EXHIBIT 10.1
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CANADIAN RECEIVABLES SALE AGREEMENT
DATED AS OF APRIL 4, 2006
AMONG
WOLVERINE TUBE (CANADA) INC.
AS ORIGINATOR,
AND
DEJ 98 FINANCE, LLC,
AS BUYER
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CANADIAN RECEIVABLES SALE AGREEMENT
TABLE OF CONTENTS
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ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE..........................................................2
Section 1.1 Purchase of Receivables...........................................................2
Section 1.2 Payment for the Purchases.........................................................3
Section 1.3 Sale Price Credit Adjustments.....................................................4
Section 1.4 Payments and Computations, Etc....................................................4
Section 1.5 License of Software...............................................................5
Section 1.6 PPSA..............................................................................5
Section 1.7 Allocation of Amounts.............................................................5
Section 1.8 Non-Assignable Contracts..........................................................6
ARTICLE II REPRESENTATIONS AND WARRANTIES.............................................................7
Section 2.1 Representations and Warranties of Originator......................................7
(a) Existence, Power and Residency........................................................7
(b) Power and Authority; Due Authorization, Execution and Delivery........................7
(c) No Conflict...........................................................................8
(d) Governmental Authorization............................................................8
(e) Actions, Suits........................................................................8
(f) Binding Effect........................................................................8
(g) Accuracy of Information...............................................................8
(h) Use of Proceeds.......................................................................9
(i) Good Title............................................................................9
(j) Perfection............................................................................9
(k) Places of Business and Locations of Records...........................................9
(l) Collections..........................................................................10
(m) Material Adverse Effect..............................................................10
(n) Names................................................................................10
(o) Ownership of Originator .............................................................10
(p) Not a Holding Company or an Investment Company.......................................10
(q) Compliance with Law..................................................................10
(r) Compliance with Credit and Collection Policy.........................................11
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CANADIAN RECEIVABLES SALE AGREEMENT
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(s) Payments to Originator...............................................................11
(t) Enforceability of Contracts..........................................................11
(u) Eligible Receivables.................................................................12
(v) Accounting...........................................................................12
(w) OFAC.................................................................................12
(x) Other Issues.........................................................................12
ARTICLE III CONDITIONS OF PURCHASE....................................................................12
Section 3.1 Conditions Precedent to Purchase.................................................12
Section 3.2 Conditions Precedent to Subsequent Payments......................................12
ARTICLE IV COVENANTS.................................................................................13
Section 4.1 Affirmative Covenants of Originator..............................................13
(a) Financial Reporting..................................................................13
(b) Notices..............................................................................14
(c) Compliance with Laws and Preservation of Existence...................................15
(d) Audits...............................................................................16
(e) Keeping and Marking of Records and Books.............................................16
(f) Compliance with Contracts and Credit and Collection Policy...........................17
(g) Ownership............................................................................17
(h) Purchasers' Reliance.................................................................18
(i) Collections..........................................................................18
(j) Taxes................................................................................19
Section 4.2 Negative Covenants of Originator.................................................19
(a) Name Change, Offices and Records.....................................................19
(b) Change in Payment Instructions to Obligors...........................................19
(c) Modifications to Contracts and Credit and Collection Policy..........................20
(d) Sales, Liens.........................................................................20
(e) Accounting for Purchase..............................................................20
ARTICLE V TERMINATION EVENTS........................................................................20
Section 5.1 Termination Events...............................................................20
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CANADIAN RECEIVABLES SALE AGREEMENT
TABLE OF CONTENTS
(continued)
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Section 5.2 Remedies.........................................................................22
ARTICLE VI INDEMNIFICATION...........................................................................22
Section 6.1 Indemnities by Originator........................................................22
Section 6.2 Other Costs and Expenses.........................................................26
Section 6.3 Payments Free and Clear of Taxes, Etc............................................26
Section 6.4 Currency.........................................................................27
ARTICLE VII MISCELLANEOUS.............................................................................28
Section 7.1 Waivers and Amendments...........................................................28
Section 7.2 Notices..........................................................................28
Section 7.3 Protection of Ownership Interests of Buyer.......................................28
Section 7.4 Confidentiality..................................................................29
Section 7.5 Bankruptcy Petition..............................................................30
Section 7.6 Limitation of Liability..........................................................31
Section 7.7 CHOICE OF LAW....................................................................31
Section 7.8 CONSENT TO JURISDICTION..........................................................31
Section 7.9 WAIVER OF JURY TRIAL.............................................................31
Section 7.10 Integration; Binding Effect; Survival of Terms, Third Party Beneficiary..........32
Section 7.11 Counterparts; Severability; Section References...................................32
Section 7.12 Acknowledgement of Receipt/Waiver................................................33
Section 7.13 Language.........................................................................33
EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records; Other Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - Form of Compliance Certificate
Exhibit V - Copy of Credit and Collection Policy
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Exhibit VI - Form of Quebec Assignment
Exhibit VII - Form of Purchase Report
Schedule A - List of Documents to Be Delivered to Buyer Prior to the Purchase
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CANADIAN RECEIVABLES SALE AGREEMENT
THIS CANADIAN RECEIVABLES SALE AGREEMENT, dated as of April 4,
2006, is by and among Wolverine Tube (Canada) Inc. an Ontario corporation
("ORIGINATOR"), and DEJ 98 FINANCE, LLC, a Delaware limited liability company
("BUYER"). UNLESS DEFINED ELSEWHERE HEREIN, CAPITALIZED TERMS USED IN THIS
AGREEMENT SHALL HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN EXHIBIT I HERETO
(OR, IF NOT DEFINED IN EXHIBIT I HERETO, THE MEANINGS ASSIGNED TO SUCH TERMS IN
EXHIBIT I TO THE PURCHASE AGREEMENT).
PRELIMINARY STATEMENTS
Originator now owns, and from time to time hereafter will own,
Receivables. Originator wishes to sell and assign to Buyer, and Buyer wishes to
purchase from Originator, all of Originator's right, title and interest in and
to its Receivables, together with the Related Security and Collections with
respect thereto.
Originator and Buyer intend the transactions contemplated
hereby to be true sales to Buyer by Originator of the Receivables, providing
Buyer with the full benefits of ownership of such Receivables, and neither
Originator nor Buyer intend these transactions to be, or for any purpose to be
characterized as, loans from Buyer to Originator.
Following the purchase of Receivables from Originator, Buyer
will sell undivided interests therein and in the associated Related Security and
Collections pursuant to that certain Amended and Restated Receivables Purchase
Agreement (as the same may from time to time hereafter be amended, supplemented,
restated or otherwise modified, the "AMENDED AND RESTATED RECEIVABLES PURCHASE
AGREEMENT") dated as of April 4, 2006 entered into by and among Buyer, as
Seller, Wolverine Finance, LLC, a Tennessee limited liability company
("WOLVERINE FINANCE"), as initial Servicer, Wolverine Tube, Inc., a Delaware
corporation, as Performance Guarantor, Variable Funding Capital Company, LLC, a
Delaware limited liability company ("VARIABLE FUNDING"), The CIT Group/Business
Credit, Inc., a New York corporation, individually and as co-agent, Wachovia
Bank, National Association, a national banking association, in its individual
capacity ("WACHOVIA"), and as agent for the Purchasers under the Transaction
Documents (together with its successors and assigns in such latter capacity, the
"AGENT").
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual agreements herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
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ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Purchase of Receivables.
(a) Effective on the date hereof, and in consideration for the
Sale Price paid to Originator and upon the terms and subject to the
conditions set forth herein (including without limitation, Section 1.8
hereof), Originator does hereby sell, assign, transfer, set-over and
otherwise convey to Buyer, without recourse (except to the extent
expressly provided herein), and Buyer does hereby purchase from
Originator, all of Originator's right, title and interest in and to
all Receivables existing as of the close of business on the Initial
Cutoff Date and all Receivables thereafter originated or acquired by
Originator through and including the Termination Date, together, in
each case, with all Related Security relating thereto and all
Collections thereof. In accordance with the preceding sentence, on the
date hereof (but subject to Section 1.8 hereof) Buyer shall acquire
all of Originator's right, title and interest in and to all
Receivables existing as of the Initial Cutoff Date and thereafter
arising through and including the Termination Date, together with all
Related Security relating thereto and all Collections thereof. Buyer
shall be obligated to pay the Sale Price for the Receivables purchased
hereunder from Originator in accordance with Section 1.2.
(b) On the 20th day of each month hereafter (or if any such day
is not a Business Day, on the next succeeding Business Day thereafter,
Originator shall (or shall require the Servicer to) deliver to Buyer a
report in substantially the form of Exhibit VII hereto (each such
report being herein called a "PURCHASE REPORT") with respect to the
Receivables sold by Originator to Buyer during the Settlement Period
then most recently ended. In addition to, and not in limitation of,
the foregoing, in connection with the payment of the Sale Price for
any Receivables purchased hereunder, Buyer may request that Originator
deliver, and Originator shall deliver, such approvals, opinions,
information or documents as Buyer may reasonably request.
(c) It is the intention of the parties hereto that the Purchase
of Receivables from Originator made hereunder shall constitute a sale,
which sale is absolute and irrevocable and provides Buyer with the
full benefits of ownership of the Receivables. Except for the Sale
Price Credits owed to Originator pursuant to Section 1.3, the sale of
Receivables hereunder by Originator is made without recourse to
Originator; PROVIDED, HOWEVER, that (i) Originator shall be liable to
Buyer for all representations, warranties, covenants and indemnities
made by Originator pursuant to the terms of the Transaction Documents
to which Originator is a party, and (ii) such sale does not constitute
and is not intended to result in an assumption by Buyer or any
assignee thereof of any obligation of Originator or any other Person
arising in connection with the Receivables, the related Contracts
and/or other Related Security or any other obligations of
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Originator. In view of the intention of the parties hereto that the
Purchase of Receivables made hereunder shall constitute a sale of such
Receivables rather than a loan secured thereby, Originator agrees that
it will, on or prior to the date hereof and in accordance with Section
4.1(e)(ii), ▇▇▇▇ its master data processing records relating to the
Receivables with a legend acceptable to Buyer and to the Agent (as
Buyer's assignee), evidencing that Buyer has purchased such
Receivables as provided in this Agreement and to note in its financial
statements that its Receivables have been sold to Buyer. Upon the
request of Buyer or the Agent (as Buyer's assignee), Originator will
execute and file such financing or continuation statements, or
amendments or renewals thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate, in all
applicable jurisdictions, to perfect and maintain the perfection of
Buyer's ownership interest in the Receivables and the Related Security
and Collections with respect thereto, or as Buyer or the Agent (as
Buyer's assignee) may reasonably request.
Section 1.2 Payment for the Purchases.
(a) Buyer is obligated to pay the Sale Price for the Purchase
from Originator of its Receivables purchased hereunder and in
existence as of the close of business on the Initial Cutoff Date in
full to Originator on the date hereof, and such Sale Price shall be
paid to Originator by delivery of immediately available funds to
Originator or to such bank account (the "DESIGNATED ACCOUNT") for the
account of Originator as Originator may designate in writing to Buyer.
(b) The Sale Price for each Receivable coming into existence or
acquired by Originator after the Initial Cutoff Date and purchased
hereunder shall be due and owing in full by Buyer, and Buyer is
obligated to pay such Sale Price, to Originator or its designee in the
manner provided in the following paragraph (c) (except that Buyer may,
with respect to any such Sale Price, offset against such Sale Price
any amounts owed by Originator to Buyer hereunder and which have
become due but remain unpaid).
(c) With respect to any Receivable coming into existence or
acquired by Originator after the Initial Cutoff Date, Buyer shall pay
Originator the Sale Price therefor by delivery of immediately
available funds to Originator or to the Designated Account, as the
case may be, such amount to be paid no later than the first Settlement
Date next following the Settlement Period during which such Receivable
came into existence or was acquired by Originator; provided that Buyer
may at any time or from time to time pay such Sale Price in Canadian
dollars, in an amount equal to the amount that would have been the
Sale Price if it was calculated without converting the outstanding
principal balance of the related Receivables into U.S. dollars.
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(d) From and after the Termination Date, Originator shall not be
obligated to (but may, at its option) sell Receivables to Buyer.
Section 1.3 Sale Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable purchased from
Originator is:
(i) reduced as a result of any defective or rejected or
returned goods or services, any discount or any adjustment or
otherwise by Originator (other than as a result of such
Receivable becoming a Defaulted Receivable or to reflect cash
Collections on account of such Receivable),
(ii) reduced or canceled as a result of a setoff in respect
of any claim by any Person (whether such claim arises out of the
same or a related transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in
Sections 2.1(h), (i), (j), (l), (r), (s), (t), (u), the second
sentence of Section 2.1(q) hereof and the last clause (relating to
bulk sales laws) of Section 2.1(c) are not true when made or deemed
made with respect to any Receivable,
then, in such event, Buyer shall be entitled to a credit (each, a "SALE PRICE
CREDIT") against the Sale Price otherwise payable to Originator hereunder equal
to the Outstanding Balance of such Receivable (calculated before giving effect
to the applicable reduction or cancellation). If such Sale Price Credit exceeds
the Original Balance of the Receivables on any day, Originator shall pay the
remaining amount of such Sale Price Credit in cash on such day.
Section 1.4 Payments and Computations, Etc.
(a) All amounts to be paid or deposited by Buyer hereunder shall
be paid or deposited in accordance with the terms hereof on the day
when due in immediately available funds to the account of Originator
designated from time to time by Originator or as otherwise directed by
Originator. In the event that any payment owed by any Person hereunder
becomes due on a day that is not a Business Day, then such payment
shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on
demand, the Default Fee in respect thereof until paid in full;
PROVIDED, HOWEVER, that such Default Fee shall not at any time exceed
the maximum rate permitted by applicable law.
(b) All computations of interest payable hereunder shall be made
on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed. For purposes
of the Interest Act (Canada), the annual rate to which any such
interest rate (or any other interest rate
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which is determined hereunder on the basis of a year of 360 days) is
equivalent, is such interest rate multiplied by the actual number of
days in the year in question, divided by 360.
Section 1.5 License of Software.
(a) To the extent that any software used by Originator to account
for the Receivables is non-transferable, Originator hereby grants to
each of Buyer, the Agent and the Servicer an irrevocable,
non-exclusive license to use, without royalty or payment of any kind,
all such software used by Originator to account for such Receivables,
to the extent necessary to administer such Receivables, whether such
software is owned by Originator or is owned by others and used by
Originator under license agreements with respect thereto, PROVIDED
THAT should the consent of any licensor of such software be required
for the grant of the license described herein, to be effective,
Originator hereby agrees that upon the request of Buyer (or Buyer's
assignee), Originator will use its reasonable efforts to obtain the
consent of such third-party licensor. The license granted hereby shall
be irrevocable until the later to occur of (i) indefeasible payment in
full of the Aggregate Unpaids (as defined in the Purchase Agreement),
and (ii) the date each of this Agreement and the Purchase Agreement
terminates in accordance with its terms.
(b) Originator (i) shall take such reasonable action requested by
Buyer and/or the Agent (as Buyer's assignee), from time to time
hereafter, that may be necessary or appropriate to ensure that Buyer
and its assigns under the Purchase Agreement have an enforceable
ownership interest in the Records relating to the Receivables
purchased from Originator hereunder, and (ii) shall use its reasonable
efforts to ensure that Buyer, the Agent and the Servicer each has an
enforceable right (whether by license or sublicense or otherwise) to
use all of the computer software used to account for such Receivables
and/or to recreate such Records.
Section 1.6 PPSA. All transactions contemplated or evidenced by this
Agreement, including the sale by Originator to Buyer of Receivables hereunder
shall be subject to the PPSA and other applicable law. Buyer and its assigns
shall have, in addition to the rights and remedies which they may have under
this Agreement, all other rights and remedies provided to a secured party under
the PPSA and other applicable law, which rights and remedies shall be
cumulative.
Section 1.7 Allocation of Amounts. The parties acknowledge that the
Receivables are conveyed hereunder excluding any PST or Finance Charges with
respect thereto. If at any time any amounts are received in respect of a
Receivable and it is unclear whether such amounts constitute PST or Finance
Charges, the determination of the Servicer with respect thereto shall be
conclusive, absent manifest error.
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Section 1.8 Non-Assignable Contracts.
(a) To the extent that any consent or acknowledgement of a third
Person (including the Obligor thereof, any governmental authority or
agency thereof) is required for the sale, assignment, transfer,
set-over or other conveyance to Buyer of a Receivable or Related
Security to Buyer and such consent or acknowledgement is not obtained
by Originator, then such Receivable or Related Security shall not be
sold, assigned, transferred, set-over or otherwise conveyed to Buyer
hereunder (but upon such consent or acknowledgement being obtained,
such Receivable or Related Security shall be automatically, and
without further action, sold, assigned, transferred, set-over and
otherwise conveyed to Buyer hereunder).
(b) Until such consent or acknowledgement is obtained Originator
shall (at Originator's sole cost and expense), except with respect to
the Receivables owing by Pyroil Canada, QBD Cooling Systems Inc. and
Cambridge-▇▇▇ to which the balance of this paragraph (b) does not
apply, from and after the date hereof, but without limiting Section
8.1(c) of the Purchase Agreement:
(A) hold the benefits of such Receivable or Related Security
(including any payments thereunder) in trust for Buyer in
accordance with the provisions of this Section 1.8, such
benefits to accrue fully to the benefit of Buyer;
(B) in order that the full value of such Receivable or Related
Security may be realized for the benefit of Buyer, take, at
the request and under the direction of Buyer, in the name of
Originator or otherwise as Buyer may specify, all such
actions and do or cause to be done all such things as are,
in the opinion of Buyer, necessary or proper in order that
the value of such Receivable or Related Security is
preserved and to ensure that Buyer is recognized as having
the exclusive beneficial interest in such Receivable or
Related Security; and
(C) effect collection of money to become or which become due and
payable under or in respect of such Receivable or Related
Security and promptly pay over to Buyer all money collected
by or paid to Originator in respect of such Receivable or
Related Security (including enforcing any rights of
Originator arising from any such Receivable or Related
Security against any Person in accordance with the
provisions hereof).
(c) Without limiting the foregoing, Originator shall use all
reasonable efforts following execution hereof, to obtain as quickly as
possible, all such consents or acknowledgments that have not been
obtained as of the
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execution hereof, including from Pyroil Canada, QBD Cooling Systems
Inc. and Cambridge-▇▇▇, provided that to the extent that any such
consents or acknowledgments have not been obtained within two weeks
following the date hereof, Originator shall forthwith take all
necessary steps to ensure that the Collections in respect of the
related Receivables are not deposited to one of the Collection
Accounts listed in Exhibit III hereto but are instead (until such time
as such consents or acknowledgments in each case are obtained), (i)
paid to separate segregated accounts, and (ii) that such separate
segregated accounts are made subject to a Collection Account
Agreement.
(d) To the extent any such consents or acknowledgments have been
obtained as of the execution hereof, but were obtained by email or
otherwise not in the form requested by counsel to the Agent, then, as
further assurance thereof, at the request of the Buyer or its assigns,
seek (and use all reasonable efforts to obtain within 2 weeks
thereafter) such additional consents or acknowledgments, in writing
and in such form as so requested.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originator. Originator hereby
represents and warrants to Buyer on the date hereof, on the date of the Purchase
and on each date that any Receivable is originated or acquired by Originator on
or after the date hereof, that:
(a) Existence, Power and Residency. Originator is a corporation,
duly organized under the laws of the jurisdiction set forth after its
name in the preamble to this Agreement (the "APPLICABLE STATE"), and
no other jurisdiction. Originator is validly existing and in good
standing under the laws of the Applicable State and is duly qualified
to do business and is in good standing as a foreign entity, and has
and holds all power and all governmental licenses, authorizations,
consents and approvals required to carry on its business in each
jurisdiction in which its business is conducted except where the
failure to so qualify or so hold could not reasonably be expected to
have a Material Adverse Effect. Originator is a resident of Canada for
the purposes of the Income Tax Act (Canada).
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by Originator of this Agreement
and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder, and
Originator's use of the proceeds of the Purchase made from it
hereunder, are within its organizational powers and authority and have
been duly authorized by all necessary organizational action on its
part. This Agreement and each other Transaction Document to which
Originator is a party has been duly executed and delivered by
Originator.
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(c) No Conflict. The execution and delivery by Originator of this
Agreement and each other Transaction Document to which it is a party,
and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its Organizational Documents, (ii) any law,
rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which
it or any of its property is bound, or (iv) any order, writ, judgment,
award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any
Adverse Claim on assets of Originator or its Subsidiaries (except as
created hereunder) except, in any case, where such contravention or
violation could not reasonably be expected to have a Material Adverse
Effect; and no transaction contemplated hereby requires compliance
with any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the
financing statements and other registrations required hereunder and
other than any consent required under the Financial Administration Act
(Canada) in respect of the sale of any Receivables owing by a
government or a governmental subdivision or agency, no authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution and delivery by Originator of this Agreement and each other
Transaction Document to which it is a party and the performance of its
obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of Originator's knowledge, threatened, against
or affecting Originator, or any of its properties, in or before any
court, arbitrator or other body, that could reasonably be expected to
have a Material Adverse Effect. Originator is not in default with
respect to any order of any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which Originator is a party constitute the legal, valid
and binding obligations of Originator enforceable against Originator
in accordance with their respective terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws relating to or limiting creditors' rights generally
and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished
by Originator or any of its Affiliates to Buyer (or its assigns) for
purposes of or in connection with this Agreement, any of the other
Transaction Documents or any transaction contemplated hereby or
thereby is, and all such information hereafter furnished by Originator
or any of its Affiliates to Buyer (or its assigns) will be, true and
accurate in every material respect on the date such
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information is stated or certified and not incomplete by omitting to
state any material fact necessary to make such information not
misleading at such time. There is no fact now known to any Authorized
Officer of Originator which has, or would reasonably be expected to
have, a Material Adverse Effect which fact has not been set forth
herein, in the financial statements, or any certificate, opinion or
other written statement made or furnished by Originator or any of its
Affiliates to Buyer.
(h) Use of Proceeds. No portion of any Sale Price payment
hereunder will be used (i) for a purpose that violates, or would be
inconsistent with, any law, rule or regulation applicable to
Originator or (ii) to acquire any security in any transaction which is
subject to Section 12, 13 or 14 of the Securities Exchange Act of
1934, as amended.
(i) Good Title. Immediately prior to the Purchase from Originator
hereunder and upon the creation of each Receivable after the Initial
Cutoff Date, Originator (i) is the legal and beneficial owner of such
Receivables and (ii) is the legal and beneficial owner of the Related
Security with respect thereto, in each case, free and clear of any
Adverse Claim, except as created by the Transaction Documents. There
have been duly filed all financing statements or other similar
instruments or documents necessary under the PPSA (or any comparable
law) of all appropriate jurisdictions to perfect Originator's
ownership interest in each such Receivable, its Collections and the
Related Security.
(j) Perfection. This Agreement, together with the filing of the
financing statements and other registrations contemplated hereby, is
effective to transfer to Buyer (and Buyer shall acquire from
Originator) (i) legal and equitable title to, with the right to sell
and encumber each Receivable, whether now existing and hereafter
arising, together with the Collections with respect thereto, and (ii)
all of Originator's right, title and interest in the Related Security
associated with each such Receivable, in each case, free and clear of
any Adverse Claim, except as created by the Transaction Documents.
There have been duly filed all financing statements or other similar
instruments or documents necessary under the PPSA (or any comparable
law) of all appropriate jurisdictions to perfect Buyer's ownership
interest in such Receivables, the Related Security and the
Collections.
(k) Places of Business and Locations of Records. The principal
places of business, domicile and chief executive office of Originator
and the offices where it keeps all of its Records are located at the
address(es) listed on Exhibit II or such other locations of which
Buyer has been notified in accordance with Section 4.2(a) in
jurisdictions where all action required by Section 4.2(a) has been
taken and completed.
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(l) Collections. The conditions and requirements set forth in
Section 4.1(i) have at all times been satisfied and duly performed.
The names and addresses of all Collection Banks, together with the
account numbers of the Collection Accounts of Originator at each
Collection Bank and the post office box number of each Lock-Box, are
listed on Exhibit III. Originator has not granted any Person, other
than Buyer (and its assigns) dominion and/or control of any Lock-Box
or Collection Account, or the right to take dominion and/or control of
any such Lock-Box or Collection Account at a future time or upon the
occurrence of a future event.
(m) Material Adverse Effect. Since December 31, 2005, no event
has occurred that would have a Material Adverse Effect.
(n) Names. The name in which Originator has executed this
Agreement is identical to the name of Originator as indicated on the
public record of the Applicable State. Originator has never used any
corporate names, trade names or assumed names (including, for greater
certainty, any French name) other than the name in which it has
executed this Agreement and as listed on Exhibit II. The exact legal
name (including, for greater certainty, any French name) of each
entity to which Originator is the successor by merger, amalgamation or
other operation of law is listed on Exhibit II.
(o) Ownership of Originator. Parent owns, directly or
indirectly, 100% of the issued and outstanding Equity Interests of
Originator. Such Equity Interests are validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to
acquire securities of Originator.
(p) Not a Holding Company or an Investment Company. Originator is
not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or any successor statute. Originator
is not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or any successor statute.
(q) Compliance with Law. Originator has complied in all respects
with all applicable laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject,
except where the failure to so comply could not reasonably be expected
to have a Material Adverse Effect. Each Receivable, together with the
Contract related thereto, does not contravene any laws, rules or
regulations applicable thereto (INCLUDING, WITHOUT LIMITATION, laws,
rules and regulations relating to cost of borrowing, consumer
protection, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices
and privacy (including for greater certainty the Personal Information
Protection and Electronic Documents Act (Canada) or any other
applicable privacy laws), and no part of such Contract is in
10
violation of any such law, rule or regulation, except where such
contravention or violation could not reasonably be expected to have a
Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Originator has
complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and
has not made any change to such Credit and Collection Policy, except
such material change as to which Buyer (or its assigns) has been
notified in accordance with Section 4.1(a)(vii).
(s) Payments to Originator. The Sale Price received by Originator
with respect to each Receivable constitutes reasonably equivalent
value in consideration therefor (and for the Related Security and
Collections in respect thereof) and approximately the fair market
value thereof. No transfer hereunder by Originator of any Receivable
is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. Sections 101 et seq.), as amended or under any
other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of
payments, readjustment of debt, marshalling of assets or similar
debtor relief laws of the United States, Canada, any state or province
thereof, or any other state or foreign country from time to time in
effect affecting the rights of creditors generally, including without
limitation, the Companies' Creditors Arrangement Act (Canada), the
Bankruptcy and Insolvency Act (Canada), the Winding-Up and
Restructuring Act (Canada), the Assignments and Preferences Act
(Ontario) and the Fraudulent Conveyances Act (Ontario), (collectively,
"DEBTOR RELIEF LAWS"). Originator is not a bankrupt, an insolvent
person, in insolvent circumstances, on the eve of insolvency, or
unable to meet its engagements, as applicable, within the meaning of
any of the Debtor Relief Laws. Originator will not become an insolvent
person or be put in insolvent circumstances within the meaning of any
of the Debtor Relief Laws by entering into, or immediately after
completion of the transactions contemplated by, this Agreement.
Originator has entered into this Agreement in good faith for the
purpose of transferring the Receivables and the Related Security and
Collections with respect thereto to Buyer and receiving from Buyer the
consideration therefor specified in this Agreement, and not for the
purpose of defeating, hindering, delaying, defrauding or oppressing
the rights and claims of creditors or others against Originator or for
any other purpose relating in any way to the claims of creditors or
others against Originator.
(t) Enforceability of Contracts. Each Contract with respect to
each Receivable is effective to create, and has created, a legal,
valid and binding obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder (or, in the
case of any Receivable denominated in Canadian dollars, to pay the
outstanding principal balance thereof in Canadian dollars) (subject to
discounts for volume purchases and prompt payment granted in the
ordinary course of business) and any accrued interest thereon,
enforceable against the Obligor in accordance with its terms, except
as such enforcement may be
11
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally and
by general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable reflected in any
Purchase Report as an Eligible Receivable was an Eligible Receivable
on the date of its acquisition by Buyer hereunder.
(v) Accounting. Originator accounts for the transactions
contemplated by this Agreement in its financial statements as being
true sales.
(w) OFAC. Neither Originator nor any of its Subsidiaries (a) is a
Sanctioned Person, (b) does business in a Sanctioned Country in
violation of the economic sanctions of the United States administered
by OFAC or (c) does business in such country or with any such agency,
organization or person, in violation of the economic sanctions of the
United States administered by OFAC.
(x) Other Issues. No PST is payable in connection with any of the
Receivables. None of the Receivables arise in connection with the
provision of services. No more than 0.1% of the Receivables have as
their Obligors, Persons resident in Newfoundland and no Obligors under
the Receivables are individuals. As of the date hereof, the only
Receivables in respect of which any required consent or acknowledgment
to the assignment thereof hereunder have not been obtained, are those
owing by Pyroil Canada, QBD Cooling Systems Inc. and Cambridge-▇▇▇ and
the Outstanding Balance owing thereunder as of March 31, 2006 is
$160,301.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchase under this
Agreement is subject to the conditions precedent that Buyer shall have received
on or before the date of the Purchase those documents listed on Schedule A.
Section 3.2 Conditions Precedent to Subsequent Payments. Buyer's obligation
to continue to purchase Receivables coming into existence after the Initial
Cutoff Date shall be subject to the further conditions precedent that: (a) the
Facility Termination Date shall not have occurred under the Purchase Agreement;
(b) Buyer (or its assigns) shall have received such other approvals, opinions or
documents as it may reasonably request and (c) on the date any such Receivable
came into existence, the following statements shall be true (and acceptance of
the proceeds of any payment for such Receivable shall be deemed a representation
and warranty by Originator that such statements are then true):
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(i) the representations and warranties set forth in Article
II are true and correct on and as of the date such Receivable
came into existence as though made on and as of such date; and
(ii) no event has occurred and is continuing that will
constitute a Termination Event or an Unmatured Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Sale
Price for any Receivable (whether by payment of cash or by offset of amounts
owed to Buyer), title to such Receivable and the Related Security and
Collections with respect thereto shall vest in Buyer, whether or not the
conditions precedent to Buyer's obligation to purchase such Receivable were in
fact satisfied. The failure of Originator to satisfy any of the foregoing
conditions precedent, however, shall give rise to a right of Buyer to rescind
the related purchase and direct Originator to pay to Buyer an amount equal to
the Sale Price payment that shall have been made with respect to any Receivables
related thereto.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originator. Until the date on which
this Agreement terminates in accordance with its terms, Originator hereby
covenants as set forth below:
(a) Financial Reporting. Originator will maintain, for itself and
each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to Buyer (or its
assigns):
(i) Annual Reporting. Within 90 days after the close of each
of its respective fiscal years, audited, unqualified consolidated
financial statements (which shall include balance sheets,
statements of income and retained earnings and a statement of
cash flows) of Parent and its Subsidiaries for such fiscal year
certified in a manner acceptable to Buyer (or its assigns) by
independent public (or chartered) accountants acceptable to Buyer
(or its assigns).
(ii) Quarterly Reporting. Within 45 days after the close of
the first three (3) quarterly periods of each of its respective
fiscal years, consolidated balance sheets of Parent and its
Subsidiaries as at the close of each such period and consolidated
statements of income and retained earnings and a statement of
cash flows of Parent and its Subsidiaries for the period from the
beginning of such fiscal year to the end of such quarter, all
certified by its chief financial officer.
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(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in
substantially the form of Exhibit IV signed by Originator's
Authorized Officer and dated the date of such annual financial
statement or such quarterly financial statement, as the case may
be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of Originator or Parent,
copies of all financial statements, reports and proxy statements
so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies
of all registration statements and annual, quarterly, monthly or
other regular reports which Originator or any of its Subsidiaries
or Affiliates files with the Securities and Exchange Commission
or any securities commission or similar body in Canada.
(vi) Copies of Notices. Promptly upon its receipt of any
notice of breach from any Collection Bank, or notice of default
from any lender, copies of the same.
(vii) Change in Credit and Collection Policy. At least
thirty (30) days prior to the effectiveness of any material
change in or material amendment to the Credit and Collection
Policy, a copy of the Credit and Collection Policy then in effect
and a notice (A) indicating such proposed change or amendment,
and (B) if such proposed change or amendment would be reasonably
likely to adversely affect the collectibility of the Receivables
or decrease the credit quality of any newly created Receivables,
requesting Buyer's (and the Agent's, as Buyer's assignee) consent
thereto.
(viii) Other Information. Promptly, from time to time, such
other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or
otherwise, of Originator as Buyer (or its assigns) may from time
to time reasonably request in order to protect the interests of
Buyer (and its assigns) under or as contemplated by this
Agreement.
(b) Notices. Originator will notify Buyer (or its assigns) in
writing of any of the following promptly upon learning of the
occurrence thereof, describing the same and, if applicable, the steps
being taken with respect thereto:
(i) Termination Events or Unmatured Termination Events. The
occurrence of each Termination Event and each
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Unmatured Termination Event, by a statement of an Authorized
Officer of Originator.
(ii) Judgment and Proceedings. (1) The entry of any judgment
or decree against Originator or any other Originator (as defined
in the Purchase Agreement) or any of its or their Subsidiaries if
the aggregate amount of all judgments and decrees then
outstanding against all such Originators and any of their
Subsidiaries exceeds $2,500,000 (or the Canadian Dollar
Equivalent thereof) after deducting (a) the amount with respect
to which any of such Originators or Subsidiary is insured and
with respect to which the insurer has not denied coverage, and
(b) the amount for which any of such Originators or Subsidiary is
otherwise indemnified if the terms of such indemnification are
satisfactory to Buyer (or its assigns), and (2) the institution
of any litigation, arbitration proceeding or governmental
proceeding against any of such Originators which, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
(iii) Material Adverse Effect. The occurrence of any event
or condition that has had, or could reasonably be expected to
have, a Material Adverse Effect.
(iv) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any other financing
arrangement pursuant to which Originator is a debtor or an
obligor and such financing arrangement is in excess of $2,500,000
(or the Canadian Dollar Equivalent thereof).
(v) ERISA Events. The occurrence of any ERISA Event.
(vi) Downgrade of Parent. Any downgrade in the rating of any
Indebtedness of Parent by S&P or by ▇▇▇▇▇'▇, setting forth the
Indebtedness affected and the nature of such change.
(c) Compliance with Laws and Preservation of Existence.
Originator will comply in all respects with all applicable laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it is subject, except where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect.
Originator will preserve and maintain its legal existence, rights,
franchises and privileges in the jurisdiction of its organization, and
qualify and remain qualified in good standing as a foreign entity in
each jurisdiction where its business is conducted, except where the
failure to so qualify
15
or remain in good standing could not reasonably be expected to have a
Material Adverse Effect. Nothing herein shall be deemed to preclude
Originator from merging or amalgamating with and into any other
Originator (as defined in the Purchase Agreement).
(d) Audits. Originator will furnish to Buyer (or its assigns)
from time to time such information with respect to it and the
Receivables sold by it as Buyer (or its assigns) may reasonably
request. Originator will, from time to time during regular business
hours as requested by Buyer (or its assigns), upon reasonable notice
and at the sole cost of Originator, permit Buyer (or its assigns) or
their respective agents or representatives, (i) to examine and make
copies of and abstracts from all Records in the possession or under
the control of Originator relating to the Receivables and the Related
Security, including, without limitation, the related Contracts (other
than those Contracts that contain a confidentiality provision that
purports to restrict Buyer's (or its assigns) right to review the
Contract for which Originator has been unable, after diligent effort,
to obtain consent to disclosure), and (ii) to visit the offices and
properties of Originator for the purpose of examining such materials
described in clause (i) above, and to discuss matters relating to
Originator's financial condition or the Receivables and the Related
Security or Originator's performance under any of the Transaction
Documents or Originator's performance under the Contracts and, in each
case, with any of the officers or employees of Originator having
knowledge of such matters (each of the foregoing examinations and
visits, a "REVIEW"); PROVIDED, HOWEVER, that, so long as no
Amortization Event (under and as defined in the Purchase Agreement)
has occurred and is continuing, the number of Reviews in any one
calendar year shall be limited to a maximum of four (4) and; PROVIDED,
FURTHER, that, Originator shall not be responsible for the reasonable
costs and expenses of more than two (2) Reviews in any one calendar
year unless (X) the immediately preceding audit was unsatisfactory to
the Agent with respect to missing information, erroneous reporting,
other non-compliance with the provisions of the Transaction Documents
or questions that have not been answered to the Agent's satisfaction,
or (Y) the Aggregate Invested Amount (under and as defined in the
Purchase Agreement) exceeds an amount equal to 0.75 times the
difference between the most recently computed Net Pool Balance (under
and as defined in the Purchase Agreement) and the most recently
computed Required Reserve (under and as defined in the Purchase
Agreement).
(e) Keeping and Marking of Records and Books.
(i) Originator 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
16
Receivables (including, without limitation, records adequate to
permit the immediate identification of each new Receivable and
all Collections of and adjustments to each existing Receivable).
Originator will give Buyer (or its assigns) notice of any
material change in the administrative and operating procedures
referred to in the previous sentence.
(ii) Originator will (A) on or prior to the date hereof,
▇▇▇▇ its master data processing records and other books and
records relating to the Receivables with a legend, acceptable to
Buyer (or its assigns), describing Buyer's ownership interests in
the Receivables and further describing the Receivable Interests
of the Agent (on behalf of the Purchasers) under the Purchase
Agreement and (B) upon the request of Buyer (or its assigns)
following the occurrence of a Termination Event: (x) ▇▇▇▇ each
Contract with a legend describing Buyer's ownership interests in
the Receivables and further describing the Receivable Interests
of the Agent (on behalf of the Purchasers) and (y) deliver to
Buyer (or its assigns) all Contracts (including, without
limitation, all multiple originals of any such Contract) relating
to such Receivables.
(f) Compliance with Contracts and Credit and Collection Policy.
Originator will timely and fully (i) perform and comply with all
provisions, covenants and other promises required to be observed by it
under the Contracts related to the Receivables, and (ii) comply in all
material respects with the Credit and Collection Policy in regard to
each such Receivable and the related Contract.
(g) Ownership. Originator will take all necessary action to
establish and maintain, irrevocably in Buyer, (A) legal and equitable
title to the Receivables and the Collections and (B) all of
Originator's right, title and interest in the Related Security
associated with the Receivables, in each case, free and clear of any
Adverse Claims other than Adverse Claims in favor of Buyer (and its
assigns) (INCLUDING, WITHOUT LIMITATION, the filing of all financing
statements or other similar instruments or documents necessary under
the PPSA (or any comparable law) of all appropriate jurisdictions to
perfect Buyer's interest in such Receivables, Related Security and
Collections and such other necessary or desirable action to perfect,
protect or more fully evidence the interest of Buyer as Buyer (or its
assigns) may reasonably request); provided that at such time following
the Termination Date when any amounts owing by Originator have been
paid in full and this Agreement terminates in accordance with its
terms, Buyer shall, at the request and expense of Originator, execute
all such discharges of any such filings as may be reasonably requested
by Originator, including a reconveyance of any Receivables sold to
Buyer under the Quebec Assignment.
17
(h) Purchasers' Reliance. Originator acknowledges that the Agent
and the Purchasers are entering into the transactions contemplated by
the Purchase Agreement in reliance upon Buyer's identity as a legal
entity that is separate from Originator and any Affiliates thereof.
Therefore, from and after the date of execution and delivery of this
Agreement, Originator will take all reasonable steps including,
without limitation, all steps that Buyer or any assignee of Buyer may
from time to time reasonably request to maintain Buyer's identity as a
separate legal entity and to make it manifest to third parties that
Buyer is an entity with assets and liabilities distinct from those of
Originator and any Affiliates thereof and not just a division of
Originator or any such Affiliate. Without limiting the generality of
the foregoing and in addition to the other covenants set forth herein,
Originator (i) will not hold itself out to third parties as liable for
the debts of Buyer nor purport to own any of the Receivables and other
assets acquired by Buyer, (ii) will take all other actions necessary
on its part to ensure that Buyer is at all times in compliance with
the "separateness covenants" set forth in Section 7.1(i) of the
Purchase Agreement and (iii) will cause all tax liabilities arising in
connection with the transactions contemplated herein or otherwise to
be allocated between Originator and Buyer on an arm's-length basis and
in a manner consistent with the procedures set forth in U.S. Treasury
Regulations Sections 1.1502-33(d) and 1.1552-1.
(i) Collections. Originator will cause (1) all proceeds from all
Lock-Boxes (including, without limitation, all checks received
therein) to be directly deposited by a Collection Bank into a
Collection Account no later than the end of the Business Day on which
such Proceeds were received in such Lock-Boxes, except for postdated
checks, which will be delivered to the Agent in accordance with the
Collection Account Agreement, and (2) each Lock-Box and Collection
Account to be subject at all times to a Collection Account Agreement
that is in full force and effect. In the event any payments relating
to Receivables are remitted directly to Originator or any Affiliate of
Originator, Originator will remit (or will cause all such payments to
be remitted) directly to a Collection Bank and deposited into a
Collection Account within two (2) Business Days following receipt
thereof and, at all times prior to such remittance, Originator will
itself hold or, if applicable, will cause such payments to be held in
trust for the exclusive benefit of Buyer and its assigns. Originator
will transfer exclusive ownership, dominion and control of each
Lock-Box and Collection Account to Buyer and, will not grant the right
to take dominion and/or control of any Lock-Box or Collection Account
at a future time or upon the occurrence of a future event to any
Person, except to Buyer (or its assigns) as contemplated by this
Agreement and the Purchase Agreement. To the extent that any Obligors
make payment under their Receivables by way of electronic funds
transfer or any similar means of payment to an account other than a
Collection Account, Seller shall, promptly (and in any event, within 2
weeks) after the date hereof, irrevocably notify such Obligors to
direct such payments to the applicable
18
Collection Account and hereafter take such further steps as may be
reasonably necessary to ensure that they do so direct such payments.
(j) Taxes. Originator will file all tax returns and reports
required by law to be filed by it and promptly pay all taxes and
governmental charges at any time owing, except any such taxes which
are not yet delinquent or are being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
Originator will pay when due any taxes payable in connection with the
Receivables, including, without limitation, any GST, PST or other
sales taxes payable in connection with the Receivables and their
creation and satisfaction, exclusive of taxes on or measured by income
or gross receipts of Buyer and its assigns.
Section 4.2 Negative Covenants of Originator. Until the date on which this
Agreement terminates in accordance with its terms, Originator hereby covenants
that:
(a) Name Change, Offices and Records. Originator will not change
its (i) jurisdiction of organization, (ii) name, (iii) identity or
structure (within the meaning of Article 9 of the Alabama enactment of
the UCC) or relocate its chief executive office or domicile at any
time while the location of its chief executive office or domicile is
relevant to perfection of Buyer's interest in the Receivables or the
associated Related Security and Collections or any office where
Records are kept unless it shall have: (i) given Buyer (and the Agent,
as its assignee) at least thirty (30) days' prior written notice
thereof and (ii) delivered to the Agent (as Buyer's assignee) (to the
extent applicable under applicable law) all financing statements,
financing change statements, instruments and other documents
reasonably requested by the Agent in connection with such change or
relocation.
(b) Change in Payment Instructions to Obligors. Originator will
not add or terminate any bank as a Collection Bank, or make any change
in the instructions to Obligors regarding payments to be made to any
Lock-Box or Collection Account, unless Buyer (or its assigns) shall
have received, at least ten (10) days before the proposed effective
date therefor, (i) written notice of such addition, termination or
change and (ii) with respect to the addition of a Collection Bank or a
Collection Account or Lock-Box, an executed Collection Account
Agreement with respect to the new Collection Account or Lock-Box;
PROVIDED, HOWEVER, that Originator may make changes in instructions to
Obligors without any prior notice regarding payments if such new
instructions require such Obligor to make payments to another existing
Collection Account. Originator will not deposit or authorize the
deposit of any funds into any Collection Account other than
Collections.
19
(c) Modifications to Contracts and Credit and Collection Policy.
Except as otherwise expressly permitted by the Transaction Documents,
Originator will not make any change to the Credit and Collection
Policy that could reasonably be expected to adversely affect the
collectibility of the Receivables or decrease the credit quality of
any of its newly created Receivables. Originator will not extend,
amend or otherwise modify the terms of any Receivable or any Contract
related thereto.
(d) Sales, Liens. Originator will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon
(including, without limitation, the filing of any financing statement
or other registration) or with respect to, any Receivable, Related
Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box or Collection Account, or
assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer
provided for herein), and Originator will defend the right, title and
interest of Buyer in, to and under any of the foregoing property,
against all claims of third parties claiming through or under
Originator.
(e) Accounting for Purchase. Originator will not, and will not
permit any Affiliate to, financially account (whether in financial
statements or otherwise) for the transactions contemplated hereby in
any manner other than the sale or other outright conveyance by
Originator to Buyer of the Receivables and the associated Related
Security or in any other respect account for or treat the transactions
contemplated hereby in any manner other than as a sale of such
Receivables and Related Security by Originator to Buyer except to the
extent that such transactions are not recognized on account of
consolidated financial reporting in accordance with generally accepted
accounting principles.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or more of the
following events shall constitute a Termination Event:
(a) Originator shall fail to make any payment or deposit
required hereunder when due and such failure shall continue for
three (3) consecutive Business Days.
(b) Originator shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in
clause (i) of this paragraph (a)) or under any other Transaction
Document to which it is a party and such failure shall continue
for seven (7) consecutive Business Days.
20
(c) Any representation, warranty, certification or statement
made by Originator in this Agreement, any other Transaction
Document or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect when made or deemed
made; PROVIDED THAT any misrepresentation or certification for
which Buyer has actually received a Sale Price Credit shall not
constitute a Termination Event hereunder.
(d) Failure of Originator to pay any Indebtedness when due
in excess of $2,500,000 (or the Canadian Dollar Equivalent
thereof); or the default by Originator in the performance of any
term, provision or condition contained in any agreement under
which any such Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders
of such Indebtedness to cause, such Indebtedness to become due
prior to its stated maturity; or any such Indebtedness of
Originator shall be declared to be due and payable or required to
be prepaid (other than by a regularly scheduled payment) prior to
the date of maturity thereof.
(e) (i) Originator or any of its Subsidiaries shall
generally not pay its debts as such debts become due or shall
admit in writing its inability to pay its debts generally or
shall make a general assignment for the benefit of creditors; or
(ii) any proceeding shall be instituted by or against Originator
or any of its Subsidiaries seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency,
arrangement or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any
substantial part of its property or any receiver, trustee or
other similar official for Originator or any of its Subsidiaries
or for any substantial part of its property shall be appointed,
whether under private right or pursuant to any such proceeding;
or (iii) Originator or any of its Subsidiaries shall take any
corporate or other action to authorize any of the actions set
forth in the foregoing clauses (i) or (ii) of this subsection
(e).
(f) A Change of Control shall occur.
(g) One or more final judgments for the payment of money in
an amount in excess of $2,500,000 (or the Canadian Dollar
Equivalent thereof), individually or in the aggregate, shall be
entered against Originator on claims not covered by insurance or
as to which the insurance carrier has denied its responsibility,
and such judgment shall continue unsatisfied and in effect for
thirty (30) consecutive days without a stay of execution.
(h) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of Originator under Title IV
of ERISA to such Pension Plan,
21
such Multiemployer Plan or the PBGC in an aggregate amount in
excess of $1,000,000; (ii) the aggregate amount of
Unfunded-Pension Liability among all Pension Plans at any time
exceeds $1,000,000 (or the Canadian Dollar Equivalent thereof);
or (iii) Originator 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 $1,000,000 (or the Canadian Dollar
Equivalent thereof).
(i) Bank Agent shall deliver a Receivables Termination
Notice under and as defined in the Intercreditor Agreement.
(j) The "Amortization Date" (under and as defined in the
Purchase Agreement) or the "Termination Date" (under and as
defined in the U.S. Receivables Sale Agreement) shall occur.
Section 5.2 Remedies. Upon the occurrence and during the continuation of a
Termination Event, Buyer may take any of the following actions: (i) declare the
Termination Date to have occurred, whereupon the Termination Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by Originator; PROVIDED, HOWEVER, that upon
the occurrence of a Termination Event described in Section 5.1(e), or of an
actual or deemed entry of an order for relief with respect to Originator under
the Federal Bankruptcy Code, the Termination Date shall automatically occur,
without demand, protest or any notice of any kind, all of which are hereby
expressly waived by Originator and (ii) to the fullest extent permitted by
applicable law, declare that the Default Fee shall accrue with respect to any
amounts then due and owing by Originator to Buyer. The aforementioned rights and
remedies shall be without limitation and shall be in addition to all other
rights and remedies of Buyer and its assigns otherwise available under any other
provision of this Agreement, by operation of law, at equity or otherwise, all of
which are hereby expressly preserved, including, without limitation, all rights
and remedies provided under the PPSA, all of which rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Originator. Without limiting any other rights
that Buyer may have hereunder or under applicable law, Originator hereby agrees
to indemnify (and pay upon demand to) Buyer and its assigns, officers,
directors, agents and employees (each an "INDEMNIFIED PARTY") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable legal and attorneys' fees (which
attorneys may be employees of Buyer or any such assign) 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 as a result of this
Agreement or the acquisition, either directly or indirectly, by Buyer of an
interest in the Receivables, EXCLUDING, HOWEVER:
22
(a) Indemnified Amounts to the extent a final judgment of a court
of competent jurisdiction holds that such Indemnified Amounts resulted
from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
(c) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located, on or measured by the
overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the characterization for
income tax purposes of the acquisition by the Purchasers of Receivable
Interests under the Purchase Agreement as a loan or loans by the
Purchasers to Buyer secured by, among other things, the Receivables,
the Related Security and the Collections;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of Originator or limit the recourse of Buyer to Originator for amounts
otherwise specifically provided to be paid by Originator under the terms of this
Agreement. Without limiting the generality of the foregoing indemnification, but
subject in each case to clauses (a), (b) and (c) above, Originator shall
indemnify Buyer for Indemnified Amounts relating to or resulting from:
(i) any representation or warranty made by Originator (or any
officers of Originator) under or in connection with any Purchase
Report, this Agreement, any other Transaction Document or any other
information or report delivered by Originator pursuant hereto or
thereto for which Buyer has not received a Sale Price Credit that
shall have been false or incorrect when made or deemed made;
(ii) the failure by Originator, to comply with any applicable
law, rule or regulation with respect to any Receivable or Contract
related thereto (including without limitation, privacy laws), or the
nonconformity of any Receivable or Contract included therein with any
such applicable law, rule or regulation or any failure of Originator
to keep or perform any of its obligations, express or implied, with
respect to any Contract;
(iii) any failure of Originator to perform its duties, covenants
or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage, suit or
other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any
Receivable;
(v) any dispute, claim, offset or defense (other than discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable (including,
23
without limitation, a defense based on such Receivable or the related
Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise or service
related to such Receivable or the furnishing or failure to furnish
such merchandise or services;
(vi) the commingling of Collections of Receivables at any time
with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document with
respect to Originator, the transactions contemplated hereby,
Originator's use of the proceeds of the Purchase from it hereunder,
the ownership of the Receivables or any other investigation,
litigation or proceeding relating to Originator in which any
Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby;
(viii) 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;
(ix) any Termination Event described in Section 5.1(e);
(xi) any failure to vest and maintain vested in Buyer, or to
transfer to Buyer, legal and equitable title to, and ownership of, the
Receivables and the associated Collections, and all of Originator's
right, title and interest in the Related Security associated with such
Receivables, in each case, free and clear of any Adverse Claim;
(xii) the failure to have filed, or any delay in filing,
financing statements, financing change statements or other similar
instruments or documents under the PPSA of any applicable jurisdiction
or other applicable laws with respect to any Receivable, the Related
Security and Collections with respect thereto, and the proceeds of any
thereof, whether at the time of the Purchase from Originator hereunder
or at any subsequent time;
(xiii) any action or omission by Originator which reduces or
impairs the rights of Buyer with respect to any Receivable or the
value of any such Receivable;
(xiv) any civil penalty or fine assessed by OFAC against, and all
reasonable costs and expenses (including counsel fees and
disbursements) incurred in connection with defense thereof by Buyer
(or its assigns) as a result of the purchase of any Receivables;
(xv) any attempt by any Person to void the Purchase from
Originator hereunder under statutory provisions or common law or
equitable action;
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(xvi) the failure of any Receivable reflected as an Eligible
Receivable on any Purchase Report prepared by Originator to be an
Eligible Receivable at the time acquired by Buyer;
(xvii) any present or future Taxes (as defined in Section 6.3) or
similar charges or imposts, together with all interest and penalties
thereon or with respect thereto, and all out-of-pocket costs and
expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the purchase
or ownership of the Receivables or any Related Security, the financing
of such purchase or ownership by Buyer or the servicing of the
Receivables, including without limitation, any withholding taxes that
are imposed by Canada or any political subdivision thereof on any
Indemnified Party or that are withheld from any Collections or other
payments made hereunder, and any such taxes or similar charges or
imposts that are imposed on any Indemnified Party as a result of such
Indemnified Party having a permanent establishment in Canada or being
found to be carrying on business in Canada (unless it acquired such
permanent establishment or commenced to be carrying on business in
Canada otherwise than as a result of the transactions contemplated
hereby or by the other Transaction Documents); provided that promptly
following an Authorized Officer of any Indemnified Party becoming
aware of receipt (the "Receipt") by such Indemnified Party of a
written claim (the "Claim") from Canadian tax authorities for payment
of any Taxes in respect of which this clause (xvii) would apply, such
Indemnified Party shall notify Originator thereof; and provided,
further, that failure or delay in giving any such notice shall not
affect the rights of such Indemnified Party under this clause (xvii)
except that, if such notice is not given within 30 days after such
Authorized Officer becomes aware of such Receipt, and no employee or
advisor of Originator or any Affiliate thereof has, within such 30 day
period, otherwise learned of such Claim (or that Canadian tax
authorities have made or may make a claim for payment of any Taxes
that are the subject of such Claim), Originator will not be liable to
such Indemnified Party in respect of any interest or penalties under
this clause (xvii) on or with respect to such Taxes to the extent that
such interest or penalties accrue after the end of such 30 day period
and before the date an employee or advisor of Originator or any
Affiliate thereof learns of such Claim (or that Canadian tax
authorities have made or may make a claim for payment of any Taxes
that are the subject of such Claim), and
(xviii) any reduction in the value of Canadian dollars as
compared to US dollars (based on the Bank of Canada noon spot rate
between such currencies), between the date of payment of the Sale
Price in respect of any Receivable and the date of collection of any
amounts owing thereunder.
Notwithstanding the foregoing, (1) the foregoing indemnification contained in
this Section 6.1 is not intended to, and shall not, constitute a guarantee of
the collectibility or payment of the Receivables conveyed hereunder; and (2)
nothing in this Section 6.1 shall require Originator to indemnify any
Indemnified Party for Receivables which are not collected, not paid or otherwise
uncollectible on account of the insolvency, bankruptcy, creditworthiness or
financial inability to pay of the applicable Obligor. The agreements in this
subsection shall survive the collection of
25
all Receivables, the termination of this Agreement and the payment of all
amounts payable hereunder.
Section 6.2 Other Costs and Expenses. Originator shall pay to Buyer on
demand all reasonable costs and out-of-pocket expenses (including outside
counsel fees) in connection with the preparation, execution, delivery and
administration of this Agreement, the transactions contemplated hereby and the
other documents to be delivered hereunder. Originator shall pay to Buyer on
demand any and all costs and expenses of Buyer, if any, including reasonable
outside counsel fees and expenses in connection with the enforcement of this
Agreement and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following a Termination Event.
Section 6.3 Payments Free and Clear of Taxes, Etc.
(a) Any and all payments required to be made by Originator
hereunder shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of Buyer or its assigns, taxes imposed on its
income by the United States (other than withholding taxes on
interest), and franchise taxes and net income taxes (or equivalent
taxes computed under alternative methods, at least one of which is
based on net income) imposed on it by the jurisdiction under the laws
of which Buyer or its assigns (as the case may be) is organized or by
any political subdivision thereof (all such non excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "TAXES"). If Originator shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder to (or for the benefit of) Buyer or its assigns, (i)
the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section) Buyer or its assigns (as
the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Originator shall make
such deductions and (iii) Originator shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, Originator agrees to pay any present or future
stamp or other documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement, other than U.S. federal
taxes except for withholding taxes on interest (hereinafter referred
to as "OTHER TAXES").
(c) Originator will indemnify Buyer or its assigns for the full
amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section)
26
paid by Buyer or its assigns (as the case may be) or deducted from any
Collections (including any Taxes or amounts on account of Taxes
deducted by any Obligor) and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted; provided that Seller will be entitled to reimbursement of
amounts paid pursuant to this Section 6.3(c) that are ultimately
determined not to be correctly or legally asserted. This
indemnification shall be made within 30 days from the date Buyer or
its assigns (as the case may be) makes written demand therefor. A
certificate as to the amount of such indemnification submitted to
Originator by Buyer or its assigns (as the case may be) setting forth,
in reasonable detail, the basis for and the calculation thereof, shall
be conclusive and binding for all purposes absent manifest error.
Section 6.4 Currency.
(a) Unless otherwise expressly stated in this Agreement, to the
extent that any Receivables are denominated in Canadian dollars,
references herein to the balance or amount of such Receivables or
Collections thereof, including the Outstanding Balance thereof, shall
be deemed for all purposes to be references to the U.S. Dollar
Equivalent of such balance or amount of such Receivables or
Collections thereof denominated in Canadian dollars.
(b) Originator will each make all payments of amounts owing by it
hereunder in the currency (the "ORIGINAL CURRENCY") in which such
amount is expressed or due. If Originator makes any such payment to
Buyer or any other Indemnified Party in a currency (the "OTHER
CURRENCY") other than the Original Currency (whether voluntarily or
pursuant to an order or judgment of a court or tribunal of any
jurisdiction), such payment will constitute a discharge of the
liability of such party hereunder in respect of such amount owing only
to the extent of the amount of the Original Currency which Buyer or
such Indemnified Party is able to purchase, with the amount it
receives on the date of receipt. If the amount of the Original
Currency which Buyer or such Indemnified Party is able to purchase is
less than the amount of such currency originally so due in respect of
such amount, Originator will indemnify and save Buyer or such
Indemnified Party, as applicable, harmless from and against any loss
or damage arising as a result of such deficiency. This indemnity will
constitute an obligation separate and independent from the other
obligations contained in this Agreement, will give rise to a separate
and independent cause of action, will survive termination hereof, will
apply irrespective of any indulgence granted by Buyer or such
Indemnified Party and will continue in full force and effect
notwithstanding any judgment or order in respect of any amount due
hereunder or under any judgment or order.
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ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its assigns) in
exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise
of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. The
rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any waiver of
this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing signed by Originator and Buyer
and, to the extent required under the Purchase Agreement, the Agent
and the Liquidity Banks or the Required Liquidity Banks. Any material
amendment, supplement, modification of waiver will require
satisfaction of the Rating Agency Condition.
Section 7.2 Notices. All communications and notices provided for hereunder
shall be in writing (including bank wire, telecopy, e-mail or electronic
facsimile transmission or similar writing) and shall be given to the other
parties hereto at their respective addresses, e-mail addresses or telecopy
numbers set forth on the signature pages hereof or at such other address or
telecopy number as such Person may hereafter specify for the purpose of notice
to each of the other parties hereto. Each such notice or other communication
shall be effective (a) if given by telecopy, upon the receipt thereof, (b) if
given by mail, three (3) Business Days after the time such communication is
deposited in the mail with first class postage prepaid, (c) if given by e-mail,
upon sender's receipt of an acknowledgement from the intended recipient of a
return e-mail, which may be delivered through a "request a read receipt for this
message" function, as available, or other written acknowledgement, in each case
acknowledging that sender's e-mail has been read or (d) if given by any other
means, when received at the address specified in this Section 7.2; provided that
such notice or other communication shall not be given by mail during any actual
or apprehended disruption of applicable postal services.
Section 7.3 Protection of Ownership Interests of Buyer.
(a) Originator agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and
take all actions, that may be necessary or desirable, or that Buyer
(or its assigns) may request, to perfect, protect or more fully
evidence the interest of Buyer hereunder in the Receivables and the
related Collections and Related Security, or to enable Buyer (or its
assigns) to exercise and enforce their rights and remedies hereunder.
At any time, Buyer (or its assigns) may, at Originator's sole cost and
expense, direct Originator to notify the Obligors of Receivables of
the ownership interests
28
of Buyer under this Agreement and may also direct that payments of all
amounts due or that become due under any or all Receivables be made
directly to Buyer or its designee.
(b) If Originator fails to perform any of its obligations
hereunder, Buyer (or its assigns) may (but shall not be required to),
after delivery of notice to Originator (which notice shall not be
required after the occurrence of a Termination Event), perform, or
cause performance of, such obligations, and Buyer's (or such assigns')
costs and expenses incurred in connection therewith shall be payable
by Originator as provided in Section 6.2. Originator irrevocably
authorizes Buyer (and its assigns) at any time and from time to time
in the sole discretion of Buyer (or its assigns), and appoints Buyer
(and its assigns) as its attorney(ies)-in-fact, to act on behalf of
Originator (i) to execute on behalf of Originator as debtor and to
file financing statements, financing change statements and other
registrations necessary or desirable in Buyer's (or its assigns') sole
discretion to perfect and to maintain the perfection and priority of
the interest of Buyer in the Receivables and the associated Related
Security and Collections and (ii) to file a carbon, photographic or
other reproduction of this Agreement or any financing statement,
financing change statement or other registration with respect to the
Receivables as a financing statement, financing change statement or
other registration in such offices as Buyer (or its assigns) in their
sole discretion deem necessary or desirable to perfect and to maintain
the perfection and priority of Buyer's interests in such Receivables.
This appointment is coupled with an interest and is irrevocable.
Originator hereby authorizes Buyer (or its assigns) to file financing
statements, financing change statements and other filing or recording
documents with respect to the Receivables and Related Security
(including any amendments thereto, or continuation or termination
statements thereof), without the signature or other authorization of
Originator, in such form and in such offices as Buyer (or any of its
assigns) reasonably determines appropriate to perfect or maintain the
perfection of the ownership interests of Buyer (or its assigns)
hereunder, and Originator approves, authorizes and ratifies any
filings or recordings made by or on behalf of the Agent (as Buyer's
assignee) in connection with the perfection of the ownership interests
in favor of Buyer or the Agent (as Buyer's assignee).
Section 7.4 Confidentiality.
(a) Originator and Buyer shall maintain and shall cause each of
its employees and officers to maintain the confidentiality of the Fee
Letter and the other confidential or proprietary information with
respect to the Agent and Variable Funding and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein,
except that Originator and its officers and employees may disclose
such information to Originator's external accountants, attorneys and
other advisors and as required by any applicable law or order of any
judicial or
29
administrative proceeding, provided that each such Person is informed
of the confidential nature of such information and either agrees (or
is under a professional ethical obligation) to keep such information
confidential.
(b) Originator hereby consents to the disclosure of any nonpublic
information with respect to it (i) to Buyer, the Agent, the Liquidity
Banks or Variable Funding by each other, (ii) to any prospective or
actual assignee or participant of any of the Persons described in
clause (i), (iii) to any rating agency, Commercial Paper dealer or
provider of a surety, guaranty or credit or liquidity enhancement to
Variable Funding or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which
Wachovia or any of its Affiliates acts as the administrative agent and
(iv) to any officers, directors, employees, outside accountants and
attorneys of any of the foregoing, PROVIDED each such Person described
in the foregoing clause (iv) is informed of the confidential nature of
such information and either agrees (or is under a professional ethical
obligation) to keep such information confidential. In addition, the
Purchasers and the Agent may disclose any such nonpublic information
pursuant to any law, rule, regulation, direction, request or order of
any judicial, administrative or regulatory authority or proceedings
(whether or not having the force or effect of law).
(c) Notwithstanding any other express or implied agreement to the
contrary, the parties hereto agree that each of them and each of their
employees, representatives, and other agents may disclose to any and
all Persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including
opinions or other tax analyses) that are provided to any of them
relating to such tax treatment and tax structure, except where
confidentiality is reasonably necessary to comply with U.S. federal or
state securities laws. For purposes of this paragraph, the terms "tax
treatment" and "tax structure" have the meanings specified in Treasury
Regulation section 1.6011-4(c).
Section 7.5 Bankruptcy Petition.
(a) Originator and Buyer each hereby covenants and agrees that, prior to
the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of Variable Funding, it will not institute
against, or join any other Person in instituting against, Variable Funding any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any state of
the United States or the laws of Canada or any province thereof.
(b) Originator covenants and agrees that, prior to the date that is one
year and one day after the payment in full of all outstanding obligations of
Buyer under the Purchase Agreement, it will not institute against, or join any
other Person in instituting against, Buyer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States or the
laws of Canada or any province thereof.
30
(c) Without limiting any other rights that Buyer or Variable Funding may
have at law or in equity, Originator agrees the damages alone would not be an
adequate remedy for the irreparable injury that would result from violation of
this Section 7.5, and that injunctive or similar relief (including an order of
specific performance) will be available to Buyer or Variable Funding in the
event of any violation of this Section.
Section 7.6 Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of Originator, Buyer,
Variable Funding, the Agent or any Liquidity Bank, no claim may be made by any
such Person (or its Affiliates, directors, officers, employees, attorneys or
agents) against any such other Person (or its Affiliates, directors, officers,
employees, attorneys or agents) for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and each of the parties hereto, on behalf of itself and its
Affiliates, directors, officers, employees, attorneys, agents, successors and
assigns, hereby waives, releases, and agrees not to ▇▇▇ upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO AND THE LAW OF
CANADA APPLICABLE THEREIN.
Section 7.8 CONSENT TO JURISDICTION. ORIGINATOR HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO
THIS AGREEMENT AND ORIGINATOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF
ANY OTHER JURISDICTION.
Section 7.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY
ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.
31
Section 7.10 Integration; Binding Effect; Survival of Terms, Third Party
Beneficiary.
(a) This Agreement and each other Transaction Document contains
the final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect
to the subject matter hereof superseding all prior oral or written
understandings.
(b) This Agreement shall be binding upon and inure to the benefit
of Originator, Buyer and their respective successors and permitted
assigns (including any trustee in bankruptcy). Originator may not
assign any of its rights and obligations hereunder or any interest
herein without the prior written consent of Buyer. Buyer may assign at
any time its rights and obligations hereunder and interests herein to
any other Person without the consent of Originator. Without limiting
the foregoing, Originator acknowledges that Buyer, pursuant to the
Purchase Agreement, may assign to the Agent, for the benefit of the
Purchasers, its rights, remedies, powers and privileges hereunder and
that the Agent may further assign such rights, remedies, powers and
privileges to the extent permitted in the Purchase Agreement.
Originator agrees that the Agent, as the assignee of Buyer, shall,
subject to the terms of the Purchase Agreement, have the right to
enforce this Agreement and to exercise directly all of Buyer's rights
and remedies under this Agreement (including, without limitation, the
right to give or withhold any consents or approvals of Buyer to be
given or withheld hereunder) and Originator agrees to cooperate fully
with the Agent in the exercise of such rights and remedies. 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 terminated in accordance with its terms;
PROVIDED, HOWEVER, that the rights and remedies with respect to (i)
any breach of any representation and warranty made by Originator
pursuant to Article II; (ii) the indemnification and payment
provisions of Article VI; and (iii) Section 7.5 shall be continuing
and shall survive any termination of this Agreement.
(c) All rights of any Indemnified Party other then Buyer, and of
Variable Funding under Section 7.5, are held by Buyer in trust for
each such Indemnified Party and for Variable Funding, and may be
exercised and enforced directly by any such Indemnified Party or by
Variable Funding.
Section 7.11 Counterparts; Severability; Section References. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
32
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "ARTICLE", "SECTION", "SCHEDULE" or "EXHIBIT" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
Section 7.12 Acknowledgement of Receipt/Waiver. Originator acknowledges
receipt of an executed copy of this Agreement and, to the extent permitted by
applicable law, waives the right to receive a copy of any financing statement,
financing change statement or verification statement in respect of any
registered financing statement or financing change statement prepared,
registered or issued in connection with this Agreement.
Section 7.13 Language. This Agreement and all related documents have been
written in the English language at the express request of the parties. Le
present contrat ainsi que tous les documents s'y rattachant ont ete rediges en
anglais a la demande expresse des parties
[Remainder of Page Intentionally Left Blank]
[Signature Pages Follow]
33
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date hereof.
WOLVERINE TUBE (CANADA) INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------
Name:
Title:
Address: Wolverine Tube (Canada) Inc.
1010 ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇.▇▇▇
DEJ 98 FINANCE, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇.▇▇▇
S-1
[Signature Page to Receivables Sale Agreement]
EXHIBIT I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined).
As used in the Agreement and the Exhibits and Schedules thereto, capitalized
terms have the meanings set forth in this Exhibit I (such meanings to be equally
applicable to the singular and plural forms thereof). IF A CAPITALIZED TERM IS
USED IN THE AGREEMENT, OR ANY EXHIBIT OR SCHEDULE THERETO, AND IS NOT OTHERWISE
DEFINED THEREIN OR IN THIS EXHIBIT I, SUCH TERM SHALL HAVE THE MEANING ASSIGNED
THERETO IN EXHIBIT I TO THE PURCHASE AGREEMENT (HEREINAFTER DEFINED).
"AGENT" has the meaning set forth in the Preliminary
Statements to the Agreement.
"AGREEMENT" means the Canadian Receivables Sale Agreement,
dated as of April 4, 2006, among Originator and Buyer, as the same may be
amended, restated or otherwise modified.
"APPLICABLE STATE" has the meaning set forth in Section
2.1(a) of the Agreement.
"BUYER" has the meaning set forth in the preamble to the
Agreement.
"CALCULATION PERIOD" means each fiscal month of Parent or
portion thereof which elapses during the term of the Agreement. The first
Calculation Period shall commence on the date of the initial Purchase hereunder
and the final Calculation Period shall terminate on the Termination Date.
"CANADIAN DOLLAR EQUIVALENT" means, at the date of
determination, the amount of Canadian dollars that the Agent could purchase, in
accordance with its normal practice, with a specified amount of U.S. dollars
based on the Bank of Canada noon spot rate on such date.
"CHANGE OF CONTROL" means (a) the acquisition by any Person,
or two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 20% or more of the outstanding voting Equity
Interests of Parent, or (b) Parent ceases to own, directly or indirectly, 100%
of the outstanding voting Equity Interests of Originator.
"CREDIT AND COLLECTION POLICY" means Originator's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in EXHIBIT V, as modified from time to time in
accordance with the Agreement.
"DEBTOR RELIEF LAWS" has the meaning set forth in Section
2.1(s).
"DEFAULT FEE" means a per annum rate of interest equal to the
sum of (i) the Prime Rate, PLUS (ii) 2% per annum.
Exhibit I-1
"DESIGNATED ACCOUNT" has the meaning set forth in Section
1.2(a).
"DISCOUNT FACTOR" means a percentage calculated to provide
Buyer with a reasonable return on its investment in the Receivables after taking
account of (i) the time value of money based upon the anticipated dates of
collection of such Receivables and the cost to Buyer of financing its investment
in such Receivables during such period and (ii) the risk of nonpayment by the
Obligors. Originator and Buyer may agree from time to time to change the
Discount Factor based on changes in one or more of the items affecting the
calculation thereof, PROVIDED THAT any change to the Discount Factor shall take
effect as of the commencement of a Calculation Period, shall apply only
prospectively and shall not affect the Sale Price payment made prior to the
Calculation Period during which Originator and Buyer agree to make such change.
As of the date hereof, the Discount Factor in respect of Eligible Receivables is
1.25% and the Discount Factor in respect of all other Receivables is 1.25%
"EQUITY INTERESTS" means, with respect to any Person, any and
all shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of such
Person, including, if such Person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation issued
thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with Originator within the meaning of Section
414(b) or (c) of the Tax Code (and Sections 414(m) and (o) of the Tax Code for
purposes of provisions relating to Section 412 of the Tax Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by Originator or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by Originator or any
ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Tide IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon Originator or any ERISA Affiliate.
Exhibit I-2
"GST" means all goods and services tax payable under Part IX
of the Excise Tax Act (Canada), all QST and all harmonized sales tax in the
Provinces of Nova Scotia, Newfoundland and New Brunswick payable under the
Excise Tax Act (Canada), as such statutes may be amended, modified, supplemented
or replaced from time to time, including any successor statute.
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.1.
"INITIAL CUTOFF DATE" means March 26, 2006.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the financial condition or operations of Originator and its Subsidiaries,
considered as a whole, (ii) the ability of Originator to perform its obligations
under the Agreement or any other Transaction Document to which it is a party,
(iii) the legality, validity or enforceability of the Agreement or any other
Transaction Document, (iv) Originator's, Buyer's, the Agent's or any Purchaser's
interest in the Receivables generally or in any significant portion of the
Receivables, the Related Security or Collections with respect thereto, or (v)
the collectibility of the Receivables generally or of any material portion of
the Receivables.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which Originator or any ERISA
Affiliate makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"OFAC" means the U.S. Department of the Treasury's Office of
Foreign Assets Control.
"ORGANIZATIONAL DOCUMENTS" means, for any Person, the
documents for its formation and organization, which, for example, (a) for a
corporation are its corporate articles or charter and bylaws, (b) for a
partnership are its certificate of partnership (if applicable) and partnership
agreement, (c) for a limited liability company are its certificate of formation
or organization and its operating agreement, regulations or the like and (d) for
a trust is the trust agreement, declaration of trust, indenture or bylaws under
which it is created.
"ORIGINAL BALANCE" means, with respect to any Receivable
coming into existence after the Initial Cutoff Date, the Outstanding Balance of
such Receivable on the date it was created.
"ORIGINATOR" has the meaning set forth in the preamble to the
Agreement.
"PARENT" has the meaning set forth in the preamble to the
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
Exhibit I-3
"PENSION PLAN" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which Originator sponsors or
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding five plan years.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which Originator or any of its ERISA Affiliates sponsors or
maintains or to which Originator or any of its ERISA Affiliates makes, is
making, or is obligated to make contributions and includes any Pension Plan,
other than a Plan maintained outside the United States primarily for the benefit
of Persons who are not U.S. residents.
"PPSA" means, with respect to any jurisdiction in Canada, the
personal property security or similar legislation applicable in such
jurisdiction, including with respect to the jurisdictions of Canada other than
Quebec, the Personal Property Security Act applicable in such jurisdictions, in
each case as from time to time in effect.
"PST" means all taxes payable under the Retail Sales Tax Act
(Ontario) or any similar statute of another jurisdiction of Canada, other than
GST and QST.
"PURCHASE" means the purchase by Buyer from Originator
pursuant to Section 1.1(a) of the Agreement of the Receivables and the Related
Security and Collections related thereto, together with all related rights in
connection therewith.
"PURCHASE AGREEMENT" has the meaning set forth in the
Preliminary Statements to the Agreement.
"PURCHASE REPORT" has the meaning set forth in Section 1.1(b)
of the Agreement.
"QUEBEC ASSIGNMENT" means an agreement substantially in the
form of Exhibit VI attached hereto.
"QST" means the tax payable under the Act Respecting the
Quebec Sales Tax, R.S.Q. c.T-01, as amended.
"RECEIVABLE" means all rights to payment owed to Originator
(at the time it arises, and before giving effect to any transfer or conveyance
under the Agreement) or to Buyer (after giving effect to the transfers under the
Agreement), whether constituting an account, a claim, a promissory note or an
intangible arising in connection with the sale of goods by Originator (other
than any such sale to a natural Person), excluding the obligation to pay any PST
or Finance Charges with respect thereto, but including, for greater certainty,
any GST and QST with respect thereto. Indebtedness and other rights and
obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Receivable separate from a Receivable consisting of
the indebtedness and other rights and obligations arising from any other
transaction; PROVIDED, FURTHER, that any indebtedness, rights or obligations
referred to in the immediately preceding
Exhibit I-4
sentence shall be a Receivable regardless or whether the account debtor or
Originator treats such indebtedness, rights or obligations as a separate payment
obligation.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of Originator's interest in the inventory and
goods (including returned or repossessed inventory or goods), if any,
the sale, financing or lease of which by Originator gave rise to such
Receivable, and all insurance contracts with respect thereto,
(ii) all other security interests, liens or other
Adverse Claims and property subject thereto from time to time, if any,
purporting to secure payment of such Receivable, whether pursuant to
the Contract related to such Receivable or otherwise, together with all
financing statements and security agreements describing any collateral
securing such Receivable,
(iii) all guaranties, letters of credit, insurance
and other agreements or arrangements of whatever character from time to
time supporting or securing payment of such Receivable whether pursuant
to the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and
agreements associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of Originator's right, title and interest
in each Lock-Box and each Collection Account, and
(vii) all proceeds of any of the foregoing.
"REPORTABLE EVENT" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"SALE PRICE" means, with respect to the Purchase from
Originator, the aggregate price (expressed in U.S. dollars) to be paid by Buyer
to Originator for the Purchase in accordance with Section 1.2 of the Agreement
for the Receivables and the associated Collections and Related Security being
sold to Buyer, which price shall equal on any date (i) the product of (x) the
Outstanding Balance of such Receivables on such date, MULTIPLIED BY (y) one
MINUS the Discount Factor in effect on such date, minus (ii) any Sale Price
Credits to be credited against the Sale Price otherwise payable in accordance
with Section 1.3 of the Agreement.
"SALE PRICE CREDIT" has the meaning set forth in Section 1.3
of the Agreement.
Exhibit I-5
"SANCTIONED COUNTRY" means a country subject to a sanctions
program identified on the list maintained by OFAC and available at
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇/▇▇▇▇▇▇▇▇▇/▇▇▇▇▇.▇▇▇▇, or as otherwise
published from time to time.
"SANCTIONED PERSON" means (a) a person named on the list of
Specially Designated Nationals or Blocked Persons maintained by OFAC available
at ▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇/▇▇▇/▇▇▇▇▇.▇▇▇▇, or as otherwise
published from time to time, or (b) (i) an agency of the government of a
Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or
(iii) a person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.
"TAX CODE" means the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"TERMINATION DATE" means the earliest to occur of (i) the
Facility Termination Date (as defined in the Purchase Agreement), (ii) the
Business Day immediately prior to the occurrence of a Termination Event set
forth in Section 5.1(e), (iii) the Business Day specified in a written notice
from Buyer to Originator following the occurrence of any other Termination
Event, and (iv) the date which is 10 Business Days after Buyer's receipt of
written notice from Originator that it wishes to terminate the facility
evidenced by this Agreement.
"TERMINATION EVENT" has the meaning set forth in Section 5.1
of the Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement,
each Collection Account Agreement and all other instruments, documents and
agreements executed and delivered in connection herewith.
"UNMATURED TERMINATION EVENT" means an event which, with the
passage of time or the giving of notice, or both, would constitute a Termination
Event.
"U.S. DOLLAR EQUIVALENT" means, at the date of determination,
the amount of U.S. dollars that the Agent could purchase, in accordance with its
normal practice, with a specified amount of Canadian dollars based on the Bank
of Canada noon spot rate on such date.
"VARIABLE FUNDING" has the meaning set forth in the
Preliminary Statements to the Agreement.
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP. ALL TERMS USED IN THE PPSA OF ONTARIO, AND
NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS DEFINED IN SUCH PPSA. EXCEPT
AS OTHERWISE EXPRESSLY STATED, ALL REFERENCES TO DOLLAR AMOUNTS ARE TO SUCH
AMOUNTS IN US DOLLARS.
Exhibit I-6
EXHIBIT II
Places of Business; Locations of Records;
Other Names
------------------------------------------------------------------------------------------------------------------------------------
PLACES OF BUSINESS; LOCATIONS OF RECORDS; OTHER NAMES
------------------------------------------------------------------------------------------------------------------------------------
LEGAL NAME PLACES OF BUSINESS CHIEF EXECUTIVE LOCATION OF DOMICILE TRADE AND
(JURISDICTION OF OFFICE RECORDS ASSUMED NAMES
ORGANIZATION)
------------------------------------------------------------------------------------------------------------------------------------
Wolverine Tube 1. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Johann (Chip) R. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇/▇
(▇▇▇▇▇▇) Inc. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ Alabama
2. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
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Exhibit II-1
EXHIBIT III
Lock-boxes; Collection Accounts; Collection Banks
Exhibit III-1
EXHIBIT IV
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that
certain Canadian Receivables Sale Agreement dated as of April 4, 2006, among
Wolverine Tube (Canada) Inc. ("ORIGINATOR") an Ontario corporation and DEJ 98
Finance, LLC, a Delaware limited liability company (the "AGREEMENT").
Capitalized terms used and not otherwise defined herein are used with the
meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly appointed Senior Vice-President and Chief
Financial Officer of Originator.
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of Originator and its Subsidiaries during the
accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes a Termination Event or an Unmatured Termination Event, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate[, except as set forth below].
[4. Described below are the exceptions, if any, to paragraph 3
by listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Originator has taken, is taking, or
proposes to take with respect to each such condition or event:
_____________________].
The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ____ day of April,
2006.
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Exhibit IV-1
EXHIBIT V
Credit and Collection Policy
[attached]
Exhibit V-1
EXHIBIT VI
FORM OF QUEBEC ASSIGNMENT
Exhibit VI-2
EXHIBIT VII
[Form of] Purchase Report
For the Calculation Period beginning [date] and ending [date]
------------
TO: BUYER AND THE AGENT (AS BUYER'S ASSIGNEE)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Aggregate Outstanding Balance of all Receivables sold
during the period: $_____________ A
----------------------------------------------------------------------------------------------------------------------
LESS: Aggregate Outstanding Balance of all Receivables
sold during such period which were not Eligible
Receivables on the date when sold: ($____________) (B)
----------------------------------------------------------------------------------------------------------------------
EQUALS: Aggregate Outstanding Balance of all Eligible
Receivables sold during the period (A - B): $___________ =C
----------------------------------------------------------------------------------------------------------------------
LESS: Sale Price discount during the Period: ($____________) (D)
----------------------------------------------------------------------------------------------------------------------
EQUALS: Gross Sale Price Payable during the period
(C -- D) $____________ =E
----------------------------------------------------------------------------------------------------------------------
LESS: Total Sale Price Credits arising during the
Period: ($____________) (F)
----------------------------------------------------------------------------------------------------------------------
EQUALS: Net Sale Price payable during the Period
(E - F): $____________ =G
----------------------------------------------------------------------------------------------------------------------
Cash Sale Price Paid to Originator during the Period: $_____________ H
----------------------------------------------------------------------------------------------------------------------
Exhibit VII-1
SCHEDULE A
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE PURCHASE
1. Executed copies of the
Canadian Receivables Sale Agreement, the Quebec
Assignment and the Purchase Agreement, duly executed by the parties
thereto, together with, in the case of the Purchase Agreement, all
exhibits thereto and closing documents and opinions required
thereunder.
2. Copy of the Credit and Collection Policy to attach to the Canadian
Receivables Sale Agreement as an Exhibit.
3. A certificate of Originator's Senior Vice President and Chief Financial
Officer certifying:
(a) A copy of the Resolutions of the Board of Directors of
Originator, authorizing Originator's execution, delivery and
performance of the Canadian Receivables Sale Agreement and the
other documents to be delivered by it thereunder;
(b) A copy of the Organizational Documents of Originator;
(c) Good Standing Certificates for Originator issued by its
jurisdiction of incorporation and each jurisdiction where it has
material operations; and
(d) The names and signatures of the officers executing the
Canadian Receivables Sale Agreement and any other documents to be
delivered by it thereunder.
4. PPSA searches against Originator from the following jurisdictions:
(a)
Ontario; and
(b) Quebec.
5. Time stamped receipt copies of proper financing statements or other
registrations, duly filed under the PPSA on or before the date of the
Canadian Receivables Sale Agreement in all jurisdictions as may be
necessary or, in the opinion of Buyer (or its assigns), desirable,
under the PPSA of all appropriate jurisdictions or any comparable law
in order to perfect the ownership interests contemplated by the
Canadian Receivables Sale Agreement; provided that any such
registrations in Quebec may be made immediately following execution of
the Canadian Receivables Sale Agreement.
Schedule A-1
6. Time stamped receipt copies of proper PPSA termination or discharge
statements, if any, and such other releases and estoppel certificates
as may be necessary or, in the opinion of Buyer (or its assigns),
desirable, to release or confirm the non-applicability of all security
interests and other rights of any Person in or potentially in the
Receivables, Contracts or Related Security previously granted by
Originator.
7. Executed Collection Account Agreements for each Lock-Box and Collection
Account.
8. A favorable opinion of
Ontario legal counsel for Originator reasonably
acceptable to Buyer (and the Agent, as Buyer's assignee) as to such
matters and in form acceptable to Buyer and its assigns.
9. A "TRUE SALE", "SUBSTANTIVE CONSOLIDATION" and tax opinion of
Ontario
counsel to Buyer or its assigns with respect to the transactions
contemplated by the Canadian Receivables Sale Agreement, in form
acceptable to Buyer and its assigns.
10. A Certificate of Originator's Senior Vice President and Chief Financial
Officer certifying that, as of the date hereof, no Termination Event or
Unmatured Termination Event exists and is continuing.
11. Executed copies of (i) all consents from and authorizations by any
Persons and (ii) all waivers and amendments to existing credit
facilities, that are necessary in connection with the Canadian
Receivables Sale Agreement.
12. If applicable, a direction letter executed by Originator authorizing
Buyer (and the Agent, as its assignee) and directing warehousemen to
allow Buyer (and the Agent, as its assignee) to inspect and make copies
from Originator's books and records maintained at off-site data
processing or storage facilities.
Schedule A-2
