EXHIBIT 10.1
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SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
Dated as of June 16, 2003
Among
LPAC CORP.
as the Seller
and
LENNOX INDUSTRIES INC.,
as the Master Servicer
and
BLUE RIDGE ASSET FUNDING CORPORATION
as a Purchaser
and
LIBERTY STREET FUNDING CORP.
as a Purchaser
THE LIBERTY STREET INVESTORS NAMED HEREIN
and
THE BANK OF NOVA SCOTIA
as Liberty Street Purchaser Agent
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as the Administrative Agent and Blue Ridge Purchaser Agent
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TABLE OF CONTENTS
Page
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Article I Purchases and Reinvestments................................................................ 2
Section 1.1 Commitments to Purchase; Limits on Purchaser's Obligations...................... 2
Section 1.2 Purchase Procedures; Assignment of the Purchaser's Interests.................... 3
Section 1.3 Reinvestments of Certain Collections; Payment of Remaining Collections.......... 3
Section 1.4 Asset Interest.................................................................. 6
Article II Computational Rules....................................................................... 6
Section 2.1 Selection of Asset Tranches..................................................... 6
Section 2.2 Computation of Invested Amount and Purchaser's Tranche Investment............... 7
Section 2.3 Computation of Concentration Limits and Unpaid Balance.......................... 7
Section 2.4 Computation of Earned Discount.................................................. 7
Section 2.5 Estimates of Earned Discount Rate, Fees, etc.................................... 8
Article III Settlements.............................................................................. 9
Section 3.1 Settlement Procedures........................................................... 9
Section 3.2 Deemed Collections; Reduction of Invested Amount, Etc........................... 12
Section 3.3 Payments and Computations, Etc.................................................. 13
Section 3.4 Treatment of Collections and Deemed Collections................................. 14
Article IV Fees and Yield Protection................................................................. 14
Section 4.1 Fees............................................................................ 14
Section 4.2 Yield Protection................................................................ 14
Section 4.3 Funding Losses.................................................................. 16
Article V Conditions of Purchases.................................................................... 17
Section 5.1 Conditions Precedent to Initial Purchase........................................ 17
Section 5.2 Conditions Precedent to All Purchases and Reinvestments......................... 18
Article VI Representations and Warranties............................................................ 19
Section 6.1 Representations and Warranties of the Seller Parties............................ 19
Article VII General Covenants of the Seller Parties.................................................. 23
Section 7.1 Affirmative Covenants of the Seller Parties..................................... 23
Section 7.2 Reporting Requirements of the Seller Parties.................................... 25
Section 7.3 Negative Covenants of the Seller Parties........................................ 27
Section 7.4 Separate Corporate Existence of the Seller...................................... 29
Article VIII Administration and Collection........................................................... 32
Section 8.1 Designation of Master Servicer.................................................. 32
Section 8.2 Duties of Master Servicer....................................................... 32
Section 8.3 [Reserved]...................................................................... 34
Section 8.4 Servicer Defaults............................................................... 34
Section 8.5 Rights of the Administrative Agent.............................................. 35
Section 8.6 Responsibilities of the Seller Parties.......................................... 36
Section 8.7 Further Action Evidencing Purchases and Reinvestments........................... 36
Section 8.8 Application of Collections...................................................... 37
Article IX Security Interest......................................................................... 37
Section 9.1 Grant of Security Interest...................................................... 37
Section 9.2 Further Assurances.............................................................. 38
Section 9.3 Remedies........................................................................ 38
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Article X Liquidation Events......................................................................... 38
Section 10.1 Liquidation Events........................................................... 38
Section 10.2 Remedies..................................................................... 41
Article XI The Administrative Agent.................................................................. 41
Section 11.1 Administrative Authorization and Action...................................... 41
Section 11.2 Administrative Agent's Reliance, Etc......................................... 41
Section 11.3 Blue Ridge Purchaser Agent Authorization and Action.......................... 42
Section 11.4 Blue Ridge Purchaser Agent's Reliance, Etc................................... 42
Section 11.5 Liberty Street Authorization and Action...................................... 42
Section 11.6 Liberty Street Purchaser Agent's Reliance, Etc............................... 43
Section 11.7 Wachovia, Scotiabank and Affiliates.......................................... 43
Article XII Assignment of The Purchaser's Interest................................................... 43
Section 12.1 Restrictions on Assignments.................................................. 43
Section 12.2 Rights of Assignee........................................................... 44
Section 12.3 Terms and Evidence of Assignment............................................. 44
Section 12.4 Rights of Liquidity Banks.................................................... 44
Article XIII Indemnification......................................................................... 45
Section 13.1 Indemnities by the Seller.................................................... 45
Section 13.2 Indemnities by Master Servicer............................................... 47
Article XIV Miscellaneous............................................................................ 48
Section 14.1 Amendments, Etc.............................................................. 48
Section 14.2 Notices, Etc................................................................. 48
Section 14.3 No Waiver; Remedies.......................................................... 49
Section 14.4 Binding Effect; Survival..................................................... 49
Section 14.5 Costs, Expenses and Taxes.................................................... 49
Section 14.6 No Proceedings............................................................... 50
Section 14.7 Confidentiality of Seller Information........................................ 50
Section 14.8 Captions and Cross References................................................ 52
Section 14.9 Integration.................................................................. 53
Section 14.10 Governing Law................................................................ 53
Section 14.11 Waiver Of Jury Trial......................................................... 53
Section 14.12 Consent To Jurisdiction; Waiver Of Immunities................................ 53
Section 14.13 Execution in Counterparts.................................................... 54
Section 14.14 No Recourse Against Other Parties............................................ 54
Section 14.15 Severability of Provisions................................................... ▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ A Definitions
SCHEDULES
Schedule 6.1(i) Description of Material Adverse Changes
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Schedule 6.1(n) List of Offices of the Master Servicer and the Seller where
Records are Kept
Schedule 6.1(o) List of Lockbox Banks
Schedule 14.2 Notice Addresses
EXHIBITS
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Exhibit 1.2(a) Form of Purchase Request
Exhibit 3.1(a) Form of Information Package
Exhibit A-1 Form of Lockbox Agreement
Exhibit B Form of Certificate of Financial Officer
Exhibit C-1 Credit and Collection Policy of Lennox
Exhibit C-2 Credit and Collection Policy of Advanced Distributor Products LLC
Exhibit C-3 Credit and Collection Policy of Heatcraft Refrigeration Products, LLC
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SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
Dated as of June 16, 2003
THIS IS A SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
(the "Agreement") among:
(1) LPAC CORP., a Delaware corporation (together with its
successors and permitted assigns, the "Seller"),
(2) LENNOX INDUSTRIES INC., an Iowa corporation (together with its
successors, "Lennox"), as master servicer hereunder (in such capacity, together
with any successor master servicer appointed pursuant to Section 8.1, the
"Master Servicer", Lennox in its capacity as the Master Servicer, together with
the Seller, each a "Seller Party" and collectively the "Seller Parties"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware corporation
("Blue Ridge"),
(4) the financial institutions identified on the signature pages
of this Agreement as "Liberty Street Investors" (together with their successors
and assigns, the "Liberty Street Investors")
(5) LIBERTY STREET FUNDING CORP., a Delaware corporation ("Liberty
Street"),
(6) THE BANK OF NOVA SCOTIA, a Canadian chartered bank
("Scotiabank"), as purchaser agent for Liberty Street and the Liberty Street
Investors (in such capacity, together with any successors thereto in such
capacity, the "Liberty Street Purchaser Agent"), and
(7) WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association ("Wachovia"), as administrative agent for the Purchasers (in such
capacity, together with any successors thereto in such capacity, the
"Administrative Agent") and as purchaser agent for Blue Ridge (in such capacity,
together with any successors thereto in such capacity, the "Blue Ridge Purchaser
Agent")
and amends and restates in its entirety that certain Amended and
Restated Receivables Purchase Agreement dated as of March 23, 2001 by and among
the parties, as the same may have been and may be amended from time to time (the
"Existing Agreement").
Unless otherwise indicated, capitalized terms used in this Agreement
are defined in Appendix A.
Background
1. The Originators own 100% of the issued and outstanding capital
stock of the Seller.
2. The Originators are engaged in the heating, ventilating, air
conditioning and refrigeration businesses.
3. Each of the Originators and the Seller has entered into the
Sale Agreement pursuant to which the Originators have transferred, and hereafter
will transfer, to the Seller all of their respective right, title and interest
in and to the Pool Receivables and certain related property.
4. The Seller has requested the Purchasers, and the Purchasers
have agreed, subject to the terms and conditions contained in this Agreement, to
purchase from the Seller from time to time undivided percentage interests,
referred to herein as the Asset Interest, in Pool Receivables and related
property.
5. The Seller and the Purchasers also desire that, subject to the
terms and conditions of this Agreement, certain of the daily Collections in
respect of the Asset Interest be reinvested in Pool Receivables, which
reinvestment shall constitute part of the Asset Interest.
6. Scotiabank has been requested, and is willing, to act as the
Liberty Street Purchaser Agent under this Agreement.
7. Wachovia has been requested, and is willing, to act as the
Administrative Agent and Blue Ridge Purchaser Agent under this Agreement.
8. The parties wish to amend and restate the Existing Agreement
as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.1 COMMITMENTS TO PURCHASE; LIMITS ON PURCHASERS' OBLIGATIONS.
Upon the terms and subject to the conditions of this Agreement
(including, without limitation, Article V), from time to time during the
Revolving Period, prior to the Termination Date, the Seller may request that the
Purchasers purchase from the Seller ownership interests in Pool Receivables and
Related Assets, and Blue Ridge shall and Liberty Street may, in its sole
discretion, make such purchase or, if Liberty Street shall decline to make such
purchase, the Liberty Street Investors shall make such purchase (in any such
case, each being a "Purchase"); provided that no Purchase shall be made by any
Purchaser if, after giving effect thereto, (a) the Invested Amount would exceed
$150,000,000 (as adjusted pursuant to Section 3.2(b)) (the "Purchase Limit"),
(b) such Purchaser Group's Purchaser Group Invested Amount would exceed the
related Purchaser Group Limit or (c) the Asset Interest, expressed as a
percentage of Net Pool Balance, would exceed 100% (the "Allocation Limit"); and
provided, further that each Purchase made pursuant to this Section 1.1 shall
have a purchase price equal to at least $1,000,000 and shall be an integral
multiple of $100,000. Notwithstanding anything to the contrary herein, the
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amount available for any Purchase hereunder shall be calculated based on the
most recently delivered Information Package and not based on the most recently
delivered Interim Information Package; provided, however that no Purchases shall
be permitted hereunder if the calculations in any Interim Information Package
delivered after the most recently delivered Information Package show that (i)
the Invested Amount would exceed the Purchase Limit, (ii) any Purchase Group
Invested Amount shall exceed the related Purchaser Group Limit, or (iii) the
Asset Interest, expressed as a percentage of Net Pool Balance would exceed the
Allocation Limit.
SECTION 1.2 PURCHASE PROCEDURES; ASSIGNMENT OF THE PURCHASERS'
INTERESTS.
(a) Purchase Request. Each Purchase from the Seller by the
Purchasers shall be made on notice from the Seller to each Purchaser Agent (on
behalf of the related Purchaser) received by such Purchaser Agent not later than
12:00 noon (New York City time) on the second Business Day preceding the date of
such proposed Purchase. Each such notice of a proposed Purchase shall be
substantially in the form of Exhibit 1.2(a) and shall specify, among other
items, the desired amount and date of such Purchase. Each Purchaser Agent shall
promptly upon receipt notify the related Purchaser of any such notice. The
Seller shall not request more than one Purchase in any calendar week.
(b) Funding of Purchase. On the date of each Purchase, each
Purchaser shall, upon satisfaction of the applicable conditions set forth in
Article V, make available to the Seller its Pro Rata Share of the amount of the
Purchase in same day funds by wire transfer to an account designated in writing
by the Seller.
(c) Assignment of Asset Interests. The Seller hereby sells,
assigns and transfers to the Purchasers on a pro rata basis, effective on and as
of the date of each Purchase and each Reinvestment by the Purchasers hereunder,
the Asset Interest.
SECTION 1.3 REINVESTMENTS OF CERTAIN COLLECTIONS; PAYMENT OF REMAINING
COLLECTIONS.
(a) On the close of business on each day during the period from
the date of the first Purchase to the Termination Date, the Master Servicer
will, out of all Collections received on such day from Pool Receivables and
Related Assets:
(i) determine the portion of the Collections attributable
to the Asset Interest by multiplying (A) the amount of such Collections
times (B) the lesser of (1) the Asset Interest and (2) 100%;
(ii) out of the portion of such Collections allocated to
the Asset Interest pursuant to clause (i) above, identify and hold in
trust for the Purchasers (provided that unless otherwise requested by
any Purchaser Agent, on behalf of the related Purchaser, such
Collections shall not be required to be held in a separate account) an
amount equal to the sum of the estimated amount of Earned Discount and
CP Costs accrued in respect of each Asset Tranche (based on the rate
information provided by the Administrative Agent pursuant to Section
2.5), all other amounts due to the Purchasers or the Agents hereunder
and the Purchasers' Share of the Servicing Fee (in each case, accrued
through such day) and not so previously identified; and
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(iii) apply the Collections allocated to the Asset Interest
pursuant to clause (i) above and not required to be identified and held
in trust pursuant to clause (ii) above to the purchase from the Seller
of ownership interests in Pool Receivables and Related Assets (each
such purchase being a "Reinvestment"); provided that:
(A) if, after giving effect to such
Reinvestment, (1) the Asset Interest would exceed the
Allocation Limit, (2) any Purchaser Group Invested Amount
shall exceed the related Purchaser Group Limit or (3) the
Invested Amount would exceed the Purchase Limit, then the
Master Servicer shall not make such Reinvestment, but shall
identify and hold in trust for the benefit of the Purchasers,
a portion of such Collections which, together with other
Collections previously identified and then so held, shall
equal the amount necessary to reduce (x) the Invested Amount
to the Purchase Limit, (y) any Purchaser Group's Purchaser
Group Invested Amount to such Purchaser Group's Purchase Group
Limit and (z) the Asset Interest to the Allocation Limit; and
(B) if any of the conditions precedent to
Reinvestment in clause (a), (b) and (d) of Section 5.2,
subject to the proviso set forth in Section 5.2, are not
satisfied, then the Master Servicer shall not reinvest any of
such remaining Collections, but shall identify them and hold
them in trust for the benefit of the Purchasers;
(iv) out of the portion of Collections not allocated to
the Asset Interest pursuant to clause (i) above, pay to the Master
Servicer or set aside (at the option of the Master Servicer) the
Seller's Share of the Servicing Fee accrued through such day and not
previously paid; and
(v) pay to the Seller (A) the remaining portion of
Collections not allocated to the Asset Interest pursuant to clause (i)
above and (B) the Collections applied to Reinvestment pursuant to
clause (iii) above.
(b) Unreinvested Collections. The Master Servicer shall identify
and hold in trust for the benefit of the Purchasers all Collections which,
pursuant to clause (iii) of Section 1.3(a), may not be reinvested in the Pool
Receivables and Related Assets, provided that unless otherwise requested by any
Purchaser Agent, such Collections need not be held in a segregated account. If,
prior to the date when such Collections are required to be paid to any Purchaser
Agent for the benefit of the related Purchaser pursuant to Section 1.3(c)(iv),
the amount of Collections so identified exceeds the amount, if any, necessary to
reduce (i) the Invested Amount to the Purchase Limit, (ii) each Purchaser
Group's Invested Amount to the related Purchaser Group Limit and (iii) the Asset
Interest to the Allocation Limit, and the conditions precedent to Reinvestment
set forth in clauses (a), (b) and (d) of Section 5.2, subject to the proviso set
forth in Section 5.2, are satisfied, then the Master Servicer shall apply such
Collections (or, if less, a portion of such Collections equal to the amount of
such excess) to the making of a Reinvestment.
(c) Payment of Amounts.
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(i) The Master Servicer shall pay all amounts identified
pursuant to Section 1.3(a)(ii) in respect of Earned Discount on an
Asset Tranche funded by a Liquidity Funding or a Liberty Street
Alternate Funding, as the case may be, to each Purchaser Agent, on the
related Purchaser's behalf, on the last day of the then current Yield
Period for an Asset Tranche, as provided in Section 3.1.
(ii) The Master Servicer shall pay all amounts of
Collections identified pursuant to Section 1.3(a)(ii) in respect of
Earned Discount on any Asset Tranche funded by Commercial Paper Notes
to each Purchaser Agent, on the related Purchaser's behalf, on the
Settlement Date following the last day of each CP Accrual Period for
such Asset Tranche, as provided in Section 3.1.
(iii) The Master Servicer shall pay all amounts of
Collections identified pursuant to Section 1.3(a)(ii) and not applied
pursuant to clauses (i) or (ii) above to each Purchaser Agent, on the
related Purchaser's behalf, on each Settlement Date for each Collection
Period, as provided in Section 3.1.
(iv) The Master Servicer shall pay all amounts identified
pursuant to Section 1.3(b) to each Purchaser Agent for the account of
the related Purchaser (A) on the last day of the then current Yield
Period for any Asset Tranche funded by a Liberty Street Alternate
Funding or a Liquidity Funding of such Purchaser Group, as provided in
Section 3.1(b), in an amount not exceeding the related Purchaser's
Tranche Investment of such Asset Tranche, and (B) on the last day of
the then current CP Accrual Period for any Asset Tranche funded by
Commercial Paper Notes, as provided in Section 3.1, in an amount not
exceeding the related Purchaser's Tranche Investment of such Asset
Tranche; provided, however, no payment shall be made under clause (B)
above unless the related Purchaser's Tranche Investments of all Asset
Tranches, if any, funded by the Liquidity Fundings of such Purchaser
Group or the Liberty Street Alternate Fundings, as the case may be,
shall have been reduced to zero.
(d) Funds Under Sale Agreement. Upon the written request of the
Agents, on behalf of the Purchasers, given at any time when (i) based on the
most recent Information Package, or Interim Information Package, as the case may
be, either (A) the Asset Interest would exceed the Allocation Limit, (B) any
Purchaser Group's Invested Amount would exceed the related Purchaser Group Limit
or, (C) the Invested Amount would exceed the Purchase Limit, or (ii) a
Liquidation Event or Unmatured Liquidation Event shall have occurred and be
continuing, the Seller shall identify all funds that under the Sale Agreement
would be applied to repay principal of the Initial Seller Notes (as defined in
the Sale Agreement) owing to the Originators. The Seller may make withdrawals of
such funds only for the purposes of (1) at any time, purchasing Receivables from
an Originator in accordance with the Sale Agreement; (2) on the Settlement Date
for any Collection Period, making payments in accordance with the last sentence
of Section 3.1(c)(ii), and (3) on the Settlement Date for any Collection Period,
if, on the basis of the most recent Information Package or Interim Information
Package, as the case may be, and after giving effect to any payment made to the
Master Servicer on such date pursuant to the last sentence of Section
3.1(c)(ii), (I) the Invested Amount does not exceed the Purchase Limit, (II) no
Purchaser Group Invested Amount exceeds the related Purchaser Group Limit and
(III) the Asset Interest does not exceed the Allocation Limit, and provided that
no Liquidation Event or Unmatured Liquidation
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Event shall have occurred and be continuing, repaying principal of the Initial
Seller Notes in accordance with this Agreement and the Sale Agreement.
SECTION 1.4 ASSET INTEREST.
(a) Components of Asset Interest. On any date the Asset Interest
will represent the Investors' undivided percentage ownership interest in all
then outstanding Pool Receivables and all Related Assets with respect to such
Pool Receivables as at such date.
(b) Computation of Asset Interest. On any date, the Asset Interest
will be equal to the percentage equivalent of the following fraction:
IA+RR
-----
NPB
where:
IA = the Invested Amount on the date of such computation;
RR = the Required Reserve on the date of such computation; and
NPB = the Net Pool Balance on the date of such computation;
provided, however, that the Asset Interest during the Liquidation Period shall
equal 100% and shall at no time exceed 100%.
(c) Frequency of Computation. The Asset Interest shall be computed
(i) as provided in Section 3.1, as of the Cut-Off Date for each Collection
Period, and (ii) on the Settlement Date following each Reporting Date, after
giving effect to the payments made pursuant to Section 3.1. In addition, at any
time, any Purchaser Agent, on behalf of the related Purchaser, may require the
Master Servicer to provide an interim report (an "Interim Information Package"),
based on the information then available to the Master Servicer, for purposes of
computing the Asset Interest, any Purchaser Group Limit or the Purchase Limit as
of any other date, and the Master Servicer agrees to do so within five (5) (or
three (3), if a Liquidation Event or a Credit Event has occurred and is
continuing) Business Days of its receipt of such Purchaser Agent's request (such
date, the "Interim Reporting Date").
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.1 SELECTION OF ASSET TRANCHES.
Each Purchaser Agent shall, from time to time for purposes of computing
Earned Discount on that portion of the Asset Interest funded with Liberty Street
Alternate Fundings or Liquidity Fundings made by the related Purchaser Group, as
the case may be, divide such portion of the Asset Interest into Asset Tranches.
The applicable Earned Discount Rate may be different for each Asset Tranche
funded by a Liquidity Funding or a Liberty Street Alternate Funding, as the case
may be. The related Purchaser Group Invested Amount shall be allocated to each
Asset
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Tranche by the related Purchaser Agent, on the related Purchaser's behalf, to
reflect the funding sources for the Asset Interest, so that:
(a) there will be a single Asset Tranche equal to the excess of
the related Purchaser Group Invested Amount over the aggregate amount allocated
at such time pursuant to clause (b) below, which Asset Tranche shall reflect the
portion of the Asset Interest funded by Commercial Paper Notes of the related
Purchaser; and
(b) there may be one or more Asset Tranches, selected by a
Purchaser Agent, on the related Purchaser's behalf, reflecting the portion or
portions of the Asset Interest funded by outstanding Liberty Street Alternate
Fundings or Liquidity Fundings of such Purchaser Group, as the case may be.
SECTION 2.2 COMPUTATION OF INVESTED AMOUNT AND PURCHASER'S TRANCHE
INVESTMENT.
In making any determination of the Invested Amount, any Purchaser Group
Invested Amount and any Purchaser's Tranche Investment, the following rules
shall apply:
(a) the Invested Amount and each Purchaser Group Invested Amount,
as the case may be, shall not be considered reduced by any allocation, setting
aside or distribution of any portion of Collections unless such Collections
shall have been actually delivered hereunder to the related Purchaser Agent, on
the related Purchaser's behalf;
(b) the Invested Amount and each Purchaser Group Invested Amount,
as the case may be, shall not be considered reduced by any distribution of any
portion of Collections if at any time such distribution is rescinded or must
otherwise be returned for any reason; and
(c) if there is any reduction in the Invested Amount or any
Purchaser Group Invested Amount, as the case may be, there shall be a
corresponding reduction in the related Purchaser's Tranche Investment with
respect to one or more Asset Tranches selected by a Purchaser Agent, on the
related Purchaser's behalf, in its discretion.
SECTION 2.3 COMPUTATION OF CONCENTRATION LIMITS AND UNPAID BALANCE.
The Obligor Concentration Limits and the aggregate Unpaid Balance of
Pool Receivables of any Obligor and its Affiliated Obligors (if any) shall be
calculated as if such Obligor and its Affiliated Obligors were one Obligor.
SECTION 2.4 COMPUTATION OF EARNED DISCOUNT.
In making any determination of Earned Discount, the following rules
shall apply:
(a) each Purchaser Agent, on the related Purchaser's behalf, shall
determine the Earned Discount accruing with respect to each Asset Tranche funded
by a Liberty Street Alternate Funding or a Liquidity Funding of such Purchaser
Group, as the case may be, for each Yield Period, in accordance with the
definition of Earned Discount;
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(b) no provision of this Agreement shall require the payment or
permit the collection of Earned Discount in excess of the maximum permitted by
applicable law; and
(c) the Earned Discount for any Asset Tranche shall not be
considered paid by any distribution if at any time such distribution is
rescinded or must otherwise be returned for any reason.
It is the intent of Blue Ridge and Liberty Street to fund its portion of the
Asset Interest by the issuance of Commercial Paper Notes. If, for any reason,
either Blue Ridge or Liberty Street is unable, or determines that it is
undesirable, to issue Commercial Paper Notes to fund its portion of the Asset
Interest, or is unable to repay such Commercial Paper Notes upon the maturity
thereof, such Purchaser will draw on Liquidity Fundings (or a Liberty Street
Alternate Funding, in the case of Liberty Street) to the extent available. If
any Purchaser funds itself through Liquidity Fundings (or a Liberty Street
Alternate Funding, in the case of Liberty Street), the Earned Discount payable
by the Seller will be based on the Bank Rate.
SECTION 2.5 ESTIMATES OF EARNED DISCOUNT RATE, FEES, ETC.
For purposes of determining the amounts required to be identified by
Master Servicer pursuant to Section 1.3, each Purchaser Agent, on the related
Purchaser's behalf, shall notify the Master Servicer (and, if Lennox is not the
Master Servicer, the Seller) from time to time of the related Purchaser's
Tranche Investment of each Asset Tranche, the Earned Discount Rate applicable to
each Asset Tranche funded by a Liberty Street Alternate Funding or Liquidity
Funding of such Purchaser Group, as the case may be, and the rates at which fees
and other amounts are accruing hereunder. It is understood and agreed that (a)
the CP Costs for any Asset Tranche funded by the issuance of Commercial Paper
Notes for any Purchaser Group are determined in arrears and may change from one
applicable CP Accrual Period to the next, (b) the Earned Discount Rate for any
Asset Tranche funded by a Liberty Street Alternate Funding or a Liquidity
Funding of any Purchaser Group may change from one applicable Yield Period to
the next, and the Bank Rate used to calculate the Earned Discount Rate may
change from time to time during an applicable Yield Period, (c) certain rate
information provided by any Purchaser Agent to the Master Servicer shall be
based upon such Purchaser Agent's good faith estimate, (d) the amount of Earned
Discount actually accrued with respect to an Asset Tranche funded by a Liberty
Street Alternate Funding or a Liquidity Funding of any Purchaser Group during
any Yield Period may exceed, or be less than, the amount identified with respect
thereto by Master Servicer, and (e) the amount of fees or other amounts payable
by the Seller hereunder which have accrued hereunder with respect to any
Collection Period may exceed, or be less than, the amount identified with
respect thereto by the Master Servicer. Failure to identify any amount so
accrued shall not relieve the Master Servicer of its obligation to remit
Collections to each Purchaser Agent, for the benefit of the related Purchaser,
with respect to such accrued amount, as and to the extent provided in Section
3.1.
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ARTICLE III
SETTLEMENTS
SECTION 3.1 SETTLEMENT PROCEDURES.
The parties hereto will take the following actions with respect to each
Collection Period:
(a) Information Package. On the eighth day of each month or if
such day is not a Business Day, the next succeeding Business Day (each a
"Reporting Date"), the Master Servicer shall deliver to each Purchaser Agent, on
the related Purchaser's behalf, a report in the form of Exhibit 3.1(a), provided
that, if a Credit Event has occurred and is continuing, such Information Package
shall be accompanied by an electronic file in a form satisfactory to each
Purchaser Agent (collectively, an "Information Package").
(b) Earned Discount and CP Costs; Other Amounts Due. (i) (A) On or
before 12:00 noon (Atlanta, Georgia, time) on the Business Day before the last
day of each Yield Period, each Purchaser Agent shall notify the Master Servicer
of the amount of Earned Discount accrued with respect to any Asset Tranche
funded by a Liberty Street Alternate Funding or a Liquidity Funding of the
related Purchaser Group, as the case may be, corresponding to such Yield Period,
and (B) on or before 12:00 noon (Atlanta, Georgia time) five (5) Business Days
before each Reporting Date, each Purchaser Agent shall notify the Master
Servicer of the CP Costs accrued during the most recently ended CP Accrual
Period with respect to any Asset Tranche funded with Commercial Paper Notes of
such Purchaser Group during all or any portion of such CP Accrual Period (ii)
the Master Servicer shall pay to each Agent for the benefit of the related
Purchaser the amount of such Earned Discount before 12:00 noon (Atlanta, Georgia
time) on the last day of such Yield Period and the amount of such CP Costs
before 12:00 noon (Atlanta, Georgia time) on each Settlement Date (iii) on or
before 12:00 noon (Atlanta, Georgia time) on the Business Day before each
Reporting Date, each Purchaser Agent, on the related Purchaser's behalf, shall
notify the Master Servicer of all Broken Funding Costs, fees and other amounts
accrued and payable by the Seller under this Agreement to the related Purchaser
during the prior calendar month (other than amounts described in clause (c)
below). The Master Servicer shall pay to each Purchaser Agent, for the benefit
of the related Purchaser, the amount of such Broken Funding Costs, fees and
other amounts (to the extent of Collections attributable to the Asset Interest
funded by such Purchaser Group during such Collection Period) on the Settlement
Date for such month. Such payments shall be made out of amounts identified
pursuant to Section 1.3 for such payment; provided, however, that to the extent
Collections attributable to the Asset Interest funded by such Purchaser Group
during such Collection Period are not sufficient to make such payment, such
payment shall be made out of funds paid by the Master Servicer to the Seller
(which amounts the Seller hereby agrees to pay to the Master Servicer), up to
the aggregate amount of Collections applied to Reinvestments under Section
1.3(a) or (b) during such month.
(c) Asset Interest Computations.
(i) On the Reporting Date for each Collection Period, the
Master Servicer shall compute, as of the related Cut-Off Date and based
upon the assumptions in the next
9
sentence, (A) the Asset Interest, (B) the amount of the reduction or
increase (if any) in the Asset Interest since the next preceding
Cut-Off Date, (C) the excess (if any) of the Asset Interest over the
Allocation Limit, (D) the excess (if any) of any Purchaser Group
Invested Amount over such Purchaser Group Limit and (E) the excess (if
any) of the Invested Amount over the Purchase Limit. Such calculations
shall be based upon the assumptions that the (1) information in the
Information Package is correct, and (2) Collections identified pursuant
to Section 1.3(b) will be paid to each Purchaser Agent, for the benefit
of the related Purchaser, on the Settlement Date for such Collection
Period.
(ii) If, according to the computations made pursuant to
clause (i) above, (A) the Asset Interest exceeds the Allocation Limit,
(B) any Purchaser Group Invested Amount exceeds such Purchaser Group
Limit or (C) the Invested Amount exceeds the Purchase Limit, then on
the Settlement Date for such Collection Period, the Master Servicer
shall pay to the applicable Purchaser Agent, for the benefit of the
related Purchaser, (to the extent of Collections during the related
Collection Period attributable to all Asset Tranches funded by such
Purchaser Group and not previously paid to such Purchaser Agent) the
amount necessary to reduce (1) the Invested Amount to the Purchase
Limit, (2) any Purchaser Group Invested Amount to such Purchaser Group
Limit and (3) the Asset Interest to the Allocation Limit, subject,
however, to the proviso to Section 1.3(c)(iv). Such payment shall be
made out of amounts identified pursuant to Section 1.3 for such purpose
and, to the extent such amounts were not so identified, the Seller
hereby agrees to pay such amounts to the Master Servicer to the extent
of Collections applied to Reinvestment under Section 1.3 during the
relevant Collection Period.
(iii) In addition to the payments described in clause (ii)
above and clause (iv) below, during the Liquidation Period, the Master
Servicer shall pay to each Agent, for the benefit of the related
Purchaser, all amounts identified pursuant to Section 1.3 (A) on the
last day of the current Yield Period for any Asset Tranche funded by a
Liberty Street Alternate Funding or a Liquidity Funding funded by such
Purchaser Group, as the case may be, in an amount not exceeding such
Purchaser's Tranche Investment of such Asset Tranche, and (B) after
reduction to zero of such Purchaser's Tranche Investments of the Asset
Tranches, if any, funded by Liberty Street Alternate Fundings or
Liquidity Fundings of such Purchaser Group, as the case may be, on the
last day of the each CP Accrual Period, in an amount not exceeding such
Purchaser's Tranche Investment of the Asset Tranche funded by
Commercial Paper Notes issued by such Purchaser Group.
(iv) On the Interim Reporting Date for each Interim
Reporting Period, the Master Servicer shall compute, as of the related
Interim Cut-Off Date and based upon the assumptions in the next
sentence, (A) the Asset Interest, (B) the amount of the reduction or
increase (if any) in the Asset Interest since the next preceding
Cut-Off Date or Interim Cut-Off Date, (C) the excess (if any) of the
Asset Interest over the Allocation Limit, (D) the excess (if any) of
any Purchaser Group Invested Amount over the related Purchaser Group
Limit and (E) the excess (if any) of the Invested Amount over the
Purchase Limit. Such calculations shall be based upon the assumptions
that (1) the information in the Interim Information Package is correct,
and (2) Collections identified pursuant to Section 1.3(b) will be paid
to each Purchaser Agent, for the benefit of the related Purchaser, on
the Settlement Date for such Collection Period.
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(v) If, according to the computations made pursuant to
clause (iv) above, (A) the Asset Interest exceeds the Allocation Limit,
(B) any Purchaser Group Invested Amount exceeds the related Purchaser
Group Limit or (C) the Invested Amount exceeds the Purchase Limit, then
on the Interim Settlement Date for such Interim Reporting Period, the
Master Servicer shall pay to the applicable Purchaser Agent, for the
benefit of the related Purchaser, (to the extent of Collections during
the related Interim Reporting Period attributable to all Asset Tranches
funded by the related Purchaser Group and not previously paid to such
Purchaser Agent) the amount necessary to reduce (1) the Invested Amount
to the Purchase Limit, (2) any Purchaser Group Invested Amount to the
related Purchaser Group Limit and (3) the Asset Interest to the
Allocation Limit, subject, however, to the proviso to Section
1.3(c)(iv). Such payment shall be made out of amounts identified
pursuant to Section 1.3 for such purpose and, to the extent such
amounts were not so identified, the Seller hereby agrees to pay such
amounts to the Master Servicer to the extent of Collections applied to
Reinvestment under Section 1.3 during the relevant Interim Reporting
Period.
(d) Order of Application. Upon receipt by each Purchaser Agent, on
the related Purchaser's behalf, of funds distributed pursuant to this Section
3.1, such Purchaser Agent shall apply them to the items specified in the
subclauses below, in the order of priority of such subclauses:
(i) to accrued Earned Discount, CP Costs and Broken
Funding Costs, plus any previously accrued Earned Discount, CP Costs
and Broken Funding Costs not paid, to the extent owing to such
Purchaser Group;
(ii) to the related Purchaser's Share of the accrued and
unpaid Servicing Fee (if the Master Servicer is not Lennox or its
Affiliate);
(iii) to such Purchaser Group's Pro Rata Share of the
Program Fee and the Unused Fee accrued during such Collection Period,
plus any previously accrued Program Fee and the Unused Fee not paid on
a prior Settlement Date;
(iv) to the reduction of the Invested Amount on a pro-rata
basis and the reduction of any Purchaser Group Invested Amount, to the
extent such reduction is required under Section 3.1(c);
(v) to other accrued and unpaid amounts owing to any
Purchaser or any Agent hereunder (except Earned Discount on any Asset
Tranche funded by a Liberty Street Alternate Funding or a Liquidity
Funding of any Purchaser Group, as the case may be, which has accrued
but is not yet overdue under Section 1.3(c));
(vi) to the related Purchaser's Share of the accrued and
unpaid Servicing Fee (if the Master Servicer is Lennox or its
Affiliate); and
(vii) to purchase newly originated Receivables during the
Revolving Period.
(e) Non-Distribution of Servicing Fee. Each Purchaser Agent hereby
consents (which consent may be revoked at any time), to the retention by the
Master Servicer of the
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amounts (if any) identified pursuant to Section 1.3 in respect of the Servicing
Fee, in which case no distribution shall be made in respect of the Servicing Fee
pursuant to clause (d) above.
(f) Delayed Payment. If on any day described in this Section 3.1
(or in Section 1.3(c) in respect of accrued Earned Discount on Asset Tranches
funded by Liberty Street Alternate Fundings or Liquidity Fundings of any
Purchaser Group, as the case may be, or accrued CP Costs on Asset Tranches
funded by the issuance of Commercial Paper Notes issued by any Purchaser Group),
because Collections during the relevant CP Accrual Period or Yield Period were
less than the aggregate amounts payable, the Master Servicer shall not make any
payment otherwise required, the next available Collections in respect of the
Asset Interest shall be applied to such payment, and no Reinvestment shall be
permitted hereunder until such amount payable has been paid in full.
SECTION 3.2 DEEMED COLLECTIONS; REDUCTION OF INVESTED AMOUNT, ETC.
(a) Deemed Collections. If on any day:
(i) the Unpaid Balance of any Pool Receivable is:
(A) reduced as a result of any defective,
rejected or returned merchandise or services, any cash
discount, or any other adjustment by any Seller Party or any
Affiliate thereof, or as a result of any tariff or other
governmental or regulatory action, or
(B) reduced or canceled as a result of a setoff
in respect of any claim by the Obligor thereof (whether such
claim arises out of the same or a related or an unrelated
transaction, including without limitation, any setoff or claim
arising as a result of any amount at any time owed by any
Originator in connection with any account receivable owed by
any such Originator to such Obligor), or
(C) reduced on account of the obligation of any
Seller Party or any Affiliate thereof to pay to the related
Obligor any rebate or refund, or
(D) less than the amount included in calculating
the Net Pool Balance for purposes of any Information Package
or Interim Information Package, as the case may be (for any
reason other than such Receivable becoming a Defaulted
Receivable), or
(ii) any of the representations or warranties of the
Seller set forth in Section 6.1(j), (l) or (p) were not true when made
with respect to any Pool Receivable, or any of the representations or
warranties of the Seller set forth in Section 6.1(l) are no longer true
with respect to any Pool Receivable, or any Pool Receivable is
repurchased by an Originator pursuant to the Sale Agreement,
then, on such day, the Seller shall be deemed to have received a Collection of
such Pool Receivable
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(A) in the case of clause (i) above, in the
amount of such reduction or cancellation or the difference
between the actual Unpaid Balance and the amount included in
calculating such Net Pool Balance, as applicable; and
(B) in the case of clause (ii) above, in the
amount of the Unpaid Balance of such Pool Receivable.
Collections deemed received by the Seller under this Section 3.2(a) are herein
referred to as "Deemed Collections."
(b) Seller's Optional Reduction of the Invested Amount. The Seller
may at any time elect to reduce the Invested Amount and each Purchaser Group
Invested Amount as follows:
(i) the Seller shall give each Purchaser Agent, on the
related Purchaser's behalf, at least five (5) Business Days' prior
written notice of such reduction (including the amount of such proposed
reduction and the proposed date on which such reduction will commence),
(ii) on the proposed date of commencement of such
reduction and on each day thereafter, the Master Servicer shall refrain
from reinvesting Collections pursuant to Section 1.3 until the amount
thereof not so reinvested shall equal the desired amount of reduction,
and
(iii) the Master Servicer shall hold such Collections in
trust for the Purchasers, pending payment to the related Purchaser
Agent, as provided in Section 1.3;
provided that:
(A) the amount of any such reduction shall be in
(1) an amount of $1,000,000, (2) an integral multiple thereof
or (3) an amount equal to the remaining Invested Amount,
(B) the Seller shall use reasonable efforts to
attempt to choose a reduction amount, and the date of
commencement thereof, so that such reduction shall commence
and conclude in the same Collection Period,
(C) unless the Invested Amount will be reduced
to zero, after giving effect to such reduction, the Invested
Amount will be at least $25,000,000, and
(D) each reduction of the Invested Amount shall
be done on a pro rata basis and shall result in a
corresponding reduction in each Purchaser Group Invested
Amount.
SECTION 3.3 PAYMENTS AND COMPUTATIONS, ETC.
(a) Payments. All amounts to be paid to any Purchaser Agent or any
other Person or deposited by the Seller or the Master Servicer hereunder (other
than amounts payable under Section 4.2) shall be paid or deposited in accordance
with the terms hereof no later than 12:00
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noon (New York City time) on the day when due in lawful money of the United
States of America in same day funds to the related Purchaser Agent Account, or
to such other account at the bank named therein or at such other bank as any
Purchaser Agent on behalf of the related Purchaser may designate by written
notice to the Person making such payment.
(b) Late Payments. The Seller or the Master Servicer, as
applicable, shall, to the extent permitted by law, pay to the Person to whom
payment is due interest on all amounts not paid or deposited when due hereunder
at 2% per annum above the Base Rate, payable on demand, provided, however, that
such interest rate shall not at any time exceed the maximum rate permitted by
applicable law.
(c) Method of Computation. All computations of interest, CP Costs,
Broken Funding Costs, Earned Discount, any fees payable under Section 4.1 and
any other fees payable by the Seller to any Purchaser or any Purchaser Agent
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day) elapsed.
SECTION 3.4 TREATMENT OF COLLECTIONS AND DEEMED COLLECTIONS.
The Seller shall forthwith deliver to the Master Servicer all Deemed
Collections, and the Master Servicer shall hold or distribute such Deemed
Collections as Earned Discount, CP Costs, Broken Funding Costs, accrued
Servicing Fee, repayment of the Invested Amount or any Purchaser Group Invested
Amount and to other accrued amounts owing hereunder to the same extent as if
such Deemed Collections had actually been received on the date of such delivery
to the Master Servicer. If Collections are then being paid to any Agent, on
behalf of the Purchasers, or its designee, or to lock boxes or accounts directly
or indirectly owned or controlled by the Administrative Agent on behalf of the
Purchasers, the Master Servicer shall forthwith cause such Deemed Collections to
be paid to each Purchaser Agent, on the related Purchaser's behalf, or its
designee or to such lock boxes or accounts, as applicable, or as the Agents
shall request. So long as the Seller shall hold any Collections (including
Deemed Collections) required to be paid to the Master Servicer or any Agent, it
shall hold such Collections in trust for the benefit of the Agents, on behalf of
the Purchasers, and shall clearly ▇▇▇▇ its records to reflect such trust;
provided that unless the Administrative Agent shall have requested it in writing
to do so, the Seller shall not be required to hold such Collections in a
separate deposit account containing only such Collections.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.1 FEES.
The Seller shall pay to each Purchaser certain fees from time to time
in amounts and payable on such dates as are set forth in the letter dated on or
about the date hereof (as amended from time to time, the "Fee Letter") among the
Seller, the Purchasers and the Agents.
SECTION 4.2 YIELD PROTECTION.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring
after June 19, 2000:
14
(A) shall subject an Affected Party to any tax,
duty or other charge with respect to the portion of the Asset
Interest owned by or funded by it, or any obligations or right
to make Purchases or Reinvestments or to provide funding
therefor, or shall change the basis of taxation of payments to
the Affected Party of any portion of the Invested Amount or
Earned Discount owned by, owed to or funded in whole or in
part by it or any other amounts due under this Agreement in
respect of the portion of the Asset Interest owned by or
funded by it or its obligations or rights, if any, to make
Purchases or Reinvestments or to provide funding therefor
(except for (1) taxes based on, or measured by, net income, or
changes in the rate of tax on or determined by reference to
the overall net income, of such Affected Party imposed by the
United States of America, by the jurisdiction in which such
Affected Party's principal executive office is located and, if
such Affected Party's principal executive office is not in the
United States of America, by the jurisdiction where such
Affected Party's principal office in the United States is
located or, (2) franchise taxes, taxes on, or in the nature
of, doing business taxes or capital taxes); or
(B) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by
the Federal Reserve Board, but excluding any reserve included
in the determination of Earned Discount), special deposit or
similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any
Affected Party or with or for the account of any affiliate (or
entity deemed by the Federal Reserve Board to be an affiliate)
of any Affected Party, or credit extended by any Affected
Party; or
(C) shall change the amount of capital
maintained or required or requested or directed to be
maintained by any Affected Party; or
(D) shall impose any other condition affecting
any Asset Interest owned or funded in whole or in part by any
Affected Party, or its obligations or rights, if any, to make
Purchases or Reinvestments or to provide funding therefor; or
(E) shall change the rate for, or the manner in
which the Federal Deposit Insurance Corporation (or a
successor thereto) assesses, deposit insurance premiums or
similar charges;
and the result of any of the foregoing is or would be
(A) to increase the cost to or to impose a cost
on (1) an Affected Party funding or making or maintaining any
Purchases or Reinvestments, any purchases, reinvestments, or
loans or other extensions of credit under any Liquidity
Agreement, or any commitment of such Affected Party with
respect to any of the foregoing, or (2) any Agent for
continuing its or the Seller's relationship with any
Purchaser, in each case, in an amount deemed to be material by
such Affected Party,
15
(B) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement or under
any Liquidity Agreement, or
(C) in the reasonable determination of such
Affected Party, to reduce the rate of return on the capital of
an Affected Party as a consequence of its obligations
hereunder or arising in connection herewith to a level below
that which such Affected Party could otherwise have achieved,
then, within thirty days after demand by such Affected Party (which demand shall
be accompanied by a certificate setting forth, in reasonable detail, the basis
of such demand and the methodology for calculating, and the calculation of, the
amounts claimed by the Affected Party), the Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such additional or increased cost or such reduction;
provided, however, the Seller shall only be required to compensate any such
Affected Party for such amounts to the extent that such Affected Party is
requiring all of its other similarly situated customers to compensate it for
such amounts.
(b) Each Affected Party will promptly notify the Seller and each
Agent of any event of which it has knowledge (including any future event that,
in the judgment of such Affected Party, is reasonably certain to occur) which
will entitle such Affected Party to compensation pursuant to this Section 4.2;
provided, however, no failure to give or delay in giving such notification shall
adversely affect the rights of any Affected Party to such compensation.
(c) In determining any amount provided for or referred to in this
Section 4.2, an Affected Party may use any reasonable averaging and attribution
methods (consistent with its ordinary business practices) that it (in its
reasonable discretion) shall deem applicable. Any Affected Party when making a
claim under this Section 4.2 shall submit to the Seller the certificate
(referred to in subsection (a) above) as to such increased cost or reduced
return (including calculation thereof in reasonable detail), which statement
shall, in the absence of demonstrable error, be conclusive and binding upon the
Seller.
(d) For avoidance of doubt, any interpretation of Accounting
Research Bulletin No. 51 by the Financial Accounting Standards Board shall
constitute an adoption, change, request or directive subject to this Section
4.2.
SECTION 4.3 FUNDING LOSSES.
In the event that any Purchaser or any Liquidity Bank shall actually
incur any loss or expense (including any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Purchaser through the issuance of Commercial Paper Notes to fund any Purchase,
such Liquidity Bank to make any Liquidity Funding or maintain any Liquidity
Funding or such Liberty Street Investor to make any Liberty Street Alternate
Funding or maintain any Liberty Street Alternate Funding) as a result of (a) any
settlement with respect to the related Purchaser's Tranche Investment of the
portion of any Asset Tranche being made by such Purchaser Group on any day other
than the scheduled last day of an applicable CP Accrual Period or Yield Period
with respect thereto (it being understood that the foregoing shall not apply to
any portion of the Invested Amount that is accruing Earned Discount calculated
by reference
16
to the Base Rate), or (b) any Purchase not being made in accordance with a
request therefor under Section 1.2, then, upon written notice from any Purchaser
Agent to the Seller and the Master Servicer, the Seller shall pay to the Master
Servicer, and the Master Servicer shall pay to such Purchaser Agent for the
account of the related Purchaser or such Liquidity Bank, as the case may be, the
amount of such loss or expense. Such written notice (which shall include the
methodology for calculating, and the calculation of, the amount of such loss or
expense, in reasonable detail) shall, in the absence of demonstrable error, be
conclusive and binding upon the Seller and the Master Servicer.
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE.
The initial Purchase pursuant to this Agreement is subject to the
following conditions precedent:
(a) each Agent, on the Purchaser's behalf, shall have received, on
or before the date of such initial Purchase, the following each (unless
otherwise indicated) dated such date and in form and substance reasonably
satisfactory to each Purchaser Agent:
(i) The amendment to the Sale Agreement ("the Sale
Amendment"), dated as of the date hereof duly executed by the parties
thereto;
(ii) Acknowledgment copies (or other evidence of filing
reasonably acceptable to the Administrative Agent on behalf of the
Secured Parties) of (A) proper amendments to certain financing
statements (Form UCC-3), in such form as the Agents, on behalf of the
Secured Parties, may reasonably request, naming each of the Originators
as the debtor and the seller of the Receivables and Related Assets, the
Seller as the secured party and purchaser thereof and the
Administrative Agent, as agent for the Secured Parties as assignee, and
(B) amendment to financing statements (Form UCC-3), in such form as the
Agents, on the behalf of the Secured Parties, may reasonably request,
naming the Seller as the debtor and the seller of undivided percentage
interests in the Pool Receivables and Related Assets and the
Administrative Agent, as agent for the Secured Parties as the secured
party and purchaser thereof, or other, similar instruments or documents
as may be necessary or, in the opinion of the Agents, on the
Purchasers' behalf, desirable under the UCC or any comparable law of
all appropriate jurisdictions to perfect the sale by each Originator to
the Seller of, and each Purchaser's undivided percentage interest in,
the Pool Receivables and Related Assets;
(iii) A reliance letter with respect to the legal opinions
of ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Seller Parties, the
Originators and Lennox International in form and substance satisfactory
to the Liberty Street Purchaser Agent.
(iv) An Information Package, prepared as of the Cut-Off
Date of May [24], 2003;
17
(v) The Liberty Street Liquidity Agreement, duly executed
by Liberty Street, the Liberty Street Liquidity Agent and each Liberty
Street Liquidity Bank;
(vi) Evidence that the Lockbox Accounts are maintained in
the name of the Seller;
(vii) payment in immediately available funds of the amount
determined to be due to Blue Ridge and the Administrative Agent
pursuant to the Information Package delivered in clause (iv) above with
respect to the removal of ▇▇▇▇▇▇▇▇▇ as an Originator pursuant to the
Sale Amendment. The payment of amounts due under this clause (vii)
shall be applied to the reduction of the Invested Amount with respect
to the Blue Ridge Purchaser Group and the payment of all other fees and
amounts then due and owing to Blue Ridge and the Administrative Agent,
including, without limitation, Earned Discount, and shall not be
affected by any right of setoff, counterclaim, recoupment, defense or
other right the Seller might have against the Administrator or Blue
Ridge, all of which rights are hereby expressly waived by the Seller;
(viii) a fully executed copy of the Fee Letter;
(ix) the Amended and Restated Assurance Agreement, dated
as of the date hereof, duly executed by Lennox International; and
(x) such other agreements, instruments, certificates,
opinions and other documents as the Agents may reasonably request; and
(b) Lennox shall have paid or caused to be paid all Transaction
Fees.
SECTION 5.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS.
Each Purchase (including the initial Purchase) and each Reinvestment
shall be subject to the further conditions precedent that on the date of such
Purchase or Reinvestment the following statements shall be true (and the Seller,
by accepting the amount of such Purchase or by receiving the proceeds of such
Reinvestment, and each other Seller Party, upon such acceptance or receipt by
the Seller, shall be deemed to have certified that):
(a) the representations and warranties contained in Section 6.1
are correct in all material respects on and as of such day as though made on and
as of such day and shall be deemed to have been made on such day,
(b) no event has occurred and is continuing, or would result from
such Purchase or Reinvestment, that constitutes a Liquidation Event or Unmatured
Liquidation Event,
(c) after giving effect to each proposed Purchase or Reinvestment,
the Invested Amount will not exceed the Purchase Limit, no Purchaser Group
Invested Amount will exceed the related Purchaser Group Limit and the Asset
Interest will not exceed the Allocation Limit,
(d) the Termination Date shall not have occurred,
18
(e) in the case of a Purchase, each Purchaser Agent shall have
timely received an appropriate notice of the proposed Purchase in accordance
with Section 1.2(a),
(f) a completed Information Package or Interim Information Package
(if applicable) shall have been delivered by the Master Servicer to each
Purchaser Agent, on the related Purchaser's behalf, as of the applicable
Reporting Date or Interim Reporting Date, as the case may be,
(g) both prior to and after giving effect to each proposed
Purchase or Reinvestment, the requirements of the Credit Agreement and any other
agreement evidencing any Material Indebtedness of Lennox International with
respect to transfers of assets and creation of liens shall not have been
violated,
(h) after giving effect to each proposed Purchase or Reinvestment,
the Weighted Average Term (with respect to Receivables included in the Net Pool
Balance) shall not exceed 60 days, and
(i) such other agreements, instruments, certificates, opinions and
other documents as the Administrative Agent may reasonably request have been
delivered;
provided, however, the absence of the occurrence and continuance of an Unmatured
Liquidation Event shall not be a condition precedent to any Reinvestment or any
Purchase on any day which does not cause the Invested Amount, after giving
effect to such Reinvestment or Purchase, to exceed the Invested Amount as of the
opening of business on such day.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES.
Each Seller Party represents and warrants as to itself, except when
specifically provided, in which case, the specified Seller Party represents and
warrants as follows:
(a) Organization and Good Standing; Ownership. Its jurisdiction of
organization is correctly set forth in the preamble to this Agreement. It is
duly organized and is a "registered organization" as defined in the UCC under
the laws of that jurisdiction and no other state or jurisdiction, and such
jurisdiction must maintain a public record showing the organization to have been
organized. It is validly existing as a corporation in good standing under the
laws of its state of organization, with power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted. The Seller had at all relevant times,
and now has, all necessary power, authority, and legal right to acquire and own
the Pool Receivables and Related Assets. The Originators own directly all the
issued and outstanding capital stock of the Seller.
(b) Due Qualification. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification,
19
licenses or approvals, except where the failure to be so qualified or have such
licenses or approvals would not have a Material Adverse Effect.
(c) Power and Authority; Due Authorization. It (i) has all
necessary power, authority and legal right (A) to execute and deliver this
Agreement and the other Transaction Documents to which it is a party, (B) to
carry out the terms of the Transaction Documents to which it is a party, (C) in
the case of the Master Servicer, to service the Receivables and the Related
Assets in accordance with this Agreement and the Sale Agreement, and (D) in the
case of the Seller, sell and assign the Asset Interest on the terms and
conditions herein provided, and (ii) has duly authorized by all necessary
corporate action the execution, delivery and performance of this Agreement and
the other Transaction Documents and, in the case of the Seller, the sales and
assignments described in clause (i)(D) above.
(d) Valid Sale; Binding Obligations. (i) This Agreement
constitutes a valid sale, transfer, and assignment of the Asset Interest to the
Purchasers, enforceable against creditors of, and purchasers from, the Seller,
and (ii) this Agreement and each other Transaction Document signed by such
Seller Party constitutes, a legal, valid and binding obligation of such Seller
Party, enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other similar laws from
time to time in effect affecting the enforcement of creditors' rights generally
and by general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance by it of
this Agreement and the other Transaction Documents to which it is a party and
the consummation by it of the transactions contemplated hereby and thereby will
not (i) conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a default
under, its articles or certificate of incorporation or by-laws, or any material
indenture, loan agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument to which it is a party or by which it or
any of its properties is bound (including, but not limited to, those agreements
or instruments evidencing Material Indebtedness of Lennox International), (ii)
result in the creation or imposition of any Lien upon any its properties
pursuant to the terms of any such material indenture, loan agreement,
receivables purchase agreement, mortgage, deed of trust, or other agreement or
instrument, other than this Agreement and the other Transaction Documents, or
(iii) violate any law or any order, rule, or regulation applicable to it of any
court or of any federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over it or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to its knowledge, threatened, before any Governmental Authority (i)
asserting the invalidity of this Agreement or any other Transaction Document,
(ii) seeking to prevent the sale and assignment of the Receivables under the
Sale Agreement or of the Asset Interest under this Agreement or the consummation
of any of the other transactions contemplated by this Agreement or any other
Transaction Document, or (iii) that would have a Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
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(h) Government Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required for the due execution, delivery and performance by
it of this Agreement and each other Transaction Document to which it is a party,
except, in the case of the Seller, for (i) the filing of the UCC financing
statements referred to in Article V, and (ii) the filing of any UCC continuation
statements and amendments from time to time required in relation to any UCC
financing statements filed in connection with this Agreement, as provided in
Section 8.7, all of which, at the time required in Article V or Section 8.7, as
applicable, shall have been duly made and shall be in full force and effect.
(i) Financial Condition. (i) The consolidated and consolidating
balance sheets of the Lennox International and its consolidated subsidiaries as
at December 31, 2002, and the related statements of income and shareholders'
equity of Lennox International and its consolidated subsidiaries for the fiscal
year then ended, certified by KPMG LLP, independent certified public
accountants, copies of which have been furnished to the Agents, fairly present
in all material respects the consolidated financial condition of Lennox
International and its consolidated subsidiaries as at such date and the
consolidated results of the operations of Lennox International and its
consolidated subsidiaries for the period ended on such date, all in accordance
with GAAP consistently applied, (ii) since December 31, 2002 there has been no
material adverse change in any such financial condition, business or operations
except as described in Schedule 6.1(i), (iii) the balance sheet of the Seller as
at March 31, 2003, certified by the chief financial officer or treasurer of the
Seller by means of a Certificate of Financial Officer in the form attached
hereto as Exhibit B, copies of which have been furnished to the Agents, fairly
present in all material respects the financial condition, assets and liabilities
of the Seller as at such date, all in accordance with GAAP consistently applied,
and (iv) since June 9, 2000 there has been no material adverse change in the
Seller's financial condition, business or operations.
(j) Nature of Receivables. Each Receivable constitutes an
"account" as such term is defined in the UCC.
(k) Margin Regulations. The use of all funds obtained by such
Seller Party under this Agreement or any other Transaction Document will not
conflict with or contravene any of Regulation T, U and X promulgated by the
Federal Reserve Board from time to time.
(l) Quality of Title. (i) This Agreement creates a valid and
continuing security interest (as defined in the applicable UCC) in the
Collateral in favor of the Administrative Agent for the benefit of the Secured
Parties, which security interest is prior to all other Liens and is enforceable
as such against creditors of and purchasers from the Seller, (ii) the Seller
owns and has good and marketable title to the Collateral free and clear of any
Lien (other than any Lien arising solely as the result of any action taken by
any Secured Parties (or any assignee thereof) or by the Administrative Agent);
(iii) when any Purchaser makes a Purchase or Reinvestment, it shall have
acquired and shall at all times thereafter continuously maintain a valid and
perfected first priority undivided percentage ownership interest to the extent
of the portion of the Asset Interest funded by the related Purchaser Group in
the Collateral, free and clear of any Lien (other than any Lien arising as the
result of any action taken by any Secured Party (or any assignee thereof or by
the Administrative Agent); (iv) other than the security interest granted to the
Administrative Agent for the benefit of the Secured Parties pursuant to this
Agreement, the Seller has not pledged,
21
assigned, sold or granted a security interest in, or otherwise conveyed any of
the Collateral; (v) the Seller has not authorized the filing of, and is not
aware of any financing statements against the Seller that include a description
of Collateral and (vi) the Seller has not authorized the filing of, and is not
aware of any financing statements against the Seller that include a description
of collateral covering the Collateral other than except such as may be filed (A)
in favor of the Originators in accordance with the Contracts, (B) in favor of
the Seller in connection with the Sale Agreement or (C) in favor of the Secured
Parties or the Administrative Agent in accordance with this Agreement or in
connection with any Lien arising solely as the result of any action taken by the
Secured Parties (or any assignee thereof) or by the Administrative Agent.
(m) Accurate Reports. No Information Package or Interim
Information Package (if prepared by such Seller Party, or to the extent
information therein was supplied by such Seller Party) or other information,
exhibit, financial statement, document, book, record or report furnished or to
be furnished by or on behalf of such Seller Party to any Agent or any Purchaser
pursuant to this Agreement was or will be inaccurate in any material respect as
of the date it was or will be dated or (except as otherwise disclosed to such
Agent or Purchaser at such time) as of the date so furnished, or contained or
(in the case of information or other materials to be furnished in the future)
will contain any material misstatement of fact or omitted or (in the case of
information or other materials to be furnished in the future) will omit to state
a material fact or any fact necessary to make the statements contained therein
not materially misleading in light of the circumstances made or presented.
(n) Offices. The principal places of business and chief executive
offices of the Master Servicer and the Seller are located at the respective
addresses set forth on Schedule 14.2, and the offices where the Master Servicer
and the Seller keep all their books, records and documents evidencing Pool
Receivables, the related Contracts and all purchase orders and other agreements
related to such Pool Receivables are located at the addresses specified in
Schedule 6.1(n) (or at such other locations, notified to each Purchaser Agent,
on the related Purchaser's behalf, in accordance with Section 7.1(f), in
jurisdictions where all action required by Section 8.5 has been taken and
completed).
(o) Lockbox Accounts. The names, addresses and jurisdictions of
organization of all the Lockbox Banks, together with the account numbers of the
Lockbox Accounts of the Seller at each Lockbox Bank and the post office box
numbers of the lockboxes, are listed on Schedule 6.1(o) (or have been notified
to and approved by the Agents in accordance with Section 7.3(d)). The Seller has
not granted any Person, other than the Administrative for the benefit of the
Secured Parties as contemplated by this Agreement, dominion and control of any
lockbox or Lockbox Account, or the right to take dominion and control of any
such lockbox or Lockbox Account at a future time.
(p) Eligible Receivables. Each Receivable included in the Net Pool
Balance as an Eligible Receivable on the date of any Purchase, Reinvestment or
computation of Net Pool Balance shall be an Eligible Receivable on such date.
(q) Servicing Programs. No license or approval is required for any
Agent's use of any program used by the Master Servicer in the servicing of the
Receivables, other than those which have been obtained and are in full force and
effect.
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(r) Compliance with Credit and Collection Policy. With respect to
each Eligible Receivable, it has complied in all material respects with the
Credit and Collection Policy.
(s) [Reserved].
(t) Names. Since the date of its incorporation, the Seller has not
used any corporate names, trade names or assumed names other than the name in
which it has executed this Agreement.
(u) Ownership of the Seller. Collectively, the Originators own
100% of the issued and outstanding capital stock of the Seller, free and clear
of any Lien. Such capital stock is validly issued, fully paid and nonassessable,
and there are no options, warrants or other rights to acquire securities of the
Seller.
(v) Investment Company. The Seller is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended from time
to time, or any successor statute.
(w) Taxes. Each Seller Party has filed all material tax returns
and reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except for immaterial amounts,
unless such immaterial amounts give rise to a Lien, and except for any such
taxes which are not yet delinquent or are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with generally accepted accounting principles shall have been set aside on its
books. The Seller is not aware of any judgment or tax lien filings against it.
(x) Compliance with Laws. Each Seller Party is in compliance with
all applicable laws, rules, regulations and orders, including those with respect
to the Pool Receivables and related Contracts, except where the failure to so
comply would not individually or in the aggregate have a Material Adverse
Effect.
ARTICLE VII
GENERAL COVENANTS OF THE SELLER PARTIES
SECTION 7.1 AFFIRMATIVE COVENANTS OF THE SELLER PARTIES.
Until the Final Payout Date, unless each Agent shall otherwise consent
in writing:
(a) Compliance With Laws, Etc. Each Seller Party will comply in
all material respects with all applicable laws, rules, regulations and orders,
including those with respect to the Pool Receivables and related Contracts,
except where the failure to so comply would not individually or in the aggregate
have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Each Seller Party will
preserve and maintain its corporate existence, status as a "registered
organization", rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to preserve and maintain
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such existence, rights, franchises, privileges and qualification would have a
Material Adverse Effect.
(c) Audits. Each Seller Party will (i) at any time and from time
to time upon not less than five (5) Business Days' notice (unless a Liquidation
Event has occurred and is continuing (or any Purchaser Agent, on the related
Purchaser's behalf, believes in good faith that a Liquidation Event has occurred
and is continuing), in which case no such notice shall be required) during such
Seller Party's regular business hours, permit each Purchaser Agent, on the
related Purchaser's behalf, or any of its agents or representatives, (A) to
examine and make copies of and abstracts from all books, records and documents
(including, without limitation, computer tapes and disks) in the possession or
under the control of such Seller Party relating to Pool Receivables, including,
without limitation, the related Contracts and purchase orders and other
agreements, and (B) to visit the offices and properties of such Seller Party for
the purpose of examining such materials described in clause (i)(A) next above,
and to discuss matters relating to Pool Receivables or such Seller Party's
performance hereunder with any of the officers or employees (with notification
to and coordination with the treasurer of such Seller or his designee) of such
Seller Party having knowledge of such matters; (ii) permit each Purchaser Agent
or any of its respective agents or representatives, upon not less than five (5)
Business Days' notice from such Purchaser Agent and the consent (which consent
shall not unreasonably be withheld or delayed) of such Seller Party (unless a
Liquidation Event has occurred and is continuing (or such Purchaser Agent
believes in good faith that a Liquidation Event has occurred and is continuing)
in which case no such notice or consent shall be required), to meet with the
independent auditors of such Seller Party, to review such auditors' work papers
and otherwise to review with such auditors the books and records of such Seller
Party with respect to the Pool Receivables and Related Assets; and (iii) without
limiting the provisions of clause (i) or (ii) next above, from time to time, at
the expense of such Seller Party, permit certified public accountants or other
auditors acceptable to each Purchaser Agent to conduct a review of such Seller
Party's books and records with respect to the Pool Receivables and Related
Assets; provided, that, so long as no Liquidation Event has occurred and is
continuing, (iv) such reviews shall not be done more than two (2) times in any
one calendar year and (v) the Seller Parties shall only be responsible for the
costs and expenses of one such review in any one calendar year.
(d) Keeping of Records and Books of Account. The Master Servicer
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Pool Receivables
in the event of the destruction of the originals thereof), and keep and
maintain, all documents, books, records and other information reasonably
necessary or advisable for the collection of all Pool Receivables (including,
without limitation, records adequate to permit the daily identification of
outstanding Unpaid Balances by Obligor and related debit and credit details of
the Pool Receivables).
(e) Performance and Compliance with Receivables and Contracts.
Each Seller Party will, at its expense, timely and fully perform and comply with
all material provisions, covenants and other promises, if any, required to be
observed by it under the Contracts related to the Pool Receivables and all
agreements related to such Pool Receivables.
(f) Location of Records. Each Seller Party will keep its chief
place of business and chief executive office, and the offices where it keeps its
records concerning the Pool
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Receivables, all related Contracts and all agreements related to such Pool
Receivables (and all original documents relating thereto), at the address(es) of
the Master Servicer and the Seller referred to in Section 6.1(n) or, upon 30
days' prior written notice to the Administrative Agent, at such other locations
in jurisdictions where all action required by Section 8.5 shall have been taken
and completed.
(g) Credit and Collection Policies. Each Seller Party will comply
in all material respects with the Credit and Collection Policy in regard to each
Pool Receivable and the related Contract.
(h) Sale Agreement. The Seller will perform and comply in all
material respects with all of its covenants and agreements set forth in the Sale
Agreement, and will enforce the performance by the Originators of their
respective obligations under the Sale Agreement.
(i) Lockbox Agreements. The Seller and the Master Servicer shall
enter into a Lockbox Agreement with Wachovia with respect to each Lockbox Bank
with respect to each Lockbox Account, and shall instruct all Obligors to deposit
all Collections to the Lockbox Accounts. Upon the establishment of the
Collection Account, if any, the Master Servicer shall instruct each Lockbox Bank
to deposit all Collections to the Collection Account. The Seller will not give
any contrary or conflicting instructions, and will, upon the request of the
Master Servicer or the Administrative Agent, confirm such instructions by the
Master Servicer or take such other action as may be reasonably required to give
effect to such instructions.
SECTION 7.2 REPORTING REQUIREMENTS OF THE SELLER PARTIES.
From the date hereof until the Final Payout Date, unless each Agent, on
the Purchasers' behalf, shall otherwise consent in writing:
(a) Quarterly Financial Statements - Lennox International. The
Master Servicer will furnish to each Purchaser Agent, on the related Purchaser's
behalf, as soon as available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of Lennox International,
copies of its consolidated, and, to the extent otherwise available,
consolidating balance sheets and related statements of income and statements of
cash flow, showing the financial condition of Lennox International and its
consolidated Subsidiaries as of the close of such fiscal quarter and the results
of its operations and the operations of such Subsidiaries during such fiscal
quarter and the then elapsed portion of the fiscal year, together with a
Certificate of Financial Officer in the form attached hereto as Exhibit B
executed by the chief financial officer or treasurer of the Lennox
International.
(b) Annual Financial Statements - Lennox International. The Master
Servicer will furnish to each Purchaser Agent, as soon as available and in any
event within 90 days after the end of each fiscal year of Lennox International,
copies of its consolidated and consolidating balance sheets and related
statements of income and statements of cash flow, showing the financial
condition of Lennox International and its consolidated Subsidiaries as of the
close of such fiscal year and the results of its operations and the operations
of such Subsidiaries during such year, all audited by KPMG LLP or other
independent public accountants of recognized national standing acceptable to
each Agent and accompanied by an opinion of such accountants
25
(which shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition and
results of operations of Lennox International on a consolidated basis (except as
noted therein) in accordance with GAAP consistently applied;
(c) Quarterly Financial Statements - Seller. The Seller will
furnish to the each Purchaser Agent, as soon as available and in any event
within 45 days after the end of each of the first three quarters of each fiscal
year of the Seller, copies of the financial statements of the Seller, consisting
of at least a balance sheet as at the close of such quarter and statements of
earnings and changes in cash flows for such quarter and for the period from the
beginning of the fiscal year to the close of such quarter, together with a
Certificate of Financial Officer in the form attached hereto as Exhibit B
executed by the chief financial officer, chief accounting officer, controller or
treasurer of the Seller or Lennox International;
(d) Annual Financial Statements - Seller. The Seller will furnish
to the each Purchaser Agent, as soon as available and in any event within 90
days after the end of each fiscal year of the Seller, copies of the financial
statements of the Seller, consisting of at least a balance sheet of the Seller
for such year and statements of earnings, cash flows and shareholders' equity,
setting forth in each case in comparative form corresponding figures from the
preceding fiscal year, together with a Certificate of Financial Officer in the
form attached hereto as Exhibit B executed by the chief financial officer or
treasurer of the Seller;
(e) Reports to Holders and Exchanges. In addition to the reports
required by subsections (a), (b), (c) and (d) above, promptly upon any Agent's
request, the Master Servicer will furnish or cause to be furnished to such
Agent, on the related Purchaser's behalf, copies of any reports specified in
such request which the Master Servicer sends to any of its securityholders, and
any reports, final registration statements (excluding exhibits), and each final
prospectus and all amendments thereto that the Master Servicer files with the
Securities and Exchange Commission or any national securities exchange other
than registration statements relating to employee benefit plans and
registrations of securities for selling securities;
(f) ERISA. Promptly after the filing or receiving thereof, each
Seller Party will furnish to each Purchaser Agent, on the related Purchaser's
behalf, copies of all reports and notices with respect to any Reportable Event
defined in Article IV of ERISA which any Seller Party or ERISA Affiliate thereof
files under ERISA with the Internal Revenue Service, the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or which such Seller Party
or ERISA Affiliate thereof receives from the Pension Benefit Guaranty
Corporation, which Reportable Event(s) individually or in the aggregate could
have a Material Adverse Effect;
(g) Liquidation Events, Etc. As soon as possible and in any event
within three (3) Business Days after obtaining knowledge of the occurrence of
any Liquidation Event, any Unmatured Liquidation Event, or any Credit Event,
each Seller Party will furnish to each Purchaser Agent, on the related
Purchaser's behalf, a written statement of the chief financial officer,
treasurer or chief accounting officer of such Seller Party setting forth details
of such event and the action that such Seller Party will take with respect
thereto;
26
(h) Litigation. As soon as possible and in any event within ten
(10) Business Days of any Seller Party's knowledge thereof, such Seller Party
will furnish to each Purchaser Agent, on the related Purchaser's behalf, notice
of (i) any litigation, investigation or proceeding which may exist at any time
which could reasonably be expected to have a Material Adverse Effect and (ii)
any development in previously disclosed litigation which development could
reasonably be expected to have a Material Adverse Effect;
(i) [Reserved];
(j) Change in Credit and Collection Policy. Prior to its effective
date, each Seller Party will furnish to each Purchaser Agent, on the related
Purchaser's behalf, notice of (i) any material change in the character of such
Seller Party's business, and (ii) any material change in the Credit and
Collection Policy;
(k) Credit Event. Within five (5) Business Days of the occurrence
thereof, each Seller Party will furnish to each Purchaser Agent, on the related
Purchaser's behalf, notice of any Credit Event; and
(l) Other. Promptly, from time to time, each Seller Party will
furnish to each Purchaser Agent, on the related Purchaser's behalf, such other
information, documents, records or reports respecting the Receivables or the
condition or operations, financial or otherwise, of such Seller Party as such
Purchaser Agent may from time to time reasonably request in order to protect the
interests of such Purchaser Agent or the related Purchaser under or as
contemplated by this Agreement.
SECTION 7.3 NEGATIVE COVENANTS OF THE SELLER PARTIES.
From June 19, 2000 until the Final Payout Date, without the prior
written consent of the Administrative Agent:
(a) Sales, Liens, Etc. (i) The Seller will not, except as
otherwise provided herein and in the other Transaction Documents, sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Lien upon or with respect to, any Pool Receivable or any Related
Asset, or any interest therein, or any account to which any Collections of any
Pool Receivable are sent, or any right to receive income or proceeds from or in
respect of any of the foregoing (except, prior to the execution of Lockbox
Agreements, set-off rights of any bank at which any such account is maintained),
and (ii) the Master Servicer will not assert any interest in the Receivables,
except as Master Servicer.
(b) Extension or Amendment of Receivables. No Seller Party will,
except as otherwise permitted in Section 8.2(c), extend, amend or otherwise
modify the terms of any Pool Receivable, or amend, modify or waive any material
term or condition of any Contract related thereto in any way that adversely
affects the collectibility of any Pool Receivable or the Purchaser's rights
therein.
(c) Change in Credit and Collection Policy. No Seller Party will
make or permit to be made any material change in the Credit and Collection
Policy, which change would impair the
27
collectibility of any significant portion of the Pool Receivables or otherwise
adversely affect the interests or remedies of the Purchaser under this Agreement
or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. No Seller Party
will add or terminate any bank as a Lockbox Bank from those listed in Schedule
6.1(o) or, after Lockbox Accounts have been delivered pursuant to Section
7.1(i), make any change in its instructions to Obligors regarding payments to be
made to the Seller or Master Servicer or payments to be made to any Lockbox Bank
(except for a change in instructions solely for the purpose of directing
Obligors to make such payments to another existing Lockbox Bank.
(e) Deposits to Collection Account. No Seller Party will deposit
or otherwise credit, or cause or permit to be so deposited or credited, to the
Collection Account, any cash or cash proceeds other than Collections of Pool
Receivables.
(f) Changes to Other Documents. The Seller will not enter into any
amendment or modification of, or supplement to, the Sale Agreement or the
Seller's certificate of incorporation.
(g) [Reserved].
(h) Seller Indebtedness. The Seller will not incur or permit to
exist any Indebtedness or liability on account of deposits or advances or for
borrowed money or for the deferred purchase price of any property or services,
except (i) indebtedness of the Seller to the Originators incurred in accordance
with the Sale Agreement, (ii) current accounts payable arising under the
Transaction Documents and not overdue and (iii) other current accounts payable
arising in the ordinary course of business and not overdue, in an aggregate
amount at any time outstanding not to exceed $10,000.
(i) Negative Pledges. No Seller Party will enter into or assume
any agreement (other than this Agreement and the other Transaction Documents)
prohibiting the creation or assumption of any Lien upon any Pool Receivables or
Related Assets, whether now owned or hereafter acquired, except as contemplated
by the Transaction Documents, or otherwise prohibiting or restricting any
transaction contemplated hereby or by the other Transaction Documents.
(j) Change of Name; Jurisdiction of Organization; Offices and
Records. No Seller Party shall change (i) its name as it appears in official
filings in the jurisdiction of its organization, (ii) its status as a
"registered organization" (within the meaning of Article 9 of any applicable
enactment of the UCC), (iii) its organizational identification number, if any,
issued by its jurisdiction of organization, or (iv) its jurisdiction of
organization unless it shall have: (A) given the Agents at least forty-five (45)
days' prior written notice thereof; (B) at least ten (10) days prior to such
change, delivered to the Agents all financing statements, instruments and other
documents requested by the Agents in connection with such change or relocation
and (C) caused an opinion of counsel acceptable to Agents and their respective
assigns to be delivered to the Agents and such assigns that Administrative
Agent's security interest (for the benefit of the Secured Parties) is perfected
and of first priority, such opinion to be in form and substance acceptable to
the Agents and such assigns in their sole discretion.
(k) [Reserved].
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(l) Mergers, Consolidations and Acquisitions.
(i) The Master Servicer will not, nor will it permit any
subservicer to merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or
purchase, lease or otherwise acquire (in one transaction or a series of
transactions) all or substantially all of the assets of any other
Person (whether directly by purchase, lease or other acquisition of all
or substantially all of the assets of such Person or indirectly by
purchase or other acquisition of all or substantially all of the
capital stock of such other Person) other than acquisitions in the
ordinary course of their business, except that if at the time thereof
and immediately after giving effect thereto no Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing (A)
the Master Servicer or such subservicer may merge or consolidate with
any Subsidiary (other than Seller) in a transaction in which such
Master Servicer or such subservicer is the surviving corporation, and
(B) the Master Servicer or such subservicer may purchase, lease or
otherwise acquire from any Subsidiary (other than Seller) all or
substantially all of its assets and may purchase or otherwise acquire
all or substantially all of the capital stock of any Person who
immediately thereafter is a Subsidiary.
(ii) Seller will not merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate
with it, or purchase, lease or otherwise acquire (in one transaction or
a series of transactions) all or substantially all of the assets of any
other Person (whether directly by purchase, lease or other acquisition
of all or substantially all of the assets of such Person or indirectly
by Purchase or other acquisition of all or substantially all of the
capital stock of such other Person) other than the acquisition of the
Receivables and Related Assets pursuant to the Sale Agreement and the
sale of an interest in the Pool Receivables and Related Assets
hereunder.
(m) [Reserved].
(n) Change in Business. No Seller Party will make or permit to be
made any material change in the character of its business, which change would
impair the collectibility of any significant portion of the Pool Receivables or
otherwise adversely affect the interests or remedies of the Purchasers under
this Agreement or any other Transaction Document.
SECTION 7.4 SEPARATE CORPORATE EXISTENCE OF THE SELLER.
Each Seller Party hereby acknowledges that the Purchaser and each Agent
are entering into the transactions contemplated hereby in reliance upon the
Seller's identity as a legal entity separate from the Master Servicer and its
other Affiliates. Therefore, each Seller Party shall take all steps specifically
required by this Agreement or reasonably required by the Agents to continue the
Seller's identity as a separate legal entity and to make it apparent to third
Persons that the Seller is an entity with assets and liabilities distinct from
those of its Affiliates, and is not a division of the Master Servicer or any
other Person. Without limiting the foregoing, each Seller Party will take such
actions as shall be required in order that:
(a) The Seller will be a limited purpose corporation whose primary
activities are restricted in its Certificate of Incorporation to purchasing or
otherwise acquiring from the
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Originators, owning, holding, granting security interests, or selling interests,
in Receivables in the Receivables Pool and Related Assets, entering into
agreements for the selling and servicing of the Receivables Pool, and conducting
such other activities as it deems necessary or appropriate to carry out its
primary activities;
(b) At least one member of the Seller's Board of Directors shall
be an Independent Director. The certificate of incorporation of the Seller shall
provide that (i) at least one member of the Seller's Board of Directors shall be
an Independent Director, (ii) the Seller's Board of Directors shall not approve,
or take any other action to cause the filing of, a voluntary bankruptcy petition
with respect to the Seller unless the Independent Director shall approve the
taking of such action in writing prior to the taking of such action and (iii)
the provisions requiring an Independent Director and the provisions described in
clauses (i) and (ii) of this paragraph (b) cannot be amended without the prior
written consent of the Independent Director;
(c) The Independent Director shall not at any time serve as a
trustee in bankruptcy for the Seller or any Affiliate thereof;
(d) Any employee, consultant or agent of the Seller will be
compensated from the Seller's funds for services provided to the Seller. The
Seller will not engage any agents other than its attorneys, auditors and other
professionals, and a servicer and any other agent contemplated by the
Transaction Documents for the Receivables Pool (the parties acknowledge that the
Master Servicer will be fully compensated for its services by payment of the
Servicing Fee), and certain organizational expenses in connection with the
formation of the Seller;
(e) The Seller will contract with the Master Servicer to perform
for the Seller all operations required on a daily basis to service the
Receivables Pool. The Seller will pay the Master Servicer the Servicing Fee
pursuant hereto. The Seller will not incur any material indirect or overhead
expenses for items shared with the Master Servicer (or any other Affiliate
thereof) which are not reflected in the Servicing Fee. To the extent, if any,
that the Seller (or any other Affiliate thereof) shares items of expenses not
reflected in the Servicing Fee, for legal, auditing and other professional
services and directors' fees, such expenses will be allocated to the extent
practical on the basis of actual use or the value of services rendered, and
otherwise on a basis reasonably related to the actual use or the value of
services rendered, it being understood that Lennox shall pay or cause to be paid
all expenses relating to the preparation, negotiation, execution and delivery of
the Transaction Documents, including, without limitation, legal, rating agency
and other fees;
(f) The Seller's operating expenses will not be paid by any other
Seller Party or other Affiliate of the Seller;
(g) The Seller will have its own stationery;
(h) The books of account, financial reports and corporate records
of the Seller will be maintained separately from those of the Master Servicer
and each other Affiliate of the Seller;
(i) Any financial statements of any Seller Party or Affiliate
thereof which are consolidated to include the Seller will contain detailed notes
clearly stating that (i) all of the Seller's assets are owned by the Seller, and
(ii) the Seller is a separate corporate entity with its own
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separate creditors that will be entitled to be satisfied out of the Seller's
assets prior to any value in the Seller becoming available to the Seller's
equity holders; and the accounting records and the published financial
statements of the Originators will clearly show that, for accounting purposes,
the Pool Receivables and Related Assets have been sold by the Originators to the
Seller;
(j) The Seller's assets will be maintained in a manner that
facilitates their identification and segregation from those of the Master
Servicer and the other Affiliates;
(k) Each Affiliate of the Seller will strictly observe corporate
formalities in its dealings with the Seller, and, except as permitted pursuant
to this Agreement with respect to Collections, funds or other assets of the
Seller will not be commingled with those of any of its Affiliates;
(l) No Affiliate of the Seller will maintain joint bank accounts
with the Seller or other depository accounts with the Seller to which any such
Affiliate (other than in its capacity as the Master Servicer hereunder or under
the Sale Agreement) has independent access, provided that prior to the
occurrence of a Credit Event, Collections may be deposited into general accounts
of the Master Servicer, subject to the obligations of the Master Servicer
hereunder;
(m) No Affiliate of the Seller shall, directly or indirectly, name
the Seller or enter into any agreement to name the Seller as a direct or
contingent beneficiary or loss payee on any insurance policy covering the
property of any Affiliate of the Seller;
(n) Each Affiliate of the Seller will maintain arm's length
relationships with the Seller, and each Affiliate of the Seller that renders or
otherwise furnishes services or merchandise to the Seller will be compensated by
the Seller at market rates for such services or merchandise;
(o) No Affiliate of the Seller will be, nor will it hold itself
out to be, responsible for the debts of the Seller or the decisions or actions
in respect of the daily business and affairs of the Seller. The Seller shall not
(i) guarantee or become obligated for the debts of any other entity or hold out
its credit as being available to satisfy the obligations of others, (ii) acquire
obligations of its shareholders or (iii) pledge its assets for the benefit of
any other entity or make any loans to any other entity. The Master Servicer and
the Seller will immediately correct any known misrepresentation with respect to
the foregoing and they will not operate or purport to operate as an integrated
single economic unit with respect to each other or in their dealing with any
other entity;
(p) The Seller will keep correct and complete books and records of
account and minutes of the meetings and other proceedings of its stockholder and
board of directors, as applicable, and the resolutions, agreements and other
instruments of the Seller will be continuously maintained as official records by
the Seller; and
(q) The Seller, on the one hand, and each Originator, on the other
hand, will conduct its business solely in its own corporate name and in such a
separate manner so as not to mislead others with whom they are dealing.
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ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.1 DESIGNATION OF MASTER SERVICER.
(a) Lennox as Initial Master Servicer. The servicing,
administering and collection of the Pool Receivables shall be conducted by the
Person designated as Master Servicer hereunder from time to time in accordance
with this Section 8.1. Until the Administrative Agent at the request of the
Agents, on the Purchasers' behalf, gives to Lennox a Successor Notice (as
defined in Section 8.1(b)), Lennox is hereby designated as, and hereby agrees to
perform the duties and obligations of, the Master Servicer pursuant to the terms
hereof. Each of the Originators named in the Sale Agreement, has agreed to act
as subservicer for the purpose of performing certain duties and obligations with
respect to all Receivables purchased by the Seller from such Originator pursuant
to the terms of the Sale Agreement. In so acting as subservicer, each of the
Originators has agreed to comply with, and be bound by, all of the terms and
provisions of this Agreement applicable to such Originator in the performance of
its duties as subservicer; provided, however, that each such Originator (i)
shall cease to act as subservicer upon the Administrative Agent's delivery of a
Successor Notice to Lennox, and (ii) shall not be entitled to receive any
Servicing Fee provided for herein (except that the Master Servicer may agree to
pay to the subservicers a proportional share of the Servicing Fee which
obligation shall be that of the Master Servicer).
(b) Successor Notice; Master Servicer Transfer Events. Upon
Lennox's receipt of a notice from the Administrative Agent of the Administrative
Agent's designation at the direction of the Purchaser Agents, on the Purchasers'
behalf, of a new Master Servicer (a "Successor Notice"), Lennox agrees that it
will terminate its activities as Master Servicer hereunder in a manner that the
Agents believe will facilitate the transition of the performance of such
activities to the new Master Servicer, and the Administrative Agent (or its
designee) shall assume each and all of Lennox's obligations to service and
administer such Receivables, on the terms and subject to the conditions herein
set forth, and Lennox shall use its best efforts to assist the Administrative
Agent (or its designee) in assuming such obligations. Without limiting the
foregoing, Lennox agrees, at its expense, to take all actions necessary to
provide the new Master Servicer with access to all computer software necessary
or useful in collecting, billing or maintaining records with respect to the
Receivables.
(c) Subcontracts. The Master Servicer may, with the prior consent
of the Agents, subcontract with any other Person for servicing, administering or
collecting the Pool Receivables, provided that the Master Servicer shall remain
liable for the performance of the duties and obligations of the Master Servicer
pursuant to the terms hereof and such subservicing arrangement may be terminated
at any Agent's request, on the related Purchaser's behalf, at anytime after a
Successor Notice has been given.
SECTION 8.2 DUTIES OF MASTER SERVICER.
(a) Appointment; Duties in General. Each of the Seller, the
Purchasers and the Agents hereby appoints as its agent the Master Servicer, as
from time to time designated
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pursuant to Section 8.1, to enforce its rights and interests in and under the
Pool Receivables, the Related Security and the related Contracts. The Master
Servicer shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Pool Receivable from time to time, all in accordance
with applicable laws, rules and regulations, with reasonable care and diligence,
and in accordance with the Credit and Collection Policy.
(b) Allocation of Collections; Segregation. The Master Servicer
shall identify for the account of the Seller and Purchasers their respective
allocable shares of the Collections of Pool Receivables in accordance with
Section 1.3 but shall not be required (unless otherwise requested by the
Administrative Agent, on the Purchasers' behalf) to segregate the funds
constituting such portions of such Collections prior to the remittance thereof
in accordance with said Section. If instructed by any Agent, on the Purchasers'
behalf, the Master Servicer shall segregate and deposit into the Collection
Account, the Purchasers' Share of Collections of Pool Receivables, on the second
Business Day following receipt by the Master Servicer of such Collections in
immediately available funds.
(c) Modification of Receivables. So long as no Liquidation Event
and no Unmatured Liquidation Event shall have occurred and be continuing,
Lennox, while it is Master Servicer, may, in accordance with the applicable
Credit and Collection Policy, (i) extend the maturity or adjust the Unpaid
Balance of any Defaulted Receivable as the Master Servicer may reasonably
determine to be appropriate to maximize Collections thereof, and (ii) adjust the
Unpaid Balance of any Receivable to reflect the reductions or cancellations
described in the first sentence of Section 3.2(a); provided that such extension
or adjustment shall not alter the status of such Receivables as Delinquent
Receivables or Defaulted Receivables or limit the rights of any Agent or any
Purchaser with respect thereto.
(d) Documents and Records. Each Seller Party shall deliver to the
Master Servicer, and the Master Servicer shall hold in trust for the Seller and
the Purchaser in accordance with their respective interests, all documents,
instruments and records (including, without limitation, computer tapes or disks)
that evidence or relate to Pool Receivables.
(e) Certain Duties to the Seller. The Master Servicer shall, as
soon as practicable following receipt, turn over to the Seller (i) that portion
of Collections of Pool Receivables representing its undivided percentage
interest therein, less the Seller's Share of the Servicing Fee, and, in the
event that neither Lennox nor any other Seller Party or Affiliate thereof is the
Master Servicer, all reasonable and appropriate out-of-pocket costs and expenses
of the Master Servicer of servicing, collecting and administering the Pool
Receivables to the extent not covered by the Servicing Fee received by it, and
(ii) the Collections of any Receivable which is not a Pool Receivable. The
Master Servicer, if other than Lennox or any other Seller Party or Affiliate
thereof, shall, as soon as practicable upon demand, deliver to the Seller all
documents, instruments and records in its possession that evidence or relate to
Receivables of the Seller other than Pool Receivables, and copies of documents,
instruments and records in its possession that evidence or relate to Pool
Receivables.
(f) Termination. The Master Servicer's authorization under this
Agreement shall terminate upon the Final Payout Date.
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(g) Power of Attorney. The Seller hereby grants to the Master
Servicer an irrevocable power of attorney, with full power of substitution,
coupled with an interest, to take in the name of the Seller all steps which are
necessary or advisable to endorse, negotiate or otherwise realize on any writing
or other right of any kind held or transmitted by the Seller or transmitted or
received by the Purchaser (whether or not from the Seller) in connection with
any Receivable.
SECTION 8.3 [RESERVED].
SECTION 8.4 SERVICER DEFAULTS.
If any one of the following events (a "Servicer Default") shall occur
and be continuing:
(a) any failure by the Master Servicer to make any payment,
transfer or deposit or to give instructions or notice to any Agent as required
by this Agreement including, without limitation, delivery of any Information
Package or Interim Information Package or any failure to make any payment or
deposit required to be made in order to reduce the Asset Interest to the
Allocation Limit and, (i) in the case of failure to deliver an Information
Package or Interim Information Package, s the case may be, such failure shall
remain unremedied for two (2) Business Days after the earliest to occur of (A)
written notice thereof shall have been given by any Agent to the Master Servicer
or (B) the Master Servicer shall have otherwise become aware of such failure and
(ii) except with respect to any payment or deposit required to be made in order
to reduce the Asset Interest to the Allocation Limit which shall be made when
due, in the case of failure to make any payment or deposit to be made by the
Master Servicer such failure shall remain unremedied for three (3) Business Days
after the due date thereof;
(b) any failure on the part of the Master Servicer duly to observe
or perform in any material respect any other covenants or agreements of the
Master Servicer set forth in this Agreement or any other Transaction Document to
which the Master Servicer is a party, which failure continues unremedied for a
period of 30 days after the first to occur of (i) the date on which written
notice of such failure requiring the same to be remedied shall have been given
to the Master Servicer by any Agent and (ii) the date on which the Master
Servicer becomes aware thereof;
(c) any representation, warranty or certification made by the
Master Servicer in this Agreement or in any certificate delivered pursuant to
this Agreement shall prove to have been incorrect when made, which continues to
be unremedied for a period of 30 days after the first to occur of (i) the date
on which written notice of such incorrectness requiring the same to be remedied
shall have been given to the Master Servicer by any Agent and (ii) the date on
which the Master Servicer becomes aware thereof; provided, however, that in the
case of any representation, warranty or certification that was not made in
writing, a Servicer Default shall occur hereunder only if such representation,
warranty or certification was reasonably relied upon by any Agent and/or the
Purchasers;
(d) a Credit Event shall occur or any bankruptcy, insolvency or
similar event occurs with respect to the Master Servicer; or
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(e) any change in the control of the Master Servicer which takes
the form of either a merger or consolidation in which the Master Servicer is not
the surviving entity.
Notwithstanding anything herein to the contrary, so long as any such Servicer
Default shall not have been remedied, the Agents, by written notice to the
Master Servicer (a "Termination Notice"), may terminate all of the rights and
obligations of the Master Servicer as Master Servicer under this Agreement and
appoint a successor Master Servicer satisfactory to the Agents (in the Agents'
sole discretion).
SECTION 8.5 RIGHTS OF THE ADMINISTRATIVE AGENT.
(a) Notice to Obligors. At any time when a Liquidation Event has
occurred and is continuing, the Agents may notify the Obligors of Pool
Receivables, or any of them, of the ownership of the Asset Interest by the
Purchasers.
(b) Notice to Lockbox Banks. At any time, the Administrative Agent
is hereby authorized to give notice to the Lockbox Banks, as provided in the
Lockbox Agreements, of the transfer to the Administrative Agent for the benefit
of the Secured Parties of dominion and control over the lockboxes and related
accounts to which the Obligors of Pool Receivables make payments. The Seller and
the Master Servicer hereby transfer to the Administrative Agent, effective when
the Administrative Agent shall give notice to the Lockbox Banks as provided in
the Lockbox Agreements, the exclusive dominion and control over such lockboxes
and accounts, and shall take any further action that the Administrative Agent
may reasonably request to effect such transfer.
(c) Rights on Servicer Transfer Event. At any time following the
designation of a Master Servicer other than Lennox pursuant to Section 8.1:
(i) The Administrative Agent may direct the Obligors of
Pool Receivables, or any of them, to pay all amounts payable under any
Pool Receivable directly to the Administrative Agent or its designee.
(ii) Any Seller Party shall, at the Administrative Agent's
request and at such Seller Party's expense, give notice of the
Purchasers' ownership and security interests in the Pool Receivables to
each Obligor of Pool Receivables and direct that payments be made
directly to the Administrative Agent or its designee.
(iii) Each Seller Party shall, at any Agent's request, (A)
assemble all of the documents, instruments and other records
(including, without limitation, computer programs, tapes and disks)
which evidence the Pool Receivables, and the related Contracts and
Related Security, or which are otherwise necessary or desirable to
collect such Pool Receivables, and make the same available to the
successor Master Servicer at a place selected by such Agent, and (B)
segregate all cash, checks and other instruments received by it from
time to time constituting Collections of Pool Receivables in a manner
acceptable to the Agents and promptly upon receipt, remit all such
cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the successor Master Servicer.
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(iv) Each Seller Party and each Purchaser hereby
authorizes the Administrative Agent, on such Purchaser's behalf, and
grants to the Administrative Agent an irrevocable power of attorney
(which shall terminate on the Final Payout Date), to take any and all
steps in such Seller Party's name and on behalf of the Seller Parties
and Purchaser which are necessary or desirable, in the determination of
the Administrative Agent, to collect all amounts due under any and all
Pool Receivables, including, without limitation, endorsing any Seller
Party's name on checks and other instruments representing Collections
and enforcing such Pool Receivables and the related Contracts.
SECTION 8.6 RESPONSIBILITIES OF THE SELLER PARTIES.
Anything herein to the contrary notwithstanding:
(a) Contracts. Each Seller Party shall remain responsible for
performing all of its obligations (if any) under the Contracts related to the
Pool Receivables and under the related agreements to the same extent as if the
Asset Interest had not been sold hereunder, and the exercise by the
Administrative Agent or its designee of its rights hereunder shall not relieve
any Seller Party from such obligations.
(b) Limitation of Liability. No Agent or Purchaser shall have any
obligation or liability with respect to any Pool Receivables, Contracts related
thereto or any other related agreements, nor shall any of them be obligated to
perform any of the obligations of any Seller Party or any Originator thereunder.
SECTION 8.7 FURTHER ACTION EVIDENCING PURCHASES AND REINVESTMENTS.
(a) Further Assurances. Each Seller Party agrees that from time to
time, at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that any Agent or its
designee may reasonably request in order to perfect, protect or more fully
evidence the Purchases hereunder and the resulting Asset Interest, or to enable
the Secured Parties or the Agents or any of their respective designees to
exercise or enforce any of their respective rights hereunder or under any
Transaction Document in respect thereof. Without limiting the generality of the
foregoing, each Seller Party will:
(i) upon the request of the Administrative Agent at the
direction of the Purchaser Agents on behalf of the Purchasers, execute
and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices,
as may be necessary or appropriate, in accordance with the terms of
this Agreement;
(ii) upon the request of any Agent after the occurrence
and during the continuance of a Liquidation Event, ▇▇▇▇ conspicuously
each Contract evidencing each Pool Receivable with a legend, acceptable
to the Agents, evidencing that the Asset Interest has been sold in
accordance with this Agreement; and
(iii) ▇▇▇▇ its master data processing records evidencing
such Pool Receivables and related Contracts with a legend, acceptable
to the Agents, evidencing that the Asset Interest has been sold in
accordance with this Agreement.
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(b) Additional Financing Statements; Performance by Administrative
Agent. Each Seller Party hereby authorizes the Administrative Agent, on the
Purchaser's behalf, or its designee to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Pool Receivables and the Related Assets now
existing or hereafter arising in the name of any Seller Party. If any Seller
Party fails to perform any of its agreements or obligations under this
Agreement, the Administrative Agent or its designee may (but shall not be
required to) itself perform, or cause performance of, such agreement or
obligation, and the reasonable expenses of the Administrative Agent or its
designee incurred in connection therewith shall be payable by the Seller Parties
as provided in Section 14.5.
(c) Continuation Statements; Opinion. Without limiting the
generality of subsection (a), the Seller will, not earlier than six (6) months
and not later than three (3) months prior to the fifth anniversary of the date
of filing of the financing statements referred to in Section 5.1(a) or any other
financing statement filed pursuant to this Agreement or in connection with any
Purchase hereunder, if the Final Payout Date shall not have occurred:
(i) if necessary, execute and deliver and file or cause
to be filed an appropriate continuation statement with respect to such
financing statement; and
(ii) deliver or cause to be delivered to each Agent an
opinion of the counsel for the Seller Parties (which may be an opinion
of in-house counsel for the Seller Parties), in form and substance
reasonably satisfactory to each Agent, confirming and updating the
opinion delivered pursuant to Section 5.1(a) to the effect that the
Asset Interest hereunder continues to be a valid and perfected
ownership or security interest, subject to no other Liens of record
except as provided herein or otherwise permitted hereunder.
SECTION 8.8 APPLICATION OF COLLECTIONS.
Any payment by an Obligor in respect of any indebtedness owed by it to
any Originator or Seller shall, except as otherwise specified by such Obligor or
required by the underlying Contract or law, be applied, first, as a Collection
of any Pool Receivable or Receivables then outstanding of such Obligor in the
order of the age of such Pool Receivables, starting with the oldest of such Pool
Receivables and, second, to any other indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.1 GRANT OF SECURITY INTEREST.
To secure all obligations of the Seller arising in connection with this
Agreement and each other Transaction Document, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute or contingent,
including, without limitation, all Indemnified Amounts, payments on account of
Collections received or deemed to be received and fees, in each case pro rata
according to the respective amounts thereof, the Seller hereby assigns and
pledges to the Administrative Agent, as agent for the
37
Purchasers and their respective successors and assigns, for the benefit of the
Secured Parties, and hereby grants to the Administrative Agent, as agent for the
Purchasers, for the benefit of the Secured Parties, a security interest in, all
of the Seller's right, title and interest now or hereafter existing in, to and
under all assets of the Seller, including, without limitation, (a) all the Pool
Receivables and Related Assets (and including specifically any undivided
interest therein retained by the Seller hereunder), (b) the Sale Agreement and
the other Transaction Documents and (c) all proceeds of any of the foregoing
(collectively, the "Collateral").
SECTION 9.2 FURTHER ASSURANCES.
The provisions of Section 8.7 shall apply to the security interest
granted under Section 9.1 as well as to the Purchases, Reinvestments and all the
Asset Interests hereunder.
SECTION 9.3 REMEDIES.
Upon the occurrence of a Liquidation Event, each Purchaser shall have,
with respect to the Collateral granted pursuant to Section 9.1, and in addition
to all other rights and remedies available to such Purchaser or the
Administrative Agent under this Agreement and the other Transaction Documents or
other applicable law, all the rights and remedies of a secured party upon
default under the UCC.
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.1 LIQUIDATION EVENTS.
The following events shall be "Liquidation Events" hereunder:
(a) The Master Servicer (if any Seller Party or Affiliate thereof
is the Master Servicer) or the Seller (in the case of clause (ii) below) (i)
shall fail to perform or observe any term, covenant or agreement that is an
obligation of the Master Servicer hereunder (other than as referred to in clause
(ii) below or in other paragraphs of this Section 10.1), and such failure shall
remain unremedied for thirty (30) days after written notice thereof shall have
been given by the Administrative Agent to the Master Servicer or the Master
Servicer shall have otherwise become aware, or (ii) shall fail to make any
payment or deposit to be made by it hereunder when due which failure shall
continue for three (3) Business Days; or
(b) Any representation or warranty made or deemed to be made by
any Seller Party or Lennox International (or any of its officers) under this
Agreement or any other Transaction Document or any Information Package, Interim
Information Package or other information or report delivered pursuant hereto
shall prove to have been false or incorrect in any material respect when made
provided, however, that in the case of any representation, warranty or
information that was not made or provided in writing, a Liquidation Event shall
occur hereunder only if such representation, warranty or information was
reasonably relied upon by any Agent and/or any Purchaser; or
(c) Any Seller Party shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement or any of the other
Transaction Documents on its part to be performed or observed and any such
failure shall remain unremedied for thirty (30) days after
38
written notice thereof shall have been given by any Agent to any Seller Party or
such Seller Party shall have otherwise become aware; or
(d) (i) Any Seller Party or Lennox International shall (A) fail to
pay any principal or interest, regardless of amount, due in respect of any
Indebtedness when the aggregate unpaid principal amount is in excess of in the
case of the Seller, $10,000, or in the case of Lennox International or the
Master Servicer $7,500,000 when and as the same shall become due and payable
(after expiration of any applicable grace period) or (B) fail to observe or
perform any other term, covenant, condition or agreement (after expiration of
any applicable grace period) contained in any agreement or instrument evidencing
or governing any such Indebtedness if the effect of any failure referred to in
this clause (B) is to cause such Indebtedness to become due prior to its stated
maturity; (ii) any default under any other agreement or instrument of the
Seller, Master Servicer or Lennox International relating to the purchase of
receivables in an aggregate amount in excess of in the case of the Seller,
$10,000, or in the case of the Master Servicer or Lennox International
$50,000,000, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default is to terminate the commitment of any party to such
agreement or instrument to purchase receivables or the right of such Seller
Party to reinvest in receivables the principal amount paid by any party to such
agreement or instrument for its interest in receivables; or (iii) a default or
trigger event shall occur under any asset securitization agreement or
arrangement entered into by any Seller Party for the sale of receivables or an
interest therein in excess of $10,000,000, if the effect of such default or
trigger event is to cause the amounts owing in connection therewith to become
payable prior to the stated maturity; or
(e) An Event of Bankruptcy shall have occurred and remain
continuing with respect to Lennox International or any Seller Party; or
(f) The Seller shall become an "investment company" within the
meaning of the Investment Company Act of 1940; or
(g) The rolling 3 month average Dilution Ratio at any Cut-Off Date
exceeds 10.00%; or
(h) The rolling 3 month average Default Ratio at any Cut-Off Date
exceeds 2.65%; or
(i) The rolling 3 month average Delinquency Ratio at any Cut-Off
Date exceeds 3.95%; or
(j) On any Settlement Date, after giving effect to the payments
made under Section 3.1(c), (i) the Asset Interest exceeds 100%, (ii) the
Invested Amount exceeds the Purchase Limit; or (iii) any Purchaser Group
Invested Amount exceed the related Purchaser Group Limit, and, in the case of
any failure to make a timely payment or deposit with respect thereto solely by
reason of any mechanical delay in or malfunction of the Fedwire system or due to
an error on the part of the initiating or receiving bank such failure shall
continue for more than one (1) Business Day; or
(k) There shall have occurred any event which materially adversely
impairs the ability of the Originators to originate Receivables of a credit
quality which are at least of the
39
credit quality of the Receivables included in the first Purchase, or any other
event occurs that is reasonably likely to have a Material Adverse Effect; or
(l) Any Seller Party, Originator or Lennox International is
subject to a Change in Control; or
(m) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Internal Revenue Code with regard to any of the
Receivables or Related Assets and such lien shall not have been released within
seven (7) days, or the Pension Benefit Guaranty Corporation shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068 of the
Employee Retirement Income Security Act of 1974 with regard to any of the
Receivables or Related Assets; or
(n) Any Seller Party or any Originator shall make any material
change in the policies as to origination of Receivables or in its Credit and
Collection Policy without prior written notice to and consent of the Agents; or
(o) The Administrative Agent for the benefit of the Secured
Parties, for any reason, does not have a valid, perfected first priority
interest in the Pool Receivables and the Related Assets; or
(p) A final judgment or judgments shall be rendered against Lennox
International, the Master Servicer, the Seller or any combination thereof for
the payment of money with respect to which an aggregate amount in excess of
$10,000 with respect to the Seller and $7,500,000 with respect to Lennox
International or the Master Servicer is not covered by insurance and the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to levy upon assets or properties of Lennox
International, the Master Servicer or the Seller to enforce any such judgment;
or
(q) A Reportable Event or Reportable Events, or a failure to make
a required installment or other payment (within the meaning of Section 412(n)(1)
of the Code), shall have occurred with respect to any Plan or Plans that
reasonably could be expected to result in liability of any Master Servicer or
any ERISA Affiliate to the Pension Benefit Guaranty Corporation ("PBGC") or to a
Plan in an aggregate amount exceeding $5,000,000 and, within 30 days after the
reporting of any such Reportable Event to the Agents, on the Purchasers' behalf,
any Agent shall have notified the Master Servicer in writing that (i) such
Agent, on the related Purchaser's behalf, has made a determination that, on the
basis of such Reportable Event or Reportable Events or the failure to make a
required payment, there are reasonable grounds (A) for the termination of such
Plan or Plans by the PBGC, (B) for the appointment by the appropriate United
States District Court of a trustee to administer such Plan or Plans or (C) for
the imposition of a lien in favor of a Plan and (ii) as a result thereof a
Liquidation Event exists hereunder; or a trustee shall be appointed by a United
States District Court to administer any such Plan or Plans; or the PBGC shall
institute proceedings to terminate any Plan or Plans;
(r) The occurrence of a Servicer Default;
(s) The Seller's Net Worth shall be less than the Threshold
Amount; or
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(t) An Event of Default (as defined in the Credit Agreement) shall
have occurred.
SECTION 10.2 REMEDIES.
(a) Optional Liquidation. Upon the occurrence of a Liquidation
Event (other than a Liquidation Event described in subsection (e) of Section
10.1), any Agent shall, at the request, or may with the consent, of the related
Purchaser, by notice to the Seller declare the Funding Termination Date to have
occurred and the Liquidation Period to have commenced.
(b) Automatic Liquidation. Upon the occurrence of a Liquidation
Event described in subsection (e) of Section 10.1, the Funding Termination Date
shall occur and the Liquidation Period shall commence automatically.
(c) Additional Remedies. Upon any Funding Termination Date
pursuant to this Section 10.2, no Purchases or Reinvestments thereafter will be
made, and each of the Agents, the Purchasers, Scotiabank and Wachovia shall
have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of each
applicable jurisdiction and other applicable laws, which rights shall be
cumulative.
ARTICLE XI
THE ADMINISTRATIVE AGENT
SECTION 11.1 ADMINISTRATIVE AUTHORIZATION AND ACTION.
Pursuant to agreements entered into with the Administrative Agent, each
Purchaser has appointed and authorized the Administrative Agent (or its
designees) to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.
SECTION 11.2 ADMINISTRATIVE AGENT'S RELIANCE, ETC.
The Administrative Agent and its directors, officers, agents or
employees shall not be liable for any action taken or omitted to be taken by it
or them in good faith under or in connection with the Transaction Documents
(including, without limitation, the servicing, administering or collecting Pool
Receivables as Master Servicer pursuant to Section 8.1), except for its or their
own breach of the terms of the applicable terms of the Transaction Documents or
its or their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Administrative Agent: (a) may consult with
legal counsel (including counsel for the Seller), independent certified public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (b) makes no warranty or
representation to the Purchasers or any other holder of any interest in Pool
Receivables and shall not be responsible to the Purchaser or any such other
holder for any statements, warranties or representations made by any Seller
Party in or in connection with any Transaction Document; (c) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Transaction Document on the part of
any Seller Party or to inspect the property
41
(including the books and records) of any Seller Party; (d) shall not be
responsible to the Purchaser or any other holder of any interest in Pool
Receivables for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Transaction Document; and (e) shall
incur no liability under or in respect of this Agreement by acting upon any
notice (including notice by telephone where permitted herein), consent,
certificate or other instrument or writing (which may be by facsimile or telex)
in good faith believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 11.3 BLUE RIDGE PURCHASER AGENT AUTHORIZATION AND ACTION.
Pursuant to agreements entered into with the Blue Ridge Purchaser
Agent, Blue Ridge has appointed and authorized the Blue Ridge Purchaser Agent
(or its designees) to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Blue Ridge Purchaser
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto.
SECTION 11.4 BLUE RIDGE PURCHASER AGENT'S RELIANCE, ETC.
The Blue Ridge Purchaser Agent and its directors, officers, agents or
employees shall not be liable for any action taken or omitted to be taken by it
or them in good faith under or in connection with the Transaction Documents
(including, without limitation, the servicing, administering or collecting Pool
Receivables as Master Servicer pursuant to Section 8.1), except for its or their
own breach of the terms of the applicable terms of the Transaction Documents or
its or their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Blue Ridge Purchaser Agent: (a) may consult
with legal counsel (including counsel for the Seller), independent certified
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (b) makes no warranty or
representation to Blue Ridge or any other holder of any portion of the Blue
Ridge Purchaser Group's interest in Pool Receivables and shall not be
responsible to Blue Ridge or any such other holder for any statements,
warranties or representations made by any Seller Party in or in connection with
any Transaction Document; (c) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of any Transaction Document on the part of any Seller Party or to inspect the
property (including the books and records) of any Seller Party; (d) shall not be
responsible to Blue Ridge or any other holder of any of the Blue Ridge Purchaser
Group's interest in Pool Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Transaction Document;
and (e) shall incur no liability under or in respect of this Agreement by acting
upon any notice (including notice by telephone where permitted herein), consent,
certificate or other instrument or writing (which may be by facsimile or telex)
in good faith believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 11.5 LIBERTY STREET AUTHORIZATION AND ACTION.
Pursuant to agreements entered into with the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ Street has appointed and authorized the Liberty Street Purchaser Agent
(or its designees) to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated
42
to the Liberty Street Purchaser Agent by the terms hereof, together with such
powers as are reasonably incidental thereto.
SECTION 11.6 LIBERTY STREET PURCHASER AGENT'S RELIANCE, ETC.
(a) The Liberty Street Purchaser Agent and its directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by it or them in good faith under or in connection with the
Transaction Documents (including, without limitation, the servicing,
administering or collecting Pool Receivables as Master Servicer pursuant to
Section 8.1), except for its or their own breach of the terms of the applicable
terms of the Transaction Documents or its or their own gross negligence or
willful misconduct. Without limiting the generality of the foregoing, the
Liberty Street Purchaser Agent: (a) may consult with legal counsel (including
counsel for the Seller), independent certified public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (b) makes no warranty or representation to Liberty
Street or any other holder of any portion of the Liberty Street Purchaser
Group's interest in Pool Receivables and shall not be responsible to Liberty
Street or any such other holder for any statements, warranties or
representations made by any Seller Party in or in connection with any
Transaction Document; (c) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
any Transaction Document on the part of any Seller Party or to inspect the
property (including the books and records) of any Seller Party; (d) shall not be
responsible to Liberty Street or any other holder of any of the Liberty Street
Purchaser Group's interest in Pool Receivables for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Transaction
Document; and (e) shall incur no liability under or in respect of this Agreement
by acting upon any notice (including notice by telephone where permitted
herein), consent, certificate or other instrument or writing (which may be by
facsimile or telex) in good faith believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 11.7 WACHOVIA, SCOTIABANK AND AFFILIATES.
Each of Scotiabank and Wachovia and any of their respective Affiliates
may generally engage in any kind of business with any Seller Party or any
Obligor, any of their respective Affiliates and any Person who may do business
with or own securities of any Seller Party or any Obligor or any of their
respective Affiliates, all as if Scotiabank or Wachovia, as the case may be was
not an Agent hereunder, and without any duty to account therefor to the
Purchasers or any other holder of an interest in Pool Receivables, but in any
event subject to Section 14.7.
ARTICLE XII
ASSIGNMENT OF THE PURCHASER'S INTEREST
SECTION 12.1 RESTRICTIONS ON ASSIGNMENTS.
(a) No Seller Party may assign its rights, or delegate its duties
hereunder or any interest herein without the prior written consent of the Agents
(except a Seller Party may delegate certain administrative duties to an
Affiliate, such as payroll, financial reporting, tax and
43
the like, so long as such Seller Party remains liable for performance of such
duties). No Purchaser may assign its rights hereunder (although it may delegate
its duties hereunder as expressly indicated herein) or the portion of the Asset
Interest funded by the related Purchaser Group (or any portion thereof) to any
Person without the prior written consent of the Seller, which consent shall not
be unreasonably withheld; provided, however, that
(i) Any Purchaser may assign all of its rights and
interests in the Transaction Documents, together with all its interest
in the Asset Interest, to any Liquidity Bank, Wachovia, Scotiabank or
any Affiliate thereof, or to any "bankruptcy remote" special purpose
entity, the business of which is administered by Wachovia, Scotiabank
or any Affiliate thereof (which assignee shall then be subject to this
Article XII); and
(ii) Each Purchaser may assign and grant a security
interest in all of its rights in the Transaction Documents, together
with all of its rights and interest in the Asset Interest, to secure
such Purchaser's obligations under or in connection with the Commercial
Paper Notes, the related Liquidity Agreement, and certain other
obligations of such Purchaser incurred in connection with the funding
of the Purchases and Reinvestments hereunder, which assignment and
grant of a security interest shall not be considered an "assignment"
for purposes of Section 12.1(b) or, prior to the enforcement of such
security interest, for purposes of any other provision of this
Agreement (other than Section 12.3).
(b) The Seller agrees to advise the Agents within five (5)
Business Days after notice to the Seller of any proposed assignment by any
Purchaser of the Asset Interest (or any portion thereof), not otherwise
permitted under subsection (a), of the Seller's consent or non-consent to such
assignment, and if it does not consent, the reasons therefor. If Seller does not
consent to such assignment, each Purchaser may immediately or at any time
thereafter assign such Asset Interest (or portion thereof) to any Person or
Persons permitted under clause (i) of Section 12.1(a).
SECTION 12.2 RIGHTS OF ASSIGNEE.
Upon the assignment by the Purchaser in accordance with this Article
XII, the assignee receiving such assignment shall have all of the rights of the
related Purchaser with respect to the Transaction Documents and the Asset
Interest (or such portion thereof as has been assigned).
SECTION 12.3 TERMS AND EVIDENCE OF ASSIGNMENT.
Any assignment of the Asset Interest (or any portion thereof) to any
Person which is otherwise permitted under this Article XII shall be upon such
terms and conditions as the related Purchaser and the assignee may mutually
agree, and may be evidenced by such instrument(s) or document(s) as may be
satisfactory to the Purchaser, the related Purchaser Agent and the assignee.
SECTION 12.4 RIGHTS OF LIQUIDITY BANKS.
The Seller hereby agrees that, upon notice to the Seller, the Liquidity
Banks may exercise all the rights of the related Purchaser Agent and Purchaser
hereunder, with respect to the portion
44
of the Asset Interest funded by the related Purchaser Group (or any portions
thereof), and Collections with respect thereto, which are owned by the related
Purchaser, and all other rights and interests of the related Purchaser in, to or
under this Agreement or any other Transaction Document. Without limiting the
foregoing, upon such notice or at any time thereafter (but subject to any
conditions applicable to the exercise of such rights by the Agents), the
Liquidity Banks may request the Master Servicer to segregate Purchasers'
allocable shares of Collections from the Seller's allocable share, may give a
Successor Notice pursuant to and in accordance with Section 8.1(b), may give or
require the Administrative Agent to give notice to the Lockbox Banks as referred
to in Section 8.5(b) and may direct the Obligors of Pool Receivables to make
payments in respect thereof directly to an account designated by them, in each
case, to the same extent as the Administrative Agent might have done.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.1 INDEMNITIES BY THE SELLER.
(a) General Indemnity. Without limiting any other rights which any
such Person may have hereunder or under applicable law, the Seller hereby agrees
to indemnify each of Scotiabank, both individually and as the Liberty Street
Purchaser Agent, Wachovia, both individually and as the Administrative Agent and
the Blue Ridge Purchaser Agent, the Purchasers, the Liquidity Banks, the
Liquidity Agent, each of their respective Affiliates, and all successors,
transferees, participants and assigns and all officers, directors, shareholders,
controlling persons, and employees of any of the foregoing, and any successor
servicer and subservicer not affiliated with Lennox (each an "Indemnified
Party"), forthwith on demand, from and against any and all damages, losses,
claims, liabilities and related costs and expenses, including attorneys' fees
and disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or relating to the Transaction Documents or the ownership or funding of the
Asset Interest or in respect of any Receivable or any Contract, excluding,
however, (x) Indemnified Amounts to the extent determined by a court of
competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of such Indemnified Party or (y) recourse (except as
otherwise specifically provided in this Agreement) for Defaulted Receivables;
the Seller further agrees to indemnify any agent (which is not otherwise an
Indemnified Party) of any of Scotiabank, Wachovia, the Agents, the Purchasers,
the Liquidity Banks, and the Liquidity Agent forthwith on demand, from and
against any and all Indemnified Amounts awarded against or incurred by any of
them arising out of or caused by the gross negligence or willful misconduct of
the Seller (unless otherwise expressly agreed to in writing by the Seller).
Without limiting the foregoing, the Seller shall indemnify each Indemnified
Party for Indemnified Amounts arising out of or relating to:
(i) the transfer by any Seller Party of any interest in
any Receivable other than the transfer of Receivables and related
property by the Originators to the Seller pursuant to the Sale
Agreement, the transfer of an Asset Interest to the Purchaser pursuant
to this Agreement and the grant of a security interest to the Purchaser
pursuant to Section 9.1;
45
(ii) any representation or warranty made in writing by any
Seller Party (or any of its officers) under or in connection with any
Transaction Document, any Information Package, Interim Information
Package or any other information or report delivered by or on behalf of
any Seller Party pursuant hereto, which shall have been false,
incorrect or misleading in any material respect when made or deemed
made or delivered, as the case may be; provided, however, that in the
case of any representation, warranty or information that was not made
or delivered in writing, indemnification shall be available to an
Indemnified Party hereunder only if such representation, warranty or
information was reasonably relied upon by such Indemnified Party;
(iii) the failure by any Seller Party to comply with any
applicable law, rule or regulation with respect to any Pool Receivable
or the related Contract, or the nonconformity of any Pool Receivable or
the related Contract with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in Purchaser
an undivided percentage ownership interest, to the extent of the Asset
Interest, in the Receivables in, or purporting to be in, the
Receivables Pool, free and clear of any Lien, other than a Lien arising
solely as a result of an act of any Purchaser or the Administrative
Agent, whether existing at the time of any Purchase or Reinvestment of
such Asset Interest or at any time thereafter;
(v) the failure to file, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool, whether at the time of any Purchase or Reinvestment or at any
time thereafter;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool (including,
without limitation, a defense based on such Receivables or the related
Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise or services
related to such Receivable or the furnishing or failure to furnish such
merchandise or services;
(vii) any matter described in clause (i) or (ii) of Section
3.2(a);
(viii) any failure of any Seller Party, as the Master
Servicer or otherwise, to perform its duties or obligations in
accordance with the provisions of Article III or Article VIII;
(ix) any product liability claim arising out of or in
connection with merchandise or services that are the subject of any
Pool Receivable;
(x) any claim of breach by any Seller Party of any
related Contract with respect to any Pool Receivable; or
46
(xi) any tax or governmental fee or charge (but not
including franchise taxes or taxes upon or measured by net income), all
interest and penalties thereon or with respect thereto, and all
out-of-pocket costs and expenses, including the reasonable fees and
expenses of counsel in defending against the same, which may arise by
reason of the purchase or ownership of any Asset Interest, or any other
interest in the Pool Receivables or in any goods which secure any such
Pool Receivables.
(b) Contest of Tax Claim; After-Tax Basis. If any Indemnified
Party shall have notice of any attempt to impose or collect any tax or
governmental fee or charge for which indemnification will be sought from any
Seller Party under Section 13.1(a)(xi), such Indemnified Party shall give prompt
and timely notice of such attempt to the Seller and the Seller shall have the
right, at its expense, to participate in any proceedings resisting or objecting
to the imposition or collection of any such tax, governmental fee or charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes (including any
deduction) and the receipt of the indemnity provided hereunder or of any refund
of any such tax previously indemnified hereunder, including the effect of such
tax, deduction or refund on the amount of tax measured by net income or profits
which is or was payable by the Indemnified Party.
(c) Contribution. If for any reason the indemnification provided
above in this Section 13.1 (and subject to the exceptions set forth therein) is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Seller shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and the Seller on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
SECTION 13.2 INDEMNITIES BY MASTER SERVICER.
Without limiting any other rights which any Indemnified Party may have
hereunder or under applicable law, the Master Servicer hereby agrees to
indemnify each of the Indemnified Parties forthwith on demand, from and against
any and all Indemnified Amounts awarded against or incurred by any of them
arising out of or relating to the Master Servicer's performance of, or failure
to perform, any of its obligations under or in connection with any Transaction
Document, or any representation or warranty made by the Master Servicer (or any
of its officers) under or in connection with any Transaction Document, any
Information Package, Interim Information Package or any other information or
report delivered by or on behalf of the Master Servicer, which shall have been
false, incorrect or misleading in any material respect when made or deemed made
or delivered, as the case may be, or the failure of the Master Servicer to
comply with any applicable law, rule or regulation with respect to any Pool
Receivable or the related Contract; provided, however, that in the case of any
representation, warranty or information that was not made or delivered in
writing, indemnification shall be available to an Indemnified Party hereunder
only if such representation, warranty or information was reasonably relied upon
by such Indemnified Party. Notwithstanding the foregoing, in no event shall any
Indemnified Party be awarded any Indemnified Amounts (a) to the extent
determined by a court of competent jurisdiction to have resulted from gross
negligence or willful misconduct on the part of such
47
Indemnified Party or (b) recourse for Defaulted Receivables. The Master Servicer
further agrees to indemnify any agent (which is not otherwise an Indemnified
Party) of any of Scotiabank, Wachovia, the Agents, the Purchasers, the Liquidity
Banks, and the Liquidity Agents forthwith on demand, from and against any and
all Indemnified Amounts awarded against or incurred by any of them arising out
of or caused by the gross negligence or willful misconduct of the Master
Servicer (unless otherwise expressly agreed to in writing by the Master
Servicer).
If for any reason the indemnification provided above in this Section
13.2 (and subject to the exceptions set forth therein) is unavailable to an
Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
the Master Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnified Party on the one hand and the Master Servicer on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement nor consent
to any departure by any Seller Party therefrom shall in any event be effective
unless the same shall be in writing and signed by (a) each Seller Party, the
Agents and the Purchasers (with respect to an amendment), or (b) the Agents and
the Purchasers (with respect to a waiver or consent by them) or any Seller Party
(with respect to a waiver or consent by it), as the case may be, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. The parties acknowledge that, before entering
into such an amendment or granting such a waiver or consent, any Purchaser may
also be required to obtain the approval of some or all of the related Liquidity
Banks or to obtain confirmation from certain rating agencies that such
amendment, waiver or consent will not result in a withdrawal or reduction of the
ratings of the Commercial Paper Notes.
SECTION 14.2 NOTICES, ETC.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by express mail or
courier or by certified mail, postage prepaid, or by facsimile, to the intended
party at the address or facsimile number of such party set forth on Schedule
14.2 or at such other address or facsimile number as shall be designated by such
party in a written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered or sent by
express mail or courier or if sent by certified mail, when received, and (b) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means; provided, however, that the financial statements required to
be delivered by Sections 7.2(a), 7.2(b), 7.2(c) and 7.2(d) shall be deemed
delivered on the date such financial statements are deposited in the United
States mail with first class postage prepaid, addressed to the intended
48
party at the address as set forth on Schedule 14.2 or at such other address as
shall be designated by such party in a written notice to the other parties
hereto.
SECTION 14.3 NO WAIVER; REMEDIES.
No failure on the part of the Administrative Agent, any Affected Party,
any Indemnified Party, any Purchaser or any other holder of the Asset Interest
(or any portion thereof) to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. Without limiting the
foregoing, each of Scotiabank, individually and as Liberty Street Purchaser
Agent, Wachovia, individually, and as Administrative Agent and the Blue Ridge
Purchaser Agent, each Liberty Street Investor and each Liquidity Bank is hereby
authorized by the Seller at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand provisional or final) at any time held and other
indebtedness at any time owing by Scotiabank, Wachovia, such Liberty Street
Investor and such Liquidity Bank to or for the credit or the account of the
Seller, against any and all of the obligations of the Seller now or hereafter
existing under this Agreement, to any Agent, any Affected Party, any Indemnified
Party or any Purchaser, or their respective successors and assigns.
SECTION 14.4 BINDING EFFECT; SURVIVAL.
This Agreement shall be binding upon and inure to the benefit of each
Seller Party, the Agents, the Purchasers and their respective successors and
assigns, and the provisions of Section 4.2 and Article XIII shall inure to the
benefit of the Affected Parties and the Indemnified Parties, respectively, and
their respective successors and assigns; provided, however, nothing in the
foregoing shall be deemed to authorize any assignment not permitted by Section
12.1. This Agreement shall create and constitute the continuing obligations of
the parties hereto in accordance with its terms, and shall remain in full force
and effect until the Final Payout Date. The rights and remedies with respect to
any breach of any representation and warranty made by the Seller pursuant to
Article VI and the indemnification and payment provisions of Article XIII and
Sections 4.2, 14.5, 14.6, 14.7 and 14.15 shall be continuing and shall survive
any termination of this Agreement.
SECTION 14.5 COSTS, EXPENSES AND TAXES.
In addition to its obligations under Article XIII, the Seller Parties
jointly and severally agree to pay on demand:
(a) all costs and expenses incurred by the Agents, any Liquidity
Bank, any Purchaser and their respective Affiliates in connection with:
(i) the negotiation, preparation, execution and delivery
of this Agreement, the other Transaction Documents or the Liquidity
Agreement, any amendment of or consent or waiver under any of the
Transaction Documents which is requested or proposed by any Seller
Party (whether or not consummated), or the enforcement by any of the
foregoing Persons of, or any actual or claimed breach of, this
Agreement or any of the other
49
Transaction Documents, including, without limitation, the reasonable
fees and expenses of counsel to any of such Persons incurred in
connection with any of the foregoing or in advising such Persons as to
their respective rights and remedies under any of the Transaction
Documents in connection with any of the foregoing, and
(ii) the administration (including periodic auditing as
provided for herein) of this Agreement and the other Transaction
Documents, including, without limitation, all reasonable out-of-pocket
expenses (including reasonable fees and expenses of independent
accountants), incurred in connection with any review of any Seller
Party's books and records either prior to the execution and delivery
hereof but subject to the provisions of the Fee Letter or pursuant to
Section 7.1(c), subject to the limitations set forth in such Section
7.1(c); and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents (and the Seller Parties, jointly
and severally agree to indemnify each Indemnified Party against any liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees).
(c) all losses, costs and expenses incurred by the Purchasers or
the Agents in connection with or as a result of any failure to make a timely
payment or deposit, including, without limitation, by reason of any mechanical
delay in or malfunction of the Fedwire system or due to an error on the part of
the initiating or receiving bank.
SECTION 14.6 NO PROCEEDINGS.
The Master Servicer hereby agrees that it will not institute against
the Seller, or join any Person in instituting against the Seller, and each
Seller Party, the Master Servicer and Scotiabank (individually or as Liberty
Street Purchaser Agent), Wachovia (individually or as Administrative Agent or
Blue Ridge Purchaser Agent) hereby agrees that it will not institute against any
Purchaser, or join any other Person in instituting against any Purchaser, any
insolvency proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Commercial Paper Notes issued
by such Purchaser shall be outstanding or there shall not have elapsed one year
plus one day since the last day on which any such Commercial Paper Notes shall
have been outstanding.
SECTION 14.7 CONFIDENTIALITY OF SELLER INFORMATION.
(a) Confidential Seller Information. Each party hereto (other than
Seller Parties) acknowledges that certain of the information provided to such
party by or on behalf of the Seller Parties in connection with this Agreement
and the transactions contemplated hereby is or may be confidential, and each
such party severally agrees that, unless the Master Servicer shall otherwise
agree in writing, and except as provided in subsection (b), such party will not
disclose to any other person or entity:
(i) any information regarding, or copies of, any
nonpublic financial statements, reports, schedules and other
information furnished by any Seller Party to any Purchaser or any Agent
(A) prior to the date hereof in connection with such party's due
50
diligence relating to the Seller Parties and the transactions
contemplated hereby, or (B) pursuant to this Agreement, including
without limitation, Section 3.1, 5.1, 6.1(i), 7.1(c) or 7.2, or
(ii) any other information regarding any Seller Party
which is designated by any Seller Party to such party in writing as
confidential
(the information referred to in clauses (i) and (ii) above, whether furnished by
any Seller Party or any attorney for or other representative thereof (each a
"Seller Information Provider"), is collectively referred to as the "Seller
Information"); provided, however, Seller Information shall not include any
information which is or becomes generally available to the general public or to
such party on a nonconfidential basis from a source other than any Seller
Information Provider, or which was known to such party on a nonconfidential
basis prior to its disclosure by any Seller Information Provider.
(b) Disclosure. Notwithstanding subsection (a), each party may
disclose any Seller Information:
(i) to any of such party's independent attorneys,
consultants and auditors, and to any dealer or placement agent for such
Purchaser's Commercial Paper Notes, who (A) in the good faith belief of
such party, have a need to know such Seller Information, and (B) are
informed by such party of the confidential nature of the Seller
Information and the terms of this Section 14.7 and has agreed, verbally
or otherwise, to be bound by the provisions of this Section 14.7,
(ii) to any Liquidity Bank, any actual or potential
assignees of, or participants in, any rights or obligations of any
Purchaser, any Liquidity Bank or the related Purchaser Agent under or
in connection with this Agreement who has agreed to be bound by the
provisions of this Section 14.7,
(iii) to any rating agency that maintains a rating for such
Purchaser's Commercial Paper Notes or is considering the issuance of
such a rating, for the purposes of reviewing the credit of such
Purchaser in connection with such rating,
(iv) to any other party to this Agreement (and any
independent attorneys, consultants and auditors of such party), for the
purposes contemplated hereby,
(v) as may be required by any municipal, state, federal
or other regulatory body having or claiming to have jurisdiction over
such party, in order to comply with any law, order, regulation,
regulatory request or ruling applicable to such party,
(vi) subject to subsection (c), in the event such party is
legally compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar process) to
disclose such Seller Information, or
(vii) in connection with the enforcement of this Agreement
or any other Transaction Document.
51
In addition, each Purchaser and each Agent may disclose on a "no name" basis to
any actual or potential investor in such Purchaser's Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of such Purchaser's
commitment and Invested Amount with respect to the Asset Interest funded by such
Purchaser Group and any other credit enhancement provided by any Seller Party
hereunder), the nature, amount and status of the Pool Receivables, and the
current and/or historical ratios of losses to liquidations and/or outstandings
with respect to the Receivables Pool.
(c) Legal Compulsion. In the event that any party hereto (other
than any Seller Party) or any of its representatives is requested or becomes
legally compelled (by interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process) to disclose any of the
Seller Information, such party will (or will cause its representative to):
(i) provide the Master Servicer with prompt written
notice so that (A) the Master Servicer may seek a protective order or
other appropriate remedy, or (B) the Master Servicer may, if it so
chooses, agree that such party (or its representatives) may disclose
such Seller Information pursuant to such request or legal compulsion;
and
(ii) unless the Master Servicer agrees that such Seller
Information may be disclosed, make a timely objection to the request or
compulsion to provide such Seller Information on the basis that such
Seller Information is confidential and subject to the agreements
contained in this Section 14.7.
In the event such protective order or remedy is not obtained, or the Master
Servicer agrees that such Seller Information may be disclosed, such party will
furnish only that portion of the Seller Information which (in such party's good
faith judgment) is legally required to be furnished and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
afforded the Seller Information.
(d) Notwithstanding anything herein to the contrary, any party to
this Agreement (and any employee, representative, or other agent of any party to
this Agreement) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of the transactions contemplated by
this Agreement and all materials of any kind (including opinions and other tax
analyses) that are provided to it relating to such tax treatment and tax
structure. However, any such information relating to the tax treatment or tax
structure is required to be kept confidential to the extent necessary to comply
with any applicable federal or state securities laws.
(e) This Section 14.7 shall survive termination of this Agreement.
SECTION 14.8 CAPTIONS AND CROSS REFERENCES.
The various captions (including, without limitation, the table of
contents) in this Agreement are provided solely for convenience of reference and
shall not affect the meaning or interpretation of any provision of this
Agreement. Unless otherwise indicated, references in this Agreement to any
Section, Appendix, Schedule or Exhibit are to such Section of or Appendix,
Schedule or Exhibit to this Agreement, as the case may be, and references in any
Section,
52
subsection, or clause to any subsection, clause or subclause are to such
subsection, clause or subclause of such Section, subsection or clause.
SECTION 14.9 INTEGRATION.
This Agreement and the other Transaction Documents contain a final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire understanding among
the parties hereto with respect to the subject matter hereof, superseding all
prior oral or written understandings.
SECTION 14.10 GOVERNING LAW.
THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
SECTION 14.11 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR
DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL NOT BE TRIED BEFORE A JURY.
SECTION 14.12 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.
EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY
UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT
AVAILABLE, OF ANY NEW YORK STATE COURT, AS APPROPRIATE, IN EITHER CASE SITTING
IN NEW YORK COUNTY, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR
FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO
EXECUTION, EXECUTION OR OTHERWISE)
53
WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS
AGREEMENT.
SECTION 14.13 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement. Delivery of an executed counterpart
of a signature page to this Agreement by facsimile shall be as effective as
delivery of a manually executed counterpart of a signature page of this
Agreement.
SECTION 14.14 NO RECOURSE AGAINST OTHER PARTIES.
The obligations of each Purchaser under this Agreement are solely the
corporate obligations of such Purchaser. No recourse shall be had for the
payment of any amount owing by any Purchaser under this Agreement or for the
payment by such Purchaser of any fee in respect hereof or any other obligation
or claim of or against such Purchaser arising out of or based upon this
Agreement, against Scotiabank, Wachovia or against any employee, officer,
director, incorporator or stockholder of such Purchaser. For purposes of this
Section 14.15, the term "Wachovia" and "Scotiabank" shall mean and include
Wachovia Bank, National Association and The Bank of Nova Scotia, as the case may
be, and all affiliates thereof and any employee, officer, director,
incorporator, stockholder or beneficial owner of any of them; provided, however,
for the purposes of this paragraph, Blue Ridge shall not be considered to be an
affiliate of Wachovia and Liberty Street shall not be considered to be an
affiliate of Scotiabank. Each of the Seller, the Master Servicer and the Agents
agree that each Purchaser shall be liable for any claims that such party may
have against such Purchaser only to the extent such Purchaser has excess funds
and to the extent such assets are insufficient to satisfy the obligations of
such Purchaser hereunder, such Purchaser shall have no liability with respect to
any amount of such obligations remaining unpaid and such unpaid amount shall not
constitute a claim against such Purchaser. Any and all claims against any
Purchaser or the related Purchaser Agent shall be subordinate to the claims of
the holders of Commercial Paper Notes and the related Liquidity Banks.
SECTION 14.15 SEVERABILITY OF PROVISIONS.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction, shall as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability, without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provisions
in any other jurisdiction.
[remainder of page intentionally left blank]
54
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
LPAC CORP.,
as Seller
By:_______________________________________
Name:_____________________________________
Title:____________________________________
LENNOX INDUSTRIES INC.,
as Master Servicer
By:_______________________________________
Name:_____________________________________
Title:____________________________________
[additional signatures to follow]
BLUE RIDGE ASSET FUNDING CORPORATION,
as a Purchaser
By: Wachovia Securities, LLC,
as Attorney-in-Fact
By:_______________________________________
Name:_____________________________________
Title:____________________________________
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Blue Ridge
Purchaser Agent
By:_______________________________________
Name:_____________________________________
Title:____________________________________
[additional signatures to follow]
LIBERTY STREET FUNDING CORP.,
as a Purchaser
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE BANK OF NOVA SCOTIA,
as Liberty Street Purchaser Agent and Liberty
Street Investor
By:_______________________________________
Name:_____________________________________
Title:____________________________________
[end of signatures]
APPENDIX A
DEFINITIONS
This is Appendix A to the Second Amended and Restated Receivables
Purchase Agreement dated as of June 16, 2003 among LPAC Corp., as the Seller,
Lennox Industries, Inc., as the Master Servicer, Blue Ridge Asset Funding
Corporation, as a Purchaser, Liberty Street, as a Purchaser, the Liberty Street
Investors named herein, The Bank of Nova Scotia, as the Liberty Street Purchaser
Agent and Wachovia Bank, National Association, as the Administrative Agent and
the Blue Ridge Purchaser Agent (as amended, supplemented or otherwise modified
from time to time, this "Agreement"). Each reference in this Appendix A to any
Section, Appendix or Exhibit refers to such Section of or Appendix or Exhibit to
this Agreement.
A. Defined Terms. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated
below:
Adjusted Dilution Ratio: The 12-month rolling average of the Dilution Ratio.
Administrative Agent: As defined in the preamble.
Affected Party: Each of Purchasers, each Liquidity Bank, any assignee or
participant of any Purchaser or any Liquidity Bank, Scotiabank, any successor to
Scotiabank, as Liberty Street Purchaser Agent, Wachovia, any successor to
Wachovia, as Administrative Agent or Blue Ridge Purchaser Agent, or any
sub-agent of any Agent.
Affiliate: With respect to any other Person controlling, controlled by, or under
common control with, such Person.
Affiliated Obligor: In relation to any Obligor, an Obligor that is an Affiliate
of such Obligor.
Agent: Any Purchaser Agent or the Administrative Agent, as the case may be.
Allocation Limit: As defined in Section 1.1.
Asset Interest: An undivided percentage ownership interest in favor of the
Administrative Agent, as agent for the Secured Parties, determined from time to
time as provided in Section 1.4(b), in (i) all then outstanding Pool Receivables
and (ii) all Related Assets.
Asset Tranche: At any time, a portion of the Asset Interest funded by any
Purchaser Group selected by the related Purchaser Agent pursuant to Section 2.1.
Assurance Agreement: The Assurance Agreement dated as of June 19, 2000 made by
Lennox International, as the same may be amended, restated, supplemented or
modified from time to time.
Bank Rate: For any Yield Period with respect to any Asset Tranche:
(i) in the case of any Yield Period other than a Yield Period
described in clause (ii) below, an interest rate per annum equal to the sum
of (A) the Bank Rate Spread per annum, plus (B) Eurodollar Rate (Reserve
Adjusted) for such Yield Period;
(ii) in the case of
(A) any Yield Period commencing on or prior to the first
day of which the related Purchaser or any related Liquidity Bank shall
have notified the related Purchaser Agent that (1) the introduction of
or any change in or in the interpretation of any law or regulation
makes it unlawful, or any central bank or other Governmental Authority
asserts that it is unlawful, for such Person to fund such Asset Tranche
at the rate described in clause (i) above, or (2) due to market
conditions affecting the interbank eurodollar market, funds are not
reasonably available to such Person in such market in order to enable
it to fund such Asset Tranche at the rate described in clause (i) above
(and in the case of subclause (1) or (2) above, such Person shall not
have subsequently notified the related Purchaser Agent that such
circumstances no longer exist), or
(B) any Yield Period as to which the related Purchaser
Agent does not receive notice or determine, by no later than 12:00 noon
(Atlanta, Georgia time) on the third Business Day preceding the first
day of such Yield Period, that the related Asset Tranche will be funded
by Liberty Street Alternate Fundings or Liquidity Fundings of the
related Purchaser Group, as the case may be, and not by the issuance of
Commercial Paper Notes,
an interest rate per annum equal to the Base Rate in effect from time to
time during such Yield Period; it being understood that, in the case of
paragraph (ii)(A) above, such rate shall only apply to the Person affected
by the circumstances described in such paragraph (ii)(A).
Bank Rate Spread: As defined in the Fee Letter.
Base Rate: For any day, the rate per annum equal to the higher as of such day of
(i) the Prime Rate, or (ii) one-half of one percent above the Federal Funds
Rate. For purposes of determining the Base Rate for any day, changes in the
Prime Rate or the Federal Funds Rate shall be effective on the date of each such
change. The Base Rate is not necessarily intended to be the lowest rate of
interest determined by Wachovia or Scotiabank in connection with extensions of
credit.
Blue Ridge: As defined in the preamble.
Blue Ridge Broken Funding Costs: For any Asset Tranche funded by the Blue Ridge
Purchaser Group which: (i) has its Purchaser Group Invested Amount reduced
without compliance by the Seller with the notice requirements hereunder or (ii)
does not become subject to a reduction following the delivery of any notice
pursuant to Section 3.2(b) or (iii) is assigned by Blue Ridge to the Liquidity
Banks under the related Liquidity Agreement or terminated prior to the date on
which it was originally scheduled to end; an amount equal to the excess, if any,
of (A) the CP Costs that would have accrued during the remainder of the tranche
periods for Commercial Paper Notes or (as applicable) Earned Discount that would
have accrued during the remainder of the
Yield Periods determined by the Blue Ridge Purchaser Agent to relate to such
Asset Tranche (as applicable) subsequent to the date of such reduction,
assignment or termination (or in respect of clause (ii) above, the date such
reduction was designated to occur pursuant to the notice) of the related
Purchaser Group Invested Amount of such Asset Tranche if such reduction,
assignment or termination had not occurred or such notice had not been
delivered, over (B) the sum of (1) to the extent all or a portion of such the
related Purchaser Group Amount is allocated to another Asset Tranche, the amount
of CP Costs or Earned Discount actually accrued during the remainder of such
period on such Invested Amount for the new Asset Tranche, and (2) to the extent
such Purchaser Group Invested Amount is not allocated to another Asset Tranche,
the income, if any, actually received during the remainder of such period by the
holder of such Asset Tranche from investing the portion of such Purchaser Group
Invested Amount not so allocated. All Blue Ridge Broken Funding Costs shall be
due and payable hereunder upon demand.
Blue Ridge CP Costs: For each day, the sum of (i) discount or interest accrued
on Pooled Commercial Paper issued by Blue Ridge on such day, plus (ii) any and
all accrued commissions in respect of placement agents and Commercial Paper Note
dealers, and issuing and paying agent fees incurred, in respect of such Pooled
Commercial Paper for such day, plus (iii) other costs associated with funding
small or odd-lot amounts with respect to all receivable purchase or financing
facilities which are funded by Pooled Commercial Paper issued by Blue Ridge for
such day, minus (iv) any accrual of income net of expenses received on such day
from investment of collections received under all receivable purchase or
financing facilities funded substantially with Pooled Commercial Paper of Blue
Ridge, minus (v) any payment received on such day net of expenses in respect of
Blue Ridge Broken Funding Costs related to the prepayment of any investment of
Blue Ridge pursuant to the terms of any receivable purchase or financing
facilities funded substantially with Pooled Commercial Paper. In addition to the
foregoing costs, if Seller shall request any Purchase during any period of time
determined by the Blue Ridge Purchaser Agent in its sole discretion to result in
incrementally higher CP Costs applicable to such Purchase, the principal
associated with any such Purchase shall, during such period, be deemed to be
funded by Blue Ridge in a special pool (which may include capital associated
with other receivable purchase or financing facilities) for purposes of
determining such additional Blue Ridge CP Costs applicable only to such special
pool and charged each day during such period against such principal.
Notwithstanding the foregoing, on any day when any Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, the Blue
Ridge CP Costs for each Asset Tranche funded through the issuance of Commercial
Paper Notes by Blue Ridge shall equal the greater of (A) the amount determined
for such day pursuant to the preceding two sentences, and (B) interest on the
related Purchaser Group Invested Amount associated with such Asset Tranche a
rate per annum equal to the Base Rate Plus 2% per annum.
Blue Ridge Liquidity Agreement: The Liquidity Asset Purchase Agreement dated as
of June 19, 2000 among Blue Ridge, Wachovia, as Administrative Agent, Wachovia,
as Liquidity Agent, and Wachovia and/or one or more other banks or other
financial institutions, as Liquidity Banks, and any other agreement hereafter
entered into by Blue Ridge providing for the making of loans, purchase of assets
or other extensions of credit to Blue Ridge secured by a direct or indirect
security interest in the portion of the Asset Interest funding by Blue Ridge (or
any portion thereof), to support all or part of Blue Ridge's payment obligations
under the Commercial Paper Notes issued by Blue Ridge or to provide an alternate
means of funding Blue Ridge's investments in accounts receivable or other
financial assets, and under which the amount
available from such extensions of credit is limited to an amount calculated by
reference to the value or eligible unpaid balance of such accounts receivable or
other financial assets or any portion thereof or the level of deal-specific
credit enhancement available with respect thereto, as such Blue Ridge Liquidity
Agreement or other agreement may be amended, supplemented or otherwise modified
from time to time.
Blue Ridge Liquidity Bank: The commercial lending institutions that are at any
time parties to the Blue Ridge Liquidity Agreement as liquidity providers
thereunder.
Blue Ridge Purchaser Agent: Wachovia, in such capacity, and its successors and
assigns.
Blue Ridge Purchaser Account: Account number 8735-098787 at Wachovia Bank,
National Association, ABA number 0531000494.
Blue Ridge Purchaser Group: Blue Ridge, Wachovia (individually and as Blue Ridge
Purchaser Agent) and each related Liquidity Bank, together with their respective
successors, assigns and participants).
Blue Ridge Purchaser Group Limit: $100,000,000.
Broken Funding Costs: For any Asset Interest, the sum of Blue Ridge Broken
Funding Costs and Liberty Street Broken Funding Costs.
Business Day: (i) with respect to any matters relating to the Eurodollar Rate, a
day on which banks are open for business in New York, New York, and in Atlanta,
Georgia and on which dealings in Dollars are carried on in the London interbank
market and (ii) for all other purposes, any day other than a Saturday, Sunday or
other day on which banking institutions or trust companies in New York, New
York, or Atlanta, Georgia are authorized or obligated by law, executive order or
governmental decree to be closed.
Capital Lease: At any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a
liability in accordance with GAAP.
Change in Control:
(i) in relation to either of the Master Servicer or
Lennox International, the acquisition after the date hereof by any
person or group of persons (within the meaning of Section 13 or 14 of
the Exchange Act), of beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under the
Exchange Act) of issued and outstanding shares of the capital stock of
such Person entitled (without regard to the occurrence of any
contingency) to vote for the election of members of the board of
directors of such Person and having a then present right to exercise
50% or more of the voting power for the election of members of the
board of directors of such Person attached to all such outstanding
shares of capital stock of such Person, unless otherwise agreed in
writing by the Agents; and
(ii) in relation to the Seller, the failure of Lennox
International to own (directly or through wholly-owned Subsidiaries of
Lennox International) 100% of the
issued and outstanding shares of the capital stock (including all
warrants, options, conversion rights, and other rights to purchase or
convert into such stock) of the Seller on a fully diluted basis.
Code: The Internal Revenue Code of 1986, as the same may be amended from time to
time.
Collateral: As defined in Section 9.1.
Collection Account: The segregated account that may be established and
maintained with Wachovia in the name of the Seller.
Collection Period:
(i) the period from the date of the initial Purchase to
the last day of the calendar month in which such date occurs; and
(ii) thereafter, each period from the last day of the next
preceding Collection Period to the last day of the next following
calendar month;
provided, however, that the last Collection Period shall end on the Final Payout
Date.
Collections: With respect to any Receivable, all funds which either (i) are
received by the Seller, the Originators or the Master Servicer from or on behalf
of the related Obligor in payment of any amounts owed (including, without
limitation, purchase prices, finance charges, interest and all other charges) in
respect of such Receivable, or applied to such amounts owed by such Obligor
(including, without limitation, insurance payments that the Seller, the
Originator or the Master Servicer applies in the ordinary course of its business
to amounts owed in respect of such Receivable and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligor
or any other party directly or indirectly liable for payment of such Receivable
and available to be applied thereon), or (ii) are Deemed Collections; provided
that, prior to such time as Lennox shall cease to be the Master Servicer, late
payment charges, collection fees, extension fees and any other similar fees or
expenses billed to and collected from an Obligor shall not be deemed to be
Collections.
Commercial Paper Notes: The commercial paper promissory notes issued by any
Purchaser in the commercial paper market.
Contract: A contract between the Seller or the Originator and any Person, or an
invoice sent or to be sent by the Seller or the Originator, pursuant to or under
which a Receivable shall arise or be created, or which evidences a Receivable. A
`related Contract' or similar reference means rights to payment, collection and
enforcement, and other rights under a Contract to the extent directly related to
a Receivable in the Receivables Pool, but not any other rights under such
Contract.
CP Accrual Period: Each Collection Period during which any Asset Tranche is
funded with Commercial Paper Notes.
CP Costs: The sum of Blue Ridge CP Costs and Liberty Street CP Costs.
Credit Agreement: That certain Revolving Credit Facility Agreement dated as of
July 29, 1999 by and among Lennox International as the borrower, certain
financial institutions, as the lenders, and Chase Bank of Texas, National
Association ("Chase"), as administrative agent for the lenders (as amended by
the First Amendment to the Revolving Credit Facility Agreement dated as of
August 6, 1999, the Second Amendment to the Revolving Credit Facility dated as
of January 25, 2000 and the Third Amendment to the Revolving Credit Facility
Agreement dated as of January 22, 2001 or as such agreement may be further
amended, restated, substituted or replaced from time to time).
Credit and Collection Policy: Collectively, those credit and collection policies
and practices of the Originators and the Master Servicer relating to Contracts
and Receivables as in effect on the date of this Agreement in the forms of
Exhibit C-1, C-2 and C-3 hereto, as may hereafter be modified without violating
Section 7.3(c), but subject to compliance with applicable tariffs or state
regulations in effect from time to time.
Credit Event: The earliest of (i) an Event of Bankruptcy with respect to Lennox
International, (ii) an Event of Bankruptcy with respect to Lennox or (iii) any
event described in subsection (d) of Section 10.1 hereof.
Cut-Off Date: The last day of each fiscal month of the Servicer.
Days Sales Outstanding or DSO: As of any day, an amount equal to the product of
(i) 91 and (ii) a fraction the numerator of which is the aggregate Unpaid
Balance of Pool Receivables as of the most recent Cut-Off Date and the
denominator of which is the aggregate dollar amount of Receivables generated by
the Originators during the three Collection Periods including and immediately
preceding such Cut-Off Date.
Deemed Collections: As defined in Section 3.2(a).
Default Horizon Ratio: As of any Cut-Off Date, the ratio (expressed as a
percentage) of (i) the aggregate sales of the Originators during the immediately
preceding six Collection Periods ending on such Cut-Off Date divided by (ii) the
Net Pool Balance on such Cut-Off Date.
Default Ratio: At any time, an amount (expressed as a percentage) equal to a
fraction the numerator of which is equal to the sum of Eligible Receivables that
became Defaulted Receivables during the immediately preceding Collection Period,
and the denominator of which is the amount of sales generated during the
Collection Period six months prior to the immediately preceding Collection
Period.
Defaulted Receivable: A Receivable: (i) as to which any payment, or part
thereof, remains unpaid for more than 120 days from the original due date for
such payment, (ii) as to which an Event of Bankruptcy has occurred and remains
continuing with respect to the Obligor thereof.
Delinquency Ratio: At any time, the ratio (expressed as a percentage) computed
as of the Cut-Off Date for the next preceding Collection Period by dividing (i)
the aggregate Unpaid Balance of all Pool Receivables that are Delinquent
Receivables on such Cut-Off Date by (ii) the aggregate Unpaid Balance of Pool
Receivables on such Cut-Off Date.
Delinquent Receivable: A Pool Receivable (i) that is not a Defaulted Receivable
and (ii) as to which any payment, or part thereof, remains unpaid for 91 days or
more from the original due date for such payment.
Dilution: The amount of any reduction or cancellation of the Unpaid Balance of a
Pool Receivable as described in Section 3.2(a).
Dilution Horizon Ratio: As of any date, the percentage equivalent of a fraction,
the numerator of which is the aggregate dollar amount of all Receivables
generated by the Originators during the two most recent Collection Periods and
the denominator of which is the Net Pool Balance as of the most recent Cut-Off
Date.
Dilution Ratio: As of any Cut-Off Date, the percentage equivalent of a fraction,
the numerator of which is the aggregate dollar amount of Dilutions that occurred
during the Collection Period ending on such date and the denominator of which is
the aggregate dollar amount of all Receivables originated by the Originators
during such Collection Period.
Dilution Reserve: The product of (i) the sum of (A) the product of (1) 2 and (2)
the Adjusted Dilution Ratio and (B) the Dilution Volatility Component and (ii)
the Dilution Horizon Ratio.
Dilution Volatility Component: The product of (i) the positive excess, if any,
of (A) the highest three month rolling average Dilution Ratio over the past 12
months over (B) the Adjusted Dilution Ratio and (ii) a fraction, the numerator
of which is the highest three month rolling average Dilution Ratio over the past
12 months and the denominator of which is the Adjusted Dilution Ratio.
Dollars: Means dollars in lawful money of the United States of America.
Downgraded Liquidity Bank: A Liquidity Bank with respect to which a Downgrading
Event shall have occurred.
Downgrading Event: With respect to any Person means the lowering of the rating
with regard to the short-term securities of such Person to below (i) A-1 by
Standard & Poor's Ratings Group, or (ii) P-1 by Moody's.
Earned Discount: For any Yield Period for any Asset Tranche funded with a
Liberty Street Alternate Funding or a Liquidity Funding by any Purchaser Group,
as the case may be:
IA x ER x ED + LF
------------
360
where:
IA = the daily average (calculated at the close of business each
day) of the related Purchaser Group Invested Amount in
such Asset Tranche during such Yield Period,
ER = the Earned Discount Rate for such Yield Period,
ED = the actual number of days elapsed during such Yield Period,
and
LF = the Liquidation Fee, if any, during such Yield Period.
Earned Discount Rate: For any Yield Period for any Asset Tranche funded by a
Liberty Street Alternate Funding or a Liquidity Funding, as the case may be, the
Bank Rate for such Asset Tranche and such Yield Period.
provided, however, that on any day when any Liquidation Event or an Unmatured
Liquidation Event shall have occurred and be continuing, the Earned Discount
Rate for each Asset Tranche (including without limitation, Asset Tranches funded
through the issuance of Commercial Paper Notes) shall mean a rate per annum
equal to the Base Rate plus 2% per annum.
Eligible Receivable: At any time, a Receivable:
(i) which is a Pool Receivable arising out of the sale by
an Originator in the ordinary course of its business that has been sold
or contributed to the Seller pursuant to the Sale Agreement in a "true
sale" transaction;
(ii) as to which the perfection of the Purchaser's
undivided ownership interest therein is governed by the laws of a
jurisdiction where the Uniform Commercial Code - Secured Transactions
is in force, and which constitutes an "account" as defined in the
Uniform Commercial Code as in effect in such jurisdiction;
(iii) the Obligor of which is a resident of the United
States, or any of its possessions or territories and is not an
Affiliate or employee of any Seller Party;
(iv) which is not a Defaulted Receivable;
(v) with regard to which the representations and
warranties of the Seller set forth in Section 6.1(l) are true and
correct;
(vi) the sale of an undivided interest in which does not
contravene or conflict with any law;
(vii) which is denominated and payable only in Dollars in
the United States;
(viii) which arises under a Contract that has been duly
authorized and that, together with such Receivable, is in full force
and effect and constitutes the legal, valid and binding obligation of
the Obligor of such Receivable enforceable against such Obligor in
accordance with its terms and is not subject to any dispute, offset,
counterclaim or defense whatsoever, provided, however, that if such
dispute, offset, counterclaim or defense affects only a portion of the
Unpaid Balance of such Receivable then such Receivable may be deemed an
Eligible Receivable to the extent of the portion of such Unpaid Balance
which is not so affected;
(ix) which, together with the Contract related thereto,
does not contravene in any material respect any laws, rules or
regulations applicable thereto (including, without limitation, laws,
rules and regulations relating to usury, truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party to
the Contract related thereto is in violation of any such law, rule or
regulation in any material respect if such violation would impair the
collectibility of such Receivable;
(x) which satisfies in all material respects all
applicable requirements of the applicable Originator's Credit and
Collection Policy;
(xi) which, according to the Contract related thereto, is
due and payable within 120 days from the invoice date of such
Receivable;
(xii) not more than 35% of the aggregate Unpaid Balance of
all Receivables of the Obligor of which are Defaulted Receivables;
(xiii) the original term of which has not been extended and
the Unpaid Balance of which has not been adjusted more than one time;
(xiv) the Obligor of which is not a Governmental Authority
as to which the assignment of receivables owing therefrom requires
compliance with the Federal Assignment of Claims Act or other similar
Legislation (unless the Seller has complied therewith);
(xv) which is not classified by the "Terms Description" of
the related Originator's Credit and Collection Policy or any other
internal classification procedures utilized by such Originator as (A)
"Authorizer," (B) "Cash Application," (C) "Check in Progress," (D)
"COD-Certified Check," (E) "COD-Company Check," (F) "Consignment
Shipment," (G) "Direct Pay," (H) "Due Immediately," (I) "Gratis," (J)
"Invoice to be Considered," (K) "Paid in Advance," (L) "Payroll
Deduction," (M) "Warrant Gratis," (N) "Warranty Parts," or (O) any
other classification now existing or hereinafter created that has the
same or any similar definition as any of the foregoing; and
(xvi) as to which the applicable Originator has satisfied
and fully performed all obligations on its part with respect to such
Receivable required to be fulfilled by it, and no further action is
required to be performed by any Person with respect thereto other than
payment thereon by the applicable Obligor.
ERISA: The U.S. Employee Retirement Income Security Act of 1974, as amended from
time to time.
ERISA Affiliate: Any trade or business (whether or not incorporated) that is a
member of a group of which the Master Servicer is a member and which is treated
as a single employer under Section 414 of the Code.
Eurodollar Business Day: A day of the year as defined in clause (i) of the
definition of Business Day.
Eurodollar Rate: For any Yield Period, the rate per annum determined on the
basis of the offered rate for deposits in Dollars of amounts equal or comparable
to the principal amount of the related
Liquidity Funding or Liberty Street Alternate Funding, as the case may be,
offered for a term comparable to such Yield Period, which rates appear on the
Telerate Page 3750 effective as of 11:00 A.M., London time, two Eurodollar
Business Days prior to the first day of such Yield Period, provided that if no
such offered rates appear on such page, the Eurodollar Rate for such Yield
Period will be the arithmetic average (rounded upwards, if necessary, to the
next higher 1/100th of 1%) of rates quoted by not less than two major banks in
New York City, selected by the related Purchaser Agent, at approximately 10:00
A.M., New York City time, two Eurodollar Business Days prior to the first day of
such Yield Period, for deposits in Dollars offered by leading European banks for
a period comparable to such Yield Period in an amount comparable to the
principal amount of such Liquidity Funding or Liberty Street Alternate Funding,
as the case may be.
Eurodollar Rate (Reserve Adjusted): With respect to any Yield Period means a
rate per annum equal to the quotient obtained (rounded upwards, if necessary, to
the next higher 1/100th of 1%) by dividing (i) the applicable Eurodollar Rate
for such Yield Period by (ii) 1.0 minus the Eurodollar Reserve Percentage.
Eurodollar Reserve Percentage: With respect to any Yield Period, the maximum
reserve percentage, if any, applicable to any Liquidity Bank under Regulation D
during such Yield Period (or if more than one percentage shall be applicable,
the daily average of such percentages for those days in such Yield Period during
which any such percentage shall be applicable) for determining the Liquidity
Bank's reserve requirement (including any marginal, supplemental or emergency
reserves) with respect to liabilities or assets having a term comparable to such
Yield Period consisting or included in the computation of "Eurocurrency
Liabilities" pursuant to Regulation D. Without limiting the effect of the
foregoing, the Eurodollar Reserve Percentage shall reflect any other reserves
required to be maintained by the Liquidity Bank by reason of any Regulatory
Change against (i) any category of liabilities which includes deposits by
reference to which the "London Interbank Offered Rate" or "LIBOR" is to be
determined or (ii) any category of extensions of credit or other assets which
include LIBOR-based credits or assets.
Event of Bankruptcy: With respect to a Person if either:
(i) a case or other proceeding shall be commenced,
without the application or consent of such Person, in any court,
seeking the liquidation, reorganization, debt arrangement, dissolution,
winding up, or composition or readjustment of debts of such Person, the
appointment of a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or substantially all of
its assets, or any similar action with respect to such Person under any
law relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect; or
(ii) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in
effect, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any general
assignment for the benefit of creditors, or shall be adjudicated
insolvent, or admit in writing its inability to, pay its debts
generally as they become due, or, if a corporation or similar entity,
its board of directors shall vote to implement any of the foregoing.
Excess Concentration Amount: As of any date, the sum of the amounts by which the
aggregate Unpaid Balance of Receivables of each Obligor exceeds the Obligor
Concentration Limit for such Obligor.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Excess Weighted Average Term Amount: On any day on which the Weighted Average
Term shall exceed 60 days, the aggregate of the Unpaid Balances, on such day, of
such Eligible Receivables that, were the then Eligible Receivables with the
longest terms (beginning with the Eligible Receivable(s) with the longest term
and working backwards toward the Eligible Receivable(s) with the shortest term)
deemed to not be Eligible Receivables on such day, would cause the Weighted
Average Term not to exceed 60 days on such day.
Existing Agreement: As defined in the Preamble.
Face Amount: With respect to any Commercial Paper Note, (i) the face amount
stated thereon in the case of any Commercial Paper Note issued on a discount
basis and (ii) the principal amount stated thereon plus the amount of all
interest scheduled to accrue on such Commercial Paper Note through its stated
maturity date in the case of any Commercial Paper Note issued on an interest
bearing basis.
Federal Funds Rate: For any day, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average rate charged to
Wachovia or Scotiabank, as the case may be on such day on such transactions, as
reasonably determined by the Wachovia or Scotiabank, as the case may be.
Federal Reserve Board: The Board of Governors of the Federal Reserve System, or
any successor thereto or to the functions thereof.
Fee Letter: As defined in Section 4.1.
Final Payout Date: The date following the Termination Date on which the Invested
Amount shall have been reduced to zero and all other amounts payable by the
Seller under the Transaction Documents shall have been paid in full.
Funding Termination Date: The earliest of the following:
(i) June 14, 2004, or such later date as may, from time
to time, be agreed to in writing by the Agents;
(ii) the date on which the Agents declare a Funding
Termination Date in a notice to the Seller in accordance with Section
10.2(a); or
(iii) in accordance with Section 10.2(b), the Funding
Termination Date occurs automatically.
GAAP: Generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such accounting
profession, which are applicable to the circumstances as of the date of
determination.
Governmental Authority: Any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, any body or entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
any court or arbitrator and any accounting board or authority (whether or not a
part of government) which is responsible for the establishment or interpretation
of national or international accounting principles, in each case whether foreign
or domestic.
Guaranty: With respect to any Person, any obligation (except the endorsement in
the ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(i) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(ii) to advance or supply funds (A) for the purchase or
payment of such Indebtedness or obligation, or (B) to maintain any
working capital or other balance sheet condition or any income
statement condition of any other Person or otherwise to advance or make
available funds for the purchase of payment of such Indebtedness or
obligation;
(iii) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of any other Person to make
payment of the Indebtedness or obligation; or
(iv) otherwise to assure the owner of such Indebtedness or
obligation against loss in respect of thereof. In any computation of
the Indebtedness or other liabilities of the obligor under any
Guaranty, the Indebtedness or other obligations that are the subject of
such Guaranty shall be assumed to be direct obligations of such
obligor.
Indebtedness: With respect to any Person shall mean, at any time, without
duplication:
(i) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(ii) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(iii) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(iv) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such liabilities);
(v) all its liabilities in respect of letters of credit
or instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money, but excluding in any event
obligations in respect of (A) trade or commercial letters of credit
issued for the account of such Person in the ordinary course of its
business and (B) stand-by letters of credit issued to support
obligations of such Person that are not of a type described in any of
clauses (i), (ii), (iii), (iv), (vi) or (vii) of this definition;
(vi) Swaps of such Person; and
(vii) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (i) through (vi)
hereof.
Indebtedness of any Person shall include all obligations of such Person
of the character described in clauses (i) through (vii) above to the extent such
Person remains legally liable in respect hereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
Indemnified Amounts: As defined in Section 13.1.
Indemnified Party: As defined in Section 13.1.
Independent Director: A Person who is a director of the Seller and who is not at
such time, and has not been at any time during the preceding five (5) years: (i)
a creditor, supplier, director, officer, employee, family member, manager,
member, limited partner, partner or contractor of Lennox International, the
Servicer any Originator or any of their respective Subsidiaries or Affiliates
(other than Seller), (ii) a direct or indirect or beneficial owner, excluding de
minimus ownership interests, (at the time of such individual's appointment as an
Independent Director or at any time thereafter while serving as an Independent
Director) of any of the outstanding common shares of the Seller, Lennox
International, the Servicer, any Originator, or any of their respective
Subsidiaries or Affiliates, having general voting rights, or (iii) a person who
controls (whether directly, indirectly or otherwise) Lennox International, the
Servicer, any Originator or any of their respective Subsidiaries or Affiliates
(other than Seller) or any creditor, supplier,
employee, officer, director, manager, member, limited partner, partner or
contractor of Lennox International, the Servicer, any Originator or any of their
respective Subsidiaries or Affiliates (other than Seller).
Information Package: As defined in Section 3.1(a).
Initial Cut-Off Date: May 31, 2000.
Initial Due Diligence Auditor: Such person designated by the Administrative
Agent as the initial due diligence auditor.
Initial Seller Note: As defined in the Sale Agreement.
Interim Cut-Off Date: Such date as may be specified by any Agent in any request
to provide an Interim Information Package pursuant to Section 1.4(c).
Interim Information Package: As defined in Section 1.4(c).
Interim Reporting Date: As defined in Section 1.4(c).
Interim Reporting Period: Such period as may be specified by any Agent in any
request to provide an Interim Information Package pursuant to Section 1.4(c).
Interim Settlement Date: One Business Day following each Interim Reporting Date.
Invested Amount: At any time with respect to the Asset Interest an amount equal
to (i) the aggregate of the amounts theretofore paid to Seller for Purchases
pursuant to Sections 1.1 and 1.2, less (ii) the aggregate amount of Collections
theretofore received and actually distributed to the Investors on account of
such Invested Amount pursuant to Section 1.3.
Investors: The Purchasers and the Liquidity Banks.
Lennox: As defined in the Preamble.
Lennox International: Lennox International Inc., a Delaware corporation.
Liberty Street: As defined in the preamble.
Liberty Street Alternate Funding: The portion of the outstanding Invested Amount
of any Asset Tranche that is funded by the Liberty Street Investors pursuant to
Section 1.1
Liberty Street Broken Funding Costs: For any Asset Tranche funded by the Liberty
Street Purchaser Group which: (i) has its Purchaser Group Invested Amount
reduced (I) if funded with Commercial Paper Notes, without compliance by Seller
with the notice requirements hereunder or (II) if funded by reference to the
Eurodollar Rate, on any date other than the last day of the related Yield Period
or (ii) does not become subject to a reduction following the delivery of any
reduction notice pursuant to Section 3.2(b) or (iii) is assigned by Liberty
Street to the Liquidity Banks under the Liberty Street Liquidity Agreement or
terminated prior to the date on which it was originally scheduled to end; an
amount equal to the excess, if any, of (A) the Liberty Street
CP Costs or Earned Discount (as applicable) that would have accrued during the
remainder of the Yield Periods or the tranche periods for Commercial Paper Notes
determined by the Liberty Street Purchaser Agent to relate to such Asset Tranche
(as applicable) subsequent to the date of such reduction, assignment or
termination (or in respect of clause (ii) above, the date such reduction was
designated to occur pursuant to the related reduction notice) of the Liberty
Street Invested Amount of such Asset Tranche if such reduction, assignment or
termination had not occurred or such reduction notice had not been delivered,
over (B) the sum of (x) to the extent all or a portion of such Liberty Street
Invested Amount is allocated to another Asset Tranche, the amount of Liberty
Street CP Costs or Earned Discount actually accrued during the remainder of such
period on such Liberty Street Invested Amount for the new Asset Tranche, and (y)
to the extent such Liberty Street Invested Amount is not allocated to another
Asset Tranche, the income, if any, actually received during the remainder of
such period by the holder of such Asset Tranche from investing the portion of
such Liberty Street Invested Amount not so allocated. All Liberty Street Broken
Funding Costs shall be due and payable hereunder upon written demand..
Liberty Street CP Costs: (a) The "weighted average cost" (as defined below) for
such day related to the issuance of Commercial Paper Notes by Liberty Street
that is allocated, in whole or in part by Liberty Street, to fund all or part of
its Purchases (and which may also be allocated in part to the funding of other
assets of Liberty Street) or (b) any other written agreement among Liberty
Street, the Seller, the Master Servicer and the related Purchaser Agent from
time to time. As used in this definition, the "weighted average cost" shall
consist of (A) the actual interest rate (or discount) paid to purchasers of
Commercial Paper Notes issued by Liberty Street, together with the commissions
of placement agents and dealers in respect of such Commercial Paper Notes, to
the extent such commissions are allocated, in whole or in part, to such
Commercial Paper Notes. (B) the costs associated with the issuance of such
Commercial Paper Notes, including without limitation, issuing and paying agent
fees incurred with respect to such Commercial Paper Notes, (C) any incremental
carrying costs incurred with respect to Commercial Paper Notes maturing on dates
other than those on which corresponding funds are received by Liberty Street
under this Agreement and (D) interest on other borrowing or funding sources by
Liberty Street, including to fund small or odd dollar amounts that are not
easily accommodated in the commercial paper market and interest under any
voluntary advance agreement. In addition to the foregoing costs, if Seller shall
request any Purchase during any period of time determined by the Liberty Street
Purchaser Agent in its sole discretion to result in incrementally higher Liberty
Street CP Costs applicable to such Purchase, the Liberty Street Invested Amount
associated with any such Purchase shall, during such period, be deemed to be
funded by Liberty Street in a special pool (which may include capital associated
with other receivable purchase facilities) for purposes of determining such
additional Liberty Street CP Costs applicable only to such special pool and
charged each day during such period to the Seller.
Liberty Street Investor: As defined in the preamble.
Liberty Street Liquidity Agreement: The Liquidity Asset Purchase Agreement dated
as of June 16, 2003 among Liberty Street, Scotiabank, as administrator and
liquidity agent and/or one or more other banks or other financial institutions,
as "Purchasers" thereunder, and any other agreement hereafter entered into by
Liberty Street providing for the making of loans, purchase of assets or other
extensions of credit to Liberty Street secured by a direct or indirect security
interest in the portion of the Asset Interest funding by Liberty Street (or any
portion thereof), to
support all or part of Liberty Street's payment obligations under the Commercial
Paper Notes issued by Liberty Street or to provide an alternate means of funding
Liberty Street's investments in accounts receivable or other financial assets,
and under which the amount available from such extensions of credit is limited
to an amount calculated by reference to the value or eligible unpaid balance of
such accounts receivable or other financial assets or any portion thereof or the
level of deal-specific credit enhancement available with respect thereto, as
such Liberty Street Liquidity Agreement or other agreement may be amended,
supplemented or otherwise modified from time to time.
Liberty Street Liquidity Bank: The commercial lending institutions that are at
any time parties to the Liberty Street Liquidity Agreement as liquidity
providers thereunder.
Liberty Street Purchaser Agent: Scotiabank, in such capacity, and its successors
and assigns.
Liquidity Street Purchaser Account: Account number 215813 at The Bank of Nova
Scotia - New York Agency, ABA number ▇▇▇-▇▇▇-▇▇▇, account name: Liberty Street
Funding Corp., reference: LPAC Corp.
Liberty Street Purchaser Group: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (individually and as
Liberty Street Purchaser Agent) and each related Liquidity Bank, together with
their respective successors, assigns and participants).
Liberty Street Purchaser Group Limit: $50,000,000.
Lien: With respect to any Person, any mortgage, lien, pledge, charge, security
interest, or other encumbrance, or any interest or title of any vendor, lessor,
lender or other secured party to or of such Person under any conditional sale or
other title retention agreement or Capital Lease, upon or with respect to any
property or asset of such Person (including in the case of stock, stockholder
agreements, voting trust agreements and all similar arrangements).
Liquidation Event: As defined in Section 10.1.
Liquidation Fee: For each Asset Tranche (or portion thereof) funded through a
Liquidity Funding or a Liberty Street Alternate Funding, as the case may be, for
each day in any Yield Period (computed without regard to clause (iii) of the
proviso of the definition of "Yield Period"), the amount, if any, by which:
(i) the additional Earned Discount (calculated without
taking into account any Liquidation Fee) which would have accrued on
the reductions of the related Purchaser's Tranche Investment with
respect to such Asset Tranche during such Yield Period (as so computed)
if such reductions had not been made, exceeds
(ii) the income, if any, received by the related Purchaser
from investing the proceeds of such reductions of such Purchaser's
Tranche Investment.
Liquidation Period: The period commencing on the date on which a Liquidation
Event has occurred or is continuing and the Agents shall have notified Seller
and the Master Servicer in writing that the Liquidation Period has commenced,
and ending on the Final Payout Date;
provided, hereunder, upon the occurrence of a Liquidation Event described in
Section 10.1(e), the Liquidation Period shall commence automatically.
Liquidity Agent: With respect to the Blue Ridge Purchaser Group, Wachovia, as
agent for the Liquidity Banks under the Blue Ridge Liquidity Agreement, or any
successor to Wachovia in such capacity and with respect to the Liberty Street
Purchaser Group, Scotiabank, as agent for the Liquidity Banks under the Liberty
Street Liquidity Agreement, or any successor to Scotiabank in such capacity
Liquidity Bank: Any Blue Ridge Liquidity Bank or Liberty Street Liquidity Bank,
as the case may be.
Liquidity Funding: A purchase made by any Liquidity Bank (or simultaneous
purchases made by the Liquidity Banks) pursuant to any Liquidity Agreement.
Lockbox Account: An account maintained for the purpose of receiving Collections
at a bank or other financial institution which has executed a Lockbox Account.
Lockbox Agreement: A letter agreement, in substantially the form of Exhibit A-1,
among the Master Servicer, the Administrative Agent, the Seller and any Lockbox
Bank.
Lockbox Bank: Any of the banks holding one or more lockboxes or Lockbox Accounts
receiving Collections from Pool Receivables.
Loss Reserve: At any time, means the product of (i) 2.5 and (ii) the highest
rolling three month average Default Ratio during the immediately preceding
twelve (12) months and (iii) the most recently calculated Default Horizon Ratio.
Master Servicer: As defined in the preamble.
Material Adverse Effect: With respect to any event or circumstance, a material
adverse effect on:
(i) (A) the assets, operations, business or financial
condition of the Seller or (B) the business, assets, operations or
financial condition of Lennox International and its Subsidiaries, taken
as a whole, which could reasonably be expected to have a material
adverse effect on the creditworthiness of any Originator;
(ii) the ability of the Seller, the Master Servicer, any
Originator or any Affiliate thereof to perform in all material respects
its obligations under this Agreement or any other Transaction Document;
or
(iii) the validity or enforceability of this Agreement or
any other Transaction Document, or the validity, enforceability or
collectibility of a material portion of the Receivables Pool; or
(iv) the status, existence, perfection, priority or
enforceability of the Secured Parties' and the Administrative Agent's
interest in the Receivables Pool.
Material Indebtedness: Indebtedness, the aggregate principal amount of which is
greater than $25,000,000.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc.
Net Pool Balance: On any date, an amount equal to (i) the aggregate Unpaid
Balance of all Eligible Receivables in the Receivables Pool on such date, minus
(ii) the Excess Concentration Amount on such date, minus (iii) the Excess
Weighted Average Term Amount on such day.
Net Worth: With respect to the Seller on any date, an amount equal to the
aggregate Unpaid Pool Balance of all Pool Receivables minus the sum of (i) the
Unpaid Balance of all Defaulted Receivables on such day, (ii) the aggregate
amount outstanding on the Initial Seller Notes on such day and (iii) an amount
equal to the Net Pool Balance times the Asset Interest on such day.
Obligor: A Person obligated to make payments with respect to a Receivable,
including any guarantor thereof.
Obligor Concentration Limit: At any time, in relation to the aggregate Unpaid
Balance of Receivables owed by any single Obligor and its Affiliated obligors
(if any):
(i) for Obligors who have a short term unsecured debt
rating currently assigned to them by either S&P or Moody's, the
applicable concentration limit shall be determined according to the
following table (and, if such Obligor is rated by both S&P and Moody's
and has a split rating, the applicable rating will be the lower of the
two):
----------------------------------------------------------
Allowable % of
S&P Rating ▇▇▇▇▇'▇ Rating Eligible Receivables
----------------------------------------------------------
A-1+ P-1 10%
-------------------------------------------------
A-1 P-1 8%
-------------------------------------------------
A-2 P-2 6%
-------------------------------------------------
A-3 P-3 3%
-------------------------------------------------
If such Obligor is rated by only S&P, the applicable rating will be deemed to be
one ratings tier below the actual rating by S&P, and, if such Obligor is rated
by only Moody's, the applicable rating will be deemed to be one ratings tier
below the actual rating by Moody's, it being understood that if, for example,
Moody's has assigned a P-1 rating to such Obligor and S&P has not rated it, the
applicable rating will be deemed to be P-2.
(ii) for Obligors who do not have a debt rating listed
above or who are not rated, 2% of the aggregate Unpaid Balance of
Eligible Receivables at such time.
provided, however that at the Originator's request and in the Agents' sole
discretion, the Agents may permit certain obligors to have an Obligor
Concentration Limit in excess of those described in clauses (i) and (ii) above
("Special Obligor"); provided that any such Special Obligor designation shall
not take effect without the confirmation of approval to the Agents by each of
Moody's and S&P of such designation, if any Agent, in its sole discretion,
determines that such confirmation of approval shall be required.
Originator: Each of Lennox, Advanced Distributor Products LLC, Heatcraft
Refrigeration Products, LLC and any other Person who is a seller under the Sale
Agreement."
Outstanding Balance: With respect to any Receivable, the outstanding balance of
such Receivable in Dollars.
Person: An individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, joint venture,
government or any agency or political subdivision thereof or any other entity.
Plan: Any pension plan subject to the provisions of Title IV of ERISA or Section
412 of the Code which is maintained for employees of Lennox or any ERISA
Affiliate.
Pool Receivable: A Receivable in the Receivables Pool.
Pooled Commercial Paper: Commercial Paper Notes of Purchaser subject to any
pooling arrangement by Purchaser, but excluding Commercial Paper Notes issued by
Purchaser for a tenor and in an amount specifically requested by any Person in
connection with any agreement effected by Purchaser.
Preferred Stock: Any class of capital stock of a corporation that is preferred
over any other class of capital stock of such corporation as to the payment of
dividends or the payment of any amount upon liquidation or dissolution of such
corporation.
Prime Rate: Refers to that interest rate so denominated and set by Wachovia from
time to time as an interest rate basis for borrowings. The Prime Rate is but one
of several interest rate bases used by Wachovia. Wachovia lends at interest
rates above and below the Prime Rate.
Program Fee: As defined in the Fee Letter.
Pro Rata Share: At any time with respect to a Purchaser Group, (a) with respect
to any payment to be made to such Purchaser Group, the percentage equivalent of
a fraction the numerator of which is equal to such Purchaser Group's Purchaser
Group Invested Amount at such time and the denominator of which is equal to the
Invested Amount at such time and (b) with respect to any Purchase to be made by
such Purchaser Group, the percentage equivalent of a fraction, the numerator of
which is equal to the related Purchaser Group Limit and the denominator of which
is equal to the Purchase Limit.
Purchase: As defined in Section 1.1.
Purchase Limit: As defined in Section 1.1.
Purchaser: Blue Ridge, Liberty Street and/or each Liberty Street Investor, as
the case may be.
Purchaser Agent: The Blue Ridge Purchaser Agent and/or the Liberty Street
Purchaser Agent, as the case may be.
Purchaser Agent Account: The Blue Ridge Purchaser Account and the Liberty Street
Purchaser Account.
Purchaser Group: The Blue Ridge Purchaser Group and/or the Liberty Street
Purchaser Group, as the case may be.
Purchaser Group Invested Amount: With respect to a Purchaser Group, the
aggregate of the portions of the Invested Amount outstanding at such time that
were funded by such Purchaser Group.
Purchaser Group Limit: The Blue Ridge Purchaser Group Limit or the Liberty
Street Purchaser Group Limit, as the case may be.
Purchasers' Share: With respect to any amount, at any time, the lesser of (i)
the most recently calculated Asset Interest and (ii) 100%.
Purchaser's Tranche Investment: In relation to any Asset Tranche, the amount of
the Invested Amount allocated by the Administrative Agent to that Asset Tranche
pursuant to Section 2.1, provided, that at all times the aggregate amounts
allocated to all Asset Tranches shall equal the Invested Amount.
Qualifying Liquidity Bank: A Liquidity Bank with a rating of its short-term
securities equal to or higher than (i) A-1 by Standard & Poor's and (ii) P-1 by
Moody's.
Receivable: Any right to payment from a Person (other than an Affiliate),
whether constituting an account, chattel paper, instrument or general intangible
and includes the right to payment of any interest or finance charges and other
amounts with respect thereto.
Receivables Pool: At any time all then outstanding Receivables which have been
sold or contributed as capital, or purported to have been sold or contributed as
capital, by an Originator to the Seller, other than those reconveyed to an
Originator pursuant to Section 3.5 of the Sale Agreement.
Regulation D: Regulation D of the Federal Reserve Board, as the same may be
amended or supplemented from time to time.
Regulatory Change: Any change after the date of this Agreement in United States
(federal, state or municipal) or foreign laws or regulations (including
Regulation D) or the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks (including the Liquidity
Banks) of or under any United States (federal, state or municipal) or foreign,
laws, or regulations (whether or not having the force of law) by any
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.
Reinvestment: As defined in Section 1.3(a)(iii).
Related Assets: (i) all rights to, but not any obligations under, all related
Contracts and other Related Security related to any Pool Receivables, (ii) all
rights and interests of the Seller under the Sale Agreement in relation to any
Pool Receivables, (iii) all books and records evidencing or
otherwise relating to any Pool Receivables, (iv) all Lockbox Accounts and all
cash and investments therein, to the extent constituting or representing the
items in the following clause (v) and (v) all Collections in respect of, and
other proceeds of, any Pool Receivables or any other Related Assets.
Related Security: With respect to any Pool Receivable, all of the Seller's (in
the case of usage in the Receivables Purchase Agreement) or the Originator's (in
the case of usage in the Sale Agreement) right, title and interest in and to:
(i) all Contracts that relate to such Pool Receivable; (ii) all merchandise
(including returned merchandise), if any, relating to the sale which gave rise
to such Pool Receivable; (iii) all security deposits and other security
interests or liens and property subject thereto from time to time purporting to
secure payment of such Pool Receivable, whether pursuant to the Contract related
to such Pool Receivable or otherwise; (iv) all UCC financing statements covering
any collateral securing payment of such Pool Receivable (but only to the extent
of the interest of the Purchaser in the respective Pool Receivable); (v) all
guarantees and other agreements or arrangements of whatever character from time
to time supporting or securing payment of such Pool Receivable whether pursuant
to the Contract related to such Pool Receivable or otherwise; and (vi) all
insurance policies, and all claims thereunder, related to such Pool Receivable,
in each case to the extent directly related to rights to payment, collection and
enforcement, and other rights with respect to such Pool Receivable. The interest
of the Purchaser in any Related Security is only to the extent of the
Purchaser's undivided percentage interest, as more fully described in the
definition of Asset Interest.
Reportable Event: Any reportable event as defined in Section 4043(b) of ERISA or
the regulations issued thereunder with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate which is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code).
Reporting Date: As defined in Section 3.1(a).
Required Reserve: On any day during a Collection Period, an amount equal to the
product of (i) the Required Reserve Factor and (ii) the Net Pool Balance.
Required Reserve Factor: On any day during a Collection Period, the greater of
(i) the Required Reserve Factor Floor and (ii) the sum of (A) the Loss Reserve,
(B) the Dilution Reserve, (C) the Yield Reserve, and (D) the Servicing Reserve.
Required Reserve Factor Floor: The sum of (i) 8.0% and (ii) the product of the
Adjusted Dilution Ratio times the Dilution Horizon Ratio.
Revolving Period: Means the period beginning on the date hereof and ending on
the earlier of (i) June 14, 2004 and (ii) the Termination Date.
S&P: Standard & Poor's Ratings Service.
Sale Agreement: The Purchase and Sale Agreement dated as of June 19, 2000 among
the Originators and the Seller as it may be amended, supplemented or otherwise
modified.
Sale Amendment: As defined in Section 5.1(a)(i).
Scotiabank: As defined in the preamble.
SEC: The Securities and Exchange Commission.
Secured Parties: The Purchasers, the Agents, the Indemnified Parties and the
Affected Parties.
Seller: As defined in the preamble.
Seller Information: As defined in Section 14.7(a).
Seller Information Provider: As defined in Section 14.7(a).
Seller Party: As defined in the preamble.
Seller's Share: With respect to any amount means 100% minus the lesser of (i)
the most recently calculated Asset Interest and (ii) 100%.
Servicer Default: As defined in Section 8.4.
Servicer Transfer Event: As defined in Section 8.1(b).
Servicing Fee: Accrued for any day in a Collection Period means: (i) an amount
equal to the product of (A) the Servicing Fee rate, (B) the aggregate Unpaid
Balance of the Pool Receivables at the close of business on the first day of
such Collection Period, and (C) 1/360; or (ii) on and after the Master
Servicer's reasonable request made at any time when Lennox shall no longer be
Master Servicer, an alternative amount specified by Master Servicer not
exceeding (A) 110% of Master Servicer's costs and expenses of performing its
obligations under the Agreement during the Collection Period when such day
occurs divided by (B) the number of days in such Collection Period.
Servicing Fee Rate: 1.00% per annum.
Servicing Reserve: The product of (i) the Servicing Fee Rate and (ii) a
fraction, the numerator of which is the Twelve Month DSO and the denominator of
which is 360.
Settlement Date: Two Business Days following each Reporting Date.
Special Obligor: As defined in the definition of Obligor Concentration Limit.
Structuring Fee: As defined in the Fee Letter.
Subsidiary: With respect to any Person means (i) a corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned or controlled by such Person, directly or
indirectly through Subsidiaries, and (ii) any partnership, association, joint
venture or other entity in which such Person, directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time.
Successor Notice: As defined in Section 8.1(b).
Swaps: With respect to any Person, payment obligations with respect to interest
rate swaps, currency swaps and similar obligations obligating such Person to
make payments, whether periodically or upon the happening of a contingency. For
the purpose of this Agreement, the amount of the obligation under any Swap shall
be an amount determined in respect thereof as of the end of the then most
recently ended fiscal quarter of such Person, based on the assumption that such
Swap had terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides for the netting
of amounts payable by and to such Person thereunder or if any such agreement
provides for the simultaneous payment of amounts by and to such Person, then in
each such case, the amount of such obligation shall be the net amount so
determined.
Termination Date: The earliest of:
(i) the date of termination (whether by scheduled
expiration, termination on default or otherwise) of the Liquidity
Banks' commitments under the Liquidity Agreement (unless such
commitments are renewed, extended or replaced on or before such date);
(ii) the Funding Termination Date;
(iii) the date designated by the Seller as the "Termination
Date" on not less than thirty (30) days' notice to the Administrative
Agent, provided that on such date the Invested Amount has been reduced
to zero, all accrued Earned Discount, CP Costs, Broken Funding Costs
and fees have been paid in full and all other amounts due to the
Purchaser and the Administrative Agent have been paid in full; and
(iv) the date on which any of the following shall occur:
(A) A Downgrading Event with respect to a
Liquidity Bank shall have occurred and been continuing for not
less than 45 days, (x) the Downgraded Liquidity Bank shall not
have been replaced by a Qualifying Liquidity Bank pursuant to
a Liquidity Agreement in form and substance acceptable to the
Purchaser and the Administrative Agent, and (y) the commitment
of such Downgraded Liquidity Bank under the Liquidity
Agreement shall not have been funded or collateralized in such
a manner that such Downgrading Event will not result in a
reduction or withdrawal of the credit rating applied to the
Commercial Paper Notes by any of the rating agencies then
rating the Commercial Paper Notes; or
(B) Purchaser shall become an "investment
company" within the meaning of the Investment Company Act of
1940, as amended.
Termination Notice: As defined in Section 8.4.
Threshold Amount: $3,900,000, or such other amount to which the Administrative
Agent may agree in writing from time to time.
Transaction Documents: This Agreement, the Lockbox Agreements, the Sale
Agreement, the Assurance Agreement, the Fee Letter, and the other documents to
be executed and delivered in connection herewith.
Transaction Fees: Subject to the limitations set forth in the Fee Letter, all
reasonable expenses of the Agents incurred in connection with the consummation
of this Agreement and each other Transaction Document, including but not limited
to (i) the legal fees of Hunton & ▇▇▇▇▇▇▇▇ LLP, counsel to the Administrative
Agent, (ii) expenses incurred in connection with any due diligence audit and
(iii) out-of-pocket expenses of the Agents.
Twelve Month DSO: For any day, the highest Days Sales Outstanding that occurred
during the twelve (12) month period ending on such date of calculation.
UCC: The Uniform Commercial Code, as from time to time in effect in the
applicable jurisdiction or jurisdictions.
Unmatured Liquidation Event: Any event which, with the giving of notice or lapse
of time, or both, would become a Liquidation Event.
Unpaid Balance: With respect to any Receivable means at any time the unpaid
amount thereof, but excluding all late payment charges, delinquency charges and
extension or collection fees.
Unused Fee: As defined in the Fee Letter.
Weighted Average Term: On any day, the weighted average of the stated terms of
all Eligible Receivables, weighted on the basis of the Unpaid Balance of each
such Receivable, as of such date of calculation.
Yield Period: With respect to any Asset Tranche funded by a Liquidity Funding or
a Liberty Street Alternate Funding, as the case may be,
(a) the period commencing on the date of the initial
Purchase of the Asset Interest, the making of such Liquidity Funding or
Liberty Street Alternate Funding, as the case may be, or the creation
of such Asset Tranche pursuant to Section 2.1 (whichever is latest) and
ending such number of days thereafter as the Administrative Agent shall
select; and
(b) each period commencing on the last day of the
immediately preceding Yield Period for the related Asset Tranche and
ending such number of days thereafter as the Administrative Agent shall
select;
provided, however, that
(i) any such Yield Period (other than a Yield Period
consisting of one day) which would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day
(unless the related Asset Tranche shall be accruing Earned Discount at
a rate determined by reference to Eurodollar Rate (Reserve Adjusted),
in
which case if such succeeding Business Day is in a different calendar
month, such Yield Period shall instead be shortened to the next
preceding Business Day);
(ii) in the case of Yield Periods of one day for any Asset
Tranche, (A) the initial Yield Period shall be the date such Yield
Period commences as described in clause (a) above; and (B) any
subsequently occurring Yield Period which is one day shall, if the
immediately preceding Yield Period is more than one day, be the last
day of such immediately preceding Yield Period, and if the immediately
preceding Yield Period is one day, shall be the next day following such
immediately preceding Yield Period; and
(iii) in the case of any Yield Period for any Asset Tranche
which commences before the Termination Date and would otherwise end on
a date occurring after such Termination Date, such Yield Period shall
end on such Termination Date and the duration of each such Yield Period
which commences on or after the Termination Date for such Asset Tranche
shall be of such duration as shall be selected by the related Purchaser
Agent.
Yield Reserve: On any date of determination, the product of (i) 1.5, (ii) the
Base Rate and (iii) a fraction the numerator of which is the Twelve Month DSO
and the denominator of which is 360.
B. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding".
SCHEDULE 6.1(i)
SCHEDULE 6.1(n)
SCHEDULE 6.1(o)
SCHEDULE 14.2
EXHIBIT 1.2 (a)
FORM OF PURCHASE REQUEST
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
The Bank of Nova Scotia
[addresss]
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Receivables
Purchase Agreement dated as of June 16, 2003 (as amended, supplemented or
otherwise modified from time to time, the "Purchase Agreement") among LPAC
Corp., as the Seller, Lennox Industries Inc., as the Master Servicer (and
together with Seller, collectively referred to as the "Seller Parties"), Blue
Ridge Asset Funding Corporation, as a purchaser ("Blue Ridge"), Liberty Street
Funding Corp., as a purchaser ("Liberty Street"), the Liberty Street Investors
named therein, The Bank of Nova Scotia, as Liberty Street Purchaser Agent
("Liberty Street Purchaser Agent") and Wachovia Bank National Association, as
administrative agent (the "Administrative Agent") and Blue Ridge Purchaser Agent
("Blue Ridge Purchaser Agent"). Capitalized terms defined in the Purchase
Agreement are used herein with the same meanings.
I. Each of the Seller Parties hereby certifies, represents and
warrants to the Purchasers and the Agents that on and as of the Purchase Date
(as hereinafter defined):
(a) all applicable conditions precedent set forth in Article V of
the Purchase Agreement have been satisfied;
(b) each of its respective representations and warranties
contained in Section 6.1 of the Purchase Agreement will be true and correct, in
all material respects, as if made on and as of the Purchase Date;
(c) no event will have occurred and is continuing, or would result
from the requested Purchase, that constitutes a Liquidation Event or Unmatured
Liquidation Event;
(d) after giving effect to the requested Purchase, the Invested
Amount will not exceed the available Purchase Limit, no Purchaser Group Invested
Amount will exceed the related Purchaser Group Invested Amount and the Asset
Interest will not exceed the Allocation Limit; and
(e) the Termination Date shall not have occurred.
7
2. The undersigned, as Seller hereby requests that the Blue Ridge
Purchase Group make a Purchase on ___________, 200_ (the "Purchase Date") in the
amount of $_____________ and that the Liberty Street Purchaser Group make a
Purchase on the Purchase Date in the amount of $_________________.
3. Please disburse the proceeds of the Purchase as follows:
[APPLY $________ TO PAYMENT OF INVESTED AMOUNT DUE ON THE PURCHASE DATE]. [WIRE
TRANSFER $________ TO ACCOUNT NO. ________ AT ___________ BANK, IN [CITY,
STATE], ABA NO. __________, REFERENCE: ________].
IN WITNESS WHEREOF, the Seller and the Master Servicer have caused this
Purchase Request to be executed and delivered as of this ____ day of
___________, _____.
LPAC Corp., as Seller
By:_________________________________
Name:_______________________________
Title:______________________________
Lennox Industries Inc., as Master Servicer
By:_________________________________
Name:_______________________________
Title:______________________________
8
EXHIBIT 3.1(a)
FORM OF INFORMATION PACKAGE
9
EXHIBIT A-1
FORM OF LOCKBOX AGREEMENT
_____________, 2003
[LOCKBOX BANK NAME]
[LOCKBOX BANK ADDRESS]
Attn: ____________________
Fax No. (___) ______________
Re: [NAME OF CURRENT LOCKBOX OWNER]/LPAC CORP.
Ladies and Gentlemen:
Reference is hereby made to each of the [DEPARTMENTAL] post office
boxes listed on Schedule 1 hereto (each, a "Lock-Box") of which [COLLECTION BANK
NAME], a _________ banking association (hereinafter "you"), has exclusive
control for the purpose of receiving mail and processing payments therefrom
pursuant to the [LOCK-BOX SERVICE AGREEMENT] dated _______________, originally
by and between _____________ (the "Company") and you (the "Service Agreement").
1. You hereby confirm your agreement to perform the services
described therein. Among the services you have agreed to perform therein, is to
endorse all checks and other evidences of payment received in each of the
Lock-Boxes, and credit such payments to account no. _____________ (the "Lock-Box
Account").
2. The Company hereby informs you that it has transferred to its
affiliate, LPAC Corp., a Delaware corporation (the "Seller") all of the
Company's right, title and interest in and to the items from time to time
received in the Lock-Boxes and/or deposited in the Lock-Box Account, but that
the [Company][Lennox Industries Inc.] has agreed to [continue to] service the
receivables giving rise to such items. Accordingly, the Company and the Seller
hereby request that the name of the Lock-Box Account be changed to "LPAC Corp."
The Borrower hereby further advises you that it has sold an undivided percentage
ownership interest in the receivables giving rise to such items to a group of
purchasers for whom Wachovia Bank, National Association acts as agent (in such
capacity, the "Administrative Agent") and has granted a security interest to the
Administrative Agent in all of the Seller's right, title and interest in and to
the Lock-Box Account and the funds therein.
3. Each of the Company and the Seller hereby irrevocably
instructs you, and you hereby agree, that upon receiving notice from the Agent
in the form attached hereto as Annex A:
(i) the name of the Lock-Box Account will be changed to
"Wachovia Bank, National Association, as Administrative Agent" (or any
designee of the Administrative Agent), and the Agent will have
exclusive ownership of and access to the Lock-Boxes and the Lock-Box
Account, and none of the Company, the Seller, nor any of their
10
respective affiliates will have any control of the Lock-Boxes or the
Lock-Box Account or any access thereto, (ii) you will either continue
to send the funds from the Lock-Boxes to the Lock-Box Account, or will
redirect the funds as the Administrative Agent may otherwise request,
(iii) you will transfer monies on deposit in the Lock-Box Account to
the following account:
Bank Name: Wachovia Bank, National Association
Location: Charlotte, NC
ABA Routing No.: ABA # ▇▇▇▇▇▇▇▇▇
Credit Account No.: For credit to Blue Ridge Asset Funding
Account #2000010384921
Reference: Blue Ridge/LPAC Corp.
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, tel. (▇▇▇) ▇▇▇-▇▇▇▇
or to such other account as the Administrative Agent may specify, (iv) all
services to be performed by you under the Service Agreement will be performed on
behalf of the Administrative Agent, and (v) all correspondence or other mail
which you have agreed to send to the Company or the Seller will be sent to the
Agent at the following address:
Wachovia Bank, National Association, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
26th Floor, GA-8047
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Asset-Backed Finance
Fax: (404) ▇▇▇- ▇▇▇▇
Moreover, upon such notice, the Administrative Agent will have all rights and
remedies given to the Company (and the Seller, as the Company's assignee) under
the Service Agreement. The Company agrees, however, to continue to pay all fees
and other assessments due thereunder at any time.
4. You hereby acknowledge that monies deposited in the Lock-Box
Account or any other account established with you by the Administrative Agent
for the purpose of receiving funds from the Lock-Boxes are subject to the liens
of the Administrative Agent, and will not be subject to deduction, set-off,
banker's lien or any other right you or any other party may have against the
Company or the Seller except that you may debit the Lock-Box Account for any
items deposited therein that are returned or otherwise not collected and for all
charges, fees, commissions and expenses incurred by you in providing services
hereunder, all in accordance with your customary practices for the charge back
of returned items and expenses.
5. You will be liable only for direct damages in the event you
fail to exercise ordinary care. You shall be deemed to have exercised ordinary
care if your action or failure to act is in conformity with general banking
usages or is otherwise a commercially reasonable practice of the banking
industry. You shall not be liable for any special, indirect or consequential
damages, even if you have been advised of the possibility of these damages.
11
6. The parties acknowledge that you may assign or transfer your
rights and obligations hereunder solely to a wholly-owned subsidiary of [INSERT
NAME OF COLLECTION BANK'S HOLDING COMPANY].
7. Seller agrees to indemnify you for, and hold you harmless
from, all claims, damages, losses, liabilities and expenses, including legal
fees and expenses, resulting from or with respect to this letter agreement and
the administration and maintenance of the Lock-Box Account and the services
provided hereunder, including, without limitation: (a) any action taken, or not
taken, by you in regard thereto in accordance with the terms of this letter
agreement, (b) the breach of any representation or warranty made by the Seller
pursuant to this letter agreement, (c) any item, including, without limitation,
any automated clearinghouse transaction, which is returned for any reason, and
(d) any failure of the Seller to pay any invoice or charge to you for services
in respect to this letter agreement and the Lock-Box Account or any amount owing
to you from the Seller with respect thereto or to the service provided
hereunder.
8. THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF _________, WHICH STATE SHALL BE YOUR
"LOCATION" FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE. This letter agreement
may be executed in any number of counterparts and all of such counterparts taken
together will be deemed to constitute one and the same instrument.
9. This letter agreement contains the entire agreement between
the parties, and may not be altered, modified, terminated or amended in any
respect, nor may any right, power or privilege of any party hereunder be waived
or released or discharged, except upon execution by all parties hereto of a
written instrument so providing. In the event that any provision in this letter
agreement is in conflict with, or is inconsistent with, any provision of the
Service Agreement, this letter agreement will exclusively govern and control.
Each party agrees to take all actions reasonably requested by any other party to
carry out the purposes of this letter agreement or to preserve and protect the
rights of each party hereunder.
Please indicate your agreement to the terms of this letter agreement by
signing in the space provided below. This letter agreement will become effective
immediately upon execution of a counterpart of this letter agreement by all
parties hereto.
Very truly yours,
[NAME OF CURRENT LOCK-BOX OWNER]
By:_____________________________
Name:___________________________
Title:__________________________
LPAC CORP.
12
By:_____________________________
Name:___________________________
Title:__________________________
LENNOX INDUSTRIES INC.
By:_____________________________
Name:___________________________
Title:__________________________
Acknowledged and agreed to as of the
date first above written:
[COLLECTION BANK]
By:_______________________________
Name:_____________________________
Title:____________________________
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:_______________________________
Name:_____________________________
Title:____________________________
13
ANNEX A
FORM OF NOTICE
[On letterhead of the Administrative Agent]
[DATE]
[LOCKBOX BANK NAME]
[LOCKBOX BANK ADDRESS]
Attn: ____________________
Fax No. (___) ______________
Re: [NAME OF CURRENT LOCK-BOX OWNER]/LPAC CORP.
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to that
certain letter agreement dated ____________, 2003 (the "Letter Agreement") among
[NAME OF CURRENT LOCK-BOX OWNER], LPAC Corp., Lennox Industries Inc., you and
us, to have the name of, and to have exclusive ownership and control of, account
no. __________ identified in the Letter Agreement (the "Lock-Box Account")
maintained with you, transferred to us. The Lock-Box Account will henceforth be
a zero-balance account, and funds deposited in the Lock-Box Account should be
sent at the end of each day to the account specified in Section 3(i) of the
Letter Agreement, or as otherwise directed by the undersigned. You have further
agreed to perform all other services you are performing under the "Service
Agreement" (as defined in the Letter Agreement) on our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
WACHOVIA BANK,
NATIONAL ASSOCIATION,
as Administrative Agent
By:______________________________
Name:____________________________
Title:___________________________
EXHIBIT B
[NAME OF COMPANY]
FORM OF CERTIFICATE OF FINANCIAL OFFICER
This Certificate is made pursuant to the provisions of the Second
Amended and Restated Receivables Purchase Agreement dated as of June 16, 2003
(the "Agreement") among LPAC Corp., as Seller, Lennox Industries Inc., as Master
Servicer, Blue Ridge Asset Funding Corporation, as a Purchaser, Liberty Street
Funding Corp., as a Purchaser, the Liberty Street Investors named therein, The
Bank of Nova Scotia, as Liberty Street Purchaser Agent and Wachovia Bank,
National Association, as Administrative Agent and Blue Ridge Purchaser Agent.
The capitalized terms used, but not defined, herein have the meanings assigned
to them in the Agreement.
The undersigned [CHIEF FINANCIAL OFFICER/TREASURER] of [NAME OF
COMPANY] (the "Company") hereby certifies that the financial statements being
delivered concurrently herewith fairly present the financial condition and
results of operations of the Company in accordance with generally accepted
accounting principles consistently applied, subject to normal year-end audit
adjustments.
[NAME OF COMPANY]
Name:_______________________________
Title:______________________________
Dated:______________________________
EXHIBIT C-1
LENNOX INDUSTRIES INC.
CREDIT AND COLLECTION POLICY
EXHIBIT C-2
ADVANCED DISTRIBUTOR PRODUCTS LLC
CREDIT AND COLLECTION POLICY
EXHIBIT C-3
HEATCRAFT REFRIGERATION PRODUCTS LLC
CREDIT AND COLLECTION POLICY