EXHIBIT 10.33
RECEIVABLES PURCHASE AND SERVICING AGREEMENT
Dated as of August 30, 2002,
by and among
AVONDALE FUNDING, LLC
as Seller,
REDWOOD RECEIVABLES CORPORATION,
as Conduit Purchaser,
AVONDALE ▇▇▇▇▇, INC.,
as Servicer,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Purchaser and as Administrative Agent
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS AND INTERPRETATION..............................................................1
Section 1.01. Definitions..........................................................................1
Section 1.02. Rules of Construction................................................................1
ARTICLE II. AMOUNTS AND TERMS OF PURCHASES..............................................................2
Section 2.01. Purchases............................................................................2
Section 2.02. Optional Changes in Maximum Purchase Limit...........................................2
Section 2.03. Investment Base Certificates Notices Relating to Purchases and
Reductions in Capital Investment ....................................................3
Section 2.04. Conveyance of Receivables............................................................4
Section 2.05. Facility Termination Date............................................................5
Section 2.06. Daily Yield..........................................................................5
Section 2.07. Fees.................................................................................6
Section 2.08. Time and Method of Payments..........................................................6
Section 2.09. Capital Requirements; Additional Costs...............................................7
Section 2.10. Breakage Costs.......................................................................8
Section 2.11. Purchase Excess......................................................................9
ARTICLE III. CONDITIONS PRECEDENT........................................................................9
Section 3.01. Conditions to Effectiveness of Agreement.............................................9
Section 3.02. Conditions Precedent to All Purchases...............................................11
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.............................................................12
Section 4.01. Representations and Warranties of the Seller........................................12
Section 4.02. Representations and Warranties and Covenants of the Servicer........................19
ARTICLE V. GENERAL COVENANTS OF THE SELLER............................................................20
Section 5.01. Affirmative Covenants of the Seller.................................................20
Section 5.02. Reporting Requirements of the Seller................................................21
Section 5.03. Negative Covenants of the Seller....................................................22
ARTICLE VI. COLLECTIONS AND DISBURSEMENTS..............................................................25
Section 6.01. Establishment of Accounts...........................................................25
Section 6.02. Funding of Collection Account.......................................................29
Section 6.03. Daily Disbursements From the Collection Account; Revolving Period...................31
Section 6.04. Disbursements From the Retention Account; Settlement Date and
Daily Procedures; Revolving Period..................................................32
Section 6.05. Liquidation Settlement Procedures...................................................34
Section 6.06. Investment of Funds in Accounts.....................................................35
i
Section 6.07. Termination Procedures..............................................................35
ARTICLE VII. SERVICER PROVISIONS........................................................................36
Section 7.01. Appointment of the Servicer.........................................................36
Section 7.02. Duties and Responsibilities of the Servicer.........................................36
Section 7.03. Collections on Receivables..........................................................36
Section 7.04. Authorization of the Servicer.......................................................37
Section 7.05. Servicing Fees......................................................................37
Section 7.06. Representations and Warranties of the Servicer......................................38
Section 7.07. Covenants of the Servicer...........................................................40
Section 7.08. Reporting Requirements of the Servicer..............................................40
ARTICLE VIII. GRANT OF SECURITY INTERESTS................................................................40
Section 8.01. Seller's Grant of Security Interest.................................................40
Section 8.02. Seller's Certification..............................................................42
Section 8.03. Consent to Assignment...............................................................42
Section 8.04. Delivery of Collateral..............................................................43
Section 8.05. Seller Remains Liable...............................................................43
Section 8.06. Covenants of the Seller and the Servicer Regarding the Seller Collateral............43
ARTICLE IX. TERMINATION EVENTS.........................................................................46
Section 9.01. Termination Events..................................................................46
Section 9.02. Events of Servicer Termination......................................................50
ARTICLE X. REMEDIES...................................................................................52
Section 10.01. Actions Upon Termination Event......................................................52
Section 10.02. Exercise of Remedies................................................................54
Section 10.03. Power of Attorney...................................................................54
Section 10.04. Continuing Security Interest........................................................54
ARTICLE XI. SUCCESSOR SERVICER PROVISIONS..............................................................54
Section 11.01. Servicer Not to Resign..............................................................54
Section 11.02. Appointment of the Successor Servicer...............................................55
Section 11.03. Duties of the Servicer..............................................................55
Section 11.04. Effect of Termination or Resignation................................................56
ARTICLE XII. INDEMNIFICATION............................................................................56
Section 12.01. Indemnities by the Seller...........................................................56
Section 12.02. Indemnities by the Servicer.........................................................57
Section 12.03. Limitation of Damages; Indemnified Persons..........................................58
ARTICLE XIII. AGENT......................................................................................59
Section 13.01. Authorization and Action............................................................59
ii
Section 13.02. Reliance............................................................................59
Section 13.03. GE Capital and Affiliates...........................................................60
ARTICLE XIV. MISCELLANEOUS..............................................................................60
Section 14.01. Notices.............................................................................60
Section 14.02. Binding Effect; Assignability.......................................................60
Section 14.03. Termination; Survival of Seller Secured Obligations Upon Facility Termination Date..61
Section 14.04. Costs, Expenses and Taxes...........................................................62
Section 14.05. Confidentiality.....................................................................63
Section 14.06. No Proceedings......................................................................64
Section 14.07. Complete Agreement; Modification of Agreement.......................................64
Section 14.08. Amendments and Waivers..............................................................64
Section 14.09. No Waiver; Remedies.................................................................64
Section 14.10. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL........................65
Section 14.11. Counterparts........................................................................66
Section 14.12. Severability........................................................................66
Section 14.13. Section Titles......................................................................67
Section 14.14. Limited Recourse....................................................................67
Section 14.15. Further Assurances..................................................................67
EXHIBITS, SCHEDULES AND ANNEXES
Exhibit 2.02(a) Form of Commitment Reduction Notice
Exhibit 2.02(b) Form of Commitment Termination Notice
Exhibit 2.03(a) Form of Investment Base Certificate
Exhibit 2.03(b) Form of Capital Purchase Request
Exhibit 2.03(c) Form of Repayment Notice
Exhibit 2.04(a) Form of Purchase Assignment
Exhibit 3.01(a)(i) Form of Solvency Certificate
Exhibit 3.01(a)(ii)(A) Form of Seller Certificate (Closing)
Exhibit 3.01(a)(ii)(B) Form of Seller Certificate (Post-Closing)
Exhibit 3.01(a)(iii)(A) Form of Servicer's Certificate (Closing)
Exhibit 3.01(a)(iii)(B) Form of Servicer's Certificate (Post-Closing)
Exhibit 3.01(a)(iv) Form of Monthly Report
Exhibit 10.03 Form of Power of Attorney
Exhibit A Credit and Collection Policy
Schedule 4.01(b) Executive Offices; Collateral Locations; Corporate or
Other Names; Organizational Identification Number
FEIN/Seller
Schedule 4.01(d) Litigation
iii
Schedule 4.01(h) Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Debt/Seller
Schedule 4.01(i) Tax Matters/Seller
Schedule 4.01(r) Deposit and Disbursement Accounts/Seller
Schedule 5.01(b) Corporate and Trade Names/Seller
Schedule 5.03(b) Existing Liens/Seller
Annex G Financial Covenants
Annex 5.02(a) Reporting Requirements of the Seller
Annex 7.07 Reporting Requirements of the Servicer
Annex X Definitions
Annex Y Schedule of Documents
iv
THIS RECEIVABLES PURCHASE AND SERVICING AGREEMENT (as amended,
supplemented or otherwise modified and in effect from time to time, the
"Agreement") is entered into as of August 30, 2002, by and among AVONDALE
FUNDING LLC, a Delaware limited liability company (the "Seller"), AVONDALE
▇▇▇▇▇, INC., an Alabama corporation, in its capacity as servicer hereunder (in
such capacity, the "Servicer"), REDWOOD RECEIVABLES CORPORATION, a Delaware
corporation (the "Conduit Purchaser"), and GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation, as a Committed Purchaser (the "Committed Purchaser") and
as administrative agent for the Conduit Purchaser and the Committed Purchaser
hereunder (in such capacity, the "Administrative Agent").
RECITALS
A. The Seller is a special purpose entity wholly owned
by the Originator.
B. The Seller has been formed for the purpose of
purchasing, or otherwise acquiring by capital contribution, all trade
receivables generated by the Originator.
C. The Seller intends to sell, and, subject to the terms
and conditions hereof, the Conduit Purchaser and the Committed Purchaser intend
to purchase, undivided percentage interests in such trade receivables, from time
to time, as described herein.
D. The Administrative Agent has been requested and is
willing to act as administrative agent on behalf of each of the Conduit
Purchaser and the Committed Purchaser in connection with the making and
financing of such purchases.
E. In order to effectuate the purposes of this
Agreement, the Conduit Purchaser and the Committed Purchaser each desires to
appoint the Originator to service, administer and collect the receivables
acquired by the Purchasers pursuant to this Agreement and the Originator is
willing to act in such capacity as Servicer hereunder on the terms and
conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in Annex X.
Section 1.02. Rules of Construction. For purposes of this
Agreement, the rules of construction set forth in Annex X shall govern. All
Appendices hereto, or expressly identified to
this Agreement, are incorporated herein by reference and, taken together with
this Agreement, shall constitute but a single agreement.
ARTICLE II.
AMOUNTS AND TERMS OF PURCHASES
Section 2.01. Purchases. From and after the Closing Date and
until the Facility Termination Date and subject to the terms and conditions
hereof, the Conduit Purchaser (prior to the occurrence of a Redwood Termination
Date) and the Committed Purchaser (after the occurrence of the Committed
Purchaser Funding Event) severally agree to purchase Purchaser Interests (each
such purchase hereunder, a "Purchase") from the Seller from time to time and the
Seller agrees to sell such Purchaser Interests to the Purchasers. The obligation
of the Conduit Purchaser to make Purchases hereunder shall be from the Closing
Date until the occurrence of either a Committed Purchaser Funding Event or the
Facility Termination Date. The obligation of the Committed Purchasers to make
Purchases hereunder shall be from and after the occurrence of a Committed
Purchaser Funding Event until the Facility Termination Date. Under no
circumstances shall a Purchaser be obligated to make any Purchase if, after
giving effect thereto, a Purchase Excess would exist. Each purchase of undivided
percentage ownership interests in the Receivables by the Purchasers hereunder
shall consist of either (i) a purchase made by the applicable Purchasers with
new funds provided by such Purchasers (each, a "Capital Purchase") or (ii) a
purchase made by the applicable Purchasers with funds consisting of Collections
allocated to the Purchaser Interests pursuant to the terms of this Agreement
(each, a "Reinvestment Purchase"). On each Business Day following the Closing
Date until the Facility Termination Date, but subject to Section 3.02 hereof,
each Purchaser holding a Purchaser Interest at such time shall be automatically
deemed to have made a Reinvestment Purchase with the amount of funds to be
distributed to the Seller pursuant to Section 6.03(c), if any.
Section 2.02. Optional Changes in Maximum Purchase Limit.
(a) So long as no Incipient Termination Event or
Termination Event shall have occurred and be continuing, the Seller may, not
more than twice during each calendar year, reduce the Maximum Purchase Limit
permanently; provided, that (i) the Seller shall give ten (10) Business Days'
prior written notice of any such reduction to the Administrative Agent
substantially in the form of Exhibit 2.02(a) (each such notice, a "Commitment
Reduction Notice"), (ii) any partial reduction of the Maximum Purchase Limit
shall be in a minimum amount of $5,000,000 or an integral multiple thereof and
(iii) no such reduction shall reduce the Maximum Purchase Limit below the
greater of (x) the Capital Investment at such time and (y) $50,000,000.
(b) The Seller may at any time on at least 30 days' prior
written notice by the Seller to the Administrative Agent irrevocably terminate
the Maximum Purchase Limit; provided, that (i) such notice of termination shall
be substantially in the form of Exhibit 2.02(b) (the "Commitment Termination
Notice") and (ii) the Seller shall reduce the Capital Investment
2
to zero and make all payments required by Section 2.03(c) at the time and in the
manner specified therein. Upon such termination, the Seller's right to request
that any Purchaser make Purchases hereunder shall simultaneously terminate and
the Facility Termination Date shall automatically occur.
(c) Each written notice required to be delivered pursuant
to Sections 2.02(a) and (b) shall be irrevocable and shall be effective (i) on
the day of receipt if received by the Administrative Agent and the Purchasers
not later than 4:00 p.m. (New York time) on any Business Day and (ii) on the
immediately succeeding Business Day if received by the Administrative Agent and
the Purchasers after such time on such Business Day or if any such notice is
received on a day other than a Business Day (regardless of the time of day such
notice is received). Each such notice of termination or reduction shall specify,
respectively, the amount of, or the amount of the proposed reduction in, the
Maximum Purchase Limit.
Section 2.03. Investment Base Certificates Notices Relating to
Purchases and Reductions in Capital Investment.
(a) Not later than 12:00 Noon (New York time) on each
Wednesday (or, if such day is not a Business Day, the immediately following
Business Day), the Seller shall deliver to the Purchasers and the Administrative
Agent an Officer's Certificate substantially in the form of Exhibit 2.03(a)
(each, an "Investment Base Certificate") which shall be prepared by the Seller
or the Servicer with information as of the close of the last day of the
immediately preceding calendar week; provided, that if (i) an Incipient
Termination Event or a Termination Event shall have occurred and be continuing,
(ii) the Administrative Agent, in good faith, believes that an Incipient
Termination Event or a Termination Event is imminent or deems that the prospect
of payment or performance of the Purchasers' rights or interests in the
Transferred Receivables or the Seller Collateral has been impaired or (iii) the
Liquidity Availability is less than $20,000,000, the Seller shall deliver an
Investment Base Certificate to the Purchasers, the Administrative Agent and the
Collateral Agent at such more frequent intervals and with respect to such time
periods as the Administrative Agent or the Collateral Agent may request from
time to time. Capital Investment Available shall be determined by the
Administrative Agent in accordance with the definition thereof based on
information related to the Seller Collateral available to it, including (A) any
information obtained in connection with any audit or reflected in the most
recent Investment Base Certificate or any other Investment Report delivered to
the Purchasers and the Administrative Agent or (B) any other information that
may be available to the Purchasers and the Administrative Agent.
(b) Each Purchase resulting in an increase in Capital
Investment shall be made upon the provision of notice by the Seller to the
Administrative Agent in the manner provided herein. Any such notice must be
given in writing so that it is received no later than 4:00 p.m. (New York time)
on the Business Day immediately preceding the proposed Purchase Date set forth
therein. Each such notice (a "Capital Purchase Request") shall (i) be
substantially in the form of Exhibit 2.03(b) and shall have attached thereto an
Investment Base Certificate as of no more than three (3) Business Days prior to
the date on which such Capital Purchase Request is
3
delivered, (ii) be irrevocable and (iii) specify the amount of the requested
increase in Capital Investment (which shall be in an amount not less than
$500,000) and the proposed Purchase Date (which shall be a Business Day), and
(iv) shall include such other information as may be reasonably required by the
Purchasers and the Administrative Agent.
(c) The Seller may at any time reduce the Capital
Investment; provided, that (i) the Seller shall give one Business Day's prior
written notice of any such reduction to the Administrative Agent substantially
in the form of Exhibit 2.03(c) (each such notice, a "Repayment Notice"), (ii)
each such notice shall be irrevocable, (iii) each such notice shall specify the
amount of the requested reduction in the Capital Investment and the proposed
date of such reduction (which shall be a Business Day) and (iv) any such
reduction must be accompanied by payment of (A) all Daily Yield accrued and
unpaid on the Capital Investment being reduced through but excluding the date of
such reduction and (B) the costs, if any, required by Section 2.10. Any such
notice of reduction must be received by the Administrative Agent no later than
4:00 p.m. (New York time) on the Business Day immediately preceding the date of
the proposed reduction in Capital Investment.
Section 2.04. Conveyance of Receivables.
(a) Purchase Assignment. On or prior to the Closing Date,
the Seller shall complete, execute and deliver to the Administrative Agent for
the benefit of the Purchasers an assignment substantially in the form of Exhibit
2.04(a) (the "Purchase Assignment") in order to evidence the Purchases.
(b) Funding of Collection Account; Increases in Capital
Investment.
(i) Funding of Collection Account by Purchaser.
Following receipt of any Capital Purchase Request, and subject to
satisfaction of the conditions set forth in Section 3.02, the
Applicable Purchaser shall make available to or on behalf of the Seller
on the Purchase Date specified therein the lesser of the (A) requested
increase in Capital Investment specified in such Capital Purchase
Request and (B) the Capital Investment Available by depositing such
amount in same day funds into the Collection Account or, on the Closing
Date only, into such other account as directed by the Seller.
(ii) Payment of Purchase Price. The Applicable
Purchaser shall, or shall cause the Administrative Agent to, deposit
into the Seller Account on each Business Day during the Revolving
Period, in same day funds, all amounts on deposit in the Collection
Account that are to be disbursed to or on behalf of the Seller pursuant
to Section 6.03(c) as payment for the Purchaser Interests.
(c) Vesting of Ownership.
(i) Effective on and as of each Purchase Date
(A) prior to the occurrence of the Committed Purchaser Funding Event,
the Conduit Purchaser shall own the Purchaser Interests sold by the
Seller hereunder on such Purchase Date, and (B) on
4
and after the occurrence of the Committed Purchaser Funding Event, the
Committed Purchaser shall own the Purchaser Interests sold by the
Seller hereunder on such Purchase Date. The Seller shall not take any
action inconsistent with such ownership and shall not claim any
ownership interest in such Purchaser Interests.
(ii) The Seller shall indicate in its Records that
interests in the Transferred Receivables have been conveyed hereunder
and that ownership of such interests is vested in the Administrative
Agent on behalf of the Purchasers. In addition, the Seller shall
respond to any inquiries with respect to the ownership of any
Transferred Receivable by stating that interests therein have been
conveyed hereunder and that ownership of such interests is vested in
the Purchasers it being understood that such statement shall not be
deemed a representation or warranty that the Transferred Receivables
themselves (as opposed to interests therein) have been conveyed to the
Purchasers hereunder. The Seller and the Servicer shall hold all
Contracts and other documents and incidents relating to such
Transferred Receivables in trust for the benefit of the Administrative
Agent on behalf of the Conduit Purchaser and the Committed Purchaser,
and for the sole purpose of facilitating the servicing of such
Transferred Receivables. The Seller and the Servicer hereby acknowledge
that the Servicer shall retain and possess such Contracts and documents
solely in its role as "Servicer" and subject to the provisions of
Article VII hereof.
(d) Repurchases of Transferred Receivables. If the
Originator is required to repurchase Transferred Receivables from the Seller
pursuant to Section 4.04 of the Sale Agreement, the Applicable Purchaser shall
sell and reconvey its Purchaser Interests in such Transferred Receivables to the
Seller either (i) through a transfer of such Purchaser Interests in exchange for
Purchaser Interests in other Transferred Receivables with an Outstanding Balance
equal to the Outstanding Balance of the Receivables being repurchased or (ii) if
and to the extent a Purchase Excess exists or would exist pursuant to such sale
and reconveyance, for cash in an amount equal to the Outstanding Balance of the
Receivables being repurchased.
Section 2.05. Facility Termination Date. Notwithstanding
anything to the contrary set forth herein, no Purchaser shall have any
obligation to purchase any additional Purchaser Interests from and after the
Facility Termination Date.
Section 2.06. Daily Yield.
(a) The Seller shall pay Daily Yield to the
Administrative Agent, for the account of the Purchasers, for each day on which
any Capital Investment is outstanding, in the manner and at the times specified
in Sections 6.03, 6.04 and 6.05.
(b) Notwithstanding the foregoing, the Seller shall pay
interest at the applicable Daily Yield Rate on Daily Yield which is not paid at
the time specified in Sections 6.03, 6.04 and 6.05 and on any other amount
payable by the Seller hereunder (to the extent permitted by law) that shall not
be paid in full when due (whether at stated maturity, by
5
acceleration or otherwise) for the period commencing on the due date thereof to
(but excluding) the date the same is indefeasibly paid in full.
Section 2.07. Fees.
(a) On or prior to the Closing Date and on each date
thereafter, the Seller shall pay to the Administrative Agent, for the account of
itself and the Purchasers, in accordance with the provisions of Sections 6.02,
6.03 and 6.04, the fees set forth in the Fee Letter that are payable on the
Closing Date or such date, as applicable.
(b) On each Settlement Date, the Seller shall pay to the
Servicer or to the Successor Servicer, as applicable, the Servicing Fee or the
Successor Servicing Fees and Expenses, respectively, in each case to the extent
of available funds therefor as provided in Section 6.04.
Section 2.08. Time and Method of Payments.
(a) Subject to the provisions of Sections 6.02, 6.03,
6.04 and 6.05, all payments in reduction of Capital Investment and all payments
of yield, fees and other amounts payable by the Seller hereunder shall be made
in Dollars, in immediately available funds, to the Administrative Agent (for its
account or the account of the applicable Purchasers, Affected Parties or
Indemnified Persons) not later than 12:00 Noon (New York time) on the due date
therefor. Any such payment made on such date but after such time shall be deemed
to have been made on, and Daily Yield shall continue to accrue and be payable
thereon until, the next succeeding Weekly Settlement Day. If any such payment
becomes due on a day other than a Business Day, the maturity thereof will be
extended to the next succeeding Weekly Settlement Day and Daily Yield thereon
shall be payable during such extension.
(b) Any and all payments by the Seller hereunder shall be
made in accordance with this Section 2.08 without setoff or counterclaim and
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, excluding taxes imposed on
or measured by the net income of any Affected Party by the jurisdictions under
the laws of which such Affected Party is organized or by any political
subdivisions thereof (such non-excluded taxes, levies, imposts, deductions,
charges and withholdings being "Indemnified Taxes"). If the Seller shall be
required by law to deduct any Indemnified Taxes from or in respect of any sum
payable hereunder, (i) the sum payable shall be increased as much as shall be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.08) the Affected
Party entitled to receive any such payment receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Seller shall
make such deductions, and (iii) the Seller shall pay the full amount deducted to
the relevant taxing or other authority in accordance with applicable law. Within
30 days after the date of any payment of Indemnified Taxes, the Seller shall
furnish to the Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof. The Seller shall indemnify any Affected
Party from and against, and, within
6
ten days of demand therefor, pay any Affected Party for, the full amount of
Indemnified Taxes (together with any taxes imposed by any jurisdiction on
amounts payable under this Section 2.08) paid by such Affected Party and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, for Indemnified Taxes that were correctly and legally asserted.
Section 2.09. Capital Requirements; Additional Costs.
(a) If the Administrative Agent on behalf of any Affected
Party shall have determined that the adoption after the date hereof of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by such Affected Party with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law) from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Affected Party against
commitments made by it under this Agreement, any other Related Document or any
Program Document and thereby reducing the rate of return on such Affected
Party's capital as a consequence of its commitments hereunder or thereunder,
then the Seller shall from time to time upon demand by the Administrative Agent
pay to the Administrative Agent on behalf of such Affected Party additional
amounts sufficient to compensate such Affected Party for the Seller's Share of
such reduction together with interest thereon from the date of any such demand
until payment in full at the applicable Daily Yield Rate; provided, however,
that if neither the Administrative Agent nor any Affected Party informs the
Seller of such additional amounts within 90 days (the "Notice Period") after the
Vice President of Portfolio and Underwriting of the Administrative Agent with
responsibility for the transactions evidenced by the Purchase Agreement shall
first have knowledge of the adoption of such law, treaty, rule, regulation,
guideline or order, giving rise to such additional amounts, then Seller shall
not be required to pay such additional amounts attributable to the period
beginning on the first day following the Notice Period and concluding on the day
the Administrative Agent or any Affected Party so informs the Seller of such
circumstances. A certificate as to the amount of that reduction and showing the
basis of the computation thereof submitted by the Administrative Agent to the
Seller shall be presumptively correct (absent manifest error) for all purposes.
(b) If, due to any Regulatory Change, there shall be any
increase in the cost to any Affected Party of agreeing to make or making,
funding or maintaining any commitment hereunder, under any other Related
Document or under any Program Document, including with respect to any Purchases,
Capital Investment, LOC Draws or Liquidity Loans, or any reduction in any amount
receivable by such Affected Party hereunder or thereunder, including with
respect to any Purchases, Capital Investment, LOC Draws or Liquidity Loans (any
such increase in cost or reduction in amounts receivable are hereinafter
referred to as "Additional Costs"), then the Seller shall, from time to time
upon demand by the Administrative Agent, pay to the Administrative Agent on
behalf of such Affected Party additional amounts sufficient to compensate such
Affected Party for the Seller's Share of such Additional Costs together with
7
interest thereon from the date demanded until payment in full thereof at the
applicable Daily Yield Rate; provided, however, that if neither the
Administrative Agent nor any Affected Party informs the Seller of such
Additional Costs within 90 days (the "Notice Period") after the Vice President
of Portfolio and Underwriting of the Administrative Agent with responsibility
for the transactions evidenced by the Purchase Agreement shall first have
knowledge of the adoption of such Regulatory Change, giving rise to such
Additional Costs, then Seller shall not be required to pay such Additional Costs
attributable to the period beginning on the first day following the Notice
Period and concluding on the day the Administrative Agent or any Affected Party
so informs the Seller of such circumstances. Such Affected Party agrees that, as
promptly as practicable after it becomes aware of any circumstance referred to
above that would result in any such Additional Costs, it shall, to the extent
not inconsistent with its internal policies of general application, use
reasonable commercial efforts to minimize costs and expenses incurred by it and
payable to it by the Seller pursuant to this Section 2.09(b).
(c) Determinations by any Affected Party for purposes of
this Section 2.09 of the effect of any Regulatory Change on its costs of making,
funding or maintaining any commitments hereunder, under any other Related
Document or under any Program Document or on amounts receivable by it hereunder
or thereunder or of the additional amounts required to compensate such Affected
Party in respect of any Additional Costs shall be set forth in a written notice
to the Seller in reasonable detail and shall be presumptively correct (absent
manifest error) for all purposes.
(d) It is understood and agreed that no additional cost,
fee or expense shall be owed to any Purchaser or the Administrative Agent
hereunder solely as a result of any Regulatory Change that results in the
Receivables being treated as "on balance sheet" with respect to the Originator
or the Parent; provided, however, that the foregoing shall not be interpreted as
preventing the imposition of any additional cost, fee or expense to the extent
that any Regulatory Change results in the Receivables being treated as "on
balance sheet" with respect to the Administrative Agent, any Purchaser, the
Collateral Agent or any other Person.
Section 2.10. Breakage Costs. The Seller shall pay to the
Administrative Agent for the account of the requesting Purchaser, upon request
of such Purchaser, such amount or amounts as shall compensate such Purchaser for
any loss, cost or expense incurred by such Purchaser (as determined by such
Purchaser in its sole discretion) as a result of any reduction by the Seller in
Capital Investment (and accompanying loss of Daily Yield thereon) other than on
the maturity date of the Commercial Paper (or other financing source) funding
such Capital Investment, which compensation shall include an amount equal to any
loss or expense incurred by such Purchaser during the period from the date of
such reduction to (but excluding) the maturity date of such Commercial Paper (or
other financing source) if the rate of interest obtainable by such Purchaser
upon the redeployment of funds in an amount equal to such reduction is less than
the interest rate applicable to such Commercial Paper (or other financing
source) (any such loss, cost or expense, "Breakage Costs"). The determination by
such Purchaser of the amount of any such loss or expense shall be set forth in a
written notice to the
8
Seller in reasonable detail and shall be presumptively correct (absent manifest
error) for all purposes.
Section 2.11. Purchase Excess. On each Business Day during the
Revolving Period and after completion of the disbursements specified in Section
6.03, the Administrative Agent shall notify the Seller and the Servicer of any
Purchase Excess on such day, and the Seller shall deposit the amount of such
Purchase Excess in the Collection Account by 12:00 Noon (New York time) on the
immediately succeeding Business Day.
ARTICLE III.
CONDITIONS PRECEDENT
Section 3.01. Conditions to Effectiveness of Agreement.
Neither the Conduit Purchaser nor the Committed Purchaser shall be obligated to
purchase Purchaser Interests hereunder on the occasion of the initial Purchase,
nor shall any Purchaser or the Administrative Agent be obligated to take,
fulfill or perform any other action hereunder, until the following conditions
have been satisfied, in the sole discretion of, or waived in writing by, the
Purchasers and the Administrative Agent:
(a) Purchase Agreement; Information; Other Related
Documents. This Agreement shall have been duly executed by, and delivered to,
the parties hereto and the Purchasers and the Administrative Agent shall have
received such other documents, information, instruments, agreements and legal
opinions as each Purchaser and the Administrative Agent shall reasonably request
in writing in connection with the transactions contemplated by this Agreement,
including all those items listed in the Schedule of Documents, each in form and
substance satisfactory to each Purchaser and the Administrative Agent.
(b) Approvals. (i) The Purchasers and the Administrative
Agent shall have received (x) satisfactory evidence that the Seller and the
Servicer have obtained all required consents and approvals of all Persons,
including all requisite Governmental Authorities, to the execution, delivery and
performance of this Agreement and the other Related Documents and the
consummation of the transactions contemplated hereby or thereby or (y) an
Officer's Certificate from each of the Seller, the Originator, and the Servicer
in form and substance satisfactory to the Purchasers and the Administrative
Agent affirming that no such consents or approvals are required and (ii) written
consent of the credit facility providers under the Credit Facility, in form and
substance reasonably satisfactory to the Administrative Agent, to the execution,
delivery and performance of this Agreement and the other Related Documents and
the consummation of the transactions contemplated hereby or thereby.
(c) Compliance with Laws. The Seller and the Servicer
shall be in compliance in all material respects with all applicable foreign,
federal, state and local laws and regulations, including, without limitation,
those specifically referenced in Section 5.01(a).
9
(d) Payment of Fees and Taxes. The Seller shall have paid
all fees required to be paid by it on the Closing Date, including all fees
required hereunder and under the Fee Letter, and shall have reimbursed each
Purchaser for all fees, costs and expenses of closing the transactions
contemplated hereunder and under the other Related Documents, including each
Purchaser's legal, rating agency and audit expenses, and other negotiation and
document preparation costs. The Seller shall have paid all taxes, including,
without limitation, any stamp taxes, which may be imposed as a result of the
transaction contemplated by this Agreement and the Related Documents.
(e) Representations and Warranties. Each representation
and warranty by the Seller contained herein and in each other Related Document
shall be true and correct as of the Closing Date, except to the extent that such
representation or warranty expressly relates solely to an earlier date.
(f) No Termination Event. (i) No Incipient Termination
Event or Termination Event hereunder (ii) nor any "Event of Default" or
"Default" under (and as defined in) the Credit Facility (iii) nor any "Event of
Default" or "Default" under (and as defined in) the Indenture, shall have
occurred and be continuing or would result after giving effect to any of the
transactions contemplated on the Closing Date.
(g) Confirmation of Commercial Paper Ratings. The
Administrative Agent shall have received written confirmation from each Rating
Agency that the then current rating of the Commercial Paper shall not be
withdrawn or downgraded after giving effect to this Agreement and the
transactions contemplated thereby.
(h) [Reserved].
(i) Absence of Material Adverse Change. As of the Closing
Date, there has been (i) except as otherwise disclosed in the financial
statements dated as of May 31, 2002, delivered to the Administrative Agent,
since August 31, 2001, no material adverse change, (w) in the business,
financial or other condition or prospects of the Seller and the Servicer, either
individually or taken as a whole, (x) any industry in which the Seller and the
Servicer operates, (y) in the Transferred Receivables, either individually or
taken as a whole, or (z) in the financial condition or prospects of the Seller
or the Servicer, (ii) no litigation commenced which if successful could have a
material adverse impact on the Seller and the Servicer, either individually or
taken as a whole, or which would challenge the transactions contemplated herein
and in the Related Documents, and (iii) except as otherwise disclosed in the
financial statements dated as of May 31, 2002, delivered to the Administrative
Agent, since August 31, 2001, no material increase in the liabilities
(liquidated or contingent) of the Seller and the Servicer, either individually
or taken as a whole, or material decrease in the assets of the Seller and the
Servicer, either individually or taken as a whole.
(j) Sale Agreement and Related Documents. The Seller, the
Originator and the Parent shall have entered into the Sale Agreement and each
Related Document in form, scope
10
and substance acceptable to the Administrative Agent and each Purchaser, (ii)
the Sale Agreement and each Related Document shall be in full force and effect
and shall provide for "true sale" treatment of all sales of Transferred
Receivables thereunder under all applicable laws and for all purposes, and (iii)
the Administrative Agent shall have received all such other information,
documents, instruments and agreements as any Purchaser or the Administrative
Agent shall reasonably request in connection with the transactions contemplated
by the Sale Agreement, including all documents, instruments, agreements and
legal opinions listed in the Schedule of Documents, each in form and substance
satisfactory to each Purchaser and the Administrative Agent.
(k) Termination of Existing Receivables Transaction. The
Administrative Agent shall have received fully executed payoff and termination
letters (in form and substance reasonably satisfactory to the Administrative
Agent) with respect to the Existing Receivables Facility and the release of all
security in connection with the Existing Receivables Facility.
Section 3.02. Conditions Precedent to All Purchases. No
Purchaser shall be obligated to purchase Purchaser Interests (or make a
Reinvestment Purchase) hereunder on any date if, as of such date:
(a) any representation or warranty of the Seller or the
Servicer contained herein or in any of the other Related Documents shall be
untrue or incorrect as of such date, either before or after giving effect to the
Purchase of Purchaser Interests on such date and to the application of the
proceeds therefrom, except to the extent that such representation or warranty
expressly relates to an earlier date and except for changes therein expressly
permitted by this Agreement;
(b) any event shall have occurred, or would result from
the Purchase of Purchaser Interests on such Purchase Date or from the
application of the proceeds therefrom, that constitutes an Incipient Termination
Event, a Termination Event, an Incipient Servicer Termination Event or an Event
of Servicer Termination;
(c) the Seller shall have failed to timely deliver an
Investment Base Certificate as most recently required pursuant to Section
2.03(a) or (b) hereof, or the Seller shall otherwise not be in compliance with
any of its covenants or other agreements set forth herein or in any Related
Document;
(d) the Facility Termination Date shall have occurred;
(e) either before or after giving effect to such Purchase
and to the application of the proceeds therefrom, a Purchase Excess would exist;
(f) the Purchaser Interests sold hereunder would not,
after giving effect to such purchase, exceed 100%;
11
(g) the Seller or the Servicer shall fail to have
delivered any information, approvals, consents and opinions to the Purchasers
and the Administrative Agent and, if applicable, each Rating Agency, (i) as any
Purchaser or the Administrative Agent may reasonably request, or (ii) as either
Rating Agency may request; or
(h) a Material Adverse Effect has occurred.
The delivery by the Seller of a Capital Purchase Request and the acceptance by
the Seller of the funds from such Capital Purchase or any Reinvestment Purchase
on any Purchase Date shall be deemed to constitute, as of any such Purchase
Date, a representation and warranty by the Seller that the conditions in this
Section 3.02 have been satisfied.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Seller. To
induce each Purchaser to purchase the Purchaser Interests and the Administrative
Agent to take any action hereunder, the Seller makes the following
representations and warranties to each Purchaser and the Administrative Agent as
of the Closing Date and, except to the extent provided otherwise below, as of
each Purchase Date, each and all of which shall survive the execution and
delivery of this Agreement.
(a) Corporate Existence; Compliance with Law. The Seller
(i) is a limited liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, the state of
Delaware (which is Seller's only state of organization); (ii) is 100% owned by
the Originator, (iii) is duly qualified to conduct business and is in good
standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification; (iv) has the requisite
power and authority and the legal right to own, pledge, mortgage or otherwise
encumber and operate its properties, to lease the property it operates under
lease, and to conduct its business, in each case, as now, heretofore and
proposed to be conducted; (v) has all licenses, permits, consents or approvals
from or by, and has made all filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct; (vi) is in compliance with its limited
liability company agreement and other organizational documents; and (vii)
subject to specific representations set forth herein regarding ERISA, tax and
other laws, is in compliance with all applicable provisions of law, except where
the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(b) Executive Offices; Collateral Locations; Corporate or
Other Names; FEIN. As of the Closing Date, the current location of the Seller's
chief executive office, principal place of business, other offices, the
warehouses and premises within which any Seller Collateral is stored or located,
and the locations of its records concerning the Seller Collateral (including
originals of the Seller Assigned Agreements) are set forth in Schedule 4.01(b)
and
12
none of such locations has changed within the past 12 months (or such shorter
time as the Seller has been in existence). During the prior five years (or such
shorter time as the Seller has been in existence), except as set forth in
Schedule 4.01(b), the Seller has not been known as or used any corporate,
fictitious or trade name. In addition, Schedule 4.01(b) lists the organizational
identification number issued by Seller's state of organization or states that no
such number has been issued and lists the federal employer identification number
of the Seller.
(c) Corporate Power, Authorization, Enforceable
Obligations. The execution, delivery and performance by the Seller of this
Agreement and the other Related Documents to which it is a party, the creation
and perfection of all Liens and ownership interests provided for herein and
therein: (i) are within the Seller's corporate power; (ii) have been duly
authorized by all necessary or proper corporate and shareholder action; (iii) do
not contravene any provision of the Seller's charter or bylaws; (iv) do not
violate any law or regulation, or any order or decree of any court or
Governmental Authority; (v) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which the Seller or the
Originator is a party or by which the Seller or the Originator or any of the
property of the Seller or the Originator is bound; (vi) do not result in the
creation or imposition of any Adverse Claim upon any of the property of the
Seller or the Originator; and (vii) do not require the consent or approval of
any Governmental Authority or any other Person, except those which have been
duly obtained, made or complied with prior to the Closing Date as provided in
Section 3.01(b). The exercise by each of the Seller, the Purchasers and the
Administrative Agent of any of its rights and remedies under any Related
Document to which it is a party, does not require the consent or approval of any
Governmental Authority or any other Person (other than consents or approvals
solely relating to or required to be obtained by a Purchaser or the
Administrative Agent, except those which will have been duly obtained, made or
complied with prior to the Closing Date as provided in Section 3.01(b). On or
prior to the Closing Date, each of the Related Documents to which the Seller is
a party shall have been duly executed and delivered by the Seller and on the
Closing Date each such Related Document shall then constitute a legal, valid and
binding obligation of the Seller enforceable against it in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws of general applicability affecting
the enforcement of creditor's rights generally or by principles of equity.
(d) No Litigation. No Litigation is now pending or, to
the knowledge of the Seller, threatened against the Seller that (i) challenges
the Seller's right or power to enter into or perform any of its obligations
under the Related Documents to which it is a party, or the validity or
enforceability of any Related Document or any action taken thereunder, (ii)
seeks to prevent the transfer, sale, pledge or contribution of any Receivable or
Seller Collateral or the consummation of any of the transactions contemplated
under this Agreement or the other Related Documents, or (iii) has a reasonable
risk of being determined adversely to the Seller and that, if so determined,
could have a Material Adverse Effect. Except as set forth on Schedule 4.01(d),
as of the Closing Date there is no Litigation pending or threatened that seeks
damages or injunctive relief against, or alleges criminal misconduct by, the
Seller.
13
(e) Solvency. Both before and after giving effect to (i)
the transactions contemplated by this Agreement and the other Related Documents
and (ii) the payment and accrual of all transaction costs in connection with the
foregoing, the Seller is and will be Solvent. No event of the type described in
Section 9.01(c) has been commenced or threatened against the Seller, the Parent
or the Originator.
(f) Material Adverse Effect. Since the date of the
Seller's organization, (i) the Seller has not incurred any obligations,
contingent or non-contingent liabilities, liabilities for charges, long-term
leases or forward or long-term commitments that, alone or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, (ii) no
contract, lease or other agreement or instrument has been entered into by the
Seller or has become binding upon the Seller's assets and no law or regulation
applicable to the Seller has been adopted that has had or could reasonably be
expected to have a Material Adverse Effect and (iii) the Seller is not in
default and no third party is in default under any material contract, lease or
other agreement or instrument to which the Seller is a party that alone or in
the aggregate could reasonably be expected to have a Material Adverse Effect.
Since the date of the Seller's organization, no event has occurred that alone or
together with other events could reasonably be expected to have a Material
Adverse Effect.
(g) Ownership of Property; Liens. No Transferred
Receivable is subject to any Adverse Claim, none of the other properties and
assets of the Seller are subject to any Adverse Claims other than (a) Permitted
Seller Encumbrances and (b) any Dilution Factors arising in the ordinary course
of business of the Originator or the Seller, and there are no facts,
circumstances or conditions known to the Seller that may result in (i) with
respect to the Transferred Receivables, any Adverse Claims (including Adverse
Claims arising under Environmental Laws) and (ii) with respect to its other
properties and assets, any Adverse Claims (including Adverse Claims arising
under Environmental Laws) other than Permitted Seller Encumbrances. The Seller
has received all assignments, bills of sale and other documents, and has duly
effected all recordings, filings and other actions necessary to establish,
protect and perfect the Seller's right, title and interest in and to the
Transferred Receivables, the Seller Collateral and its other properties and
assets. The Seller has rights in and the power to transfer the Transferred
Receivables. The Seller has rights in and the power to transfer each item of the
Seller Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder free and
clear of any and all Liens other than Permitted Seller Encumbrances. The Liens
granted to the Purchaser pursuant to Section 8.01 will at all times be fully
perfected first priority Liens in and to the Seller Collateral.
(h) Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Debt. Except as set forth in Schedule 4.01(h), the Seller has no
Subsidiaries, is not engaged in any joint venture or partnership with any other
Person, and is not an Affiliate of any other Person. All of the issued and
outstanding Stock of the Seller is owned by each of the Stockholders in the
amounts set forth on Schedule 4.01(h). There are no outstanding rights to
purchase, options, warrants or similar rights or agreements pursuant to which
the Seller may be required to issue, sell, repurchase or redeem any of its Stock
or other equity
14
securities or any Stock or other equity securities of its Subsidiaries. All
outstanding Debt of the Seller as of the Closing Date is described in Section
5.03(h).
(i) Taxes. All tax returns, reports and statements,
including information returns, required by any Governmental Authority to be
filed by the Seller and each of its Affiliates included in the Parent Group have
been filed with the appropriate Governmental Authority and all charges have been
paid prior to the date on which any fine, penalty, interest or late charge may
be added thereto for nonpayment thereof (or any such fine, penalty, interest,
late charge or loss has been paid), excluding charges or other amounts being
contested in accordance with Section 5.01(e). Proper and accurate amounts have
been withheld by the Seller or such Affiliate from its respective employees for
all periods in full and complete compliance with all applicable federal, state,
local and foreign laws and such withholdings have been timely paid to the
respective Governmental Authorities. Schedule 4.01(i) sets forth as of the
Closing Date (i) those taxable years for which the Seller's or such Affiliates'
tax returns are currently being audited by the IRS or any other applicable
Governmental Authority and (ii) any assessments or threatened assessments in
connection with any such audit or otherwise currently outstanding. Except as
described on Schedule 4.01(i) or otherwise notified to the Administrative Agent
in writing, neither the Seller nor any such Affiliate has executed or filed with
the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any charges. The Seller is not liable for any charges: (A) under
any agreement (including any tax sharing agreements) or (B) to the best of the
Seller's knowledge, as a transferee. As of the Closing Date, neither the Seller
nor any of its Affiliates included in the Parent Group has agreed or been
requested to make any adjustment under IRC Section 481(a), by reason of a change
in accounting method or otherwise, that would have a Material Adverse Effect.
(j) Full Disclosure. (i) All information contained in
this Agreement, any Investment Base Certificate or any of the other Related
Documents, or any written statement furnished by or on behalf of the Seller to
any Purchaser or the Administrative Agent pursuant to the terms of this
Agreement or any of the other Related Documents is true and accurate in every
material respect, and (ii) none of this Agreement, any Investment Base
Certificate or any of the other Related Documents, or any written statement
furnished by or on behalf of the Seller to either Purchaser or the
Administrative Agent pursuant to the terms of this Agreement or any of the other
Related Documents is misleading as a result of the failure to include therein a
material fact.
(k) ERISA. The Seller is in compliance with ERISA and has
not incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC under
ERISA.
(l) Brokers. No broker or finder acting on behalf of the
Seller was employed or utilized in connection with this Agreement or the other
Related Documents or the transactions contemplated hereby or thereby and the
Seller has no obligation to any Person in respect of any finder's or brokerage
fees in connection herewith or therewith.
15
(m) Margin Regulations. The Seller is not engaged in the
business of extending credit for the purpose of "purchasing" or "carrying" any
"margin security," as such terms are defined in Regulation U of the Federal
Reserve Board as now and from time to time hereafter in effect (such securities
being referred to herein as "Margin Stock"). The Seller owns no Margin Stock,
and no portion of the proceeds of the purchase price for Transferred Receivables
sold hereunder will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock, for the purpose of reducing or retiring
any Debt that was originally incurred to purchase or carry any Margin Stock or
for any other purpose that might cause any portion of such proceeds to be
considered a "purpose credit" within the meaning of Regulations T, U or X of the
Federal Reserve Board. The Seller will not take or permit to be taken any action
that might cause any Related Document to violate any regulation of the Federal
Reserve Board.
(n) Nonapplicability of Bulk Sales Laws. No transaction
contemplated by this Agreement or any of the Related Documents requires
compliance with any bulk sales act or similar law.
(o) Securities Act and Investment Company Act Exemptions.
Each Purchase of Purchaser Interests under this Agreement will constitute (i) a
"current transaction" within the meaning of Section 3(a)(3) of the Securities
Act and (ii) a purchase or other acquisition of notes, drafts, acceptances, open
accounts receivable or other obligations representing part or all of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act.
(p) Government Regulation. The Seller is not an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act. The Purchase of Purchaser Interests by the Purchasers
hereunder, the application of the proceeds thereof and the consummation of the
transactions contemplated by this Agreement and the other Related Documents will
not violate any provision of any such statute or any rule, regulation or order
issued by the Securities and Exchange Commission.
(q) Nonconsolidation. The Seller is operated in such a
manner that the separate corporate existence of the Seller, on the one hand, and
any member of the Parent Group, on the other hand, would not be disregarded in
the event of the bankruptcy or insolvency of any member of the Parent Group and,
without limiting the generality of the foregoing:
(i) the Seller is a limited purpose entity whose
activities are restricted in its limited liability company agreement
and other organizational documents to those activities expressly
permitted hereunder and under the other Related Documents and the
Seller has not engaged, and does not presently engage, in any activity
other than those activities expressly permitted hereunder and under the
other Related Documents, nor has the Seller entered into any agreement
other than this Agreement, the other Related Documents to which it is a
party and, with the prior written consent of the Purchasers and
16
the Administrative Agent, any other agreement necessary to carry out
more effectively the provisions and purposes hereof or thereof;
(ii) no member of the Parent Group or any
individual at the time he or she is acting as an officer of any such
member is or has been involved in the day-to-day management of the
Seller; provided, however, that the foregoing shall not prohibit any
individual from being an officer with respect to the Seller, the
Servicer, the Originator and the Parent simultaneously;
(iii) other than the purchase and acceptance
through capital contribution of Transferred Receivables and any capital
contributions of cash, the payment of dividends and the return of
capital to the Originator, the payment of Servicing Fees to the
Servicer under this Agreement and arm's length transactions with
respect to the provision of office space, office equipment, office
supplies and administrative services, the Seller engages and has
engaged in no intercorporate transactions with any member of the Parent
Group;
(iv) the Seller maintains corporate records and
books of account separate from that of each member of the Parent Group,
holds regular corporate meetings and otherwise observes corporate
formalities and has a business office separate from that of each member
of the Parent Group;
(v) the financial statements and books and
records of the Seller, the Parent and the Originator reflect the
separate corporate existence of the Seller;
(vi) (A) the Seller maintains its assets
separately from the assets of each member of the Parent Group
(including through the maintenance of separate records, books of
account and bank accounts and except for any Records to the extent
necessary to assist the Servicer in connection with the servicing of
the Transferred Receivables), (B) the Seller's funds (including all
money, checks and other cash proceeds) and assets, and records relating
thereto, have not been and are not commingled with those of any member
of the Parent Group except for temporary commingling of the type
described in Section 7.03 which is promptly corrected as described in
Section 7.03 and (C) the separate creditors of the Seller 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 Stockholders;
(vii) except as otherwise expressly permitted
hereunder, under the other Related Documents and under the Seller's
organizational documents, no member of the Parent Group (A) pays the
Seller's expenses, (B) guarantees the Seller's obligations, or (C)
advances funds to the Seller for the payment of expenses or otherwise;
17
(viii) all business correspondence and other
communications of the Seller are conducted in the Seller's own name, on
its own stationery and through a separately-listed telephone number;
(ix) the Seller does not act as agent for any
member of the Parent Group, but instead presents itself to the public
as an entity separate from each such member and independently engaged
in the business of purchasing and financing Receivables;
(x) the Seller maintains at least two
independent managers each of whom (A) is not a Stockholder, director,
officer, employee or associate, or any relative of the foregoing, of
any member of the Parent Group (other than the Seller), all as provided
in its limited liability company agreement, (B) has (1) prior
experience as an independent director for a corporation whose charter
documents required the unanimous consent of all independent directors
thereof before such corporation could consent to the institution of
bankruptcy or insolvency proceedings against it or could file a
petition seeking relief under any applicable federal or state law
relating to bankruptcy and (2) at least three years of employment
experience with one or more entities that provide, in the ordinary
course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities, and (C) is otherwise acceptable
to the Purchasers and the Administrative Agent (it being understood
that any director affiliated with Global Securitization Services, LLC,
Lord Securities Corporation or Amacar, L.L.C. or a similar organization
acceptable to the Administrative Agent which is in the business of
providing independent directors for special-purpose financing entities
such as the Seller shall be acceptable to the Administrative Agent; and
(xi) the limited liability company agreement of
the Seller require (A) the affirmative vote of each independent manager
before a voluntary petition under Section 301 of the Bankruptcy Code
may be filed by the Seller, and (B) the Seller to maintain (1) correct
and complete books and records of account and (2) minutes of the
meetings and other proceedings of its Stockholders and board of
directors.
(r) Deposit and Disbursement Accounts. Schedule 4.01(r)
lists all banks and other financial institutions at which the Seller maintains
deposit or other bank accounts as of the Closing Date, including any Lockbox
Accounts and the Concentration Account, and such schedule correctly identifies
the name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete
account number therefor.
(s) Transferred Receivables.
(i) Transfers. Each Transferred Receivable was
purchased by or contributed to the Seller on the relevant Transfer Date
pursuant to the Sale Agreement.
18
(ii) Eligibility. Each Transferred Receivable
designated as an Eligible Receivable in each Investment Base
Certificate constitutes an Eligible Receivable as of the date specified
in such Investment Base Certificate.
(iii) No Material Adverse Effect. The Seller has
no knowledge of any fact (including any defaults by the Obligor
thereunder on any other Receivable) that would cause it or should have
caused it to expect that any payments on each Transferred Receivable
designated as an Eligible Receivable in any Investment Base Certificate
will not be paid in full when due or to expect any other Material
Adverse Effect.
(iv) Nonavoidability of Transfers. The Seller
shall (A) have received each Contributed Receivable as a contribution
to the capital of the Seller by the Originator and (B) (1) have
purchased each Sold Receivable from the Originator for cash
consideration and (2) have accepted assignment of any Eligible
Receivables transferred pursuant to clause (b) of Section 4.04 of the
Sale Agreement, in each case in an amount that constitutes fair
consideration and reasonably equivalent value therefor. Each Sale of a
Sold Receivable effected pursuant to the terms of the Sale Agreement
shall not have been made for or on account of an antecedent debt owed
by any Originator to the Seller and no such Sale is or may be avoidable
or subject to avoidance under any bankruptcy laws, rules or
regulations.
(t) Representations and Warranties and Covenants in Other
Related Documents. Each of the representations and warranties of the Seller
contained in the Related Documents (other than this Agreement) is true and
correct in all respects. Each of the Seller, the Parent, the Originator and each
of their Subsidiaries is in compliance with all covenants and agreements
contained in the Related Documents.
(u) Termination Events. No Incipient Termination Event or
Termination Event has occurred and is continuing
Section 4.02. Representations and Warranties and Covenants of
the Servicer. To induce the Purchasers to purchase the Purchaser Interests and
the Administrative Agent to take any action required to be performed by it
hereunder, in addition to the representations and warranties contained in
Section 7.06, the Servicer represents and warrants to the Purchasers and the
Administrative Agent, which representation and warranty shall survive the
execution and delivery of this Agreement, that each of the representations and
warranties of the Servicer contained in any Related Document is true and correct
and the Servicer hereby makes each such representation and warranty to, and for
the benefit of, the Purchasers and the Administrative Agent as if the same were
set forth in full herein.
19
ARTICLE V.
GENERAL COVENANTS OF THE SELLER
Section 5.01. Affirmative Covenants of the Seller. The Seller
covenants and agrees that from and after the Closing Date and until the
Termination Date:
(a) Compliance with Agreements and Applicable Laws. The
Seller shall perform each of its obligations under this Agreement and the other
Related Documents and comply with all federal, state and local laws and
regulations applicable to it and the Transferred Receivables, including those
relating to truth in lending, retail installment sales, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices,
privacy, licensing, securities laws, margin regulations, taxation, ERISA and
labor matters and Environmental Laws and Environmental Permits, except to the
extent that the failure to so comply, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. The Seller shall
continue to pay all fees required to be paid by it under the Fee Letter, all
governmental fees and all taxes, including without limitation any stamp taxes
which may be imposed as a result of the transactions contemplated by this
Agreement and the Related Documents. The Seller shall comply in all respects
with the Credit and Collection Policies with respect to each Transferred
Receivable and the Contract therefor.
(b) Maintenance of Existence and Conduct of Business. The
Seller shall: (i) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its rights and
franchises; (ii) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder and in accordance with (1) the terms of its
limited liability company agreement and other organizational documents, (2)
Sections 4.01(a), (q) and (t) and (3) the assumptions set forth in each legal
opinion of King & Spalding or other counsel to the Seller from time to time
delivered pursuant to Section 3.02(d) of the Sale Agreement with respect to
issues of substantive consolidation and true sale and absolute transfer; (iii)
at all times maintain, preserve and protect all of its assets and properties
used or useful in the conduct of its business, including all licenses, permits,
charters and registrations, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; and (iv) transact business only in such corporate and trade
names as are set forth in Schedule 5.01(b). The Seller shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, so that financial statements can be
prepared from such books and records in accordance with GAAP and on a basis
consistent with the financial statements delivered pursuant to Section 5.02(a).
(c) Deposit of Collections. All Obligors have been
instructed to remit all payments with respect to any Transferred Receivable
directly into a Lockbox Account. The Seller shall deposit or cause to be
deposited promptly into a Lockbox Account, and in any event
20
no later than the first Business Day after receipt thereof, all Collections the
Seller may receive with respect to any Transferred Receivable.
(d) Use of Proceeds. The Seller shall utilize the
proceeds of the Purchases made hereunder solely for (i) the purchase of
Receivables from the Originator pursuant to the Sale Agreement, (ii) the payment
of dividends to its Stockholders, and (iii) the payment of administrative fees
or Servicing Fees or expenses to the Servicer or routine administrative or
operating expenses, in each case only as expressly permitted by and in
accordance with the terms of this Agreement and the other Related Documents.
(e) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 5.01(e)(ii), the Seller
shall pay, perform and discharge or cause to be paid, performed and
discharged promptly all charges payable by it, including (A) charges
imposed upon it, its income and profits, or any of its property (real,
personal or mixed) and all charges with respect to taxes, social
security and unemployment withholding with respect to its employees,
and (B) lawful claims for labor, materials, supplies and services or
otherwise before any such amounts shall become past due.
(ii) The Seller may in good faith contest, by
appropriate proceedings, the validity or amount of any charges or
claims described in Section 5.01(e)(i); provided, that (A) adequate
reserves with respect to such contest are maintained in accordance with
GAAP, (B) such contest is maintained and prosecuted continuously and
with diligence, (C) none of the Seller Collateral becomes subject to
forfeiture or loss as a result of such contest, (D) no Lien shall be
imposed to secure payment of such charges or claims other than inchoate
tax liens and (E) none of the Purchasers or the Administrative Agent
has advised the Seller in writing that such Affected Party reasonably
believes that failure to pay or to discharge such claims or charges
could have or result in a Material Adverse Effect.
(f) ERISA. The Seller shall give the Administrative Agent
prompt written notice of any event that could result in the imposition of a Lien
under Section 412 of the IRC or Section 302 or 4068 of ERISA.
(g) Environmental Laws. The Seller shall give the
Administrative Agent prompt written notice of receipt by the Seller of any
material notice relating to Environmental Laws or Permits.
(h) Credit Facility Refinancing Information. Not later
than (but no more than fifteen days prior to) the dates that are 6 months, 3
months and 1 month prior to the then current expiration date of the Credit
Facility, the Seller shall (or shall cause the Servicer to) provide information
reports to the Administrative Agent (in each case in form and substance
reasonably
21
satisfactory to the Administrative Agent) detailing the Originator's plans to
refinance the then existing Credit Facility.
(i) Servicing Software. The Seller shall use its best
efforts to obtain written authorization of the licensor of the Servicing
Software to grant the Administrative Agent (and its assigns) the right to use
such Servicing Software for purposes of obtaining information about and
servicing the Transferred Receivables by the date that is 90 days after the
Closing Date.
Section 5.02. Reporting Requirements of the Seller.
(a) The Seller hereby agrees that, from and after the
Closing Date and until the Termination Date, it shall deliver or cause to be
delivered to the Purchasers, the Administrative Agent and the Collateral Agent
and, in the case of paragraph(g) therein only, to the Rating Agencies, the
financial statements, notices and other information at the times, to the Persons
and in the manner set forth in Annex 5.02(a).
(b) The Seller hereby agrees that from and after the
Closing Date until the Termination Date, it shall deliver or cause to be
delivered to the Purchaser, the Administration Agent and the Collateral Agent,
Investment Base Certificates in accordance with the provisions of Section
2.03(a).
(c) The Seller hereby agrees that, from and after the
Closing Date and until the Termination Date, it shall deliver or cause to be
delivered to the Purchasers, the Administrative Agent and the Collateral Agent,
the Investment Reports such other reports, statements and reconciliations with
respect to the Investment Base or Seller Collateral as any Purchaser, the
Administrative Agent or the Collateral Agent shall from time to time request in
its reasonable discretion.
(d) The Seller hereby agrees that, from and after the
Closing Date until the Termination Date, it shall prepare and deliver all
reports, statements and records required to be delivered by it hereunder or
under any other Related Document so as to clearly distinguish Transferred
Receivables that are subsequently reconveyed to the Originator pursuant to
Section 4.04 of the Sale Agreement from Transferred Receivables that are not so
reconveyed.
Section 5.03. Negative Covenants of the Seller. The Seller
covenants and agrees that, without the prior written consent of the Purchasers
and the Administrative Agent, from and after the Closing Date until the
Termination Date:
(a) Sale of Stock and Assets. The Seller shall not sell,
transfer, convey, assign or otherwise dispose of, or assign any right to receive
income in respect of, any of its properties or other assets, including its
capital Stock (whether in a public or a private offering or otherwise), any
Transferred Receivable, Seller Collateral or Contract therefor or any of its
rights with respect to any Lockbox or any Lockbox Account, the Collection
Account, the Concentration Account, the Retention Account or any other deposit
account in which any
22
Collections of any Transferred Receivable are deposited except as otherwise
expressly permitted by this Agreement or any of the other Related Documents.
(b) Liens. The Seller shall not create, incur, assume or
permit to exist (i) any Adverse Claim on or with respect to its Transferred
Receivables or (ii) any Adverse Claim on or with respect to its other properties
or assets (whether now owned or hereafter acquired) except for the Liens set
forth in Schedule 5.03(b) and other Permitted Seller Encumbrances. In addition,
the Seller shall not become a party to any agreement, note, indenture or
instrument or take any other action that would prohibit the creation of a Lien
on any of its properties or other assets in favor of the Purchasers as
additional collateral for the Seller Secured Obligations, except as otherwise
expressly permitted by this Agreement or any of the other Related Documents.
(c) Modifications of Receivables, Contracts or Credit and
Collection Policies. The Seller shall not, without the prior written consent of
the Administrative Agent and with respect to clause (ii) only, upon provision of
written notice to the Rating Agencies, (i) extend, amend, rescind, forgive,
discharge, compromise, waive, cancel or otherwise modify the terms of any
Transferred Receivable or amend, modify or waive any term or condition of any
Contract related thereto, provided, that, as long as no Incipient Termination
Event or Termination Event has occurred and is continuing, the Seller may
authorize the Servicer to take such actions as are expressly permitted by the
terms of any Related Document or the Credit and Collection Policies, or (ii)
amend, modify or waive any term or provision of the Credit and Collection
Policies.
(d) Changes in Instructions to Obligors. The Seller shall
not make any change in its instructions to Obligors regarding the deposit of
Collections with respect to the Transferred Receivables without the prior
written consent of the Administrative Agent.
(e) Capital Structure and Business. The Seller shall not
(i) make any changes in any of its business objectives, purposes or operations
that could have or result in a Material Adverse Effect, (ii) make any change in
its capital structure as described on Schedule 4.01(h), including the issuance
of any shares of Stock, warrants or other securities convertible into Stock or
any revision of the terms of its outstanding Stock, (iii) reincorporate or
reorganize itself under the laws of any jurisdiction other than the jurisdiction
in which it is incorporated or organized as of the date hereof without the prior
written consent of the Administrative Agent, or (iv) amend its limited liability
company agreement or any of its other organizational documents. The Seller shall
not engage in any business other than as provided in its limited liability
company agreement and organizational documents and the Related Documents.
(f) Mergers, Subsidiaries, Etc. The Seller shall not
directly or indirectly, by operation of law or otherwise, (i) form or acquire
any Subsidiary, or (ii) merge with, consolidate with, convey, transfer, lease or
otherwise dispose of, all (or substantially all) of its assets (whether now
owned or hereafter acquired) to, or acquire all (or substantially all) of the
assets or capital Stock or other ownership interests of, or otherwise combine
with or acquire, any Person (whether in one transaction or in a series of
transaction) other than dispositions of accounts receivable and related assets
as contemplated by this Agreement.
23
(g) Sale Characterization; Sale Agreement. The Seller
shall not make statements or disclosures, prepare any financial statements or in
any other respect account for or treat the transactions contemplated by the Sale
Agreement (including for accounting, tax and reporting purposes) in any manner
other than (i) with respect to each Sale of each Sold Receivable effected
pursuant to the Sale Agreement, as a true sale and absolute assignment of the
title to and sole record and beneficial ownership interest of the Transferred
Receivables by the Originator to the Seller and (ii) with respect to each
contribution of Contributed Receivables thereunder, as an increase in the stated
capital of the Seller.
(h) Restricted Payments. The Seller shall not enter into
any lending transaction with any other Person. The Seller shall not at any time
(i) advance credit to any Person or (ii) declare any dividends, repurchase any
Stock, return any capital, or make any other payment or distribution of cash or
other property or assets in respect of the Seller's Stock if, after giving
effect to any such advance or distribution, a Purchase Excess, Incipient
Termination Event or Termination Event would exist or otherwise result
therefrom.
(i) Debt. The Seller shall not create, incur, assume or
permit to exist any Debt, except (i) Debt of the Seller to any Affected Party,
Indemnified Person, the Servicer or any other Person in each case expressly
permitted by this Agreement or any other Related Document, (ii) deferred taxes,
(iii) unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law, and (iv) indorser liability in connection with the indorsement of
negotiable instruments for deposit or collection in the ordinary course of
business.e instruments for deposit or collection in the ordinary course of
business.
(j) Prohibited Transactions. The Seller shall not enter
into, or be a party to, any transaction with any Person except as permitted
hereunder or under any other Related Document.
(k) Investments. Except as otherwise expressly permitted
hereunder or under the other Related Documents, the Seller shall not make any
investment in, or make or accrue loans or advances of money to, any Person,
including any Stockholder, director, officer or employee of the Seller, the
Parent or any of the Parent's other Subsidiaries, through the direct or indirect
lending of money, holding of securities or otherwise, except with respect to
Transferred Receivables and Permitted Investments.
(l) Commingling. The Seller shall not deposit or give any
instructions to any Person to remit or deposit any funds that (i) do not
constitute Collections of Transferred Receivables or (ii) constitute Collections
of Excluded Receivables into any Lockbox or Lockbox Account or the Concentration
Account. If such funds are nonetheless deposited into a Lockbox, Lockbox Account
or the Concentration Account, the Seller shall promptly notify the
Administrative Agent and the Administrative Agent shall promptly remit any such
amounts to the Originator.
24
(m) ERISA. The Seller shall not, and shall not cause or
permit any of its ERISA Affiliates to, cause or permit to occur an event that
could result in the imposition of a Lien under Section 412 of the IRC or Section
302 or 4068 of ERISA.
(n) Related Documents. The Seller shall not amend, modify
or waive any term or provision of any Related Document without the prior written
consent of the Administrative Agent.
(o) Board Policies. The Seller shall not modify the terms
of any policy or resolutions of its board of directors if such modification
could have or result in a Material Adverse Effect.
(p) Purchase of Receivables. The Seller shall not,
directly or indirectly, purchase any accounts receivables from any Person (other
than the Originator pursuant to the terms of the Sale Agreement) without the
express written consent of the Administrative Agent.
(q) Dividends and other Distributions. The Seller shall
not declare or pay dividends, distributions or other amounts with respect to its
Stock unless, after giving effect to such dividends, distributions and other
amounts, the Net Worth Percentage of the Seller shall be equal to or greater
than 5%.
ARTICLE VI.
COLLECTIONS AND DISBURSEMENTS
Section 6.01. Establishment of Accounts.
(a) The Lockbox Accounts and the Concentration Account.
(i) The Seller has established with each Lockbox
Account Bank one or more Lockbox Accounts. The Seller has established
the Concentration Account with the Concentration Account Bank. The
Seller agrees that, at any time (A) after the occurrence of a
Termination Event, Incipient Termination Event, Servicer Termination
Event or Incipient Servicer Termination Event or (B) the Liquidity
Availability is less than $20,000,000, the Administrative Agent (i) is
authorized to deliver a Notice of Direction or similar notice of
control to each Lockbox Account Bank and each Concentration Account
Bank and (ii) shall have exclusive dominion and control of each Lockbox
Account and the Concentration Account and all monies, instruments and
other property from time to time on deposit therein. If on any date (x)
the Administrative Agent has delivered a Notice of Direction or similar
notice of control on account of the Liquidity Availability being less
than $20,000,000, (y) the Liquidity Availability on such date exceeds
$20,000,000 and has exceeded $20,000,000 at all times during the 90
consecutive day period immediately prior to such date and (z) no
Termination Event, Incipient Termination Event, Servicer
25
Termination Event or Incipient Servicer Termination Event has occurred
and is then continuing, then (upon the written request of the Seller)
the Administrative Agent shall negotiate in good faith with the Seller
to establish procedures for instructing each Lockbox Account Bank and
Concentration Account Bank so notified that they may re-commence
following instructions of the Seller or the Servicer, as applicable,
with respect to the particular account. Prior to the delivery of a
Notice of Direction by the Administrative Agent, the Seller shall have
access to and may make withdrawals from the Lockbox Accounts and the
Concentration Account; provided, however, that all such funds so
withdrawn shall be applied by the Seller in accordance with the
provisions of this Article VI and any funds to be remitted to the
Administrative Agent, any Purchaser or the Collateral Agent shall be
held in trust for the benefit of the Administrative Agent, the
Purchasers and the Collateral Agent, as applicable, and that (as
provided in Section 6.01(b)(ii) hereof) (a) on each Business Day, funds
in amounts sufficient to pay all sums specified in Section 6.02 to be
paid on such Business Day and (b) on each Weekly Settlement Day, funds
in an amount sufficient to fund all amounts (without duplication)
specified in Sections 6.02, 6.03 (other than 6.03(c)), 6.04 (other than
6.04(a)(iv)) and 6.05 (other than 6.05(g)), shall be wired by Seller to
the Collection Account to be on deposit in immediately available funds
prior to 12:00 Noon. (New York time) on such day. After the delivery of
a Notice of Direction by the Administrative Agent, the Seller shall not
make or cause to be made, or have any ability to make or cause to be
made, any withdrawals from any Lockbox Account or the Concentration
Account except as provided in Section 6.01(b)(iii).
(ii) The Seller and/or the Servicer have
instructed all existing Obligors of Transferred Receivables, and shall
instruct all future Obligors of such Receivables, to make payments in
respect thereof only (A) by check or money order mailed to one or more
lockboxes or post office boxes under the control of the Administrative
Agent (each a "Lockbox" and collectively the "Lockboxes") pursuant to
the terms of a Lockbox Account Agreement or (B) by wire transfer or
moneygram directly to a Lockbox Account. Schedule 4.01(r) lists all
Lockboxes and all Lockbox Account Banks at which the Seller maintains
Lockbox Accounts as of the Closing Date, and such schedule correctly
identifies (1) with respect to each such Lockbox Account Bank, the
name, address and telephone number thereof, (2) with respect to each
Lockbox Account, the name in which such account is held and the
complete account number therefor, and (3) with respect to each Lockbox,
the lockbox number and address thereof. The Seller and the Servicer
shall endorse, to the extent necessary, all checks or other instruments
received in any Lockbox so that the same can be deposited in the
Lockbox Account, in the form so received (with all necessary
endorsements), on the first Business Day after the date of receipt
thereof. In addition, each of the Seller and the Servicer shall deposit
or cause to be deposited into a Lockbox Account or the Concentration
Account all cash, checks, money orders or other proceeds of Transferred
Receivables or Seller Collateral received by it other than in a Lockbox
or a Lockbox Account, in the form so received (with all necessary
endorsements), not later than the close of business on the first
Business Day following the date of receipt thereof, and until so
deposited all such items or other proceeds shall be held in trust, as
trustee, for the benefit of the Collateral Agent.
26
Neither the Seller nor the Servicer shall make any deposits into a
Lockbox or any Lockbox Account except in accordance with the terms of
this Agreement or any other Related Document.
(iii) If, for any reason, a Lockbox Account
Agreement terminates or any Lockbox Account Bank fails to comply with
its obligations under the Lockbox Account Agreement to which it is a
party, then the Seller shall promptly notify all Obligors of
Transferred Receivables who had previously been instructed to make any
payments to a Lockbox Account maintained at any such Lockbox Account
Bank to make all future payments to a new Lockbox Account in accordance
with this Section 6.01(a)(iii). The Seller shall not close any such
Lockbox Account unless it shall have (A) received the prior written
consent of the Administrative Agent, (B) established a new account with
the same Lockbox Account Bank or with a new depositary institution
satisfactory to the Administrative Agent, (C) entered into an agreement
covering such new account with such Lockbox Account Bank or with such
new depositary institution substantially in the form of such Lockbox
Account Agreement or that is satisfactory in all respects to the
Administrative Agent (whereupon, for all purposes of this Agreement and
the other Related Documents, such new account shall become a Lockbox
Account, such new agreement shall become a Lockbox Account Agreement
and any new depositary institution shall become a Lockbox Account
Bank), and (D) taken all such action as the Administrative Agent shall
require to grant and perfect a first priority Lien in such new Lockbox
Account to the Purchaser under Section 8.01 of this Agreement. Except
as permitted by this Section 6.01(a), neither the Seller nor the
Servicer shall open any new Lockbox or Lockbox Account without the
prior written consent of the Administrative Agent.
(iv) Schedule 4.01(r) correctly identifies the
Concentration Account, the name, address and telephone number of the
Concentration Account Bank, and the name in which the Concentration
Account is held and the complete account number therefor. If, for any
reason, the Lockbox Account Agreement applicable to the Concentration
Account terminates or the Concentration Account Bank fails to comply
with its obligations under such Lockbox Account Agreement, then the
Administrative Agent may direct the Lockbox Account Banks to forward
all Collections received in the Lockbox Accounts to the Collection
Account. The Seller shall not close the Concentration Account unless it
shall have (A) received the prior written consent of the Administrative
Agent, (B) established a new account with the same Concentration
Account Bank or with a new depositary institution satisfactory to the
Administrative Agent, (C) entered into an agreement covering such new
account with such Concentration Account Bank or with such new
depositary institution substantially in the form of a Lockbox Account
Agreement or that is satisfactory in all respects to the Administrative
Agent (whereupon, for all purposes of this Agreement and the other
Related Documents, such new account shall become a Concentration
Account, such new agreement shall become a Lockbox Account Agreement
and any new depositary institution shall become a Concentration Account
Bank), and (D) taken all such action as
27
the Administrative Agent shall require to grant and perfect a first
priority Lien in such new Concentration Account to the Purchaser under
Section 8.01 of this Agreement. Except as permitted by this Section
6.01(a), neither the Seller nor the Servicer shall open any
Concentration Account without the prior written consent of the
Administrative Agent.
(v) Pursuant to Section 6.02, the Seller shall
instruct each Lockbox Account Bank to transfer, and the Seller hereby
grants the Administrative Agent the authority to instruct each such
Lockbox Account Bank to transfer, on each Business Day in same day
funds, all available funds in each Lockbox Account to the Concentration
Account.
(b) Collection Account.
(i) The Purchasers have established and shall
maintain the Collection Account with the Depositary. The Collection
Account shall be registered in the name of the Administrative Agent and
the Administrative Agent shall, subject to the terms of this Agreement,
have exclusive dominion and control thereof and of all monies,
instruments and other property from time to time on deposit therein.
(ii) Prior to the delivery of a Notice of
Direction by the Administrative Agent, (a) on each Business Day, funds
in an amount sufficient to pay all sums specified in Section 6.02 to be
paid on such Business Day and (b) on each Weekly Settlement Day, funds
in an amount sufficient to pay all amounts (without duplication)
specified in Sections 6.02, 6.03 (other than 6.03(c)), 6.04 (other than
6.04(a)(iv)) and 6.05 (other than 6.05(g)) to be paid on such day, in
each case, shall be deposited by the Seller into the Collection Account
prior to 12:00 Noon (New York time) on such day.
(iii) After the delivery of a Notice of Direction
by the Administrative Agent, the Seller shall instruct the
Concentration Account to transfer, and the Seller hereby grants the
Administrative Agent the authority to instruct each such Concentration
Account Bank to transfer, no later than 12:00 Noon (New York time) on
each Business Day, in each case, in same day funds, all available funds
in the Concentration Account to the Collection Account.
(iv) The Purchasers and the Administrative Agent
may deposit into the Collection Account from time to time all monies,
instruments and other property received by any of them as proceeds of
the Transferred Receivables. Prior to the Facility Termination Date, on
each Business Day, the Administrative Agent shall instruct and cause
the Depositary (which instruction may be in writing or by telephone
confirmed promptly thereafter in writing) to release funds on deposit
in the Collection Account in the order of priority set forth in Section
6.03. On each Business Day from and after the Facility Termination Date
the Administrative Agent shall apply all amounts when received in the
Collection Account in the order of priority set forth in Section 6.05.
28
(v) If, for any reason, the Depositary wishes to
resign as depositary of the Collection Account or fails to carry out
the instructions of the Administrative Agent, then the Administrative
Agent shall promptly notify the Purchasers. Neither the Purchasers nor
the Administrative Agent shall close the Collection Account unless (A)
a new deposit account has been established with the Depositary or a new
depository, (B) the Purchasers and the Administrative Agent have
entered into an agreement covering such new account with such
depositary institution satisfactory in all respects to the
Administrative Agent (whereupon such new account shall become the
Collection Account for all purposes of this Agreement and the other
Related Documents), and (C) the Purchasers and the Administrative Agent
have taken all such action as the Administrative Agent shall require to
grant and perfect a first priority Lien in such new Collection Account
to the Administrative Agent on behalf of the Purchasers and to the
Collateral Agent on behalf of the Conduit Purchaser under the
Collateral Agent Agreement.
(c) Retention Account. (i) The Administrative Agent has
established and shall maintain the Retention Account with the Depositary. The
Retention Account shall be registered in the name of the Administrative Agent
and the Administrative Agent shall, subject to the terms of this Agreement, have
exclusive dominion and control thereof and of all monies, instruments and other
property from time to time on deposit therein.
(ii) If, for any reason, the Depositary wishes to
resign as depositary of the Retention Account or fails to carry out the
instructions of the Administrative Agent, then the Administrative Agent
shall promptly notify the Purchasers. Neither the Purchasers nor the
Administrative Agent shall close the Retention Account unless (A) a new
retention account has been established with the Depositary or a new
depository institution, (B) the Purchasers and the Administrative Agent
have entered into an agreement covering such new account with such
depositary institution satisfactory in all respects to the
Administrative Agent (whereupon such new account shall become the
Retention Account for all purposes of this Agreement and the other
Related Documents), and (C) the Purchasers and the Administrative Agent
have taken all such action as the Administrative Agent shall require to
grant and perfect a first priority Lien in such new Retention Account
to the Administrative Agent on behalf of the Purchasers and to the
Collateral Agent on behalf of the Conduit Purchaser under the
Collateral Agent Agreement.
Section 6.02. Funding of Collection Account.
(a) As soon as practicable, and in any event no later
than 12:00 Noon (New York time) on each Business Day (without duplication):
(i) if such day is prior to the delivery of a
Notice of Direction by the Administrative Agent, the Seller shall
deposit funds into the Collection Account in an amount equal to (A) if
such day is not a Weekly Settlement Day, all amounts specified in
29
this Section 6.02 to be paid on such Business Day or (B) if such day is
a Weekly Settlement Day, all amounts (without duplication) specified in
Sections 6.02, 6.03 (other than 6.03(c)), 6.04 (other than 6.04(a)(iv))
and 6.05 (other than 6.05(g)) to be paid on such day.
(ii) after the delivery of a Notice of Direction
by the Administrative Agent, the Administrative Agent shall transfer or
cause to be transferred, to the extent then available, all Collections
deposited in any Lockbox Account prior to such Business Day to the
Concentration Account and all amounts subsequently on deposit in the
Concentration Account to the Collection Account;
(iii) the Applicable Purchaser or the
Administrative Agent shall deposit in the Collection Account the
amount, if any, required pursuant to Section 2.04(b)(i);
(iv) if, on the immediately preceding Business
Day, the Administrative Agent shall have notified the Seller of any
Purchase Excess, then the Seller shall deposit cash in the amount of
such Purchase Excess in the Collection Account;
(v) if on such Business Day the Seller is
required to make other payments under this Agreement not previously
retained out of Collections (including Additional Amounts and
Indemnified Amounts not previously paid), then the Seller shall deposit
an amount equal to such payments in the Collection Account;
(vi) if since the immediately preceding Business
Day, the Originator made a capital contribution or repurchased a
Transferred Receivable pursuant to Section 4.04 of the Sale Agreement
or made a payment as a result of any Dilution Factors pursuant to
Section 4.02(o) of the Sale Agreement, then the Seller shall deposit in
the Collection Account cash in the amount so received from the
Originator for such contribution or for such repurchase or payment;
(vii) the Servicer shall deposit in the Collection
Account the Outstanding Balance of any Transferred Receivable the
Servicer elected to pay pursuant to Section 7.04 since the immediately
preceding Business Day; and
(viii) the Seller shall deposit in the Collection
Account the Outstanding Balance of any Transferred Receivable the
Seller elected to pay pursuant to Section 8.06(d) since the immediately
preceding Business Day
(b) If, on or before the second Business Day immediately
preceding any Settlement Date, the Administrative Agent shall have notified the
Seller of any Retention Account Deficiency pursuant to Section 6.04(b), then the
Seller shall deposit cash in the amount of such deficiency in the Collection
Account no later than 12:00 Noon (New York time) on such Settlement Date.
30
(c) From and after the Facility Termination Date, the
Administrative Agent shall transfer all amounts on deposit in the Retention
Account as of that date and all amounts on deposit in any of Seller's other
deposit accounts as of that date to the Collection Account.
Section 6.03. Daily Disbursements From the Collection Account;
Revolving Period. On each Business Day no later than 1:00 p.m. (New York time)
during the Revolving Period, and following the transfers made pursuant to
Section 6.02, the Administrative Agent shall disburse the amount of all
Collections then on deposit in the Collection Account and its related
subaccounts in the following priority:
(a) (x) prior to the occurrence of a Committed Purchaser
Funding Event, to the Retention Account and (y) after the occurrence of a
Committed Purchaser Funding Event, to the Administrative Agent:
(i) an amount equal to any Retention Account
Deficiency, first from amounts deposited pursuant to Section 6.02(b)
and second from Collections then on deposit in the Collection Account;
and
(ii) an amount equal to the sum of:
(A) if such day is a Weekly Settlement
Day, all accrued but unpaid Daily
Yield since the immediately
preceding Weekly Settlement Day;
(B) if such day is a Weekly Settlement
Day, the Yield Shortfall as of the
close of business on the
immediately preceding Business Day;
(C) if such day is a Weekly Settlement
Day, the Servicing Fee that has
accrued since the immediately
preceding Weekly Settlement Day;
provided, however, that if the
Originator or any Affiliate of the
Originator is the Servicer then
such amount will not be deposited
in the Retention Account on such
day but the Seller shall pay the
Servicing Fee in accordance with
the provisions of Section 7.05(b);
(D) if such day is a Weekly Settlement
Day, the Servicing Fee Shortfall,
if any, as of the close of business
on the immediately preceding
Business Day; provided, however,
that if the Originator or any
Affiliate of the Originator is the
Servicer, then the amount of such
Servicing Fee Shortfall
attributable to the Servicer will
not be deposited in the Retention
Account on such day but the Seller
shall pay the Servicing Fee in
accordance with the provisions of
Section 7.05(b);
31
(E) if such day is a Weekly Settlement
Day, the Unused Commitment Fee that
has accrued since the immediately
preceding Weekly Settlement Day;
(F) if such day is a Weekly Settlement
Day, the Unused Commitment Fee
Shortfall as of the close of
business on the immediately
preceding Business Day; and
(G) any Additional Amounts or
Indemnified Amounts as to which any
Indemnified Person has made a
demand on the Seller and which
remain unpaid for five (5) or more
Business Days;
(b) to the Purchasers:
(i) an amount equal to any Purchase Excess to be
applied in reduction of Capital Investment, to the Purchasers ratably
based on the amount of their respective Capital Investments;
(ii) an amount equal to the deposits made in the
Collection Account pursuant to Section 6.02(a)(v) and not otherwise
disbursed pursuant to Section 6.03(a), to be disbursed ratably based on
the amounts owed to the applicable Purchasers;
(iii) if, pursuant to a Repayment Notice, the
Seller has requested a reduction of the Capital Investment of the
Purchasers, then to the Purchasers, ratably based on the amount of
their respective Capital Investments, the lesser of (A) the sum of (1)
the amount of such requested reduction of Capital Investment plus (2)
all Daily Yield accrued and unpaid thereon through but excluding the
date of such reduction plus (3) the costs, if any, required pursuant to
Section 2.10 and (B) the balance remaining on deposit in the Collection
Account;
(c) to the Seller Account, the balance of any amounts
remaining in the Collection Account after making the foregoing disbursements.
Section 6.04. Disbursements From the Retention Account;
Settlement Date and Daily Procedures; Revolving Period.
(a) During the Revolving Period, (x) on each Settlement
Date prior to the occurrence of a Committed Purchaser Funding Event and (y) on
each Business Day on and after the occurrence of a Committed Purchaser Funding
Event, the amounts on deposit in the Retention Account or transferred to the
Administrative Agent pursuant to Section 6.03(a) shall be disbursed or retained
by the Administrative Agent in the following priority:
(i) to the applicable Purchasers (or, if
applicable, any Indemnified Person or Affected Party), an amount equal
to:
32
(A) if such Settlement Date occurs on
or prior to the occurrence of a
Committed Purchaser Funding Event,
an amount equal to:
(1) the accrued and unpaid Accrued
Monthly Yield as of the end of the immediately
preceding Settlement Period;
(2) the accrued and unpaid Unused
Commitment Fee as of the end of the immediately
preceding Settlement Period;
(3) all Additional Amounts incurred and
payable to any Affected Party as of the end of the
immediately preceding Settlement Period;
(4) all other amounts accrued and
payable under the Agreement (including Indemnified
Amounts incurred and payable to any Indemnified
Person) as of the end of the immediately preceding
Settlement Period to the extent not already
transferred pursuant to Section 6.03(b)(ii); and
(5) if a Purchase Excess exists on such
date, an amount equal to such excess to the extent
not already transferred pursuant to Section
6.03(b)(i), to be applied in reduction of Capital
Investment;
(B) if such Business Day occurs after
the occurrence of a Committed
Purchaser Funding Event, an amount
equal to:
(1) the accrued and unpaid Daily Yield
as of such date;
(2) the accrued and unpaid Unused
Commitment Fee as of such date;
(3) all Additional Amounts as to which
any Affected Party has made a demand on the Seller
and which remain unpaid for five (5) or more Business
Days;
(4) all other amounts accrued and
payable under this Agreement (including Indemnified
Amounts as to which any Indemnified Person has made a
demand on the Seller to the extent not already
transferred pursuant to Section 6.03(b)(ii); and
(5) if a Purchase Excess exists on such
date, an amount equal to such excess to the extent
not already transferred pursuant to Section
6.03(b)(i), to be applied in reduction of Capital
Investment;
33
(ii) to the extent any funds have been deposited
in the Retention Account in accordance with Section 6.03(a)(ii)(C) and
(D), to the Servicer or the Successor Servicer, as applicable, on
behalf of the Seller, an amount equal to the accrued and unpaid
Servicing Fee or Successor Servicing Fees and Expenses as of (x) the
end of the immediately preceding Settlement Period (if such Settlement
Date occurs on or prior to the occurrence of a Committed Purchaser
Funding Event) or (y) such date (if such date occurs after the
occurrence of a Committed Purchaser Funding Event);
(iii) to be retained in the Retention Account, if
such Settlement Period occurs prior to the occurrence of a Committed
Purchaser Funding Event, an amount equal to the Accrued Monthly Daily
Yield, Accrued Unused Commitment Fee and, to the extent any funds have
been deposited in the Retention Account pursuant to Sections
6.03(a)(ii)(C) and (D), Accrued Servicing Fee as of such date; and
(iv) to the Seller Account, the balance of any
funds remaining in the Collection Account after retaining or disbursing
the foregoing amounts (and, prior to the occurrence of a Committed
Purchaser Funding Event, the Administrative Agent shall also transfer
to the Seller Account on such date any and all interest earned on, and
paid by the Depository with respect to, any funds on deposit in the
Retention Account during the preceding Settlement Period).
(b) No later than the second Business Day immediately
preceding each Settlement Date, the Administrative Agent shall determine and
notify the Seller of any Retention Account Deficiency for the preceding
Settlement Period, and the Seller shall deposit cash in the amount of such
Retention Account Deficiency to the Collection Account pursuant to Section
6.02(b).
Section 6.05. Liquidation Settlement Procedures. On each
Business Day from and after the Facility Termination Date until the Termination
Date, the Administrative Agent shall, as soon as practicable, (A) to the extent
the Seller has any deposit accounts (other than any Lockbox Account) holding
Collections or the proceeds thereof, shall transfer all amounts on deposit
therein to the Collection Account, (B) transfer all amounts then on deposit in
the Retention Account to the Collection Account and (C) shall transfer all
amounts in the Collection Account (including amounts transferred from the
Retention Account pursuant to Section 6.02(c) and amounts which are not
allocable to the Purchaser Interests) in the following priority:
(a) if an Event of Servicer Termination has occurred and
a Successor Servicer has assumed the responsibilities and obligations of the
Servicer in accordance with Section 11.02, then to the Successor Servicer an
amount equal to its accrued and unpaid Successor Servicing Fees and Expenses;
(b) to the Purchasers, ratably, an amount equal to
accrued and unpaid Daily Yield through and including the date of maturity (if
any) of the Commercial Paper (or other funding source) maintaining the Capital
Investment;
34
(c) to the Purchasers, an amount equal to the unpaid
Investment;
(d) to the Administrative Agent, an amount equal to
accrued and unpaid Unused Commitment Fees;
(e) pro rata, to all Additional Amounts incurred and
payable to any Affected Party and Indemnified Amounts incurred and payable to
any Indemnified Person; and
(f) if an Event of Servicer Termination shall not have
occurred, to the Servicer in an amount equal to the accrued and unpaid Servicing
Fee; and
(g) to the Seller Account, the balance of any funds
remaining in the Collection Account after payment in full of all other amounts
set forth in this Section 6.05.
Section 6.06. Investment of Funds in Accounts. Prior to the
occurrence of a Committed Purchaser Funding Event or the Facility Termination
Date, to the extent uninvested amounts are on deposit in the Retention Account
on any given day during the Revolving Period, the Administrative Agent shall
invest all such amounts in Permitted Investments selected by the Administrative
Agent that mature no later than the immediately succeeding Settlement Date. From
and after the occurrence of a Committed Purchaser Funding Event or the Facility
Termination Date, any investment of such amounts shall be solely at the
discretion of the Administrative Agent, subject to the restrictions described
above. All proceeds of any such investment shall be deposited upon receipt into
the Retention Account.
Section 6.07. Termination Procedures.
(a) On the earlier of (i) the first Business Day after
the Facility Termination Date on which the Capital Investment has been reduced
to zero or (ii) the Final Purchase Date, if the obligations to be paid pursuant
to Section 6.05 have not been paid in full, the Seller shall immediately deposit
in the Collection Account an amount sufficient to make such payments in full.
(b) On the Termination Date, all amounts on deposit in
the Collection Account and the Retention Account shall be disbursed to the
Seller and all ownership interests or Liens of the Purchasers in and to all
Transferred Receivables and all Liens of the Purchasers and the Administrative
Agent in and to the Seller Collateral shall be released by each Purchaser and
the Administrative Agent. Such disbursement shall constitute the final payment
to which the Seller is entitled pursuant to the terms of this Agreement.
(c) Seller acknowledges that it is not authorized to file
any financing statement or amendment or termination statement with respect to
any financing statement without the written consent of Administrative Agent and
agrees that it will not do so without the prior written consent of
Administrative Agent, subject to Seller's rights under Section 9-509(d)(2) of
the UCC.
35
ARTICLE VII.
SERVICER PROVISIONS
Section 7.01. Appointment of the Servicer. Each of the Conduit
Purchaser and the Committed Purchaser hereby appoints the Servicer as its agent,
and the Seller hereby acknowledges such appointment, to service the Transferred
Receivables and enforce its (and the Originator's) rights and interests in and
under each Transferred Receivable and Contract therefor and to the Seller
Collateral and to serve in such capacity until the termination of its
responsibilities pursuant to Sections 9.02 or 11.01. In connection therewith,
the Servicer hereby accepts such appointment and agrees to perform the duties
and obligations set forth herein. The Servicer may, with the prior written
consent of each Purchaser and the Administrative Agent, subcontract with a
Sub-Servicer for the collection, servicing or administration of the Transferred
Receivables; provided, that (a) the Servicer shall remain liable for the
performance of the duties and obligations of such Sub-Servicer pursuant to the
terms hereof and (b) any Sub-Servicing Agreement that may be entered into and
any other transactions or services relating to the Transferred Receivables
involving a Sub-Servicer shall be deemed to be between the Sub-Servicer and the
Servicer alone, and the Purchasers and the Administrative Agent shall not be
deemed parties thereto and shall have no obligations, duties or liabilities with
respect to the Sub-Servicer.
Section 7.02. Duties and Responsibilities of the Servicer.
Subject to the provisions of this Agreement, the Servicer shall conduct the
servicing, administration and collection of the Transferred Receivables and the
Seller Collateral and shall take, or cause to be taken, all actions that (i) may
be necessary or advisable to service, administer and collect each Transferred
Receivable and the Seller Collateral from time to time, (ii) the Servicer would
take if the Transferred Receivables and the Seller Collateral were owned by the
Servicer, and (iii) are consistent with industry practice for the servicing of
such Transferred Receivables and the Seller Collateral and are in compliance
with the provisions of the Credit and Collection Policies.
Section 7.03. Collections on Receivables.
(a) In the event that the Servicer is unable to determine
the specific Receivables on which Collections have been received from the
Obligor thereunder, the parties agree for purposes of this Agreement only that
such Collections shall be deemed to have been received on such Receivables in
the order in which they were originated with respect to such Obligor. In the
event that the Servicer is unable to determine the specific Receivables on which
discounts, offsets or other non-cash reductions have been granted or made with
respect to the Obligor thereunder, the parties agree for purposes of this
Agreement only that such reductions shall be deemed to have been granted or made
(i) if no Termination Event has occurred and is continuing, on such Receivables
as determined by the Servicer, and (ii) from and after the occurrence and during
the continuation of a Termination Event, in the reverse order in which they were
originated with respect to such Obligor.
36
(b) If the Servicer determines that amounts unrelated to
the Transferred Receivables (the "Unrelated Amounts") have been deposited in the
Collection Account, then the Servicer shall provide written evidence thereof to
the Purchasers and the Administrative Agent no later than the first Business Day
following the day on which the Servicer had actual knowledge thereof, which
evidence shall be provided in writing and shall be otherwise satisfactory to
each such Affected Party. Upon receipt of any such notice, the Administrative
Agent shall segregate the Unrelated Amounts and the same shall not be deemed to
constitute Collections on Transferred Receivables and shall not be subject to
the provisions of Article VI.
Section 7.04. Authorization of the Servicer. Each of the
Conduit Purchaser and the Committed Purchasers hereby authorizes the Servicer,
and the Seller acknowledges such authorization, to take any and all reasonable
steps in its name and on its behalf necessary or desirable and not inconsistent
with the ownership of the Purchaser Interests purchased by such Purchaser
hereunder and the pledge of the Conduit's Purchaser Interest by the Conduit
Purchaser to the Collateral Agent pursuant to the Collateral Agent Agreement, in
the determination of the Servicer, to (a) collect all amounts due under any
Transferred Receivable and the Seller Collateral, including endorsing its name
on checks and other instruments representing Collections on such Receivable, and
execute and deliver any and all instruments of satisfaction or cancellation or
of partial or full release or discharge and all other comparable instruments
with respect to any such Receivable and (b) after any Transferred Receivable
becomes a Defaulted Receivable and to the extent permitted under and in
compliance with applicable law and regulations, commence proceedings with
respect to the enforcement of payment of any such Receivable and the Contract
therefor and adjust, settle or compromise any payments due thereunder, in each
case to the same extent as the Originator could have done if it had continued to
own such Receivable. The Originator, the Seller, the Administrative Agent and
each Purchaser shall furnish the Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. Notwithstanding anything to the
contrary contained herein, the Purchasers and the Administrative Agent shall
have the absolute and unlimited right to direct the Servicer (whether the
Servicer is the Originator or otherwise) (i) to commence or settle any legal
action to enforce collection of any Transferred Receivable or (ii) to foreclose
upon, repossess or take any other action that the Administrative Agent deems
necessary or advisable with respect thereto; provided, that in lieu of
commencing any such action or taking other enforcement action, the Servicer may,
at its option, elect to (x) deposit an amount equal to the Outstanding Balance
for such Transferred Receivable into the Collection Account or (y) replace such
Transferred Receivable with an Eligible Receivable(s) of equal or greater amount
to the Capital Investment with respect to the Purchasers' Purchaser Interest in
such Transferred Receivable. In no event shall the Servicer be entitled to make
any Affected Party a party to any Litigation without such Affected Party's
express prior written consent, or to make the Seller a party to any Litigation
without the Administrative Agent's consent.
Section 7.05. Servicing Fees. (a) As compensation for its
servicing activities and as reimbursement for its reasonable expenses in
connection therewith, the Servicer shall be entitled to receive the Servicing
Fees, if any, in accordance with Sections 6.04 and 6.05. The
37
Servicer shall be required to pay for all expenses incurred by it in connection
with its activities hereunder (including any payments to accountants, counsel or
any other Person) and shall not be entitled to any payment therefor other than
the Servicing Fees.
(b) For any period that the Originator or any Affiliate
of the Originator is the Servicer, the Seller agrees that it shall pay to the
Servicer on each Settlement Date the applicable Servicing Fee, to the extent of
funds available to the Seller on such Settlement Date. The Seller agrees that it
will pay the Servicing Fee to the Servicer prior to using any funds available to
it on such Settlement Date for any other purposes, including, without
limitation, the purchase of additional Receivables. If the Seller does not have
sufficient funds available to so pay the Servicing Fee in full on any Settlement
Date, the shortfall shall be paid on the next Business Day on which the Seller
does have available funds but only to the extent that funds are then available
to the Seller in accordance with the provisions of Article VI. The Servicer
waives any right it has or may at any time have to demand payment and/or take
any action to or in furtherance of payment of any shortfall in the payment of
the Servicing Fee and agrees that it shall not have a "claim under Section
101(5) of the Bankruptcy Code of the payment of any such shortfall, except for,
and only to the extent of, any excess available funds, as described above.
(c) On each Settlement Date, an Authorized Officer of the
Servicer shall deliver to the Administrative Agent a certificate certifying that
the Servicing Fee payable for the preceding Settlement Period has been paid in
accordance with the provisions of this Section 7.05.
Section 7.06. Representations and Warranties of the Servicer.
To induce the Purchasers to purchase the Purchaser Interests and the
Administrative Agent to take any action required to be performed by it
hereunder, the Servicer represents and warrants to the Purchasers and the
Administrative Agent, which representation and warranty shall survive the
execution and delivery of this Agreement:
(a) Corporate Existence; Compliance with Law. The
Servicer (i) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, the state of
Alabama (which is the Servicer's only state of incorporation); (ii) is duly
qualified to conduct business and is in good standing in each other jurisdiction
where its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to do so would not have a Material
Adverse Effect; (iii) has the requisite corporate power and authority and the
legal right to own and operate its properties, to lease the property it operates
under lease, and to conduct its business as now, heretofore and proposed to be
conducted; (iv) has all licenses, permits, consents or approvals from or by, and
has made all filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct, except where the failure to do so would not have a
Material Adverse Effect; (v) is in compliance with its charter and bylaws; and
(vi) subject to specific representations set forth herein regarding ERISA, tax
and other laws, is in compliance with all applicable provisions of law, except
where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
38
(b) Corporate Power, Authorization, Enforceable
Obligations. The execution, delivery and performance by the Servicer of this
Agreement and the other Related Documents to which it is a party and, solely
with respect to clause (vii) below, the exercise by each of the Seller, the
Purchasers or the Administrative Agent of any of its rights and remedies under
any Related Document to which it is a party: (i) are within the Servicer's
corporate power; (ii) have been duly authorized by all necessary or proper
corporate and shareholder action; (iii) do not contravene any provision of the
Servicer's charter or bylaws; (iv) do not violate any law or regulation, or any
order or decree of any court or Governmental Authority; (v) do not conflict with
or result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by, any
indenture or any material, mortgage, deed of trust, lease, agreement or other
instrument to which the Servicer is a party or by which the Servicer or any of
the property of the Servicer is bound; (vi) do not result in the creation or
imposition of any Adverse Claim upon any of the property of the Servicer; and
(vii) do not require the consent or approval of any Governmental Authority or
any other Person, except those referred to in Section 3.01(b), all of which will
have been duly obtained, made or complied with prior to the Closing Date. On or
prior to the Closing Date, each of the Related Documents to which the Servicer
is a party shall have been duly executed and delivered by the Servicer and each
such Related Document shall then constitute a legal, valid and binding
obligation of the Servicer enforceable against it in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights and by general
principles of equity.
(c) No Litigation. No Litigation is now pending or, to
the knowledge of the Servicer, threatened against the Servicer that (i)
challenges the Servicer's right or power to enter into or perform any of its
obligations under the Related Documents to which it is a party, or the validity
or enforceability of any Related Document or any action taken thereunder, (ii)
seeks to prevent the transfer, sale, pledge or contribution of any Receivable or
Seller Collateral or the consummation of any of the transactions contemplated
under this Agreement or the other Related Documents, or (iii) has a reasonable
risk of being determined adversely to the Servicer and that, if so determined,
could have a Material Adverse Effect.
(d) Full Disclosure. No information contained in this
Agreement, any Investment Base Certificate or any of the other Related
Documents, or any written statement furnished by or on behalf of the Servicer to
either Purchaser or the Administrative Agent pursuant to the terms of this
Agreement or any of the other Related Documents contains any untrue statement of
a material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made.
(e) Servicing Software. The Servicer has all necessary
licenses and rights to use the Servicing Software.
(f) Other Representations and Warranties. Each of the
representations and warranties of the Servicer contained in any Related Document
is true and correct.
39
Section 7.07. Covenants of the Servicer. The Servicer
covenants and agrees that from and after the Closing Date and until the
Termination Date:
(a) Ownership of Transferred Receivables. The Servicer
shall identify the Transferred Receivables clearly and unambiguously in its
Servicing Records to reflect that such Transferred Receivables have been sold or
contributed to the Seller and that interests therein have been transferred to
the Purchasers by marking each Servicing Record with the following legend: "The
accounts receivable and other obligations set forth herein, together with
certain related property interests, have been sold to Avondale Funding, LLC, and
interests therein have been further transferred to certain purchasers for whom
General Electric Capital Corporation acts as agent." The Servicer shall maintain
its books and records so as to clearly distinguish Excluded Receivables from
Transferred Receivables.
(b) Compliance with Credit and Collection Policies. The
Servicer shall comply in all respects with the Credit and Collection Policies
with respect to each Transferred Receivable and the Contract therefor. The
Servicer shall not amend, waive or modify any term or provision of the Credit
and Collection Policies without the prior written consent of the Administrative
Agent.
(c) Credit Facility Refinancing Information. If the
Servicer is Avondale ▇▇▇▇▇, Inc. or an Affiliate of the Parent, not later than
(but no more than fifteen days prior to) the dates that are 6 months, 3 months
and 1 month prior to the then current expiration date of the Credit Facility,
the Servicer shall provide information reports to the Administrative Agent (in
each case in form and substance reasonably satisfactory to the Administrative
Agent) detailing the Servicer's plans to refinance then existing Credit
Facility.
(d) Servicing Software. The Servicer shall use its best
efforts to obtain written authorization of the licensor of the Servicing
Software to grant the Administrative Agent (and its assigns) the right to use
such Servicing Software for purposes of obtaining information about and
servicing the Transferred Receivables by the date that is 90 days after the
Closing Date.
Section 7.08. Reporting Requirements of the Servicer. The
Servicer hereby agrees that, from and after the Closing Date and until the
Termination Date, it shall deliver or cause to be delivered to the Purchasers
and the Administrative Agent the financial statements, notices, and other
information at the times, to the Persons and in the manner set forth in Annex
7.07.
ARTICLE VIII.
GRANT OF SECURITY INTERESTS
Section 8.01. Seller's Grant of Security Interest. The parties
hereto intend that each Purchase of Purchaser Interests to be made hereunder
shall constitute a purchase and sale of
40
undivided percentage ownership interests in the Transferred Receivables and not
a loan. Notwithstanding the foregoing, in addition to and not in derogation of
any rights now or hereafter acquired by any Purchaser or the Administrative
Agent hereunder, the parties hereto intend that this Agreement shall constitute
a security agreement under applicable law. In such regard and, in any event, to
secure the prompt and complete payment, performance and observance of all Seller
Secured Obligations, and to induce the Administrative Agent, Conduit Purchaser
and the Committed Purchaser to enter into this Agreement and perform the
obligations required to be performed by it hereunder in accordance with the
terms and conditions thereof, the Seller hereby grants, assigns, conveys,
pledges, hypothecates and transfers to the Administrative Agent, for the benefit
of itself, the Conduit Purchaser and the Committed Purchaser, a Lien upon and
security interest in all of its right, title and interest in, to and under, but
none of its obligations arising from, the following property, whether now owned
by or owing to, or hereafter acquired by or arising in favor of, the Seller
(including under any trade names, styles or derivations of the Seller), and
regardless of where located (all of which being hereinafter collectively
referred to as the "Seller Collateral"):
(a) all Receivables, Contracts therefor and Collections
thereon;
(b) the Sale Agreement, all Lockbox Account Agreements
and all other Related Documents now or hereafter in effect relating to the
purchase, servicing or processing of Receivables (collectively, the "Seller
Assigned Agreements"), including (i) all rights of the Seller to receive moneys
due and to become due thereunder or pursuant thereto, (ii) all rights of the
Seller to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect thereto, (iii) all claims of the Seller for damages or breach with
respect thereto or for default thereunder and (iv) the right of the Seller to
amend, waive or terminate the same and to perform and to compel performance and
otherwise exercise all remedies thereunder;
(c) all of the following (collectively, the "Seller
Account Collateral"):
(i) all deposit accounts, including the Lockbox
Accounts, the Lockboxes, the Concentration Account, and all funds on
deposit therein and all certificates and instruments, if any, from time
to time representing or evidencing any deposit account, the Lockbox
Accounts, the Concentration Account, the Lockboxes or such funds,
(ii) the Collection Account, the Retention
Account and all funds on deposit therein and all certificates and
instruments, if any, from time to time representing or evidencing the
Collection Account, the Retention Account or such funds,
(iii) all Investments from time to time of amounts
in the Collection Account and the Retention Account, and all
certificates, instruments and investment property, if any, from time to
time representing or evidencing such Investments,
41
(iv) all notes, certificates of deposit and other
instruments from time to time delivered to or otherwise possessed by
any Purchaser or any assignee or agent on behalf of any Purchaser in
substitution for or in addition to any of the then existing Seller
Account Collateral, and
(v) all interest, dividends, cash, instruments,
investment property and other property from time to time received,
receivable or otherwise distributed with respect to or in exchange for
any and all of the then existing Seller Account Collateral;
(d) all other property that may from time to time
hereafter be granted and pledged by the Seller or by any Person on its behalf
under this Agreement, including any deposit with any Purchaser or the
Administrative Agent of additional funds by the Seller; and
(e) to the extent not otherwise included, all proceeds
and products of the foregoing and all accessions to, substitutions and
replacements for, and profits of, each of the foregoing Seller Collateral
(including proceeds that constitute property of the types described in Sections
8.01(a) through (d).
Section 8.02. Seller's Certification. The Seller hereby
certifies that (a) the benefits of the representations, warranties, covenants
and agreements of the Originator and the Parent made to the Seller under the
Sale Agreement have been assigned by the Seller to the Administrative Agent on
behalf of the Purchasers hereunder; and (b) accordingly, any payments received
or to be received by the Seller under the Sale Agreement as a result of the
breach of a representation, warranty or covenant, fulfillment of an obligation
or as an indemnification payment shall be paid to the Administrative Agent; and
(c) the Sale Agreement provides that the representations, warranties and
covenants described in Sections 4.01, 4.02 and 4.03 thereof, the rights and
remedies contained in Section 4.02(o) and 4.04, the indemnification and payment
provisions of Article V thereof and the provisions of Sections 4.03(j), 8.03,
8.12 and 8.14 thereof shall survive the sale of the Transferred Receivables (and
undivided percentage ownership interests therein) and the termination of the
Sale Agreement and this Agreement. The Seller hereby acknowledges that the
Conduit Purchaser has assigned to the Collateral Agent under the Collateral
Agent Agreement the benefits of the representations, warranties and covenants
certified in this Section 8.02(a) to have been assigned to the Conduit
Purchaser.
Section 8.03. Consent to Assignment. Each of the Seller and
the Servicer acknowledges and consents to the grant by the Conduit Purchaser to
the Collateral Agent pursuant to the Collateral Agent Agreement of a Lien upon
all of the Conduit Purchaser's rights, title and interest in, to and under the
Seller Collateral and acknowledges the rights of the Collateral Agent hereunder
and thereunder and the covenants made by the Conduit Purchaser in favor of the
Collateral Agent set forth therein, and further acknowledges and consents that,
upon the occurrence and during the continuance of an Incipient Termination Event
or a Termination Event prior to a Committed Purchaser Funding Event, the
Collateral Agent shall be entitled to enforce the provisions of the Seller
Assigned Agreements and shall be entitled to all the rights and remedies of the
Conduit Purchaser thereunder. In addition, each of the Seller and the
42
Servicer hereby authorizes the Collateral Agent to rely on the representations
and warranties made by it in the Seller Assigned Agreements to which it is a
party and in any other certificates or documents furnished by it to any party in
connection therewith.
Section 8.04. Delivery of Collateral. All certificates or
instruments representing or evidencing the Seller Collateral shall be delivered
to and held by or on behalf of the Administrative Agent and shall be in suitable
form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Administrative Agent. The Administrative Agent shall have
the right (a) at any time to exchange certificates or instruments representing
or evidencing Seller Collateral for certificates or instruments of smaller or
larger denominations and (b) at any time in its discretion following the
occurrence and during the continuation of a Termination Event and without notice
to the Seller, to transfer to or to register in the name of the Administrative
Agent or its nominee any or all of the Seller Collateral. The Seller will, (A)
at all times from and after the date hereof, clearly and conspicuously ▇▇▇▇ its
computer and master data processing books and records with the legend set forth
in Section 7.07(a), and (B) segregate (from all other receivables then owned or
being serviced by the Seller) all contracts relating to each Receivable.
Section 8.05. Seller Remains Liable. It is expressly agreed by
the Seller that, anything herein to the contrary notwithstanding, the Seller
shall remain liable under any and all of the Transferred Receivables, the
Contracts therefor, the Seller Assigned Agreements and any other agreements
constituting the Seller Collateral to which it is a party to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder. The Purchasers, the Administrative Agent, the Collateral Agent and
the other Conduit Purchaser Secured Parties shall not have any obligation or
liability under any such Receivables, Contracts or agreements by reason of or
arising out of this Agreement or the Collateral Agent Agreement or the granting
herein or therein of a Lien thereon or the receipt by the Administrative Agent,
Purchasers, the Collateral Agent or any Purchaser Secured Party of any payment
relating thereto pursuant hereto or thereto. The exercise by any Purchaser or
the Administrative Agent of any of its respective rights under this Agreement
shall not release the Originator, the Seller or the Servicer from any of their
respective duties or obligations under any such Receivables, Contracts or
agreements. None of the Purchasers, the Administrative Agent, the Collateral
Agent or any of the Conduit Purchaser Secured Parties shall be required or
obligated in any manner to perform or fulfill any of the obligations of the
Originator, the Seller or the Servicer under or pursuant to any such Receivable,
Contract or agreement, or to make any payment, or to make any inquiry as to the
nature or the sufficiency of any payment received by it or the sufficiency of
any performance by any party under any such Receivable, Contract or agreement,
or to present or file any claims, or to take any action to collect or enforce
any performance or the payment of any amounts that may have been assigned to it
or to which it may be entitled at any time or times.
Section 8.06. Covenants of the Seller and the Servicer
Regarding the Seller Collateral.
43
(a) Offices and Records. The Seller shall maintain its
principal place of business and chief executive office and the office at which
it stores its Records at the respective locations specified in Schedule 4.01(b)
or, upon 30 days' prior written notice to the Administrative Agent, at such
other location in a jurisdiction where all action requested by the
Administrative Agent pursuant to Section 14.15 shall have been taken with
respect to the Seller Collateral. Each of the Seller and the Servicer shall, at
its own cost and expense, maintain adequate and complete records of the
Transferred Receivables and the Seller Collateral, including records of any and
all payments received, credits granted and merchandise returned with respect
thereto and all other dealings therewith. Each of the Seller and the Servicer
shall ▇▇▇▇ conspicuously with the legend set forth in Section 7.07(a) hereof,
its books and records, computer tapes, computer disks and credit files
pertaining to the Seller Collateral, and its file cabinets or other storage
facilities where it maintains information pertaining thereto, to evidence this
Agreement and the assignment and Liens granted pursuant to this Article VIII.
Upon the occurrence and during the continuance of a Termination Event, the
Seller and the Servicer shall deliver and turn over such books and records to
the Administrative Agent or its representatives at any time on demand of the
Administrative Agent. Prior to the occurrence of a Termination Event and upon
notice from the Administrative Agent, the Seller and the Servicer shall permit
any representative of the Administrative Agent to inspect such books and records
and shall provide photocopies thereof to the Administrative Agent as more
specifically set forth in Section 8.06(b).
(b) Access. Each of the Seller and the Servicer shall, at
its own expense, during normal business hours, from time to time upon three
Business Day's prior notice as frequently as the Administrative Agent determines
to be appropriate: (i) provide the Purchasers, the Administrative Agent and any
of their respective officers, employees and agents access to its properties
(including properties utilized in connection with the collection, processing or
servicing of the Transferred Receivables), facilities, advisors and employees
(including officers) and to the Seller Collateral, (ii) permit the Purchasers,
the Administrative Agent and any of their respective officers, employees and
agents to inspect, audit and make extracts and copies (including computer tapes
and disks) from its books and records, including all Records, (iii) permit the
Purchasers or the Administrative Agent and their respective officers, employees
and agents to inspect, review and evaluate the Transferred Receivables and the
Seller Collateral and (iv) permit the Purchasers or the Administrative Agent and
their respective officers, employees and agents to discuss matters relating to
the Transferred Receivables and the Seller Collateral or its performance under
this Agreement or the other Related Documents or its affairs, finances and
accounts with any of its officers, directors, employees, representatives or
agents (in each case, with those persons designated by the Seller or the
Servicer, as applicable, in a reasonable manner and having knowledge of such
matters) and, provided that the Seller or the Servicer (as applicable) has been
afforded a reasonable opportunity to have its representatives present, with its
independent certified public accountants, in each case, whether on or off the
premises of the Seller and the Servicer; all the costs, fees and expenses of
each such audit shall be borne by the Servicer as part of the duties and
obligations for which it receives the Servicing Fee; provided, however, that
prior to the earlier to occur of (i) the occurrence of a Default Event or (ii)
such time as the Administrative Agent, in good faith, deems that the prospect of
payment or
44
performance of the Purchasers' rights or interests in the Transferred
Receivables, the Seller Assigned Agreements or any other Seller Collateral has
been impaired, the number of audits in any calendar year shall not exceed two.
If (A) an Incipient Termination Event or a Termination Event shall have occurred
and be continuing or (B) the Administrative Agent, in good faith, believes that
an Incipient Termination Event or a Termination Event is imminent or deems that
the prospect of payment or performance of the Purchasers' rights or interests in
the Transferred Receivables, the Seller Assigned Agreements or any other Seller
Collateral has been impaired, then each of the Seller and the Servicer shall, at
its own expense, provide such access at all times and without advance notice. If
a Termination Event shall have occurred and be continuing, each of the Seller
and the Servicer shall use reasonable efforts to respond to inquires by the
Purchasers, the Administrative Agent and their respective officers, employees
and agents regarding the Transferred Receivables, the Seller Collateral and the
related Obligors. Each of the Seller and the Servicer shall make available to
the Administrative Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records, including Records,
that the Administrative Agent may request.
(c) Communication with Accountants. Each of the Seller
and the Servicer authorizes the Purchasers and the Administrative Agent to
communicate directly with its independent certified public accountants provided
that the Seller or the Servicer (as applicable has been afforded a reasonable
opportunity to have its representatives present at such time, and authorizes and
shall instruct those accountants and advisors to disclose and make available to
the Purchasers and the Administrative Agent any and all financial statements and
other supporting financial documents, schedules and information relating to the
Seller or the Servicer (including copies of any issued management letters) with
respect to its business, financial condition and other affairs.
(d) Collection of Transferred Receivables. Except as
otherwise provided in this Section 8.06(d), the Servicer shall continue to
collect or cause to be collected, at its sole cost and expense, all amounts due
or to become due to the Seller under the Transferred Receivables, the Seller
Assigned Agreements and any other Seller Collateral. In connection therewith,
the Seller and the Servicer shall take such action as it, and from and after the
occurrence and during the continuance of a Termination Event, the Administrative
Agent, may deem necessary or desirable to enforce collection of the Transferred
Receivables, the Seller Assigned Agreements and the other Seller Collateral;
provided, that the Seller or the Servicer may, rather than commencing any such
action or taking any other enforcement action, at its option, elect to pay to
the Administrative Agent, for the account of the Applicable Purchaser (in
accordance with its Purchaser Interests), the Outstanding Balance of any such
Transferred Receivable by depositing such amount into the Collection Account;
provided further, that if (i) an Incipient Termination Event or a Termination
Event shall have occurred and be continuing or (ii) the Administrative Agent, in
good faith, believes that an Incipient Termination Event or a Termination Event
is imminent or deems that the prospect of payment or performance of the
Purchasers' rights or interests in the Transferred Receivables, the Seller
Assigned Agreements or any other Seller Collateral has been impaired, then the
Administrative Agent may, without prior notice to the Seller or the Servicer,
notify or cause the Servicer to notify any Obligor under any Transferred
45
Receivable or obligors under the Seller Assigned Agreements of the assignment of
such Transferred Receivables or Seller Assigned Agreements, as the case may be,
to the Administrative Agent on behalf of the Purchasers hereunder and direct
that payments of all amounts due or to become due to the Seller thereunder be
made directly to the Administrative Agent or any servicer, collection agent or
lockbox or other account designated by the Administrative Agent and, upon such
notification and at the sole cost and expense of the Seller and the Servicer,
the Administrative Agent may enforce collection of any such Transferred
Receivable or the Seller Assigned Agreements and adjust, settle or compromise
the amount or payment thereof.
(e) Performance of Seller Assigned Agreements. Each of
the Seller and the Servicer shall (i) perform and observe all the terms and
provisions of the Seller Assigned Agreements to be performed or observed by it,
maintain the Seller Assigned Agreements in full force and effect, enforce the
Seller Assigned Agreements in accordance with their terms and take all action as
may from time to time be requested by the Administrative Agent in order to
accomplish the foregoing, and (ii) upon the request of and as directed by the
Administrative Agent, make such demands and requests to any other party to the
Seller Assigned Agreements as are permitted to be made by the Seller or the
Servicer thereunder.
(f) Invoices with respect to Receivables. Neither the
Seller nor the Servicer shall retain in its possession any copy purporting to be
an "original" of any invoice with respect to any Receivable.
ARTICLE IX.
TERMINATION EVENTS
Section 9.01. Termination Events. If any of the following
events (each, a "Termination Event") shall occur (regardless of the reason
therefor):
(a) (i) the Seller shall fail to make any payment of any
Seller Secured Obligation when due and payable and the same shall remain
unremedied for one Business Day or more, (ii) the Originator or the Parent shall
fail to make any payment when due and payable pursuant to the Sale Agreement and
the same shall remain unremedied for two (2) Business Day or more, (iii) the
Seller shall fail to deliver the Investment Base Certificate as required
pursuant to Section 2.03 or the reports as and when required in clauses (a),
(b), (c), (d) or (e) of Annex 5.02(a) and, in each case, failure shall remain
unremedied for two (2) Business Days or more, or (iv) the Seller shall fail or
neglect to perform, keep or observe any other provision of this Agreement or the
other Related Documents (other than any provision embodied in or covered by any
other clause of this Section 9.01) and the same shall remain unremedied for five
(5) Business Days or more after written notice thereof shall have been given by
the Administrative Agent to the Seller; or
46
(b) a default or breach shall occur under any other
agreement, document or instrument to which the Parent, any Subsidiary of the
Parent, the Originator or the Seller is a party or by which any such Person or
its property is bound, and such default or breach (i) involves the failure to
make any payment when due in respect of any Debt (other than the Seller Secured
Obligations) of any such Person or (ii) which would permit any holder of such
Debt or a trustee or agent to cause Debt or a portion thereof which, except with
respect to the Seller, is in excess of a principal amount of $2,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment or (iii) causes Debt or a portion thereof which,
except with respect to the Seller, is in excess of a principal amount of
$2,000,000 in the aggregate to become due prior to its stated maturity or prior
to its regularly scheduled dates of payment; in each case, regardless of whether
such default is waived, or such right is exercised, by such holder, trustee or
agent; or
(c) a case or proceeding shall have been commenced
against the Seller, the Servicer, the Originator or the Parent or any other
Subsidiary of the Parent seeking a decree or order in respect of any such Person
(i) under the Bankruptcy Code or any other applicable federal, state or foreign
bankruptcy, liquidation, insolvency, moratorium, receivership or other similar
law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any such Person or for any substantial
part of such Person's assets, or (iii) ordering the winding-up or liquidation of
the affairs of any such Person; or
(d) the Seller, the Servicer, the Originator or the
Parent or any other Subsidiary of the Parent shall (i) file a petition seeking
relief under the Bankruptcy Code or any other applicable federal, state or
foreign bankruptcy, liquidation, insolvency, moratorium, receivership, or other
similar law, (ii) consent or fail to object in a timely and appropriate manner
to the institution of proceedings thereunder or to the filing of any such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for any such
Person or for any substantial part of such Person's assets, (iii) make an
assignment for the benefit of creditors, or (iv) take any corporate action in
furtherance of any of the foregoing; or
(e) (i) the Parent, the Originator, the Seller or the
Servicer generally does not pay its debts as such debts become due or admits in
writing its inability to, or is generally unable to, pay its Debts as such Debts
become due or (ii) the fair market value of the Parent's, the Originator's or
the Seller's liabilities (whether or not reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured) exceeds the fair market value of its
assets; or
(f) a final judgment or judgments for the payment of
money in excess of $1,000,000 in the aggregate at any time outstanding shall be
rendered against the Parent, the Originator or any Affiliate thereof and the
same shall not, within 30 days after the entry thereof, have been discharged or
execution thereof stayed or bonded pending appeal, or shall not have been
discharged prior to the expiration of any such stay; or
47
(g) a judgment or order for the payment of money shall be
rendered against the Seller; or
(h) (i) any information contained in any Investment Base
Certificate is untrue or incorrect in any respect, or (ii) any representation or
warranty of the Parent, the Originator or the Seller herein or in any other
Related Document or in any written statement, report, financial statement or
certificate (other than an Investment Base Certificate) made or delivered by or
on behalf of the Parent, the Originator or the Seller to any Affected Party
hereto or thereto is untrue or incorrect in any material respect as of the date
when made or deemed made; or
(i) any Governmental Authority (including the IRS or the
PBGC) shall file notice of a Lien with regard to any assets of the Parent or the
Originator (other than a Lien (i) limited by its terms to assets other than
Receivables and (ii) not materially adversely affecting the financial condition
of such Person or the ability of the Originator to perform as Servicer
hereunder); or
(j) any Governmental Authority (including the IRS or the
PBGC) shall file notice of a Lien with regard to any of the assets of the Seller
and either (i) the Seller or the Servicer shall have received actual knowledge
or notice of such Lien or (ii) such Lien shall have been in place for a period
of ten (10) calendar days; or
(k) (i) there shall have occurred any event which
materially adversely impairs in the reasonable judgment of the Administrative
Agent the ability of the Originator to originate Receivables of a credit quality
which are at least of the credit quality of the Receivables in the initial
Purchase, (ii) the Administrative Agent shall have determined (and so notified
the Seller) that any event has occurred which materially impairs the
collectibility of the Receivables, or (iii) the Administrative Agent shall have
determined (and so notified the Seller) that any event or condition that has had
or could reasonably be expected to have or result in a Material Adverse Effect
has occurred; or
(l) (i) a default or breach shall occur under any
provision of Sections 4.02(o), 4.02(q), 4.04, 5.01 or 8.14 of the Sale Agreement
and the same shall remain unremedied for one Business Day or more after the
occurrence thereof, (ii) a default or breach shall occur under any other
provision of the Sale Agreement and the same shall remain unremedied for two
Business Days or more after written notice thereof shall have been given by the
Administrative Agent to the Seller or (iii) the Sale Agreement shall for any
reason cease to evidence the transfer to the Seller of the legal and equitable
title to, and ownership of, the Transferred Receivables; or
(m) except as otherwise expressly provided herein, any
Lockbox Account Agreement or the Sale Agreement shall have been modified,
amended or terminated without the prior written consent of the Purchasers and
the Administrative Agent (it being understood that no "Termination Event" shall
occur hereunder solely as a result of the Administrative Agent terminating any
Lockbox Account Agreement on its own initiative without the prior consent of the
Seller); or
48
(n) an Event of Servicer Termination shall have occurred;
or
(o) (i) with respect to the Transferred Receivables, (A)
prior to the Purchase of Purchaser Interests therein hereunder, the Seller shall
cease to hold valid and properly perfected title to and sole record and
beneficial ownership in such Transferred Receivables or (B) after the Purchase
of Purchaser Interests hereunder, (1) the Administrative Agent (on behalf of the
Purchasers) shall cease to hold either (a) valid and properly perfected title to
and sole record and beneficial ownership in the related Transferred Receivables
or (b) a first priority, perfected Lien in the related Transferred Receivables
or any of the Seller Collateral; or
(p) a Change of Control shall occur with respect to the
Seller, the Originator or the Parent; or
(q) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or his estate shall cease to maintain
voting control over more than 50% of the capital stock of the Parent; or
(r) the Seller shall amend its bylaws or its certificate
or articles of incorporation without the express prior written consent of the
Purchasers and the Administrative Agent; or
(s) the Seller shall have received an Election Notice
pursuant to Section 2.01(d) of the Sale Agreement; or
(t) (i) the Default Ratio shall exceed 9%; (ii) the
Delinquency Ratio shall exceed 5%; (iii) the Dilution Trigger Ratio shall exceed
5%; (iv) the Receivables Collection Turnover shall exceed 68 days; or (v) the
Seller's Net Worth Percentage shall be less than 5%; or
(u) (i) any "Event of Default" or "Default" (as defined
in the Credit Facility) shall occur and be continuing or the Credit Facility
shall terminate or shall otherwise cease to be in full force and effect or (ii)
any "Event of Default" or "Default" (as defined in the Indenture) shall occur
and be continuing or the Indenture shall terminate or shall otherwise cease to
be in full force and effect; or
(v) any material provision of any Related Document to
which any of the Seller, the Servicer, the Originator or the Parent is a party
shall for any reason cease to be valid, binding and enforceable in accordance
with its terms (or the Parent, the Originator, the Servicer or the Seller shall
challenge the enforceability of any Related Document or shall assert in writing,
or engage in any action or inaction based on any such assertion, that any
provision of any of the Related Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);
then, and in any such event, the Administrative Agent shall, at the request of,
or may, with the consent of, the Purchaser or the Administrative Agent, by
notice to the Seller, declare the Facility Termination Date to have occurred
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Seller; provided, that the Facility Termination Date
49
shall automatically occur (i) upon the occurrence of any of the Termination
Events described in Sections 9.01(c) (other than solely with respect to a
Subsidiary of the Parent other than the Seller, the Servicer or the Originator),
(d) (other than solely with respect to a Subsidiary of the Parent other than the
Seller, the Servicer or the Originator), (e) or (s) or (ii) three days after the
occurrence of the Termination Event described in Section 9.01(a)(i) if the same
shall not have been remedied by such time, in each case without demand, protest
or any notice of any kind, all of which are hereby expressly waived by the
Seller.
Section 9.02. Events of Servicer Termination. If any of the
following events (each, an "Event of Servicer Termination") shall occur
(regardless of the reason therefor):
(a) the Servicer shall (i) fail to make any payment or
deposit required to be made by it under this Agreement or any other Related
Document, (ii) fail to deliver any Investment Base Certificate required to be
delivered by it under this Agreement or any other Related Document and such
failure shall remain unremedied for two (2) Business Day or more, (iii) fail to
deliver any reports required to be delivered by it clauses (a), (b), (c), (d) or
(e) of Annex 5.02(a) hereof or any provision of this Agreement or any other
Related Document (excluding any Investment Base Certificate) and such failure
shall remain unremedied for two (2) Business Days or more, or (iv) fail or
neglect to perform, keep or observe any other provision of this Agreement or the
other Related Documents (whether in its capacity as the Originator or as
Servicer) and the same shall remain unremedied for five (5) Business Days or
more after written notice thereof shall have been given by the Purchasers or the
Administrative Agent to the Servicer; or
(b) any event, default or breach shall occur under any
other agreement, document or instrument to which the Parent, the Originator or
the Servicer is a party or by which any such Person or its property is bound,
and such default or breach (i) involves the failure to make any payment when due
in respect of any Debt (other than the Seller Secured Obligations) of any such
Person which, except as provided in clause (iv) below, is not cured within a
period of fifteen days, or (ii) permits any holder of such Debt or a trustee or
agent with respect to such Debt to refuse or declare its intention to refuse to
make any further advance or other funding thereunder or (iii) permits any holder
of such Debt or a trustee or agent to cause Debt or a portion thereof which is
in excess of a principal amount of $2,000,000 in the aggregate to become due
prior to its stated maturity or prior to its regularly scheduled dates of
payment, and which, except as provided in clause (iv) below, is not cured within
a period of thirty days, or (iv) causes Debt or a portion thereof which is in
excess of a principal amount of $2,000,000 in the aggregate to become due prior
to its stated maturity or prior to its regularly scheduled dates of payment; in
each case, regardless of whether such default is waived, or such right is
exercised, by such holder, trustee or agent; or
(c) a case or proceeding shall have been commenced
against the Servicer or any Affiliate thereof which acts as a Sub-Servicer
seeking a decree or order in respect of any such Person (i) under the Bankruptcy
Code or any other applicable federal, state or foreign bankruptcy, liquidation,
insolvency, moratorium, receivership or reorganization or other similar
50
law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any such Person or for any substantial
part of such Person's assets, or (iii) ordering the winding-up or liquidation of
the affairs of any such Person; or
(d) the Servicer or any Affiliate thereof which acts as a
Sub-Servicer shall (i) file a petition seeking relief under the Bankruptcy Code
or any other applicable federal, state or foreign bankruptcy, liquidation,
insolvency, moratorium, receivership or reorganization or other similar law,
(ii) consent or fail to object in a timely and appropriate manner to the
institution of proceedings thereunder or to the filing of any such petition or
to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any such Person or
for any substantial part of such Person's assets, (iii) make an assignment for
the benefit of creditors, or (iv) take any corporate action in furtherance of
any of the foregoing; or
(e) (i) the Servicer or any Affiliate thereof which acts
as a Sub-Servicer generally does not pay its debts as such debts become due or
admits in writing its inability to, or is generally unable to, pay its Debts as
such Debts become due or (ii) the fair market value of the Servicer's
liabilities (whether or not reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured) exceeds the fair market value of its assets; orquitable,
secured or unsecured) exceeds the fair market value of its assets; or
(f) a final judgment or judgments for the payment of
money in excess of $1,000,000 in the aggregate at any time outstanding shall be
rendered against the Servicer or any Affiliate thereof which acts as a
Sub-Servicer and the same shall not, within 30 days after the entry thereof,
have been discharged or execution thereof stayed or bonded pending appeal, or
shall not have been discharged prior to the expiration of any such stay; or
(g) (i) any information contained in any Investment Base
Certificate is untrue or incorrect in any respect, or (ii) any representation or
warranty of the Servicer herein or in any other Related Document or in any
written statement, report, financial statement or certificate (other than an
Investment Base Certificate) made or delivered by the Servicer to any Affected
Party hereto or thereto is untrue or incorrect in any respect as of the date
when made or deemed made; or
(h) the Administrative Agent shall have determined that
any event or condition that materially adversely affects the ability of the
Servicer to collect the Transferred Receivables or to otherwise perform
hereunder has occurred; or
(i) a Termination Event shall have occurred or this
Agreement shall have been terminated; or
(j) a deterioration has taken place in the quality of
servicing of Transferred Receivables or other Receivables serviced by the
Servicer that the Administrative Agent, in its sole discretion, determines to be
material, and such material deterioration has not been
51
eliminated within 30 days after written notice thereof shall have been given by
the Administrative Agent to the Servicer; or
(k) the Parent, the Originator, or the Servicer shall,
assign or purport to assign any of their respective obligations hereunder or
under any Related Document without the prior written consent of the
Administrative Agent; or
(l) a default or breach of any of the covenants set forth
in Annex G shall have occurred; or
(m) a Change of Control shall occur with respect to the
Servicer; or
(n) the Seller's board of directors shall have determined
that it is in the best interests of the Seller to terminate the duties of the
Servicer hereunder and shall have given the Servicer, the Purchasers and the
Administrative Agent at least 30 days' written notice thereof;
then, and in any such event, the Administrative Agent shall, at the request of,
or may, with the consent of, the Purchasers or the Administrative Agent, by
delivery of a Servicer Termination Notice to the Seller and the Servicer,
terminate the servicing responsibilities of the Servicer hereunder, without
demand, protest or further notice of any kind, all of which are hereby waived by
the Servicer. Upon the delivery of any such notice, all authority and power of
the Servicer under this Agreement and the Sale Agreement shall pass to and be
vested in the Successor Servicer acting pursuant to Section 11.02; provided,
that notwithstanding anything to the contrary herein, the Servicer agrees to
continue to follow the procedures set forth in Section 7.02 with respect to
Collections on the Transferred Receivables until a Successor Servicer has
assumed the responsibilities and obligations of the Servicer in accordance with
Section 11.02.
ARTICLE X.
REMEDIES
Section 10.01. Actions Upon Termination Event. If any
Termination Event shall have occurred and be continuing and the Administrative
Agent shall have declared the Facility Termination Date to have occurred or the
Facility Termination Date shall be deemed to have occurred pursuant to Section
9.01, then the Administrative Agent may exercise in respect of the Seller
Collateral, in addition to any and all other rights and remedies granted to it
hereunder, under any other Related Document or under any other instrument or
agreement securing, evidencing or relating to the Seller Secured Obligations or
otherwise available to it, all of the rights and remedies of a secured party
upon default under the UCC (such rights and remedies to be cumulative and
nonexclusive), and, in addition, may take the following actions:
(a) The Administrative Agent may, without notice to the
Seller except as required by law and at any time or from time to time, charge,
offset or otherwise apply amounts payable to the Seller from the Collection
Account, any Lockbox Account, the Retention Account
52
or any part of such accounts in accordance with the priorities set forth in
Sections 6.05 and 6.07 against all or any part of the Seller Secured
Obligations.
(b) The Administrative Agent may, without notice except
as specified below, solicit and accept bids for and sell the Seller Collateral
or any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or any of the Purchasers', or Administrative Agent's
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Administrative Agent may deem commercially reasonable. The
Administrative Agent shall have the right to conduct such sales on the Seller's
premises or elsewhere and shall have the right to use any of the Seller's
premises without charge for such sales at such time or times as the
Administrative Agent deems necessary or advisable. The Seller agrees that, to
the extent notice of sale shall be required by law, at least ten Business Days'
notice to the Seller of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Administrative Agent shall not be obligated to make any sale of Seller
Collateral regardless of notice of sale having been given. The Administrative
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed for such sale, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Every such
sale shall operate to divest all right, title, interest, claim and demand
whatsoever of the Seller in and to the Seller Collateral so sold, and shall be a
perpetual bar, both at law and in equity, against the Originator, the Seller,
any Person claiming the Seller Collateral sold through the Originator or the
Seller, and their respective successors or assigns. The Administrative Agent
shall deposit the net proceeds of any such sale in the Collection Account and
such proceeds shall be disbursed in accordance with Section 6.05.
(c) Upon the completion of any sale under Section
10.01(b), the Seller or the Servicer shall deliver or cause to be delivered to
the purchaser or purchasers at such sale on the date thereof, or within a
reasonable time thereafter if it shall be impracticable to make immediate
delivery, all of the Seller Collateral sold on such date, but in any event full
title and right of possession to such property shall vest in such purchaser or
purchasers upon the completion of such sale. Nevertheless, if so requested by
the Administrative Agent or by any such purchaser, the Seller shall confirm any
such sale or transfer by executing and delivering to such purchaser all proper
instruments of conveyance and transfer and releases as may be designated in any
such request.
(d) At any sale under Section 10.01(b), the Purchasers,
the Administrative Agent or any other Purchaser Secured Party may bid for and
purchase the property offered for sale and, upon compliance with the terms of
sale, may hold, retain and dispose of such property without further
accountability therefor.
(e) The Administrative Agent may exercise, at the sole
cost and expense of the Seller, any and all rights and remedies of the Seller
under or in connection with the Seller Assigned Agreements or the other Seller
Collateral, including any and all rights of the Seller to
53
demand or otherwise require payment of any amount under, or performance of any
provisions of, the Seller Assigned Agreements.
Section 10.02. Exercise of Remedies. No failure or delay on
the part of the Administrative Agent in exercising any right, power or privilege
under this Agreement and no course of dealing between the Originator, the
Parent, the Seller or the Servicer, on the one hand, and the Administrative
Agent, on the other hand, shall operate as a waiver of such right, power or
privilege, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power or
privilege. The rights and remedies under this Agreement are cumulative, may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies that the Administrative Agent would otherwise have at law or in equity.
No notice to or demand on any party hereto shall entitle such party to any other
or further notice or demand in similar or other circumstances, or constitute a
waiver of the right of the party providing such notice or making such demand to
any other or further action in any circumstances without notice or demand.
Section 10.03. Power of Attorney. On the Closing Date, each of
the Seller and the Servicer shall execute and deliver a power of attorney
substantially in the form attached hereto as Exhibit 10.03 (each, a "Power of
Attorney"). The power of attorney granted pursuant to each Power of Attorney is
a power coupled with an interest and shall be irrevocable until all of the
Seller Secured Obligations are indefeasibly paid or otherwise satisfied in full.
The powers conferred on the Administrative Agent under each Power of Attorney
are solely to protect the Purchaser's Liens upon and interests in the Seller
Collateral and shall not impose any duty upon the Administrative Agent to
exercise any such powers. The Administrative Agent shall not be accountable for
any amount other than amounts that it actually receives as a result of the
exercise of such powers and none of the Administrative Agent's officers,
directors, employees, agents or representatives shall be responsible to the
Seller or the Servicer for any act or failure to act, except in respect of
damages attributable solely to their own gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction.
Section 10.04. Continuing Security Interest. This Agreement
shall create a continuing Lien in the Seller Collateral until the conditions to
the release of the Liens of the Purchaser and the Administrative Agent thereon
set forth in Section 6.07(b) have been satisfied.
ARTICLE XI.
SUCCESSOR SERVICER PROVISIONS
Section 11.01. Servicer Not to Resign. The Servicer shall not
resign from the obligations and duties hereby imposed on it except upon a
determination that (a) the performance of its duties hereunder has become
impermissible under applicable law or regulation and (b) there is no reasonable
action that the Servicer could take to make the performance of its duties
hereunder become permissible under applicable law. Any such determination shall
(i) with
54
respect to clause (a) above, be evidenced by an opinion of counsel to such
effect and (ii) with respect to clause (b) above, be evidenced by an Officer's
Certificate to such effect, in each case delivered to the Purchaser and the
Administrative Agent. No such resignation shall become effective until a
Successor Servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 11.02.
Section 11.02. Appointment of the Successor Servicer. In
connection with the termination of the Servicer's responsibilities or the
resignation by the Servicer under this Agreement pursuant to Sections 9.02 or
11.01, the Administrative Agent shall (a) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations as Servicer (but not
in any other capacity, it being specifically understood that the Administrative
Agent shall not assume any of the obligations of the Servicer set forth in
Section 12.02) under this Agreement (and except that the Administrative Agent
makes no representations and warranties pursuant to Section 4.02) and (b) may at
any time appoint a successor servicer to the Servicer that shall be acceptable
to the Administrative Agent, that shall have satisfied the Rating Agency
Condition in respect thereof and shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Servicer under this
Agreement (the Administrative Agent, in such capacity, or such successor
servicer being referred to as the "Successor Servicer"); provided, that the
Successor Servicer shall have no responsibility for any actions of the Servicer
prior to the date of its appointment or assumption of duties as Successor
Servicer. In selecting a Successor Servicer, the Administrative Agent may obtain
bids from any potential Successor Servicer and may agree to any bid it deems
appropriate. The Successor Servicer shall accept its appointment by executing,
acknowledging and delivering to the Administrative Agent an instrument in form
and substance acceptable to the Administrative Agent.
Section 11.03. Duties of the Servicer. The Servicer covenants
and agrees that, following the appointment of, or assumption of duties by, a
Successor Servicer:
(a) The Servicer shall terminate its activities as
Servicer hereunder in a manner that facilitates the transfer of servicing duties
to the Successor Servicer and is otherwise acceptable to each Purchaser and the
Administrative Agent and, without limiting the generality of the foregoing,
shall timely deliver (i) any funds to the Administrative Agent that were
required to be remitted to the Administrative Agent for deposit in the
Collection Account and (ii) all Servicing Records and other information with
respect to the Transferred Receivables to the Successor Servicer at a place
selected by the Successor Servicer. The Servicer shall account for all funds and
shall execute and deliver such instruments and do such other things as may be
required to vest and confirm in the Successor Servicer all rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer.
(b) The Servicer shall terminate each existing
Sub-Servicing Agreement and the Successor Servicer shall not be deemed to have
assumed any of the Servicer's interests therein or to have replaced the Servicer
as a party thereto.
55
Section 11.04. Effect of Termination or Resignation. Any
termination of or resignation by the Servicer hereunder shall not affect any
claims that the Seller, the Purchasers, or the Administrative Agent may have
against the Servicer for events or actions taken or not taken by the Servicer
arising prior to any such termination or resignation.
ARTICLE XII.
INDEMNIFICATION
Section 12.01. Indemnities by the Seller.
(a) Without limiting any other rights that the Conduit
Purchaser, the Committed Purchaser, the Administrative Agent, the Collateral
Agent, the Liquidity Agent, any Liquidity Lender, the Letter of Credit Agent or
any Letter of Credit Provider or any of their respective officers, directors,
employees, attorneys, agents or representatives (each, an "Indemnified Person")
may have hereunder or under applicable law, the Seller hereby agrees to
indemnify and hold harmless each Indemnified Person from and against any and all
Indemnified Amounts that may be claimed or asserted against or incurred by any
such Indemnified Person in connection with or arising out of the transactions
contemplated under this Agreement or under any other Related Document or any
actions or failures to act in connection therewith, including any and all legal
costs and expenses arising out of or incurred in connection with disputes
between or among any parties to any of the Related Documents; provided, that the
Seller shall not be liable for any indemnification to a Indemnified Person to
the extent that any such Indemnified Amount (x) results from (i) with respect to
any Indemnified Person other than the Conduit Purchaser, such Indemnified
Person's gross negligence or (ii) with respect to any Indemnified Person, such
Indemnified Person's willful misconduct, in each case as finally determined by a
court of competent jurisdiction or (y) constitutes recourse for uncollectible or
uncollected Transferred Receivables. Without limiting the generality of the
foregoing, the Seller shall pay on demand to each Indemnified Person any and all
Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty
made or deemed made by the Seller (or any of its officers) under or in
connection with this Agreement or any other Related Document or on any
other information delivered by the Seller pursuant hereto or thereto
that shall have been incorrect in any material respect when made or
deemed made or delivered;
(ii) the failure by the Seller to comply with any
term, provision or covenant contained in this Agreement, any other
Related Document or any agreement executed in connection herewith or
therewith, any applicable law, rule or regulation with respect to any
Transferred Receivable or the Contract therefor, or the nonconformity
of any Transferred Receivable or the Contract therefor with any such
applicable law, rule or regulation; or
56
(iii) (1) the failure to vest and maintain vested
in the Seller or the Purchasers valid and properly perfected title to
and sole record and beneficial ownership of the Receivables that
constitute Transferred Receivables, together with all Collections in
respect thereof, free and clear of any Adverse Claim, (2) the failure
to maintain or transfer to the Purchasers a first, priority, perfected
Lien in the Seller Collateral and (3) the failure to maintain or
transfer to the Administrative Agent a first priority, perfected Lien
therein;
(iv) any dispute, claim, offset or defense of any
Obligor (other than its discharge in bankruptcy to the payment of any
Transferred Receivable that is the subject of a Purchase hereunder
(including a defense based on such Receivable or the Contract therefor
not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or services giving
rise to such Receivable or the furnishing of or failure to furnish such
merchandise or services or relating to collection activities with
respect to such Receivable (if such collection activities were
performed by any of its Affiliates acting as Servicer), except to the
extent that such dispute, claim, offset or defense results solely from
any action or inaction on the part of any Indemnified Person;
(v) any products liability claim or other claim
arising out of or in connection with merchandise, insurance or services
that is the subject of any Contract with respect to any Transferred
Receivable;
(vi) the commingling of Collections with respect
to Transferred Receivables by the Seller at any time with its other
funds or the funds of any other Person;
(vii) any failure by the Seller to cause the
filing of, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable
jurisdiction or any other applicable laws with respect to any
Transferred Receivable that is the subject of a Purchase hereunder,
whether at the time of any such Purchase or at any subsequent time; or
(viii) any failure of a Lockbox Account Bank or a
Concentration Account Bank to comply with the terms of the applicable
Lockbox Account Agreement.
(b) Any Indemnified Amounts subject to the
indemnification provisions of this Section 12.01 not paid in accordance with
Article VI shall be paid by the Seller to the Indemnified Person entitled
thereto within five Business Days following demand therefor.
Section 12.02. Indemnities by the Servicer.
(a) Without limiting any other rights that an Indemnified
Person may have hereunder or under applicable law, the Servicer hereby agrees to
indemnify and hold harmless each Indemnified Person from and against any and all
Indemnified Amounts that may be claimed
57
or asserted against or incurred by any such Indemnified Person in connection
with or arising out of any breach by the Servicer of its obligations hereunder
or under any other Related Document; provided, that the Servicer shall not be
liable for any indemnification to an Indemnified Person to the extent that any
such Indemnified Amount (x) results solely from (i) with respect to any
Indemnified Person other than the Conduit Purchaser, such Indemnified Person's
gross negligence or (ii) with respect to any Indemnified Person, such
Indemnified Person's willful misconduct, in each case as finally determined by a
court of competent jurisdiction, or (y) constitutes recourse for uncollectible
or uncollected Transferred Receivables. Without limiting the generality of the
foregoing, the Servicer shall pay on demand to each Indemnified Person any and
all Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty
made or deemed made by the Servicer (or any of its officers) under or
in connection with this Agreement or any other Related Document or on
any other information delivered by the Servicer pursuant hereto or
thereto that shall have been incorrect in any material respect when
made or deemed made or delivered;
(ii) the failure by the Servicer to comply with
any term, provision or covenant contained in this Agreement, any other
Related Document or any agreement executed in connection herewith or
therewith, any applicable law, rule or regulation with respect to any
Transferred Receivable or the Contract therefor, or the nonconformity
of any Transferred Receivable or the Contract therefor with any such
applicable law, rule or regulation;
(iii) the imposition of any Adverse Claim with
respect to any Transferred Receivable or the Seller Collateral as a
result of any action taken by the Servicer; or
(iv) the commingling of Collections with respect
to Transferred Receivables by the Servicer at any time with its other
funds or the funds of any other Person.
(b) Any Indemnified Amounts subject to the
indemnification provisions of this Section 12.02 not paid in accordance with
Article VI shall be paid by the Servicer to the Indemnified Person entitled
thereto within five Business Days following demand therefor.
Section 12.03. Limitation of Damages; Indemnified Persons. NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.
58
ARTICLE XIII.
AGENT
Section 13.01. Authorization and Action.
(a) The Administrative Agent may take such action and
carry out such functions under this Agreement as are authorized to be performed
by it pursuant to the terms of this Agreement, any other Related Document or
otherwise contemplated hereby or thereby or are reasonably incidental thereto;
provided, that the duties of the Administrative Agent hereunder shall be
determined solely by the express provisions of this Agreement, and, other than
the duties set forth in Section 13.02, any permissive right of the
Administrative Agent hereunder shall not be construed as a duty.
Section 13.02. Reliance. None of the Administrative Agent, any
of its Affiliates or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or the other Related Documents,
except for damages solely caused by its or their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. Without
limiting the generality of the foregoing, and notwithstanding any term or
provision hereof to the contrary, the Seller, the Servicer, the Conduit
Purchaser and the Committed Purchaser hereby acknowledge and agree that the
Administrative Agent (a) acts as agent hereunder for the Conduit Purchaser and
the Committed Purchaser and has no duties or obligations to, shall incur no
liabilities or obligations to, and does not act as an agent in any capacity for,
the Seller (other than, with respect to the Administrative Agent, under the
Power of Attorney with respect to remedial actions) or the Originator, (b) may
consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts, (c) makes no representation or warranty hereunder to any
Affected Party and shall not be responsible to any such Person for any
statements, representations or warranties made in or in connection with this
Agreement or the other Related Documents, (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement, or the other Related Documents on the
part of the Seller, the Servicer, the Conduit Purchaser or the Committed
Purchaser or to inspect the property (including the books and records) of the
Seller, the Servicer, the Conduit Purchaser or the Committed Purchaser, (e)
shall not be responsible to the Seller, the Servicer or any Purchaser for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Related Documents or any other instrument
or document furnished pursuant hereto or thereto, (f) shall incur no liability
under or in respect of this Agreement or the other Related Documents by acting
upon any notice, consent, certificate or other instrument or writing believed by
it to be genuine and signed, sent or communicated by the proper party or parties
and (g) shall not be bound to make any investigation into the facts or matters
stated in any notice or other communication hereunder and may rely on the
accuracy of such facts or matters. Notwithstanding the foregoing, the
Administrative Agent acknowledges that it has a duty to
59
transfer funds between and among the Accounts and the Collection Account, and
make investments of funds on deposit in the Retention Account, in accordance
with Article VI and the instructions of the Servicer.
Section 13.03. GE Capital and Affiliates. GE Capital and its
Affiliates may generally engage in any kind of business with any Obligor, the
Parent, the Originator, the Seller, the Servicer, the Conduit Purchaser or the
Committed Purchaser, any of their respective Affiliates and any Person who may
do business with or own securities of such Persons or any of their respective
Affiliates, all as if GE Capital were not the Administrative Agent and without
the duty to account therefor to any Obligor, the Parent, the Originator, the
Seller, the Servicer, any Purchaser or any other Person.
ARTICLE XIV.
MISCELLANEOUS
Section 14.01. Notices. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other parties, or whenever any of the parties
desires to give or serve upon any other parties any communication with respect
to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (a) upon the earlier of actual
receipt and three Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by facsimile (with such facsimile
promptly confirmed by delivery of a copy by personal delivery or United States
Mail as otherwise provided in this Section 14.01), (c) one Business Day after
deposit with a reputable overnight courier with all charges prepaid or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile number set forth
under its name on the signature page hereof or to such other address (or
facsimile number) as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than the Conduit Purchaser, the Committed Purchaser and the
Administrative Agent) designated in any written notice provided hereunder to
receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
Notwithstanding the foregoing, whenever it is provided herein that a notice is
to be given to any other party hereto by a specific time, such notice shall only
be effective if actually received by such party prior to such time, and if such
notice is received after such time or on a day other than a Business Day, such
notice shall only be effective on the immediately succeeding Business Day.
Section 14.02. Binding Effect; Assignability.
60
(a) This Agreement shall be binding upon and inure to the
benefit of the Seller, the Servicer, the Conduit Purchaser, the Committed
Purchaser and the Administrative Agent and their respective successors and
permitted assigns. Neither the Seller nor the Servicer may assign, transfer,
hypothecate or otherwise convey any of their respective rights or obligations
hereunder or interests herein without the express prior written consent of the
Conduit Purchaser, the Committed Purchaser and the Administrative Agent and
unless the Rating Agency Condition shall have been satisfied with respect to any
such assignment. Any such purported assignment, transfer, hypothecation or other
conveyance by the Seller or the Servicer without the prior express written
consent of the Conduit Purchaser, the Committed Purchaser and the Administrative
Agent shall be void.
(b) The Conduit Purchaser, the Committed Purchaser or the
Administrative Agent may, at any time, assign any of its rights and obligations
hereunder or interests herein to any Person which has a short-term debt rating
of at least A-1 by S&P and P-1 by ▇▇▇▇▇'▇, and any such assignee may further
assign at any time its rights and obligations hereunder or interests herein
(including any rights it may have in and to the Purchaser Interests and the
Seller Collateral and any rights it may have to exercise remedies hereunder), in
each case without the consent of the Parent, the Originator, the Seller or the
Servicer. The Seller acknowledges and agrees that, upon any such assignment, the
assignee thereof may enforce directly, without joinder of any Purchaser, all of
the obligations of the Seller hereunder.
(c) The Seller hereby acknowledges that in accordance
with the provisions of the LAPA, on the day of the Committed Purchaser Funding
Event, (A) the Liquidity Lenders may purchase from the Conduit Purchaser all or
any part of the Purchaser Interests sold by the Seller hereunder on each
Purchase Date prior to the Committed Purchaser Funding Event, and (B) the
Conduit Purchaser may assign all or any part of its rights and interest in the
Seller Collateral to the Liquidity Lenders.
Section 14.03. Termination; Survival of Seller Secured
Obligations Upon Facility Termination Date.
(a) This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms, and
shall remain in full force and effect until the Termination Date.
(b) Except as otherwise expressly provided herein or in
any other Related Document, no termination or cancellation (regardless of cause
or procedure) of any commitment made by any Affected Party under this Agreement
shall in any way affect or impair the obligations, duties and liabilities of the
Seller or the rights of any Affected Party relating to any unpaid portion of the
Seller Secured Obligations, due or not due, liquidated, contingent or
unliquidated or any transaction or event occurring prior to such termination, or
any transaction or event, the performance of which is required after the
Facility Termination Date. Except as otherwise expressly provided herein or in
any other Related Document, all undertakings, agreements, covenants, warranties
and representations of or binding upon the Seller or the
61
Servicer, and all rights of any Affected Party hereunder, all as contained in
the Related Documents, shall not terminate or expire, but rather shall survive
any such termination or cancellation and shall continue in full force and effect
until the Termination Date; provided, that the rights and remedies provided for
herein with respect to any breach of any representation or warranty made by the
Seller or the Servicer pursuant to Article IV, the indemnification and payment
provisions of Article XII and Sections 14.04, 14.05 and 14.06 shall be
continuing and shall survive the Termination Date.
Section 14.04. Costs, Expenses and Taxes. (a) The Seller shall
reimburse each Purchaser and the Administrative Agent for all out-of-pocket
expenses incurred in connection with the negotiation and preparation of this
Agreement and the other Related Documents (including all out-of-pocket expenses
of the Administrative Agent and the Purchasers incurred in connection with their
field audits and due diligence and the reasonable fees and expenses of all of
its special counsel, advisors, consultants and auditors retained in connection
with the transactions contemplated thereby and advice in connection therewith).
The Seller shall reimburse the Conduit Purchaser, the Committed Purchaser and
the Administrative Agent for all fees, costs and expenses, including the
reasonable fees, costs and expenses of counsel actually incurred and the fees,
costs and expenses of other advisors (including environmental and management
consultants and appraisers) for advice, assistance, or other representation in
connection with:
(i) the forwarding to the Seller or any other
Person on behalf of the Seller by any Purchaser of any payments for
Purchases made by it hereunder;
(ii) any amendment, modification or waiver of,
consent with respect to, or termination of this Agreement or any of the
other Related Documents or advice in connection with the administration
thereof or their respective rights hereunder or thereunder;
(iii) any Litigation, contest or dispute (whether
instituted by the Seller, the Conduit Purchaser, the Committed
Purchaser, the Administrative Agent or any other Person as a party,
witness, or otherwise) in any way relating to the Seller Collateral,
any of the Related Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any
Litigation, contest, dispute, suit, case, proceeding or action, and any
appeal or review thereof, in connection with a case commenced by or
against the Seller or any other Person that may be obligated to the
Purchaser or the Administrative Agent by virtue of the Related
Documents, including any such Litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or
restructuring of the transactions contemplated hereby during the
pendency of one or more Termination Events;
(iv) any attempt to enforce any remedies of the
Conduit Purchaser, the Committed Purchaser or the Administrative Agent
against the Seller or any other Person that may be obligated to them by
virtue of any of the Related Documents, including any
62
such attempt to enforce any such remedies in the course of any work-out
or restructuring of the transactions contemplated hereby during the
pendency of one or more Termination Events;
(v) any work-out or restructuring of the
transactions contemplated hereby during the pendency of one or more
Termination Events; and
(vi) efforts to (A) monitor the Purchases or any
of the Seller Secured Obligations, (B) evaluate, observe or assess the
Parent, the Originator, the Seller or the Servicer or their respective
affairs, and (C) verify, protect, evaluate, assess, appraise, collect,
sell, liquidate or otherwise dispose of any of the Seller Collateral;
including all attorneys' and other professional and service providers' fees
arising from such services, including those in connection with any appellate
proceedings, and all expenses, costs, charges and other fees incurred by such
counsel and others in connection with or relating to any of the events or
actions described in this Section 14.04, all of which shall be payable, promptly
on demand, by the Seller to the Conduit Purchaser, the Committed Purchaser or
the Administrative Agent, as applicable. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: fees, costs and
expenses of accountants, attorneys, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram or
facsimile charges; secretarial overtime charges; and expenses for travel,
lodging and food paid or incurred in connection with the performance of such
legal or other advisory services.
(b) In addition, the Seller shall pay promptly on demand
any and all stamp, sales, excise and other taxes (excluding income taxes) and
fees payable or determined to be payable in connection with the execution,
delivery, filing or recording of this Agreement or any other Related Document,
and the Seller agrees to indemnify and save each Indemnified Person harmless
from and against any and all liabilities with respect to or resulting from any
delay or failure to pay such taxes and fees.
Section 14.05. Confidentiality.
(a) Except to the extent otherwise required by applicable
law, as required to be filed publicly with the Securities and Exchange
Commission, or unless the Administrative Agent shall otherwise consent in
writing, the Seller and the Servicer each agrees to maintain the confidentiality
of this Agreement (and all drafts hereof and documents ancillary hereto) in its
communications with third parties other than any Affected Party or any
Indemnified Person and otherwise and not to disclose, deliver or otherwise make
available to any third party (other than its directors, officers, employees,
accountants or counsel) the original or any copy of all or any part of this
Agreement (or any draft hereof and documents ancillary hereto) except to an
Affected Party or an Indemnified Person.
63
(b) The Seller and the Servicer each agrees that it shall
not (and shall not permit any of its Subsidiaries to) issue any news release or
make any public announcement pertaining to the transactions contemplated by this
Agreement and the other Related Documents without the prior written consent of
the Conduit Purchaser, the Committed Purchaser and the Administrative Agent
(which consent shall not be unreasonably withheld) unless such news release or
public announcement is required by law, in which case the Seller or the
Servicer, as applicable, shall consult with the Conduit Purchaser, the Committed
Purchaser and the Administrative Agent prior to the issuance of such news
release or public announcement. The Seller may, however, disclose the general
terms of the transactions contemplated by this Agreement and the other Related
Documents to trade creditors, suppliers and other similarly-situated Persons so
long as such disclosure is not in the form of a news release or public
announcement.
Section 14.06. No Proceedings. Each of the Seller and the
Servicer hereby agrees that, from and after the Closing Date and until the date
one year plus one day following the date on which the Commercial Paper with the
latest maturity has been indefeasibly paid in full in cash, it will not,
directly or indirectly, institute or cause to be instituted against the Conduit
Purchaser or the Committed Purchaser any proceeding of the type referred to in
Sections 9.01(c) and 9.01(d). This Section 14.06 shall survive the termination
of this Agreement.
Section 14.07. Complete Agreement; Modification of Agreement.
This Agreement and the other Related Documents constitute the complete agreement
among the parties hereto with respect to the subject matter here of and thereof,
supersede all prior agreements and understandings relating to the subject matter
hereof and thereof, and may not be modified, altered or amended except as set
forth in Section 14.08.
Section 14.08. Amendments and Waivers. No amendment,
modification, termination or waiver of any provision of this Agreement or any of
the other Related Documents, or any consent to any departure by the Seller or
the Servicer therefrom, shall in any event be effective unless the same shall be
in writing and signed by each of the parties hereto or thereto and by the
Collateral Agent; provided, that (i) the Administrative Agent shall notify each
of the Rating Agencies concurrently with the execution of any amendment to any
provision of this Agreement or any of the other Related Documents, and (ii) it
shall be a condition precedent to the effectiveness of any material amendment to
any provision of this Agreement or any of the other Related Documents that the
Rating Agency Condition shall have been satisfied in respect thereof.
Section 14.09. No Waiver; Remedies. The failure by the Conduit
Purchaser, the Committed Purchaser or the Administrative Agent, at any time or
times, to require strict performance by the Seller or the Servicer of any
provision of this Agreement or any Purchase Assignment shall not waive, affect
or diminish any right of any Purchaser or the Administrative Agent thereafter to
demand strict compliance and performance herewith or therewith. Any suspension
or waiver of any breach or default hereunder shall not suspend, waive or affect
any other breach or default whether the same is prior or subsequent thereto and
whether the same or
64
of a different type. None of the undertakings, agreements, warranties, covenants
and representations of the Seller or the Servicer contained in this Agreement or
any Purchase Assignment, and no breach or default by the Seller or the Servicer
hereunder or thereunder, shall be deemed to have been suspended or waived by any
Purchaser or the Administrative Agent unless such waiver or suspension is by an
instrument in writing signed by an officer of or other duly authorized signatory
of the Conduit Purchaser, the Committed Purchaser, the Collateral Agent and the
Administrative Agent and directed to the Seller or the Servicer, as applicable,
specifying such suspension or waiver. The rights and remedies of the Conduit
Purchaser, the Committed Purchaser, the Collateral Agent and the Administrative
Agent under this Agreement shall be cumulative and nonexclusive of any other
rights and remedies that the Conduit Purchaser, the Committed Purchaser, the
Collateral Agent and the Administrative Agent may have under any other
agreement, including the other Related Documents, by operation of law or
otherwise. Recourse to the Seller Collateral shall not be required.
Section 14.10. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL.
(a) THIS AGREEMENT AND EACH OTHER RELATED DOCUMENT
(EXCEPT TO THE EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE
CONTRARY) AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT
OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES) EXCEPT TO THE EXTENT
THAT THE PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE
ADMINISTRATIVE AGENT IN THE RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN
RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE
STATE OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY
SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT; PROVIDED, THAT EACH
PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY;
PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE ANY PURCHASER OR THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING
OTHER LEGAL
65
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE SELLER COLLATERAL OR ANY
OTHER SECURITY FOR THE SELLER SECURED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE CONDUIT PURCHASER, THE COMMITTED PURCHASER OR
THE ADMINISTRATIVE AGENT. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH
BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIEST OF (1) SUCH PARTY'S ACTUAL RECEIPT THEREOF,
(2) CONFIRMATION OF DELIVERY IN ANY FORM ISSUED BY THE UNITED STATES POSTAL
SERVICE OR (3) A DELIVERY CONFIRMATION IN THE FORM PROVIDED BY ANY NATIONALLY
RECOGNIZED COURIER SERVICE. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF
ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
Section 14.11. Counterparts. This Agreement may be executed in
any number of separate counterparts, each of which shall collectively and
separately constitute one agreement.
Section 14.12. Severability. Wherever possible, each provision
of this Agreement shall be interpreted in such a manner as to be effective and
valid under applicable
66
law, but if any provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
Section 14.13. Section Titles. The section titles and table of
contents contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.
Section 14.14. Limited Recourse. The obligations of the
Conduit Purchaser and the Committed Purchaser under this Agreement and all
Related Documents are solely the corporate obligations of each such Purchaser.
No recourse shall be had for the payment of any amount owing in respect of
Purchases or for the payment of any fee hereunder or any other obligation or
claim arising out of or based upon this Agreement or any other Related Document
against any Stockholder, employee, officer, director, agent or incorporator of
such Purchaser. Any accrued obligations owing by the Conduit Purchaser or the
Committed Purchaser under this Agreement shall be payable by such Purchaser
solely to the extent that funds are available therefor from time to time in
accordance with the provisions of Article VI of this Agreement, and, with
respect to the Conduit Purchaser, in accordance with Article VI of the
Collateral Agent Agreement (and such accrued obligations shall not be
extinguished until paid in full). The Conduit Purchaser shall not, and shall not
be obligated to, pay any amount pursuant to the Related Documents unless (i) the
Conduit Purchaser has received funds which may be used to make such payment
pursuant to the Program Documents, and (ii) after giving effect to such payment,
either (A) the Conduit Purchaser could issue Commercial Paper to refinance all
outstanding Commercial Paper (assuming such outstanding Commercial Paper matured
at such time) without violating the Program Documents, or (B) all Commercial
Paper is paid in full. Any amount which the Conduit Purchaser does not pay
pursuant to the operation of the preceding sentence shall not constitute a claim
(as defined in Section 101 of the Bankruptcy Code) against or an obligation of
the Conduit Purchaser for any insufficiency unless and until the Conduit
Purchaser satisfies the provisions of such preceding sentence. This Section
14.14 shall survive the termination of this Agreement.
Section 14.15. Further Assurances.
(a) Each of the Seller and the Servicer shall, at its
sole cost and expense, upon request of the Conduit Purchaser, the Committed
Purchaser or the Administrative Agent, promptly and duly execute and deliver any
and all further instruments and documents, Records, invoices and other
documentation relating to the Receivables and take such further action that may
be necessary or desirable or that the Conduit Purchaser, the Committed Purchaser
or the Administrative Agent may request to (i) perfect, protect, preserve,
continue and maintain fully the Purchases made and the right, title and
interests (including Liens) granted to such Purchaser under this Agreement, (ii)
enable the Conduit Purchaser, the Committed Purchaser or the Administrative
Agent to exercise and enforce its rights under this Agreement or any of the
other Related Documents or (iii) otherwise carry out more effectively the
provisions and purposes of
67
this Agreement or any other Related Document. Without limiting the generality of
the foregoing, the Seller shall, upon request of the Conduit Purchaser and the
Committed Purchaser or the Administrative Agent, (A) execute and file such
financing or continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices that may be necessary or
desirable or that the Purchasers or the Administrative Agent may request to
perfect, protect and preserve the Purchases made and the Liens granted pursuant
to this Agreement, free and clear of all Adverse Claims, (B) ▇▇▇▇, or cause the
Servicer to conspicuously ▇▇▇▇, each Contract evidencing each Transferred
Receivable with the legend set forth in Section 7.07 hereof, (C) ▇▇▇▇, or cause
the Servicer to ▇▇▇▇, its master data processing records evidencing such
Transferred Receivables with such legend and (D) notify or cause the Servicer to
notify Obligors of the sale of undivided percentage ownership interests in the
Transferred Receivables effected hereunder.
(b) Without limiting the generality of the foregoing, the
Seller hereby authorizes the Conduit Purchaser, the Committed Purchaser and the
Administrative Agent, and each of the Conduit Purchaser and the Committed
Purchaser hereby authorizes the Administrative Agent, to file one or more
financing or continuation statements, or amendments thereto or assignments
thereof, relating to all or any part of the Transferred Receivables, including
Collections with respect thereto, or the Seller Collateral without the signature
of the Seller or, as applicable, the Conduit Purchaser or the Committed
Purchaser, as applicable, to the extent permitted by applicable law. A carbon,
photographic or other reproduction of this Agreement or of any notice or
financing statement covering the Transferred Receivables, the Seller Collateral
or any part thereof shall be sufficient as a notice or financing statement where
permitted by law.
Section 14.16. Rights under Receivables Termination Agreement.
The Buyer hereby assigns all of its rights and interests in, to and under that
certain Receivables Purchase Termination and Reassignment Agreement dated as of
August 30, 2002 (the "Termination Agreement") among Manufacturers and Traders
Trust Company, Avondale Receivables Master Trust, Avondale Receivables Company,
Avondale ▇▇▇▇▇, Inc., Falcon Asset Securitization Corporation and Bank One,
N.A., to the Administrative Agent (on behalf of itself and the Purchasers) and
acknowledges and agrees that each of the Purchasers and the Administrative Agent
have entered into the transactions contemplated by this Agreement and the
Related Documents in express reliance upon the terms of the Termination
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
68
IN WITNESS WHEREOF, the parties have caused this Receivables
Purchase and Servicing Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
AVONDALE FUNDING, LLC, as the Seller
By
---------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇
Telecopy:
------------------------
AVONDALE ▇▇▇▇▇, INC., as the Servicer
By
---------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy (▇▇▇) ▇▇▇-▇▇▇▇
REDWOOD RECEIVABLES CORPORATION, as the
Conduit Purchaser
By
-------------------------------------
Name:
Title: Assistant Secretary
Address: c/o General Electric
Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Purchaser
By
-------------------------------------
Name :
Title: Duly Authorized Signatory
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President -
Portfolio/Avondale
Telephone: (203) 316-_____
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By
-------------------------------------
Name:
Title: Duly Authorized Signatory
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President -
Portfolio/Avondale
Telephone: (203) 316-_____
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ACKNOWLEDGED AND AGREED:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent
By
--------------------------------------
Name:
Title: Duly Authorized Signatory
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President
Telephone: (203) 316-_____
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit 2.02(a) to Purchase Agreement
FORM OF COMMITMENT REDUCTION NOTICE
[Insert Date]
Redwood Receivables Corporation
c/o General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Redwood Administrator
General Electric Capital Corporation,
as Administrative Agent
c/o General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Portfolio/Avondale
Re: Receivables Purchase and Servicing Agreement
dated as of August 30, 2002
-----------------------------------------------------
Ladies and Gentlemen:
This notice is given pursuant to Section 2.02(a) of that
certain Receivables Purchase and Servicing Agreement dated as of August 30, 2002
(the "PURCHASE AGREEMENT"), by and among Avondale Funding, LLC (the "SELLER"),
Avondale ▇▇▇▇▇, Inc., (the "ORIGINATOR"), in its capacity as servicer thereunder
(in such capacity, the "SERVICER"), Redwood Receivables Corporation as Conduit
Purchaser (in such capacity, the "CONDUIT PURCHASER"), and General Electric
Capital Corporation, as a committed purchaser (in such capacity, the "COMMITTED
PURCHASER" and as administrative agent for the Conduit Purchaser and the
Committed Purchaser thereunder (in such capacity, the "ADMINISTRATIVE AGENT").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Purchase Agreement.
Pursuant to Section 2.02(a) of the Purchase Agreement, the
Seller hereby irrevocably notifies the Purchasers and the Administrative Agent
of its election to permanently reduce the Maximum Purchase Limit to [$_____],
effective as of [_____ __], [___] (which is a Business Day at least ten days
after the date this notice is given). This reduction is the [first/second]
reduction for the current calendar year permitted by Section 2.02(a) of the
Purchase Agreement. After such reduction, the Maximum Purchase Limit will not be
less than the greater of (i) the outstanding Capital Investment or (ii)
$50,000,000.
Very truly yours,
AVONDALE FUNDING, LLC
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Exhibit 2.02(b) to Purchase Agreement
FORM OF COMMITMENT TERMINATION NOTICE
[Insert Date]
Redwood Receivables Corporation
c/o General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Redwood Administrator
General Electric Capital Corporation,
as Administrative Agent
c/o General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Portfolio/Avondale
Re: Receivables Purchase and Servicing Agreement
dated as of August 30, 2002
-----------------------------------------------------
Ladies and Gentlemen:
This notice is given pursuant to Section 2.02(b) of that
certain Receivables Purchase and Servicing Agreement dated as of August 30, 2002
(the "PURCHASE AGREEMENT"), by and among Avondale Funding, LLC (the "SELLER"),
Avondale ▇▇▇▇▇, Inc., (the "ORIGINATOR"), in its capacity as servicer thereunder
(in such capacity, the "SERVICER"), Redwood Receivables Corporation as Conduit
Purchaser (in such capacity, the "CONDUIT PURCHASER"), and General Electric
Capital Corporation, as a committed purchaser (in such capacity, the "COMMITTED
PURCHASER" and as administrative agent for the Conduit Purchaser and the
Committed Purchaser thereunder (in such capacity, the "ADMINISTRATIVE AGENT").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Purchase Agreement.
Pursuant to Section 2.02(b) of the Purchase Agreement, the
Seller hereby irrevocably notifies the Purchasers and the Administrative Agent
of its election to terminate the Maximum Purchase Limit effective as of
[_______], [___] (which is a Business Day at least 30 days after the date this
notice is given). In connection therewith, the Seller shall reduce Capital
Investment to zero on or prior to such date and make all other payments required
by Section 2.03(c) and pay any other fees that are due and payable pursuant to
the Fee Letter at the time and in the manner specified therein.
Very truly yours,
AVONDALE FUNDING, LLC
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Exhibit 2.03(a) to Purchase Agreement
AVONDALE FUNDING, LLC
INVESTMENT BASE CERTIFICATE
[Please see attached]
Exhibit 2.03(b) to Purchase Agreement
FORM OF CAPITAL PURCHASE REQUEST
[Insert Date]
Redwood Receivables Corporation
c/o General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Redwood Administrator
General Electric Capital Corporation,
as Administrative Agent
c/o General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Portfolio/Avondale
Re: Receivables Purchase and Servicing Agreement
dated as of August 30, 2002
-----------------------------------------------------
Ladies and Gentlemen:
This notice is given pursuant to Section 2.03(b) of that
certain Receivables Purchase and Servicing Agreement dated as of August 30, 2002
(the "PURCHASE AGREEMENT"), by and among Avondale Funding, LLC (the "SELLER"),
Avondale ▇▇▇▇▇, Inc., (the "ORIGINATOR"), in its capacity as servicer thereunder
(in such capacity, the "SERVICER"), Redwood Receivables Corporation as Conduit
Purchaser (in such capacity, the "CONDUIT PURCHASER"), and General Electric
Capital Corporation, as a committed purchaser (in such capacity, the "COMMITTED
PURCHASER" and as administrative agent for the Conduit Purchaser and the
Committed Purchaser thereunder (in such capacity, the "ADMINISTRATIVE AGENT").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Purchase Agreement.
Pursuant to Section 2.01 of the Purchase Agreement, the Seller
hereby requests that a Capital Purchase be made from the Seller on [_____ __],
[____] (which is a Business Day), in the amount of [$_____], to be disbursed to
the Seller in accordance with Section 2.04(b) of the Purchase
Agreement. The Seller hereby confirms that the conditions set forth in Section
3.02 of the Purchase Agreement have been satisfied.
Very truly yours,
AVONDALE FUNDING, LLC
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Exhibit 2.03(c) to Purchase Agreement
FORM OF REPAYMENT NOTICE
[Insert Date]
Redwood Receivables Corporation
c/o General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Redwood Administrator
General Electric Capital Corporation,
as Administrative Agent
c/o General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Portfolio/Avondale
Re: Receivables Purchase and Servicing Agreement
dated as of August 30, 2002
-----------------------------------------------------
Ladies and Gentlemen:
This notice is given pursuant to Section 2.03(c) of that
certain Receivables Purchase and Servicing Agreement dated as of August 30, 2002
(the "PURCHASE AGREEMENT"), by and among Avondale Funding, LLC (the "SELLER"),
Avondale ▇▇▇▇▇, Inc., (the "ORIGINATOR"), in its capacity as servicer thereunder
(in such capacity, the "SERVICER"), Redwood Receivables Corporation as Conduit
Purchaser (in such capacity, the "CONDUIT PURCHASER"), and General Electric
Capital Corporation, as a committed purchaser (in such capacity, the "COMMITTED
PURCHASER" and as administrative agent for the Conduit Purchaser and the
Committed Purchaser thereunder (in such capacity, the "ADMINISTRATIVE AGENT").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Purchase Agreement.
Pursuant to Section 2.03(c) of the Purchase Agreement, the
Seller hereby notifies the Purchasers and the Administrative Agent of its
request to reduce the Capital Investment by [$_____] effective as of [_____ __],
[___] (which is a Business Day), from [Collections/other sources]. In connection
therewith, the Seller will pay to the Administrative Agent (1) all Daily Yield
accrued on the Capital Investment being reduced through but excluding the date
of such reduction and (2) any and all Breakage Costs payable under Section 2.10
of the Purchase Agreement by virtue thereof.
Very truly yours,
AVONDALE FUNDING, LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit 2.04(a)
FORM OF PURCHASE ASSIGNMENT
THIS PURCHASE ASSIGNMENT (the "PURCHASE ASSIGNMENT") is
entered into as of __________, 2002, by and between AVONDALE FUNDING, LLC
("SELLER") and GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent
under the Purchase Agreement described below (the "ADMINISTRATIVE AGENT").
1. We refer to that certain Receivables Purchase and Servicing
Agreement (the "PURCHASE AGREEMENT") of even date herewith among the Seller, the
Servicer (as defined therein), the Purchasers (as defined therein) and the
Administrative Agent. All of the terms, covenants and conditions of the Purchase
Agreement are hereby made a part of this Purchase Assignment and are deemed
incorporated herein in full. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Purchase Agreement.
2. For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Seller hereby sells to each
Purchaser, without recourse, except as provided in Section 12.01 of the Purchase
Agreement, an undivided interest in all of the Seller's right, title and
interest in, under and to all Transferred Receivables (including all
Collections, Records and proceeds with respect thereto) sold from time to time
by the Seller to such Purchaser under the Purchase Agreement to the extent of
such Purchaser's Purchaser Interest and subject to the terms and conditions of
the Purchase Agreement.
3. The Seller hereby covenants and agrees to sign, sell or
execute and deliver, or cause to be signed, sold or executed and delivered, and
to do or make, or cause to be done or made, upon request of each Purchaser and
at the Seller's expense, any and all agreements, instruments, papers, deeds,
acts or things, supplemental, confirmatory or otherwise, as may be reasonably
required by such Purchaser for the purpose of or in connection with acquiring or
more effectively vesting in such Purchaser or evidencing the vesting in such
Purchaser of the property, rights, title and interests of the Seller sold
hereunder or intended to be sold hereunder to such Purchaser.
4. Wherever possible, each provision of this Purchase
Assignment shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Purchase Assignment shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Purchase Assignment.
5. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS PURCHASE ASSIGNMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6. THIS PURCHASE ASSIGNMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND
ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, the parties have caused this Purchase
Assignment to be executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
AVONDALE FUNDING, LLC GENERAL ELECTRIC CAPITAL
CORPORATION, AS ADMINISTRATIVE
AGENT
By: By:
----------------------------------- ------------------------------
Name: Name:
--------------------------------- ----------------------------
Title: Title:
-------------------------------- ---------------------------
Exhibit 3.01(a)(i) to Purchase Agreement
FORM OF OFFICER'S CERTIFICATE AS TO SOLVENCY
AVONDALE FUNDING, LLC
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of
Avondale Funding, LLC (the "SELLER"), hereby certify in connection with that
certain Receivables Purchase and Servicing Agreement (the "PURCHASE AGREEMENT")
dated as of August 30, 2002 by and among the Seller, Avondale ▇▇▇▇▇, Inc., (the
"ORIGINATOR"), in its capacity as servicer thereunder (in such capacity, the
"SERVICER"), Redwood Receivables Corporation as Conduit Purchaser (in such
capacity, the "CONDUIT PURCHASER"), and General Electric Capital Corporation, as
a committed purchaser (in such capacity, the "COMMITTED PURCHASER" and as
administrative agent for the Conduit Purchaser and the Committed Purchaser
thereunder (in such capacity, the "ADMINISTRATIVE AGENT"), as follows:
1. Capitalized terms herein and not otherwise defined shall
have the respective meanings ascribed to them in the Purchase Agreement.
2. Both before and after giving effect to (a) the transactions
contemplated by the Purchase Agreement and the other Related Documents and (b)
the payment and accrual of all transaction costs in connection with the
foregoing, the Seller is and will be Solvent. The Seller has no Debt to any
Person other than pursuant to the transactions expressly permitted by the
Purchase Agreement and the other Related Documents.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of __________, ___.
AVONDALE FUNDING, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit 3.01(a)(ii)(A) to Purchase Agreement
FORM OF OFFICER'S CLOSING CERTIFICATE OF SELLER
AVONDALE FUNDING, LLC
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of
Avondale Funding, LLC (the "SELLER"), hereby certify in connection with that
certain Receivables Purchase and Servicing Agreement (the "PURCHASE AGREEMENT")
dated as of August 30, 2002 by and among the Seller, Avondale ▇▇▇▇▇, Inc., (the
"ORIGINATOR"), in its capacity as servicer thereunder (in such capacity, the
"SERVICER"), Redwood Receivables Corporation as Conduit Purchaser (in such
capacity, the "CONDUIT PURCHASER"), and General Electric Capital Corporation, as
a committed purchaser (in such capacity, the "COMMITTED PURCHASER" and as
administrative agent for the Conduit Purchaser and the Committed Purchaser
thereunder (in such capacity, the "ADMINISTRATIVE AGENT"), as follows:
1. Capitalized terms herein and not otherwise defined shall
have the respective meanings ascribed to them in the Purchase Agreement.
2. Since the date of the Seller's formation, (a) the Seller
has not incurred any obligations, contingent or non-contingent liabilities,
liabilities for charges, long-term leases or unusual forward or long-term
commitments that, alone or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, (b) no contract, lease or other agreement or
instrument has been entered into by the Seller or has become binding upon the
Seller's assets and no law or regulation applicable to the Seller has been
adopted that has had or could reasonably be expected to have a Material Adverse
Effect, and (c) the Seller is not in default and no third party is in default
under any material contract, lease or other agreement or instrument to which the
Seller is a party that alone or in the aggregate could reasonably be expected to
have a Material Adverse Effect. Since the date of the Seller's formation, no
event has occurred that alone or together with other events could reasonably be
expected to have a Material Adverse Effect.
3. Each of the representations and warranties of the Seller
contained in any of the Related Documents are true and correct on and as of the
Closing Date as though made on and as of such date (except to the extent any
such representation and warranty relates solely to an earlier date). No
Incipient Termination Event or Termination Event shall have occurred and be
continuing, or would result after giving effect to any of the transactions
contemplated on the Closing Date. No "default or "event of default" exists under
the Credit Facility or the Indenture.
4. The Seller is in material compliance with all federal,
state, and local laws and regulations, including those relating to labor and
environmental matters and ERISA.
5. Except as otherwise indicated on a schedule to a Related
Document or another schedule delivered pursuant to the Schedule of Documents, or
as otherwise consented to by the Purchasers and the Administrative Agent, the
Seller has delivered to the Purchasers and the Administrative Agent true and
correct copies of all documents required to be delivered to such Persons
pursuant to the Schedule of Documents, all such documents are complete and
correct in all material respects on and as of the Closing Date, and each and
every other contingency to the closing of the transactions contemplated by the
Related Documents has been performed.
6. No Adverse Claims have arisen or been granted with respect
to the Seller Collateral other than Permitted Seller Encumbrances.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of __________, ____.
AVONDALE FUNDING, LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit 3.01(a)(ii)(B) to Purchase Agreement
FORM OF OFFICER'S POST-CLOSING CERTIFICATE OF SELLER
AVONDALE FUNDING, LLC
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of
Avondale Funding, LLC (the "SELLER"), hereby certify in connection with that
certain Receivables Purchase and Servicing Agreement (the "PURCHASE AGREEMENT")
dated as of August 30, 2002 by and among the Seller, Avondale ▇▇▇▇▇, Inc., (the
"ORIGINATOR"), in its capacity as servicer thereunder (in such capacity, the
"SERVICER"), Redwood Receivables Corporation as Conduit Purchaser (in such
capacity, the "CONDUIT PURCHASER"), and General Electric Capital Corporation, as
a committed purchaser (in such capacity, the "COMMITTED PURCHASER" and as
administrative agent for the Conduit Purchaser and the Committed Purchaser
thereunder (in such capacity, the "ADMINISTRATIVE AGENT"), as follows:
1. Capitalized terms herein and not otherwise defined shall
have the respective meanings ascribed to them in the Purchase Agreement.
2. Each of the representations and warranties of the Seller
contained in any of the Related Documents are true and correct on and as of the
date hereof as though made on and as of such date (except to the extent any such
representation and warranty relates solely to an earlier date), and no Incipient
Termination Event or Termination Event has occurred and is continuing, or would
result from the transactions effected pursuant thereto as of the date hereof.
3. The Seller is in material compliance with all federal,
state, and local laws and regulations, including those relating to labor and
environmental matters and ERISA.
4. No Adverse Claims have arisen or been granted with respect
to the Seller Collateral other than Permitted Seller Encumbrances.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of __________, ____.
AVONDALE FUNDING, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit 3.01(a)(iii)(A) to Purchase Agreement
FORM OF OFFICER'S CLOSING CERTIFICATE OF SERVICER
AVONDALE ▇▇▇▇▇, INC.
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of
Avondale ▇▇▇▇▇, Inc, hereby certify in connection with that certain Receivables
Purchase and Servicing Agreement (the "PURCHASE AGREEMENT") dated as of August
30, 2002 by and among Avondale ▇▇▇▇▇, Inc., (the "ORIGINATOR"), in its capacity
as servicer thereunder (in such capacity, the "SERVICER"), Avondale Funding, LLC
(the "SELLER"), Redwood Receivables Corporation as Conduit Purchaser (in such
capacity, the "CONDUIT PURCHASER"), and General Electric Capital Corporation, as
a committed purchaser (in such capacity, the "COMMITTED PURCHASER" and as
administrative agent for the Conduit Purchaser and the Committed Purchaser
thereunder (in such capacity, the "ADMINISTRATIVE AGENT"), as follows:
1. Capitalized terms herein and not otherwise defined shall
have the respective meanings ascribed to them in the Purchase Agreement.
2. Since May 31, 2002, (a) the Servicer has not incurred any
obligations, contingent or non-contingent liabilities, liabilities for charges,
long-term leases or unusual forward or long-term commitments that, alone or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
(b) no contract, lease or other agreement or instrument has been entered into by
the Servicer or has become binding upon the Servicer's assets and no law or
regulation applicable to the Servicer has been adopted that has had or could
reasonably be expected to have a Material Adverse Effect, and (c) the Servicer
is not in default and no third party is in default under any material contract,
lease or other agreement or instrument to which the Servicer is a party that
alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Since May 31, 2002, no event has occurred that alone or together
with other events could reasonably be expected to have a Material Adverse
Effect.
3. Both before and after giving effect to (i) the transactions
contemplated by the Purchase Agreement and the other Related Documents and (ii)
the payment and accrual of all transaction costs in connection with the
foregoing, the Servicer is and will be Solvent.
4. Each of the representations and warranties of the Servicer
contained in any of the Related Documents are true and correct on and as of the
Closing Date as though made on and as of such date (except to the extent any
such representation and warranty relates solely to an earlier date). No Event of
Servicer Termination nor Incipient Servicer Termination Event shall
have occurred and be continuing, or would result after giving effect to any of
the transactions contemplated on the Closing Date. No "default" or "event of
default" exists under the Credit Facility or under the Indenture.
5. The Servicer is in material compliance with all federal,
state, and local laws and regulations, including those relating to labor and
environmental matters and ERISA.
6. Except as otherwise indicated on a schedule to a Related
Document or another schedule delivered pursuant to the Schedule of Documents, or
as otherwise consented to by the Purchasers and the Administrative Agent, the
Servicer has delivered to the Purchasers and the Administrative Agent true and
correct copies of all documents required to be delivered to such Persons
pursuant to the Schedule of Documents, all such documents are complete and
correct in all material respects on and as of the Closing Date, and each and
every other contingency to the closing of the transactions contemplated by the
Related Documents has been performed.
7. No Adverse Claims have arisen or been granted with respect
to the Transferred Receivables of the Servicer other than Permitted Originator
Encumbrances.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of __________, ____.
AVONDALE ▇▇▇▇▇, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Exhibit 3.01(a)(iii)(B) to Purchase Agreement
FORM OF OFFICER'S POST-CLOSING CERTIFICATE OF SERVICER
AVONDALE ▇▇▇▇▇, INC.
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of
Avondale ▇▇▇▇▇, Inc., hereby certify in connection with that certain Receivables
Purchase and Servicing Agreement (the "PURCHASE AGREEMENT") dated as of August
30, 2002 by and among Avondale ▇▇▇▇▇, Inc., (the "ORIGINATOR"), in its capacity
as servicer thereunder (in such capacity, the "SERVICER"), Avondale Funding, LLC
(the "SELLER"), Redwood Receivables Corporation as Conduit Purchaser (in such
capacity, the "CONDUIT PURCHASER"), and General Electric Capital Corporation, as
a committed purchaser (in such capacity, the "COMMITTED PURCHASER" and as
administrative agent for the Conduit Purchaser and the Committed Purchaser
thereunder (in such capacity, the "ADMINISTRATIVE AGENT"), as follows:
1. Capitalized terms herein and not otherwise defined shall
have the respective meanings ascribed to them in the Purchase Agreement.
2. Each of the representations and warranties of the Servicer
contained in any of the Related Documents are true and correct on and as of the
date hereof as though made on and as of such date (except to the extent any such
representation and warranty relates solely to an earlier date), and no Incipient
Servicer Termination Event or Event of Servicer Termination has occurred and is
continuing, or would result from the transactions effected pursuant thereto as
of the date hereof.
3. The Servicer is in material compliance with all federal,
state, and local laws and regulations, including those relating to labor and
environmental matters and ERISA.
4. No Adverse Claims have arisen or been granted with respect
to the Transferred Receivables of the Servicer other than Permitted Originator
Encumbrances.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of __________, ____.
AVONDALE ▇▇▇▇▇. INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit 3.01(a)(iv)
to
Purchase Agreement
FORM OF MONTHLY REPORT
Avondale Funding, LLC
Exhibit 3.01(a)(iv)-I - Consolidated Sales and Receivables Analysis
Exhibit 3.01(a)(iv)-II - Consolidated Aging
Exhibit 3.01(a)(iv)-III - Accounts Receivable Reconciliation
Exhibit 3.01(a)(iv)-IV - Overcollateralization Summary
Exhibit 3.01(a)(iv)-V - Trigger Calculations
Exhibit 3.01(a)(iv)-VI - Dynamic Purchase Rate Calculation
[Please see attached]
Exhibit 10.03
Form of
POWER OF ATTORNEY
This Power of Attorney is executed and delivered by [Seller or
Servicer] ("AVONDALE"), as the [Seller/Servicer] under the Purchase Agreement
(each as defined below), to General Electric Capital Corporation, as
Administrative Agent under the Purchase Agreement (hereinafter referred to as
"ATTORNEY"), pursuant to that certain Receivables Purchase and Servicing
Agreement dated as of August 30, 2002 (the "PURCHASE AGREEMENT"), by and among
AVONDALE, the other parties thereto and Attorney and the other Related
Documents. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Purchase Agreement. No person to whom this
Power of Attorney is presented, as authority for Attorney to take any action or
actions contemplated hereby, shall inquire into or seek confirmation from
AVONDALE as to the authority of Attorney to take any action described below, or
as to the existence of or fulfillment of any condition to this Power of
Attorney, which is intended to grant to Attorney unconditionally the authority
to take and perform the actions contemplated herein and any Person may
irrevocably rely on this Power of Attorney as evidence of the Attorney's power
and authority. The power of attorney granted hereby is coupled with an interest
and may not be revoked or cancelled by AVONDALE until all Seller Secured
Obligations under the Related Documents have been indefeasibly paid in full and
Attorney has provided its written consent thereto.
AVONDALE hereby irrevocably constitutes and appoints Attorney
(and all officers, employees or agents designated by Attorney), with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in its place and stead and in its name or in Attorney's own
name, from time to time in Attorney's discretion, upon the occurrence and during
the continuance of any Termination Event, to take any and all appropriate action
and to execute and deliver any and all documents and instruments that may be
necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, hereby grants to Attorney the
power and right, on its behalf, without notice to or assent by it to do the
following:
(a) open mail for it, and ask, demand, collect, give
acquittances and receipts for, take possession of, or endorse and receive
payment of, any checks, drafts, notes, acceptances, or other instruments for the
payment of moneys due, and sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, and notices in connection with any of its property;
[Seller only: (b) effect any repairs to any of its assets, or
continue or obtain any insurance and pay all or any part of the premiums
therefor and costs thereof, and make, settle and adjust all claims under such
policies of insurance, and make all determinations and decisions with respect to
such policies;]
(c) pay or discharge any taxes, Liens, or other encumbrances
levied or placed on or threatened against it or [Seller: its property][Servicer:
the Seller Collateral or Transferred Receivables];
(d) [Seller: defend any suit, action or proceeding brought
against it][Servicer: defend any suit, action or proceeding relating to the
Seller Collateral or Transferred Receivables brought against it] if it does not
defend such suit, action or proceeding or if Attorney believes that it is not
pursuing such defense in a manner that will maximize the recovery to Attorney,
and settle, compromise or adjust any suit, action, or proceeding described above
and, in connection therewith, give such discharges or releases as Attorney may
deem appropriate;
(e) file or prosecute any claim, Litigation, suit or
proceeding in any court of competent jurisdiction or before any arbitrator, or
take any other action otherwise deemed appropriate by Attorney [Servicer: , in
each case, relating to the Seller Collateral or Transferred Receivables,] for
the purpose of collecting any and all such moneys due to it whenever payable and
to enforce any other right [Seller: in respect of its property][Servicer: in
respect of the Seller Collateral or Transferred Receivables]; and
(f) sell, transfer, pledge, make any agreement with respect
to, or otherwise deal with, [Seller: any of its property,][Servicer: the Seller
Collateral or Transferred Receivables,] and execute, in connection with such
sale or action, any endorsements, assignments or other instruments of conveyance
or transfer in connection therewith.
AVONDALE hereby ratifies, to the extent permitted by law, all that said
attorneys shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney is executed by
AVONDALE, and AVONDALE has caused its seal to be affixed pursuant to the
authority of its board of directors this [____] day of [___________, ____].
AVONDALE
ATTEST:
--------------------------
By: (SEAL)
-----------------------------
Title:
--------------------------
[NOTARIZATION IN APPROPRIATE FORM FOR THE STATE OF EXECUTION IS REQUIRED.]
EXHIBIT A TO THE PURCHASE AGREEMENT
CREDIT AND COLLECTION POLICY
[Please see attached]
Annex G to Purchase Agreement
FINANCIAL COVENANTS
(a) Fixed Charge Coverage Ratio. The Parent and its
Subsidiaries shall have on a consolidated basis, as of the end of each Fiscal
Quarter set forth below, a Fixed Charge Coverage then ended of not less than the
following:
Fiscal Quarter Ending Fixed Charge Coverage Ratio
--------------------- ---------------------------
August 2002 1.50:1.00
November 2002 1.75:1.00
February 2003 1.75:1.00
May 2003 1.75:1.00
August 2003 1.75:1.00
November 2003 1.75:1.00
February 2004 1.75:1.00
May 2004 1.75:1.00
August 2004 1.75:1.00
Thereafter 1.75:1.00
(b) Minimum Consolidated Cashflow. Parent and its
Subsidiaries shall have on a consolidated basis for each Fiscal Quarter set
forth below Consolidated Cashflow of not less than the following:
Fiscal Quarter Ending Minimum Consolidated Cashflow
--------------------- -----------------------------
August 2002 $54,400,000
November 2002 $57,100,000
February 2003 $56,200,000
May 2003 $60,000,000
August 2003 $60,000,000
November 2003 $60,000,000
February 2004 $60,000,000
May 2004 $60,000,000
August 2004 $60,000,000
Thereafter $60,000,000
(c) Total Debt to Cash Flow Ratio. The Total Debt to Cash Flow
Ratio of the Parent and its Subsidiaries on a consolidated basis shall be less
than the following for each Fiscal Quarter set forth below:
Fiscal Quarter Ending Total Debt to Cash Flow Ratio
--------------------- -----------------------------
August 2002 4.50:1.00
November 2002 4.25:1.00
February 2003 4.00:1.00
May 2003 4.00:1.00
August 2003 4.00:1.00
November 2003 4.00:1.00
February 2004 4.00:1.00
May 2004 4.00:1.00
August 2004 4.00:1.00
Thereafter 4.00:1.00
Capitalized terms used in this Annex G and not otherwise
defined below shall have the respective meanings ascribed to them in Annex X.
The following terms shall have the respective meanings set forth below:
"Capital Stock" means any nonredeemable capital stock of the
Parent or any Consolidated Subsidiary (to the extent issued to a Person other
than the Parent), whether common or preferred.
"Capitalized Lease" means any lease that is required to be
capitalized on a consolidated balance sheet of the lessee and its subsidiaries
in accordance with GAAP.
"Consolidated Cash Flow" means for any period, for the Parent
and its Consolidated Subsidiaries, determined on a consolidated basis in
accordance with GAAP, and calculated for the Fiscal Quarter just ended and the
immediately preceding three Fiscal Quarters, Consolidated Net Income, plus (i)
Net Interest Expense (including interest on the Subordinated Debt) plus (ii)
income taxes plus (iii) depreciation plus (iv) amortization plus or minus, as
the case may be, (v) LIFO Adjustments and plus (vi) the amount of any non-cash
write-offs of obsolete or surplus equipment, spare parts or real property, up to
but not in excess of $10,000,000 during any period of four consecutive Fiscal
Quarters.
"Consolidated Net Income" means, for any period, the Net
Income of the Parent and its Consolidated Subsidiaries determined on a
consolidated basis, but excluding (i) extraordinary items and (ii) any equity
interests of the Parent or any Subsidiary in the unremitted earnings of any
Person that is not a Subsidiary. For purposes of clause (i) of this definition,
extraordinary items shall include termination and severance payments to
employees and costs and expenses incurred or accrued in connection with the
closing of facilities, relating to or as a result of the acquisition of the
Graniteville Assets, but, as to cash items, only to the extent of
such cash items which were paid or incurred prior to the end of the first Fiscal
Quarter of the 1997 fiscal year and in an aggregate amount not exceeding
$5,000,000.
"Consolidated Subsidiary" means, at any date, any Subsidiary
or other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Parent in its consolidated financial statements
as of such date.
"Consolidated Total Funded Debt" means at any date the Funded
Debt of the Parent and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date.
"Current Maturities of Long Term Debt" means all payments in
respect of Long Term Debt (other than the Working Capital Obligations) that are
required to be made within one year from the date of determination, whether or
not the obligation to make such payments would constitute a current liability of
the obligor under GAAP.
"Debt" of any Person means, at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person to as lessee under
Capitalized Leases, (v) all obligations of such Person to reimburse any bank or
other Person in respect of amounts payable under a banker's acceptance, (vi) all
Redeemable Preferred Stock of such Person (in the event such Person is not a
corporation), (vii) all obligations of such Person to reimburse any bank or
other Person in respect of amounts paid or to be paid under a letter of credit
or similar instrument, (viii) all Debt of others secured by a Lien on any asset
of such Person, whether or not such Debt is assumed by such Person, (ix) all
Debt of others Guaranteed by such Person and (x) all Seller Secured Obligations;
provided, however, that that certain Lease Agreement dated as of May 16, 1997,
between Graniteville, L.L.C., as "Lessor", and Avondale ▇▇▇▇▇ Graniteville
Fabrics, Inc., as "Lessee" shall not constitute Debt for any purpose hereunder.
"Dividends" means any dividend or other distribution paid in
respect of any Capital Stock and Redeemable Preferred Stock (other than
dividends paid or payable in the form of additional Capital Stock or Redeemable
Preferred Stock).
"Fiscal Quarter" shall mean any fiscal quarter of the Parent.
"Fixed Charge Coverage Ratio" shall mean, on a consolidated
basis for the Parent and its Consolidated Subsidiaries, the ratio of (i)
Consolidated Cash Flow, less Dividends paid, for the Fiscal Quarter just ended
and the immediately preceding three Fiscal Quarters, to (ii) the sum of Net
Interest Expense for the Fiscal Quarter just ended and the immediately preceding
three Fiscal Quarters and Current Maturities of Long Term Debt, in each case
calculated as of the end of the Fiscal Quarter just ended.
"Funded Debt" of any Person shall mean all Debt of such Person
of the types described in clauses (i) through (vi), inclusive, and clause (x) of
the definition of Debt, regardless of the maturity thereof.
"Graniteville Assets" means the assets acquired by the
Originator from the Graniteville Company pursuant to that certain Graniteville
Asset Purchase Agreement dated as of March 31, 1996 among the Originator, the
Parent, Graniteville Company and Triarc Company.
"Guarantee" by any Person means any obligation, contingent or
otherwise of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term "Guarantee"
shall not include any endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a corresponding
meaning.
"Lien" means, with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title or preferential arrangement which has the practical effect of constituting
a security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this document, any Person shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"LIFO Adjustments" means adjustments to cost of goods sold
attributable to adjusting the carrying value of inventory under the last-in,
first-out method of accounting.
"Long Term Debt" means any Consolidated Total Funded Debt
which matures (or the maturity of which may at the option of the Parent or any
Consolidated Subsidiary be extended so that it matures) more than one year after
such date.
"Net Income" means, as applied to any Person, for any period,
the aggregate amount of net income of such Person, after taxes, for such period,
as determined in accordance with GAAP.
"Net Interest Expense" means, for any period, interest expense
(including capitalized interest, to the extent capitalized interest exceeds
$50,000 in any fiscal year, including interest, yield, discount or similar
amounts paid under the Purchase Agreement and the Related Documents) in respect
of Debt, less interest income.
"Redeemable Preferred Stock" of any Person means any preferred
stock issued by such Person which is either (i) mandatorily redeemable (by the
sinking fund or similar payments or otherwise) or (ii) redeemable at the option
of the holder thereof.
"Rolling Period" shall mean, as of the end of any Fiscal
Quarter, the immediately preceding four (4) Fiscal Quarters, including the
Fiscal Quarter then ending.
"Subordinated Debt" means (i) the 10.25% Subordinated Notes
and (ii) any other Debt, the payment of which has been expressly subordinated to
payment of the "Obligations" under (and as defined in) the Credit Facility
pursuant and subject to documents containing terms and conditions satisfactory
to the "Agent" under the Credit Facility and which has a maturity no earlier
than February 28, 2004.
"10.25% Subordinated Notes" means the "Senior Subordinated
Notes" due 2006 issued by the Originator on April 29, 1996, as amended,
modified, renewed or supplemented from time to time in accordance with the
provisions of the Credit Facility.
"Total Debt to Cash Flow Ratio" means the ratio of
Consolidated Total Funded Debt to Consolidated Cash Flow, calculated at the end
of each Fiscal Quarter.
"Working Capital Obligations" means the aggregate amount of
"Revolver Loans" and "Swing Loans" plus the amount of the "Letter of Credit
Obligations" outstanding at any time under (and as defined in) the Credit
Facility.
Rules of Construction Concerning Financial Covenants. Unless
otherwise specifically provided therein, any accounting term used in any Related
Document shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations thereunder shall be computed in accordance
with GAAP consistently applied. That certain items or computations are
explicitly modified by the phrase "in accordance with GAAP" shall in no way be
construed to limit the foregoing. If any Accounting Changes occur and such
changes result in a change in the calculation of the financial covenants,
standards or terms used in any Related Document, then the parties thereto agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such Accounting Changes with the desired result that the criteria for
evaluating the financial condition of such Persons and their Subsidiaries shall
be the same after such Accounting Changes as if such Accounting Changes had not
been made. If the parties thereto agree upon the required amendments thereto,
then after appropriate amendments have been executed and the underlying
Accounting Change with respect thereto has been implemented, any reference to
GAAP contained therein shall, only to the extent of such Accounting Change,
refer to GAAP consistently applied after giving effect to the implementation of
such Accounting Change. If such parties cannot agree upon the required
amendments within 30 days following the date of implementation of any Accounting
Change, then all financial statements delivered and all calculations of
financial covenants and other standards and terms in accordance with the Related
Documents shall be prepared, delivered and made without regard to the underlying
Accounting Change.
ANNEX 5.02(a)
to
PURCHASE AGREEMENT
REPORTING REQUIREMENTS OF THE SELLER
The Seller shall furnish, or cause to be furnished, to the
Purchaser, the Administrative Agent, the Collateral Agent and (in the case of
paragraph (g) below only) the Rating Agencies:
(a) (a) Monthly Report. As soon as available, and in
any event no later than 11:00 a.m. (New York time) on the twelfth Business Day
of each fiscal month, a Monthly Report in the form of Exhibit 3.01(a)(iv)
prepared by the Seller as of the last day of the previous fiscal month.
(b) (b) Annual Audited Financials. As soon as
available, and in any event within 90 days after the end of each fiscal year,
(i) a copy of the audited consolidated financial statements for such year for
the Seller, certified in each case in a manner satisfactory to the
Administrative Agent and the Collateral Agent by Crisp ▇▇▇▇▇▇ ▇▇▇▇▇ (or its
successor) or other nationally recognized independent public accountants
acceptable to the Administrative Agent and the Collateral Agent, with such
financial statements being prepared in accordance with GAAP applied consistently
throughout the period involved (except as approved by such accountants and
disclosed therein), (ii) a copy of the audited consolidated financial statements
for such year for the Parent and its Subsidiaries, certified in each case in a
manner satisfactory to the Administrative Agent and the Collateral Agent by
Crisp ▇▇▇▇▇▇ ▇▇▇▇▇ (or its successor) or other nationally recognized independent
public accountants acceptable to the Administrative Agent and the Collateral
Agent, with such financial statements being prepared in accordance with GAAP
applied consistently throughout the period involved (except as approved by such
accountants and disclosed therein) and (iii) a report from Crisp ▇▇▇▇▇▇ ▇▇▇▇▇
(or its successor) or other nationally recognized independent public accountants
acceptable to the Administrative Agent and the Collateral Agent (upon which
report the Administrative Agent and the Collateral Agent shall be entitled to
rely) to the effect that such firm has caused this Agreement to be reviewed and
that in the course of their audit of the Parent and its Subsidiaries no facts
have come to their attention to cause them to believe that any Termination Event
or Incipient Termination Event exists and in particular that they have no
knowledge of any failure on the part of the Parent or the Seller to comply with
the financial covenants in this Agreement or any failure on the part of the
Seller to comply with this Agreement in the preparation of the Monthly Reports
(including the Investment Base Certificates attached thereto) delivered during
the previous fiscal year, or if such is not the case, specifying any exception
and the nature thereof.
(c) (c) Quarterly Financials. As soon as available,
and in any event no later than 45 days following the end of each fiscal quarter
(other than a fiscal quarter which is also a fiscal year end), financial
information regarding the Parent and its Subsidiaries, certified by the chief
financial officer of the Parent, consisting of consolidated (i) unaudited
balance
sheets as of the close of such fiscal quarter and the related statements of
income and cash flows for that portion of the fiscal year ending as of the close
of such fiscal quarter and (ii) unaudited statements of income and cash flows
for such fiscal quarter, setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the Budgets
for such fiscal year, all prepared in accordance with GAAP (except for year-end
adjustments and the absence of footnotes). Such financial information shall be
accompanied by the certification of the chief financial officer of the Parent
that (A) such financial information presents fairly in accordance with GAAP the
financial position and results of operations of the Parent and its Subsidiaries,
on a consolidated basis, in each case as at the end of such quarter and for the
period then ended and (B) any other information presented, if any, is true,
correct and complete in all material respects and that there was no Incipient
Termination Event or Termination Event in existence as of such time or, if an
Incipient Termination Event or Termination Event shall have occurred and be
continuing, describing the nature thereof and all efforts undertaken to cure
such Incipient Termination Event or Termination Event. In addition, the Seller
shall furnish, or cause to be furnished, to the Administrative Agent and the
Collateral Agent, within 45 days after the end of each fiscal quarter and a
statement in reasonable detail (each, a "Compliance Certificate") showing the
calculations used in determining compliance with each financial covenant set
forth on Annex G.
(d) (d) Monthly Financials. As soon as available,
and in any event within 30 days after the end of each fiscal month, financial
information regarding the Parent and its Subsidiaries, certified by the Chief
Financial Officer of the Parent, consisting of consolidated (i) unaudited
balance sheets as of the close of such fiscal month and the related statements
of income and cash flows for that portion of the fiscal year ending as of the
close of such fiscal month and (ii) unaudited statements of income and cash
flows for such fiscal month, setting forth in comparative form the figures for
the corresponding period in the prior year and the figures contained in the
Budgets for such fiscal year, all prepared in accordance with GAAP.
(e) (e) Budget. As soon as available, but not later
than the earlier of (a) the later of (I) 30 days following the end of each
fiscal year or (II) the date the Board of Directors of the Parent and the
Originator has approved the Budget and (b) 90 days following the end of each
fiscal year, a Budget for the Parent and the Originator, approved by the Board
of Directors of the Parent and the Originator, for the then current fiscal year.
(f) (f) Management Letters. Copies of all management
letters, exception reports or similar letters or reports that, in any case,
contain (1) any material comments regarding the Originator or the Parent, within
thirty days after receipt thereof by the Seller or the Parent or any of its
Affiliates, or (2) any comments regarding the Seller, within five Business Days
after receipt thereof by the Seller or the Parent or any of its Affiliates, in
each case, received by the Seller or the Parent or any of its Affiliates from
its independent certified public accountants.
(g) (g) Default Notices. As soon as practicable, and
in any event within five Business Days after an Authorized Officer of the Seller
has actual knowledge of the existence thereof, telephonic or telecopied notice
of each of the following events, in each case
specifying the nature and anticipated effect thereof and what action, if any,
the Seller proposes to take with respect thereto, which notice, if given
telephonically, shall be promptly confirmed in writing on the next Business Day:
(i) (i) any Incipient Termination Event or
Termination Event;
(ii) (ii) any Adverse Claim made or asserted
against any of the Seller Collateral of which it becomes aware;
(iii) (iii) the occurrence of any event that
would have a material adverse effect on the aggregate value of the
Seller Collateral or on the assignments and Liens granted by the Seller
pursuant to this Agreement;
(iv) (iv) the occurrence of any event of the
type described in Sections 4.02(h)(i), (ii) or (iii) of the Sale
Agreement involving any Obligor obligated under Transferred Receivables
with an aggregate Outstanding Balance at such time of $100,000 or more;
(v) (v) the commencement of a case or
proceeding by or against the Seller seeking a decree or order in
respect of the Seller (A) under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar law,
(B) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for the Seller or for any
substantial part of its assets, or (C) ordering the winding-up or
liquidation of the affairs of the Seller;
(vi) (vi) the receipt of notice that (A) the
Seller is being placed under regulatory supervision, (B) any license,
permit, charter, registration or approval necessary for the conduct of
the Seller's business is to be, or may be, suspended or revoked, or (C)
the Seller is to cease and desist any practice, procedure or policy
employed by it in the conduct of its business if such cessation may
have a Material Adverse Effect;
(vii) (vii) (A) the occurrence of any "Event of
Default" (as defined in the Credit Facility), (B) the termination of
the Credit Facility or any event that has caused the Credit Facility to
cease to be in full force and effect, (C) the occurrence of any "Event
of Default" (as defined in the Indenture), (D) the termination of the
Indenture or any event that has caused the Indenture to cease to be in
full force and effect, (E) any default under any agreement between GE
Capital or its Affiliates, on the one hand, and Seller or its
Affiliates, on the other hand or (F) any default under any Debt of the
Parent or its Subsidiaries which is in excess of a principal amount of
$2,000,000; or
(viii) (viii) any other event, circumstance or
condition that has had or could reasonably be expected to have a
Material Adverse Effect.
(h) (h) SEC Filings and Press Releases. Promptly
upon their becoming available, copies of: (i) all financial statements, reports,
notices and proxy statements made
publicly available by the Seller or the Originator to its security holders; (ii)
all regular and periodic reports and all registration statements and
prospectuses, if any, filed by the Seller or the Originator with any securities
exchange or with the Securities and Exchange Commission or any governmental or
private regulatory authority; and (iii) all press releases and other statements
made available by the Seller or the Originator to the public concerning material
adverse changes or developments in the business of any such Person.
(i) (i) Litigation. Promptly upon learning thereof,
written notice of any Litigation affecting the Seller, the Transferred
Receivables or the Seller Collateral, whether or not fully covered by insurance,
and regardless of the subject matter thereof that (i) seeks damages in an amount
that would be reasonably likely to cause a Material Adverse Effect, (ii) seeks
injunctive relief, (iii) is instituted against any Plan, its fiduciaries or its
assets or against the Seller or any ERISA Affiliate of the Seller in connection
with any Plan, (iv) alleges criminal misconduct the Seller, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
violation of any Environmental Laws and could be reasonably expected to have a
Material Adverse Effect, or (vi) would, if determined adversely, have a Material
Adverse Effect.
(j) (j) Other Documents. Such other financial and
other information respecting the Transferred Receivables, the Contracts therefor
or the condition or operations, financial or otherwise, of the Seller or the
Originator or any of its Subsidiaries as the Purchaser, the Administrative Agent
or the Collateral Agent shall, from time to time, reasonably request.
(k) (k) Miscellaneous Certifications. As soon as
available, and in any event within 90 days after the end of each fiscal year,
(i) a Bringdown Certificate, (ii) a Servicer's Certificate, and (iii) if
requested, an opinion of counsel, in form and substance satisfactory to the
Purchaser, the Administrative Agent, and the Collateral Agent, reaffirming as of
the date of such opinion the opinion of counsel with respect to the Seller and
the Originators delivered to the Purchaser, the Administrative Agent and the
Collateral Agent on the Closing Date.
ANNEX 7.07
to
PURCHASE AGREEMENT
REPORTING REQUIREMENTS OF THE SERVICER
The Servicer shall furnish, or cause to be furnished, to the
Purchaser, the Administrative Agent and the Collateral Agent all of the
following (except if the Servicer is the Parent, in which case the Servicer
shall not be required to furnish the information required in paragraphs (a) and
(b) below):
(l) (a) Annual Audited Financials. As soon as
available and in any event within 90 days after the end of each fiscal year of
the Servicer, a copy of the audited consolidated financial statements of the
Servicer and its Subsidiaries for such year, certified in each case in a manner
satisfactory to the Administrative Agent and the Collateral Agent by Crisp
▇▇▇▇▇▇ ▇▇▇▇▇ (or any successor thereto) or another firm of nationally recognized
independent certified public accountants acceptable to the Administrative Agent
and the Collateral Agent (and accompanied by consolidating financial
information) with such financial statements being prepared in accordance with
GAAP applied consistently throughout the period involved (except as approved by
such accountants and disclosed therein).
(m) (b) Quarterly Financials. As soon as available,
and in any event no later than 45 days following the end of each fiscal quarter
(other than a fiscal quarter which is also a fiscal year end), financial
information regarding the Servicer and its Subsidiaries, certified by the chief
financial officer of the Servicer, consisting of consolidated (i) unaudited
balance sheets as of the close of such fiscal quarter and the related statements
of income and cash flows for that portion of the fiscal year ending as of the
close of such fiscal quarter and (ii) unaudited statements of income and cash
flows for such fiscal quarter, setting forth in comparative form the figures for
the corresponding period in the prior year and the figures contained in the
Budgets for such fiscal year, all prepared in accordance with GAAP (except for
year-end adjustments and the absence of footnotes). Such financial information
shall be accompanied by the certification of the chief financial officer of the
Servicer that (A) such financial information presents fairly in accordance with
GAAP the financial position and results of operations of the Servicer and its
Subsidiaries, on a consolidated basis, in each case as at the end of such
quarter and for the period then ended and (B) any other information presented,
if any, is true, correct and complete in all material respects and that there
was no Incipient Termination Event or Termination Event in existence as of such
time or, if an Incipient Termination Event or Termination Event shall have
occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Incipient Termination Event or Termination Event.
(n) (c) Quarterly Officer's Certificate. As soon as
available, and in any event within 45 days after the end of each of the first
three fiscal quarters of each fiscal year and 90 days after the end of each
fiscal year, an Officer's Certificate stating, as to each signer thereof, that
(i) a review of the activities of the Servicer during the preceding fiscal
quarter and of its
104
performance under this Agreement has been made under such officer's supervision,
(ii) to the best of such officer's knowledge, based on such review, the Servicer
has fulfilled all of its obligations under this Agreement throughout such period
or, if there has been a default in the fulfillment of any such obligation,
describing the nature and status thereof and all efforts undertaken to cure such
default, (iii) there was no Event of Servicer Termination in existence as of
such time or, if an Event of Servicer Termination shall have occurred and be
continuing, describing the nature and status thereof and all efforts undertaken
to cure such Event of Servicer Termination, (iv) the Servicer has complied with
each of its covenants under the Purchase Agreement and the other Related
Documents, including those covenants set forth in Section 7.07 of the Purchase
Agreement and Annex G, and (v) each of the representations and warranties of the
Servicer contained in the Purchase Agreement or in any other Related Document is
true and correct in all respects and with the same force and effect as though
made on and as of the date of such certification, except to the extent that any
such representation or warranty expressly relates to an earlier date and except
for changes therein expressly permitted therein.
(o) (d) Management Letters. Copies of all management
letters, exception reports or similar letters or reports that, in any case,
contain (1) any material comments regarding the Originator or the Parent, within
thirty days after receipt thereof by the Servicer or any of its Affiliates, or
(2) any comments regarding the Seller, within five Business Days after receipt
thereof by the Servicer or any of its Affiliates, in each case, received by the
Servicer or any of its Affiliates from its independent certified public
accountants.
(p) (e) Default Notices. As soon as practicable, and
in any event within five Business Days after an Authorized Officer of the
Servicer has actual knowledge of the existence thereof, telephonic or telecopied
notice of each of the following events, in each case specifying the nature and
anticipated effect thereof, which notice, if given telephonically, shall be
promptly confirmed in writing on the next Business Day:
(i) (i) any Incipient Termination Event,
Termination Event, Incipient Servicer Termination Event or Event of
Servicer Termination;
(ii) (ii) any Adverse Claim made or asserted
against any of the Seller Collateral of which it becomes aware;
(iii) (iii) the occurrence of any event that
would have a material adverse effect on the aggregate value of the
Seller Collateral or on the assignments and Liens granted by the Seller
pursuant to this Agreement;
(iv) (iv) the occurrence of any event of the
type described in Sections 4.02(h)(i), (ii) or (iii) of the Sale
Agreement involving any Obligor obligated under Transferred Receivables
with an aggregate Outstanding Balance at such time of $100,000 or more;
(v) (v) (A) the occurrence of any "Event of
Default" (as defined in the Credit Facility), (B) the termination of
the Credit Facility or any event that has caused
105
the Credit Facility to cease to be in full force and effect, (C) the
occurrence of any "Event of Default" (as defined in the Indenture), (D)
the termination of the Indenture or any event that has caused the
Indenture to cease to be in full force and effect, (E) any default
under any agreement between GE Capital or its Affiliates, on the one
hand, and Servicer or its Affiliates, on the other hand or (F) any
default under any Debt of the Servicer or its Subsidiaries which is in
excess of a principal amount of $2,000,000; or
(vi) (vi) any other event, circumstance or
condition that has had or could reasonably be expected to have a
Material Adverse Effect.
(q) (f) SEC Filings and Press Releases. Promptly
upon their becoming available, copies of: (i) all financial statements, reports,
notices and proxy statements made publicly available by the Servicer to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by the Servicer with any securities
exchange or with the Securities and Exchange Commission or any governmental or
private regulatory authority; and (iii) all press releases and other statements
made available by the Servicer to the public concerning material adverse changes
or developments in the business of any such Person.
(r) (g) Litigation. Promptly upon learning thereof,
written notice of any Litigation affecting the Originator, the Seller, the
Servicer, the Transferred Receivables or the Seller Collateral, whether or not
fully covered by insurance, and regardless of the subject matter thereof that
(i) is or is reasonably likely to be asserted by an Obligor with respect to any
Transferred Receivable and with respect to which the amount in dispute is or may
be reasonably expected to be in excess of $100,000, (ii) seeks damages in an
amount that would be reasonably likely to cause a Material Adverse Effect, (iii)
seeks injunctive relief, (iv) is instituted against any Plan, its fiduciaries or
its assets or against the Originator, the Servicer or the Seller or ERISA
Affiliate thereof in connection with any Plan, (v) alleges criminal misconduct
by the Originator, the Seller or the Servicer, (vi) alleges the violation of any
law regarding, or seeks remedies in connection with, any violation of any
Environmental Laws and could be reasonably expected to have a Material Adverse
Effect, or (vii) would, if determined adversely, have a Material Adverse Effect.
(s) (h) Servicing Fee. On each Settlement Date, a
certificate certifying that the Servicing Fee payable for the preceding
Settlement Period has been paid in accordance with the provisions of Section
7.05 of the Purchase Agreement.
(t) (i) Other Documents. Such other financial and
other information respecting the Transferred Receivables, the Contracts therefor
or the condition or operations, financial or otherwise, of the Servicer or any
of its Subsidiaries as the Purchaser, the Administrative Agent or the Collateral
Agent shall, from time to time, request.
106
SCHEDULE 4.01(B)
EXECUTIVE OFFICES; COLLATERAL LOCATIONS; CORPORATE OR OTHER NAMES;
ORGANIZATIONAL IDENTIFICATION NUMBER FEIN/SELLER
Chief Executive Office: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Principal Place of Business: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Other Offices: None
Premises within which any
Collateral is stored: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Location of Records: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Corporate, fictitious
or trade names: None
Organizational
Identification Number: 3560382
FEIN: ▇▇-▇▇▇▇▇▇▇
107
SCHEDULE 4.01(D)
LITIGATION/SELLER
None
108
SCHEDULE 4.01(H)
VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK/SELLER
Subsidiaries: None
Joint ventures or
partnerships: None
Affiliations: None
Issued and
outstanding stock: None; Seller is a limited liability company
whose sole member is Avondale ▇▇▇▇▇, Inc.
Outstanding Rights to
purchase, options,
warrants or
simular rights: None
109
SCHEDULE 4.01(I)
TAX MATTERS/SELLER
Taxable years for which Seller's or such Affiliates' tax returns are currently
being audited by the IRS: None
Agreements or documents with the IRS or any other Governmental entity extending
the period for tax assessment or collection of any charges: None
110
SCHEDULE 4.01(R)
DEPOSIT AND DISBURSEMENT ACCOUNTS/SELLER
DEPOSIT ACCOUNT NAME: BANK:
--------------- ----- -----
▇▇-▇▇▇-▇▇▇ Avondale Funding, LLC Wachovia Bank National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CONCENTRATION
ACCOUNT: NAME: BANK:
-------- ----- -----
▇▇-▇▇▇-▇▇▇ Avondale ▇▇▇▇▇, Inc. Wachovia Bank National Association
(f/k/a Wachovia Bank, N.A.)
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
LOCKBOX
LOCKBOX: ACCOUNT: NAME: BANK:
-------- -------- ----- -----
Avondale ▇▇▇▇▇, Inc. 101307 Avondale ▇▇▇▇▇, Inc. Wachovia Bank, National Association
P.O. Box 101307 Fabric Division (f/k/a Wachovia Bank, N.A.)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (Atlanta) ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Flows into Act. 13-022-948)
Avondale ▇▇▇▇▇, Inc. 101264 Avondale ▇▇▇▇▇, Inc. Wachovia Bank, National Association
P.O. Box 101264 Trucking Division (f/k/a Wachovia Bank, N.A.)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (Atlanta) ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Flows into Act. 13-022-948)
Avondale ▇▇▇▇▇, Inc. 101436 Avondale ▇▇▇▇▇, Inc. Wachovia Bank, National Association
P.O. Box 101436 Yarn Division (f/k/a Wachovia Bank, N.A.)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (Atlanta) ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Flows into Act. 13-022-948)
Avondale ▇▇▇▇▇, Inc. 951280 Avondale ▇▇▇▇▇, Inc. Wachovia Bank, National Association
▇.▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Fabrics (f/k/a Wachovia Bank of Texas)
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (Dallas) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Flows into Act. 13-022-948)
Avondale ▇▇▇▇▇, Inc. 75431 Avondale ▇▇▇▇▇, Inc. Wachovia Bank, National Association
▇.▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Fabrics (f/k/a ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (Charlotte) Attention: Lockbox 75431
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Flows into Act. 13-022-948)
111
SCHEDULE 5.01(B)
CORPORATE AND TRADE NAMES/SELLER
Seller will transact business only in the following corporate and/or trade
names: Avondale Funding, LLC
112
SCHEDULE 5.03(B)
EXISTING LIENS/SELLER
Existing Liens: None
113
FEE LETTER
August 30, 2002
Avondale Funding, LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇
Ladies and Gentlemen:
Reference is hereby made to that certain Receivables Purchase
and Servicing Agreement dated as of August 30, 2002 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Receivables
Purchase Agreement") among Avondale Funding, LLC (the "Seller"), Avondale ▇▇▇▇▇,
Inc., as the initial Servicer (the "Servicer"), Redwood Receivables Corporation,
as conduit purchaser (the "Conduit Purchaser"), and General Electric Capital
Corporation ("GE Capital"), as committed purchaser (the "Committed Purchaser")
and as administrative agent (the "Administrative Agent"). Capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Receivables Purchase Agreement.
Facility Structuring Fee. In consideration for the services
provided by GE Capital in connection with the arrangement and structuring of the
transactions contemplated by the Receivables Purchase Agreement, the Seller
hereby agrees to pay to GE Capital a facility structuring fee (the "Facility
Structuring Fee") of $450,000 on the Closing Date.
The Facility Structuring Fee shall be payable in immediately
available funds to such account as GE Capital may direct and shall be fully
earned when paid and nonrefundable. The fees, indemnities and other amounts
payable pursuant to the Receivables Purchase Agreement and the other agreements,
documents and instruments executed in connection therewith (including any
additional or replacement fee letters), shall in each case be in addition to the
Facility Structuring Fee provided for herein.
Certain Definitions. For purposes of the Receivables Purchase
Agreement, the following terms shall have the following meanings:
"Per Annum Daily Margin" shall mean (a) with respect to
Capital Investment made by the Conduit Purchaser, 0.80% and (b) with
respect to Capital Investment made by the Committed Purchaser, (i) at
the LIBOR Rate, 2.75% and (ii) at the Index Rate, a percentage equal to
the then applicable "Base Rate Applicable Margin" as set forth in the
definition of "Applicable Margin" contained in the Fourth Amendment
dated as of May 24, 2002 to the Second Amended and Restated Credit
Agreement dated as of September 28, 2000 among Avondale ▇▇▇▇▇, Inc.,
the financial institutions party thereto as "Banks" and Wachovia Bank,
National Association, as Agent (as such term is defined on the Closing
Date).
114
"Unused Commitment Fee Rate" shall mean 0.250%.
This letter constitutes the complete agreement among the
parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings relating the subject matter
hereof and thereof. No amendment, waiver, supplement or other modification of
this letter shall be effective unless made in writing and executed by each of
the parties hereto.
This letter shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns;
provided, that the Seller may not assign any of its obligations hereunder
without the prior written consent of the Administrative Agent.
THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
115
Signature Page
to
Receivables Purchase and Servicing Agreement
dated as of August 30, 2002
This letter may be executed in counterparts which, when taken
together, shall constitute an original. The delivery of an executed counterpart
hereof by facsimile shall constitute delivery of an executed counterpart hereof.
Sincerely,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Purchaser and as
Administrative Agent
By:
---------------------------------
Name:
Title: Duly Authorized Signatory
REDWOOD RECEIVABLES CORPORATION,
as Conduit Purchaser
By:
---------------------------------
Name:
Title: Assistant Secretary
Agreed to and accepted
this ____ day of August, 2002.
AVONDALE FUNDING, LLC.
By:
-----------------------------
Name:
Title: