CREDIT AND SECURITY AGREEMENT
THIS CREDIT AND SECURITY AGREEMENT is entered into as of
December 10, 1999, by and among:
(1) PRECISION RECEIVABLES CORP., an Oregon corporation
(together with its successors and permitted assigns, the "BORROWER"),
(2) PRECISION CASTPARTS CORP., an Oregon corporation (together
with its successors, "PCC"), as initial servicer hereunder (in such
capacity, together with any successor servicer or sub-servicer
appointed pursuant to SECTION 8.1, the "SERVICER"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware
corporation (together with its successors, "BLUE RIDGE"), and WACHOVIA
BANK, N.A., a national banking association, in its capacity as a
Liquidity Bank to Blue Ridge (together with its successors,
"WACHOVIA"), as Lenders (hereinafter defined), and
(4) WACHOVIA BANK, N.A., as agent for the Lenders (in such
capacity, together with any successors thereto in such capacity, the
"AGENT").
UNLESS OTHERWISE INDICATED, CAPITALIZED TERMS USED IN THIS AGREEMENT ARE
DEFINED IN ANNEX A.
W I T N E S S E T H :
WHEREAS, the Borrower is a wholly-owned direct subsidiary of
PCC;
WHEREAS, certain of PCC's Subsidiaries as Originators have
entered into the First-Step Receivables Purchase Agreement pursuant to
which each of the Originators has sold, and hereafter will sell, to PCC
all of its right, title and interest in and to its accounts receivable
and certain related rights;
WHEREAS, PCC has entered into the Sale Agreement pursuant to
which PCC has sold and/or contributed, and hereafter will sell and/or
contribute, to the Borrower all of PCC's right, title and interest in
and to such accounts receivable and related rights;
WHEREAS, the Originators are engaged primarily in the business
of manufacturing complex metal components and products including large,
complex structural investment castings and airfoil castings used in jet
aircraft engines, industrial gas turbines, fluid management systems,
industrial metalworking tools and machines, pulp and paper, advanced
metalforming technologies, tungsten carbide and other metal products;
WHEREAS, the Borrower has requested that the Lenders make
revolving loans to the Borrower from time to time hereafter secured by
the Collateral, and,
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subject to the terms and conditions contained in this Agreement, the
Lenders are willing to make such secured loans;
WHEREAS, the Lenders have requested that PCC act as the
initial Servicer for the Collateral, and, subject to the terms and
conditions contained in this Agreement, PCC is willing to act in such
capacity; and
WHEREAS, Wachovia has been requested, and is willing, to act
as the Agent under this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto hereby agree as
follows:
ARTICLE I.
THE CREDIT
Section 1.1 THE FACILITY. On the terms and subject to the conditions
set forth in this Agreement, the Borrower (or the Servicer on the Borrower's
behalf) may from time to time during the Revolving Period request Advances be
made on Settlement Dates by delivering a Borrowing Request to the Agent in
accordance with SECTION 2.1. Upon receipt of a copy of each Borrowing Request
from the Borrower or Servicer, the Agent shall advise the Borrower not later
than 12:00 noon (New York City time) on the Business Day following such
receipt whether Blue Ridge and/or the Liquidity Banks will fund a Loan (or
Loans) in the aggregate amount of the requested Advance, and in the event
that Blue Ridge elects not to make any such Loan to the Borrower, each of the
Liquidity Banks severally agrees to make its Ratable Share of such Loan to
the Borrower, on the terms and subject to the conditions hereof, PROVIDED
THAT at no time may the aggregate principal amount of Blue Ridge's and the
Liquidity Banks' Loans at any one time outstanding exceed the lesser of (i)
the Aggregate Commitment, and (ii) the Borrowing Base (such lesser amount,
the "ALLOCATION LIMIT"). Each Loan shall be in the minimum amount of
$10,000,000 or a larger integral multiple of $1,000,000, or for the remaining
unused amount of the Aggregate Commitment. All Liquidity Banks' Commitments
shall terminate on the Termination Date. Each of the Loans, and all other
Obligations of the Borrower, shall be secured by the Collateral as provided
in ARTICLE IX.
Section 1.2 FUNDING MECHANICS; LIQUIDITY FUNDINGS.
(a) Each Advance hereunder shall consist of Loans made from
Blue Ridge and/or the Liquidity Banks.
(b) Each Lender funding any Loan (or portion thereof) shall
initiate a wire transfer in the principal amount of its Loan on the
applicable Borrowing Date to the Agent in immediately available funds not
later than 10:00 a.m. (New York City time) on the applicable Borrowing Date
and, subject to its receipt of such Loan proceeds, the Agent shall initiate a
wire transfer of such funds to the account specified by the Borrower in its
Borrowing Request not later than 11:00 a.m. (New York City time) on such
Borrowing Date.
(c) While it is the intent of Blue Ridge to fund each
requested Advance through the issuance of Commercial Paper Notes, the parties
acknowledge that if Blue Ridge is
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unable, or determines that it is undesirable, to issue Commercial Paper Notes
to fund all or any portion of the Loans at a CP Rate, or is unable to repay
such Commercial Paper Notes upon the maturity thereof, Blue Ridge may put all
or any portion of its Loans to the Liquidity Banks at any time pursuant to
the Liquidity Agreement to finance or refinance the necessary portion of its
Loans through a Liquidity Funding to the extent available. The Liquidity
Fundings may be Alternate Base Rate Loans or Eurodollar Loans, or a
combination thereof, selected by the Borrower in accordance with ARTICLE II.
In addition, the parties acknowledge that Commercial Paper Notes are issued
at a discount and at varying discount rates; accordingly, it may not be
possible for all CP Rate Loans to be made in amounts precisely equal to the
amounts specified in a Borrowing Request. Regardless of whether a Liquidity
Funding constitutes an assignment of a Loan or the sale of one or more
participations therein, each Liquidity Bank participating in a Liquidity
Funding shall have the rights of a "Lender" hereunder with the same force and
effect as if it had directly made a Loan to the Borrower in the amount of its
Liquidity Funding.
(d) Nothing herein shall be deemed to commit Blue Ridge (or
any other Lender) to make CP Rate Loans.
Section 1.3 INTEREST RATES.
(a) Each CP Rate Loan shall bear interest on the
outstanding principal amount thereof from and including the first day of the
CP Tranche Period applicable thereto selected in accordance with ARTICLE II
of this Agreement to (but not including) the last day of such CP Tranche
Period at the applicable CP Rate.
(b) Each Eurodollar Loan shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto selected in accordance with ARTICLE II of
this Agreement to (but not including) the last day of such Interest Period at
a rate per annum equal to the sum of (i) the applicable Eurodollar Rate
(Reserve Adjusted) for such Interest Period plus (ii) the LIBOR Spread (as
defined in the Fee Letter).
(c) Each Alternate Base Rate Loan shall bear interest on
the outstanding principal amount thereof, for each day from and including the
date such Loan is made to but excluding the date it is paid at a rate per
annum equal to the Alternate Base Rate for such day. Changes in the rate of
interest on Alternate Base Rate Loans will take effect simultaneously with
each change in the Alternate Base Rate.
(d) Notwithstanding anything to the contrary contained in
SECTIONS 1.3(a), (b) or (c), upon the occurrence of an Event of Default, and
during the continuance thereof, all Obligations shall bear interest, payable
upon demand, at the Default Rate.
(e) Interest at any of the aforementioned rates shall be
calculated for actual days elapsed on the basis of a 360-day year. Interest
shall be payable for the day a Loan is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time)
at the place of payment. If any payment of principal of or interest on a Loan
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.
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Section 1.4 PAYMENT DATES; NOTELESS AGREEMENT.
(a) The Borrower promises to pay the principal of each CP
Rate Loan on the last day of its CP Tranche Period.
(b) The Borrower promises to pay the principal of each
Eurodollar Loan on the last day of its Interest Period.
(c) The Borrower promises to pay the principal of each
Alternate Base Rate Loan, together with all accrued and unpaid interest
thereon, on or before the earlier to occur of (i) the Termination Date, and
(ii) the refinancing of such Loan with a CP Rate Loan or a Eurodollar Rate
Loan.
(d) The Borrower promises to pay all accrued and unpaid
interest on each Loan on its applicable Interest Payment Date.
(e) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender from time to
time, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. Upon request of the Borrower or the
Agent, such Lender will confirm the outstanding principal balances of its
Loans and the amount of any accrued and unpaid interest thereon. The entries
maintained in the accounts maintained pursuant to this Section shall be PRIMA
FACIE evidence of the existence and amounts of the Obligations therein
recorded; PROVIDED, HOWEVER, that the failure of any Lender to maintain such
accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Obligations in accordance with their terms.
Section 1.5 PREPAYMENTS Subject, in the case of CP Rate Loans and
Eurodollar Loans, to the funding indemnification provisions of SECTION 4.3:
(a) The Borrower may from time to time prepay, without penalty
or premium, all outstanding Loans, or, in a minimum aggregate amount of
$5,000,000 (or a larger integral multiple of $1,000,000), any portion
of the outstanding Loans upon two (2) Business Days' prior written
notice to the Agent (each, a "PREPAYMENT NOTICE"), PROVIDED THAT each
such prepayment of principal is accompanied by a payment of all
accrued and unpaid interest thereon and is made ratably amongst the
Lenders;
(b) If on any Business Day, the aggregate outstanding
principal amount of Blue Ridge's Loans and the Liquidity Fundings made
by the Liquidity Banks exceeds the Allocation Limit, the Borrower shall
prepay such Loans, without premium or penalty, by initiating a wire
transfer to the Agent not later than 11:00 a.m. (New York City time)
on the second Business Day thereafter in an amount sufficient to
eliminate such excess, together with accrued and unpaid interest on
the amount prepaid; and
(c) Upon receipt of any wire transfer pursuant to SECTION
1.5(b), the Agent shall initiate a wire transfer to the Lenders of
their respective shares thereof not later than 11:00 a.m. (New York
City time) on the date when received.
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Section 1.6 REDUCTIONS IN AGGREGATE COMMITMENT The Borrower may
permanently reduce the Aggregate Commitment in whole, or ratably in part, in
a minimum amount of $10,000,000 (or a larger integral multiple of
$1,000,000), upon at least five (5) Business Days' written notice to the
Agent (each, a "COMMITMENT REDUCTION NOTICE"), PROVIDED, HOWEVER, that (a)
the amount of the Aggregate Commitment may not be reduced below the aggregate
principal amount of the outstanding Advances, and (b) the amount of the
Aggregate Commitment may not be reduced below $25,000,000 unless the
Aggregate Commitment is terminated in full. All accrued and unpaid fees shall
be payable on the effective date of any termination of the Aggregate
Commitment. Each Commitment Reduction Notice shall be irrevocable once
delivered to the Agent.
Section 1.7 REQUESTS FOR INCREASES IN AGGREGATE COMMITMENT The
Borrower may from time to time request increases in the Aggregate Commitment
in a minimum amount of $10,000,000 (or a larger integral multiple of
$1,000,000), upon at least thirty (30) days' prior written notice to the
Agent, which notice shall specify the amount of and proposed effective date
for any such requested increase (each, a "COMMITMENT INCREASE REQUEST"). If
each of the Lenders agrees to the requested increase by notifying the Agent
and the Borrower in writing of their concurrence, such increase shall be made
to the Commitments of the Liquidity Banks, ratably in accordance with their
respective Ratable Shares as of the effective date specified in the
Commitment Increase Request. If less than all of the Lenders agree to such
increase, the amount of the Aggregate Commitment shall remain unchanged.
Section 1.8 EXTENSION OF THE SCHEDULED TERMINATION DATE Provided
that no Event of Default exists and is continuing, the Borrower may request
an extension of the Scheduled Termination Date by submitting a request for an
extension (each, an "EXTENSION REQUEST") to the Agent no more than 60 days
prior to the Scheduled Termination Date then in effect. The Extension Request
must specify the new Scheduled Termination Date requested by the Borrower and
the date (which must be at least thirty (30) days after the Extension Request
is delivered to the Agent) as of which the Agent, the Lenders and the
Liquidity Banks must respond to the Extension Request (the "RESPONSE DATE").
The new Scheduled Termination Date shall be no more than 364 days after the
Scheduled Termination Date in effect at the time the Extension Request is
received, including the Scheduled Termination Date as one of the days in the
calculation of the days elapsed. Promptly upon receipt of an Extension
Request, the Agent shall notify Blue Ridge and the Liquidity Banks of the
contents thereof and shall request each such Person to approve the Extension
Request. Each Lender and Liquidity Bank approving the Extension Request shall
deliver its written approval to the Agent no later than the Response Date,
whereupon the Agent shall notify the Borrower within one (1) Business Day
thereafter as to whether all of the Lenders have approved the Extension
Request. If all of the Lenders have approved the Extension Request, the
Scheduled Termination Date specified in the Extension Request shall become
effective on the existing Scheduled Termination Date, and the Agent shall
promptly notify the Borrower and the Lenders of the new Scheduled Termination
Date. If all of the Lenders do not unanimously agree to an Extension Request,
the Scheduled Termination Date shall remain unchanged.
Section 1.9 DISTRIBUTION OF CERTAIN NOTICES; NOTIFICATION OF
INTEREST RATES Promptly after receipt thereof, the Agent will notify Blue
Ridge and the Liquidity Banks of the contents of each Information Package,
Borrowing Request, Extension Request, Commitment Reduction Notice, Prepayment
Notice, Commitment Increase Request or notice of default received by it
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from the Borrower or the Servicer hereunder. In addition, the Agent shall
promptly notify the Lenders and the Borrower of each determination of and
change in Interest Rates.
ARTICLE II.
BORROWING AND PAYMENT MECHANICS; CERTAIN COMPUTATIONS
Section 2.1 METHOD OF BORROWING The Borrower (or the Servicer on the
Borrower's behalf) shall give the Agent irrevocable notice in the form of
EXHIBIT 2.1 hereto (each, a "BORROWING REQUEST") not later than 12:00 noon
(New York City time) at least two (2) Business Days before the Borrowing Date
(which shall be a Settlement Date) of each Advance. On each Borrowing Date
each Lender shall make available its Loan or Loans in immediately available
funds to the Agent by initiating a wire transfer in such amount not later
than 10:00 a.m. (New York City time). Subject to its receipt of such wire
transfers, the Agent will initiate a wire transfer of the funds so received
from the Lenders to the Borrower at the account specified in its Borrowing
Request not later than 11:00 a.m. (New York City time) on the applicable
Borrowing Date. Neither the Borrower, nor the Servicer on the Borrower's
behalf, may deliver more than one (1) Borrowing Request in any month that
would have the effect of increasing the aggregate outstanding principal
balance of the Advances.
Section 2.2 SELECTION OF CP TRANCHE PERIODS AND INTEREST PERIODS.
Prior to the occurrence of an Event of Default, the Borrower (or the Servicer
on the Borrower's behalf) in its Borrowing Request may request CP Tranche
Periods (or, in the case of Liquidity Fundings, Interest Periods) from time
to time to apply to each Lender's CP Rate Loans or Eurodollar Loans, as
applicable; PROVIDED, HOWEVER, that (i) at least one (1) CP Tranche Period or
one (1) Interest Period shall mature on each Settlement Date, and (ii) no CP
Tranche Period or Interest Period which began prior to the Scheduled
Termination Date shall extend beyond the Scheduled Termination Date.
While the Agent will use reasonable efforts to accommodate
the Borrower's (or the Servicer's, on the Borrower's behalf) requests for CP
Tranche Periods or Interest Periods prior to an Event of Default, the Agent
shall have the right to subdivide any requested Loan into one or more Loans
of different CP Tranche Periods or Interest Periods, as the case may be, or,
if the requested period is not feasible, to suggest an alternative CP Tranche
Period or Interest Period, PROVIDED THAT not less than $1,000,000 of
principal may be allocated to any CP Tranche Period or Interest Period of any
Lender, and no Alternate Base Rate Loan may have a principal amount of less
than $1,000,000.
The Borrower (or the Servicer on the Borrower's behalf) may
not request an Interest Period for a Eurodollar Loan unless it shall have
given the Agent written notice of its desire therefor not later than 12:00
noon (New York City time) at least three (3) Business Days prior to the first
day of the desired Interest Period. Accordingly, all Liquidity Fundings shall
initially be Alternate Base Rate Loans.
Unless the Agent shall have received written notice by
12:00 noon (New York City time) on the second Business Day prior to the last
day of a CP Tranche Period that the Borrower intends to reduce the aggregate
principal amount of the CP Rate Loans outstanding, Blue Ridge shall be
entitled to assume that the Borrower desires to refinance the maturing CP
Rate Loans on the last day of such CP Tranche Period with new CP Rate Loans
in like principal
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amounts with CP Tranche Periods of approximately the same duration; PROVIDED,
HOWEVER, that Blue Ridge shall not be liable for failure to effect such
refinancing and the Borrower shall remain liable to pay the matured CP Rate
Loans which were not so refinanced (unless they are refinanced with a
Liquidity Funding).
Unless the Agent shall have received written notice by
12:00 noon (New York City time) on the third Business Day prior to the last
day of an Interest Period that the Borrower intends to reduce the aggregate
principal amount of the Eurodollar Loans outstanding from the Liquidity
Banks, each of the Liquidity Banks shall be entitled to assume that the
Borrower desires to refinance its maturing Eurodollar Loans on the last day
of such Interest Period with Eurodollar Loans with a one (1) month Interest
Period.
Section 2.3 COMPUTATION OF CONCENTRATION LIMITS AND UNPAID BALANCE
The Obligor Concentration Limits and the aggregate Unpaid Balance of
Receivables of each Obligor and its Affiliated Obligors (if any) shall be
calculated as if each such Obligor and its Affiliated Obligors were one
Obligor.
Section 2.4 MAXIMUM INTEREST RATE No provision of this Agreement
shall require the payment or permit the collection of interest in excess of
the maximum permitted by applicable law.
Section 2.5 PAYMENTS AND COMPUTATIONS, ETC.
(a) PAYMENTS The Borrower or the Servicer, as the case may
be, shall initiate a wire transfer of immediately available funds of all
amounts to be paid or deposited by the Borrower or the Servicer to the Agent
or any of the Lenders (other than amounts payable under SECTION 4.2) no later
than 11:00 a.m. (New York City time) on the day when due in Dollars to the
Agent at its address specified in SCHEDULE 14.2, and, to the extent such
payment is for the account of a Lender, the Agent shall promptly disburse
such funds to the appropriate Lender.
(b) LATE PAYMENTS To the extent permitted by law, upon
demand, the Borrower or the Servicer, as applicable, shall pay to the Agent
for the account of each Person to whom payment of any Obligation is due,
interest on all amounts not paid or deposited by 2:00 p.m. (New York City
time) on the date when due (without taking into account any applicable grace
period) at the Default Rate; PROVIDED, HOWEVER, that no such interest rate
shall at any time exceed the maximum rate permitted by applicable law.
(c) METHOD OF COMPUTATION All computations of interest,
Servicer's Fee, any per annum fees payable under SECTION 4.1 and any other
per annum fees payable by the Borrower to the Lenders, the Servicer or the
Agent under the Loan Documents shall be made on the basis of a year of 360
days for the actual number of days (including the first day but excluding the
last day) elapsed.
(d) AVOIDANCE OR RECISSION OF PAYMENTS To the maximum
extent permitted by applicable law, no payment of any Obligation shall be
considered to have been paid if at any time such payment is rescinded or must
be returned for any reason.
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Section 2.6 NON-RECEIPT OF FUNDS BY THE AGENT Unless a Lender
notifies the Agent prior to the date and time on which it is scheduled to
fund a Loan that it does not intend to fund, the Agent may assume that such
funding will be made and may, but shall not be obligated to, make the amount
of such Loan available to the intended recipient in reliance upon such
assumption. If such Lender has not in fact funded its Loan proceeds to the
Agent, the recipient of such payment shall, on demand by the Agent, repay to
the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was
so made available by the Agent until the date the Agent recovers such amount
at a rate per annum equal to the Federal Funds Rate for such day.
ARTICLE III.
SETTLEMENTS
Section 3.1 REPORTING.
(a) INFORMATION PACKAGES Not later than the 17th of each
month hereafter, or if any such day is not a Business Day, on the next
succeeding Business Day (each, a "REPORTING DATE"), the Servicer shall
deliver to the Agent, a report in the form of EXHIBIT 3.1(a) (each, an
"INFORMATION PACKAGE") accompanied by an electronic file in a form reasonably
satisfactory to the Agent; PROVIDED, HOWEVER, that if an Event of Default
shall exist and be continuing, the Agent may request that a computation of
the Borrowing Base be made more frequently than monthly.
(b) INTEREST; OTHER AMOUNTS DUE At or before 12:00 noon
(New York City time) on the Business Day before each Settlement Date, the
Agent shall notify the Borrower and the Servicer of (i) the aggregate
principal balance of all Loans that are then outstanding, and (ii) the
aggregate amount of all principal, interest and fees that will be due and
payable by the Borrower to the Agent for the account of the Agent or the
Lenders on such Settlement Date.
Section 3.2 TURNOVER OF COLLECTIONS Without limiting the Agent's and
the Lenders' recourse to the Borrower for payment of any and all Obligations:
(a) If any Information Package reveals that a mandatory
prepayment is required under SECTION 1.5(b), not later than the 12:00
noon (New York City time) on the next succeeding Settlement Date, the
Servicer shall turn over to the Agent, for distribution to the Lenders,
a portion of the Collections equal to the aggregate amount of such
required mandatory prepayments;
(b) If any Loans are to be voluntarily prepaid on a Settlement
Date in accordance with SECTION 1.5(a), on such Settlement Date the
Servicer shall turn over to the Agent, for distribution to the Lenders,
a portion of the Collections equal to the aggregate amount of such
optional prepayment; and
(c) In addition to, but without duplication of, the foregoing,
on (i) each Settlement Date and (ii) each other date on which any
principal of or interest on any of the Loans becomes due (whether by
acceleration or otherwise), the Servicer shall turn over to the Agent,
for distribution to the Lenders, a portion of the Collections equal to
the aggregate amount all Obligations that are due and owing on such
date.
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If the Collections are insufficient to make all payments required under
clauses (a), (b) and (c) and to pay the Servicer's Fees and, if
applicable, all expenses due and owing to any replacement Servicer
under SECTION 8.1(d) (all of the foregoing, collectively, the "REQUIRED
AMOUNTS") and the Borrower has made any Demand Advances, the Borrower
shall make demand upon PCC for payment of the Demand Advances in an
amount equal to the lesser of the Required Amounts or the aggregate
outstanding principal balance of such Demand Advances (plus any accrued
and unpaid interest thereon) and, upon receipt of such amount, the
Borrower shall pay it to the Agent for distribution in accordance with
this SECTION 3.2.
(d) If the amount of Collections and payments on Demand
Advances received by the Agent on any Settlement Date are insufficient
to pay all Required Amounts, such amount shall be applied to the items
specified in the subclauses below, in the order of priority of such
subclauses:
(i) to any accrued and unpaid interest on the Loans
that is then due and owing, including any previously accrued
interest which was not paid on its applicable due date;
(ii) if the Servicer is not the Borrower or an
Affiliate thereof, to any accrued and unpaid Servicer's Fee
that is then due and owing to such Servicer, together with any
invoiced expenses of the Servicer due and owing pursuant to
SECTION 8.1(d);
(iii) to the Usage Fee and the Facility Fee accrued
during such Settlement Period, plus any previously accrued
Usage Fee and Facility Fee not paid on a prior Settlement
Date;
(iv) to the payment of the principal of any Loans
that are then due and owing;
(v) to other Obligations that are then due and owing;
(vi) if the Servicer is the Borrower, PCC or one of
their respective Affiliates, to the accrued and unpaid
Servicer's Fee that are then due and owing to such Servicer;
and
(vii) the balance, if any, to the Borrower.
Section 3.3 NON-DISTRIBUTION OF SERVICER'S FEE Each of the Agent and
the other Secured Parties hereby consents to the retention by the Servicer of
a portion of the Collections equal to the Servicer's Fee (and, if applicable,
any invoiced expenses of such Servicer that are due and owing pursuant to
SECTION 8.1(d)) so long as the Collections received by the Servicer are
sufficient to pay all amounts pursuant to SECTION 3.2 of a higher priority as
specified in such Section.
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Section 3.4 DEEMED COLLECTIONS If on any day:
(a) the Unpaid Balance of any Receivable is reduced as a
result of any defective or rejected goods or services, any cash
discount or any other adjustment by any Originator or any Affiliate
thereof, or as a result of any tariff or other governmental or
regulatory action, or
(b) the Unpaid Balance of any Receivable is reduced or
canceled as a result of a setoff in respect of any claim by the Obligor
thereof (whether such claim arises out of the same or a related or an
unrelated transaction), or
(c) the Unpaid Balance of any Receivable is reduced on account
of the obligation of any Originator or any Affiliate thereof to pay to
the related Obligor any rebate or refund, or
(d) the Unpaid Balance of any Receivable is less than the
amount included in calculating the Net Pool Balance for purposes of any
Information Package (for any reason other than such Receivable becoming
a Defaulted Receivable), or
(e) any of the representations or warranties of the Borrower
set forth in SECTION 6.1(j), (l) or (p) were not true when made with
respect to any Receivable, or any of the representations or warranties
of the Borrower set forth in SECTION 6.1(l) are no longer true with
respect to any Receivable, or any Receivable is repurchased by any of
the Originators pursuant to the Sale Agreement,
then, on such day, the Borrower shall be deemed to have received a Collection
of such Receivable (1) in the case of clauses (a)-(d) above, in the amount of
such reduction or cancellation or the difference between the actual Unpaid
Balance and the amount included in calculating such Net Pool Balance, as
applicable; and (2) in the case of clause (e) above, in the amount of the
Unpaid Balance of such Receivable.
ARTICLE IV.
FEES AND YIELD PROTECTION
Section 4.1 FEES PCC or the Borrower, as applicable, shall pay to
the Agent and the Lenders certain fees from time to time in amounts and
payable on such dates as are set forth in the Fee Letter.
Section 4.2 YIELD PROTECTION. If (i) Regulation D or (ii) any
Regulatory Change:
(a) shall subject an Affected Party to any tax, duty or other
charge with respect to its portion of the Obligations or, as
applicable, its Commitment or its Liquidity Commitment, or shall change
the basis of taxation of payments to the Affected Party of any
Obligations, owed to or funded in whole or in part by it or any other
amounts due under this Agreement in respect of its portion of the
Obligations or, as applicable, its Commitment or its Liquidity
Commitment except for (1) taxes based on, or measured by, net income,
or changes in the rate of tax on or determined by reference to the
overall net income, of such Affected Party imposed by the United States
of America, by the jurisdiction in which such Affected Party's
principal executive office is located and, if
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such Affected Party's principal executive office is not in the United
States of America, by the jurisdiction where such Affected Party's
principal office in the United States is located, (2) franchise taxes,
taxes on, or in the nature of, doing business taxes or capital taxes,
or (3) withholding taxes required for payments made to any foreign
entity which, at the time such foreign entity issues its Commitment or
Liquidity Commitment or becomes an assignee of a Lender hereunder,
fails to deliver to the Agent and the Borrower an accurate IRS Form
1001 or 4224 (or successor form), as applicable; or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Federal
Reserve Board, but excluding any reserve included in the determination
of interest), special deposit or similar requirement against assets of
any Affected Party, deposits or obligations with or for the account of
any Affected Party or with or for the account of any affiliate (or
entity deemed by the Federal Reserve Board to be an affiliate) of any
Affected Party, or credit extended by any Affected Party; or
(c) shall affect the amount of capital required or expected to
be maintained by any Affected Party; or
(d) shall impose any other condition affecting any Obligation
owned or funded in whole or in part by any Affected Party, or its
rights or obligations, if any, to make Loans or Liquidity Fundings; or
(e) shall change the rate for, or the manner in which the
Federal Deposit Insurance Corporation (or a successor thereto) assesses
deposit insurance premiums or similar charges;
and the result of any of the foregoing is or would be:
(x) to increase the cost to or to impose a cost on
(I) an Affected Party funding or making or maintaining any
Loan, any Liquidity Funding, or any commitment of such
Affected Party with respect to any of the foregoing, or (II)
the Agent for continuing its or the Borrower's relationship
with any Affected Party, in each case, in an amount deemed to
be material by such Affected Party,
(y) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement or under
the Liquidity Agreement, or
(z) to reduce the rate of return on such Affected
Party's capital as a consequence of its Commitment, its
Liquidity Commitment or the Loans made by it to a level below
that which such Affected Party could have achieved but for the
occurrence of such circumstances,
then, within thirty days after demand by such Affected Party (which demand shall
be accompanied by a certificate setting forth, in reasonable detail, the basis
of such demand and the methodology for calculating, and the calculation of, the
amounts claimed by the Affected Party), the Borrower shall pay directly to such
Affected Party such additional amount or amounts as will
11
compensate such Affected Party for such actual additional cost, actual
increased cost or actual reduction.
(f) Each Affected Party will promptly notify the Borrower and
the Agent of any event of which it has knowledge (including any future
event that, in the judgment of such Affected Party, is reasonably
certain to occur) which will entitle such Affected Party to
compensation pursuant to this SECTION 4.2; PROVIDED, HOWEVER, no
failure to give or delay in giving such notification shall adversely
affect the rights of any Affected Party to such compensation.
(g) In determining any amount provided for or referred to in
this SECTION 4.2, an Affected Party may use any reasonable averaging
and attribution methods (consistent with its ordinary business
practices) that it (in its reasonable discretion) shall deem
applicable. Any Affected Party when making a claim under this SECTION
4.2 shall submit to the Borrower the above-referenced certificate as to
such actual additional cost, actual increased cost or actual reduced
return (including calculation thereof in reasonable detail), which
statement shall, in the absence of demonstrable error, be conclusive
and binding upon the Borrower.
(h) Each of the Lenders agrees, and to require each Affected
Party to agree that, with reasonable promptness after an officer of
such Lender or such Affected Party responsible for administering the
Transaction Documents becomes aware that it has become an Affected
Party under this SECTION 4.2, is entitled to receive payments under
this SECTION 4.2, or is or has become subject to U.S. withholding taxes
payable by any Loan Party in respect of its investment hereunder, it
will, to the extent not inconsistent with any internal policy of such
Person or any applicable legal or regulatory restriction, (i) use all
reasonable efforts to make, fund or maintain its commitment or
investment hereunder through another branch or office of such Affected
Party, or (ii) take such other reasonable measures, if, as a result
thereof, the circumstances which would cause such Person to be an
Affected Party under this SECTION 4.2 would cease to exist, or the
additional amounts which would otherwise be required to be paid to such
Person pursuant to this SECTION 4.2 would be reduced, or such
withholding taxes would be reduced, and if the making, funding or
maintaining of such commitment or investment through such other office
or in accordance with such other measures, as the case may be, would
not otherwise adversely affect such commitment or investment or the
interests of such Person; provided that such Person will not be
obligated to utilize such other lending office pursuant to this SECTION
4.2 unless the Borrower agrees to pay all incremental expenses incurred
by such Person as a result of utilizing such other office as described
in clause (i) above.
Section 4.3 FUNDING LOSSES In the event that any Lender or any
Liquidity Bank shall, for any reason other than default by such Lender or
Liquidity Bank, actually incur any actual loss or expense (including any actual
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to make any Loan or such
Liquidity Bank to make or maintain any Liquidity Funding) as a result of (i) any
payment of principal with respect to Lender's Loan being made on any day other
than the scheduled last day of an applicable CP Tranche Period or Interest
Period with respect thereto (it being understood that the foregoing shall not
apply to any Alternate Base Rate Loans), or (ii) any Loan not being
12
made in accordance with a request therefor under SECTION 2.1, then, upon
written notice from the Agent to the Borrower and the Servicer, the Borrower
shall pay to the Servicer, and the Servicer shall pay to the Agent for the
account of such Lender or Liquidity Bank, as applicable, the amount of such
actual loss or expense. Such written notice (which shall include the
methodology for calculating, and the calculation of, the amount of such
actual loss or expense, in reasonable detail) shall, in the absence of
demonstrable error, be conclusive and binding upon the Borrower and the
Servicer.
ARTICLE V.
CONDITIONS OF ADVANCES
Section 5.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE The initial
Advance pursuant to this Agreement is subject to the condition precedent that
the Agent shall have received, on or before the date of such initial Advance,
the following each (unless otherwise indicated) dated such date and in form
and substance reasonably satisfactory to the Agent:
(a) Each of the First-Step Receivables Purchase Agreement and
the Sale Agreement, duly executed by the parties thereto;
(b) A certificate of the Secretary or Assistant Secretary of
each Loan Party certifying the names and true signatures of the
officers authorized on its behalf to sign this Agreement and the other
Transaction Documents to be delivered by it hereunder (on which
certificate the Agent and the Lenders may conclusively rely until such
time as the Agent shall receive from such Loan Party a revised
certificate meeting the requirements of this SUBSECTION (b));
(c) The articles or certificate of incorporation of each Loan
Party, duly certified by the Secretary of State of such Loan Party's
state of incorporation, as of a recent date acceptable to the Agent in
each case together with a copy of the by-laws of such Loan Party, duly
certified by the Secretary or an Assistant Secretary of such Loan
Party;
(d) Copies of good standing certificates (or the equivalent)
for each Loan Party, issued by the Secretaries of State of the state of
incorporation of such Loan Party and the state where such Loan Party's
principal place of business is located;
(e) Acknowledgment copies (or other evidence of filing
reasonably acceptable to the Agent) of (i) proper financing statements
(Form UCC-1), in such form as the Agent may reasonably request, naming
each of the Originators as debtor and seller of its Receivables and
Related Assets, PCC as the secured party, and the Borrower as assignee,
(ii) UCC-3 assignments with respect to each of the financing statements
described in clause (i) above naming the Agent, for the benefit of the
Secured Parties, as assignee of the Borrower, and (iii) financing
statements (Form UCC-1), in such form as the Agent may reasonably
request, naming the Borrower as the debtor and the Agent, as agent for
the Secured Parties, as the secured party, or other, similar
instruments or documents, as may be necessary or, in the opinion of the
Agent desirable under the UCC or any comparable law of all appropriate
jurisdictions to perfect the sale by each of the
13
Originators to PCC, and by PCC to the Borrower of, and the Agent's
security interest in the Collateral;
(f) Search reports provided in writing to the Agent (i)
listing all effective financing statements that name any Originator or
Loan Party as debtor and that are filed in the jurisdictions in which
filings were made pursuant to SUBSECTION (e) above and in such other
jurisdictions that the Agent shall reasonably request, together with
copies of such financing statements (none of which (other than any of
the financing statements described in SUBSECTION (e) or above or in
SUBSECTION (m) below) shall cover any Receivables or Related Assets),
and (ii) listing all tax liens and judgment liens (if any) filed
against any debtor referred to in CLAUSE (i) above in the jurisdictions
described therein and showing no such Liens;
(g) The Subordinated Note, duly executed by the Borrower (and
any revolving notes to be issued under the First-Step Receivables
Purchase Agreement, duly executed by PCC);
(h) Favorable opinions of Stoel Rives LLP, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇., Esq. and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, collectively covering the matters set
forth in of EXHIBIT 5.1(h);
(i) Favorable opinions of counsel to the Originators and the
Loan Parties, as to:
(1) the existence of a "true sale" of the Receivables
from each of the Originators to PCC under the First-Step
Receivables Purchase Agreement and from PCC to the Borrower
under the Sale Agreement; and
(2) the inapplicability of the doctrine of
substantive consolidation to the Borrower and each of the
Originators and PCC in connection with any bankruptcy
proceeding involving any of the Originators or PCC;
(j) A PRO FORMA Information Package, prepared as of the
Cut-Off Dates specified in clauses (a)(i) and (b)(i) of the definition
of "Cut-Off Date";
(k) A report in form and substance satisfactory to the Agent
from the Initial Due Diligence Auditor as to a pre-closing due
diligence audit by the Initial Due Diligence Auditor;
(l) The Liquidity Agreement, in form and substance
satisfactory to the Agent, duly executed by the parties thereto;
(m) UCC-3 partial releases and/or termination statements with
respect to any existing Liens on the Collateral;
(n) The Fee Letter, together with payment of the Structuring
Fee;
14
(o) A certificate of an Authorized Officer of each of the Loan
Parties certifying that as of the date of the initial Advance, no Event
of Default or Unmatured Event of Default exists and is continuing; and
(p) Such other agreements, instruments, certificates, opinions
and other documents as the Agent may reasonably request.
Section 5.2 CONDITIONS PRECEDENT TO ALL ADVANCES Each Advance
(including the initial Advance) shall be subject to the further conditions
precedent that on the applicable Borrowing Date, each of the following
statements shall be true (and the Borrower, by accepting the amount of such
Advances or by receiving the proceeds of any Loan comprising such Advance, and
PCC, upon such acceptance or receipt by the Borrower, shall be deemed to have
certified that):
(a) the representations and warranties contained in SECTION
6.1 are correct in all material respects on and as of the date of such
Advance as though made on and as of such day and shall be deemed to
have been made on such day (except to the extent such representations
and warranties expressly refer to an earlier date, in which case they
shall be true and correct as of such earlier date),
(b) no event has occurred and is continuing, or would result
from such Advance, that constitutes an Event of Default or Unmatured
Default,
(c) the Termination Date shall not have occurred, and
(d) the Agent shall have timely received an appropriate
Borrowing Request in accordance with SECTION 2.1;
PROVIDED, HOWEVER, the absence of the occurrence and continuance of an
Unmatured Default shall not be a condition precedent to any Advance which
does not increase the aggregate principal amount of all Advances outstanding
over the aggregate outstanding principal balance of the Advances as of the
opening of business on such day.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Section 6.1 REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES Each Loan
Party represents and warrants, as to itself, as follows:
(a) DUE INCORPORATION AND GOOD STANDING; OWNERSHIP OF THE
ORIGINATORS AND THE BORROWER Each Loan Party is a corporation duly
incorporated, validly existing and in good standing (to the extent
applicable) under the laws of the jurisdiction of its incorporation. PCC
owns, directly or indirectly, all the issued and outstanding capital stock of
each of the Originators and the Borrower, and all of such capital stock is
fully paid and non-assessable and free and clear of any Liens.
(b) DUE QUALIFICATION Each Loan Party is duly qualified to
do business as a foreign corporation in good standing (to the extent
applicable) in all jurisdictions not covered by SECTION 6.1(a) in which the
ownership or lease of property or the conduct of its business requires
15
such qualification, except where the failure to be so qualified or have such
licenses or approvals would not have a Material Adverse Effect.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION Each Loan Party
(i) has all necessary power, authority and legal right, and has obtained all
necessary licenses and approvals, (A) to execute and deliver this Agreement
and the other Transaction Documents to which it is a party, (B) to carry out
the terms of the Transaction Documents to which it is a party, (C) in the
case of the Servicer (or any Affiliate thereof that is acting as a
sub-servicer), to service the Receivables and the Related Assets in
accordance with this Agreement and the Sale Agreement, and (D) in the case of
the Borrower, to grant the security interest in the Collateral and borrow the
Loans on the terms and conditions herein provided, and (ii) has duly
authorized by all necessary corporate action the execution, delivery and
performance of this Agreement and the other Transaction Documents to which it
is a party and, in the case of the Borrower, the security interest described
in CLAUSE (I)(D) above.
(d) TITLE TO RECEIVABLES; VALID SECURITY INTEREST Each
Receivable has been acquired by PCC from the applicable Originator in
accordance with the terms of the First-Step Receivables Purchase Agreement,
and by the Borrower from PCC in accordance with the terms of the Sale
Agreement, and the Borrower has thereby irrevocably obtained all legal and
equitable title to, and has the legal right to sell and encumber, such
Receivable and the Related Assets. Each such Receivable has been transferred
to the Borrower free and clear of any Lien except as contemplated hereby.
Without limiting the foregoing, there have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC
of all appropriate jurisdictions to perfect the Borrower's ownership interest
in such Receivable. This Agreement creates a valid security interest in the
Collateral in favor of the Agent, for the benefit of the Secured Parties,
enforceable against creditors of and purchasers from the Borrower to the
extent provided by the UCC.
(e) NONCONTRAVENTION The execution, delivery and
performance by such Loan Party of this Agreement and each other Transaction
Document to which it is party do not and will not: (i) contravene the terms
of any of its articles or certificate of incorporation or by-laws; (ii)
conflict with or result in a material breach or contravention of, or the
creation of any Lien under, any document evidencing any material Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or (iii) violate any Requirement of Law.
(f) NO PROCEEDINGS There are no actions, suits, labor
controversies, proceedings, claims or disputes pending, or to the best
knowledge of such Loan Party, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, against such Loan Party,
or its Subsidiaries or any of their respective properties which: (i) purport
to affect or pertain to this Agreement or any other Transaction Document, or
any of the transactions contemplated hereby or thereby; or (ii) if determined
adversely to such Loan Party or its Subsidiaries, would reasonably be
expected to have a Material Adverse Effect, except for such matters as
described in (x) PCC's Report on Form 10-K for the fiscal year ended March
28, 1999, and (y) ▇▇▇▇▇-▇▇▇▇▇▇ Company's Report on Form 10-K for the fiscal
year ended May 31, 1999. No injunction, writ, temporary restraining order or
order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery or
performance of this Agreement or any other Transaction Document, or directing
that
16
the transactions provided for herein or therein not be consummated as herein
or therein provided. The Loan Parties are generally subject to suit and
neither they nor any of their properties or revenues enjoys any right of
immunity from judicial proceedings.
(g) ENFORCEABILITY This Agreement and each other
Transaction Document signed by such Loan Party constitutes, a legal, valid
and binding obligation of such Loan Party, enforceable in accordance with its
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability).
(h) GOVERNMENT APPROVALS No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, such Loan
Party of this Agreement or any other Transaction Document, EXCEPT for (i) the
filing of the UCC financing statements referred to in ARTICLE V, and (ii) the
filing of any UCC continuation statements and amendments from time to time
required in relation to any UCC financing statements filed in connection with
this Agreement, as provided in SECTION 8.5, all of which, at the time
required in ARTICLE V or SECTION 8.5, as applicable, shall have been duly
made and shall be in full force and effect.
(i) FINANCIAL STATEMENTS AND ABSENCE OF CERTAIN MATERIAL
ADVERSE CHANGES.
(x) Each of the financial statements of PCC and its
consolidated Subsidiaries previously or hereafter furnished to the
Agent, fairly presents in all material respects the consolidated
financial condition of PCC and its consolidated Subsidiaries, taken as
a whole, as at the dates thereof and the results of their consolidated
operations for the periods covered thereby and each of such financial
statements has been prepared in accordance with GAAP consistently
applied (subject, in the case of interim financial statements, to
customary year-end audit adjustments).
(y) From September 26, 1999 through and including the date of
the initial Advance, there has been no material adverse change in PCC's
consolidated financial condition, business or operations. Since the
date of the initial Advance, there has been no material adverse change
in PCC's consolidated financial condition, business or operations that
has had, or would reasonably be expected to have, a material adverse
effect upon its ability to perform its obligations, as an Originator or
as Servicer, under the Transaction Documents when and as required, and
no material adverse effect on the collectibility of any material
portion of the Receivables.
(z) Since the date of the initial Advance, no event has
occurred which would have a Material Adverse Effect.
(j) NATURE OF RECEIVABLES Each Receivable constitutes an
Account.
(k) MARGIN REGULATIONS The use of all funds obtained by such
Loan Party under this Agreement or any other Transaction Document will not
conflict with or contravene any of Regulations T, U and X promulgated by the
Federal Reserve Board from time to time.
17
(l) QUALITY OF TITLE (i) Each Receivable, together with the
Related Assets, is owned by the Borrower free and clear of any Lien (other
than any Lien arising pursuant to SECTION 5.1(e) or arising solely as the
result of any action taken by the Agent or one of the Secured Parties); (ii)
the Agent, on behalf of the Secured Parties, has a valid and perfected first
priority security interest in the Collateral; and (iii) no financing
statement or other instrument similar in effect covering any portion of the
Collateral is on file in any recording office except such as may be filed (A)
in favor of an Originator in accordance with the Contracts, (B) in favor of
PCC (and the Borrower or the Agent as its assigns) in connection with the
First-Step Receivables Purchase Agreement, (C) in favor of the Borrower (and
the Agent as its assign) in connection with the Sale Agreement, (D) in favor
of the Agent in accordance with this Agreement or (E) in connection with any
Lien arising solely as the result of any action taken by the Agent or one of
the Secured Parties.
(m) ACCURATE REPORTS No Information Package (if prepared by
such Loan Party, or to the extent information therein was supplied by such
Loan Party), no other information furnished verbally or in writing prior to
the date of this Agreement, and no other information, exhibit, financial
statement, document, book, record or report furnished or to be furnished in
writing after the date of this Agreement, by or on behalf of such Loan Party
to the Agent or any of the Lenders pursuant to this Agreement was or will be
inaccurate in any material respect as of the date it was or will be dated or
(except as otherwise disclosed to the Agent or the Lenders at such time) as
of the date so furnished, or contained or (in the case of information or
other materials to be furnished in the future) will contain any material
misstatement of fact or omitted or (in the case of information or other
materials to be furnished in the future) will omit to state a material fact
or any fact necessary to make the statements contained therein not materially
misleading in light of the circumstances made or presented.
(n) OFFICES The principal places of business and chief
executive offices of the Servicer and the Borrower, and the offices where the
Servicer and the Borrower keep their books, records and documents evidencing
Receivables, the related Contracts, purchase orders and other agreements
related to such Receivables, are located at the addresses specified in
SCHEDULE 6.1(n) (or at such other locations, notified to the Agent in
accordance with SECTION 7.1(f), in jurisdictions where all action required by
SECTION 8.5 has been taken and completed).
(o) LOCK-BOX ACCOUNTS The names and addresses of all the
Lock-Box Banks, together with the account numbers of the accounts of the
Borrower at such Lock-Box Banks, are specified in SCHEDULE 6.1(o) (or have
been notified to and approved by the Agent in accordance with SECTION
7.3(d)). As of the date of each of the Advances occurring on or after January
31, 2000, each of the Lock-Box Accounts is subject to a Lock-Box Agreement
that is in full force and effect.
(p) ELIGIBLE RECEIVABLES Each Receivable included as an
Eligible Receivable in the Net Pool Balance in connection with any
computation or recomputation of the Borrowing Base is an Eligible Receivable
on such date.
(q) YEAR 2000 READINESS Each of the Loan Parties (i) has
reviewed the areas within its business and operations which could reasonably
be expected to be adversely affected by the Year 2000 Problem, (ii) has
developed a Year 2000 Plan to address the Year 2000 Problem on a timely
basis, (iii) is taking all actions reasonably necessary to meet the schedule
18
and goals of the Year 2000 Plan and (iv) has established adequate reserves
reasonably necessary to implement the Year 2000 Plan. Neither of the Loan
Parties reasonably anticipates that the Year 2000 Problem will have a
Material Adverse Effect.
(r) NAMES In the past five (5) years, the Borrower has not
used any corporate names, trade names or assumed names other than the name in
which it has executed this Agreement.
(s) CREDIT AND COLLECTION POLICY With respect to each
Receivable, each of the applicable Originator, the Borrower and the Servicer
has complied in all material respects with the applicable Credit and
Collection Policy, whether written or unwritten, and no change has been made
to such Credit and Collection Policy since the date of this Agreement which
would be reasonably likely to materially and adversely affect the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables except for such changes as to which the Agent has
received the notice required under SECTION 7.2(j) and has given its prior
written consent thereto (which consent shall not be unreasonably withheld or
delayed).
(t) PAYMENTS TO ORIGINATOR With respect to each Receivable
and its Related Rights sold or contributed to the Borrower by PCC, the
Borrower has given, and PCC has received, reasonably equivalent value in
exchange therefor, and such transfer was not made for or on account of an
antecedent debt. No transfer by PCC of any Receivable is or may be voidable
under any section of the Federal Bankruptcy Code.
(u) NOT AN INVESTMENT COMPANY The Borrower is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended from time to time, or any successor statute.
(v) BORROWING BASE As of each Borrowing Date, after giving
effect to the Loans to be made on such date, the Borrowing Base is at least
equal to the aggregate outstanding principal balance of the Advances.
ARTICLE VII.
GENERAL COVENANTS OF LOAN PARTIES
Section 7.1 AFFIRMATIVE COVENANTS OF LOAN PARTIES From the date
hereof until the Final Payout Date, unless the Agent shall otherwise consent
in writing:
(a) COMPLIANCE WITH LAWS, ETC. Each Loan Party will comply
in all material respects with all applicable laws, rules, regulations and
orders, including those with respect to the Receivables and related
Contracts, except where the failure to so comply would not individually or in
the aggregate have a Material Adverse Effect.
(b) PRESERVATION OF CORPORATE EXISTENCE Each Loan Party
will preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified in good standing (to the extent applicable) as a foreign
corporation in each jurisdiction where the failure to preserve and maintain
such existence, rights, franchises, privileges and qualification would have a
Material Adverse Effect.
19
(c) AUDITS Each Loan Party will (i) at any time and from
time to time upon not less than ten (10) Business Days' notice (unless an
Event of Default has occurred and is continuing, in which case no such notice
shall be required) during regular business hours, permit the Agent or any of
its agents or representatives: (A) to examine and make copies of and
abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in the possession or under the control
of such Loan Party relating to Receivables, including, without limitation,
the related Contracts and purchase orders and other agreements, and (B) to
visit the offices and properties of such Loan Party for the purpose of
examining such materials described in CLAUSE (i)(A) next above, and to
discuss matters relating to Receivables or such Loan Party's performance
hereunder with any of the officers or employees of such Loan Party having
knowledge of such matters; and (ii) without limiting the provisions of CLAUSE
(i) above, from time to time, at the expense of such Loan Party, permit
certified public accountants or auditors selected by the Agent to conduct a
review of such Loan Party's books and records with respect to the Receivables
and Related Assets (each, a "REVIEW"); PROVIDED, HOWEVER, that, so long as no
Event of Default has occurred and is continuing, the Loan Parties shall only
be responsible for the reasonable costs and expenses of one such Review under
this Section or under SECTION 7.2(g) in any one (1) calendar year.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT The Servicer
will maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing
Receivables in the event of the destruction of the originals thereof), and
keep and maintain, all documents, books, records and other information
reasonably necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the daily
identification of outstanding Unpaid Balances by Obligor and related debit
and credit details of the Receivables). Each of the Borrower and PCC shall
post all Demand Advances to its respective books and records in accordance
with GAAP on or before each Settlement Date.
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND
CONTRACTS Each Loan Party will, at its expense, timely and fully perform and
comply with all material provisions, covenants and other promises, if any,
required to be observed by it under the Contracts related to the Receivables
and all agreements related to such Receivables, except where the failure to
so perform or comply would not have a Material Adverse Effect.
(f) LOCATION OF RECORDS Each Loan Party will keep its
principal place of business and chief executive office, and the offices where
it keeps its records concerning the Receivables, all related Contracts and
all agreements related to such Receivables (and all original documents
relating thereto), at the address(es) of the Servicer and the Borrower
referred to in SECTION 6.1(n) or, upon 15 days' prior written notice to the
Agent, at such other locations in jurisdictions where all action required by
SECTION 8.5 shall have been taken and completed.
(g) CREDIT AND COLLECTION POLICIES The Borrower will
require, and PCC will cause, each Originator to comply in all material
respects with the applicable Credit and Collection Policy, whether written or
unwritten, in regard to each Receivable and the related Contracts.
(h) SALE AGREEMENT AND FIRST-STEP RECEIVABLES PURCHASE
AGREEMENT The Borrower will perform and comply in all material respects with
all of its covenants and
20
agreements set forth in the Sale Agreement, and will enforce the performance
by PCC of its obligations under the Sale Agreement and by PCC and each of the
Originators of its respective obligations under the First-Step Receivables
Purchase Agreement. PCC will perform and comply in all material respects with
all of its covenants and agreements set forth in the Sale Agreement and the
First-Step Receivables Purchase Agreement, and will enforce the performance
by each of the Originators of its obligations under the First-Step
Receivables Purchase Agreement.
(i) COLLECTIONS All Obligors shall be instructed to make
payments on Receivables directly to a Lock-Box Account which, from and after
January 31, 2000, is the subject of a Lock-Box Agreement. If, notwithstanding
the foregoing, any Collections are paid directly to any Loan Party, such Loan
Party shall deposit the same (with any necessary indorsements) to such a
Lock-Box Account within two (2) Business Days after receipt thereof. Upon
demand of the Agent, the Borrower or the Servicer shall establish a
segregated account at Wachovia which is subject to a perfected security
interest in favor of the Agent, for the benefit of the Secured Parties (the
"COLLECTION ACCOUNT"), into which all deposits from time to time in Lock-Box
Accounts, and all other Collections, are concentrated pending application in
accordance with the terms of this Agreement to the Obligations.
(j) FURTHER ASSURANCES Each of the Loan Parties shall take
all necessary action to establish and maintain (i) in favor of the Borrower,
a valid and perfected ownership interest in the Receivables and Related
Assets, and (ii) in favor of the Agent for the benefit of the Secured
Parties, a valid and perfected first priority security interest in the
Receivables and the Related Assets, including, without limitation, taking
such action to perfect, protect or more fully evidence the interest of the
Agent as the Agent may reasonably request.
Section 7.2 REPORTING REQUIREMENTS OF LOAN PARTIES From the date
hereof until the Final Payout Date, unless the Agent shall otherwise consent
in writing:
(a) QUARTERLY FINANCIAL STATEMENTS (i) PCC will furnish to
the Agent as soon as available and in any event within 55 days after the end
of each of the first three (3) quarters of each fiscal year of PCC, copies of
its unaudited consolidated balance sheets and related consolidated statements
of income and cash flow, showing the financial condition of PCC and its
consolidated Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such Subsidiaries during such
fiscal quarter and the then elapsed portion of the fiscal year, together with
a Certificate of Financial Officer in the form attached hereto as EXHIBIT 7.2
executed by the chief financial officer or treasurer of PCC; and (ii) the
Borrower will furnish to the Agent, as soon as available and in any event
within 55 days after the end of each of the first three (3) quarters of each
fiscal year of the Borrower, copies of the financial statements of the
Borrower, consisting of at least a balance sheet as at the close of such
quarter and statements of earnings and changes in cash flows for such quarter
and for the period from the beginning of the fiscal year to the close of such
quarter, together with a Certificate of Financial Officer in the form
attached hereto as EXHIBIT 7.2 executed by the chief financial officer or
treasurer of the Borrower;
(b) ANNUAL FINANCIAL STATEMENTS (i) PCC will furnish to the
Agent, as soon as available and in any event within 100 days after the end of
each fiscal year of PCC, copies of its audited consolidated balance sheets
and related audited consolidated statements of income and
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cash flow, showing the financial condition of PCC and its consolidated
Subsidiaries as of the close of such fiscal year and the results of its
operations and the operations of such Subsidiaries during such year, all
audited by PriceWaterhouse Coopers LLP or other independent public
accountants of recognized national standing and accompanied by an opinion of
such accountants (which shall not be qualified in any material respect) to
the effect that such consolidated financial statements fairly present the
financial condition and results of operations of PCC on a consolidated basis
(except as noted therein) in accordance with GAAP consistently applied; and
(ii) the Borrower will furnish to the Agent, as soon as available and in any
event within 100 days after the end of each fiscal year of the Borrower,
copies of the financial statements of the Borrower, consisting of at least a
balance sheet of Borrower for such year and statements of earnings, cash
flows and shareholders' equity, setting forth in each case in comparative
form corresponding figures from the preceding fiscal year, together with a
Certificate of Financial Officer in the form attached hereto as EXHIBIT 7.2
executed by the chief financial officer or treasurer of the Borrower;
(c) REPORTS TO SEC AND EXCHANGES In addition to the reports
required by SUBSECTIONS (a) and (b) next above, promptly upon the Agent's
reasonable request, PCC will furnish to the Agent copies of any reports or
registration statements that PCC files with the SEC or any national
securities exchange other than registration statements relating to employee
benefit plans and to registrations of securities for selling securities;
(d) ERISA Promptly after the filing or receiving thereof,
each Loan Party will furnish to the Agent copies of all reports and notices
with respect to any Reportable Event which any Loan Party files under ERISA
with the Internal Revenue Service, the PBGC or the U.S. Department of Labor
or which such Loan Party receives from the PBGC;
(e) EVENTS OF DEFAULT, ETC. As soon as possible and in any
event within ten (10) Business Days after any Authorized Officer of either
Loan Party obtains knowledge of the occurrence of any Event of Default or any
Unmatured Default, each Loan Party will furnish to the Agent a written
statement of a Authorized Officer of such Loan Party setting forth details of
such event and the action that such Loan Party will take with respect thereto;
(f) LITIGATION As soon as possible and in any event within
ten (10) Business Days after any Authorized Officer of either Loan Party
obtains knowledge thereof, such Loan Party will furnish to the Agent notice
of (i) any litigation, investigation or proceeding relating to either of the
Loan Parties, the Transaction Documents or the Receivables which may exist at
any time which would reasonably be expected to have a Material Adverse Effect
and (ii) any development in previously disclosed litigation which development
would reasonably be expected to have a Material Adverse Effect;
(g) REVIEWS OF RECEIVABLES As soon as available and in any
event within 120 days following the end of each fiscal year of the Borrower,
the Borrower will furnish to the Agent a report summarizing the results of
the Review referenced in SECTION 7.1(c) prepared by accountants or auditors
reasonably selected by the Agent as of the end of such fiscal year,
substantially in the form of the report delivered pursuant to SECTION 5.1(k)
and covering such other matters as the Agent may reasonably request in order
to protect the interests of the Agent or the other Secured Parties under or
as contemplated by this Agreement;
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(h) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY Each
Loan Party will furnish to the Agent prompt written notice of any material
change in the character of such Loan Party's business prior to the occurrence
of such change, and each Loan Party will provide the Agent with not less than
fifteen (15) Business Days' prior written notice of any material change in
the Credit and Collection Policy (together with a copy of such proposed
change); and
(i) OTHER Promptly, from time to time, each Loan Party will
furnish to the Agent such other information, documents, records or reports
respecting the Receivables or the condition or operations, financial or
otherwise, of such Loan Party as the Agent may from time to time reasonably
request in order to protect the interests of the Agent or the other Secured
Parties under or as contemplated by this Agreement.
Section 7.3 NEGATIVE COVENANTS OF LOAN PARTIES From the date hereof
until the Final Payout Date, without the prior written consent of the Agent:
(a) SALES, LIENS, ETC. (i) The Borrower will not, except as
otherwise provided herein and in the other Transaction Documents, sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create
or suffer to exist any Lien upon or with respect to, any Collateral, or any
account to which any Collections are sent, or any right to receive income or
proceeds from or in respect of any of the foregoing (except, prior to the
execution of the Lock-Box Agreements, set-off rights of any bank at which any
such account is maintained), and (ii) the Servicer will not assert any
interest in the Receivables, except as the Servicer.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES No Loan Party
will, except as otherwise permitted in SECTION 8.2(c), extend, amend or
otherwise modify the terms of any Receivable, or amend, modify or waive any
material term or condition of any Contract related thereto in any way that
would have a Material Adverse Effect.
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY No
Loan Party will make or permit to be made any change in the character of its
business or in the Credit and Collection Policy, which change would, in
either case, have a Material Adverse Effect.
(d) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS No Loan
Party will add or terminate any bank as a Lock-Box Bank from those listed in
SCHEDULE 6.1(o) or, after the Collection Account has been established
pursuant to SECTION 7.1(i), make any change in its instructions to Obligors
regarding payments to be made to the Borrower or the Servicer or payments to
be made to any Lock-Box Bank (except for a change in instructions solely for
the purpose of directing Obligors to make such payments to another existing
Lock-Box Bank), unless (i) the Agent shall have received prior written notice
of such addition, termination or change and (ii) the Agent shall have
received duly executed copies of Lock-Box Agreements in a form reasonably
acceptable to the Agent with each new Lock-Box Bank.
(e) DEPOSITS TO LOCK-BOX ACCOUNTS AND COLLECTION ACCOUNT No
Loan Party will deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Lock-Box Account or the Collection Account, any
cash or cash proceeds other than Collections of Receivables.
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(f) CHANGES TO OTHER DOCUMENTS No Loan Party will enter
into any amendment or modification of, or supplement to, the First-Step
Receivables Purchase Agreement, the Sale Agreement, the Subordinated Note or
the Borrower's articles or certificate of incorporation.
(g) RESTRICTED PAYMENTS BY THE BORROWER The Borrower will
not:
(i) Purchase or redeem any shares of the capital stock of the
Borrower, declare or pay any dividends thereon, make any loan to any
Originator, make any distribution to stockholders or set aside any
funds for any such purpose, unless, in each of the foregoing cases: (A)
such purchase, redemption, payment, loan or distribution is made on, or
immediately following, a Settlement Date after payment of all
Obligations due and owing on such Settlement Date, and (B) after giving
effect to such purchase, redemption, payment, loan or distribution, the
Borrower's net worth (determined in accordance with GAAP) will be at
least $4,500,000; or
(ii) Make any payment of principal or interest on the
Subordinated Note if any Event of Default exists or would result
therefrom or if such payment would result in the Borrower's having
insufficient cash on hand to pay all Obligations that will be due and
owing on the next succeeding Settlement Date.
(h) BORROWER INDEBTEDNESS The Borrower will not incur or
permit to exist any Indebtedness or liability on account of deposits except:
(A) Subordinated Loans incurred in accordance with the Sale Agreement and
evidenced by a Subordinated Note, (B) current payables and expense
reimbursement obligations arising under the Transaction Documents and not
overdue and (C) other current accounts payable arising in the ordinary course
of business and not overdue, in an aggregate amount at any time outstanding
of less than $10,775.
(i) PROHIBITION ON ADDITIONAL NEGATIVE PLEDGES No Loan
Party will, nor will it permit any of its Subsidiaries to, enter into or
assume any agreement (other than this Agreement and the other Transaction
Documents) prohibiting the creation or assumption of any Lien upon the
Receivables or Related Assets, whether now owned or hereafter acquired,
except as contemplated by the Transaction Documents, or otherwise prohibiting
or restricting any transaction contemplated hereby or by the other
Transaction Documents, and no Loan Party will enter into or assume any
agreement creating any Lien upon the Subordinated Note.
(j) NAME CHANGE, OFFICES, RECORDS AND BOOKS OF ACCOUNTS The
Borrower will not change its name, identity or corporate structure (within
the meaning of Section 9-402(7) of any applicable enactment of the UCC) or
relocate its chief executive office or any office where Records are kept by
it unless it shall have: (i) given the Agent at least fifteen (15) Business
Days' prior written notice thereof and (ii) prior to the effectiveness of
such change, delivered to the Agent all financing statements, instruments and
other documents requested by the Agent in connection with such change or
relocation.
(k) MERGERS, CONSOLIDATIONS AND ACQUISITIONS The Borrower
will not merge into or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or purchase, lease or otherwise
acquire (in one transaction or a series of transactions) all or substantially
all of the assets of any other Person (whether directly by
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purchase, lease or other acquisition of all or substantially all of the
assets of such Person or indirectly by purchase or other acquisition of all
or substantially all of the capital stock of such other Person) other than
the acquisition of the Receivables and Related Assets pursuant to the Sale
Agreement.
(l) DISPOSITION OF RECEIVABLES AND RELATED ASSETS Except
pursuant to this Agreement, the Borrower will not sell, lease, transfer,
assign or otherwise dispose of (in one transaction or in a series of
transactions) any Receivables and Related Assets.
(m) BORROWING BASE The Borrower will not request any
Advance if, after giving effect thereto, the aggregate outstanding principal
balance of the Loans would exceed the Borrowing Base.
Section 7.4 SEPARATE CORPORATE EXISTENCE OF THE BORROWER Each Loan
Party hereby acknowledges that Lenders and the Agent are entering into the
transactions contemplated hereby in reliance upon the Borrower's identity as
a legal entity separate from the Servicer and its other Affiliates.
Therefore, each Loan Party shall take all steps specifically required by this
Agreement or reasonably required by the Agent to continue the Borrower's
identity as a separate legal entity and to make it apparent to third Persons
that the Borrower is an entity with assets and liabilities distinct from
those of its Affiliates, and is not a division of PCC or any other Person.
Without limiting the foregoing, each Loan Party will take such actions as
shall be required in order that:
(a) The Borrower will be a limited purpose corporation whose
primary activities are restricted in its certificate of incorporation
to purchasing or otherwise acquiring from PCC, owning, holding,
granting security interests in the Collateral, entering into agreements
for the financing and servicing of the Receivables, making loans to the
Originators, and conducting such other activities as it deems necessary
or appropriate to carry out its primary activities;
(b) Not less than one (1) member of the Borrower's Board of
Directors (the "INDEPENDENT DIRECTOR") shall be an individual who is
not, and never has been, a direct, indirect or beneficial stockholder,
officer, director, employee, affiliate, associate, material supplier or
material customer of PCC or any of its Affiliates (other than an
Affiliate organized with a limited purpose charter for the purpose of
acquiring receivables or other financial assets or intangible
property). The certificate of incorporation of the Borrower shall
provide that (a) at least one (1) member of the Borrower's Board of
Directors shall be an Independent Director, (b) the Borrower's Board of
Directors shall not approve, or take any other action to cause the
filing of, a voluntary bankruptcy petition with respect to the Borrower
unless the Independent Director shall approve the taking of such action
in writing prior to the taking of such action and (c) the provisions
requiring an independent director and the provision described in
clauses (a) and (b) of this paragraph (ii) cannot be amended without
the prior written consent of the Independent Director;
(c) The Independent Director shall not at any time serve as a
trustee in bankruptcy for the Borrower or any Affiliate thereof;
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(d) Any director, employee, consultant or agent of the
Borrower will be compensated from the Borrower's funds for services
provided to the Borrower. The Borrower will not engage any agents other
than its attorneys, auditors and other professionals and a servicer and
any other agent contemplated by the Transaction Documents for the
Collateral, which servicer will be fully compensated for its services
by payment of the Servicer's Fee, and certain organizational expenses
in connection with the formation of the Borrower;
(e) The Borrower will contract with the Servicer to perform
for the Borrower all operations required on a daily basis to service
the Collateral. The Borrower will pay the Servicer the Servicer's Fee
pursuant hereto. The Borrower will not incur any material indirect or
overhead expenses for items shared with PCC (or any other Affiliate
thereof) which are not reflected in the Servicer's Fee. To the extent,
if any, that the Borrower (or any other Affiliate thereof) shares items
of expenses not reflected in the Servicer's Fee, for legal, auditing
and other professional services and directors' fees, such expenses will
be allocated to the extent practical on the basis of actual use or the
value of services rendered, and otherwise on a basis reasonably related
to the actual use or the value of services rendered, it being
understood that PCC shall pay all expenses relating to the preparation,
negotiation, execution and delivery of the Transaction Documents,
including, without limitation, legal, rating agency and other fees;
(f) The Borrower's operating expenses will not be paid by any
other Loan Party or other Affiliate of the Borrower;
(g) The Borrower will have its own stationery;
(h) The books of account, financial reports and corporate
records of the Borrower will be maintained separately from those of PCC
and each other Affiliate of the Borrower;
(i) Any financial statements of any Loan Party or Affiliate
thereof which are consolidated to include the Borrower will contain
detailed notes clearly stating that (A) all of the Borrower's assets
are owned by the Borrower, and (B) the Borrower is a separate corporate
entity with its own separate creditors that will be entitled to be
satisfied out of the Borrower's assets prior to any value in the
Borrower becoming available to the Borrower's equity holders; and the
accounting records and the published financial statements of each of
the Originators will clearly show that, for accounting purposes, the
Receivables and Related Assets have been sold by such Originator to the
Borrower;
(j) The Borrower's assets will be maintained in a manner that
facilitates their identification and segregation from those of the
Servicer and the other Affiliates;
(k) Each Affiliate of the Borrower will strictly observe
corporate formalities in its dealings with the Borrower, and, except as
permitted pursuant to this Agreement with respect to Collections, funds
or other assets of the Borrower will not be commingled with those of
any of its Affiliates;
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(l) No Affiliate of the Borrower will maintain joint bank
accounts with the Borrower or other depository accounts with the
Borrower to which any such Affiliate (other than in the Borrower's or
such Affiliate's existing or future capacity as the Servicer hereunder
or under the Sale Agreement) has independent access, PROVIDED that
prior to demand by the Agent pursuant to SECTION 7.1(i) to establish a
segregated Collection Account, Collections may be deposited into
general accounts of PCC, subject to the obligations of the Servicer
hereunder;
(m) No Affiliate of the Borrower shall, directly or
indirectly, name the Borrower or enter into any agreement to name the
Borrower as a direct or contingent beneficiary or loss payee on any
insurance policy covering the property of any Affiliate of the
Borrower;
(n) Each Affiliate of the Borrower will maintain arm's length
relationships with the Borrower, and each Affiliate of the Borrower
that renders or otherwise furnishes services or merchandise to the
Borrower will be compensated by the Borrower at market rates for such
services or merchandise;
(o) No Affiliate of the Borrower will be, nor will it hold
itself out to be, responsible for the debts of the Borrower or the
decisions or actions in respect of the daily business and affairs of
the Borrower. PCC and the Borrower will immediately correct any known
misrepresentation with respect to the foregoing and they will not
operate or purport to operate as an integrated single economic unit
with respect to each other or in their dealing with any other entity;
(p) The Borrower will keep correct and complete books and
records of account and minutes of the meetings and other proceedings of
its stockholder and board of directors, as applicable, and the
resolutions, agreements and other instruments of the Borrower will be
continuously maintained as official records by the Borrower; and
(q) Each of the Borrower, on the one hand, and the
Originators, on the other hand, will conduct its business solely in its
own corporate name and in such a separate manner so as not to mislead
others with whom they are dealing.
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 DESIGNATION OF SERVICER.
(a) PCC AS INITIAL SERVICER The servicing, administering
and collection of the Receivables shall be conducted by the Person designated
as Servicer hereunder from time to time in accordance with this SECTION 8.1.
Until the Agent gives to PCC a Successor Notice (as defined in SECTION
8.1(b)), PCC is hereby designated as, and hereby agrees to perform the duties
and obligations of, Servicer pursuant to the terms hereof.
(b) SUCCESSOR NOTICE; SERVICER TRANSFER EVENTS Upon PCC's
receipt of a notice from the Agent following a Servicer Transfer Event of the
designation of a new Servicer (a "SUCCESSOR NOTICE"), PCC agrees that it will
terminate its activities as Servicer hereunder in a
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manner that will facilitate the transition of the performance of such
activities to the new Servicer, and the Agent (or the designee of the Agent)
shall assume each and all of PCC's obligations to service and administer the
Receivables, on the terms and subject to the conditions herein set forth, and
PCC shall use its reasonable best efforts to assist the Agent (or the Agent's
designee) in assuming such obligations. Without limiting the foregoing, PCC
agrees, at its expense, to take all actions necessary to provide the new
Servicer with access to all computer software necessary to generate reports
useful in collecting or billing Receivables, solely for use in collecting and
billing Receivables. If PCC disputes the occurrence of a Servicer Transfer
Event, PCC may take appropriate action to resolve such dispute; provided that
PCC must terminate its activities hereunder as Servicer and allow the newly
designated Servicer to perform such activities on the date specified by the
Agent as described above, notwithstanding the commencement or continuation of
any proceeding to resolve the aforementioned dispute, if the Agent reasonably
determine, in good faith, that such termination is necessary or advisable to
protect the Secured Parties' interests hereunder.
(c) SUBCONTRACTS. So long as PCC is acting as the Servicer,
it may subcontract with one or more of the Originators for servicing,
administering or collecting all or any portion of the Receivables, PROVIDED,
HOWEVER, that no such subcontract shall relieve PCC of its primary liability
for performance of its duties as Servicer pursuant to the terms hereof and
any such subservicing arrangement may be terminated at the request of the
Agent at any time after a Successor Notice has been given. In addition to the
foregoing, with the prior written consent of the Agent (which consent shall
not be unreasonably withheld or delayed), any Servicer may subcontract with
other Persons for servicing, administering or collecting all or any portion
of the Receivables, PROVIDED, HOWEVER, that no such subcontract shall relieve
such Servicer of its primary liability for performance of its duties as
Servicer pursuant to the terms hereof and any such subservicing arrangement
may be terminated at the request of the Agent at any time that the Agent
reasonably determines that such subservicer is not performing adequately.
(d) EXPENSE INDEMNITY AFTER A SERVICER TRANSFER EVENT. In
addition to, and not in lieu of the Servicer's Fee, if PCC or one of its
Affiliates is replaced as Servicer following a Servicer Transfer Event, the
Borrower shall reimburse the Servicer within ten (10) Business Days after
receipt of a written invoice, any and all reasonable costs and expenses of
the Servicer incurred in connection with its servicing of the Receivables for
the benefit of the Secured Parties.
Section 8.2 DUTIES OF SERVICER.
(a) APPOINTMENT; DUTIES IN GENERAL Each of the Borrower,
the Lenders and the Agent hereby appoints as its agent, the Servicer, as from
time to time designated pursuant to SECTION 8.1, to enforce its rights and
interests in and under the Receivables, the Related Security and the related
Contracts. The Servicer shall take or cause to be taken all such actions as
may be necessary or advisable to collect each Receivable from time to time,
all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and
Collection Policy.
(b) SEGREGATION OF COLLECTIONS The Servicer shall not be
required (unless otherwise requested by the Agent) to segregate the funds
constituting such portions of such Collections prior to the remittance
thereof in accordance with ARTICLE III. If instructed by the Agent, the
Servicer shall segregate and deposit into the Collection Account Collections
not later
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than the second Business Day following receipt by the Servicer of such
Collections in immediately available funds.
(c) MODIFICATION OF RECEIVABLES PCC, while it is the
Servicer, may, in accordance with the Credit and Collection Policy, so long
as no Event of Default and no Unmatured Default shall have occurred and be
continuing, extend the maturity or adjust the Unpaid Balance of any
Receivable as PCC may reasonably determine to be appropriate to maximize
Collections in a manner consistent with the Credit and Collection Policy
(although no such extension or adjustment shall alter the status of such
Receivable as a Defaulted Receivable or a Delinquent Receivable or, in the
case of an adjustment, limit the rights of the Agent or the Lenders under
SECTION 3.4).
(d) DOCUMENTS AND RECORDS Each Loan Party shall deliver to
the Servicer, and the Servicer shall hold in trust for the Borrower and the
Secured Parties, all documents, instruments and records (including, without
limitation, computer tapes or disks) that evidence or relate to Receivables.
(e) CERTAIN DUTIES TO THE BORROWER The Servicer shall, as
soon as practicable following receipt, turn over to the Borrower (i) that
portion of the Collections which are not required to be turned over to the
Agent, less the Servicer's Fee, and, in the event that neither PCC nor any
other Loan Party or Affiliate thereof is the Servicer, all reasonable and
appropriate out-of-pocket costs and expenses of the Servicer of servicing,
collecting and administering the Receivables to the extent not covered by the
Servicer's Fee received by it, and (ii) the Collections of any receivable
which is not a Receivable. The Servicer, if other than PCC or any other Loan
Party or Affiliate thereof, shall, as soon as practicable upon demand,
deliver to the Borrower all documents, instruments and records in its
possession that evidence or relate to receivables of the Borrower other than
Receivables, and copies of documents, instruments and records in its
possession that evidence or relate to Receivables.
(f) TERMINATION The Servicer's authorization under this
Agreement shall terminate upon the Final Payout Date.
(g) POWER OF ATTORNEY The Borrower hereby grants to the
Servicer an irrevocable power of attorney, with full power of substitution,
coupled with an interest, to take in the name of the Borrower all steps which
are necessary or advisable to endorse, negotiate or otherwise realize on any
writing or other right of any kind held or transmitted by the Borrower or
transmitted or received by Lender (whether or not from the Borrower) in
connection with any Receivable.
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Section 8.3 RIGHTS OF THE AGENT.
(a) NOTICE TO OBLIGORS At any time when an Unmatured
Default or an Event of Default has occurred and is continuing, the Agent may
notify the Obligors of Receivables, or any of them, of its security interest,
for the benefit of the Secured Parties, in the Collateral.
(b) NOTICE TO LOCK-BOX BANKS At any time after the
occurrence of an Unmatured Default or an Event of Default, the Agent is
hereby authorized to direct the Agent, and the Agent is hereby authorized and
directed to comply with such direction, to give notice to the Lock-Box Banks,
as provided in the Lock-Box Agreements, of the transfer to the Agent of
dominion and control over the Lock-Boxes and related Lock-Box Accounts to
which the Obligors of Receivables make payments. The Borrower and the
Servicer hereby transfer to the Agent, effective when the Agent shall give
notice to the Lock-Box Banks as provided in the Lock-Box Agreements, the
exclusive dominion and control over such Lock-Boxes and Lock-Box Accounts,
and shall take any further action that the Agent may reasonably request to
effect such transfer.
(c) RIGHTS ON SERVICER TRANSFER EVENT At any time following
the designation of a Servicer other than PCC pursuant to SECTION 8.1:
(i) The Agent may direct the Obligors of Receivables,
or any of them, to pay all amounts payable under any
Receivable directly to the Agent or its designee.
(ii) Any Loan Party shall, at the Agent's request and
at such Loan Party's expense, give notice of the Agent's
security interest in the Collateral to each Obligor of
Receivables and direct that payments be made directly to the
Agent or its designee.
(iii) Each Loan Party shall, at the Agent's request:
(A) assemble all of the documents, instruments and other
records (including, without limitation, computer programs,
tapes and disks) which evidence the Collateral, or which are
otherwise necessary or desirable to collect the Collateral,
and make the same available to the successor Servicer at a
place selected by the Agent, and (B) segregate all cash,
checks and other instruments received by it from time to time
constituting Collections in a manner acceptable to the Agent
and promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments
of transfer, to the successor Servicer.
(iv) Each of the Loan Parties, the Agent and the
Lenders hereby authorizes the Agent and grants to the Agent an
irrevocable power of attorney (which shall terminate on the
Final Payout Date), to take any and all steps in such Person's
name and on behalf of such Person which are necessary or
desirable, in the determination of the Agent, to collect all
amounts due under any and all Receivables, including, without
limitation, endorsing any Loan Party's name on checks and
other instruments
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representing Collections and enforcing such
Receivables and the related Contracts.
Section 8.4 RESPONSIBILITIES OF LOAN PARTIES Anything herein to the
contrary notwithstanding:
(a) CONTRACTS Each Loan Party shall remain responsible for
performing all of its obligations (if any) under the Contracts related to the
Receivables and under the related agreements to the same extent as if the
security interest in the Collateral had not been granted hereunder, and the
exercise by the Agent or its designee of its rights hereunder shall not
relieve any Loan Party from such obligations.
(b) LIMITATION OF LIABILITY The Agent and the Lenders shall
not have any obligation or liability with respect to any Receivables,
Contracts related thereto or any other related agreements, nor shall any of
them be obligated to perform any of the obligations of any Loan Party or any
Originator thereunder; PROVIDED, HOWEVER, that if the Agent or any Lender
performs any of such obligations, it shall be liable for failure to perform
such obligations in a manner that is not grossly negligent.
Section 8.5 FURTHER ACTION EVIDENCING THE SECURITY INTEREST.
(a) FURTHER ASSURANCES Each Loan Party agrees that from
time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the Agent
or its designee may reasonably request in order to perfect, protect or more
fully evidence the Agent's security interest, on behalf of the Secured
Parties, in the Collateral, or to enable the Agent or its designee to
exercise or enforce any of the Secured Parties' respective rights hereunder
or under any Transaction Document in respect thereof. Without limiting the
generality of the foregoing, each Loan Party will:
(i) upon the request of the Agent, execute and file
such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate, in accordance
with the terms of this Agreement;
(ii) upon the request of the Agent after the
occurrence and during the continuance of an Event of Default,
▇▇▇▇ conspicuously each Contract evidencing each Receivable
with a legend, acceptable to the Agent, evidencing the Agent's
security interest therein pursuant to this Agreement; and
(iii) ▇▇▇▇ its master data processing records
evidencing the Collateral with a legend, acceptable to the
Agent, evidencing that a security interest in the Collateral
has been granted pursuant to this Agreement.
(b) ADDITIONAL FINANCING STATEMENTS; CONTINUATION
STATEMENTS; PERFORMANCE BY AGENT Each Loan Party hereby authorizes the Agent
or its designee to file one (1) or more
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financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Collateral now existing or hereafter
arising in the name of any Loan Party. If any Loan Party fails to promptly
execute and deliver to the Agent any financing statement or continuation
statement or amendment thereto or assignment thereof requested by the Agent
each Loan Party hereby authorizes the Agent to execute such statement on
behalf of such Loan Party. If any Loan Party fails to perform any of its
agreements or obligations under this Agreement, the Agent or its designee may
(but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the reasonable expenses of the Agent or its
designee incurred in connection therewith shall be payable by Loan Parties as
provided in SECTION 14.5.
Section 8.6 APPLICATION OF COLLECTIONS Any payment by an Obligor in
respect of any indebtedness owed by it to an Originator or the Borrower
shall, except as otherwise specified by such Obligor or required by the
underlying Contract or law, be applied, first, as a Collection of any
Receivable or Receivables then outstanding of such Obligor in the order of
the age of such Receivables, starting with the oldest of such Receivables
and, second, to any other indebtedness of such Obligor.
ARTICLE IX.
SECURITY INTEREST
Section 9.1 GRANT OF SECURITY INTEREST To secure the due and
punctual payment of the Obligations, whether now or hereafter existing, due
or to become due, direct or indirect, or absolute or contingent, including,
without limitation, all Indemnified Amounts, in each case pro rata according
to the respective amounts thereof, the Borrower hereby pledges to the Agent,
for the benefit of the Secured Parties, and hereby grants to the Agent, for
the benefit of the Secured Parties, a security interest in all of the
Borrower's right, title and interest now or hereafter existing in, to and
under (a) all the Receivables and Related Assets, (b) the First-Step
Receivables Purchase Agreement, the Sale Agreement and the other Transaction
Documents, (c) the Demand Advances, and (d) all proceeds of any of the
foregoing (collectively, the "COLLATERAL").
Section 9.2 REMEDIES Upon the occurrence of an Event of Default, the
Agent, on behalf of the Secured Parties, shall have, with respect to the
Collateral granted pursuant to SECTION 9.1, and in addition to all other
rights and remedies available to Lenders or the Agent under this Agreement
and the other Transaction Documents or other applicable law, all the rights
and remedies of a secured party upon default under the UCC.
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Section 9.3 TERMINATION AFTER FINAL PAYOUT DATE Each of the Secured
Parties hereby authorizes the Agent, and the Agent hereby agrees, promptly
after the Final Payout Date to execute and deliver to the Borrower such UCC-3
termination statements as may be necessary to terminate the Agent's security
interest in and Lien upon the Collateral, all at the Borrower's expense. Upon
the Final Payout Date, all right, title and interest of the Agent and the
other Secured Parties in and to the Collateral shall terminate.
Section 9.4 LIMITATION ON RIGHTS TO COLLATERAL PROCEEDS Nothing in
this Agreement shall entitle the Secured Parties to receive or retain
proceeds of the Collateral in excess of the aggregate amount of the
Obligations owing to such Secured Parties (or to any Indemnified Party
claiming through such Secured Parties).
ARTICLE X.
EVENTS OF DEFAULT
Section 10.1 EVENTS OF DEFAULT The occurrence of any of the
following events shall constitute an "EVENT OF DEFAULT" hereunder:
(a) The Servicer or the Borrower shall fail to pay any
Obligation of the type described in clause (i) of the definition of
"Obligations" or to deposit any amount required to be deposited by it
hereunder in respect of any such Obligations within one (1) Business
Day after the same is required to be paid or deposited, or the Servicer
or the Borrower shall fail to pay any Obligation of the type described
in clause (ii) of the definition of "Obligations" or to deposit any
amount required to be deposited by it hereunder in respect of any such
Obligations within five (5) Business Days after the same is required to
be paid or deposited; or
(b) Any representation or warranty made or deemed to be made
by any Loan Party (or any of its officers) under this Agreement or any
other Transaction Document or any Information Package or other
information, recomputation of the Borrowing Base or other report
delivered pursuant hereto shall prove to have been false or incorrect
in any material adverse respect when made or deemed to have been made;
or
(c) (i) Any Loan Party fails to perform or observe any term,
covenant or agreement contained in any of SECTIONS 7.1(i), 7.2(e),
7.2(f), 7.2(g), 7.2(h), 7.3 OR 8.2(b); or
(ii) Any Loan Party fails to perform or observe any
other term, covenant or agreement contained in this Agreement or any
other Transaction Document, and such default shall continue unremedied
for a period of ten (10) Business Days (or, in the case of SECTION
3.1(a), a period of two (2) Business Days) after the earlier to occur
of (A) the date upon which written notice thereof is given to such Loan
Party by the Agent and (B) the date either of the Loan Parties becomes
aware thereof; or
(d) (i) The Borrower shall (A) fail to pay any principal or
interest, regardless of amount, due in respect of any Indebtedness
(other than Subordinated Loans) of which the aggregate unpaid principal
amount is $10,775 or greater, when and as the same shall become due and
payable (after expiration of any applicable grace period) or
33
(B) fail to observe or perform any other term, covenant, condition
or agreement (after expiration of any applicable grace period)
contained in any agreement or instrument evidencing or governing any
such Indebtedness if the effect of any failure referred to in this
CLAUSE (B) is to cause, or permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such
Indebtedness to become due prior to its stated maturity; or
(ii) PCC or any of its Subsidiaries (other than the
Borrower) (A) shall fail to pay any principal or interest, regardless
of amount, due in respect of any Indebtedness of which the aggregate
unpaid principal amount is in excess of $35,000,000, when and as the
same shall become due and payable (after expiration of any applicable
grace period) or (B) shall fail to observe or perform any other term,
covenant, condition or agreement (after expiration of any applicable
grace period) contained in any agreement or instrument evidencing or
governing any Indebtedness in excess of $35,000,000 in aggregate
principal amount of PCC or any of its Subsidiaries (other than the
Borrower) if the effect of any failure referred to in this CLAUSE (B)
is to cause, or permit the holder or holders of such Indebtedness or a
trustee on its or their behalf (with or without the giving of notice,
the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity; or
(e) An Event of Bankruptcy shall have occurred and remain
continuing with respect to any Loan Party or, if the Servicer is not
PCC or an Affiliate thereof, with respect to the Servicer; or
(f) The three (3)-month rolling average Dilution Ratio at any
Cut-Off Date exceeds 4.50%; or
(g) The three (3)-month rolling average Default Ratio at any
Cut-Off Date exceeds 4.75%; or
(h) The three (3)-month rolling average Delinquency Ratio at
any Cut-Off Date exceeds 8.25%; or
(i) On any Settlement Date, after giving effect to the
payments made under ARTICLE II or ARTICLE III, the aggregate
outstanding principal balance of the Advances exceeds the Allocation
Limit; or
(j) There shall have occurred any event which materially
adversely impairs the ability of the Originators, taken as a whole, to
originate Receivables; or
(k) A Change in Control shall occur; or
(l) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Code with regard to any of the
Receivables or Related Assets and such lien shall not have been
released within seven (7) days, or the PBGC shall file a notice of lien
pursuant to Section 4068 of the ERISA with regard to any of the
Receivables or Related Assets; or
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(m) The Agent, on behalf of the Secured Parties, for any
reason, does not have a valid, perfected first priority security
interest in the Receivables and the Related Assets; or
(n) (i) (A) One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered
against the Borrower involving in the aggregate a liability (to the
extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series
of transactions, incidents or conditions, greater than or equal to
$10,775, and the same shall remain unsatisfied, unvacated and unstayed
pending appeal for a period of thirty (30) days after the entry
thereof, (B) any non-monetary judgment, order or decree is entered
against the Borrower which has a Material Adverse Effect, or (C) any
non-monetary judgment, order or decree is entered against the Borrower
which would reasonably be expected to have a Material Adverse Effect,
and the same shall remain unsatisfied, unvacated and unstayed pending
appeal for a period of ten (10) days after the entry thereof; or
(ii) (A) One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered
against PCC or any of the Originators involving in the aggregate a
liability (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage) as to any
single or related series of transactions, incidents or conditions, of
$35,000,000 or more, and the same shall remain unsatisfied, unvacated
and unstayed pending appeal for a period of thirty (30) days after the
entry thereof, (B) any non-monetary judgment, order or decree is
entered against PCC or any of the Originators which has a Material
Adverse Effect, or (C) any non-monetary judgment, order or decree is
entered against PCC or any of the Originators which would reasonably be
expected to have a Material Adverse Effect, and the same shall remain
unsatisfied, unvacated and unstayed pending appeal for a period of ten
(10) days after the entry thereof; or
(o) (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which his resulted or could reasonably be
expected to result in liability of any of the Originators under Title
IV of ERISA to such Pension Plan, such Multiemployer Plan or the PBGC
in an aggregate amount in excess of $35,000,000; (ii) the aggregate
amount of Unfunded Pension Liability among all Pension Plans at any
time exceeds $50,000,000; or (iii) any of the Originators or any ERISA
Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $35,000,000; or
(p) Any other event occurs that has, or could reasonably be
expected to have, a Material Adverse Effect.
35
Section 10.2 REMEDIES.
(a) OPTIONAL ACCELERATION Upon the occurrence of an Event
of Default (other than an Event of Default described in SECTION 10.1(e) with
respect to the Borrower), the Agent may by notice to the Borrower, declare
the Termination Date to have occurred and the Obligations to be immediately
due and payable, whereupon the Aggregate Commitment shall terminate and all
Obligations shall become immediately due and payable.
(b) AUTOMATIC ACCELERATION Upon the occurrence of an Event
of Default described in SECTION 10.1(e) with respect to the Borrower, the
Termination Date shall automatically occur and the Obligations shall be
immediately due and payable.
(c) ADDITIONAL REMEDIES Upon the Termination Date pursuant
to this SECTION 10.2, the Aggregate Commitment will terminate, no Loans or
Advances thereafter will be made, and the Agent, on behalf of the Secured
Parties, shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC
of each applicable jurisdiction and other applicable laws, which rights shall
be cumulative.
ARTICLE XI.
THE AGENT
Section 11.1 APPOINTMENT.
(a) Each Lender hereby irrevocably designates and appoints
Wachovia as its agent hereunder, and authorizes the Agent to take such
action on its behalf under the provisions of the Transaction Documents
and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of the Transaction Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship
with any Lender or Liquidity Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Agent shall be read into this Agreement or otherwise exist against the
Agent.
(b) The provisions of this ARTICLE XI are solely for the
benefit of the Agent and the Lenders, and neither of the Loan Parties
shall have any rights as a third-party beneficiary or otherwise under
any of the provisions of this ARTICLE XI, except that this ARTICLE XI
shall not affect any obligations which the Agent or any Lender may have
to either of the Loan Parties under the other provisions of this
Agreement.
(c) In performing its functions and duties hereunder, the
Agent shall act solely as the agent of the Secured Parties and does not
assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for either of the Loan Parties
or any of their respective successors and assigns.
Section 11.2 DELEGATION OF DUTIES The Agent may execute any of its
duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel
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concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
Section 11.3 EXCULPATORY PROVISIONS Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable to any of the
Lenders for any action lawfully taken or omitted to be taken by it or them or
any Person described in SECTION 11.2 under or in connection with this
Agreement (except for its, their or such Person's own bad faith, gross
negligence or willful misconduct), or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties
made by the Borrower contained in this Agreement or in any certificate,
report, statement or other document referred to or provided for in, or
received under or in connection with, this Agreement or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other document furnished in connection herewith, or for any
failure of either of the Loan Parties to perform its respective obligations
hereunder, or for the satisfaction of any condition specified in ARTICLE V,
except receipt of items required to be delivered to the Agent. The Agent
shall not be under any obligation to any Lender or Liquidity Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Loan Parties. This SECTION
11.3 is intended solely to govern the relationship between each Agent, on the
one hand, and the Lenders and their respective Liquidity Banks, on the other.
Section 11.4 RELIANCE BY AGENT.
(a) The Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without
limitation, counsel to the Loan Parties), independent accountants and
other experts selected by the Agent. The Agent shall in all cases be
fully justified in failing or refusing to take any action under this
Agreement or any other document furnished in connection herewith unless
it shall first receive such advice or concurrence of such of the
Lenders and Liquidity Banks as it shall determine to be appropriate
under the relevant circumstances, or it shall first be indemnified to
its satisfaction by the Liquidity Banks against any and all liability,
cost and expense which may be incurred by it by reason of taking or
continuing to take any such action.
(b) Any action taken by the Agent in accordance with SECTION
11.4(a) shall be binding upon all Lenders.
Section 11.5 NOTICE OF EVENTS OF DEFAULT The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default
or Unmatured Default unless the Agent has received notice from a Lender, a
Liquidity Bank or a Loan Party referring to this Agreement, stating that an
Event of Default or Unmatured Default has occurred hereunder and describing
such Event of Default or Unmatured Default. In the event that the Agent
receives such a notice, it shall promptly give notice thereof to the Lenders
and Liquidity Banks. The Agent shall take such action with respect to such
Event of Default or Unmatured Default as shall be directed by the Majority
Lenders.
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Section 11.6 NON-RELIANCE ON AGENT AND OTHER LENDERS Each of the
Lenders expressly acknowledges that neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by the Agent
hereafter taken, including, without limitation, any review of the affairs of
the Loan Parties, shall be deemed to constitute any representation or
warranty by the Agent. Each of the Lenders also represents and warrants to
the Agent and the other Lenders that it has, independently and without
reliance upon any such Person (or any of their Affiliates) and based on such
documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Loan
Parties and made its own decision to enter into this Agreement. Each of the
Lenders also represents that it will, independently and without reliance upon
the Agent or any other Liquidity Bank or Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property,
prospects, financial and other condition and creditworthiness of the Loan
Parties. Neither of the Agent nor any of the Lenders, nor any of their
respective Affiliates, shall have any duty or responsibility to provide any
party to this Agreement with any credit or other information concerning the
business, operations, property, prospects, financial and other condition or
creditworthiness of the Loan Parties which may come into the possession of
such Person or any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates, except that the Agent shall promptly
distribute to the Lenders and the Liquidity Banks, copies of financial and
other information expressly provided to the Agent by either of the Loan
Parties pursuant to this Agreement for distribution to the Lenders.
Section 11.7 INDEMNIFICATION OF AGENT Each Liquidity Bank agrees to
indemnify the Agent and its officers, directors, employees, representatives
and agents (to the extent not reimbursed by the Loan Parties and without
limiting the obligation of the Loan Parties to do so), ratably in accordance
with their respective Ratable Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of
counsel for the Agent or such Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Agent in its capacity as such or such Person shall be designated a party
thereto) that may at any time be imposed on, incurred by or asserted against
the Agent or such Person as a result of, or arising out of, or in any way
related to or by reason of, any of the transactions contemplated hereunder or
the execution, delivery or performance of this Agreement or any other
document furnished in connection herewith (but excluding any such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the bad faith,
gross negligence or willful misconduct of the Agent or such Person as finally
determined by a court of competent jurisdiction).
Section 11.8 AGENT IN ITS INDIVIDUAL CAPACITY The Agent in its
individual capacity and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Loan Parties and their
Affiliates as though it were not the Agent hereunder. With respect to its Loans,
if any, pursuant to this Agreement, the Agent shall have the same rights and
powers under this Agreement as any Lender and may exercise the same as though it
38
were not an Agent, and the terms "LENDER" and "LENDERS" shall include the
Agent in its individual capacity.
Section 11.9 SUCCESSOR AGENT The Agent, upon five (5) days' notice
to the Borrower and the Lenders, may voluntarily resign at any time;
PROVIDED, HOWEVER, that Wachovia shall not voluntarily resign as the Agent so
long as any of the Liquidity Banks' respective Commitments remain in effect
or Blue Ridge has any outstanding Loans hereunder. If the Agent (other than
Wachovia) shall voluntarily resign, then the Majority Lenders during such
five (5)-day period shall appoint, from amongst the remaining Lenders, a
successor agent, whereupon such successor agent shall succeed to the rights,
powers and duties of the Agent and the term "AGENT" shall mean such successor
agent, effective upon its appointment, and the former Agent's rights, powers
and duties as Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this
Agreement. Upon replacement of the Agent in accordance with this SECTION
11.9, the retiring Agent shall execute such UCC-3 assignments and amendments,
and assignments and amendments of the Transaction Documents, as may be
necessary to give effect to its replacement by a successor Agent. After any
retiring Agent's resignation hereunder as Agent, the provisions of this
ARTICLE XI and ARTICLE XIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
Section 11.10 AGENT'S CONFLICT WAIVERS Wachovia acts, or may in the
future act, (i) as administrative agent for Blue Ridge, (ii) as issuing and
paying agent for Blue Ridge's Commercial Paper Notes, (iii) to provide credit
or liquidity enhancement for the timely payment for Blue Ridge's Commercial
Paper Notes and (iv) to provide other services from time to time for Blue
Ridge (collectively, the "WACHOVIA ROLES"). Without limiting the generality
of SECTIONS 11.1 and 11.8, each Agent, Lender and Liquidity Bank hereby
acknowledges and consents to any and all Wachovia Roles and agrees that in
connection with any Wachovia Role, Wachovia may take, or refrain from taking,
any action which it, in its discretion, deems appropriate, including, without
limitation, in its role as administrative agent for Blue Ridge, the giving of
notice to the Liquidity Banks of a mandatory purchase pursuant to the
Liquidity Agreement, and hereby acknowledges that neither Wachovia nor any of
its Affiliates has any fiduciary duties hereunder to any Lender (other than
Blue Ridge) or to any of the Liquidity Banks arising out of any Wachovia
Roles.
Section 11.11 UCC FILINGS Each of the Secured Parties hereby
expressly recognizes and agrees that the Agent may be listed as the assignee
or secured party of record on the various UCC filings required to be made
under the Transaction Documents in order to perfect their respective
interests in the Collateral, that such listing shall be for administrative
convenience only in creating a record or nominee holder to take certain
actions hereunder on behalf of the Secured Parties and that such listing will
not affect in any way the status of the Secured Parties as the true parties
in interest with respect to the Collateral. In addition, such listing shall
impose no duties on the Agent other than those expressly and specifically
undertaken in accordance with this ARTICLE XI.
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ARTICLE XII.
ASSIGNMENTS AND PARTICIPATIONS
Section 12.1 RESTRICTIONS ON ASSIGNMENTS, ETC.
(a) No Loan Party may assign its rights, or delegate its
duties hereunder or any interest herein without the prior written
consent of the Agent; PROVIDED, HOWEVER, that the foregoing shall not
be deemed to restrict PCC's right, prior to delivery of a Successor
Notice, to delegate its duties as Servicer to other Originators,
PROVIDED THAT PCC shall remain primarily liable for the performance or
non-performance of such duties.
(b) Blue Ridge may, at any time, assign all or any portion of
a Loan, or sell participations therein, to the Liquidity Banks (or to
the Agent for the ratable benefit of the Liquidity Banks).
(c) In addition to, and not in limitation of, assignments and
participations described in SECTION 12.1(b):
(i) in the event that any Liquidity Bank becomes a
Downgraded Liquidity Bank, such Downgraded Liquidity Bank
shall give prompt written notice of its Downgrading Event to
the Agent and to the Borrower. Within five (5) Business Days
after the Borrower's receipt of such notice, the Borrower may
propose an Eligible Assignee who is willing to accept an
assignment of, and to assume, such Downgraded Liquidity Bank's
rights and obligations under this Agreement and under the
Liquidity Agreement. In the event that the Borrower fails to
propose such an Eligible Assignee within such five (5)
Business Day period, or such Eligible Assignee does not
execute and deliver assignment and assumption documents
reasonably acceptable to such Downgraded Liquidity Bank and
the Agent and pay the Downgraded Liquidity Bank's Obligations
in full, in each case, not later than 5:00 p.m. (New York City
time) on the tenth (10th) Business Day following the
Borrower's receipt of notice of such Downgrading Event, the
Agent may identify an Eligible Assignee without the Borrower's
consent, and the Downgraded Liquidity Bank shall promptly
assign its rights and obligations to the Eligible Assignee
designated by the Agent against payment in full of the
Obligations;
(ii) each of the Lenders may assign all or any
portion of its Loans and, if applicable its Commitment under
this Agreement to any Eligible Assignee with the prior written
consent of (A) the Agent and (B) the Borrower, which consent
of the Borrower shall not be unreasonably withheld or delayed;
and
(iii) each of the Lenders may sell participations in
all or any portion of their respective rights and obligations
in, to and under the Transaction Documents and the Obligations
in accordance with SECTIONS 12.2 and 14.7.
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Section 12.2 RIGHTS OF ASSIGNEES AND PARTICIPANTS.
(a) Upon the assignment by a Lender in accordance with SECTION
12.1(b) OR (c), the Eligible Assignee(s) receiving such assignment
shall have all of the rights of such Lender with respect to the
Transaction Documents and the Obligations (or such portion thereof as
has been assigned).
(b) In no event will the sale of any participation interest in
any Lender's or any Eligible Assignee's rights under the Transaction
Documents or in the Obligations relieve the seller of such
participation of its obligations, if any, hereunder or, if applicable,
under the Liquidity Agreement.
Section 12.3 TERMS AND EVIDENCE OF ASSIGNMENT Any assignment to any
Eligible Assignee(s) pursuant to SECTION 1.2(c), 12.1(b) or 12.1(c) shall be
upon such terms and conditions as the assigning Lender and the Agent, on the
one hand, and the Eligible Assignee, on the other, may mutually agree, and
shall be evidenced by such instrument(s) or document(s) as may be
satisfactory to such Lender, the Agent and the Eligible Assignee(s). Any
assignment made in accordance with the terms of this ARTICLE XII shall
relieve the assigning Lender of its obligations, if any, under this Agreement
(and, if applicable, the Liquidity Agreement) to the extent assigned.
ARTICLE XIII.
INDEMNIFICATION
Section 13.1 INDEMNITIES BY THE BORROWER.
(a) GENERAL INDEMNITY Without limiting any other rights
which any such Person may have hereunder or under applicable law, the
Borrower hereby agrees to indemnify each of the Agent, the Lenders, the
Liquidity Banks, each of their respective Affiliates, and all successors,
transferees, participants and assigns and all officers, directors,
shareholders, controlling persons, employees and agents of any of the
foregoing (each, an "INDEMNIFIED PARTY"), forthwith on demand, from and
against any and all damages, losses, claims, liabilities and related costs
and expenses, including reasonable attorneys' fees and disbursements (all of
the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS")
awarded against or incurred by any of them arising out of or relating to the
Transaction Documents, the Obligations or the Collateral, EXCLUDING, HOWEVER,
(x) Indemnified Amounts to the extent determined by a court of competent
jurisdiction to have resulted from bad faith, gross negligence or willful
misconduct on the part of such Indemnified Party or (y) recourse (except as
otherwise specifically provided in this Agreement) for Indemnified Amounts to
the extent the same includes losses in respect of Receivables which are
uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor. Without limiting the foregoing, the
Borrower shall indemnify each Indemnified Party for Indemnified Amounts
arising out of or relating to:
(i) the creation of any Lien on, or transfer by any
Loan Party of any interest in, the Collateral other than the
sale of Receivables and related property by the Originators to
PCC pursuant to the First-Step Receivables Purchase Agreement,
the sale or contribution of Receivables and related property
by PCC to
41
the Borrower pursuant to the Sale Agreement and the grant by
the Borrower of a security interest in the Collateral to the
Agent pursuant to SECTION 9.1;
(ii) any representation or warranty made by any Loan
Party (or any of its officers) under or in connection with any
Transaction Document, any Information Package or any other
information or report delivered by or on behalf of any Loan
Party pursuant hereto, which shall have been false, incorrect
or misleading in any respect when made or deemed made or
delivered, as the case may be;
(iii) the failure by any Loan Party to comply with
any applicable law, rule or regulation with respect to any
Receivable or the related Contract, or the nonconformity of
any Receivable or the related Contract with any such
applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in the
Agent, for the benefit of the Secured Parties, a valid and
perfected first priority security interest in the Collateral,
free and clear of any other Lien, other than a Lien arising
solely as a result of an act of one of the Secured Parties,
now or at any time thereafter;
(v) the failure to file, or any delay in filing,
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Collateral;
(vi) any dispute, claim, offset or defense (other
than discharge in bankruptcy) of the Obligor to the payment of
any Receivable (including, without limitation, a defense based
on such Receivables or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other claim
resulting from the sale of the goods and/or services related
to such Receivable or the furnishing or failure to furnish
such goods and/or services;
(vii) any matter described in SECTION 3.4;
(viii) any failure of either Loan Party, as the
Borrower, the Servicer or otherwise, to perform its duties or
obligations in accordance with the provisions of this
Agreement or the other Transaction Documents to which it is a
party;
(ix) any products liability claim or any claim of
breach by either Loan Party of any related Contract with
respect to any Receivable;
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(x) any tax or governmental fee or charge (but not
including taxes upon or measured by net income, franchise
taxes or withholding taxes), 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 Agent's security interest in the Collateral;
(xi) the Year 2000 Problem as it relates to either
Loan Party or the Receivables;
(xii) the commingling of Collections of Receivables
at any time with other funds;
(xiii) any investigation, litigation or proceeding
related to or arising from this Agreement or any other
Transaction Document, the transactions contemplated hereby or
thereby, the use of the proceeds of any Loan, the security
interest in the Receivables and Related Assets or any other
investigation, litigation or proceeding relating to the
Borrower or any of the Originators in which any Indemnified
Party becomes involved as a result of any of the transactions
contemplated hereby or thereby (other than an investigation,
litigation or proceeding (1) relating to a dispute solely
amongst the Lenders (or certain Lenders) and the Agent or (2)
excluded by SECTION 13.1(a));
(xiv) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such
Obligor being immune from civil and commercial law and suit on
the grounds of sovereignty or otherwise from any legal action,
suit or proceeding;
(xv) the occurrence of any Event of Default of the
type described in SECTION 10.1(e); or
(xvi) any loss incurred by any of the Secured Parties
as a result of the inclusion in the Borrowing Base of
Receivables owing from any single Obligor and its Affiliated
Obligors which causes the aggregate Unpaid Balance of all such
Receivables to exceed the applicable Obligor Concentration
Limit.
(b) CONTEST OF TAX CLAIM; AFTER-TAX BASIS If any
Indemnified Party shall have notice of any attempt to impose or collect any
tax or governmental fee or charge for which indemnification will be sought
from any Loan Party under SECTION 13.1(a)(x), such Indemnified Party shall
give prompt and timely notice of such attempt to the Borrower and the
Borrower shall have the right, at its expense, to participate in any
proceedings resisting or objecting to the imposition or collection of any
such tax, governmental fee or charge. Indemnification hereunder shall be in
an amount necessary to make the Indemnified Party whole after taking into
account
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any tax consequences to the Indemnified Party of the payment of any of the
aforesaid taxes (including any deduction) and the receipt of the indemnity
provided hereunder or of any refund of any such tax previously indemnified
hereunder, including the effect of such tax, deduction or refund on the
amount of tax measured by net income or profits which is or was payable by
the Indemnified Party.
(c) CONTRIBUTION If for any reason the indemnification
provided above in this SECTION 13.1 (and subject to the exceptions set forth
herein) is unavailable to an Indemnified Party or is insufficient to hold an
Indemnified Party harmless, then the Borrower shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only
the relative benefits received by such Indemnified Party on the one hand and
the Borrower on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable considerations.
Section 13.2 INDEMNITIES BY SERVICER Without limiting any other
rights which any Indemnified Party may have hereunder or under applicable
law, the Servicer hereby agrees to indemnify each of the Indemnified Parties
forthwith on demand, from and against any and all Indemnified Amounts awarded
against or incurred by any of them arising out of or relating to the
Servicer's performance of, or failure to perform, any of its obligations
under or in connection with any Transaction Document, or any representation
or warranty made by the Servicer (or any of its officers in their capacities
as such) under or in connection with any Transaction Document, any
Information Package or any other information or report delivered by or on
behalf of the Servicer, which shall have been false, incorrect or misleading
in any material respect when made or deemed made or delivered, as the case
may be, or the failure of the Servicer to comply with any applicable law,
rule or regulation with respect to any Receivable or the related Contract.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
awarded any Indemnified Amounts (a) to the extent determined by a court of
competent jurisdiction to have resulted from bad faith, gross negligence or
willful misconduct on the part of such Indemnified Party or (b) as recourse
for Indemnified Amounts to the extent the same includes losses in respect of
Receivables which are uncollectible on account of the insolvency, bankruptcy
or lack of creditworthiness of the related Obligor.
If for any reason the indemnification provided above in this SECTION
13.2 (and subject to the exceptions set forth herein) is unavailable to an
Indemnified Party or is insufficient to hold an Indemnified Party harmless,
then the Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and the Servicer on the
other hand but also the relative fault of such Indemnified Party as well as
any other relevant equitable considerations.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement nor consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be in writing
and signed by each of the Loan Parties and the Agent, and any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. The Loan Parties acknowledge that, before entering
into such
44
an amendment or granting such a waiver or consent, the Agent will be required
to obtain the approval of the Majority Lenders (or, in certain instances, all
of the Liquidity Banks) and may be required to obtain the approval of the
Rating Agencies.
Section 14.2 NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent
by express mail or courier or by certified mail, postage prepaid, or by
facsimile, to the intended party at the address or facsimile number of such
party set forth on SCHEDULE 14.2 or at such other address or facsimile number
as shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, (a) if
personally delivered or sent by express mail or courier or if sent by
certified mail, when received, and (b) if transmitted by facsimile, when
sent, receipt confirmed by telephone or electronic means.
Section 14.3 NO WAIVER; REMEDIES No failure on the part of the Agent
or any of the other Secured Parties to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, each of the Agent, the Lenders and the
Liquidity Banks is hereby authorized by the Borrower at any time and from
time to time, to the fullest extent permitted by law, to set off and apply to
payment of any Obligations that are then due and owing any and all deposits
(general or special, time or demand provisional or final) at any time held
and other indebtedness at any time owing by such Person to or for the credit
or the account of the Borrower.
Section 14.4 BINDING EFFECT; SURVIVAL This Agreement shall be
binding upon and inure to the benefit of each the Loan Parties, the Agent,
the Lenders and their respective successors and permitted assigns, and the
provisions of SECTION 4.2 and ARTICLE XIII shall inure to the benefit of the
Affected Parties and the Indemnified Parties, respectively, and their
respective successors and assigns; PROVIDED, HOWEVER, nothing in the
foregoing shall be deemed to authorize any assignment not permitted by
SECTION 12.1. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall
remain in full force and effect until the Final Payout Date. The rights and
remedies with respect to any breach of any representation and warranty made
by the Borrower pursuant to ARTICLE VI and the provisions of ARTICLE XIII and
SECTIONS 4.2, 14.5, 14.6, 14.7, 14.8 and 14.15 shall be continuing and shall
survive any termination of this Agreement.
Section 14.5 COSTS, EXPENSES AND TAXES In addition to their
obligations under the other provisions of this Agreement, the Loan Parties
jointly and severally agree to pay:
(a) within fifteen (15) Business Days after receipt of a
written invoice therefor: all reasonable out-of-pocket costs and
expenses (including, without limitation, the reasonable fees and
expenses of counsel and independent accountants) incurred by each of
the Lenders, the Agent and the Liquidity Banks in connection with the
negotiation, preparation, execution and delivery of any amendment or
consent to, or waiver of, any provision of the Transaction Documents
which is requested or proposed by any Loan Party (whether or not
consummated), the administration of the Transaction Documents following
an Event of Default (or following a waiver of or consent to any
45
Event of Default), or the enforcement by any of the foregoing Persons
of, or any actual or claimed breach of, this Agreement or any of the
other Transaction Documents, including, without limitation, (i) the
reasonable fees and expenses of counsel to any of such Persons incurred
in connection with any of the foregoing or in advising such Persons as
to their respective rights and remedies under any of the Transaction
Documents in connection with any of the foregoing, and (ii) the
reasonable fees and expenses of independent accountants incurred in
connection with any review of any Loan Party's books and records or
valuation of the Receivables and Related Assets; and
(b) upon demand: all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery,
filing and recording of this Agreement or the other Transaction
Documents (and Loan Parties, jointly and severally agree to indemnify
each Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and
fees).
Section 14.6 NO PROCEEDINGS Each of the parties hereto hereby agrees
that it will not institute against the Borrower or Blue Ridge, or join any
Person in instituting against the Borrower or Blue Ridge, any insolvency
proceeding (namely, any proceeding of the type referred to in the definition
of Event of Bankruptcy) so long as any Commercial Paper Notes or other senior
Indebtedness issued by Blue Ridge shall be outstanding or there shall not
have elapsed one (1) year plus one (1) day since the last day on which any
such Commercial Paper Notes or other senior Indebtedness shall have been
outstanding.
Section 14.7 CONFIDENTIALITY OF BORROWER INFORMATION.
(a) CONFIDENTIAL BORROWER INFORMATION Each party hereto
(other than the Loan Parties) acknowledges that certain of the information
provided to such party by or on behalf of the Loan Parties in connection with
this Agreement and the transactions contemplated hereby is or may be
confidential, and each such party severally agrees that, unless PCC shall
otherwise agree in writing, and except as provided in SUBSECTION (b), such
party will not disclose to any other person or entity:
(i) any information regarding, or copies of, any
nonpublic financial statements, reports, schedules and other
information furnished by any Loan Party to the Agent or the
Lenders (A) prior to the date hereof in connection with such
party's due diligence relating to the Loan Parties and the
transactions contemplated hereby, or (B) pursuant to SECTION
3.1, 5.1, 6.1(i), 6.1(m), 7.1(c) or 7.2, or
(ii) any other information regarding any Loan Party
which is designated by any Loan Party to such party in writing
as confidential
(the information referred to in CLAUSES (i) AND (ii) above, whether furnished
by any Loan Party or any attorney for or other representative thereof (each,
a "BORROWER INFORMATION PROVIDER"), is collectively referred to as the
"BORROWER INFORMATION"); PROVIDED, HOWEVER, "BORROWER INFORMATION" shall not
include any information which is or becomes generally available to the
general public or to such party on a nonconfidential basis from a source
other than any Borrower
46
Information Provider, or which was known to such party on a nonconfidential
basis prior to its disclosure by any Borrower Information Provider.
(b) DISCLOSURE Notwithstanding SUBSECTION (a), each party
may disclose any Borrower Information:
(i) to any of such party's attorneys and auditors,
(ii) to any dealer or placement agent for such
party's Commercial Paper Notes, who (A) in the good faith
belief of such party, has a need to know the Borrower
Information, (B) is informed by such party of the confidential
nature of the Borrower Information and the terms of this
SECTION 14.7 and (C) has agreed in writing to be bound by the
provisions of this SECTION 14.7,
(iii) to any Liquidity Bank (whether or not on the
date of disclosure, such Liquidity Bank continues to be an
Eligible Assignee), to any other actual or potential permitted
assignee or participant permitted under SECTION 12.1 who has
agreed to be bound by the provisions of this SECTION 14.7,
(iv) to any rating agency that maintains a rating for
such party's Commercial Paper Notes or is considering the
issuance of such a rating, for the purposes of reviewing the
credit of any Lender in connection with such rating,
(v) to any other party to this Agreement (and any
independent attorneys and auditors of such party), for the
purposes contemplated hereby,
(vi) as may be required by any municipal, state,
federal or other regulatory body having or claiming to have
jurisdiction over such party, in order to comply with any law,
order, regulation, regulatory request or ruling applicable to
such party,
(vii) subject to SUBSECTION (c), in the event such
party is legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand or
similar process) to disclose such Borrower Information,
(viii) to any entity that provides a surety bond or
other credit enhancement to Blue Ridge, or
(ix) in connection with the enforcement of this
Agreement or any other Transaction Document.
In addition, each of the Lenders and the Agent may disclose on a "no name"
basis to any actual or potential investor in Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of the
47
Aggregate Commitment and the Advances), the nature, amount and status of the
Receivables, and the current and/or historical ratios of losses to
liquidations and/or outstandings with respect to the Receivables.
(c) LEGAL COMPULSION In the event that any party hereto
(other than any Loan Party) or any of its representatives is requested or
becomes legally compelled (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to
disclose any of the Borrower Information, such party will (or will cause its
representative to):
(i) provide PCC with prompt written notice so that
(A) PCC may seek a protective order or other appropriate
remedy, or (B) PCC may, if it so chooses, agree that such
party (or its representatives) may disclose such Borrower
Information pursuant to such request or legal compulsion; and
(ii) unless PCC agrees that such Borrower Information
may be disclosed, make a timely objection to the request or
compulsion to provide such Borrower Information on the basis
that such Borrower Information is confidential and subject to
the agreements contained in this SECTION 14.7.
In the event such protective order or remedy is not obtained, or PCC agrees
that such Borrower Information may be disclosed, such party will furnish only
that portion of the Borrower Information which (in such party's good faith
judgment) is legally required to be furnished and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
afforded the Borrower Information.
(d) SURVIVAL This SECTION 14.7 shall survive termination of
this Agreement.
Section 14.8 CONFIDENTIALITY OF PROGRAM INFORMATION.
(a) CONFIDENTIAL INFORMATION Each party hereto acknowledges
that Blue Ridge and the Agent regard the structure of the transactions
contemplated by this Agreement to be proprietary, and each such party agrees
that:
(i) it will not disclose without the prior consent of
Blue Ridge or the Agent (other than to the directors,
employees, auditors, counsel or affiliates (collectively,
"REPRESENTATIVES") of such party, each of whom shall be
informed by such party of the confidential nature of the
Program Information (as defined below) and of the terms of
this SECTION 14.8): (A) any information regarding the pricing
in, or copies of, the Liquidity Agreement or the Fee Letter,
or (B) any information which is furnished by Blue Ridge or the
Agent to such party and which is designated by Blue Ridge or
the Agent to such party in writing or otherwise as
confidential or not otherwise available to the general public
(the information referred to in CLAUSES (A) and (B) is
collectively referred to as the "PROGRAM INFORMATION");
PROVIDED, HOWEVER, that such party may disclose any such
Program Information (I) as may be required by any municipal,
state, federal or other regulatory body having or claiming to
have jurisdiction
48
over such party, including, without limitation, the SEC,
(II) in order to comply with any law, order, regulation,
regulatory request or ruling applicable to such party, (III)
subject to SUBSECTION (c) below, in the event such party is
legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand
or similar process) to disclose any such Program Information,
or (IV) in financial statements as required by GAAP;
(ii) it will use the Program Information solely for
the purposes of evaluating, administering and enforcing the
transactions contemplated by the Transaction Documents and
making any necessary business judgments with respect thereto;
and
(iii) it will, upon demand, return (and cause each of
its representatives to return) to the Agent, all documents or
other written material received from Blue Ridge or the Agent
in connection with (a)(i) (b) or (c) above and all copies
thereof made by such party which contain the Program
Information.
(b) AVAILABILITY OF CONFIDENTIAL INFORMATION This SECTION
14.8 shall be inoperative as to such portions of the Program Information
which are or become generally available to the public or such party on a
nonconfidential basis from a source other than the Agent or were known to
such party on a nonconfidential basis prior to its disclosure by the Agent.
(c) LEGAL COMPULSION TO DISCLOSE In the event that any
party or anyone to whom such party or its representatives transmits the
Program Information is requested or becomes legally compelled (by
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any of the Program
Information, such party will:
(i) provide the Agent with prompt written notice so
that the Agent may seek a protective order or other
appropriate remedy and/or, if it so chooses, agree that such
party may disclose such Program Information pursuant to such
request or legal compulsion; and
(ii) unless the Agent agrees that such Program
Information may be disclosed, make a timely objection to the
request or compulsion to provide such Program Information on
the basis that such Program Information is confidential and
subject to the agreements contained in this SECTION 14.8.
In the event that such protective order or other remedy is not obtained, or
the Agent agrees that such Program Information may be disclosed, such party
will furnish only that portion of the Program Information which (in such
party's good faith judgment) is legally required to be furnished and will
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Program Information. In the event any Loan
Party is required to file a copy of the Program Information with the SEC or
any other governmental authority, it will
49
(A) provide the Agent with prompt written notice of such requirement and (B)
exercise reasonable efforts to obtain reliable assurance that such
governmental authority will give confidential treatment to the Program
Information.
(d) SURVIVAL This SECTION 14.8 shall survive termination of
this Agreement.
Section 14.9 CAPTIONS AND CROSS REFERENCES The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning
or interpretation of any provision of this Agreement. Unless otherwise
indicated, references in this Agreement to any Section, Annex, Schedule or
Exhibit are to such Section of or Annex, Schedule or Exhibit to this
Agreement, as the case may be, and references in any Section, subsection, or
clause to any subsection, clause or subclause are to such subsection, clause
or subclause of such Section, subsection or clause.
Section 14.10 INTEGRATION This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions
by the parties hereto with respect to the subject matter hereof and shall
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof, superseding all prior oral or written
understandings.
Section 14.11 GOVERNING LAW THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICTS OF LAW, EXCEPT TO THE EXTENT THAT THE PERFECTION
OF THE SECURITY INTEREST OF THE AGENT, ON BEHALF OF THE SECURED PARTIES, IN
THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
Section 14.12 WAIVER OF JURY TRIAL EACH PARTY HERETO HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY
BANKING OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL NOT BE TRIED BEFORE A JURY.
Section 14.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES EACH
LOAN PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF
FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN
EITHER CASE SITTING IN THE BOROUGH OF MANHATTAN, IN NEW YORK COUNTY,
NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, AND (ii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE
50
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF AN ACTION OR
PROCEEDING IN SUCH COURTS.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
Section 14.14 EXECUTION IN COUNTERPARTS This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same Agreement.
Section 14.15 NO RECOURSE AGAINST OTHER PARTIES The several
obligations of the Lenders under this Agreement are solely the corporate
obligations of such Lender. No recourse shall be had for the payment of any
amount owing by such Lender under this Agreement or for the payment by such
Lender of any fee in respect hereof or any other obligation or claim of or
against such Lender arising out of or based upon this Agreement, against any
employee, officer, director, incorporator or stockholder of such Lender. Each
of the Borrower, the Servicer and the Agent agrees that Blue Ridge shall be
liable for any claims that such party may have against Blue Ridge only to the
extent Blue Ridge has excess funds and to the extent such assets are
insufficient to satisfy the obligations of Blue Ridge hereunder, Blue Ridge
shall have no liability with respect to any amount of such obligations
remaining unpaid and such unpaid amount shall not constitute a claim against
Blue Ridge. Any and all claims against Blue Ridge or the Agent shall be
subordinate to the claims against such Persons of the holders of Commercial
Paper Notes and the Liquidity Banks.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
BORROWER:
PRECISION RECEIVABLES CORP.
By: __________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
SERVICER:
PRECISION CASTPARTS CORP.
By: __________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief Financial
Officer
AGENT:
WACHOVIA BANK, N.A., as Agent
By: __________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
52
LENDERS:
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA BANK, N.A., ITS ATTORNEY-IN-FACT
By: __________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
Commitment: not applicable
WACHOVIA BANK, N.A.
By: __________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
Commitment: $150,000,000
53