the disposition of funds in the Borrower Account and each
Lockbox Account without further consent by the Borrower, the Servicer or any
Originator. None of the Borrower Account or any Lockbox Account is in the name
of any person other than the Borrower or the Administrative Agent, and the
Borrower has not consented to the Borrower Account Bank or any Lockbox Account
Bank following the instructions of any Person other than the Administrative
Agent. Accordingly, the Administrative Agent has a first priority perfected
security interest in the Borrower Account and each Lockbox Account, and all
funds on deposit therein.
(r) Transferred Receivables.
-----------------------
(i) Transfers. Each Transferred Receivable was purchased by or
---------
contributed to the Borrower on the relevant Transfer Date pursuant to the
Sale Agreement.
(ii) Eligibility. Each Transferred Receivable designated as an
-----------
Eligible Receivable in each Borrowing Base Certificate constitutes an
Eligible Receivable as of the date specified in such Borrowing Base
Certificate.
(iii) No Material Adverse Effect. The Borrower has no actual
--------------------------
knowledge of any fact (including any defaults by the Obligor thereunder on
any other Receivable) that would cause it or should have caused it to
expect that any payments on any Transferred Receivable designated as an
Eligible Receivable in any Borrowing Base Certificate will not be paid in
full when due or that has caused it to expect any material adverse effect
on any such Transferred Receivable.
(iv) Nonavoidability of Transfers. The Borrower shall (A) have
----------------------------
received each Contributed Receivable as a contribution to the capital of
the Borrower by the Member and (B) (1) have purchased each Sold Receivable
from the applicable Originator for cash consideration or with the proceeds
of a Subordinated Loan and (2)
21
have accepted assignment of any Eligible Receivables transferred pursuant
to clause (b) of Section 4.04 of the Sale Agreement, in each case in an
---------- ------------
amount that constitutes fair consideration and reasonably equivalent value
therefor. Each Sale of a Sold Receivable effected pursuant to the terms of
the Sale Agreement shall not have been made for or on account of an
antecedent debt owed by any Originator to the Borrower and no such Sale is
or may be avoidable or subject to avoidance under any bankruptcy laws,
rules or regulations.
(s) Representations and Warranties in Other Related Documents. Each
---------------------------------------------------------
of the representations and warranties of the Borrower contained in the Related
Documents (other than this Agreement) is true and correct in all respects and
the Borrower hereby makes each such representation and warranty to, and for the
benefit of, the Lenders and the Administrative Agent as if the same were set
forth in full herein.
ARTICLE V.
GENERAL COVENANTS OF THE BORROWER
Section 5.01. Affirmative Covenants of the Borrower. The Borrower
-------------------------------------
covenants and agrees that from and after the Effective Date and until the
Termination Date:
(a) Compliance with Agreements and Applicable Laws. The Borrower
----------------------------------------------
shall perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
applicable to it and the Transferred Receivables, including those relating to
truth in lending, retail installment sales, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices, privacy,
licensing, taxation, ERISA and labor matters and environmental laws and
environmental permits.
(b) Maintenance of Existence and Conduct of Business. The Borrower
------------------------------------------------
shall: (i) do or cause to be done all things necessary to preserve and keep in
full force and effect its limited liability company existence and its rights and
franchises; (ii) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder and in accordance with (1) the terms of its
limited liability company agreement, (2) Sections 4.01(p) and (3) the
----------------
assumptions set forth in each legal opinion of ▇▇▇▇▇ ▇▇▇▇▇, L.L.P., or other
counsel to the Borrower from time to time delivered pursuant to Section 3.02(d)
of the Sale Agreement with respect to issues of substantive consolidation and
true sale and absolute transfer; (iii) at all times maintain, preserve and
protect all of its assets and properties used or useful in the conduct of its
business, including all licenses, permits, charters and registrations, and keep
the same in good repair, working order and condition in all material respects
(taking into consideration ordinary wear and tear) and from time to time make,
or cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and (iv) transact
business only in the name of Imperial Sugar Securitization LLC or such trade
names as are set forth in Schedule 5.01(b).
----------------
(c) Lockboxes; Deposit of Collections. The Borrower shall deposit or
---------------------------------
cause to be deposited promptly into a Lockbox Account, and in any event no later
than the first
22
Business Day after receipt thereof, all Collections it may receive with respect
to any Transferred Receivable.
(d) Use of Proceeds. The Borrower shall utilize the proceeds of the
---------------
Advances made hereunder solely for (i) the purchase of Receivables from the
Originators pursuant to the Sale Agreement, (ii) the payment of distributions to
the Member, (iii) the repayment of Subordinated Loans, and (iv) the payment of
administrative fees or Servicing Fees or expenses to the Servicer or routine
administrative or operating expenses, in each case only as expressly permitted
by and in accordance with the terms of this Agreement and the other Related
Documents.
(e) Payment, Performance and Discharge of Obligations.
-------------------------------------------------
(i) Subject to Section 5.01(e)(ii), the Borrower shall pay,
-------------------
perform and discharge or cause to be paid, performed and discharged
promptly all charges payable by it, including (A) charges imposed upon it,
its income and profits, or any of its property (real, personal or mixed)
and all charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (B) lawful claims for labor,
materials, supplies and services or otherwise before any thereof shall
become past due.
(ii) The Borrower may in good faith contest, by appropriate
proceedings, the validity or amount of any charges or claims described in
Section 5.01(e)(i); provided, that (A) adequate reserves with respect to
------------------ --------
such contest are maintained on the books of the Borrower, in accordance
with GAAP, (B) such contest is maintained and prosecuted continuously and
with diligence, (C) none of the Borrower Collateral becomes subject to
forfeiture or loss as a result of such contest, (D) no Lien shall be
imposed to secure payment of such charges or claims other than inchoate tax
liens and (E) none of the Lenders or the Administrative Agent has advised
the Borrower in writing that such Affected Party reasonably believes that
failure to pay or to discharge such claims or charges could have or result
in a Material Adverse Effect.
(f) ERISA. The Borrower shall give the Administrative Agent prompt
-----
written notice of any event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA.
(g) Maintenance of Minimum Combined Availability. The Borrower shall
--------------------------------------------
maintain the required Minimum Combined Availability.
Section 5.02. Reporting Requirements of the Borrower. The Borrower
--------------------------------------
hereby agrees that from and after the Effective Date until the Termination Date,
it shall furnish or cause to be furnished to the Administrative Agent and the
Lenders:
(a) the financial statements, notices and other information at the
times, to the Persons and in the manner set forth in Annex 5.02(a).
-------------
23
(b) As soon as available, and in any event no later than 11:00 a.m.
(New York time) on the third Business Day of each week, a Borrowing Base
Certificate, each of which shall be prepared by the Borrower or the Servicer as
of the last day of the previous week; provided, that if (i) an Incipient
--------
Termination Event or a Termination Event shall have occurred and be continuing
or (ii) the Administrative Agent, in good faith, believes that an Incipient
Termination Event or a Termination Event is imminent or deems the Lender's
rights or interests in the Transferred Receivables or the Borrower Collateral
insecure, then such reports shall be delivered daily.
(c) Such other reports, statements and reconciliations with respect
to the Borrowing Base or Borrower Collateral as the Lenders or the
Administrative Agent shall from time to time request in its reasonable
discretion.
Section 5.03. Negative Covenants of the Borrower. The Borrower
----------------------------------
covenants and agrees that, without the prior written consent of the Lenders and
the Administrative Agent, from and after the Effective Date until the
Termination Date:
(a) Sale of Membership Interests and Assets. The Borrower shall not
---------------------------------------
sell, transfer, convey, assign or otherwise dispose of, or assign any right to
receive income in respect of, any of its properties or other assets, including
its membership interests (whether in a public or a private offering or
otherwise) (other than in connection with the pledge by the Member of its
membership interest in the Borrower to the lenders in connection with the Credit
Agreement), any Transferred Receivable or Contract therefor or any of its rights
with respect to any Lockbox or any Lockbox Account, the Collection Account or
any other deposit account in which any Collections of any Transferred Receivable
are deposited except as otherwise expressly permitted by this Agreement or any
of the other Related Documents.
(b) Liens. The Borrower shall not create, incur, assume or permit to
-----
exist (i) any Adverse Claim on or with respect to its Transferred Receivables or
(ii) any Adverse Claim on or with respect to its other properties or assets
(whether now owned or hereafter acquired) except for the Liens set forth in
Schedule 5.03(b) and other Permitted Encumbrances. In addition, the Borrower
----------------
shall not become a party to any agreement, note, indenture or instrument or take
any other action that would prohibit the creation of a Lien on any of its
properties or other assets in favor of the Lenders as additional collateral for
the Borrower Obligations, except as otherwise expressly permitted by this
Agreement or any of the other Related Documents.
(c) Modifications of Receivables, Contracts or Credit and Collection
----------------------------------------------------------------
Policies. The Borrower shall not, without the prior written consent of the
--------
Administrative Agent, (i) extend, amend, forgive, discharge, compromise, waive,
cancel or otherwise modify the terms of any Transferred Receivable or amend,
modify or waive any term or condition of any Contract related thereto, provided,
--------
that the Borrower may authorize the Servicer to take such actions as are
expressly permitted by the terms of any Related Document or the Credit and
Collection Policies, or (ii) amend, modify or waive any term or provision of the
Credit and Collection Policies.
24
(d) Changes in Instructions to Obligors. The Borrower shall not make
-----------------------------------
any change in its instructions to Obligors regarding the deposit of Collections
with respect to the Transferred Receivables, except to the extent the
Administrative Agent directs the Borrower to change such instructions to
Obligors or the Administrative Agent consents in writing to such change.
(e) Capital Structure and Business. The Borrower shall not (i) make
------------------------------
any changes in any of its business objectives, purposes or operations that could
have or result in a Material Adverse Effect, (ii) make any change in its capital
structure, including the issuance of any membership interests, warrants or other
securities convertible into membership interests or any revision of the terms of
its outstanding membership interests, or (iii) amend its certificate of
formation or limited liability company agreement. The Borrower shall not engage
in any business other than as provided in its organizational documents and the
Related Documents.
(f) Mergers, Subsidiaries, Etc. The Borrower shall not directly or
---------------------------
indirectly, by operation of law or otherwise, (i) form or acquire any
Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially
all of the assets or capital Stock of, or otherwise combine with or acquire, any
Person.
(g) Sale Characterization; Receivables Sale Agreement. The Borrower
-------------------------------------------------
shall not make statements or disclosures, prepare any financial statements or in
any other respect account for or treat the transactions contemplated by the Sale
Agreement (including for accounting, tax and reporting purposes) in any manner
other than (i) with respect to each Sale of each Sold Receivable effected
pursuant to the Sale Agreement, as a true sale and absolute assignment of the
title to and sole record and beneficial ownership interest of the Transferred
Receivables by the Originators to the Borrower and (ii) with respect to each
contribution of Contributed Receivables thereunder, as an increase in the stated
capital of the Borrower.
(h) Restricted Payments. Except for the Subordinated Loans, the
-------------------
Borrower shall not enter into any lending transaction with any other Person.
The Borrower shall not at any time (i) advance credit to any Person or (ii)
declare any distributions, repurchase any membership interest, return any
capital, or make any other payment or distribution of cash or other property or
assets in respect of the Borrower's membership interest or make a repayment with
respect to any Subordinated Loans if, after giving effect to any such advance or
distribution, a Funding Excess, Incipient Termination Event or Termination Event
would exist or otherwise result therefrom.
(i) Indebtedness. The Borrower shall not create, incur, assume or
------------
permit to exist any Debt, except (i) Debt of the Borrower to any Affected Party,
Indemnified Person, the Servicer or any other Person expressly permitted by this
Agreement or any other Related Document, (ii) Subordinated Loans pursuant to the
Subordinated Notes, (iii) deferred taxes, (iv) unfunded pension fund and other
employee benefit plan obligations and liabilities to the extent they are
permitted to remain unfunded under applicable law, and (v) endorser liability in
connection with the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business.
25
(j) Prohibited Transactions. The Borrower shall not enter into, or
-----------------------
be a party to, any transaction with any Person except as expressly permitted
hereunder or under any other Related Document.
(k) Investments. Except as otherwise expressly permitted hereunder
-----------
or under the other Related Documents, the Borrower shall not make any investment
in, or make or accrue loans or advances of money to, any Person, including the
Member, any director, officer or employee of the Borrower, the Parent or any of
the Parent's other Subsidiaries, through the direct or indirect lending of
money, holding of securities or otherwise, except with respect to Transferred
Receivables and Permitted Investments.
(l) Commingling. The Borrower shall not deposit or permit the
-----------
deposit of any funds that do not constitute Collections of Transferred
Receivables into any Lockbox Account (other than collections related to Third-
Party Receivables). If funds that are not Collections are deposited into a
Lockbox Account and the Servicer has so notified the Administrative Agent in
writing, the Administrative Agent shall promptly remit (or direct the applicable
Lockbox Account Bank to remit) any such amounts that are not Collections to the
applicable Originator or other Person designated in such notice from the
Servicer.
(m) ERISA. The Borrower shall not, and shall not cause or permit any
-----
of its ERISA Affiliates to, cause or permit to occur an event that could result
in the imposition of a Lien under Section 412 of the IRC or Section 302 or 4068
of ERISA.
(n) Related Documents. The Borrower shall not amend, modify or waive
-----------------
any term or provision of any Related Document without the prior written consent
of the Administrative Agent.
(o) Board Policies. The Borrower shall not modify the terms of any
--------------
policy or resolutions of its board of directors if such modification could have
or result in a Material Adverse Effect.
(p) Additional Members of Borrower. The Borrower shall not admit any
------------------------------
additional member without the prior written consent of the Administrative Agent
and the Lenders other than a "Special Member" as such term is defined in the
Borrower's limited liability company agreement as of the date hereof.
ARTICLE VI.
COLLECTIONS AND DISBURSEMENTS
Section 6.01. Establishment of Accounts.
-------------------------
(a) The Lockbox Accounts.
--------------------
(i) The Borrower has established with each Lockbox Bank one
or more Lockbox Accounts. The Borrower agrees that the Administrative Agent
shall have exclusive dominion and control of each Lockbox Account and all
monies, instruments
26
and other property from time to time on deposit therein. The Borrower shall
not make or cause to be made, or have any ability to make or cause to be
made, any withdrawals from any Lockbox Account except as provided in
Section 6.01(b)(ii).
-------------------
(ii) The Borrower and the Servicer have instructed all existing
Obligors of Transferred Receivables, and shall instruct all future Obligors
of such Receivables, to make payments in respect thereof only (A) by check
or money order mailed to one or more lockboxes or post office boxes under
the control of the Administrative Agent (each a "Lockbox" and collectively
-------
the "Lockboxes") or (B) by wire transfer or moneygram directly to a Lockbox
---------
Account. Schedule 4.01(q) lists all Lockboxes and all Lockbox Banks at
----------------
which the Borrower maintains Lockbox Accounts as of the Effective Date, and
such schedule correctly identifies (1) with respect to each such Lockbox
Bank, the name, address and telephone number thereof, (2) with respect to
each Lockbox Account, the name in which such account is held and the
complete account number therefor, and (3) with respect to each Lockbox, the
lockbox number and address thereof. The Borrower and the Servicer shall
endorse, to the extent necessary, all checks or other instruments received
in any Lockbox so that the same can be deposited in the Lockbox Account, in
the form so received (with all necessary endorsements), on the first
Business Day after the date of receipt thereof. In addition, each of the
Borrower and the Servicer shall deposit or cause to be deposited into a
Lockbox Account all cash, checks, money orders or other proceeds of
Transferred Receivables or Borrower Collateral received by it other than in
a Lockbox or a Lockbox Account, in the form so received (with all necessary
endorsements), not later than the close of business on the first Business
Day following the date of receipt thereof, and until so deposited all such
items or other proceeds shall be held in trust for the benefit of the
Administrative Agent. Neither the Borrower nor the Servicer shall make any
deposits into a Lockbox or any Lockbox Account except in accordance with
the terms of this Agreement or any other Related Document.
(iii) If, for any reason, a Lockbox Account Agreement terminates
or any Lockbox Bank fails to comply with its obligations under the Lockbox
Account Agreement to which it is a party, then the Borrower shall promptly
notify all Obligors of Transferred Receivables who had previously been
instructed to make wire payments to a Lockbox Account maintained at any
such Lockbox Bank to make all future payments to a new Lockbox Account in
accordance with this Section 6.01(a)(iii). The Borrower shall not close
--------------------
any such Lockbox Account unless it shall have (A) received the prior
written consent of the Administrative Agent, (B) established a new account
with the same Lockbox Bank or with a new depositary institution
satisfactory to the Administrative Agent, (C) entered into an agreement
covering such new account with such Lockbox Bank or with such new
depositary institution substantially in the form of such Lockbox Account
Agreement or that is satisfactory in all respects to the Administrative
Agent (whereupon, for all purposes of this Agreement and the other Related
Documents, such new account shall become a Lockbox Account, such new
agreement shall become a Lockbox Account Agreement and any new depositary
institution shall become a Lockbox Bank), and (D) taken all such action as
the Administrative Agent shall require to grant and perfect a first
priority Lien in such new Lockbox Account to the Lender under
27
Section 8.01 of this Agreement. Except as permitted by this Section
------------ -------
6.01(a), neither the Borrower nor the Servicer shall open any new Lockbox
-------
or Lockbox Account without the prior written consent of the Administrative
Agent.
(b) Collection Account.
------------------
(i) The Lenders have established and shall maintain the
Collection Account with Bankers Trust Company (the "Depositary"). The
Collection Account shall be registered in the name of the Administrative
Agent and the Administrative Agent shall, subject to the terms of this
Agreement, have exclusive dominion and control thereof and of all monies,
instruments and other property from time to time on deposit therein.
(ii) The Borrower shall instruct each Lockbox Bank to transfer,
and the Borrower hereby grants the Administrative Agent the authority to
instruct each such Lockbox Bank to transfer, on each Business Day in same
day funds, all available funds in each Lockbox Account to the Collection
Account. The Lenders and the Administrative Agent may deposit into the
Collection Account from time to time all monies, instruments and other
property received by any of them as proceeds of the Transferred
Receivables.
(iii) If, for any reason, the Depositary wishes to resign as
depositary of the Collection Account or fails to carry out the instructions
of the Administrative Agent, then the Administrative Agent shall promptly
notify the Lenders. Neither the Lenders nor the Administrative Agent shall
close the Collection Account unless (A) a new deposit account has been
established with the Depositary, (B) the Lenders and the Administrative
Agent have entered into an agreement covering such new account with such
new depositary institution satisfactory in all respects to the
Administrative Agent (whereupon such new account shall become the
Collection Account for all purposes of this Agreement and the other Related
Documents), and (C) the Lenders and the Administrative Agent have taken all
such action as the Administrative Agent shall require to grant and perfect
a first priority Lien in such new Collection Account to the Administrative
Agent on behalf of the Lenders.
(c) Borrower Account.
----------------
(i) The Borrower has established the Borrower Account and
agrees that the Administrative Agent shall have exclusive dominion and
control of such Borrower Account and all monies, instruments and other
property from time to time on deposit therein.
(ii) The Administrative Agent hereby agrees that until such time
as it instructs the Borrower Account Bank otherwise, the Borrower shall
have the right to give instruction for the withdrawal, transfer or payment
of funds on deposit in the Borrower Account. The Administrative Agent
further agrees that it shall not instruct the Borrower Account Bank to no
longer accept instructions from the Borrower unless an Incipient
Termination Event or a Termination Event shall have occurred and be
continuing.
28
ARTICLE VII.
SERVICER PROVISIONS
Section 7.01. Appointment of the Servicer. Each of the Lenders hereby
---------------------------
appoints the Servicer as its agent, and the Borrower hereby acknowledges such
appointment, to service the Transferred Receivables and enforce its rights and
interests in and under each Transferred Receivable and Contract therefor and to
serve in such capacity until the termination of its responsibilities pursuant to
Sections 9.02 or 11.01. In connection therewith, the Servicer hereby accepts
------------- -----
such appointment and agrees to perform the duties and obligations set forth
herein. The Servicer may, with the prior written consent of each Lender and the
Administrative Agent, subcontract with a Sub-Servicer for the collection,
servicing or administration of the Transferred Receivables; provided, that (a)
--------
the Servicer shall remain liable for the performance of the duties and
obligations of such Sub-Servicer pursuant to the terms hereof and (b) any Sub-
Servicing Agreement that may be entered into and any other transactions or
services relating to the Transferred Receivables involving a Sub-Servicer shall
be deemed to be between the Sub-Servicer and the Servicer alone, and the Lenders
and the Administrative Agent shall not be deemed parties thereto and shall have
no obligations, duties or liabilities with respect to the Sub-Servicer.
Section 7.02. Duties and Responsibilities of the Servicer. Subject to
-------------------------------------------
the provisions of this Agreement, the Servicer shall conduct the servicing,
administration and collection of the Transferred Receivables and shall take, or
cause to be taken, all actions that (i) may be necessary or advisable to
service, administer and collect each Transferred Receivable from time to time,
(ii) the Servicer would take if the Transferred Receivables were owned by the
Servicer, and (iii) are consistent with industry practice for the servicing of
such Transferred Receivables.
Section 7.03. Collections on Receivables.
--------------------------
(a) In the event that the Servicer is unable to determine the specific
Transferred Receivables on which Collections have been received from the Obligor
thereunder, the parties agree for purposes of this Agreement only that such
Collections shall be deemed to have been received on such Receivables in the
order in which they were originated with respect to such Obligor. In the event
that the Servicer is unable to determine the specific Transferred Receivables on
which discounts, offsets or other non-cash reductions have been granted or made
with respect to the Obligor thereunder, the parties agree for purposes of this
Agreement only that such reductions shall be deemed to have been granted or made
(i) prior to a Termination Event, on such Receivables as determined by the
Servicer, and (ii) from and after the occurrence of a Termination Event, in the
reverse order in which they were originated with respect to such Obligor.
(b) If the Servicer determines that amounts unrelated to the
Transferred Receivables (the "Unrelated Amounts") have been deposited in the
-----------------
Collection Account, then the Servicer shall provide written evidence thereof to
the Lenders and the Administrative Agent no later than the first Business Day
following the day on which the Servicer had actual knowledge
29
thereof, which evidence shall be provided in writing and shall be otherwise
satisfactory to each such Affected Party. Upon receipt of any such notice, the
Administrative Agent shall, if such amounts have not been applied to the
Borrower Obligations, segregate the Unrelated Amounts and the same shall not be
deemed to constitute Collections on Transferred Receivables.
Section 7.04. Authorization of the Servicer. Each of the Lenders
-----------------------------
hereby authorizes the Servicer, and the Borrower acknowledges such
authorization, to take any and all reasonable steps in its name and on its
behalf necessary or desirable and not inconsistent with the rights of the
Administrative Agent and the Lenders hereunder, in the determination of the
Servicer, to (a) collect all amounts due under any Transferred Receivable,
including endorsing its name on checks and other instruments representing
Collections on such Receivable, and execute and deliver any and all instruments
of satisfaction or cancellation or of partial or full release or discharge and
all other comparable instruments with respect to any such Receivable and (b)
after any Transferred Receivable becomes a Delinquent Receivable or a Defaulted
Receivable and to the extent permitted under and in compliance with applicable
law and regulations, commence proceedings with respect to the enforcement of
payment of any such Receivable and the Contract therefor and adjust, settle or
compromise any payments due thereunder, in each case to the same extent as the
applicable Originator could have done if it had continued to own such
Receivable. Each Originator, the Borrower, the Administrative Agent and each
Lender shall furnish the Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. Notwithstanding anything to the
contrary contained herein, the Lenders and the Administrative Agent shall have
the absolute and unlimited right to direct the Servicer (i) to commence or
settle any legal action to enforce collection of any Transferred Receivable or
(ii) to foreclose upon, repossess or take any other action that the
Administrative Agent deems necessary or advisable with respect thereto. In no
event shall the Servicer be entitled to make any Affected Party a party to any
Litigation without such Affected Party's express prior written consent, or to
make the Borrower a party to any Litigation without the Administrative Agent's
consent.
Section 7.05. Servicing Fees. As compensation for its servicing
--------------
activities and as reimbursement for its reasonable expenses in connection
therewith, the Servicer shall be entitled to receive the Servicing Fees in
accordance with Section 2.07. The Servicer shall be required to pay for all
------------
expenses incurred by it in connection with its activities hereunder (including
any payments to accountants, counsel or any other Person) and shall not be
entitled to any payment therefor other than the Servicing Fees.
Section 7.06. Representations and Warranties of the Servicer. To
----------------------------------------------
induce the Lenders to make Advances from time to time and the Administrative
Agent to take any action required to be performed by it hereunder, the Servicer
makes the following representations and warranties to each Lender and the
Administrative Agent on the Effective Date and each Advance Date, which shall
survive the execution and delivery of this Agreement:
(a) Corporate Existence; Compliance with Law. The Servicer (i) is a
----------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; (ii) is duly qualified to conduct business
and is in good standing in each other jurisdiction where its ownership or lease
of property or the conduct of its business
30
requires such qualification; (iii) has the requisite corporate power and
authority and the legal right to own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it operates under lease, and to
conduct its business, in each case, as now, heretofore and proposed to be
conducted; (iv) has all licenses, permits, consents or approvals from or by, and
has made all filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (v) is in compliance with its charter and bylaws; and
(vi) subject to specific representations set forth herein regarding ERISA, tax
and other laws, is in compliance with all applicable provisions of law, except
(in the case of each of the foregoing clauses (ii) through (vi)) where the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(b) Corporate Power, Authorization, Enforceable Obligations. The
-------------------------------------------------------
execution, delivery and performance by the Servicer of this Agreement and the
other Related Documents to which it is a party and, solely with respect to
clause (vii) below, the exercise by each of the Borrower, the Lenders or the
Administrative Agent of any of its rights and remedies under any Related
Document to which it is a party (i) are within the Servicer's corporate power;
(ii) have been duly authorized by all necessary or proper corporate and
shareholder action; (iii) do not contravene any provision of the Servicer's
charter or bylaws; (iv) do not violate any law or regulation, or any order or
decree of any court or Governmental Authority; (v) do not conflict with or
result in the breach or termination of, constitute a default under or accelerate
or permit the acceleration of any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which the
Servicer is a party or by which the Servicer or any of the property of the
Servicer is bound; (vi) do not result in the creation or imposition of any
Adverse Claim upon any of the property of the Servicer; and (vii) do not require
the consent or approval of any Governmental Authority or any other Person,
except those which have been duly obtained, made or complied with prior to the
Closing Date as provided in Section 3.01(b). On or prior to the Effective Date,
---------------
each of the Related Documents to which the Servicer is a party shall have been
duly executed and delivered by the Servicer and each such Related Document shall
then constitute a legal, valid and binding obligation of the Servicer
enforceable against it in accordance with its terms.
(c) No Litigation. Other than the Imperial Bankruptcy Proceeding, no
-------------
Litigation is now pending or, to the knowledge of the Servicer, threatened
against the Servicer that (i) challenges the Servicer's right or power to enter
into or perform any of its obligations under the Related Documents to which it
is a party, or the validity or enforceability of any Related Document or any
action taken thereunder, (ii) seeks to prevent the transfer, sale, pledge or
contribution of any Receivable or the consummation of any of the transactions
contemplated under this Agreement or the other Related Documents, or (iii)
except as set forth on Schedule 7.06(c), has a reasonable risk of being
----------------
determined adversely to the Servicer and that, if so determined, could have a
Material Adverse Effect.
(d) Solvency. Both before and after giving effect to (i) the
--------
transactions contemplated by this Agreement and the other Related Documents and
(ii) the payment and accrual of all transaction costs in connection with the
foregoing, the Servicer is and will be Solvent.
31
(e) Taxes. All tax returns, reports and statements, including
-----
information returns, required by any Governmental Authority to be filed by the
Servicer and each of its Affiliates included in the Parent Group have been filed
with the appropriate Governmental Authority and all charges have been paid prior
to the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof (or any such fine, penalty, interest, late charge
or loss has been paid), excluding charges or other amounts being contested in
accordance with Section 5.01(e) or other amounts not paid by any member of the
---------------
Parent Group other than the Servicer the nonpayment of which would not have a
Material Adverse Effect. Proper and accurate amounts have been withheld by the
Servicer or such Affiliate from its respective employees for all periods in full
and complete compliance with all applicable federal, state, local and foreign
laws and such withholdings have been timely paid to the respective Governmental
Authorities. Schedule 7.06(e) sets forth as of the Closing Date (i) those
----------------
taxable years for which the Servicer's or such Affiliates' tax returns are
currently being audited by the IRS or any other applicable Governmental
Authority and (ii) any assessments or threatened assessments in connection with
any such audit or otherwise currently outstanding. Except as described on
Schedule 7.06(e), neither the Servicer nor any such Affiliate has executed or
----------------
filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for assessment
or collection of any charges. The Servicer is not liable for any charges: (A)
under any agreement (including any tax sharing agreements) or (B) to the best of
the Servicer's knowledge, as a transferee. As of the Closing Date, neither the
Servicer nor any of its Affiliates included in the Parent Group has agreed or
been requested to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, that would have a Material Adverse
Effect.
(f) Full Disclosure. To the extent prepared by or based upon
---------------
information provided by the Servicer, all information contained in this
Agreement, any Borrowing Base Certificate or any of the other Related Documents,
or any written statement furnished to any Lender or the Administrative Agent
pursuant to the terms of this Agreement or any of the other Related Documents is
true and accurate in every material respect, and none of this Agreement, any
Borrowing Base Certificate or any of the other Related Documents, or any written
statement furnished to any Lender or the Administrative Agent pursuant to the
terms of this Agreement or any of the other Related Documents is misleading as a
result of the failure to include therein a material fact (it being understood
that the foregoing shall not apply to projections of (i) future financial
information or (ii) information related to Receivables which information shall
be based upon the Parent's reasonable good faith estimates).
(g) ERISA. The Servicer is in compliance with ERISA and has not
-----
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC under
ERISA except with respect to instances of the foregoing that would not be
reasonably expected to have a Material Adverse Effect.
(h) Brokers. No broker or finder acting on behalf of the Servicer was
-------
employed or utilized in connection with this Agreement or the other Related
Documents or the transactions contemplated hereby or thereby and the Servicer
has no obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
32
(i) Margin Regulations. The Servicer is not engaged in the business
------------------
of extending credit for the purpose of "purchasing" or "carrying" any "margin
security," as such terms are defined in Regulation U of the Federal Reserve
Board as now and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). The Servicer owns no Margin Stock, and
no portion of the proceeds of the Advances made hereunder will be used, directly
or indirectly, for the purpose of purchasing or carrying any Margin Stock, for
the purpose of reducing or retiring any Debt that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that might cause any
portion of such proceeds to be considered a "purpose credit" within the meaning
of Regulations T, U or X of the Federal Reserve Board. The Servicer will not
take or permit to be taken any action that might cause any Related Document to
violate any regulation of the Federal Reserve Board.
(j) Government Regulation. The Servicer is not an "investment
---------------------
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act.
(k) Deposit and Disbursement Accounts. Schedule 4.01(q) lists all
--------------------------------- ----------------
banks and other financial institutions at which the Servicer maintains deposit
or other bank accounts as of the Closing Date, including any Lockbox Accounts,
and such schedule correctly identifies the name, address and telephone number of
each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.
(l) No Material Adverse Effect. The Servicer has no actual knowledge
--------------------------
of any fact (including any defaults by the Obligor thereunder on any other
Receivable) that would cause it or should have caused it to expect that any
payments on any Transferred Receivable designated as an Eligible Receivable in
any Borrowing Base Certificate will not be paid in full when due or that has
caused it to expect any material adverse effect on any such Transferred
Receivable.
(m) Representations and Warranties in Other Related Documents. Each
---------------------------------------------------------
of the representations and warranties of the Servicer contained in the Related
Documents (other than this Agreement) is true and correct in all respects and
the Servicer hereby makes each such representation and warranty to, and for the
benefit of, the Lenders and the Administrative Agent as if the same were set
forth in full herein.
Section 7.07. Covenants of the Servicer. The Servicer covenants and
-------------------------
agrees that from and after the Effective Date and until the Termination Date:
(a) Compliance with Agreements and Applicable Laws. The Servicer
----------------------------------------------
shall perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
applicable to it and the Transferred Receivables, including those relating to
truth in lending, retail installment sales, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices, privacy,
licensing, taxation, ERISA and labor matters and environmental laws and
environmental permits.
(b) Maintenance of Existence and Conduct of Business. The Servicer
------------------------------------------------
shall: (i) do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and its rights and franchises;
(ii) continue to conduct its business
33
substantially as now conducted or as otherwise permitted hereunder and in
accordance with the terms of its certificate of incorporation and bylaws, (iii)
at all times maintain, preserve and protect all of its assets and properties
used or useful in the conduct of its business, including all licenses, permits,
charters and registrations, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; and (iv) transact business only in such corporate and trade
names as are set forth in Schedule 7.07(b).
----------------
(c) Deposit of Collections. The Servicer shall deposit or cause to be
----------------------
deposited promptly into a Lockbox Account, and in any event no later than the
first Business Day after receipt thereof, all Collections it may receive with
respect to any Transferred Receivable.
(d) ERISA. The Servicer shall give the Administrative Agent prompt
-----
written notice of any event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA.
(e) Compliance with Credit and Collection Policies. The Servicer
----------------------------------------------
shall comply in all respects with the Credit and Collection Policies with
respect to each Transferred Receivable and the Contract therefor. The Servicer
shall not amend, waive or modify any term or provision of the Credit and
Collection Policies.
(f) Ownership of Transferred Receivables. The Servicer shall identify
------------------------------------
the Transferred Receivables clearly and unambiguously in its Servicing Records
to reflect that a Lien on such Transferred Receivables has been granted to the
Administrative Agent for the benefit of the Lenders.
Section 7.08. Reporting Requirements of the Servicer. The Servicer
--------------------------------------
hereby agrees that, from and after the Effective Date and until the Termination
Date, it shall deliver or cause to be delivered to the Lenders and the
Administrative Agent the financial statements, notices, and other information at
the times, to the Persons and in the manner set forth in Section 5.02 and Annex
------------ -----
5.02(a). The proviso in the definition of Settlement Period shall not affect
-------
the timing of any delivery of any such information set forth in Section 5.02 or
------------
Annex 5.02(a) or the time period covered by any such information.
------------
ARTICLE VIII.
GRANT OF SECURITY INTERESTS
Section 8.01. Borrower's Grant of Security Interest. To secure the
-------------------------------------
prompt and complete payment, performance and observance of all Borrower
Obligations, and to induce the Administrative Agent and the Lenders to enter
into this Agreement and perform the obligations required to be performed by them
hereunder in accordance with the terms and conditions thereof, the Borrower
hereby grants, assigns, conveys, pledges, hypothecates and transfers to the
Administrative Agent, for the benefit of itself and the Lenders a Lien upon and
security interest in all of its right, title and interest in, to and under, but
none of its obligations arising from, the
34
following property, whether now owned by or owing to, or hereafter acquired by
or arising in favor of, the Borrower (including under any trade names, styles or
derivations of the Borrower), and regardless of where located (all of which
being hereinafter collectively referred to as the "Borrower Collateral"):
-------------------
(a) all Receivables;
(b) the Sale Agreement, all Lockbox Account Agreements and all other
Related Documents now or hereafter in effect relating to the purchase, servicing
or processing of Receivables (collectively, the "Borrower Assigned Agreements"),
----------------------------
including (i) all rights of the Borrower to receive moneys due and to become due
thereunder or pursuant thereto, (ii) all rights of the Borrower to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect thereto,
(iii) all claims of the Borrower for damages or breach with respect thereto or
for default thereunder and (iv) the right of the Borrower to amend, waive or
terminate the same and to perform and to compel performance and otherwise
exercise all remedies thereunder;
(c) all of the following (collectively, the "Borrower Account
----------------
Collateral"):
----------
(i) the Lockbox Accounts, the Lockboxes, and all funds on
deposit therein and all certificates and instruments, if any, from time to
time representing or evidencing the Lockbox Accounts, the Lockboxes or such
funds,
(ii) the Collection Account and all funds on deposit therein and
all certificates and instruments, if any, from time to time representing or
evidencing the Collection Account or such funds,
(iii) all notes, certificates of deposit and other instruments
from time to time delivered to or otherwise possessed by any Lender or any
assignee or agent on behalf of any Lender in substitution for or in
addition to any of the then existing Borrower Account Collateral, and
(iv) all interest, dividends, cash, instruments, investment
property and other property from time to time received, receivable or
otherwise distributed with respect to or in exchange for any and all of the
then existing Borrower Account Collateral;
(d) all other property that may from time to time hereafter be granted
and pledged by the Borrower or by any Person on its behalf under this Agreement,
including any deposit with any Lender or the Administrative Agent of additional
funds by the Borrower; and
(e) to the extent not otherwise included, all proceeds and products of
the foregoing and all accessions to, substitutions and replacements for, and
profits of, each of the foregoing Borrower Collateral (including proceeds that
constitute property of the types described in Sections 8.01(a) through (d)).
---------------- ---
Section 8.02. Borrower's Certification. The Borrower hereby certifies
------------------------
that (a) the benefits of the representations, warranties and covenants of each
Originator made to the
35
Borrower under the Sale Agreement have been assigned by the Borrower to the
Administrative Agent for the benefit of the Lenders hereunder; (b) the rights of
the Borrower to require payment of a Rejected Amount from an Originator under
the Sale Agreement may be enforced by the Lenders and the Administrative Agent;
and (c) the Sale Agreement provides that the representations, warranties and
covenants described in Sections 4.01, 4.02 and 4.03 thereof, the indemnification
------------- ---- ----
and payment provisions of Article V thereof and the provisions of Sections
---------
4.03(j), 8.03 and 8.14 thereof shall survive the sale of the Transferred
------- ---- ----
Receivables (and undivided percentage ownership interests therein) and the
termination of the Sale Agreement and this Agreement.
Section 8.03. Delivery of Collateral. All certificates or instruments
----------------------
representing or evidencing the Borrower Collateral shall be delivered to and
held by or on behalf of the Administrative Agent and shall be in suitable form
for transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Administrative Agent. The Administrative Agent shall have the right (a) at any
time to exchange certificates or instruments representing or evidencing Borrower
Collateral for certificates or instruments of smaller or larger denominations
and (b) at any time in its discretion following the occurrence and during the
continuation of a Termination Event and without notice to the Borrower, to
transfer to or to register in the name of the Administrative Agent or its
nominee any or all of the Borrower Collateral.
Section 8.04. Borrower Remains Liable. It is expressly agreed by the
-----------------------
Borrower that, anything herein to the contrary notwithstanding, the Borrower
shall remain liable under any and all of the Transferred Receivables, the
Contracts therefor, the Borrower Assigned Agreements and any other agreements
constituting the Borrower Collateral to which it is a party to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder. The Lenders and the Administrative Agent shall not have any
obligation or liability under any such Receivables, Contracts or agreements by
reason of or arising out of this Agreement or the granting herein or therein of
a Lien thereon or the receipt by the Administrative Agent or the Lenders of any
payment relating thereto pursuant hereto or thereto. The exercise by any Lender
or the Administrative Agent of any of its respective rights under this Agreement
shall not release any Originator, the Borrower or the Servicer from any of their
respective duties or obligations under any such Receivables, Contracts or
agreements. None of the Lenders or the Administrative Agent shall be required or
obligated in any manner to perform or fulfill any of the obligations of any
Originator, the Borrower or the Servicer under or pursuant to any such
Receivable, Contract or agreement, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any such Receivable, Contract
or agreement, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts that may have been
assigned to it or to which it may be entitled at any time or times.
Section 8.05. Covenants of the Borrower and the Servicer Regarding the
--------------------------------------------------------
Borrower Collateral.
-------------------
(a) Offices and Records. The Borrower shall maintain its principal
-------------------
place of business and chief executive office and the office at which it stores
its Records at the respective
36
locations specified in Schedule 4.01(b) or, upon 30 days' prior written notice
----------------
to the Administrative Agent, at such other location in a jurisdiction where all
action requested by the Administrative Agent pursuant to Section 14.14 shall
-------------
have been taken with respect to the Borrower Collateral. Each of the Borrower
and the Servicer shall, at its own cost and expense, maintain adequate and
complete records of the Transferred Receivables and the Borrower Collateral,
including records of any and all payments received, credits granted and
merchandise returned with respect thereto and all other dealings therewith. Each
of the Borrower and the Servicer shall, by no later than the Effective Date,
▇▇▇▇ conspicuously with a legend, in form and substance satisfactory to the
Administrative Agent, its books and records (including computer records) and
credit files pertaining to the Borrower Collateral, and its file cabinets or
other storage facilities where it maintains information pertaining thereto, to
evidence this Agreement and the assignment and Liens granted pursuant to this
Article VIII. Upon the occurrence and during the continuance of a Termination
------------
Event, the Borrower and the Servicer shall deliver and turn over such books and
records to the Administrative Agent or its representatives at any time on demand
of the Administrative Agent. Prior to the occurrence of a Termination Event and
upon notice from the Administrative Agent, the Borrower and the Servicer shall
permit any representative of the Administrative Agent to inspect such books and
records and shall provide photocopies thereof to the Administrative Agent as
more specifically set forth in Section 8.06(b).
---------------
(b) Access. Each of the Borrower and the Servicer shall, at its own
------
expense, during normal business hours, from time to time upon one Business Day's
prior notice as frequently as the Administrative Agent determines to be
appropriate: (i) provide the Lenders, the Administrative Agent and any of their
respective officers, employees and agents access to its properties (including
properties utilized in connection with the collection, processing or servicing
of the Transferred Receivables), facilities, advisors and employees (in the
presence of an officer if so requested by the Borrower or the Servicer and if
such officer is provided within one day of such request) (including officers)
and to the Borrower Collateral, (ii) permit the Lenders, the Administrative
Agent and any of their respective officers, employees and agents to inspect,
audit and make extracts from its books and records, including all Records, (iii)
permit the Lenders or the Administrative Agent and their respective officers,
employees and agents to inspect, review and evaluate the Transferred Receivables
and the Borrower Collateral and (iv) permit the Lenders or the Administrative
Agent and their respective officers, employees and agents to discuss matters
relating to the Transferred Receivables or its performance under this Agreement
or the other Related Documents or its affairs, finances and accounts with any of
its officers, directors, employees (in the presence of an officer if so
requested by the Borrower or the Servicer and if such officer is provided within
one day of such request), representatives or agents (in each case, with those
persons having knowledge of such matters) and with its independent certified
public accountants (in the presence of an officer if so requested by the
Borrower or the Servicer and if such officer is provided within one day of such
request). If (i) the Administrative Agent in good ▇▇▇▇▇ ▇▇▇▇▇ any Lender's
rights or interests in the Transferred Receivables, the Borrower Assigned
Agreements or any other Borrower Collateral insecure or the Administrative
Agent, in good faith believes that an Incipient Termination Event or a
Termination Event is imminent or (ii) an Incipient Termination Event or a
Termination Event shall have occurred and be continuing then each of the
Borrower and the Servicer shall, at its own expense, provide such access at all
times without prior notice from the Administrative Agent and provide the Lenders
37
or the Administrative Agent with access to its suppliers and customers. Each of
the Borrower and the Servicer shall make available to the Administrative Agent
and its counsel, as quickly as is possible under the circumstances, originals or
copies of all books and records, including Records, that the Administrative
Agent may request. Each of the Borrower and the Servicer shall deliver any
document or instrument necessary for the Administrative Agent, as the
Administrative Agent may from time to time request, to obtain records from any
service bureau or other Person that maintains records for the Borrower or the
Servicer, and shall maintain duplicate records or supporting documentation on
media, including computer tapes and discs owned by the Borrower or the Servicer.
(c) Communication with Accountants. Each of the Borrower and the
------------------------------
Servicer authorizes the Lenders and the Administrative Agent to communicate
directly with its independent certified public accountants (in the presence of
an officer if so requested by the Borrower or the Servicer and if such officer
is provided within one day of such request) and authorizes and shall instruct
those accountants and advisors to disclose and make available to the Lenders and
the Administrative Agent any and all financial statements and other supporting
financial documents, schedules and information relating to the Borrower or the
Servicer (including copies of any issued management letters) with respect to its
business, financial condition and other affairs.
(d) Collection of Transferred Receivables. Except as otherwise
-------------------------------------
provided in this Section 8.06(d), the Servicer shall continue to collect or
---------------
cause to be collected, at its sole cost and expense, all amounts due or to
become due to the Borrower under the Transferred Receivables, the Borrower
Assigned Agreements and any other Borrower Collateral. In connection therewith,
the Borrower and the Servicer shall take such action as it, and from and after
the occurrence and during the continuance of a Termination Event, the
Administrative Agent, may deem necessary or desirable to enforce collection of
the Transferred Receivables, the Borrower Assigned Agreements and the other
Borrower Collateral; provided, that the Administrative Agent may, if a
--------
Termination Event shall have occurred and be continuing without prior notice to
the Borrower or the Servicer, notify any Obligor under any Transferred
Receivable or obligors under the Borrower Assigned Agreements of the assignment
of such Transferred Receivables or Borrower Assigned Agreements, as the case may
be, to the Administrative Agent on behalf of the Lenders hereunder and direct
that payments of all amounts due or to become due to the Borrower thereunder be
made directly to the Administrative Agent or any servicer, collection agent or
lockbox or other account designated by the Administrative Agent and, upon such
notification and at the sole cost and expense of the Borrower, the
Administrative Agent may enforce collection of any such Transferred Receivable
or the Borrower Assigned Agreements and adjust, settle or compromise the amount
or payment thereof. The Administrative Agent shall provide prompt notice to the
Borrower and the Servicer of any such notification of assignment or direction
of payment to the Obligors under any Transferred Receivables.
(e) Performance of Borrower Assigned Agreements. Each of the Borrower
-------------------------------------------
and the Servicer shall (i) perform and observe all the terms and provisions of
the Borrower Assigned Agreements to be performed or observed by it, maintain the
Borrower Assigned Agreements in full force and effect, enforce the Borrower
Assigned Agreements in accordance
38
with their terms and take all action as may from time to time be requested by
the Administrative Agent in order to accomplish the foregoing, and (ii) upon the
request of and as directed by the Administrative Agent, make such demands and
requests to any other party to the Borrower Assigned Agreements as are permitted
to be made by the Borrower or the Servicer thereunder.
(f) License for Use of Software and Other Intellectual Property.
-----------------------------------------------------------
Unless expressly prohibited by the licensor thereof or any provision of
applicable law, if any, each of the Borrower and the Servicer hereby grants to
the Administrative Agent on behalf of the Lenders a limited license to use,
without charge, the Borrower's and the Servicer's computer programs, software,
printouts and other computer materials, technical knowledge or processes, data
bases, materials, trademarks, registered trademarks, trademark applications,
service marks, registered service marks, service ▇▇▇▇ applications, patents,
patent applications, trade names, rights of use of any name, labels, fictitious
names, inventions, designs, trade secrets, goodwill, registrations, copyrights,
copyright applications, permits, licenses, franchises, customer lists, credit
files, correspondence, and advertising materials or any property of a similar
nature, as it pertains to the Borrower Collateral, or any rights to any of the
foregoing, only as reasonably required in connection with the advertising for
sale, and selling any of the Borrower Collateral, or exercising of any other
remedies hereto, and each of the Borrower and the Servicer agrees that its
rights under all licenses and franchise agreements shall inure to the
Administrative Agent's benefit (on behalf of the Lenders) for purposes of the
license granted herein. Except upon the occurrence and continuation of a
Termination Event, the Administrative Agent and the Lenders agree not to use any
such license without giving the Borrower and the Servicer prior written notice.
ARTICLE IX.
TERMINATION EVENTS
Section 9.01. Termination Events. If any of the following events
------------------
(each, a "Termination Event") shall occur (regardless of the reason therefor):
-----------------
(a) the Borrower shall (i) fail to make any payment of any Borrower
Obligation when due and payable and the same shall remain unremedied for one
Business Day or more, or (ii) fail or neglect to perform, keep or observe any
other provision of this Agreement or the other Related Documents (other than any
provision embodied in or covered by any other clause of this Section 9.01) and
------------
the same shall remain unremedied for two (2) Business Days or more after written
notice thereof shall have been given by the Administrative Agent to the
Borrower; or
(b) (i) a default or breach shall occur under any other agreement,
document or instrument to which an Originator, the Borrower or the Parent or any
of its Subsidiaries is a party or by which any such Person or its property is
bound, which agreement, document or instrument relates to or evidences Debt owed
by such Person to General Electric Capital Corporation or any of its Affiliates,
and such default or breach has not been waived; or (ii) a default or breach
shall occur under any other agreement, document or instrument to which an
Originator, the Borrower or the Parent or any of its Subsidiaries is a party or
by which any such Person or its property is bound, and such default or breach
has not been waived and (1) involves a Debt which, except
39
with respect to a Debt of the Borrower, is in an aggregate principal amount in
excess of $1,000,000, (2) permits any holder of such Debt or a trustee or agent
to cause such Debt or a portion thereof which, except with respect to the
Borrower, is in excess of a principal amount of $1,000,000 in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment or (3) causes Debt or a portion thereof which, except with
respect to the Borrower, is in excess of a principal amount of $1,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment; provided, the draw on one or more letters of credit
--------
in an aggregate amount of $2,000,000 by The Bank of New York, as Trustee for the
holders of the Industrial Development Authority of the City of Visalia, Savannah
Foods & Industries, Inc. Project Series 1990 bonds as a result of the failure to
post a letter of credit with a termination date of September, 2002 shall not
constitute a Termination Event by reason of this Section 9.01(b); or
---------------
(c) a case or proceeding shall have been commenced against the
Borrower, the Parent or any of its Subsidiaries, or any Originator seeking a
decree or order in respect of any such Person under the Bankruptcy Code or any
other applicable federal, state or foreign bankruptcy or other similar law, (i)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for any such Person or for any substantial part of such
Person's assets, or (ii) ordering the winding-up or liquidation of the affairs
of any such Person, and such case or proceeding continues for 60 days unless
dismissed, bonded or discharged; provided, however, that such 60-day period
-------- -------
shall be deemed terminated immediately if (x) a decree or order is entered by a
court of competent jurisdiction with respect to a case or proceeding described
in this subsection (c) or (y) any of the events described in Section 9.01(d)
-------------- --- ---------------
shall have occurred; or
(d) the Borrower, the Parent or any of its Subsidiaries, or any
Originator shall (i) file a petition seeking relief under the Bankruptcy Code or
any other applicable federal, state or foreign bankruptcy or other similar law,
(ii) consent or fail to object in a timely and appropriate manner to the
institution of proceedings thereunder or to the filing of any such petition or
to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any such Person or
for any substantial part of such Person's assets, (iii) make an assignment for
the benefit of creditors, or (iv) take any corporate action in furtherance of
any of the foregoing; or
(e) (i) any Originator, the Borrower, the Parent or any of its
Subsidiaries, or the Servicer generally does not pay its debts as such debts
become due or admits in writing its inability to, or is generally unable to, pay
its debts as such debts become due or (ii) the fair market value of the
liabilities of any Originator, the Borrower, the Parent, or any Subsidiary of
the Parent exceeds the fair market value of its assets; or
(f) a final judgment or judgments for the payment of money in excess
of $2,500,000 in the aggregate (net of insurance proceeds) at any time
outstanding shall be rendered against any Originator, the Parent or any
Subsidiary of the Parent and either (i) enforcement proceedings shall have been
commenced upon any such judgment or (ii) the same shall not, within 30 days
after the entry thereof, have been discharged or execution thereof stayed or
40
bonded pending appeal, or shall not have been discharged prior to the expiration
of any such stay; or
(g) a judgment or order for the payment of money shall be rendered
against the Borrower; or
(h) (i) any information contained in any Borrowing Base Certificate is
untrue or incorrect in any material respect, or (ii) any representation or
warranty of any Originator or the Borrower herein or in any other Related
Document or in any written statement, report, financial statement or certificate
(other than a Borrowing Base Certificate) made or delivered by or on behalf of
such Originator or the Borrower to any Affected Party hereto or thereto is
untrue or incorrect in any material respect as of the date when made or deemed
made; or
(i) any Governmental Authority (including the IRS or the PBGC) shall
file notice of a Lien with regard to any assets of any Originator, the Parent or
any of its Subsidiaries and the amount claimed by such Governmental Authority is
in excess of $1,000,000 (other than a Lien (i) limited by its terms to assets
other than Receivables and (ii) not materially adversely affecting the financial
condition of such Originator, the Parent or Subsidiary of the Parent or the
ability of the Imperial Distributing, Inc. to perform as Servicer hereunder); or
(j) any Governmental Authority (including the IRS or the PBGC) shall
file notice of a Lien with regard to any of the assets of the Borrower; or
(k) (1) there shall have occurred any event which in the reasonable
judgment of the Administrative Agent, materially adversely impairs (i) the
ability of any Originator to originate Receivables of a credit quality which are
at least of the credit quality of the Receivables as of the date of the initial
Advance hereunder, (ii) the financial condition or operations of any Originator,
the Borrower or the Parent, or (iii) the collectibility of Receivables, or (2)
the Administrative Agent shall have determined (and so notified the Borrower)
that any event or condition that has had or could reasonably be expected to have
or result in a Material Adverse Effect has occurred; or
(l) (i) a default or breach shall occur under any provision of
Sections 4.04, 5.01 or 8.14 of the Sale Agreement and the same shall remain
------------- ---- ----
unremedied for one Business Day or more after the occurrence thereof, (ii) a
default or breach shall occur under any other provision of the Sale Agreement
and the same shall remain unremedied for two (2) Business Days or more after
written notice thereof shall have been given by the Administrative Agent to the
Borrower or (iii) the Sale Agreement shall for any reason cease to evidence the
transfer to the Borrower of the legal and equitable title to, and ownership of,
the Transferred Receivables; or
(m) except as otherwise expressly provided herein, any Lockbox Account
Agreement or the Sale Agreement shall have been modified, amended or terminated
without the prior written consent of the Lenders and the Administrative Agent;
or
(n) an Event of Servicer Termination shall have occurred; or
41
(o) (i) with respect to the Transferred Receivables, (A) prior to
the making of Advances hereunder, the Borrower shall cease to hold valid and
properly perfected title to and sole record and beneficial ownership in such
Transferred Receivables or (B) after the making of Advances hereunder, the
Administrative Agent (on behalf of the Lenders) shall cease to hold a first
priority, perfected Lien in the related Transferred Receivables or any of the
Borrower Collateral; or
(p) a Change of Control shall occur; or
(q) the Borrower shall amend its Certificate of Formation or limited
liability company agreement without the express prior written consent of the
Lenders and the Administrative Agent; or
(r) the Borrower shall have received an Election Notice pursuant to
Section 2.01(d) of the Sale Agreement; or
---------------
(s) (i) the Default Ratio shall exceed 6.5%; (ii) the Delinquency
Ratio shall exceed 4.5%; (iii) the Dilution Ratio shall exceed 7.0%; (iv) the
Receivables Collection Turnover shall exceed 30 days; or (v) the Borrower's Net
Worth Percentage shall be less than 15%; or
(t) a default or breach of any of the financial covenants of the
Parent and its Subsidiaries set forth in Article VII of the Credit Agreement as
in effect on the Closing Date; such covenants to include: (i) the "Consolidated
Net Worth" covenant contained in Section 7.1(c) of the Credit Agreement, and
(ii) the "Minimum EBITDA" covenant contained in Section 7.1(d) of the Credit
Agreement, each of which is hereby incorporated by reference and all
corresponding defined terms, provided that, no modification to such covenants or
-------- ----
defined terms used in such financial covenants (or any embedded defined term
used or referred to in such definitions) shall be effective to amend such
covenants and defined terms for purposes of this Agreement without the prior
written consent of the Administrative Agent; to the extent such written consent
is not obtained with respect to an amendment, the financial covenants (and any
relevant defined terms) contained in the Credit Agreement without giving effect
to such amendment shall remain in effect for purposes of this Agreement; or
(u) any material provision of any Related Document shall for any
reason cease to be valid, binding and enforceable in accordance with its terms
(or any Originator or the Borrower shall challenge the enforceability of any
Related Document or shall assert in writing, or engage in any action or inaction
based on any such assertion, that any provision of any of the Related Documents
has ceased to be or otherwise is not valid, binding and enforceable in
accordance with its terms);
(v) the incurrence of a liability to the PBGC under ERISA by the
Parent, any Originator or the Servicer (except for premium payments arising in
the ordinary course of business), in excess of $1,000,000;
(w) the condition precedent to the initial Advance set forth in
Section 3.02(a) hereof shall not have been satisfied on or before September 30,
---------------
2001; or
42
(x) the "Consolidated Fixed Charge Coverage Ratio" (as defined in
the Credit Agreement as in effect as of the Closing Date) as of the end of any
fiscal quarter is less than the ratio set forth below opposite such fiscal
quarter:
----------------------------------------------------------------------------------------------------------
Fiscal Quarter Consolidated Fixed Charge Coverage Ratio
----------------------------------------------------------------------------------------------------------
September 30, 2001 0.11 to 1.00
----------------------------------------------------------------------------------------------------------
December 31, 2001 0.02 to 1.00
----------------------------------------------------------------------------------------------------------
March 31, 2002 0.07 to 1.00
----------------------------------------------------------------------------------------------------------
June 30, 2002 0.47 to 1.00
----------------------------------------------------------------------------------------------------------
September 30, 2002 0.80 to 1.00
----------------------------------------------------------------------------------------------------------
Each fiscal quarter thereafter 1.00 to 1.00
----------------------------------------------------------------------------------------------------------
then, and in any such event, the Administrative Agent, may, with the consent of
the Lenders, and shall, at the request of the Lenders, by notice to the
Borrower, declare the Commitment Termination Date to have occurred without
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, that the Commitment Termination Date shall
--------
automatically occur (i) upon the occurrence of any of the Termination Events
described in Sections 9.01(c), (d), (e) or (r) or (ii) three days after the
---------------- --- --- ---
occurrence of the Termination Event described in Section 9.01(a)(i) if the same
------------------
shall not have been remedied by such time, in each case without demand, protest
or any notice of any kind, all of which are hereby expressly waived by the
Borrower.
Section 9.02. Events of Servicer Termination. If any of the following
------------------------------
events (each, an "Event of Servicer Termination") shall occur (regardless of the
-----------------------------
reason therefor):
(a) the Servicer shall (i) fail to make any payment or deposit
hereunder when due and payable, (ii) fail to deliver when due any of the reports
required to be delivered pursuant to Section 5.02 and 7.08 or any other report
------------ ----
related to the Receivables as required by the other Related Documents and the
same shall remain unremedied for two (2) Business Days or more after written
notice thereof shall have been given by the Lenders or the Administrative Agent
to the Servicer or (iii) fail or neglect to perform, keep or observe any other
provision of this Agreement or the other Related Documents (other than any
provision embodied in or covered by any other clause of this Section 9.02) and
------------
the same shall remain unremedied for five (5) Business Days or more after
written notice thereof shall have been given by the Administrative Agent to the
Borrower; or
(b) fail or neglect to perform, keep or observe any provision of
this Agreement or the other Related Documents including, without limitation, the
obligation to make any payment or deposit hereunder or thereunder; or
(c) any representation or warranty of the Servicer herein or in any
other Related Document or in any written statement, report, financial statement
or certificate made or delivered by the Servicer to the Lenders or the
Administrative Agent hereto or thereto is untrue or incorrect in any material
respect as of the date when made or deemed made; or
43
(d) (i) a default or breach shall occur under any other agreement,
document or instrument to which the Servicer is a party or by which the Servicer
or its property is bound, which agreement, document or instrument relates to or
evidences Debt owed by the Servicer to General Electric Capital Corporation or
any of its Affiliates, and such default or breach has not been waived; or (ii) a
default or breach shall occur under any other agreement, document or instrument
to which the Servicer is a party or by which any such Person or its property is
bound, and such default or breach has not been waived and (1) involves a Debt
which is in an aggregate principal amount in excess of $1,000,000, (2) permits
any holder of such Debt or a trustee or agent to cause such Debt or a portion
thereof which is in excess of a principal amount of $1,000,000 in the aggregate
to become due prior to its stated maturity or prior to its regularly scheduled
dates of payment or (3) causes Debt or a portion thereof which is in excess of a
principal amount of $1,000,000 in the aggregate to become due prior to its
stated maturity or prior to its regularly scheduled dates of payment; or
(e) a case or proceeding shall have been commenced against the
Servicer or any Affiliate which acts as a Sub-Servicer seeking a decree or order
in respect of any such Person (i) under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for any such Person or for any substantial part of such
Person's assets, or (iii) ordering the winding-up or liquidation of the affairs
of any such Person , and such case or proceeding continues for 60 days unless
dismissed, bonded or discharged; provided, however, that such 60-day period
-------- -------
shall be deemed terminated immediately of (x) a decree or order is entered by a
court of competent jurisdiction with respect to a case or proceeding described
in this subsection (e), or (y) any of the events described in Section 9.02(f)
-------------- ---------------
shall have occurred; or
(f) the Servicer or any Affiliate which acts as a Sub-Servicer shall
(i) file a petition seeking relief under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii)
consent or fail to object in a timely and appropriate manner to the institution
of proceedings thereunder or to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any such Person or
for any substantial part of such Person's assets, (iii) make an assignment for
the benefit of creditors, or (iv) take any corporate action in furtherance of
any of the foregoing; or
(g) (i) the Servicer or any Affiliate which acts as a Sub-Servicer
generally does not pay its debts as such debts become due or admits in writing
its inability to, or is generally unable to, pay its debts as such debts become
due or (ii) the fair market value of the Servicer's liabilities exceeds the fair
market value of its assets; or
(h) a final judgment or judgments for the payment of money in excess
of $2,500,000 in the aggregate (net of insurance proceeds) at any time
outstanding shall be rendered against the Servicer or any other Subsidiary of
the Parent which acts as a Sub-Servicer and either (i) enforcement proceedings
shall have been commenced upon any such judgment or (ii) the same shall not,
within 30 days after the entry thereof, have been discharged or execution
thereof
44
stayed or bonded pending appeal, or shall not have been discharged prior to the
expiration of any such stay; or
(i) (i) any information contained in any Borrowing Base Certificate
is untrue or incorrect in any material respect or (ii) any representation or
warranty of the Servicer herein or in any other Related Document or in any
written statement, report, financial statement or certificate (other than a
Borrowing Base Certificate) made or delivered by the Servicer to any Affected
Party hereto or thereto is untrue or incorrect in any material respect as of the
date when made or deemed made and such representation and warranty, if relating
to any Transferred Receivable, has not been cured by the repurchase of any such
Transferred Receivable pursuant to Section 4.04 of the Sale and Contribution
Agreement; or
(j) the Administrative Agent shall have determined that any event or
condition that materially adversely affects the ability of the Servicer to
collect the Transferred Receivables or to otherwise perform hereunder has
occurred; or
(k) a Termination Event shall have occurred or this Agreement shall
have been terminated; or
(l) a deterioration has taken place in the quality of servicing of
Transferred Receivables or other Receivables serviced by the Servicer that the
Administrative Agent, in its sole discretion, determines to be material, and
such material deterioration has not been eliminated within 30 days after written
notice thereof shall have been given by the Administrative Agent to the
Servicer; or
(m) the Servicer shall assign or purport to assign any of its
obligations hereunder without the prior written consent of the Administrative
Agent; or
(n) a Change of Control shall occur with respect to the Servicer;
then, and in any such event, the Administrative Agent may, with the consent of
the Lenders, and shall, at the request of the Lenders, by delivery of a Servicer
Termination Notice to the Borrower and the Servicer, terminate the servicing
responsibilities of the Servicer hereunder, without demand, protest or further
notice of any kind, all of which are hereby waived by the Servicer. Upon the
delivery of any such notice, all authority and power of the Servicer under this
Agreement and the Sale Agreement shall pass to and be vested in the Successor
Servicer acting pursuant to Section 11.02; provided, that notwithstanding
------------- --------
anything to the contrary herein, the Servicer agrees to continue to follow the
procedures set forth in Section 7.02 with respect to Collections on the
------------
Transferred Receivables until a Successor Servicer has assumed the
responsibilities and obligations of the Servicer in accordance with Section
-------
11.02.
-----
ARTICLE X.
REMEDIES
Section 10.01. Actions Upon Termination Event. If any Termination
------------------------------
Event shall have occurred and be continuing and the Administrative Agent shall
have declared the
45
Commitment Termination Date to have occurred or the Commitment Termination Date
shall be deemed to have occurred pursuant to Section 9.01, then the
------------
Administrative Agent may exercise in respect of the Borrower Collateral, in
addition to any and all other rights and remedies granted to it hereunder, under
any other Related Document or under any other instrument or agreement securing,
evidencing or relating to the Borrower Obligations or otherwise available to it,
all of the rights and remedies of a secured party upon default under the UCC
(such rights and remedies to be cumulative and nonexclusive), and, in addition,
may take the following actions:
(a) The Administrative Agent may, without notice to the Borrower
except as required by law and at any time or from time to time, charge, offset
or otherwise apply amounts payable to the Borrower from the Collection Account
or any Lockbox Account against all or any part of the Borrower Obligations.
(b) The Administrative Agent may, without notice except as specified
below, solicit and accept bids for and sell the Borrower Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or any of the Lenders', or Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. The Administrative Agent
shall have the right to conduct such sales on the Borrower's premises or
elsewhere and shall have the right to use any of the Borrower's premises without
charge for such sales at such time or times as the Administrative Agent deems
necessary or advisable. The Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten Business Days' notice to the Borrower of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Administrative Agent
shall not be obligated to make any sale of Borrower Collateral regardless of
notice of sale having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed for such sale, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Every such sale shall operate to
divest all right, title, interest, claim and demand whatsoever of the Borrower
in and to the Borrower Collateral so sold, and shall be a perpetual bar, both at
law and in equity, against each Originator, the Borrower, any Person claiming
the Borrower Collateral sold through any Originator or the Borrower, and their
respective successors or assigns. The Administrative Agent shall deposit the net
proceeds of any such sale in the Collection Account and such proceeds shall be
applied against all or any part of the Borrower Obligations.
(c) Upon the completion of any sale under Section 10.01(b), the
----------------
Borrower or the Servicer shall deliver or cause to be delivered to the purchaser
or purchasers at such sale on the date thereof, or within a reasonable time
thereafter if it shall be impracticable to make immediate delivery, all of the
Borrower Collateral sold on such date, but in any event full title and right of
possession to such property shall vest in such purchaser or purchasers upon the
completion of such sale. Nevertheless, if so requested by the Administrative
Agent or by any such purchaser, the Borrower shall confirm any such sale or
transfer by executing and delivering to such purchaser all proper instruments of
conveyance and transfer and releases as may be designated in any such request.
46
(d) At any sale under Section 10.01(b), any Lender or the
----------------
Administrative Agent may bid for and purchase the property offered for sale and,
upon compliance with the terms of sale, may hold, retain and dispose of such
property without further accountability therefor.
(e) The Administrative Agent may exercise, at the sole cost and
expense of the Borrower, any and all rights and remedies of the Borrower under
or in connection with the Borrower Assigned Agreements or the other Borrower
Collateral, including any and all rights of the Borrower to demand or otherwise
require payment of any amount under, or performance of any provisions of, the
Borrower Assigned Agreements.
Section 10.02. Exercise of Remedies. No failure or delay on the part
--------------------
of the Administrative Agent in exercising any right, power or privilege under
this Agreement and no course of dealing between any Originator, the Borrower or
the Servicer, on the one hand, and the Administrative Agent, on the other hand,
shall operate as a waiver of such right, power or privilege, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. The rights and remedies under
this Agreement are cumulative, may be exercised singly or concurrently, and are
not exclusive of any rights or remedies that the Administrative Agent would
otherwise have at law or in equity. No notice to or demand on any party hereto
shall entitle such party to any other or further notice or demand in similar or
other circumstances, or constitute a waiver of the right of the party providing
such notice or making such demand to any other or further action in any
circumstances without notice or demand.
Section 10.03. Power of Attorney. On the Closing Date, each of the
-----------------
Borrower and the Servicer shall execute and deliver a power of attorney
substantially in the form attached hereto as Exhibit 10.03 (each, a "Power of
------------- --------
Attorney"). The power of attorney granted pursuant to each Power of Attorney is
--------
a power coupled with an interest and shall be irrevocable until all of the
Borrower Obligations are indefeasibly paid or otherwise satisfied in full. The
powers conferred on the Administrative Agent under each Power of Attorney are
solely to protect the Lender's Liens upon and interests in the Borrower
Collateral and shall not impose any duty upon the Administrative Agent to
exercise any such powers. The Administrative Agent shall not be accountable for
any amount other than amounts that it actually receives as a result of the
exercise of such powers and none of the Administrative Agent's officers,
directors, employees, agents or representatives shall be responsible to the
Borrower or the Servicer for any act or failure to act, except to the extent of
damages attributable to their own gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
Section 10.04. Continuing Security Interest. This Agreement shall
----------------------------
create a continuing Lien in the Borrower Collateral until the Termination Date.
ARTICLE XI.
SUCCESSOR SERVICER PROVISIONS
47
Section 11.01. Servicer Not to Resign. The Servicer shall not resign
----------------------
from the obligations and duties hereby imposed on it except upon a determination
that (a) the performance of its duties hereunder has become impermissible under
applicable law or regulation and (b) there is no reasonable action that the
Servicer could take to make the performance of its duties hereunder become
permissible under applicable law. Any such determination shall (i) with respect
to clause (a) above, be evide nced by an opinion of counsel to such effect and
----------
(ii) with respect to clause (b) above, be evidenced by an Officer's Certificate
----------
to such effect, in each case delivered to the Lender and the Administrative
Agent. No such resignation shall become effective until a Successor Servicer
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 11.02.
-------------
Section 11.02. Appointment of the Successor Servicer. In connection
-------------------------------------
with the termination of the Servicer's responsibilities or the resignation by
the Servicer under this Agreement pursuant to Sections 9.02 or 11.01, the
------------- -----
Administrative Agent shall (a) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations as Servicer (but not in any
other capacity, including specifically not the obligations of the Servicer set
forth in Section 12.02) under this Agreement (and except that the Administrative
-------------
Agent makes no representations and warranties pursuant to Section 4.02) and (b)
-------------
may at any time appoint a successor servicer to the Servicer that shall be
acceptable to the Administrative Agent and shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer under
this Agreement (the Administrative Agent, in such capacity, or such successor
servicer being referred to as the "Successor Servicer"); provided, that the
------------------ --------
Successor Servicer shall have no responsibility for any actions of the Servicer
prior to the date of its appointment or assumption of duties as Successor
Servicer. In selecting a Successor Servicer, the Administrative Agent may obtain
bids from any potential Successor Servicer and may agree to any bid it deems
appropriate. The Successor Servicer shall accept its appointment by executing,
acknowledging and delivering to the Administrative Agent an instrument in form
and substance acceptable to the Administrative Agent.
Section 11.03. Duties of the Servicer. The Servicer covenants and
----------------------
agrees that, following the appointment of, or assumption of duties by, a
Successor Servicer:
(a) The Servicer shall terminate its activities as Servicer
hereunder in a manner that facilitates the transfer of servicing duties to the
Successor Servicer and is otherwise acceptable to each Lender and the
Administrative Agent and, without limiting the generality of the foregoing,
shall timely deliver (i) any funds to the Administrative Agent that were
required to be remitted to the Administrative Agent for deposit in the
Collection Account and (ii) all Servicing Records and other information with
respect to the Transferred Receivables to the Successor Servicer at a place
selected by the Successor Servicer. The Servicer shall account for all funds and
shall execute and deliver such instruments and do such other things as may be
required to vest and confirm in the Successor Servicer all rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer.
(b) The Servicer shall terminate each existing Sub-Servicing
Agreement and the Successor Servicer shall not be deemed to have assumed any of
the Servicer's interests therein or to have replaced the Servicer as a party
thereto.
48
Section 11.04. Effect of Termination or Resignation. Any termination
------------------------------------
of or resignation by the Servicer hereunder shall not affect any claims that the
Borrower, the Lenders, or the Administrative Agent may have against the Servicer
for events or actions taken or not taken by the Servicer arising prior to any
such termination or resignation.
ARTICLE XII.
INDEMNIFICATION
Section 12.01. Indemnities by the Borrower.
---------------------------
(a) Without limiting any other rights that the Lenders or the
Administrative Agent or any of their respective officers, directors, employees,
attorneys, agents or representatives (each, an "Indemnified Person") may have
------------------
hereunder or under applicable law, the Borrower hereby agrees to indemnify and
hold harmless each Indemnified Person from and against any and all Indemnified
Amounts that may be claimed or asserted against or incurred by any such
Indemnified Person in connection with or arising out of the transactions
contemplated under this Agreement or under any other Related Document or any
actions or failures to act in connection therewith, including any and all
reasonable legal costs and reasonable expenses arising out of or incurred in
connection with disputes between or among any parties to any of the Related
Documents; provided, that the Borrower shall not be liable for any
--------
indemnification to an Indemnified Person to the extent that any such Indemnified
Amount results from (i) such Indemnified Person's gross negligence or willful
misconduct, in each case as finally determined by a court of competent
jurisdiction or (ii) such Indemnified Persons' breach of any provision of this
Agreement or any other Related Document applicable to it, as finally determined
by a court of competent jurisdiction. Without limiting the generality of the
foregoing, the Borrower shall pay on demand to each Indemnified Person any and
all Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made or deemed
made by the Borrower (or any of its officers) under or in connection with
this Agreement or any other Related Document or on any other information
delivered by the Borrower pursuant hereto or thereto that shall have been
incorrect in any material respect when made or deemed made or delivered;
(ii) the failure by the Borrower to comply with any term,
provision or covenant contained in this Agreement, any other Related
Document or any agreement executed in connection herewith or therewith, any
applicable law, rule or regulation with respect to any Transferred
Receivable or the Contract therefor, or the nonconformity of any
Transferred Receivable or the Contract therefor with any such applicable
law, rule or regulation; or
(iii) (1) the failure to vest and maintain vested in the
Borrower or the Lender valid and properly perfected title to and sole
record and beneficial ownership of the Receivables that constitute
Transferred Receivables, together with all Collections in respect thereof,
free and clear of any Adverse Claim and (2) the failure to maintain or
49
transfer to the Administrative Agent, for the benefit of itself and the
Lenders a first, priority, perfected Lien in the Borrower Collateral;
(iv) any dispute, claim, offset or defense of any Obligor
(other than its discharge in bankruptcy) to the payment of any Transferred
Receivable (including a defense based on such Receivable or the Contract
therefor not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or services giving rise to such
Receivable or the furnishing of or failure to furnish such merchandise or
services or relating to collection activities with respect to such
Receivable (if such collection activities were performed by any of its
Affiliates acting as Servicer), except to the extent that such dispute,
claim, offset or defense results from any action or inaction on the part of
any Indemnified Person;
(v) any products liability claim or other claim arising out of
or in connection with merchandise, insurance or services that is the
subject of any Contract with respect to any Transferred Receivable;
(vi) the commingling of Collections with respect to Transferred
Receivables by the Borrower at any time with its other funds or the funds
of any other Person;
(vii) any failure by the Borrower to cause the filing of, or any
delay in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or any other
applicable laws with respect to any Transferred Receivable hereunder,
whether at the time of the Borrower's purchase of such Receivable or any
Advance made hereunder or at any subsequent time; or
(viii) any failure of a Lockbox Bank to comply with the terms of
the applicable Lockbox Account Agreement.
(b) Any Indemnified Amounts subject to the indemnification provisions
of this Section 12.01 not paid in accordance with Article VI shall be paid by
------------- ----------
the Borrower to the Indemnified Person entitled thereto within five Business
Days following demand therefor.
Section 12.02. Indemnities by the Servicer.
---------------------------
(a) Without limiting any other rights that an Indemnified Person may
have hereunder or under applicable law, the Servicer hereby agrees to indemnify
and hold harmless each Indemnified Person from and against any and all
Indemnified Amounts that may be claimed or asserted against or incurred by any
such Indemnified Person in connection with or arising out of any breach by the
Servicer of its obligations hereunder or under any other Related Document;
provided, that the Servicer shall not be liable for any indemnification to an
--------
Indemnified Person to the extent that any such Indemnified Amount (x) results
from (i) such Indemnified Person's gross negligence or willful misconduct, in
each case as finally determined by a court of competent jurisdiction or (ii)
such Indemnified Person's breach of any provision of this Agreement or any other
Related Document applicable to it, as finally determined by a court of
50
competent or (y) constitutes recourse for uncollectible or uncollected
Transferred Receivables as a result of the insolvency, bankruptcy or lack of
creditworthiness of any Obligor. Without limiting the generality of the
foregoing, the Servicer shall pay on demand to each Indemnified Person any and
all Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made or deemed
made by the Servicer (or any of its officers) under or in connection with
this Agreement or any other Related Document or on any other information
delivered by the Servicer pursuant hereto or thereto that shall have been
incorrect in any material respect when made or deemed made or delivered;
(ii) the failure by the Servicer to comply with any term,
provision or covenant contained in this Agreement, any other Related
Document or any agreement executed in connection herewith or therewith, any
applicable law, rule or regulation with respect to any Transferred
Receivable or the Contract therefor, or the nonconformity of any
Transferred Receivable or the Contract therefor with any such applicable
law, rule or regulation;
(iii) the imposition of any Adverse Claim with respect to any
Transferred Receivable or the Borrower Collateral as a result of any action
taken by the Servicer; or
(iv) the commingling of Collections with respect to
Transferred Receivables by the Servicer at any time with its other funds or
the funds of any other Person.
(b) Any Indemnified Amounts subject to the indemnification provisions
of this Section 12.02 not paid in accordance with Article VI shall be paid by
------------- ----------
the Servicer to the Indemnified Person entitled thereto within five Business
Days following demand therefor.
Section 12.03. Limitation of Damages; Indemnified Persons. NO
------------------------------------------
INDEMNIFIED PERSON OR PARTY TO THIS AGREEMENT SHALL BE RESPONSIBLE OR LIABLE TO
ANY OTHER PARTY TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR,
ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING
CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
ARTICLE XIII.
ADMINISTRATIVE AGENT
Section 13.01. Authorization and Action.
------------------------
51
(a) The Administrative Agent may take such action and carry out such
functions under this Agreement as are authorized to be performed by it pursuant
to the terms of this Agreement, any other Related Document or otherwise
contemplated hereby or thereby or are reasonably incidental thereto; provided,
--------
that the duties of the Administrative Agent hereunder shall be determined solely
by the express provisions of this Agreement, and, other than the duties set
forth in Section 13.02, any permissive right of the Administrative Agent
-------------
hereunder shall not be construed as a duty.
Section 13.02. Reliance. None of the Administrative Agent, any of
--------
its Affiliates or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or the other Related Documents,
except for damages solely caused by its or their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. Without
limiting the generality of the foregoing, and notwithstanding any term or
provision hereof to the contrary, the Borrower, the Servicer, and each Lender
hereby acknowledge and agree that the Administrative Agent (a) acts as agent
hereunder for the Lenders and has no duties or obligations to, shall incur no
liabilities or obligations to, and does not act as an agent in any capacity for,
the Borrower (other than, with respect to the Administrative Agent, under the
Power of Attorney with respect to remedial actions) or the Originators, (b) may
consult with legal counsel, independent public accountants and other experts
selected by it 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, (c) makes no representation or warranty hereunder to any
Affected Party and shall not be responsible to any such Person for any
statements, representations or warranties made in or in connection with this
Agreement or the other Related Documents, (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement, or the other Related Documents on the
part of the Borrower, the Servicer, any Lender or to inspect the property
(including the books and records) of the Borrower, the Servicer, or any Lender,
(e) shall not be responsible to the Borrower, the Servicer or any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Related Documents or any other instrument
or document furnished pursuant hereto or thereto, (f) shall incur no liability
under or in respect of this Agreement or the other Related Documents by acting
upon any notice, consent, certificate or other instrument or writing believed by
it to be genuine and signed, sent or communicated by the proper party or parties
and (g) 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 13.03. GE Capital and Affiliates. GE Capital and its
-------------------------
Affiliates may generally engage in any kind of business with any Obligor, the
Originators, the Borrower, the Servicer, any Lender, any of their respective
Affiliates and any Person who may do business with or own securities of such
Persons or any of their respective Affiliates, all as if GE Capital were not the
Administrative Agent and without the duty to account therefor to any Obligor,
any Originator, the Borrower, the Servicer, any Lender or any other Person.
Section 13.04. Lender Credit Decision. Each Lender acknowledges
----------------------
that it has, independently and without reliance upon the Administrative Agent or
any other Lender and such
52
other documents and information as it has deemed appropriate, made its own
credit and financial analysis of Borrower and its own decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
Section 13.05. Indemnification. Lenders agree to indemnify the
---------------
Administrative Agent (to the extent not reimbursed by Borrower and without
limiting the obligations of Borrower hereunder), ratably according to their
respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any other Related Document or
any action taken or omitted by the Administrative Agent in connection therewith;
provided, however, that no Lender shall be liable for 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 by a court
of competent jurisdiction. Without limiting the foregoing, each Lender agrees
to reimburse the Administrative Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Related
Document, to the extent that the Administrative Agent is not reimbursed for such
expenses by Borrower.
Section 13.06. Successor Administrative Agent. The Administrative
------------------------------
Agent may resign at any time by giving not less than thirty (30) days' prior
written notice thereof to Lenders and Borrower. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor the Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within 30 days after
the resigning the Administrative Agent's giving notice of resignation, then the
resigning the Administrative Agent may, on behalf of Lenders, appoint a
successor Administrative Agent, which shall be a Lender, if a Lender is willing
to accept such appointment, or otherwise shall be a commercial bank or financial
institution or a subsidiary of a commercial bank or financial institution which
commercial bank or financial institution is organized under the laws of the
United States of America or of any State thereof which has a long-term debt
rating from S&P of A - or better and has a combined capital and surplus of at
least $300,000,000. If no successor the Administrative Agent has been appointed
pursuant to the foregoing, by the 30th day after the date such notice of
resignation was given by the resigning Administrative Agent, such resignation
shall become effective and the Requisite Lenders shall thereafter perform all
the duties of the Administrative Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor the Administrative Agent as provided
above. Any successor Administrative Agent appointed by Requisite Lenders
hereunder shall be subject to the approval of Borrower, such approval not to be
unreasonably withheld or delayed; provided that such approval shall not be
--------
required if an Incipient Termination Event or an Termination Event shall have
occurred and
53
be continuing. Upon the acceptance of any appointment as the Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the resigning Administrative Agent. Upon the
earlier of the acceptance of any appointment as the Administrative Agent
hereunder by a successor Administrative Agent or the effective date of the
resigning Administrative Agent's resignation, the resigning Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Related Documents, except that any indemnity rights or other rights in
favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this Section 14 shall inure to its
----------
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement and the other Related Documents. The
Administrative Agent may be removed at the written direction of the Requisite
Lenders; provided that in so doing, the Lenders shall be deemed to have waived
and released any and all claims they may have against the Administrative Agent.
Section 13.07. Setoff and Sharing of Payments. In addition to any
------------------------------
rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Termination Event, each Lender and each holder of any Revolving Note is
hereby authorized at any time or from time to time, without notice to Borrower
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and to apply any and all balances held by it at any of
its offices for the account of Borrower (regardless of whether such balances are
then due to Borrower) and any other properties or assets any time held or owing
by that Lender or that holder to or for the credit or for the account of
Borrower against and on account of any of the Obligations which are not paid
when due. Any Lender or holder of any Revolving Note exercising a right to set
off or otherwise receiving any payment on account of the Borrower Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Borrower Obligations as would be necessary to
cause such Lender to share the amount so set off or otherwise received with each
other Lender or holder in accordance with their respective Pro Rata Shares.
Borrower agrees, to the fullest extent permitted by law, that (a) any Lender or
holder may exercise its right to set off with respect to amounts in excess of
its Pro Rata Share of the Borrower Obligations and may sell participations in
such amount so set off to other Lenders and holders and (b) any Lender or
holders so purchasing a participation in the Advances made or other Borrower
Obligations held by other Lenders or holders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Advances and
the other Borrower Obligations in the amount of such participation.
Notwithstanding the foregoing, if all or any portion of the set-off amount or
payment otherwise received is thereafter recovered from the Lender that has
exercised the right of set-off, the purchase of participations by that Lender
shall be rescinded and the purchase price restored without interest.
ARTICLE XIV.
MISCELLANEOUS
54
Section 14.01. Notices. Except as otherwise provided herein,
-------
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other parties, or whenever any of the parties
desires to give or serve upon any other parties any communication with respect
to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (a) upon the earlier of actual
receipt and three Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by facsimile (with such facsimile
promptly confirmed by delivery of a copy by personal delivery or United States
Mail as otherwise provided in this Section 14.01), (c) one Business Day after
-------------
deposit with a reputable overnight courier with all charges prepaid or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile number set forth
under its name on the signature page hereof or to such other address (or
facsimile number) as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than any Lender and the Administrative Agent) designated in
any written notice provided hereunder to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication. Notwithstanding the foregoing,
whenever it is provided herein that a notice is to be given to any other party
hereto by a specific time, such notice shall only be effective if actually
received by such party prior to such time, and if such notice is received after
such time or on a day other than a Business Day, such notice shall only be
effective on the immediately succeeding Business Day.
Section 14.02. Binding Effect; Assignability.
-----------------------------
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Servicer, each Lender and the Administrative Agent and their
respective successors and permitted assigns. Neither the Borrower nor the
Servicer may assign, transfer, hypothecate or otherwise convey any of their
respective rights or obligations hereunder or interests herein without the
express prior written consent of each Lender and the Administrative Agent. Any
such purported assignment, transfer, hypothecation or other conveyance by the
Borrower or the Servicer without the prior express written consent of the
Requisite Lenders and the Administrative Agent shall be void.
(b) Borrower hereby consents to any Lender's assignment of, and/or
sale of participations in, at any time or times after the Effective Date, the
Related Documents, Advances, and any Commitment or of any portion thereof or
interest therein, including any Lender's rights, title, interests, remedies,
powers or duties thereunder, whether evidenced by a writing or not. Any
assignment by a Lender shall (i) require the consent of the Administrative Agent
and the execution of an assignment agreement (an "Assignment Agreement")
--------------------
substantially in the form attached hereto as Exhibit 14.02(b) and otherwise in
----------------
form and substance satisfactory to, and acknowledged by, the Administrative
Agent; (ii) if a partial assignment, in an amount at least equal to $5,000,000
and, after giving effect to any such partial assignment, the assigning Lender
shall have retained Commitments in an amount at least equal to $5,000,000;
55
and (iv) include a payment to the Administrative Agent by the assignor or
assignee Lender of an assignment fee of $3,500. In the case of an assignment by
a Lender under this Section 14.02, the assignee shall have, to the extent of
-------------
such assignment, the same rights, benefits and obligations as it would if it
were a Lender hereunder. The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment. Borrower hereby acknowledges
and agrees that any assignment will give rise to a direct obligation of Borrower
to the assignee and that the assignee shall be considered to be a "Lender". In
all instances, each Lender's liability to make Advances hereunder shall be
several and not joint and shall be limited to such Lender's Pro Rata Share of
the applicable Commitment. In the event any Lender assigns or otherwise
transfers all or any part of a Revolving Note, such Lender shall so notify
Borrower and Borrower shall, upon the request of such Lender, execute new
Revolving Notes in exchange for the Revolving Notes being assigned.
Notwithstanding the foregoing provisions of this Section 14.02(b), any Lender
----------------
may at any time pledge or assign all or any portion of such Lender's rights
under this Agreement and the other Related Documents to a Federal Reserve Bank;
provided, however, that no such pledge or assignment shall release such Lender
-------- -------
from such Lender's obligations hereunder or under any other Related Document.
(c) Any participation by a Lender of all or any part of its
Commitments shall be in an amount at least equal to $5,000,000, and with the
understanding that all amounts payable by Borrower hereunder shall be determined
as if that Lender had not sold such participation, and that the holder of any
such participation shall not be entitled to require such Lender to take or omit
to take any action hereunder except actions directly affecting (i) any reduction
in the principal amount of, or interest rate or Fees payable with respect to,
any Advance in which such holder participates, (ii) any extension of any
scheduled payment of the principal amount of any Advance in which such holder
participates or the final maturity date thereof, and (iii) any release of all or
substantially all of the Borrower Collateral (other than in accordance with the
terms of this Agreement or the other Related Documents). Solely for purposes of
Sections 2.08, 2.09, 2.10, 12.01, Borrower acknowledges and agrees that a
------------- ---- ---- -----
participation shall give rise to a direct obligation of Borrower to the
participant and the participant shall be considered to be a "Lender" for
purposes of such sections (except that, unless Borrower otherwise consents, no
amounts shall be payable to such participant under Section 2.09 or 2.10 to the
------------ ----
extent that such amounts would have been required to have been paid under the
circumstances in existence on the effective date of such participation). Except
as set forth in the preceding sentence Borrower shall have no obligation or duty
to any participant. Neither the Administrative Agent nor any Lender (other than
the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred.
(d) Except as expressly provided in this Section 14.02, no Lender
-------------
shall, as between Borrower and that Lender, or between Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Advances, the Revolving Notes or other Obligations owed to such
Lender.
56
(e) Borrower shall assist any Lender permitted to sell assignments or
participations under this Section 14.02 as reasonably required to enable the
-------------
assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be requested and the participation of
management in meetings with, potential assignees or participants. Borrower
shall, if Agent so requests in connection with an initial syndication of the
Advances hereunder, assist in the preparation of informational materials for
such syndication.
(f) A Lender may furnish any information concerning Borrower in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants). Each Lender shall obtain
from all prospective and actual assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 14.05.
-------------
(g) Any Lender with the consent of the Administrative Agent or the
Administrative Agent may, at any time, assign any of its rights and obligations
hereunder or interests herein to any Person and any such assignee may further
assign at any time its rights and obligations hereunder or interests herein
(including any rights it may have in and to the Advances and the Borrower
Collateral and any rights it may have to exercise remedies hereunder), in each
case without the consent of any Originator, the Borrower or the Servicer. The
Borrower acknowledges and agrees that, upon any such assignment, the assignee
thereof may enforce directly, without joinder of any Lender, all of the
obligations of the Borrower hereunder.
Section 14.03. Termination; Survival of Borrower Obligations Upon
--------------------------------------------------
Commitment Termination Date.
---------------------------
(a) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until the Termination Date.
(b) Except as otherwise expressly provided herein or in any other
Related Document, no termination or cancellation (regardless of cause or
procedure) of any commitment made by any Affected Party under this Agreement
shall in any way affect or impair the obligations, duties and liabilities of the
Borrower or the rights of any Affected Party relating to any unpaid portion of
the Borrower Obligations, due or not due, liquidated, contingent or unliquidated
or any transaction or event occurring prior to such termination, or any
transaction or event, the performance of which is required after the Commitment
Termination Date. Except as otherwise expressly provided herein or in any other
Related Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Borrower or the Servicer, and all rights
of any Affected Party hereunder, all as contained in the Related Documents,
shall not terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination
Date; provided, that the rights and remedies provided for herein with respect to
--------
any breach of any representation or warranty made by the Borrower or the
Servicer pursuant to Article IV, the indemnification and
----------
57
payment provisions of Article XII and Sections 14.04, 14.05 and 14.06 shall be
----------- -------------- ----- -----
continuing and shall survive the Termination Date.
Section 14.04. Costs, Expenses and Taxes. (a) The Borrower shall
-------------------------
reimburse each Lender and the Administrative Agent for all reasonable out-of-
pocket expenses incurred in connection with the negotiation and preparation of
this Agreement and the other Related Documents (including the reasonable fees
and expenses of all of its special counsel, advisors, consultants and auditors
retained in connection with the transactions contemplated thereby and advice in
connection therewith). The Borrower shall reimburse each Lender and the
Administrative Agent for all fees, costs and expenses, including the fees, costs
and expenses of counsel or other advisors (including environmental and
management consultants and appraisers) for advice, assistance, or other
representation in connection with:
(i) the forwarding to the Borrower or any other Person on
behalf of the Borrower by any Lender of any proceeds of Advances made by
such Lender hereunder;
(ii) any amendment, modification or waiver of, consent with
respect to, or termination of this Agreement or any of the other Related
Documents or advice in connection with the administration thereof or their
respective rights hereunder or thereunder;
(iii) any Litigation, contest or dispute (whether instituted by
the Borrower, any Lender, the Administrative Agent or any other Person as a
party, witness, or otherwise) in any way relating to the Borrower
Collateral, any of the Related Documents or any other agreement to be
executed or delivered in connection herewith or therewith, including any
Litigation, contest, dispute, suit, case, proceeding or action, and any
appeal or review thereof, in connection with a case commenced by or against
the Borrower or any other Person that may be obligated to any Lender or the
Administrative Agent by virtue of the Related Documents, including any such
Litigation, contest, dispute, suit, proceeding or action arising in
connection with any work-out or restructuring of the transactions
contemplated hereby during the pendency of one or more Termination Events;
(iv) any attempt to enforce any remedies of a Lender or the
Administrative Agent against the Borrower or any other Person that may be
obligated to them by virtue of any of the Related Documents, including any
such attempt to enforce any such remedies in the course of any work-out or
restructuring of the transactions contemplated hereby during the pendency
of one or more Termination Events;
(v) any work-out or restructuring of the transactions
contemplated hereby during the pendency of one or more Termination Events;
and
(vi) efforts to (A) monitor the Advances or any of the
Borrower Obligations, (B) evaluate, observe or assess the Originators, the
Borrower or the Servicer or their respective affairs, and (C) verify,
protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise
dispose of any of the Borrower Collateral;
58
including all attorneys' and other professional and service providers' fees
arising from such services, including those in connection with any appellate
proceedings, and all expenses, costs, charges and other fees incurred by such
counsel and others in connection with or relating to any of the events or
actions described in this Section 14.04, all of which shall be payable, on
-------------
demand, by the Borrower to the applicable Lender or the Administrative Agent, as
applicable. Without limiting the generality of the foregoing, such expenses,
costs, charges and fees may include: fees, costs and expenses of accountants,
environmental advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or facsimile charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.
(b) In addition, the Borrower shall pay on demand any and all stamp,
sales, excise and other taxes (excluding income taxes) and fees payable or
determined to be payable in connection with the execution, delivery, filing or
recording of this Agreement or any other Related Document, and the Borrower
agrees to indemnify and save each Indemnified Person harmless from and against
any and all liabilities with respect to or resulting from any delay or failure
to pay such taxes and fees.
Section 14.05. Confidentiality.
---------------
(a) Except to the extent otherwise required by applicable law, in
connection with the Imperial Bankruptcy Proceeding or as required to be filed
publicly with the Securities and Exchange Commission, or unless the
Administrative Agent shall otherwise consent in writing, the Borrower and the
Servicer each agrees to maintain the confidentiality of this Agreement (and all
drafts hereof and documents ancillary hereto) in its communications with third
parties other than any Affected Party or any Indemnified Person and otherwise
and not to disclose, deliver or otherwise make available to any third party
(other than its directors, officers, employees, accountants or counsel) the
original or any copy of all or any part of this Agreement (or any draft hereof
and documents ancillary hereto) except to an Affected Party or an Indemnified
Person.
(b) The Borrower and the Servicer each agrees that it shall not (and
shall not permit any of its Subsidiaries to) issue any news release or make any
public announcement pertaining to the transactions contemplated by this
Agreement and the other Related Documents without the prior written consent of
the Requisite Lenders and the Administrative Agent (which consent shall not be
unreasonably withheld) unless such news release or public announcement is
required by law or related to the Imperial Bankruptcy Proceeding, in which case
the Borrower or the Servicer, as applicable, shall consult with the Requisite
Lenders and the Administrative Agent prior to the issuance of such news release
or public announcement. The Borrower may, however, disclose the general terms
of the transactions contemplated by this Agreement and the other Related
Documents to trade creditors, suppliers and other similarly-situated Persons so
long as such disclosure is not in the form of a news release or public
announcement.
59
(c) The Administrative Agent and each Lender agrees to maintain the
confidentiality of the Information (as defined below), and will not use such
confidential Information for any purpose or in any matter except in connection
with this Agreement, except that Information may be disclosed (a) to (i) each
Affected Party and (ii) its and each Affected Party's and their respective
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential and to not
disclose or use such Information in violation of Regulation FD (17 C.F.R. (S)
243.100-243.103)), (b) any regulatory authority (it being understood that it
will to the extent reasonably practicable provide the Borrower with an
opportunity to request confidential treatment from such regulatory authority),
(c) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process, (d) to any other party to this Agreement, (e) to the
extent required in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any other Related
Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to any assignee of (or participant in), or any prospective assignee of (or
participant in), any of its rights or obligations under this Agreement, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or any
other confidentiality agreement to which it is party with the Borrower or the
Parent or any subsidiary thereof or (ii) becomes available to the
Administrative Agent, or any Lender on a nonconfidential basis from a source
other than the Parent or any subsidiary thereof. For the purposes of this
Section, "Information" means all information received from the Borrower and
Servicer relating to the Borrower, the Servicer, the Parent or any subsidiary
thereof or their businesses, or any Obligor, other than any such information
that is available to Administrative Agent, or any Lender on a nonconfidential
basis prior to disclosure by Borrower or Servicer; provided that, in the case of
information (other than any information related to an Obligor or financial
projections) received from Borrower or Servicer after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have compiled with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
Section 14.06. Complete Agreement; Modification of Agreement. This
---------------------------------------------
Agreement and the other Related Documents constitute the complete agreement
among the parties hereto with respect to the subject matter hereof and thereof,
supersede all prior agreements and understandings relating to the subject matter
hereof and thereof, and may not be modified, altered or amended except as set
forth in Section 14.07.
-------------
Section 14.07. Amendments and Waivers.
----------------------
(a) Except for actions expressly permitted to be taken by the
Administrative Agent, no amendment, modification, termination or waiver of any
provision of this Agreement or any of the Revolving Notes, or any consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by Borrower, and by the
60
Requisite Lenders or all affected Lenders, as applicable and, to the extent
required under clause (c) below, by the Administrative Agent. Except as set
---
forth in clause (b) below, all such amendments, modifications, terminations or
----------
waivers requiring the consent of any Lenders without specifying the required
percentage of Lenders shall require the written consent of the Requisite
Lenders.
(b) No amendment, modification, termination or waiver shall, unless in
writing and signed by each Lender directly affected thereby, do any of the
following: (i) increase the principal amount of any Lender's Commitment; (ii)
reduce the principal of, rate of interest on or Fees payable with respect to any
Advance of any affected Lender; (iii) extend any scheduled payment date or final
maturity date of the principal amount of any Advance of any affected Lender;
(iv) waive, forgive, defer, extend or postpone any payment of interest or Fees
as to any affected Lender; (v) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Advances which shall be required
for Lenders or any of them to take any action hereunder; (vi) release all or
substantially all of the Borrower Collateral or (vii) amend or waive this
Section 14.07 or the definitions of the terms "Requisite Lenders" insofar as
-------------
such definitions affect the substance of this Section 14.07 Furthermore, no
-------------
amendment, modification, termination or waiver affecting the rights or duties of
the Administrative Agent under this Agreement or any other Related Document
shall be effective unless in writing and signed by the Administrative Agent, in
addition to Lenders required hereinabove to take such action. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for the Administrative
Agent to take additional Borrower Collateral pursuant to any Related Document.
No amendment, modification, termination or waiver of any provision of any
Revolving Note shall be effective without the written concurrence of the holder
of that Revolving Note. No notice to or demand on Borrower in any case shall
entitle Borrower to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 14.07 shall be binding upon each holder
-------------
of the Revolving Notes at the time outstanding and each future holder of the
Revolving Notes.
(c) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change"):
---------------
(i) requiring the consent of all affected Lenders, the consent
of Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described this clause (i) and in clause (ii) below being
---------- -----------
referred to as a "Non-Consenting Lender"), or
---------------------
(ii) requiring the consent of Requisite Lenders, the consent of
Lenders holding 51% or more of the aggregate Commitments is obtained, but
the consent of Requisite Lenders is not obtained,
then, so long as the Administrative Agent is not a Non-Consenting Lender, at the
Borrower's request the Administrative Agent, or a Person acceptable to the
Administrative Agent, shall have the right with the Administrative Agent's
consent and in the Administrative Agent's sole
61
discretion (but shall have no obligation) to purchase from such Non-Consenting
Lenders, and such Non-Consenting Lenders agree that they shall, upon the
Administrative Agent's request, sell and assign to the Administrative Agent or
such Person, all of the Commitments of such Non-Consenting Lender for an amount
equal to the principal balance of all Advances held by the Non-Consenting Lender
and all accrued interest and Fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(d) Upon indefeasible payment in full in cash and performance of all
of the Borrower Obligations (other than indemnification Borrower Obligations
under Section 12.01), termination of the Commitments and a release of all claims
-------------
against the Administrative Agent and Lenders, and so long as no suits, actions
proceedings, or claims are pending or threatened against any Indemnified Person
asserting any damages, losses or liabilities that are Indemnified Liabilities,
the Administrative Agent shall deliver to Borrower termination statements,
mortgage releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Borrower Obligations.
Section 14.08. No Waiver; Remedies. The failure by any Lender or
-------------------
the Administrative Agent, at any time or times, to require strict performance by
the Borrower or the Servicer of any provision of this Agreement or any
Receivables Assignment shall not waive, affect or diminish any right of any
Lender or the Administrative Agent thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of any breach or
default hereunder shall not suspend, waive or affect any other breach or default
whether the same is prior or subsequent thereto and whether the same or of a
different type. None of the undertakings, agreements, warranties, covenants and
representations of the Borrower or the Servicer contained in this Agreement or
any Receivables Assignment, and no breach or default by the Borrower or the
Servicer hereunder or thereunder, shall be deemed to have been suspended or
waived by any Lender or the Administrative Agent unless such waiver or
suspension is by an instrument in writing signed by an officer of or other duly
authorized signatory of the Lenders and the Administrative Agent and directed to
the Borrower or the Servicer, as applicable, specifying such suspension or
waiver. The rights and remedies of the Lenders and the Administrative Agent
under this Agreement shall be cumulative and nonexclusive of any other rights
and remedies that the Lenders and the Administrative Agent may have under any
other agreement, including the other Related Documents, by operation of law or
otherwise. Recourse to the Borrower Collateral shall not be required.
Section 14.09. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
-------------------------------------------------
JURY TRIAL.
----------
(a) THIS AGREEMENT AND EACH OTHER RELATED DOCUMENT (EXCEPT TO THE
EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT
REGARD TO CONFLICTS OF
62
LAW PRINCIPLES) EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION
OR PRIORITY OF THE INTERESTS OF THE ADMINISTRATIVE AGENT IN THE RECEIVABLES OR
REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO
--------
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY; PROVIDED FURTHER,
-------- -------
THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ANY LENDER
OR THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO REALIZE ON THE BORROWER COLLATERAL OR ANY OTHER
SECURITY FOR THE BORROWER OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE LENDERS, OR THE ADMINISTRATIVE AGENT. EACH PARTY HERETO
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION
THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL
----- --- ----------
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH BENEATH ITS NAME ON THE
SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON
THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT
IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
63
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
Section 14.10. Counterparts. This Agreement may be executed in any
------------
number of separate counterparts, each of which shall collectively and separately
constitute one agreement.
Section 14.11. Severability. Wherever possible, each provision of
------------
this Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
Section 14.12. Section Titles. The section, titles and table of
--------------
contents contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.
Section 14.13. Limited Recourse. The obligations of each Lender
----------------
under this Agreement and all Related Documents are solely the corporate
obligations of such Lender. No recourse shall be had for the payment of any
amount owing in respect of Advances or for the payment of any fee hereunder or
any other obligation or claim arising out of or based upon this Agreement or any
other Related Document against any Stockholder, employee, officer, director,
agent or incorporator of such Lender. Any accrued obligations owing by any
Lender under this Agreement shall be payable by such Lender solely to the extent
that funds are available therefor from time to time in accordance with the
provisions of Article VI of this Agreement.
----------
Section 14.14. Further Assurances.
------------------
(a) Each of the Borrower and the Servicer shall, at its sole cost and
expense, upon request of the Lenders or the Administrative Agent, promptly and
duly execute and deliver any and all further instruments and documents and take
such further action that may be necessary or desirable or that the Lenders or
the Administrative Agent may request to (i) perfect, protect, preserve, continue
and maintain fully the Liens granted to the Administrative Agent for the benefit
of itself and the Lenders under this Agreement, (ii) enable the Lenders or the
Administrative Agent to exercise and enforce its rights under this Agreement or
any of the other Related Documents or (iii) otherwise carry out more effectively
the provisions and purposes of this Agreement or any other Related Document.
Without limiting the generality of the foregoing, the Borrower shall, upon
request of the Lenders or the Administrative Agent, (A) execute and file such
financing or continuation statements, or amendments thereto or
64
assignments thereof, and such other instruments or notices that may be necessary
or desirable or that the Lenders or the Administrative Agent may request to
perfect, protect and preserve the Liens granted pursuant to this Agreement, free
and clear of all Adverse Claims, (B) ▇▇▇▇, or cause the Servicer to ▇▇▇▇, each
Contract (other than invoices) evidencing each Transferred Receivable with a
legend, acceptable to each Lender and the Administrative Agent evidencing that
the Borrower has purchased such Transferred Receivables and that the
Administrative Agent, for the benefit of the Lenders, has a security interest in
and lien thereon, (C) ▇▇▇▇, or cause the Servicer to ▇▇▇▇, its master data
processing records evidencing such Transferred Receivables with such a legend
and (D) notify or cause the Servicer to notify Obligors of the Liens on the
Transferred Receivables granted hereunder.
(b) Without limiting the generality of the foregoing, the Borrower
hereby authorizes the Lenders and the Administrative Agent, and each of the
Lenders hereby authorizes the Administrative Agent, to file one or more
financing or continuation statements, or amendments thereto or assignments
thereof, relating to all or any part of the Transferred Receivables, including
Collections with respect thereto, or the Borrower Collateral without the
signature of the Borrower or, as applicable, the Lenders, as applicable, to the
extent permitted by applicable law. A carbon, photographic or other
reproduction of this Agreement or of any notice or financing statement covering
the Transferred Receivables, the Borrower Collateral or any part thereof shall
be sufficient as a notice or financing statement where permitted by law.
65
IN WITNESS WHEREOF, the parties have caused this Receivables Funding
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
IMPERIAL SUGAR SECURITIZATION, LLC, as the Borrower
By /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------------------
Name ▇. ▇. ▇▇▇▇▇▇
------------------------------------------
Title PRESIDENT
------------------------------------------
Address:
-------
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IMPERIAL DISTRIBUTING, INC., as the Servicer
By /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------------------
Name ▇. ▇. ▇▇▇▇▇▇
------------------------------------------
Title PRESIDENT
------------------------------------------
Address:
-------
c/o Imperial Sugar Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
66
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Duly Authorized Signatory
Address:
-------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President -
Portfolio/Underwriting
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
67
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Duly Authorized Signatory
Address:
-------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President -
Portfolio/Underwriting
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
68