PURCHASE, SALE AND CONTRIBUTION AGREEMENT
Dated as of August 15, 2002
among
THE ORIGINATORS NAMED HEREIN,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FUNDING LLC
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL & FINANCE CORPORATION
as the initial Servicer
TABLE OF CONTENTS
PAGE
Article I AGREEMENT TO PURCHASE, SELL AND CONTRIBUTE.........................................6
Section 1.1 Agreement To Purchase, Sell and Contribute......................6
Section 1.2 Timing of Purchases and Contributions...........................6
Section 1.3 Consideration for Purchases.....................................7
Section 1.4 Purchase and Sale Termination Date..............................7
Section 1.5 Intention of the Parties........................................7
Article II Reporting ........................................................................7
Section 2.1 Purchase Report.................................................7
Article III CONTRIBUTION AND PAYMENT OF PURCHASE PRICE.......................................8
Section 3.1 Initial Purchase Price Payment; Contribution....................8
Section 3.2 Subsequent Purchase Price Payments; Subsequent Contributions....8
Section 3.3 Settlement as to Specific Receivables and Dilution..............9
Article IV CONDITIONS OF PURCHASES..........................................................11
Section 4.1 Conditions Precedent (or Concurrent) to Initial Purchase.......11
Section 4.2 Certification as to Representations and Warranties.............12
Article V REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS.................................13
Section 5.1 Organization and Good Standing.................................13
Section 5.2 Due Qualification..............................................13
Section 5.3 Power and Authority; Due Authorization.........................13
Section 5.4 Valid Sale; Binding Obligations................................13
Section 5.5 No Violation...................................................13
Section 5.6 Proceedings....................................................14
Section 5.7 Bulk Sales Acts................................................14
Section 5.8 Government Approvals...........................................14
Section 5.9 Financial Condition............................................14
Section 5.10 Licenses and Contingent Liabilities............................14
Section 5.11 Margin Regulations.............................................14
Section 5.12 Quality of Title...............................................14
Section 5.13 Accuracy of Information........................................15
Section 5.14 Offices........................................................15
Section 5.15 Trade Names....................................................15
Section 5.16 Taxes..........................................................15
Section 5.17 Compliance with Applicable Laws................................16
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Section 5.18 Reliance on Separate Legal Identity............................16
Article VI COVENANTS OF THE ORIGINATORS.....................................................16
Section 6.1 Affirmative Covenants..........................................16
Section 6.2 Reporting Requirements.........................................17
Section 6.3 Negative Covenants.............................................18
Section 6.4 Cash Management Banks..........................................18
Section 6.5 Accounting for Purchases.......................................18
Section 6.6 Transaction Documents..........................................19
Article VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES.................19
Section 7.1 Rights of the Company..........................................19
Section 7.2 Responsibilities of Each Originator............................19
Section 7.3 Further Action Evidencing Purchases............................20
Section 7.4 Application of Collections.....................................20
Article VIII PURCHASE AND SALE TERMINATION EVENTS...........................................20
Section 8.1 Purchase and Sale Termination Events...........................20
Section 8.2 Remedies.......................................................21
Article IX INDEMNIFICATION..................................................................22
Section 9.1 Indemnities by the Originators.................................22
Article X MISCELLANEOUS ....................................................................23
Section 10.1 Amendments, etc................................................23
Section 10.2 Notices, etc...................................................24
Section 10.3 No Waiver; Cumulative Remedies.................................24
Section 10.4 Binding Effect; Assignability..................................24
Section 10.5 Governing Law..................................................24
Section 10.6 Costs, Expenses and Taxes......................................25
Section 10.7 Submission to Jurisdiction.....................................25
Section 10.8 Waiver of Jury Trial...........................................25
Section 10.9 Captions and Cross References; Incorporation by Reference......26
Section 10.10 Execution in Counterparts......................................26
Section 10.11 Acknowledgment and Agreement...................................26
Section 10.12 Additional Originators.........................................26
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EXHIBIT A - Form of Purchase Report
EXHIBIT B - Form of Company Note
EXHIBIT C - Form of Originator Assignment Certificate
EXHIBIT D - Office Locations / Jurisdiction of Incorporation
EXHIBIT E - Trade Names
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PURCHASE, SALE AND CONTRIBUTION AGREEMENT
THIS PURCHASE, SALE AND CONTRIBUTION AGREEMENT (this "AGREEMENT"),
dated as of August 15, 2002, is among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL & FINANCE
CORPORATION, a Delaware corporation ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL"), as the initial
Servicer (in such capacity, the "Servicer"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CONSTRUCTORS, INC.
("CONSTRUCTORS"), a Delaware corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENERGY CORPORATION
("ENERGY"), a Delaware corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ USA CORPORATION ("USA"), a
Delaware corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ POWER GROUP, INC. ("POWER"), a Delaware
corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, INC. ("ZACK"), a Delaware corporation, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ENERGY SERVICES, INC. ("ENERGY SERVICES"), a California corporation,
(Constructors, Energy, USA, Power, Zack and Energy Services and the originators
described in SECTION 10.12 are herein collectively called the "ORIGINATORS" and
individually called an "Originator"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FUNDING LLC, a Delaware
limited liability company (the "COMPANY").
DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
"ADVERSE CLAIM" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement; it being understood
that any thereof in favor of the Company or the Agent shall not constitute an
Adverse Claim.
"BUSINESS DAY" means any day that is not a Saturday, Sunday, or other
day on which national banks are authorized or required to close.
"CASH MANAGEMENT ACCOUNT" has the meaning given to it in the Loan and
Security Agreement.
"CASH MANAGEMENT BANK" has the meaning given to it in the Loan and
Security Agreement.
"CLOSING DATE" has the meaning given to it in SECTION 1.1.
"CODE" means the New York Uniform Commercial Code, as in effect from
time to time.
"COLLECTIONS" means, with respect to any Pool Receivable: (a) all
funds that are received by any Originator, the Company or the Servicer in
payment of any amounts owed in respect of such Receivable (including purchase
price, finance charges, interest and all other charges), or applied to amounts
owed in respect of such Pool Receivable (including insurance payments and net
proceeds of the sale or other disposition of repossessed goods or other
collateral or property of the related Obligor or any other Person directly or
indirectly liable for the payment of such Pool Receivable and available to be
applied thereon) and (b) all other proceeds of such Pool Receivable.
"COMPANY NOTE" has the meaning given to it in SECTION 3.1.
"CONTRACT" means, with respect to any Receivable, any and all
contracts, instruments, agreements, leases, invoices, notes or other writings
pursuant to which such Receivable arises or that evidence such Receivable or
under which an Obligor becomes or is obligated to make payment in respect of
such Receivable.
"CONTRIBUTION AMOUNT" means, with respect to any contributed
Receivable, the fair market value, net of assumed liabilities, of the
contributed property as agreed to by the Company and the applicable Originator.
"ELIGIBLE ACCOUNT" means any Receivable that, upon its acquisition by
the Company pursuant to this Agreement, will qualify as an "Eligible Account" as
such term is defined in the Loan and Security Agreement.
"INELIGIBLE ACCOUNT" means any Receivable that, upon its acquisition
by the Company pursuant to this Agreement, will not qualify as an Eligible
Account.
"MARKET VALUE" means, with respect to any Receivable and the Related
Rights, 99% of the Outstanding Balance of such Receivable.
"MATERIAL ADVERSE EFFECT" means, relative to any Person with respect
to any event or circumstance, a material adverse effect on:
(a) the assets, operations, business or financial condition of such
Person,
(b) the ability of any of such Person to perform its obligations
under this Agreement or any other Transaction Document to which it is a party,
(c) the validity or enforceability of any other Transaction Document,
or the validity, enforceability or collectibility of a material portion of the
Pool Receivables or
(d) the status, perfection, enforceability or priority of the
Company's or the Agent's interest in the Pool Assets.
"OBLIGOR" means, with respect to a Receivable, the Person obligated
to make payments pursuant to the Contract relating to such Receivable.
"ORIGINATOR ASSIGNMENT CERTIFICATE" means each assignment, in
substantially the form of EXHIBIT C to this Agreement, evidencing the Company's
ownership of the Receivables generated by a particular Originator, as the same
may be amended, supplemented, amended and restated, or otherwise modified from
time to time in accordance with this Agreement.
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof less any available discounts (whether or
not they will be taken) and net of customer deposits and unapplied cash
remitted.
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"PAYMENT DATE" means (i) the Closing Date and (ii) each Business Day
thereafter that the applicable Originator is open for business.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"POOL ASSETS" means (i) all Pool Receivables, (ii) all Related
Security with respect to such Pool Receivables, (iii) all Collections with
respect to such Pool Receivables, (iv) all Cash Management Accounts and all
amounts on deposit therein, and all certificates and instruments, if any, from
time to time evidencing such Cash Management Accounts and amounts on deposit
therein, (v) all rights (but none of the obligations) of the Company under this
Agreement and (vi) all proceeds of the foregoing.
"POOL RECEIVABLE" means a Receivable in the Receivables Pool.
"PURCHASE AND SALE INDEMNIFIED AMOUNTS" has the meaning given to it
in SECTION 9.1.
"PURCHASE AND SALE INDEMNIFIED PARTY" has the meaning given to it in
SECTION 9.1.
"PURCHASE AND SALE TERMINATION DATE" has the meaning given to it in
SECTION 1.4.
"PURCHASE AND SALE TERMINATION EVENT" has the meaning given to it in
SECTION 8.1.
"PURCHASE FACILITY" has the meaning given to it in SECTION 1.1.
"PURCHASE PRICE" has the meaning given to it in SECTION 3.1.
"PURCHASE REPORT" has the meaning given to it in SECTION 2.1.
"RECEIVABLE" means any indebtedness and other obligations owed to any
Originator by, or any right of any Originator to payment from or on behalf of,
an Obligor, whether constituting an "account," "chattel paper," "instrument" or
"general intangible" (as each such term is defined in the Code), arising in
connection with the sale of goods or the rendering of services by an Originator,
and includes the obligation to pay any finance charges, fees and other charges
with respect thereto. Indebtedness and other obligations arising from any one
transaction, including indebtedness and other obligations represented by an
individual invoice or agreement, shall constitute a Receivable separate from a
Receivable consisting of the indebtedness and other obligations arising from any
other transaction.
"RECEIVABLES POOL" means, at any time, all of the then outstanding
Receivables purchased by the Company (or received as contributions) pursuant to
this Agreement.
"RELATED RIGHTS" has the meaning given to it in SECTION 1.1.
"RELATED SECURITY" means, with respect to any Receivable:
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(a) all of the Company's and the applicable Originator's interest in
any goods (including returned goods), and documentation of title evidencing the
shipment or storage of any goods (including returned goods), relating to any
sale giving rise to such Receivable,
(b) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with all UCC financing statements or similar filings relating thereto,
and
(c) all of the Company's and the applicable Originator's rights,
interests and claims under the Contracts and all guaranties, indemnities,
insurance and other agreements (including the related Contract) or arrangements
of whatever character from time to time supporting or securing payment of such
Receivable or otherwise relating to such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise.
"SOLVENT" means, with respect to any Person at any time, a condition
under which:
(i) the fair value and present fair saleable value of such Person's
total assets is, on the date of determination, greater than such Person's total
liabilities (including contingent and unliquidated liabilities) at such time;
(ii) the fair value and present fair saleable value of such Person's
assets is greater than the amount that will be required to pay such Person's
probable liability on its existing debts as they become absolute and matured
("DEBTS," for this purpose, includes all legal liabilities, whether matured or
unmatured, liquidated or unliquidated, absolute, fixed, or contingent);
(iii) such Person is and shall continue to be able to pay all of its
liabilities as such liabilities mature; and
(iv) such Person does not have unreasonably small capital with which
to engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Person's contingent or unliquidated liabilities
at any time shall be that amount which, in light of all the facts and
circumstances then existing, represents the amount which can reasonably be
expected to become an actual or matured liability;
(B) the "fair value" of an asset shall be the amount which may be
realized within a reasonable time either through collection or sale of such
asset at its regular market value;
(C) the "regular market value" of an asset shall be the amount which
a capable and diligent business person could obtain for such asset from an
interested buyer who is willing to purchase such asset under ordinary selling
conditions; and
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(D) the "present fair saleable value" of an asset means the amount
which can be obtained if such asset is sold with reasonable promptness in an
arm's-length transaction in an existing and not theoretical market.
"SUBORDINATE NOTE" has the meaning given to it in SECTION 3.1.
"TRANSACTION DOCUMENT" has the meaning given to it in the
Loan and Security Agreement.
"UNMATURED PURCHASE AND SALE TERMINATION EVENT" means any event
which, with the giving of notice or lapse of time, or both, would become a
Purchase and Sale Termination Event (as defined in SECTION 8.1).
Unless otherwise indicated, certain terms that are capitalized and
used throughout this Agreement are defined in the Loan and Security Agreement of
even date herewith (as the same may be amended, supplemented or otherwise
modified from time to time, the "LOAN AND SECURITY AGREEMENT") among the
Company, the Lenders set forth therein and Foothill Capital Corporation, in its
capacity as Arranger and Administrative Agent (in such capacities, the "Agent").
All references herein to months are to calendar months unless otherwise
expressly indicated.
BACKGROUND
1. The Company is a limited liability company, all of the outstanding
interests of which are owned by the Originators. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital is a
wholly-owned subsidiary of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Ltd. ("FWL"). Each Originator is a
wholly-owned subsidiary of FWL.
2. The Originators generate Receivables in the ordinary course of
their respective businesses.
3. The Originators, in order to finance their respective businesses,
wish to sell (with respect to all Eligible Accounts) or contribute (with respect
to Ineligible Accounts) all of their Receivables to the Company, and the Company
is willing, on the terms and subject to the conditions set forth herein, to
purchase (with respect to all Eligible Accounts) or accept as capital
contributions (with respect to Ineligible Accounts) all of the Receivables from
the Originators. The Company intends to finance the purchase of Receivables
pursuant to the Loan and Security Agreement.
4. Each Originator and the Company intends this transaction to be a
true sale and contribution of Receivables by each Originator to the Company
providing the Company with the full benefits of ownership of the Receivables and
each Originator and the Company do not intend the transactions hereunder to be,
or for any purpose to be, characterized as a loan from the Company to any
Originator.
NOW, THEREFOR, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
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Article I
AGREEMENT TO PURCHASE, SELL AND CONTRIBUTE
Section 1.1 AGREEMENT TO PURCHASE, SELL AND CONTRIBUTE. On the terms
and subject to the conditions set forth in this Agreement, each Originator,
severally and for itself alone, agrees to sell (with respect to Eligible
Accounts) or contribute (with respect to Ineligible Accounts) to the Company,
and the Company agrees to purchase (with respect to Eligible Accounts) or
receive as a capital contribution (with respect to Ineligible Accounts) from
such Originator, from time to time on or after the date hereof (the "Closing
Date"), but before the Purchase and Sale Termination Date, all of such
Originator's right, title and interest in and to:
(a) each Receivable of such Originator that existed and was owing to
such Originator as at the closing of such Originator's business on the Closing
Date;
(b) each Receivable created by such Originator from and including the
Closing Date to and including the Purchase and Sale Termination Date;
(c) all rights to, but not the obligations under, all Related
Security;
(d) all monies due or to become due with respect to any of the
foregoing;
(e) all books and records related to any of the foregoing; and
(f) all collections and other proceeds of any of the foregoing (as
defined in the applicable UCC) that are or were received by such Originator on
or after the Closing Date, including, without limitation, all funds which either
are received by such Originator, the Company or Servicer from or on behalf of
the Obligors in payment of any amounts owed (including, without limitation,
invoice price, finance charges, interest and all other charges) in respect of
Receivables, or are applied to such amounts owed by the Obligors (including,
without limitation, insurance payments that an Originator or Servicer applies in
the ordinary course of its business to amounts owed in respect of any Receivable
and net proceeds of sale or other disposition of repossessed goods or other
collateral or property of the Obligors or any other parties directly or
indirectly liable for payment of such Receivables).
All purchases and contributions hereunder shall be made without recourse, but
shall be made pursuant to, and in reliance upon, the representations, warranties
and covenants of each Originator set forth in this Agreement and each other
Transaction Document. No obligation or liability to any Obligor on any
Receivable is intended to be assumed by the Company hereunder, and any such
assumption is expressly disclaimed. The Company's foregoing commitment to
purchase and accept as capital contributions Receivables and the proceeds and
rights described in CLAUSES (C) through (F) (collectively, the "RELATED RIGHTS")
is herein called the "PURCHASE Facility."
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Section 1.2 TIMING OF PURCHASES AND CONTRIBUTIONS.
(a) CLOSING DATE PURCHASES. Each Originator's entire right, title and
interest in (i) each Receivable that existed and was owing to such Originator as
at the Closing Date and (ii) all Related Rights automatically shall be deemed to
have been sold (with respect to Eligible Accounts) or contributed (with respect
to Ineligible Accounts) to the Company on the Closing Date.
(b) REGULAR PURCHASES AND CONTRIBUTIONS. After the Closing Date,
until the Purchase and Sale Termination Date, each Receivable (and the Related
Rights) created by each Originator shall be deemed to have been sold (with
respect to Eligible Accounts) or contributed (with respect to Ineligible
Accounts) to the Company immediately (and without further action) upon the
creation of such Receivable.
Section 1.3 CONSIDERATION FOR PURCHASES. On the terms and subject to
the conditions set forth in this Agreement, the Company agrees to make Purchase
Price payments to the respective Originators and record capital contributions by
the respective Originators in accordance with ARTICLE III.
Section 1.4 PURCHASE AND SALE TERMINATION DATE. The "PURCHASE AND
SALE TERMINATION DATE" shall be the earliest to occur of (a) the date of the
termination of this Agreement pursuant to SECTION 8.2 and (b) the date the Loan
and Security Agreement has been terminated and all Obligations under the Loan
and Security Agreement have been paid in full.
Section 1.5 INTENTION OF THE PARTIES. It is the express intent of the
parties hereto that the transfers of the Receivables and Related Rights by each
Originator to the Company, as contemplated by this Agreement be, and be treated
as, sales (with respect to Eligible Accounts) and contributions (with respect to
Ineligible Accounts), and not as secured loans secured by the Receivables and
Related Rights. If, however, notwithstanding the intent of the parties, such
transactions are deemed to be loans, the parties agree that on the date hereof,
the Originator hereby grants to the Company a first priority security interest
in all of such Originator's right, title and interest in and to the Receivables
and the Related Rights now existing and hereafter created, all monies due or to
become due and all amounts received with respect thereto, and all proceeds
thereof, to secure all of such Originator's obligations hereunder (which rights
and security interest will be assigned to the Agent and the Lenders in
accordance with SECTION 10.11 and the Loan and Security Agreement).
Article II
Reporting
Section 2.1 PURCHASE REPORT. On the Closing Date and on each Tuesday
thereafter (by the close of business on such day), or if any Tuesday is not a
Business Day on the immediately following Business Day (by the close of business
on such day), the Servicer shall deliver to the Company, the Agent and each
Originator a report in substantially the form of EXHIBIT A (each such report
being herein called a "PURCHASE REPORT") with respect to the matters set forth
therein and the Company's purchases or contributions of Receivables from each
Originator that are to be made on the Closing Date or that were made during the
preceding week, as applicable.
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Article III
CONTRIBUTION AND PAYMENT OF PURCHASE PRICE
Section 3.1 INITIAL PURCHASE PRICE PAYMENT; CONTRIBUTION.
(a) On the terms and subject to the conditions set forth in this
Agreement, the Company agrees with each Originator, with respect to the purchase
of Eligible Accounts from such Originator on the Closing Date, to (a) pay to
such Originator an amount (PRO RATA, by Market Value, among each Originator
transferring Eligible Accounts on such day) equal to 85% of the Market Value of
such Eligible Accounts in cash and (b) issue to such Originator a promissory
note with an initial principal balance equal to 15% of the Market Value of such
Eligible Accounts in the form of EXHIBIT B (each such promissory note, as it may
be amended, supplemented, indorsed or otherwise modified from time to time,
together with all promissory notes issued from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents, being
herein called a "COMPANY NOTE" or a "SUBORDINATE Note"). The cash payment amount
for any Eligible Account PLUS the initial principal balance of any Company Note
issued (or the increase in principal balance pursuant to SECTION 3.2) in
exchange for such Receivable (which amount shall equal the Market Value of such
Eligible Account) shall be referred to herein as the "PURCHASE PRICE" for such
Eligible Account.
(b) On the terms and subject to the conditions set forth in this
Agreement, the Company agrees with each Originator, with respect to the transfer
of Ineligible Accounts from such Originator on the Closing Date, such transfer
shall be deemed an assignment and conveyance constituting a capital contribution
by such Originator to the Company in an amount equal to the Contribution Amount
of such Ineligible Accounts.
(c) In the event that, on the Closing Date, the Company has
insufficient borrowing capacity under the Loan and Security Agreement to
purchase all of the Eligible Accounts in accordance with SUBSECTION (A) above,
then any Eligible Account not purchased in accordance with such subsection shall
be transferred to the Company by the applicable Originator and shall be deemed
an assignment and conveyance constituting a capital contribution by such
Originator to the Company in an amount equal to the Contribution Amount of such
Eligible Account.
Section 3.2 SUBSEQUENT PURCHASE PRICE PAYMENTS; SUBSEQUENT
CONTRIBUTIONS.
(a) On each Payment Date falling after the Closing Date, on the terms
and subject to the conditions set forth in this Agreement, the Company shall,
with respect to the Eligible Accounts generated by each Originator on such day,
take the following actions:
(i) FIRST, the Market Value of each Eligible Account shall be paid to
each Originator (PRO RATA, by Market Value, among each Originator)
equal to 85% of the Market Value of such Eligible Account in cash;
and
(ii) SECOND, the principal amount outstanding under the Company Note
issued to each Originator shall be increased by an amount equal to
15% of the Market Value of such Eligible Account;
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PROVIDED, HOWEVER, that no Eligible Accounts shall be transferred to the
Company, and the Company shall not purchase any Eligible Accounts, on any
Payment Date on which the Company has insufficient funds to purchase all the
Eligible Accounts available for purchase on such Payment Date (and all Eligible
Accounts available for purchase and not purchased on prior Payment Dates).
(b) Servicer shall make all appropriate record keeping entries with
respect to Company Notes or otherwise to reflect the foregoing payments and
Servicer's books and records shall constitute rebuttable presumptive evidence of
the principal amount of and accrued interest on any Company Note at any time.
Furthermore, Servicer shall hold the Company Notes for the benefit of the
Originators. Each Originator hereby irrevocably authorizes Servicer to ▇▇▇▇ the
Company Notes "CANCELLED" and to return such Company Notes to the Company upon
the final payment thereof after the occurrence of the Purchase and Sale
Termination Date.
(c) On each Payment Date falling after the Closing Date, on the terms
and subject to the conditions set forth in this Agreement, each Originator
shall, with respect to the Ineligible Accounts generated by such Originator on
such day, make an assignment and conveyance constituting a capital contribution
by such Originator to the Company of such Ineligible Accounts in an amount equal
to the Contribution Amount of such Ineligible Accounts.
Section 3.3 SETTLEMENT AS TO SPECIFIC RECEIVABLES AND DILUTION.
(a) If (i) on the day of purchase of any Eligible Account from an
Originator hereunder, any of the representations or warranties of such
Originator set forth in any Transaction Document is not true with respect to
such Receivable or the Agent, the Company or any other party discovers that such
Receivable otherwise did not qualify as an Eligible Account on its day of
purchase or (ii) as a result of any action or inaction of such Originator, on
any day any representations or warranties set forth in SECTION 5.12(B) is no
longer true with respect to such a Receivable, then, in each case, the Purchase
Price with respect to such Eligible Account shall be reduced to zero and shall
be accounted to Originator as provided in SUBSECTION (C) below.
(b) If, on any day, the Outstanding Balance of any Receivable
purchased or contributed hereunder is reduced or adjusted as a result of any
defective, rejected or returned goods or services, or any discount or other
adjustment (except for any adjustment based on insolvency, bankruptcy or other
credit deterioration of the Account Debtor) made by Originator, the Company or
Servicer or any setoff or dispute between such Originator or the Servicer and an
Obligor as indicated on the books of the Company (or, for periods prior to the
Closing Date, the books of such Originator), in each case except for discounts
described in the definition of "Outstanding Balance" previously accounted for
under such definition, then the Market Value or the Contribution Amount, as
applicable, with respect to such Receivable shall be reduced by the amount of
such net reduction and shall be accounted to such Originator as provided in
SUBSECTION (D) below.
(c) Any reduction in the Purchase Price of any Eligible Account
pursuant to SUBSECTION (A) above shall be applied as a credit for the account of
the Company against the Purchase Price of Eligible Accounts subsequently
purchased by the Company from such Originator hereunder; PROVIDED, HOWEVER, if
there have been no purchases of Eligible Accounts from such Originator (or
insufficiently large purchases of Eligible Accounts) to create a Purchase Price
sufficient to so apply such credit against, then:
(i) 85% of the amount of such credit shall be paid in cash to the Company
by such Originator in the manner and for application
as described in the following proviso;
(ii) 15% of the amount of such credit shall be deemed to be a payment
under, and shall be deducted from the principal amount outstanding
under, the Company Note payable to such Originator; and
(iii) the Contribution Amount of such Receivable shall be deemed to be a
capital contribution from the Originator to the Company;
PROVIDED that the amount of any such credit shall be paid by such Originator to
the Company by deposit in immediately available funds into the relevant Cash
Management Account for application by Servicer to the same extent as if
Collections of the applicable Receivable in such amount had actually been
received on such date.
(d) Any reduction in the Market Value or Contribution Amount of any
Receivable pursuant to SUBSECTION (B) above shall be applied as a credit for the
account of the Company against the Market Value or Contribution Amount, as
applicable, of Receivables subsequently purchased or contributed by the Company
from such Originator hereunder, as applicable; PROVIDED, HOWEVER if there have
been no purchases or contributions of Receivables from such Originator (or
insufficiently large purchases or contributions of Receivables) to create a
Market Value or Contribution Value sufficient to so apply such credit against,
then:
(i) 85% of the amount of such credit in Market Value, in the case of an
Eligible Account, shall be paid in cash to the Company by such
Originator in the manner and for application as described in the
following proviso;
(ii) 15% of the amount of such credit in Market Value, in the case of an
Eligible Account, shall be deemed to be a payment under, and shall be
deducted from the principal amount outstanding under, the Company
Note payable to such Originator; and
(iii) the reduction in the Contribution Amount of such Receivable, in the
case of an Ineligible Account, shall be deemed to be a reduction of
the Originator's capital in the Company;
PROVIDED that the amount of any such credit shall be paid by such Originator to
the Company by deposit in immediately available funds into the relevant Cash
Management Account for application by Servicer to the same extent as if
Collections of the applicable Receivable in such amount had actually been
received on such date.
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(e) Each Purchase Report (other than the Purchase Report delivered on
the Closing Date) shall include, in respect of the Receivables previously
generated by each Originator, a calculation of the aggregate reductions in
Purchase Price or Market Value described in SUBSECTION (A) or (B) relating to
such Receivables since the last Purchase Report delivered hereunder, as
indicated on the books of the Company (or, for such period prior to the Closing
Date, the books of Originator).
Article IV
CONDITIONS OF PURCHASES
Section 4.1 CONDITIONS PRECEDENT (OR CONCURRENT) TO INITIAL PURCHASE.
The initial purchase and contribution hereunder is subject to the condition
precedent (or concurrent) that the Servicer (on the Company's behalf), shall
have received, with a copy delivered to the Agent, on or before the Closing
Date, the following, each (unless otherwise indicated) dated the Closing Date,
and each in form and substance satisfactory to the Agent and the Servicer
(acting on the Company's behalf):
(a) An Originator Assignment Certificate in the form of EXHIBIT C
from each Originator, duly completed, executed and delivered by such Originator;
(b) A copy of the resolutions of the Board of Directors of each
Originator approving the Transaction Documents to be delivered by it and the
transactions contemplated hereby and thereby, certified by the respective
Secretary or Assistant Secretary of each Originator;
(c) Good standing certificates for each Originator issued as of a
recent date acceptable to Servicer by the Secretary of State of the jurisdiction
of such Originator's incorporation and the jurisdiction where such Originator's
chief executive office is located;
(d) A certificate of the Secretary or Assistant Secretary of each
Originator certifying the names and true signatures of the officers authorized
on such Person's behalf to sign the Transaction Documents to be delivered by it
(on which certificate Servicer and the Company may conclusively rely until such
time as Servicer shall receive from such Person a revised certificate meeting
the requirements of this SUBSECTION (D));
(e) The certificate or articles of incorporation or other
organizational document of each Originator, duly certified by the Secretary of
State of the jurisdiction of such Originator's incorporation as of a recent date
acceptable to Servicer, together with a copy of the by-laws of such Originator,
each duly certified by the Secretary or an Assistant Secretary of such
Originator;
(f) Originals of the proper financing statements (Form UCC-1) that
name each Originator as the assignor and the Company as the assignee (and the
Agent, as assignee of the Company) of the Receivables generated by such
Originator as may be necessary or, in Servicer's or the Agent's opinion,
desirable under the UCC of all appropriate jurisdictions to perfect the
Company's ownership interest (or security interest) in all Receivables and such
other rights, accounts, instruments and moneys (including, without limitation,
Related Security) in which an ownership or security interest may be assigned to
it hereunder;
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(g) A written search report from a Person satisfactory to Servicer
listing all effective financing statements that name any Originator as debtor or
assignor and that are filed in the jurisdictions in which filings were made
pursuant to the foregoing SUBSECTION (F), and in all other jurisdictions
requested by the Agent, together with copies of such financing statements (none
of which, except for those described in the foregoing SUBSECTION (F), shall
cover any Receivable or any Related Rights) which is to be sold to the Company
hereunder, and tax and judgment lien search reports from a Person satisfactory
to Servicer showing no evidence of such liens filed against any Originator;
(h) A favorable opinion of King & Spalding, counsel to the
Originators, in form and substance satisfactory to Servicer and the Agent;
(i) A Company Note in favor of each Originator, duly executed by the
Company;
(j) The Servicing Agreement, dated the date hereof, among the
Servicer, the Company and the Agent, duly executed by the Servicer, the Company
and the Agent;
(k) The Loan and Security Agreement, duly executed by the Agent, the
Lenders and the Company, provided that all of the conditions precedent to the
initial Advance have been satisfied in accordance with the terms thereof;
(l) The Existing Credit Agreement, duly executed by the parties
thereto; and
(m) A certificate from an officer of each Originator to the effect
that Servicer and each Originator have placed on the most recent, and have taken
all steps reasonably necessary to ensure that there shall be placed on each
subsequent, data processing report that it generates which are of the type that
a proposed purchaser or lender would use to evaluate the Receivables, the
following legend (or the substantive equivalent thereof): "THE RECEIVABLES
DESCRIBED HEREIN HAVE BEEN SOLD OR CONTRIBUTED TO ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FUNDING LLC,
PURSUANT TO A PURCHASE, SALE AND CONTRIBUTION AGREEMENT, DATED AS OF AUGUST 15,
2002, AMONG ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL & FINANCE CORPORATION, THE ORIGINATORS NAMED
THEREIN AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FUNDING LLC; AND A SECURITY INTEREST IN THE
RECEIVABLES DESCRIBED HEREIN HAS BEEN GRANTED TO FOOTHILL CAPITAL CORPORATION,
AS AGENT, PURSUANT TO A LOAN AND SECURITY AGREEMENT, DATED AS OF AUGUST 15, 2002
AMONG ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FUNDING LLC, THE LENDERS NAMED THEREIN AND FOOTHILL CAPITAL
CORPORATION, AS AGENT."
Section 4.2 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES. Each
Originator, by accepting the Purchase Price and capital credit related to each
purchase and contribution of Receivables generated by such Originator, shall be
deemed to have acknowledged the sale and contribution of the Receivables to the
Company and shall be deemed to have certified that the representations and
warranties contained in ARTICLE V are true and correct on and as of such day,
with the same effect as though made on and as of such day.
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Article V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS
In order to induce the Company to enter into this Agreement and to
make purchases and accept contributions hereunder, each Originator hereby makes
with respect to itself the representations and warranties set forth in this
ARTICLE V.
Section 5.1 ORGANIZATION AND GOOD STANDING. Such Originator has been
duly organized and is validly existing as a corporation in good standing under
the laws of the state of its incorporation, with power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted.
Section 5.2 DUE QUALIFICATION. Such Originator is duly licensed or
qualified to do business as a foreign corporation in good standing in the
jurisdiction where its chief executive office is located and in all other
jurisdictions in which (a) the ownership or lease of its property or the conduct
of its business requires such licensing or qualification and (b) the failure to
be so licensed or qualified would be reasonably likely to have a Material
Adverse Effect.
Section 5.3 POWER AND AUTHORITY; DUE AUTHORIZATION. Such Originator
has (a) all necessary power, authority and legal right (i) to execute and
deliver, and perform its obligations under, each Transaction Document to which
it is a party and (ii) to generate, own, sell and assign Receivables on the
terms and subject to the conditions herein and therein provided; and (b) duly
authorized such execution and delivery and such sale and assignment and the
performance of such obligations by all necessary corporate action.
Section 5.4 VALID SALE; BINDING OBLIGATIONS. Each sale made by such
Originator pursuant to this Agreement shall constitute a valid sale, transfer,
and assignment of Receivables to the Company, enforceable against creditors of,
and purchasers from, such Originator; and assuming its enforceability against
each of the other parties thereto, this Agreement constitutes, and each other
Transaction Document to be signed by such Originator, when duly executed and
delivered, will constitute, a legal, valid, and binding obligation of such
Originator, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
Section 5.5 NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents and the
fulfillment of the terms hereof or thereof, will not (a) conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under (1) such Originator's articles
or certificate of incorporation or by-laws, or (ii) any indenture, loan
agreement, mortgage, deed of trust, or other agreement or instrument to which it
is a party or by which it is bound, (b) result in the creation or imposition of
any Adverse Claim upon any of its properties pursuant to the terms of any such
indenture, loan agreement, mortgage, deed of trust, or other agreement or
instrument, other than the Transaction Documents, or (c) violate any law or any
order, rule, or regulation applicable to it of any court or of any state or
foreign regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over it or any of its properties.
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Section 5.6 PROCEEDINGS. There is no action, suit, proceeding or
investigation pending before any court, regulatory body, arbitrator,
administrative agency, or other tribunal or governmental instrumentality (a)
asserting the invalidity of any Transaction Document, (b) seeking to prevent the
issuance of such Originator's Originator Assignment Certificate or the
consummation of any of the transactions contemplated by any Transaction
Document, or (c) except as set forth in the most recent Form 10-Q quarterly
reports and Form 10-K annual report of the Parent or FW LLC and in Schedule 5.6
to the Loan and Security Agreement, which if decided adversely to any Originator
or the Company could reasonably be expected to have a Material Adverse Effect.
Section 5.7 BULK SALES ACTS. No transaction contemplated hereby
requires compliance with, or will be subject to avoidance under, any bulk sales
act or similar law.
Section 5.8 GOVERNMENT APPROVALS. Except for the filing of the UCC
financing statements referred to in ARTICLE IV, all of which, at the time
required in ARTICLE IV, shall have been duly made and shall be in full force and
effect, no authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for such
Originator's due execution, delivery and performance of any Transaction Document
to which it is a party.
Section 5.9 FINANCIAL CONDITION.
(a) MATERIAL ADVERSE CHANGE. Since the date of the latest financial
statements submitted to the Lender Group, under the Loan and Security Agreement,
on or before the Closing Date, no event has occurred that has had, or is
reasonably likely to have, a Material Adverse Effect, except as set forth in
Schedule 5.7 to the Loan and Security Agreement.
(b) SOLVENT. Assuming the consummation of the Existing Credit
Agreement, on the date hereof, and on the date of each purchase and contribution
hereunder (both before and after giving effect to such purchase and
contribution), such Originator shall be Solvent.
Section 5.10 LICENSES AND CONTINGENT LIABILITIES. Such Originator has
not failed to obtain any licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its properties or to the conduct of
its business, which violation or failure to obtain would be reasonably likely to
have a Material Adverse Effect,
Section 5.11 MARGIN REGULATIONS. No use of any funds acquired by such
Originator under this Agreement will conflict with or contravene any of
Regulations T, U and X promulgated by the Board of Governors of the Federal
Reserve System from time to time.
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Section 5.12 QUALITY OF TITLE.
(a) Each Receivable of such Originator (together with the Related
Rights with respect to such Receivable) which is to be sold or contributed to
the Company hereunder is or shall be owned by such Originator, free and clear of
any Adverse Claim, except as provided herein and in the Loan and Security
Agreement. Whenever the Company makes a purchase or receives a capital
contribution hereunder, it shall have acquired and shall continue to have
maintained a valid and perfected ownership interest (free and clear of any
Adverse Claim) in all Receivables generated by such Originator and all
Collections related thereto, and in such Originator's entire right, title and
interest in and to the Related Rights with respect thereto.
(b) No effective financing statement or other instrument similar in
effect covering any Receivable generated by such Originator or any Related
Rights is on file in any recording office except such as may be filed in favor
of the Company (and assigned to the Agent) in accordance with this Agreement or
in favor of the Agent in accordance with the Loan and Security Agreement.
(c) Unless otherwise identified to the Company on the date of the
purchase or contribution hereunder, each Receivable purchased or contributed
hereunder is on the date of purchase or contribution an Eligible Account.
Section 5.13 ACCURACY OF INFORMATION. All factual written information
heretofore or contemporaneously furnished (and prepared) by such Originator to
the Company or the Agent for purposes of or in connection with any Transaction
Document or any transaction contemplated hereby or thereby is, and all other
such factual written information hereafter furnished (and prepared) by such
Originator to the Company or the Agent pursuant to or in connection with any
Transaction Document will be, when taken as a whole, true and accurate in every
material respect on the date as of which such information is dated or certified.
Section 5.14 OFFICES. Such Originator's principal place of business
and chief executive office is located at the address set forth under such
Originator's signature hereto, and the offices where such Originator keeps all
its books, records and documents evidencing its Receivables, the related
Contracts and all other agreements related to such Receivables are located at
the addresses specified in EXHIBIT D. Such Originator's jurisdiction of
incorporation is specified in EXHIBIT D.
Section 5.15 TRADE NAMES. Such Originator does not use any trade name
other than its actual corporate name and the trade names set forth in EXHIBIT E.
From and after the date that fell five (5) years before the date hereof, except
as set forth in EXHIBIT E, such Originator has not been known by any legal name
other than its corporate name as of the date hereof, nor has such Originator
been the subject of any merger or other corporate reorganization.
Section 5.16 TAXES. Such Originator has filed all tax returns and
reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books.
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Section 5.17 COMPLIANCE WITH APPLICABLE LAWS. Such Originator is in
compliance with the requirements of all applicable laws, rules, regulations, and
orders of all governmental authorities, a breach of any of which, individually
or in the aggregate, would be reasonably likely to have a Material Adverse
Effect.
Section 5.18 RELIANCE ON SEPARATE LEGAL IDENTITY. Such Originator
acknowledges that the Agent and the Lenders are entering into the Loan and
Security Agreement in reliance upon the Company's identity as a legal entity
separate from any Originator.
Article VI
COVENANTS OF THE ORIGINATORS
Section 6.1 AFFIRMATIVE COVENANTS. From the date hereof until the
first day following the Purchase and Sale Termination Date, each Originator
will, unless the Agent and the Company shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to the
Receivables generated by it and the Contracts and other agreements related
thereto except where the failure to so comply would not materially and adversely
affect the collectibility of such Receivables or the rights of the Company
hereunder.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification would
be reasonably likely to have a Material Adverse Effect; PROVIDED that nothing in
this SECTION 6.1(B) shall prevent any Originator from consummating any
transaction otherwise permitted under SECTION 6.3(E).
(c) RECEIVABLES REVIEWS. (i) At any time and from time to time during
regular business hours, and upon reasonable prior notice permit the Company, the
Servicer, the Agent, the Lenders or their respective agents, or representatives,
(A) to examine and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and disks) in
possession or under the control of such Originator relating to Receivables,
including, without limitation, the related Contracts and purchase orders and
other agreements related thereto, and (B) to visit the offices and properties of
such Originator for the purpose of examining such materials described in CLAUSE
(I)(A) next above, and to discuss matters relating to Receivables originated by
it or the performance hereunder with any of the officers or employees of such
Originator having knowledge of such matters, and (ii) without limiting the
foregoing CLAUSE (I) above, from time to time on request of the Agent, permit
certified public accountants or other auditors acceptable to the Company and the
Agent to conduct, at the Company's expense, a review of such Originator's books
and records with respect to such Receivables, PROVIDED that, so long as no
Default or Event of Default (each as defined in the Loan and Security Agreement)
shall have occurred and be continuing, (A) the Company shall not be responsible
for the costs of more than four (4) such reviews in any calendar year and (B)
such reviews shall be conducted during normal business hours. In addition, the
Agent and each Lender shall have the rights set forth under Section 4.6 of the
Loan and Security Agreement.
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(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate reords evidencing Receivables it generates in the event of
the destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for the
collection of such Receivables (including, without limitation, records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable).
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. Timely
and fully perform and comply with all provisions, covenants and other promises
required to be observed by it under the Contracts and all other agreements
related to the Receivables that it generates.
(f) LOCATION OF RECORDS. Keep its principal place of business and
chief executive office, and the offices where it keeps its records concerning or
related to Receivables, at the address(es) referred to in EXHIBIT D or, upon 30
days' prior written notice to the Company and the Agent, at any other locations
reasonably acceptable to the Company and the Agent.
(g) CREDIT AND COLLECTION POLICIES. Comply in all material respects
with its Credit and Collection Policy in connection with the Receivables that it
generates and all Contracts and other agreements related thereto.
(h) JURISDICTION OF INCORPORATION. Keep its jurisdiction of
incorporation at the address referred to as such in Exhibit D.
Section 6.2 REPORTING REQUIREMENTS. From the date hereof until the
first day following the Purchase and Sale Termination Date, each Originator
will, unless Servicer (on behalf of the Company) shall otherwise consent in
writing, furnish to the Company and the Agent:
(a) PURCHASE AND SALE TERMINATION EVENTS. As soon as possible after
knowledge of the occurrence of, and in any event within three Business Days
after knowledge of the occurrence of each Purchase and Sale Termination Event or
each Unmatured Purchase and Sale Termination Event in respect of such
Originator, the statement of the chief financial officer or chief accounting
officer of such Originator describing such Purchase and Sale Termination Event
or Unmatured Purchase and Sale Termination Event and the action that such
Originator proposes to take with respect thereto, in each case in reasonable
detail;
(b) PROCEEDINGS. As soon as possible and in any event within three
Business Days after such Originator otherwise has knowledge thereof, written
notice of litigation, investigation or proceeding of the type described in
SECTION 5.6 not previously disclosed to the Company; and
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(c) OTHER. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the conditions or
operations, financial or otherwise, of such Originator or the Company, including
any reports or information required or permitted to be requested under the Loan
and Security Agreement, as the Company or the Agent may from time to time
reasonably request in order to protect the interests of the Company or the Agent
under or as contemplated by the Transaction Documents.
Section 6.3 NEGATIVE COVENANTS. From the date hereof until the date
following the Purchase and Sale Termination Date, each Originator agrees that,
unless the Servicer (on behalf of the Company) and the Agent (on behalf of the
Lenders) shall otherwise consent in writing, it shall not:
(a) SALES, LIENS, ETC. Except as otherwise provided herein or in any
other Transaction Document, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, any Receivable or related Contract or Related Security, or any
interest therein, or any Collections thereon, or assign any right to receive
income in respect thereof.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted under Section 7.10 of the Loan and Security Agreement, extend, amend
or otherwise modify the terms of any Receivable in any material respect
generated by it, or amend, modify or waive, in any material respect, any term or
condition of any Contract related thereto (which term or condition relates to
payments under, or the enforcement of, such Contract).
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make any
change in the character of its business or materially alter its Credit and
Collection Policy, which change would, in either case, materially adversely
impair the collectibility of the Receivables generated by it.
(d) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Take any
action to cause or permit any Receivable generated by it to become evidenced by
any "instrument" or "chattel paper" (as defined in the applicable UCC) unless
such instrument is delivered to the Agent.
(e) MERGERS, ACQUISITIONS, SALES, ETC. (i) Be a party to any merger
or consolidation, except a merger or consolidation among two or more
Originators, or (ii) directly or indirectly sell, transfer, assign, convey or
lease (A) whether in one or a series of transactions, all or substantially all
of its assets, except to another Originator, or (B) any Receivables or any
interest therein (other than pursuant to this Agreement).
Section 6.4 CASH MANAGEMENT BANKS. Make any changes in its
instructions to Obligors regarding Collections or add or terminate any Cash
Management Bank except in accordance with Section 2.7 of the Loan and Security
Agreement.
Section 6.5 ACCOUNTING FOR PURCHASES. Account for or treat (whether
in financial statements or otherwise) the transactions contemplated hereby in
any manner other than as sales and contributions of the Receivables and Related
Rights by such Originator to the Company.
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Section 6.6 TRANSACTION DOCUMENTS. Enter into, execute, deliver or
otherwise become bound by any agreement, instrument, document or other
arrangement that restricts the right of such Originator to amend, supplement,
amend and restate or otherwise modify, or to extend or renew, or to waive any
right under, this Agreement or any other Transaction Documents.
Article VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
Section 7.1 RIGHTS OF THE COMPANY. Each Originator hereby authorizes
the Company, Servicer, the Agent or their respective designees, after the
occurrence of a Purchase and Sale Termination Event or an Unmatured Purchase and
Sale Termination Event), to take any and all steps in such Originator's name
necessary or desirable, in their respective determination, to collect all
amounts due under any and all Receivables, including, without limitation,
indorsing the name of such Originator on checks and other instruments
representing Collections and enforcing such Receivables and the provisions of
the related Contracts that concern payment and/or enforcement of rights to
payment. Notwithstanding anything herein to the contrary, if at any time, the
Company, the Servicer or the Agent desires to exercise its rights under this
SECTION 7.1, the Company, the Servicer or the Agent, as the case may be, shall
direct the applicable Originator to take any and all steps described in the
prior sentence; PROVIDED, that if such applicable Originator fails to take such
steps the Company, the Servicer, the Agent or the their respective designees (at
the applicable, Originator's expense) may take such steps.
Section 7.2 RESPONSIBILITIES OF EACH ORIGINATOR. Anything herein to
the contrary notwithstanding:
(a) COLLECTION PROCEDURES. Each Originator agrees to direct its
respective Obligors to make payments of Receivables directly to a post office
box related to the relevant Cash Management Account at a Cash Management Bank in
accordance with the Loan and Security Agreement. Each Originator further agrees
to transfer any Collections that it receives directly to Servicer (for the
Company's account) within one (1) Business Day of receipt thereof, and agrees
that all such Collections shall be deemed to be received in trust for the
Company and shall be maintained and segregated separate and apart from all other
funds and monies of such Originator until transfer of such Collections to
Servicer.
(b) Each Originator shall perform its obligations hereunder, and the
exercise by the Company or its designee of its rights hereunder shall not
relieve such Originator from such obligations.
(c) None of the Company, Servicer or the Agent shall have any
obligation or liability to any Obligor or any other third Person with respect to
any Receivables, Contracts related thereto or any other related agreements, nor
shall the Company, Servicer, Lenders or the Agent be obligated to perform any of
the obligations of any Originator thereunder.
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(d) Each Originator hereby grants to Servicer an irrevocable power of
attorney, with full power of substitution, coupled with an interest, to take in
the name of such Originator all steps necessary or advisable to indorse,
negotiate or otherwise realize on any writing or other right of any kind held or
transmitted by such Originator or transmitted or received by the Company
(whether or not from such Originator) in connection with any Receivable.
Section 7.3 FURTHER ACTION EVIDENCING PURCHASES. Each Originator
agrees that from time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all further action that
the Company, the Servicer or the Agent may reasonably request that are necessary
or desirable in order to perfect, protect or more fully evidence the Receivables
and Related Rights purchased by, or contributed to, the Company hereunder, or to
enable the Company, the Servicer or the Agent to exercise or enforce any of its
rights hereunder or under any other Transaction Document. Without limiting the
generality of the foregoing, upon the request of the Company, the Servicer or
the Agent, each Originator will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate; and
(b) ▇▇▇▇ the master data processing records that evidence or list (i)
such Receivables and (ii) related Contracts with the legend set forth in SECTION
4.1(J).
Each Originator hereby authorizes the Company, the Servicer, the
Agent or any of their designees to file one or more financing or continuation
statements, and amendments thereto and assignments thereof, relative to all or
any of the Receivables and Related Rights now existing or hereafter generated by
such Originator. If any Originator fails to perform any of its agreements or
obligations under this Agreement, the Company, the Servicer, the Agent or their
designees may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of the Company,
the Servicer, the Agent or their designees incurred in connection therewith
shall be payable by such non-performing Originator as provided in SECTION 9.1.
Section 7.4 APPLICATION OF COLLECTIONS. Any payment by an Obligor in
respect of any indebtedness owed by it to any Originator shall, except as
otherwise specified by such Obligor or otherwise required by contract or law and
unless otherwise instructed by the Company, the Servicer or the Agent, be
applied as a Collection of any Receivable or Receivables of such Obligor to the
extent of any amounts then due and payable thereunder before being applied to
any other indebtedness of such Obligor.
Article VIII
PURCHASE AND SALE TERMINATION EVENTS
Section 8.1 PURCHASE AND SALE TERMINATION EVENTS. Each of the
following events or occurrences described in this SECTION 8.1 shall constitute a
"PURCHASE AND SALE TERMINATION EVENT":
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(a) An Event of Default (as defined in the Loan and Security
Agreement) shall have occurred; PROVIDED that in the event that an Event of
Default shall have occurred and be continuing solely by reason of the occurrence
of a Single Originator Default and the Agent and Lenders shall have waived such
Event of Default in accordance with the Loan and Security Agreement, such
Purchase and Sale Termination Event shall also be deemed waived automatically
without any further action; or
(b) Any Originator shall fail to make any payment or deposit to be
made by it hereunder when due and such failure shall remain unremedied for three
Business Days; or
(c) Any representation or warranty made or deemed to be made by any
Originator (or any of its officers) under or in connection with this Agreement,
any other Transaction Documents or any other information or report delivered
pursuant hereto or thereto shall prove to have been false or incorrect in any
material respect when made or deemed made; or
(d) Any Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be performed or
observed and such failure shall remain unremedied for five Business Days after
written notice thereof shall have been given by Servicer to such Originator; or
(e) The Company shall fail to have sufficient funds to make a payment
to purchase any Eligible Accounts within three (3) Business Days of such
Eligible Accounts being available for purchase by the Company.
Section 8.2 REMEDIES.
(a) OPTIONAL TERMINATION. Upon the occurrence of a Purchase and Sale
Termination Event, the Agent (and not the Company or the Servicer) shall have
the option by notice to the Originators (with a copy to the Company or the
Servicer) to declare the Purchase and Sale Termination Date to have occurred.
(b) REMEDIES CUMULATIVE. Upon any termination of the Purchase
Facility pursuant to SECTION 8.2 (A), the Company shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative. Without limiting the
foregoing, the occurrence of the Purchase and Sale Termination Date shall not
deny the Company any remedy in addition to termination of the Purchase Facility
to which the Company may be otherwise appropriately entitled, whether at law or
equity. Upon any termination of the Purchase Facility pursuant to SECTION 8.2
(A), the Company will exercise any of the rights and remedies described in this
SECTION 8.2(B) only at the direction of, or with the consent of, the Agent.
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Article IX
INDEMNIFICATION
Section 9.1 INDEMNITIES BY THE ORIGINATORS. Without limiting any
other rights which the Company may have hereunder or under applicable law, each
Originator, severally and for itself alone, hereby agrees to indemnify the
Company, the Agent, the Lenders and each of their respective officers,
directors, members, employees and administrators (each of the foregoing Persons
being individually called a "PURCHASE AND SALE INDEMNIFIED PARTY"), forthwith on
demand, from and against any and all damages, losses, claims, judgments,
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively called "PURCHASE AND
SALE INDEMNIFIED AMOUNTS") awarded against or actually incurred by any of them
to the extent arising out of or as a result of the failure of such Originator to
perform its obligations under this Agreement, any other Transaction Document or
arising out of the claims asserted against a Purchase and Sale Indemnified Party
relating to the transactions contemplated herein or therein or the use of
proceeds thereof or therefrom, EXCLUDING, HOWEVER, (i) Purchase and Sale
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Purchase and Sale Indemnified Party, (ii) any
indemnification which has the effect of recourse for non-payment of the
Receivables to any indemnitor (except as otherwise specifically provided under
this SECTION 9.1) and (iii) any tax based upon or measured by net income or
gross receipts. Without limiting the foregoing, each Originator, severally and
for itself alone, indemnifies each Purchase and Sale Indemnified Party for
Purchase and Sale Indemnified Amounts relating to or resulting from:
(a) the transfer by such Originator of an interest in any Receivable
to any Person other than the Company;
(b) the breach of any representation or warranty made by such
Originator (or any of its officers) under or in connection with this Agreement
or any other Transaction Document, or any information or report delivered by
such Originator pursuant hereto or thereto which shall have been false or
incorrect in any material respect when made or deemed made;
(c) the failure by such Originator to comply with any applicable law,
rule or regulation with respect to any Receivable generated by such Originator
or the related Contract, or the nonconformity of any Receivable generated by
such Originator or the related Contract with any such applicable law, rule or
regulation;
(d) the failure to vest and maintain vested in the Company an
ownership interest in the Receivables generated by such Originator free and
clear of any Adverse Claim, other than an Adverse Claim arising solely as a
result of an act of the Company, whether existing at the time of the purchase or
contribution of such Receivables or at any time thereafter;
(e) the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables or
purported Receivables generated by such Originator, whether at the time of any
purchase or contribution or at any subsequent time;
-21-
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable or purported
Receivable generated by such Originator (including, without limitation, a
defense based on such Receivable's or the related Contracts' 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 services
related to any such Receivable or the furnishing of or failure to furnish such
services;
(g) any product liability claim arising out of or in connection with
services that are the subject of any Receivable generated by such Originator;
and
(h) any tax or governmental fee or charge (other than any tax
excluded pursuant to CLAUSE (III) in the proviso to the preceding sentence), all
interest and penalties thereon or with respect thereto, and all out-of-pocket
costs and expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the purchase,
contribution or ownership of the Receivables generated by such Originator or any
Related Security connected with any such Receivables.
If for any reason the indemnification provided above in this SECTION
9.1 is unavailable to a Purchase and Sale Indemnified Party or is insufficient
to hold such Purchase and Sale Indemnified Party harmless, then each of the
Originators, severally and for itself alone, shall contribute to the amount paid
or payable by such Purchase and Sale Indemnified Party to the maximum extent
permitted under applicable law.
Notwithstanding anything herein to the contrary, (i) the foregoing
indemnification is not intended to, and shall not, constitute a guarantee of the
collectibility or payment of any Receivable conveyed hereunder; and (ii) nothing
in this SECTION 9.1 shall require any Originator to indemnify any Indemnified
Party for any Receivable which is not collected, not paid or otherwise
uncollectible on account of the insolvency, bankruptcy, creditworthiness or
financial inability to pay of the applicable Obligor. The agreements in this
SECTION 9.1 shall survive the collection of all Receivables, the termination of
this Agreement and the payment of all amounts payable hereunder.
Article X
MISCELLANEOUS
Section 10.1 AMENDMENTS, ETC.
(a) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and consented to by (i) the Company, the Servicer, the Agent and the
Originators (with respect to an amendment) or (ii) by the Company, the Servicer
and the Agent (with respect to a waiver or consent by the Company).
-22-
(b) No failure or delay on the part of the Company, the Servicer, the
Agent, any Originator or any third party beneficiary in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Company, the Servicer or any Originator in any case shall entitle
it to any notice or demand in similar or other circumstances. No waiver or
approval by the Company, the Servicer or the Agent under this Agreement shall,
except as may otherwise be stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval under this Agreement shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
(c) The Transaction Documents contain a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter thereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter thereof, superseding all prior
oral or written understandings.
Section 10.2 NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage-prepaid, or by facsimile, to the intended party at the
address or facsimile number of such party set forth under its name on the
signature pages hereof or at such other address or facsimile number as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (i) if personally delivered,
when received, (ii) if sent by certified mail three (3) Business Days after
having been deposited in the mail, postage prepaid, and (iii) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means.
Section 10.3 NO WAIVER; CUMULATIVE REMEDIES. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, each Originator hereby authorizes the Company,
at any time and from time to time, to the fullest extent permitted by law, to
setoff, against any obligations of such Originator to the Company arising in
connection with the Transaction Documents (including without limitation amounts
payable pursuant to SECTION 9.1) that are then due and payable or that are not
then due and payable but are accruing, any and all indebtedness at any time
owing by the Company to or for the credit or the account of any Originator.
Section 10.4 BINDING EFFECT; ASSIGNABILITY. This Agreement shall be
binding upon and inure to the benefit of the Company and each Originator and
their respective successors and permitted assigns. No Originator may assign any
of its rights hereunder or any interest herein without the prior written consent
of the Company (which consent must be approved, and may be directed, by the
Agent) except as otherwise herein specifically provided. 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 such
time as the parties hereto shall agree. The rights and remedies with respect to
any breach of any representation and warranty made by any Originator pursuant to
ARTICLE V and the indemnification and payment provisions of ARTICLE IX and
SECTION 10.6 shall be continuing and shall survive any termination of this
Agreement.
-23-
Section 10.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
Section 10.6 COSTS, EXPENSES AND TAXES. In addition to the
obligations of the Originators under ARTICLE IX, each Originator, severally and
for itself alone, agrees to pay on demand:
(a) all reasonable costs and expenses actually incurred in connection
with the enforcement of this Agreement, the Originator Assignment Certificates
and the other Transaction Documents; and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents to be delivered hereunder, and
agrees to indemnify each Purchase and Sale Indemnified Party against any
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
Section 10.7 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF NEW YORK, NEW YORK
OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK, NEW YORK, OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) IRREVOCABLY CONSENTS TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN SECTION
10.2; AND (e) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION 10.7
SHALL AFFECT THE COMPANY' S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
CAPITAL, ANY ORIGINATOR OR ITS RESPECTIVE PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.
Section 10.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT,
AND AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY
BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER
PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
-24-
Section 10.9 CAPTIONS AND CROSS REFERENCES; INCORPORATION BY
REFERENCE. The various captions (including, without limitation, the table of
contents) in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any underscored Section or Exhibit are to such
Section or Exhibit of this Agreement, as the case may be. The Exhibits hereto
are hereby incorporated by reference into and made a part of this Agreement.
Section 10.10 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement.
Section 10.11 ACKNOWLEDGMENT AND AGREEMENT. By execution below, each
Originator expressly acknowledges and agrees that all of the Company's rights,
title, and interests in, to, and under this Agreement (but not its obligations),
shall be assigned by the Company to the Agent, for the benefit of the Agent and
the Lenders, pursuant to the Loan and Security Agreement, and each Originator
consents to such assignment. Each of the parties hereto acknowledges and agrees
that the Agent and the Lenders are third party beneficiaries of the rights of
the Company arising hereunder and under the other Transaction Documents to which
any Originator is a party. Any direction or consent that may or must be given by
the Company hereunder must be approved by the Agent and may be directed to be
given by the Company by the Agent.
Section 10.12 ADDITIONAL ORIGINATORS. After the Closing Date, any
wholly-owned subsidiary of FWL may be added as an Originator hereunder, under
the terms and conditions of this Agreement; PROVIDED, that (i) such Originator
will be deemed to make all the representations and covenants made by the
Originators hereunder as of the date such entity is added as an Originator
hereunder, (ii) such entity must be incorporated or organized in the United
States and have its primary place of business in the United States, (iii) such
Originator must have a membership interest in the Company and (iv) prior notice
of such additional Originator must be given to the Company and the Agent. In
addition, prior to the designation of any Subject Account acquired from any such
additional Originator as an "Eligible Account," the requirements set forth in
the definition thereof in the Loan and Security Agreement must be satisfied.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-25-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FUNDING LLC
By:
------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Funding LLC
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ORIGINATORS:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CONSTRUCTORS, INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Constructors, Inc.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENERGY CORPORATION
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Energy Corporation
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ USA CORPORATION
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ USA Corporation
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ POWER GROUP, INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Power Group Inc.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, Inc.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENERGY SERVICES, INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Energy Services, Inc.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL & FINANCE CORPORATION,
as initial Servicer
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital & Finance Corporation
Address: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
EXHIBIT A
FORM OF PURCHASE REPORT
ORIGINATOR: _________________
PURCHASER: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FUNDING LLC
DATE: _________________
I. OUTSTANDING BALANCE OF RECEIVABLES PURCHASED: ________________
II. CASH PAYMENT= $ _________________
III. COMPANY NOTE PRINCIPAL AMOUNT ISSUANCE OR ADDITION= $ _______
IV. CAPITAL CONTRIBUTION MARKET VALUE= $ _________________
V. CAPITAL CONTRIBUTION CONTRIBUTION AMOUNT= $ _________________
VI. REDUCTION OF PURCHASE PRICE OF ELIGIBLE ACCOUNTS IN ACCORDANCE WITH
SECTIONS 3.3(a) and (c) SINCE PRIOR PURCHASE REPORT=$ ______________
VII. CASH PAYMENTS TO THE COMPANY FROM ORIGINATORS IN ACCORDANCE WITH
SECTION 3.3(c) SINCE PRIOR PURCHASE REPORT= $
-----------------
VIII. REDUCTION OF NOTE PRINCIPAL AMOUNT IN ACCORDANCE WITH SECTION 3.3(c)
SINCE PRIOR PURCHASE REPORT= $ _________________
IX. CONTRIBUTION AMOUNT FOR RECEIVABLES CONTRIBUTED PURSUANT TO SECTION
3.3(c) SINCE PRIOR PURCHASE REPORT= $ _________________
X. AGGREGATE REDUCTION OF MARKET VALUE OF ELIGIBLE ACCOUNT IN ACCORDANCE
WITH SECTIONS 3.3(b) and (d) SINCE PRIOR PURCHASE
REPORT= $ _________________
XI. CASH PAYMENTS TO THE COMPANY FROM ORIGINATORS IN ACCORDANCE WITH
SECTION 3.3(d) SINCE PRIOR PURCHASE REPORT= $
-----------------
XII. REDUCTION OF NOTE PRINCIPAL AMOUNT IN ACCORDANCE WITH SECTION 3.3(d)
SINCE PRIOR PURCHASE REPORT= $ _________________
XIII. AGGREGATE REDUCTION OF CONTRIBUTION AMOUNT OF INELIGIBLE ACCOUNT IN
ACCORDANCE WITH SECTIONS 3.3(b) and (d) SINCE PRIOR
PURCHASE REPORT= $ _________________
A-1
EXHIBIT B
FORM OF SUBORDINATED NOTE
New York, New York
August 15, 2002
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Funding LLC, a
Delaware limited liability company ("FWF"), promises to pay to _________________
("Originator"), on the terms and subject to the conditions set forth herein and
in the Purchase, Sale and Contribution Agreement referred to below, the
aggregate non-cash portion of the purchase price of all Receivables purchased by
FWF from Originator pursuant to Sections 3.1 and 3.2 of the Purchase Agreement,
as such non-cash portion is shown in the records of Servicer.
1. Purchase and Sale Agreement. This Subordinated Note is one of the
Subordinated Notes described in, and is subject to the terms and conditions set
forth in, that certain Purchase, Sale and Contribution Agreement of even date
herewith (as the same may be amended, supplemented, amended and restated or
otherwise modified in accordance with its terms, the "Purchase Agreement"),
among FWF, Originator, and certain other Persons. Reference is hereby made to
the Purchase Agreement for a statement of certain other rights and obligations
of FWF and Originator.
2. Definitions. Capitalized terms used (but not defined) herein have
the meanings assigned thereto in the Purchase Agreement. In addition, as used
herein, the following terms have the following meanings:
"Bankruptcy Proceedings" has the meaning set forth in clause (b) of
paragraph 8 hereof.
"Final Maturity Date" means the Payment Date immediately following
the date that falls one hundred twenty one (121) days after the Purchase and
Sale Termination Date.
"Senior Creditors" means the Agent and the Lenders.
"Senior Obligations" means the Obligations (as defined in the Loan
and Security Agreement).
"Subordination Provisions" means, collectively, clauses (a) through
(1) of paragraph 7 hereof.
"Transaction Documents" has the meaning set forth in the Loan and
Security Agreement.
B-1
3. Interest. Subject to the Subordination Provisions set forth below,
FWF promises to pay interest on the outstanding principal amount under this
Subordinated Note at a rate per annum equal to the 30-day London Interbank
Offered Rate ("LIBOR") plus two percent (2%), or the maximum rate permitted by
law, whichever is lower. LIBOR means the average (rounded upward, if necessary,
to the next whole multiple of 1/16 of 1%) of the respective rates per annum at
which deposits in dollars are offered in the London interbank market at
approximately 11:00 a.m. (London time) two business days before the first day of
the 30 day period as reported in the Wall Street Journal, payable in arrears on
the first day of each month (each, a "Payment Date"), provided that no interest
shall be paid in the event that a Purchase and Sale Termination Event or
Unmatured Purchase and Sale Termination Event has occurred and is continuing. In
the event any Purchase and Sale Termination Event or Unmatured Purchase and Sale
Termination Event has occurred and is continuing, such accrued interest will be
capitalized by being added to the principal amount outstanding under this
Subordinated Note on each Payment Date and thereafter, such capitalized interest
shall accrue interest in accordance with the preceding sentence.
4. Principal Payment Dates. Subject to the Subordination Provisions
set forth below, payments of the principal amount of this Subordinated Note
shall be made as follows:
(a) the principal amount of this Subordinated Note shall be reduced
by an amount equal to each payment deemed made pursuant to Section 3.3 of the
Purchase Agreement; and
(b) the entire remaining unpaid principal amount outstanding under
this Subordinated Note and any Expenses (as hereinafter defined) or other
amounts due and owing to Originator hereunder shall be paid on the Final
Maturity Date.
Subject to the Subordination Provisions set forth below, the principal amount of
and accrued interest on this Subordinated Note may be prepaid on any Business
Day without premium or penalty.
5. Payment Mechanics. All payments of principal and interest
hereunder are to be made in lawful money of the United States of America.
6. Enforcement Expenses. In addition to and not in limitation of the
foregoing, but subject to the Subordination Provisions set forth below and to
any limitation imposed by applicable law, FWF agrees to pay all expenses,
including reasonable attorneys' fees and legal expenses (collectively,
"Expenses"), incurred by Originator in seeking to collect any amounts payable
hereunder which are not paid when due.
7. Subordination Provisions. FWF covenants and agrees, and Originator
and any other holder of this Subordinated Note (collectively, Originator and any
such other holder are called the "Holder"), by its acceptance of this
Subordinated Note, likewise covenants and agrees on behalf of itself and any
holder of this Subordinated Note, that the payment of the principal amount of
and interest on this Subordinated Note is hereby expressly subordinated in right
of payment to the payment and performance of the Senior Obligations to the
extent and in the manner set forth in the following clauses of this paragraph 7:
B-2
(a) No payment or other distribution of FWF's assets of any kind or
character, whether in cash, securities, or other rights or property, shall be
made on account of this Subordinated Note except to the extent such payment or
other distribution is made, in respect of interest, pursuant to paragraph 3 of
this Subordinated Note, and in respect of principal, Expenses or any other
amounts, pursuant to clause (a) or (b) of paragraph 4 of this Subordinated Note;
(b) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to FWF, whether
voluntary or involuntary, partial or complete, and whether in bankruptcy,
insolvency or receivership proceedings, or upon an assignment for the benefit of
creditors, or any other marshalling of the assets and liabilities of FWF or any
sale of all or substantially all of the assets of FWF other than as permitted by
the Purchase Agreement (such proceedings being herein collectively called
"Bankruptcy Proceedings"), the Senior Obligations shall first be paid and
performed in full and in cash before Originator shall be entitled to receive and
to retain any payment or distribution in respect of this Subordinated Note. In
order to implement the foregoing: (i) all payments and distributions of any kind
or character in respect of this Subordinated Note to which Holder would be
entitled except for this clause (b) shall be made directly to the Agent (for the
benefit of the Senior Creditors); (ii) Holder shall promptly file a claim or
claims, in the form required in any Bankruptcy Proceedings, for the full
outstanding amount of this Subordinated Note, and shall use commercially
reasonable efforts to cause said claim or claims to be approved and all payments
and other distributions in respect thereof to be made directly to the Agent (for
the benefit of the Senior Creditors) until the Senior Obligations shall have
been paid and performed in full and in cash; and (iii) Holder hereby irrevocably
agrees that the Agent, in the name of Holder or otherwise, may demand, ▇▇▇ for,
collect and receive any and all such payments or distributions, and file, prove
and vote or consent in any such Bankruptcy Proceedings with respect to any and
all claims of Holder relating to this Subordinated Note, in each case until the
Senior Obligations shall have been paid and performed in full and in cash;
(c) In the event that Holder receives any payment or other
distribution of any kind or character from FWF or from any other source
whatsoever, in respect of this Subordinated Note, other than as expressly
permitted by the terms of this Subordinated Note, such payment or other
distribution shall be received in trust for the Senior Creditors and shall be
turned over by Holder to the Agent (for the benefit of the Senior Creditors)
forthwith. Holder will ▇▇▇▇ its books and records so as clearly to indicate that
this Subordinated Note is subordinated in accordance with the terms hereof. All
payments and distributions received by the Agent in respect of this Subordinated
Note, to the extent received in or converted into cash, may be applied by the
Agent (for the benefit of the Senior Creditors), first, to the payment of any
and all expenses (including reasonable attorneys' fees and legal expenses) paid
or incurred by the Senior Creditors in enforcing these Subordination Provisions,
or in endeavoring to collect or realize upon this Subordinated Note, and any
balance thereof shall, solely as between Originator and the Senior Creditors, be
applied by the Agent (for application in accordance with the terms of the Loan
and Security Agreement) toward the payment of the Senior Obligations; but as
between FWF and its creditors, no such payments or distributions of any kind or
character shall be deemed to be payments or distributions in respect of the
Senior Obligations;
B-3
(d) Notwithstanding any payments or distributions received by the
Senior Creditors in respect of this Subordinated Note, Holder shall not be
subrogated to any rights of the Senior Creditors in respect of the Senior
Obligations until the Senior Obligations have been paid and performed in full
and in cash.
(e) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of Holder, on the one hand, and the
Senior Creditors on the other hand. Nothing contained in these Subordination
Provisions or elsewhere in this Subordinated Note is intended to or shall
impair, as between FWF, its creditors (other than the Senior Creditors) and
Holder, FWF's obligation, which is unconditional and absolute, to pay Holder the
principal of and interest on this Subordinated Note as and when the same shall
become due and payable in accordance with the terms hereof or to affect the
relative rights of Holder and creditors of FWF (other than the Senior
Creditors);
(f) Holder shall not, until the Senior Obligations have been paid and
performed in full and in cash, (i) cancel, waive, forgive, transfer or assign,
or commence legal proceedings to enforce or collect, or subordinate to any
obligation of FWF, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, or now or hereafter existing, or due or to
become due, other than the Senior Obligations, this Subordinated Note or any
rights in respect hereof, (ii) convert this Subordinated Note into an equity
interest in FWF, unless Holder shall have received the prior written consent of
the Agent in each case, or (iii) accept or receive any lien, security interest
or other encumbrance on any assets of FWF as security for any of the obligations
hereunder;
(g) Holder shall not, without the advance written consent of the
Agent, commence, or join with any other Person in commencing, any Bankruptcy
Proceedings or any other action or proceeding with respect to FWF until at least
one year and one day shall have passed since the Senior Obligations shall have
been paid and performed in full and in cash;
(h) If, at any time, any payment (in whole or in part) of any Senior
Obligation is rescinded or must be restored or returned by a Senior Creditor
(whether in connection with Bankruptcy Proceedings or otherwise), these
Subordination Provisions shall continue to be effective or shall be reinstated,
as the case may be, as though such payment had not been made;
B-4
(i) Each of the Senior Creditors may, from time to time, at its sole
discretion, without notice to Holder, and without waiving any of its rights
under these Subordination Provisions, take any or all of the following actions:
(i) retain or obtain an interest in any property to secure any of the Senior
Obligations; (ii) retain or obtain the primary or secondary obligations of any
other obligor or obligors with respect to any of the Senior Obligations; (iii)
extend or renew for one or more periods (whether or not longer than the original
period), alter or exchange any of the Senior Obligations, or release or
compromise any obligation of any nature with respect to any of the Senior
Obligations; (iv) consent to any amendment, supplement, restatement, or other
modification to any Transaction Document; and (v) release its security interest
in, or surrender, release or permit any substitution or exchange for all or any
part of any rights or property securing any of the Senior Obligations, or extend
or renew for one or more periods (whether or not longer than the original
period), or release, compromise, alter or exchange any obligations of any nature
of any obligor with respect to any such rights or property;
(j) Holder hereby waives: (i) notice of acceptance of these
Subordination Provisions by any of the Senior Creditors; (ii) notice of the
existence, creation, non-payment or non-performance of all or any of the Senior
Obligations; and (iii) all diligence in enforcement, collection or protection
of, or realization upon, the Senior Obligations, or any thereof, or any security
therefor;
(k) Each of the Senior Creditors may, from time to time, on the terms
and subject to the conditions set forth in the Transaction Documents to which
such Persons are party, but without notice to Holder, assign or transfer any or
all of the Senior Obligations, or any interest therein; and, notwithstanding any
such assignment or transfer or any subsequent assignment or transfer thereof,
such Senior Obligations shall be and remain Senior Obligations for the purposes
of these Subordination Provisions, and every immediate and successive assignee
or transferee of any of the Senior Obligations or of any interest of such
assignee or transferee in the Senior Obligations shall be entitled to the
benefits of these Subordination Provisions to the same extent as if such
assignee or transferee were the assignor or transferor; and
(l) These Subordination Provisions constitute a continuing offer from
the holder of this Subordinated Note to all Persons who become the holders of,
or who continue to hold, Senior Obligations; and these Subordination Provisions
are made for the benefit of the Senior Creditors, and the Agent may proceed to
enforce such provisions on behalf of each of such Persons.
8. General. No failure or delay on the part of Originator or any
Senior Creditor in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. No amendment, modification or waiver of, or consent with
respect to, any provision of this Subordinated Note shall in any event be
effective unless (1) the same shall be in writing and signed and delivered by
FWF, Holder and Agent and (ii) all consents required for such actions under the
Transaction Documents shall have been received by the appropriate Persons.
B-5
9. Maximum Interest. Notwithstanding anything in this Subordinated
Note to the contrary, FWF shall never be required to pay unearned interest on
any amount outstanding hereunder and shall never be required to pay interest on
the principal amount outstanding hereunder at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received under
applicable federal or state law (such maximum rate being herein called the
"Highest Lawful Rate"). If the effective rate of interest which would otherwise
be payable under this Subordinated Note would exceed the Highest Lawful Rate, or
if the holder of this Subordinated Note shall receive any unearned interest or
shall receive monies that are deemed to constitute interest which would increase
the effective rate of interest payable by FWF under this Subordinated Note to a
rate in excess of the Highest Lawful Rate, then (i) the amount of interest which
would otherwise by payable by FWF under this Subordinated Note shall be reduced
to the amount allowed by applicable law, and (ii) any unearned interest paid by
FWF or any interest paid by FWF in excess of the Highest Lawful Rate shall be
refunded to FWF. Without limitation of the foregoing, all calculations of the
rate of interest contracted for, charged or received by Originator under this
Subordinated Note that are made for the purpose of determining whether such rate
exceeds the Highest Lawful Rate applicable to Originator (such Highest Lawful
Rate being herein called the "Originator's Maximum Permissible Rate") shall be
made, to the extent permitted by usury laws applicable to Originator (now or
hereafter enacted), by amortizing, prorating and spreading in equal parts during
the actual period during which any amount has been outstanding hereunder all
interest at any time contracted for, charged or received by Originator in
connection herewith. If at any time and from time to time (i) the amount of
interest payable to Originator on any date shall be computed at Originator's
Maximum Permissible Rate pursuant to the provisions of the foregoing sentence
and (ii) in respect of any subsequent interest computation period the amount of
interest otherwise payable to Originator would be less than the amount of
interest payable to Originator computed at Originator's Maximum Permissible
Rate, then the amount of interest payable to originator in respect of such
subsequent interest computation period shall continue to be computed at
Originator's Maximum Permissible Rate until the total amount of interest payable
to Originator shall equal the total amount of interest which would have been
payable to Originator if the total amount of interest had been computed without
giving effect to the provisions of the foregoing sentence.
10. No Negotiation. This Subordinated Note is not negotiable.
11. Governing Law. THIS SUBORDINATED NOTE HAS BEEN DELIVERED IN NEW
YORK, NEW YORK, AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF).
[Signature Page to Follow]
B-6
12. Captions. Paragraph captions used in this Subordinated Note are
for convenience only and shall not affect the meaning or interpretation of any
provision of this Subordinated Note.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FUNDING LLC
By:__________________________
Title:_________________________
B-7
EXHIBIT C
FORM OF ORIGINATOR ASSIGNMENT CERTIFICATE
ORIGINATOR ASSIGNMENT CERTIFICATE
Reference is made to the Purchase, Sale and Contribution Agreement of
even date herewith (as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time, the "PURCHASE, SALE AND
CONTRIBUTION Agreement") among the undersigned, the other Originators named
therein, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Funding LLC ("FWF"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital &
Finance Corporation, as the initial Servicer. Unless otherwise defined herein,
capitalized terms used herein have the meanings provided in the Purchase, Sale
and Contribution Agreement or in the Loan and Security Agreement (as defined in
the Purchase, Sale and Contribution Agreement), as applicable.
The undersigned hereby sells, assigns and transfers unto
FWF and its successors and assigns all right, title and
interest of the undersigned in and to:
(a) each Receivable of the undersigned that existed and was owing to
the undersigned as of the Closing Date;
(b) each Receivable created by the undersigned from and including the
Closing Date to and including the Purchase and Sale Termination Date;
(c) all rights to, but not the obligations under, all Related
Security;
(d) all monies due or to become due with respect thereto; and
(e) all proceeds thereof (as defined in the New York UCC) that are or
were received by the undersigned on or after the Closing Date including, without
limitation, all funds which either are received by the undersigned, FWF or the
Servicer from or on behalf of the Obligors in payment of any amounts owed
(including, without limitation, invoice price, finance charges, interest and all
other charges) in respect of Receivables, or are applied to such amounts owed by
the Obligors (including, without limitation, insurance payments that the
undersigned or the Servicer applies in the ordinary course of its business to
amounts owed in respect of any Receivable and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligors
or any other parties directly or indirectly liable for payment of such
Receivables).
This Originator Assignment Certificate is made without recourse but
on the terms and subject to the conditions set forth in the Transaction
Documents to which the undersigned is a party. The undersigned acknowledges and
agrees that FWF and its successors and assigns are accepting this Originator
Assignment Certificate in reliance on the representations, warranties and
covenants of the undersigned contained in the Transaction Documents to which the
undersigned is a party.
C-1
THIS ORIGINATOR ASSIGNMENT CERTIFICATE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE PURCHASE, SALE AND CONTRIBUTION AGREEMENT AND
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF).
IN WITNESS WHEREOF, the undersigned has caused this Originator
Assignment Certificate to be duly executed and delivered by its duly authorized
officer this ____ day of ______, 2002.
By:
---------------------------------------------
Name:
Title:
C-2