EXHIBIT 4.2
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RECEIVABLES PURCHASE AGREEMENT
dated as of February 20, 2004
among
EAGLE MATERIALS INC.,
as initial Servicer
EXP FUNDING, LLC,
as Seller
MARKET STREET FUNDING CORPORATION,
as Issuer
and
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
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TABLE OF CONTENTS
PAGE
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility............................................ 1
Section 1.2. Making Purchases............................................. 1
Section 1.3. Purchased Interest Computation............................... 2
Section 1.4. Settlement Procedures........................................ 3
Section 1.5. Fees......................................................... 6
Section 1.6. Payments and Computations, Etc. ............................. 6
Section 1.7. Increased Costs.............................................. 7
Section 1.8. Requirements of Law.......................................... 8
Section 1.9. Inability to Determine Euro-Rate............................. 8
Section 1.10. Funding Losses............................................... 9
Section 1.11. Taxes........................................................ 9
Section 1.12. Repurchase Option............................................ 10
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants.................... 11
Section 2.2. Termination Events........................................... 11
ARTICLE III
INDEMNIFICATION
Section 3.1. Indemnities by the Seller.................................... 11
Section 3.2. Indemnities by the Servicer.................................. 13
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer.................................. 13
Section 4.2. Duties of the Servicer....................................... 14
Section 4.3. Establishment and Use of Certain Accounts.................... 15
Section 4.4. Enforcement Rights........................................... 16
Section 4.5. Responsibilities of the Seller............................... 17
Section 4.6. Servicing Fee................................................ 17
ARTICLE V
MISCELLANEOUS
Section 5.1. Amendments, Etc. ............................................ 17
-i-
Section 5.2. Notices, Etc. ............................................... 18
Section 5.3. Successors and Assigns; Assignments; Participations.......... 18
Section 5.4. Costs, Expenses and Taxes.................................... 19
Section 5.5. Confidentiality.............................................. 19
Section 5.6. No Proceedings; Limitation on Payments....................... 20
Section 5.7. GOVERNING LAW AND JURISDICTION............................... 20
Section 5.8. Execution in Counterparts.................................... 21
Section 5.9. Survival of Termination...................................... 21
Section 5.10. WAIVER OF JURY TRIAL......................................... 21
Section 5.11. Entire Agreement............................................. 21
Section 5.12. Headings..................................................... 21
EXHIBIT I Definitions
EXHIBIT II Conditions of Purchases
EXHIBIT III Representations and Warranties
EXHIBIT IV Covenants
EXHIBIT V Termination Events
SCHEDULE I Credit and Collection Policy
SCHEDULE II Lock-Box Banks and Lock-Box Accounts
ANNEX A Form of Purchase Notice
ANNEX B Form of Paydown Notice
ANNEX C Form of Servicer Report
This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement") is entered into as of February 20,
2004, among EXP FUNDING, LLC, a Delaware limited liability company, as seller
(the "Seller"), EAGLE MATERIALS INC., a Delaware corporation ("Eagle
Materials"), as initial servicer (in such capacity, together with its successors
and permitted assigns in such capacity, the "Servicer"), MARKET STREET FUNDING
CORPORATION, a Delaware corporation, as Issuer (the "Issuer") and PNC BANK,
NATIONAL ASSOCIATION, a national banking association ("PNC"), as administrator
for the Issuer (in such capacity, together with its successors and assigns in
such capacity, the "Administrator").
PRELIMINARY STATEMENTS
WHEREAS, certain terms that are capitalized and used throughout this
Agreement are defined in Exhibit I. References in the Exhibits hereto to "the
Agreement" refer to this Agreement, as amended, supplemented or otherwise
modified from time to time.
WHEREAS, the Seller desires to sell, transfer and assign an undivided
percentage ownership interest in a pool of receivables, and the Issuer desires
to acquire such undivided percentage interest, as such percentage interest shall
be adjusted from time to time based upon, in part, reinvestment payments that
are made by the Issuer.
NOW THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility. (a) On the terms and conditions
hereinafter set forth, the Issuer hereby agrees to purchase from the Seller, and
make reinvestments in, undivided percentage ownership interests with regard to
the Purchased Interest from time to time from the date hereof to the Facility
Termination Date. Under no circumstances shall the Issuer make any such purchase
or reinvestment if, after giving effect to such purchase or reinvestment (i) the
aggregate outstanding Capital of the Purchased Interest would exceed the
Purchase Limit or (ii) the Purchased Interest would exceed 100%.
(b) The Seller may, upon at least 30 days' written notice to the
Administrator, terminate the Facility provided in this Agreement in whole or,
upon at least 30 days' written notice to the Administrator, from time to time,
irrevocably reduce in part the unused portion of the Purchase Limit; provided,
that each partial reduction shall be in the amount of at least $5,000,000, or an
integral multiple of $1,000,000 in excess thereof, and that, unless terminated
in whole, the Purchase Limit shall in no event be reduced below $20,000,000.
Section 1.2. Making Purchases. (a) Each purchase (but not reinvestment) of
undivided percentage ownership interests with regard to the Purchased Interest
hereunder shall be made upon the Seller's irrevocable written notice (a
"Purchase Notice") in the form of Annex A delivered to the Administrator in
accordance with Section 5.2 (which notice must be received by the Administrator
before 11:00 a.m., New York City time) at least two Business Days before the
requested purchase date, which notice shall specify: (A) the amount requested to
be paid to the Seller (such amount, which shall not be less than $300,000 and
anything in excess of $300,000 shall be an integral multiple of $100,000), being
the Capital relating to the undivided percentage ownership interest then being
purchased, (B) the date of such purchase (which shall be a Business Day) and (C)
a pro forma calculation of the Purchased Interest after giving effect to such
purchase. The funding basis for each such purchase shall be the CP Rate or, if
the Issuer has exercised its discretion not to fund or maintain such purchase
through the issuance of Notes because such purchase with the issuance of Notes
would be economically inadvisable to the Issuer, the Administrator, the Seller
or any other similarly situated Person, or otherwise not permitted or available,
the Yield Rate selected at such time by the Administrator.
(b) On the date of each purchase (but not reinvestment) of undivided
percentage ownership interests with regard to the Purchased Interest hereunder,
the Issuer shall, upon satisfaction of the applicable conditions set forth in
Exhibit II, make available to the Seller in same day funds, at PNC Bank,
National Association, account number 1013639238, ABA 043 000 096 (or such other
account as may be so designated in writing by the Seller to the Administrator)
an amount equal to the Capital relating to the undivided percentage ownership
interest then being funded.
(c) Effective on the date of each purchase pursuant to this Section and
each reinvestment pursuant to Section 1.4, the Seller hereby sells and assigns
to the Issuer an undivided percentage ownership interest in: (i) each Pool
Receivable then existing, (ii) all Related Security with respect to such Pool
Receivables and (iii) all Collections with respect to, and other proceeds of,
such Pool Receivables and Related Security.
(d) To secure all of the Seller's obligations (monetary or otherwise)
under this Agreement and the other Transaction Documents to which it is a party,
whether now or hereafter existing or arising, due or to become due, direct or
indirect, absolute or contingent, the Seller hereby grants to the Issuer (and
its assigns) a security interest in all of the Seller's right, title and
interest (including any undivided interest of the Seller) in, to and under all
of the following, whether now or hereafter owned, existing or arising: (i) all
Pool Receivables, (ii) all Related Security with respect to such Pool
Receivables, (iii) all Collections with respect to such Pool Receivables, (iv)
the Lock-Box Accounts and all amounts on deposit therein, and all certificates
and instruments, if any, from time to time evidencing such Lock-Box Accounts and
amounts on deposit therein, (v) all rights (but none of the obligations) of the
Seller under the Sale Agreements, and (vi) all proceeds of, and all amounts
received or receivable under any or all of, the foregoing (collectively, the
"Pool Assets"). The Issuer shall have, with respect to the Pool Assets, and in
addition to all the other rights and remedies available to the Issuer, all the
rights and remedies of a secured party under any applicable UCC.
Section 1.3. Purchased Interest Computation. The Purchased Interest shall
be initially computed on the date of the initial purchase hereunder. Thereafter,
until the Facility Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. From and after the occurrence of any Termination Day,
the Purchased Interest shall (until the event(s) giving rise to such Termination
Day are satisfied or waived by the Administrator), be deemed to be 100%. The
Purchased Interest shall become zero when the Capital thereof and Discount
thereon shall have been paid in
full, all the amounts owed by the Seller and the Servicer hereunder to the
Issuer, the Administrator and any other Indemnified Party or Affected Person are
paid in full, and the Servicer shall have received the accrued Servicing Fee
thereon.
Section 1.4. Settlement Procedures. (a) The collection and distribution of
the Pool Receivables shall be administered by the Servicer in accordance with
the terms of this Agreement.
(b) The Servicer shall, on each day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or Servicer:
(i) set aside, segregate and hold in trust for the benefit of the
Issuer (and, if requested by the Administrator, transfer to a separate
account approved by the Administrator) out of the percentage of
Collections represented by the Purchased Interest, first, an amount equal
to the Discount accrued through such day for each Portion of Capital and
not previously set aside, second, an amount equal to the fees set forth in
the Fee Letter accrued and unpaid through such day, and third, to the
extent funds are available therefor, an amount equal to the Issuer's Share
of the Servicing Fee accrued through such day and not previously set
aside,
(ii) subject to Section 1.4(f), if such day is not a Termination
Day, remit to the Seller, on behalf of the Issuer, the remainder of the
percentage of Collections represented by the Purchased Interest (to the
extent representing a return on Capital); such remainder shall be
automatically reinvested in Pool Receivables, and in the Related Security,
Collections and other proceeds with respect thereto; provided, however,
that if after giving effect to such reinvestment the Purchased Interest
would exceed 100%, then the Servicer shall not remit to the Seller, but
shall set aside and hold in trust for the Issuer (and, if requested by the
Administrator, transfer to a separate account approved by the
Administrator), a portion of such Collections that, together with the
other Collections set aside pursuant to this paragraph, shall equal the
amount necessary to reduce the Purchased Interest to 100%,
(iii) if such day is a Termination Day, set aside, segregate and
hold in trust for the benefit of the Issuer (and, if requested by the
Administrator, transfer to a separate account approved by the
Administrator) the entire remainder of the Issuer's Share of the
Collections; provided, that so long as the Facility Termination Date has
not occurred, if amounts are set aside and held in trust on any
Termination Day and, thereafter, the conditions set forth in Section 2 of
Exhibit II are satisfied or are waived by the Administrator, such
previously set aside amounts shall, unless already distributed pursuant to
Section 1.4(d), below, to the extent representing a return on Capital, be
reinvested in accordance with clause (ii) of this Section 1.4(b) on the
day of such subsequent satisfaction or waiver, and
(iv) remit to the Seller (subject to Section 1.4(f)) for its own
account any Collections in excess of (without duplication): (a) amounts
required to be reinvested in accordance with clause (ii) or the proviso to
clause (iii) of this Section 1.4(b) plus (b) the amounts that are required
to be set aside pursuant to clause (i), the proviso to clause (ii)
and clause (iii) of this Section 1.4(b) plus (c) the Seller's Share of the
Servicing Fee accrued and unpaid through such day (which shall be retained
by the Servicer for its own account and, on each Settlement Date, be
treated for all purposes hereof as the payment by the Seller of its share
of the Servicing Fee as contemplated by Section 4.6(a) on such date) plus
(d) all other amounts owed by the Seller under this Agreement to the
Issuer, the Administrator, and any other Indemnified Party or Affected
Person.
(c) The Servicer shall deposit into the Administration Account (or such
other account designated by the Administrator at such time), on each Settlement
Date with respect to any Portion of Capital, Collections held for the Issuer
pursuant to clause (b)(i) or (f) of this Section 1.4 plus the amount of
Collections then held for the Issuer pursuant to clauses (b)(ii) and (iii) of
this Section 1.4. Prior to the occurrence and continuation of any Termination
Day, the Servicer may deposit into its own account on each Settlement Date from
Collections held on deposit in the Lock-Box Accounts pursuant to Section
1.4(b)(i) in respect of the accrued Servicing Fee, an amount equal to the
Issuer's Share of such accrued Servicing Fee.
(d) Upon receipt of funds deposited into the Administration Account
pursuant to clause (c) of this Section, the Administrator shall cause such funds
to be distributed as follows:
(i) if such distribution occurs on a day that is not a Termination
Day and the Purchased Interest does not exceed 100%, first, to the Issuer,
in payment in full of all accrued Discount and fees (other than Servicing
Fees) with respect to each such Portion of Capital, and second, if the
Servicer has not, in accordance with the last sentence of Section 1.4(c),
deposited such amounts in its own account, to the Servicer in payment in
full of the Issuer's Share of accrued Servicing Fees, and
(ii) if such distribution occurs on a Termination Day or on a day
when the Purchased Interest exceeds 100%, first, if Eagle Materials or an
Affiliate thereof is not the Servicer, to the Servicer in payment in full
of all accrued Servicing Fees; second, to the Issuer, in payment in full
of all accrued Discount and fees (other than Servicing Fees); third, to
the Issuer, in payment in full of Capital (or, if such day is not a
Termination Day, the amount necessary to reduce the Purchased Interest to
100%), fourth, if the Capital and accrued Discount with respect to each
Portion of Capital have been reduced to zero, and all accrued Servicing
Fees payable to the Servicer (if other than Eagle Materials or an
Affiliate thereof) have been paid in full, to the Issuer, the
Administrator and any other Indemnified Party or Affected Person in
payment in full of any other amounts owed thereto by the Seller hereunder
and, fifth, to the Servicer (if the Servicer is Eagle Materials or an
Affiliate thereof) in payment in full of the Issuer's Share of all accrued
Servicing Fees.
After the Capital, Discount, fees payable pursuant to the Fee Letter and
Servicing Fees with respect to the Purchased Interest, and any other amounts
payable by the Seller and the Servicer to the Issuer, the Administrator or any
other Indemnified Party or Affected Person hereunder, have been paid in full,
all additional Collections with respect to the Purchased Interest shall be paid
to the Seller for its own account.
(e) For the purposes of this Section 1.4:
(i) if on any day the Outstanding Balance of any Pool Receivable
is reduced or adjusted as a result of any defective, rejected, returned,
repossessed or foreclosed goods or services, or any revision,
cancellation, allowance, discount or other adjustment made by the
Servicer, the Seller or any Affiliate of the Servicer or the Seller (other
than as a result of (x) having been written off the Seller's books as
uncollectible due to credit reasons of an Obligor or (y) a discharge in
bankruptcy of an Obligor), or any setoff or dispute between the Seller or
any Affiliate of the Seller and an Obligor, the Seller shall be deemed to
have received on such day a Collection of such Pool Receivable in the
amount of such reduction or adjustment and shall immediately pay any and
all such amounts in respect thereof to a Lock-Box Account for the benefit
of the Issuer and its assigns and for application pursuant to this Section
1.4;
(ii) if on any day any of the representations or warranties in
Section 1(l) or Section 3(a) of Exhibit III is not true with respect to
any Pool Receivable, the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in full and shall immediately pay
any and all such amounts in respect thereof to a Lock-Box Account for the
benefit of the Issuer and its assigns and for application pursuant to this
Section 1.4 (Collections deemed to have been received pursuant to clause
(i) or (ii) of this paragraph (e) are hereinafter sometimes referred to as
"Deemed Collections") (any Receivable which becomes subject to a Deemed
Collection in an amount equal to the Outstanding Balance of such
Receivable, pursuant to clauses (i) or (ii) of this paragraph (e), and for
which such Deemed Collection has actually been paid in cash and deposited
into a Lock-Box Account in accordance with the terms hereof, shall no
longer be a "Receivable" for purposes of this Agreement and the other
Transaction Documents and the security interest or undivided ownership
interest of the Issuer therein and in the Related Security solely with
respect thereto shall be and be deemed to be automatically released upon
actual receipt of such Deemed Collection by deposit thereof (in an amount
at least equal to the entire aggregate Outstanding Balance of such
Receivable) in a Lock-Box Account without any further action by or notice
to any Person, and the Issuer hereby authorizes at the expense of the
Seller, the filing of any release or partial termination at such time in
accordance with the UCC of any applicable jurisdiction solely with respect
to the Receivable and applicable Related Security to which such Deemed
Collection relates);
(iii) except as required by applicable law or the relevant Contract,
all Collections received from an Obligor of any Receivable shall be
applied to the Receivables of such Obligor in the order of the age of such
Receivables, starting with the oldest such Receivable, unless such Obligor
designates in writing its payment for application to specific Receivables;
and
(iv) if and to the extent the Administrator or the Issuer shall be
required for any reason to pay over to an Obligor (or any trustee,
receiver, custodian or similar official in any Insolvency Proceeding) any
amount received by it hereunder, such amount shall be deemed not to have
been so received by the Administrator or the Issuer but rather to have
been retained by the Seller and, accordingly, the Administrator or the
Issuer, as the case
may be, shall have a claim against the Seller for such amount, payable
when and to the extent that any distribution from or on behalf of such
Obligor is made in respect thereof.
(f) If at any time the Seller shall wish to cause the reduction of
Capital, the Seller may do so as follows:
(i) the Seller shall give the Administrator and the Servicer at
least two (2) Business Days' prior written notice thereof (a "Paydown
Notice"), which notice shall be in the form of Annex B hereto;
(ii) on the proposed date of commencement of such reduction and on
each day thereafter, the Servicer shall cause Collections not to be
remitted to the Seller for reinvestment until the amount thereof not so
remitted shall equal the desired amount of reduction; and
(iii) the Servicer shall account for such Collections and make
payment to the Administrator on the next succeeding Settlement Date and
Capital shall be deemed reduced in the amount to be paid to the
Administrator only when in fact finally so paid;
provided, that:
(A) the amount of any such reduction shall be not less than
$300,000 (or for any specific request, $100,000, at the sole
discretion of the Administrator) and shall be an integral multiple
of $100,000, and the entire Capital of the Purchased Interest after
giving effect to such reduction shall be not less than $5,000,000
and shall be in an integral multiple of $100,000 (unless Capital
shall have been reduced to zero in accordance with Section 1.1(b));
and
(B) the Seller shall choose a reduction amount, and the date
of commencement thereof, so that to the extent practicable such
reduction shall commence and conclude in the same Yield Period.
Section 1.5. Fees. The Seller shall pay to the Administrator for the
benefit of the Issuer and the Administrator, certain fees in the amounts and on
the dates set forth in the Fee Letter.
Section 1.6. Payments and Computations, Etc. (a) All amounts to be paid or
deposited by the Seller or the Servicer hereunder shall be made without
reduction for offset or counterclaim and shall be paid or deposited no later
than 12:00 p.m. (New York City time) on the day when due in same day funds to
the Administration Account. All amounts received after 12:00 p.m. (New York City
time) will be deemed to have been received on the next Business Day.
(b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate
equal to 2.0% per annum above the Base Rate, payable on demand.
(c) All computations of interest under clause (b) and all computations
of Discount, fees and other amounts hereunder shall be made on the basis of a
year of 360 (or 365 or 366, as applicable, with respect to Discount or other
amounts calculated by reference to the Base Rate) days for the actual number of
days elapsed. Whenever any payment or deposit to be made hereunder shall be due
on a day other than a Business Day, such payment or deposit shall be made on the
next Business Day and such extension of time shall be included in the
computation of such payment or deposit.
Section 1.7. Increased Costs. (a) If, after the date hereof, the
Administrator, the Issuer, any Liquidity Bank, any other Program Support
Provider or any of their respective Affiliates (each an "Affected Person")
reasonably determines that the existence of or compliance with: (i) any law,
rule or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein or in the interpretation or application
thereof, or (ii) any request, guideline or directive from Financial Accounting
Standards Board ("FASB"), or any central bank or other Governmental Authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Affected Person, and such
Affected Person determines that the amount of such capital is increased by or
based upon the existence of any commitment to make purchases of (or otherwise to
maintain the investment in) Pool Receivables or any related liquidity facility,
credit enhancement facility and other commitments of the same type, then, upon
demand by such Affected Person (with a copy to the Administrator), the Seller
shall promptly pay to the Administrator, for the account of such Affected
Person, from time to time as specified by such Affected Person, additional
amounts sufficient to compensate such Affected Person in the light of such
circumstances, to the extent that such Affected Person reasonably determines
such increase in capital to be allocable to the existence of any of such
commitments. For the avoidance of doubt, if the issuance of FASB Interpretation
No. 46, or any other change in accounting standards or the issuance of any other
pronouncement, release or interpretation, causes or requires the consolidation
of all or a portion of the assets and liabilities of the Issuer or the Seller
with the assets and liabilities of the Administrator or any other Affected
Person, such event shall constitute a circumstance on which such Person may base
a claim for reimbursement under this Section 1.7. A certificate as to such
amounts submitted to the Seller and the Administrator by such Affected Person
shall be conclusive and binding for all purposes, absent manifest error.
(b) If, subsequent to the execution of this Agreement, due to either:
(i) the introduction of or any change in or in the interpretation of any law or
regulation or (ii) compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to any Affected Person of agreeing to
purchase or purchasing, or maintaining the ownership of, the Purchased Interest
(or its portion thereof) in respect of which Discount is computed by reference
to the Euro-Rate, then, upon demand by such Affected Person, the Seller shall
promptly pay to such Affected Person, from time to time as specified by such
Affected Person, additional amounts sufficient to compensate such Affected
Person for such increased costs. A certificate as to such amounts submitted to
the Seller and the Administrator by such Affected Person shall be conclusive and
binding for all purposes, absent manifest error.
(c) If such increased costs affect the related Affected Person's portfolio
of financing transactions, such Affected Person shall use reasonable averaging
and attribution methods to allocate such increased costs to the transactions
contemplated by this Agreement.
Section 1.8. Requirements of Law. If, after the date hereof, any Affected
Person reasonably determines that the existence of or compliance with: (a) any
law or regulation or any change therein or in the interpretation or application
thereof, or (b) any request, guideline or directive from any central bank or
other Governmental Authority (whether or not having the force of law):
(i) does or shall subject such Affected Person to any tax of any
kind whatsoever with respect to this Agreement, any increase in the
Purchased Interest (or its portion thereof) or in the amount of Capital
relating thereto, or does or shall change the basis of taxation of
payments to such Affected Person on account of Collections, Discount or
any other amounts payable hereunder (excluding taxes imposed on the
overall income of such Affected Person, and franchise taxes imposed on
such Affected Person, by the jurisdiction under the laws of which such
Affected Person is organized or a political subdivision thereof), or
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
purchases, advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Affected Person that are not
otherwise included in the determination of the Euro-Rate hereunder,
and the result of any of the foregoing is: (A) to increase the cost to such
Affected Person of agreeing to purchase or purchasing or maintaining the
ownership of undivided percentage ownership interests with regard to the
Purchased Interest (or interests therein) or any Portion of Capital, or (B) to
reduce any amount receivable hereunder (whether directly or indirectly), then,
in any such case, upon demand by such Affected Person, the Seller shall promptly
pay to such Affected Person additional amounts necessary to compensate such
Affected Person for such additional cost or reduced amount receivable. All such
amounts shall be payable as incurred. A certificate as to such amounts from such
Affected Person to the Seller and the Administrator shall be conclusive and
binding for all purposes, absent manifest error.
Section 1.9. Inability to Determine Euro-Rate. (a) If the Administrator
determines before the first day of any Yield Period (which determination shall
be final and conclusive) that, by reason of circumstances affecting the
interbank eurodollar market generally (i) deposits in dollars (in the relevant
amounts for such Yield Period) are not being offered to banks in the interbank
eurodollar market for such Yield Period, (ii) adequate means do not exist for
ascertaining the Euro-Rate for such Yield Period, or (iii) the Euro-Rate does
not accurately reflect the cost to any Liquidity Bank (as determined by the
Administrator) of maintaining any Portion of Capital during such Yield Period,
then until the Administrator notifies the Servicer that the circumstances giving
rise to such suspension no longer exist, (x) no Portions of Capital shall be
Euro-Rate Portions of Capital and (y) the Discount for any outstanding Portions
of Capital that are Euro-Rate Portions of Capital shall, on the last day of the
then current Yield Period, be converted to Base Rate Portions of Capital.
(b) If, on or before the first day of any Yield Period, the
Administrator shall have been notified by any Affected Person that, such
Affected Person has determined (which determination shall be final and
conclusive) that, any enactment, promulgation or adoption of or any change in
any applicable law, rule or regulation, or any change in the interpretation or
administration thereof by a governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Affected Person with any guideline, request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for such Affected Person to fund or
maintain any Euro-Rate Portion of Capital, then until the Administrator notifies
the Servicer that the circumstances giving rise to such determination no longer
apply, no Portions of Capital shall be Euro-Rate Portions of Capital and any
outstanding Euro-Rate Portions of Capital at such time shall be converted into
Base Rate Portions of Capital.
Section 1.10. Funding Losses. The Seller shall compensate each Affected
Person, upon written request by such Person (which request shall set forth in
reasonable detail the basis for requesting such amounts) for all reasonable
losses, expenses and liabilities (including any interest paid by such Affected
Person to lenders of funds borrowed by it to fund or maintain any Portion of
Capital hereunder at the Yield Rate determined by reference to the Euro-Rate and
any loss sustained by such Person in connection with the re-employment of such
funds), which such Affected Person may sustain with respect to funding or
maintaining such Portion of Capital at the Euro-Rate if, for any reason, at the
applicable request by the Seller to fund or maintain such Portion of Capital at
the Yield Rate determined by reference to the Euro-Rate does not occur on a date
specified therefor.
Section 1.11. Taxes. The Seller agrees that:
(a) (i) Any and all payments by the Seller under this Agreement shall be
made free and clear of and without deduction for any and all current or future
taxes, stamp or other taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding overall income
or franchise taxes, in either case, imposed on the Person receiving such payment
by the Seller hereunder by the jurisdiction under whose laws such Person is
organized or any political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Seller shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to the Issuer,
any Liquidity Bank or the Administrator, then the sum payable shall be increased
by the amount necessary to yield to such Person (after payment of all Taxes) an
amount equal to the sum it would have received had no such deductions been made.
(i) Whenever any Taxes are payable by the Seller, as promptly as
possible thereafter, the Seller shall send to the Administrator for its
own account or for the account of the Issuer or any Liquidity Bank or
other Program Support Provider, as the case may be, a certified copy of an
original official receipt showing payment thereof or such other evidence
of such payment as may be available to the Seller and acceptable to the
taxing authorities having jurisdiction over such Person. If the Seller
fails to pay any Taxes when due to the appropriate taxing authority or
fails to remit to the Administrator the required receipts or other
required documentary evidence, the Seller shall indemnify the
Administrator and/or any other Affected Person, as applicable, for any
incremental taxes,
interest or penalties that may become payable by such party as a result of
any such failure.
(b) (i) If the Administrator or the applicable Affected Person is not
created or organized under the laws of the United States or a political
subdivision thereof, such Person shall, to the extent that it may then do so
under applicable laws and regulations, deliver to the Seller (with, in the case
of any Affected Person, a copy to the Administrator) (i) within thirty (30) days
after the date hereof, or, if later, the date on which such Person becomes an
Affected Person pursuant to this Agreement two (or such other number as may from
time to time be prescribed by applicable laws or regulations) duly completed
copies of IRS Form 4224 or Form 1001 (or any successor form or other certificate
or statement which may be required from time to time by the relevant United
States taxing authorities or applicable law or regulation), as appropriate, to
permit the Seller to make payments hereunder for the account of such Person, as
the case may be, without deduction or withholding of income taxes and (ii) upon
the obsolescence of or after the occurrence of any event requiring a change in
any form or certificate previously delivered pursuant to this Section 1.11(b),
copies (in such numbers as may from time to time be prescribed by applicable law
or regulation) of such additional, amended or successor form, certificate or
statement as may be required under applicable law or regulation to permit the
Seller to make payments hereunder for the account of such Person without
deduction or withholding of income taxes.
(i) The Seller shall not be required to pay any amounts to any
Affected Person in respect of Taxes for any period pursuant to paragraph
(a), above, if the obligation to pay such amounts would not have arisen
but for a failure by such Affected Person to comply with the provisions of
this paragraph (b) for such period, unless such Affected Person is unable
to comply with this paragraph (b) because of (i) a change in applicable
law, regulation or official interpretation thereof or (ii) an amendment,
modification or revocation of any applicable tax treaty or a change in
official position regarding the application or interpretation thereof, in
each case after the date hereof (or, in the case of any Person who became
an Affected Person after the date hereof, after the date on which it so
became an Affected Person).
(ii) Within thirty (30) days of the written request of the Seller
therefor, the Administrator or such Affected Person, as appropriate, shall
execute and deliver to the Borrower such certificates, forms or other
documents which can be furnished consistent with the facts and which are
reasonably necessary to assist the Seller in applying for refunds of taxes
remitted hereunder.
Section 1.12. Repurchase Option. So long as no Termination Event or
Unmatured Termination Event would occur or be continuing after giving effect
thereto, the Seller shall have the right (the "Call Right") to repurchase all,
but not less than all, of the Purchased Interest held by the Issuer upon not
less than 30 days' prior written notice to the Administrator. Such notice shall
specify the date that the Seller desires that such repurchase occur (such date,
the "Repurchase Date"). On the Repurchase Date, the Seller shall transfer to the
Administration Account in immediately available funds an amount equal to (i) the
aggregate outstanding Capital of the Purchased Interest at such time, (ii) all
accrued and unpaid Discount to the Repurchase Date, (iii) all accrued and unpaid
fees owing to the Issuer and the Administrator pursuant to the
Fee Letter, and (iv) all expenses, indemnities and other amounts payable
hereunder to the Issuer and the Administrator. Any repurchase pursuant to this
Section 1.12 shall be made without recourse to or warranty by the Issuer or the
Administrator. Further, on the Repurchase Date, the Facility Termination Date
shall have occurred and no further purchases or reinvestments of Collections
shall be made hereunder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants. Each of the Seller
and the Servicer hereby makes the representations and warranties, and hereby
agrees to perform and observe the covenants, applicable to it set forth in
Exhibits III and IV, respectively.
Section 2.2. Termination Events. If any of the Termination Events set
forth in Exhibit V shall occur, the Administrator may by notice to the Seller,
declare the Facility Termination Date to have occurred (in which case the
Facility Termination Date shall be deemed to have occurred); provided, that
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in paragraph (f) of Exhibit
V, the Facility Termination Date shall occur. Upon any such declaration,
occurrence or deemed occurrence of the Facility Termination Date, the Issuer and
the Administrator shall have, in addition to the rights and remedies that they
may have under this Agreement, all other rights and remedies provided after
default under the New York UCC and under other applicable law, which rights and
remedies shall be cumulative.
ARTICLE III
INDEMNIFICATION
Section 3.1. Indemnities by the Seller. Without limiting any other rights
that the Administrator, the Issuer, the Liquidity Banks, any other Program
Support Providers or any of their respective Affiliates, employees, officers,
directors, agents, counsel, successors, transferees or assigns (each, an
"Indemnified Party") may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and against any and all
claims, damages, expenses, costs, losses and liabilities (including Attorney
Costs) (all of the foregoing being collectively referred to as "Indemnified
Amounts"), which may be asserted against or incurred by any of them, arising out
of or resulting from this Agreement (whether directly or indirectly), the use of
proceeds of purchases or reinvestments, the ownership of the Purchased Interest,
or any interest therein, or in respect of any Receivable, Related Security or
Contract, excluding, however: (a) Indemnified Amounts to the extent resulting
from gross negligence or willful misconduct on the part of such Indemnified
Party, (b) recourse (except as otherwise specifically provided in this
Agreement) for uncollectible Receivables, or (c) any overall income taxes or
franchise taxes, in either case, imposed on such Indemnified Party by the
jurisdiction under the laws of which such Indemnified Party is organized or any
political subdivision thereof. Without limiting or being limited by the
foregoing, and subject to the exclusions set forth in the preceding sentence,
the Seller shall pay on demand to each Indemnified Party any and all
amounts necessary to indemnify such Indemnified Party from and against any and
all Indemnified Amounts relating to or resulting from any of the following:
(i) the failure of any Receivable included in the calculation of
the Net Receivables Pool Balance as an Eligible Receivable to be an
Eligible Receivable, the failure of any information contained in any
Servicer Report to be true and correct, or the failure of any other
information provided to the Issuer or the Administrator with respect to
Receivables or this Agreement to be true and correct,
(ii) the failure of any representation, warranty or certification
made or deemed made by the Seller (or any of its officers) under or in
connection with this Agreement to have been true and correct as of the
date made or deemed made in all respects when made,
(iii) the failure by the Seller to comply with any applicable law,
rule or regulation with respect to any Pool Receivable or the related
Contract, or the failure of any Pool Receivable or the related Contract to
conform to any such applicable law, rule or regulation,
(iv) the failure to vest in the Issuer a valid and enforceable: (A)
perfected undivided percentage ownership or security interest, to the
extent of the Purchased Interest, in the Receivables in, or purporting to
be in, the Receivables Pool and the other Pool Assets, or (B) first
priority perfected security interest in the Pool Assets, in each case,
free and clear of any Adverse Claim,
(v) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Receivables in, or purporting to be in, the Receivables Pool and the other
Pool Assets, whether at the time of any purchase or reinvestment or at any
subsequent time,
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the related Obligor) of the related Obligor to the payment
of any Receivable in, or purporting to be in, the Receivables Pool
(including 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 goods or services related to such Receivable or the
furnishing or failure to furnish such goods or services or relating to
collection activities with respect to such Receivable,
(vii) any failure of the Seller to perform its duties or obligations
in accordance with the provisions hereof,
(viii) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract,
(ix) the commingling of Collections at any time with other funds,
(x) the use of proceeds of purchases or reinvestments, or
(xi) any reduction in Capital as a result of the distribution of
Collections pursuant to Section 1.4(d), if all or a portion of such
distributions shall thereafter be rescinded or otherwise must be returned
for any reason.
Section 3.2. Indemnities by the Servicer. Without limiting any other
rights that the Administrator, the Issuer or any other Indemnified Party may
have hereunder or under applicable law, but subject to the exclusions set forth
in clauses (a) through (c) of the first sentence of Section 3.1, the Servicer
hereby agrees to indemnify each Indemnified Party from and against any and all
Indemnified Amounts arising out of or resulting from (whether directly or
indirectly): (a) the failure of any information contained in any Servicer Report
to be true and correct, or the failure of any other information provided to any
such Indemnified Party by, or on behalf of, the Servicer to be true and correct,
(b) the failure of any representation, warranty or statement made or deemed made
by the Servicer (or any of its officers) under or in connection with this
Agreement to have been true and correct as of the date made or deemed made in
all respects when made, (c) the failure by the Servicer to comply with any
applicable law, rule or regulation with respect to any Pool Receivable or the
related Contract, (d) any dispute, claim, offset or defense of the Obligor to
the payment of any Receivable in, or purporting to be in, the Receivables Pool
resulting from or related to the collection activities with respect to such
Receivable, or (e) any failure of the Servicer to perform its duties or
obligations in accordance with the provisions hereof.
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer. (a) The servicing, administering
and collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as the Servicer in accordance with this Section.
Until the Administrator gives notice to Eagle Materials (in accordance with this
Section) of the designation of a new Servicer, Eagle Materials is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms hereof. Upon the occurrence of a Termination
Event or, to the extent not capable of cure, an Unmatured Termination Event, the
Administrator may designate as Servicer any Person (including itself) to succeed
Eagle Materials or any successor Servicer, on the condition in each case that
any such Person so designated shall agree to perform the duties and obligations
of the Servicer pursuant to the terms hereof.
(b) Upon the designation of a successor Servicer as set forth in clause
(a), Eagle Materials agrees that it will terminate its activities as Servicer
hereunder in a manner that the Administrator determines will facilitate the
transition of the performance of such activities to the new Servicer, and Eagle
Materials shall in all reasonable respects cooperate with and assist such new
Servicer in the transition. Such cooperation shall include, access to and
transfer of related records and use by the new Servicer of all licenses,
hardware or software (to the extent legally permissible and to the extent Eagle
Materials may transfer or grant access to any such licenses or software without
violating the terms of any agreement between Eagle Materials and the
applicable provider of such licenses or software and relating to the transfer
and/or assignment thereof), reasonably necessary to collect the Pool Receivables
and the Related Security.
(c) Eagle Materials acknowledges that, in making their decision to
execute and deliver this Agreement, the Administrator and the Issuer have relied
on Eagle Materials' agreement to act as Servicer hereunder. Accordingly, Eagle
Materials agrees that it will not voluntarily resign as Servicer, except to the
extent required by law.
(d) The Servicer may delegate its duties and obligations hereunder to
any subservicer (each a "Sub-Servicer"); provided, that, in each such
delegation: (i) such Sub-Servicer shall agree in writing to perform the duties
and obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain primarily liable for the performance of the duties and obligations
so delegated, (iii) the Seller, the Administrator and the Issuer shall have the
right to look solely to the Servicer for performance and (iv) the terms of any
agreement with any Sub-Servicer shall provide that the Administrator may
terminate such agreement upon the termination of the Servicer hereunder by
giving notice of its desire to terminate such agreement to the Servicer (and the
Servicer shall provide appropriate notice to each such Sub-Servicer); provided,
however, that if any such delegation is to any Person other than an Affiliate of
the Servicer, the Administrator shall have consented in writing in advance to
such delegation.
Section 4.2. Duties of the Servicer. (a) The Servicer shall take or cause
to be taken all such action as may be necessary or advisable to administer and
collect each Pool Receivable from time to time, all in accordance with this
Agreement and all applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policies. The
Servicer shall set aside for the accounts of the Seller and the Issuer the
amount of Collections to which each is entitled in accordance with Article I
hereof. The Servicer and the Originators may, in accordance with the applicable
Credit and Collection Policy, take such action, including modifications, waivers
or restructurings of Pool Receivables and the related Contracts, as the Servicer
and the Originators may reasonably determine to be appropriate to maximize
Collections thereof or reflect adjustments permitted under the Credit and
Collection Policy or required under applicable laws, rules or regulations or the
applicable Contract; provided, however, that for the purposes of this Agreement:
(i) such action shall not change the number of days such Pool Receivable has
remained unpaid from the date of the original due date related to such Pool
Receivable, (ii) such action shall not alter the status of such Pool Receivable
as a Delinquent Receivable or a Defaulted Receivable under this Agreement or
limit the rights of the Issuer or the Administrator under this Agreement and
(iii) if a Termination Event or an Unmatured Termination Event has occurred and
is continuing and Eagle Materials or an Affiliate thereof is serving as the
Servicer, Eagle Materials or such Affiliate may take such action only upon the
prior approval of the Administrator or without such prior approval to the extent
such action is required by applicable laws, rules or regulations. The Seller
shall deliver to the Servicer and the Servicer shall hold for the benefit of the
Seller and the Issuer, in accordance with their respective interests, all
records and documents (including computer tapes or disks) with respect to each
Pool Receivable. Notwithstanding anything to the contrary contained herein, the
Administrator may direct the Servicer (whether the Servicer is Eagle Materials
or any other Person) to commence or settle any legal action to enforce
collection of any Pool Receivable or to foreclose upon or repossess any Related
Security; provided, however, that no such direction may be given unless either:
(A) a Termination Event or Unmatured Termination Event has occurred
and is continuing or (B) the Administrator reasonably believes that failure to
commence, settle or effect such legal action, foreclosure or repossession could
adversely affect Receivables constituting a material portion of the Pool
Receivables.
(b) The Servicer shall, as soon as practicable following actual receipt
of collected funds, turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less, if Eagle Materials or an Affiliate thereof
is not the Servicer, all reasonable and appropriate out-of-pocket costs and
expenses of such Servicer of servicing, collecting and administering such
collections. The Servicer, if other than Eagle Materials or an Affiliate
thereof, shall, as soon as practicable upon demand, deliver to the Seller all
records in its possession that evidence or relate to any indebtedness that is
not a Pool Receivable, and copies of records in its possession that evidence or
relate to any indebtedness that is a Pool Receivable.
(c) The Servicer's obligations hereunder shall terminate on the latest
of the Facility Termination Date, the date on which no Capital of or Discount in
respect of the Purchased Interest shall be outstanding or the date all other
amounts owed by the Seller under the Agreement to the Issuer, the Administrator
and any other Indemnified Party or Affected Person shall be paid in full.
After such termination, if Eagle Materials or an Affiliate thereof was not
the Servicer on the date of such termination, the Servicer shall promptly
deliver to the Seller all books, records and related materials that the Seller
previously provided to the Servicer, or that have been obtained by the Servicer,
in connection with this Agreement.
Section 4.3. Establishment and Use of Certain Accounts.
(a) Lock-Box Accounts. Prior to the initial purchase hereunder, the
Seller and the Servicer shall enter into Lock-Box Agreements establishing the
Lock-Box Accounts listed on Schedule II with all of the Lock-Box Banks, and
deliver original counterparts thereof to the Administrator.
(b) Permitted Investments. Prior to the occurrence and continuation of
any Termination Event or Unmatured Termination Event, any amounts in the
Lock-Box Accounts may be invested by the Lock-Box Bank at Servicer's direction,
in Permitted Investments, so long as (i) either (A) such Permitted Investments
are credited to a "securities account" (as defined in the applicable UCC) over
which the Administrator (for the benefit of the Issuer) shall have a first
priority perfected security interest, (B) such Permitted Investments are
purchased in the name of the Issuer or (C) such Permitted Investments are held
in another manner sufficient to establish the Administrator's first priority
perfected security interest over such Permitted Investments and (ii) such
Permitted Investments are scheduled to mature prior to the last day of the Yield
Period during which such investment is made.
(c) Control of Accounts. The Administrator may at any time following the
occurrence and during the continuance of a Termination Event or Unmatured
Termination Event give notice to each Lock-Box Bank that the Administrator is
exercising its rights under the Lock-Box Agreements to do any or all of the
following: (i) to have the exclusive ownership and control of the Lock-Box
Accounts transferred to the Administrator, to the extent provided in the
related Lock-Box Agreement, (ii) to have the proceeds that are sent to the
respective Lock-Box Accounts be redirected pursuant to its instructions rather
than deposited in the applicable Lock-Box Account and (iii) to take any or all
other actions permitted under the applicable Lock-Box Agreement. The Seller
hereby agrees that if the Administrator at any time takes any action set forth
in the preceding sentence, the Administrator shall have exclusive control of the
proceeds (including Collections) of all Pool Receivables and the Seller hereby
further agrees to take any other action that the Administrator may reasonably
request to transfer such control. Any proceeds of Pool Receivables received by
the Seller or the Servicer, thereafter shall be sent immediately to the
Administrator. The parties hereto hereby acknowledge that if at any time the
Administrator takes control of any Lock-Box Account, the Administrator shall not
have any rights to the funds therein in excess of the unpaid amounts due to the
Administrator, the Issuer or any other Person hereunder and any such funds shall
be distributed by the Administrator in accordance with the provisions set forth
in Section 1.4.
Section 4.4. Enforcement Rights. (a) At any time following the occurrence
and during the continuance of a Termination Event or Unmatured Termination
Event:
(i) the Administrator may notify any or all of the Obligors of the
Issuer's interest in the Pool Receivables and may direct any or all of the
Obligors of Pool Receivables to pay all amounts payable under any such
Receivables directly to the Administrator or its designee;
(ii) at the Administrator's request and at the Seller's expense,
the Seller shall give notice of the Issuer's interest in the Pool
Receivables to each Obligor and direct that payments be made directly to
the Administrator or its designee;
(iii) the Seller shall assemble all books and records necessary or
desirable to collect the Pool Receivables and Related Security, and make
the same available to the Administrator at a place selected by the
Administrator or its designee; and
(iv) the Administrator may enforce the Sale Agreements against the
parties thereto and shall have the right to give or withhold any or all
consents, requests, notices, directions, approvals, demands, extensions or
waivers under or with respect thereto, to the same extent as the Seller
would otherwise be entitled to do.
(b) The Seller hereby authorizes the Administrator , and gives to the
Administrator its irrevocable power of attorney, which shall be coupled with an
interest, during the occurrence and continuation of a Termination Event or
Unmatured Termination Event, to take any and all steps during such occurrence
and continuance in the name of the Seller, which steps are necessary or
desirable, in the reasonable determination of the Administrator, to collect all
amounts due under the Pool Receivables and Related Security, including, without
limitation, endorsing the Seller's name on checks and other instruments
representing Collections and, enforcing such Receivables and the related
Contracts. Notwithstanding anything to the contrary contained in this
subsection, none of the powers conferred upon such attorney-in-fact pursuant to
the preceding sentence shall subject such attorney-in-fact to any liability if
any action taken by it shall prove to be inadequate or invalid, nor shall they
confer any obligations upon such attorney-in-fact in any manner whatsoever.
Section 4.5. Responsibilities of the Seller. (a) Anything herein to the
contrary notwithstanding, the Seller shall (directly or indirectly by causing
the applicable Originator to): (i) perform all of its obligations, if any, under
the Contracts related to the Pool Receivables to the same extent as if interests
in such Pool Receivables had not been transferred hereunder, and the exercise by
the Administrator or the Issuer of their respective rights hereunder shall not
relieve the Seller from such obligations, and (ii) pay when due any taxes,
including any sales taxes payable in connection with the Pool Receivables and
their creation and satisfaction. The Administrator and the Issuer shall not have
any obligation or liability with respect to any Pool Asset, nor shall any of
them be obligated to perform any of the obligations of the Seller, Eagle
Materials or any Originator thereunder.
(b) Eagle Materials hereby irrevocably agrees that if at any time it
shall cease to be the Servicer hereunder, it shall act (if the then-current
Servicer so requests) as the data-processing agent of the Servicer and, in such
capacity, Eagle Materials shall conduct the data-processing functions of the
administration of the Receivables and the Collections thereon in substantially
the same way that Eagle Materials conducted such data-processing functions while
it acted as the Servicer.
Section 4.6. Servicing Fee. (a) Subject to clause (b), the Servicer shall
be paid a fee equal to 1.0% per annum (the "Servicing Fee Rate") of the daily
average aggregate Outstanding Balance of the Pool Receivables. The Issuer's
Share of such fee shall be paid through the distributions contemplated by
Section 1.4(d), and the Seller's Share of such fee shall be paid directly by the
Seller in the manner contemplated by Section 1.4(b)(iv).
(b) If the Servicer ceases to be Eagle Materials or an Affiliate
thereof, the servicing fee shall be the greater of: (i) the amount calculated
pursuant to clause (a) and (ii) an alternative amount specified by the successor
Servicer not to exceed 110% of the aggregate reasonable costs and expenses
incurred by such successor Servicer in connection with the performance of its
obligations as Servicer.
ARTICLE V
MISCELLANEOUS
Section 5.1. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Transaction Document, or consent to any departure by
a party therefrom, shall be effective unless in a writing signed by the
Administrator, and, in the case of any such waiver or consent, by the party or
parties thereto against whom such waiver or consent is sought to be enforced,
and, in the case of any amendment, by the other parties thereto; and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that, to the
extent required at such time in connection with the Issuer's commercial paper
program, no such material amendment shall be effective until both Moody's and
Standard & Poor's have notified the Servicer and the Administrator in writing
that such action will not result in a reduction or withdrawal of the rating of
any Notes. No failure on the part of the Issuer or the Administrator to
exercise, and no delay in exercising any right hereunder shall operate as a
waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
Section 5.2. Notices, Etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile communication) and be sent or delivered to each party hereto at its
address set forth under its name on the signature pages hereof or at such other
address as shall be designated by such party in a written notice to the other
parties hereto. Notices and communications by facsimile shall be effective when
sent (and shall be followed by hard copy sent by first class mail), and notices
and communications sent by other means shall be effective when received.
Section 5.3. Successors and Assigns; Assignments; Participations. (a)
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
all covenants, promises and agreements by or on behalf of any parties hereto
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns. The Seller may not assign or transfer
any of its rights or obligations hereunder without the written consent of the
Administrator.
(b) This Agreement and the Issuer's rights and obligations herein
(including ownership of the Purchased Interest or an interest therein)shall be
assignable, in whole or in part, by the Issuer and its successors and assigns
with the prior written consent of the Seller; provided, however, that such
consent shall not be unreasonably withheld; and provided further, that no such
consent shall be required if the assignment is made to PNC, any Affiliate of PNC
(other than a director or officer of PNC), or any Person that is: (i) in the
business of issuing Notes and (ii) associated with or administered by PNC or any
Affiliate of PNC. Each assignor may, in connection with the assignment, disclose
to the applicable assignee any information relating to the Seller, the Servicer,
any Originator or the Pool Receivables furnished to such assignor by or on
behalf of the Servicer, the Seller, the Issuer or the Administrator, subject to
compliance with the provisions of Section 5.5.
(c) The Issuer may at any time grant to one or more banks or other
institutions (each a "Liquidity Bank") party to the Liquidity Agreement, or to
any other Program Support Provider, participating interests in the Purchased
Interest. In the event of any such grant by the Issuer of a participating
interest to a Liquidity Bank or other Program Support Provider, the Issuer shall
remain responsible for the performance of its obligations hereunder. The Seller
agrees that each Liquidity Bank or other Program Support Provider shall be
entitled to the benefits of Sections 1.7, 1.8 and 1.10.
(d) This Agreement and the rights and obligations of the Administrator
hereunder shall be assignable, in whole or in part, by the Administrator and its
successors and assigns; provided, that unless: (i) such assignment is to an
Affiliate of PNC, (ii) it becomes unlawful for PNC to serve as the Administrator
or (iii) a Termination Event exists, the Seller has consented to such
assignment, which consent shall not be unreasonably withheld.
(e) Without limiting any other rights that may be available under
applicable law, the rights of each Liquidity Bank may be enforced through it or
by its agents.
(f) Promptly, but in any event within two (2) Business Days following
the effectiveness thereof, the Administrator agrees to provide the Seller with
written notice of any reductions in the aggregate commitments of the then
existing Liquidity Banks under the Liquidity Agreement. On or prior to the date
which is 30 days prior to the then existing scheduled termination date of the
Liquidity Agreement, and promptly after it obtains knowledge thereof during such
30-day period, the Administrator shall provide the Seller with written notice of
any Liquidity Bank's decision not to renew or extend its commitment thereunder
on or prior to such scheduled termination date.
Section 5.4. Costs, Expenses and Taxes. (a) In addition to the
indemnification provisions set forth in Section 3.1, the Seller shall pay on
demand (i) all reasonable out-of-pocket fees and expenses (including Attorneys
Costs) of the Administrator incurred in connection with the preparation,
execution, delivery, administration, amendment, modification and waiver of this
Agreement and the other Transaction Documents and (ii) all reasonable
out-of-pocket fees and expenses of the Administrator and the Issuer (including
Attorneys Costs) incurred in connection with the enforcement of this Agreement
and the other Transaction Documents, including, without limitation, any Servicer
fees paid to any third party other than the Seller or Eagle Materials for
services rendered to the Issuer and the Administrator in collecting the
Receivables and the other Related Security.
(b) In addition, the Seller will pay any and all stamp and other taxes
and fees payable or determined to be payable in connection with the execution,
delivery, filing, recording or enforcement of this Agreement or the other
Transaction Documents, and hereby indemnifies and saves the Administrator and
the Issuer harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
Section 5.5. Confidentiality. Unless otherwise required by applicable law,
regulation or legal process, each of the Seller and the Servicer agrees to
maintain the confidentiality of this Agreement and the other Transaction
Documents (and all drafts thereof) in communications with third parties and
otherwise; provided, that this Agreement and the other Transaction Documents may
be disclosed to: (a) third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Administrator, (b) the Originators and their
Affiliates if they agree to hold such documents confidential, and (c) the legal
counsel and auditors of the Seller, the Servicer and the Originators if they
agree to hold such documents confidential. Unless otherwise required by
applicable law, regulation or legal process, each of the Administrator and the
Issuer agree to maintain the confidentiality of non-public information regarding
Eagle Materials and its Affiliates and the Receivables Pool; provided, that such
information may be disclosed to: (i) assignees or participants under Section 5.3
to the extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to Eagle
Materials, (ii) legal counsel and auditors of the Issuer or the Administrator if
they agree to hold it confidential in accordance with this Section, (iii) the
rating agencies rating the Notes, (iv) any Program Support Provider or potential
Program Support Provider (if they agree to hold it confidential in accordance
with this Section), (v) any placement agency placing the Notes and (vi) any
regulatory authorities having jurisdiction over the Administrator, the Issuer,
any Program Support Provider or any Liquidity Bank. Anything herein to the
contrary notwithstanding, each Person to whom any such nonpublic information has
been disclosed pursuant to this Section and
any successor or assign of any such
Person (and each employee, representative or other agent of any of the
foregoing), may disclose to any and all Persons, without limitation of any kind,
the "tax treatment" and "tax structure" (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated herein
and all materials of any kind (including opinions or other tax analyses) that
are or have been provided to any of the foregoing relating to such tax treatment
or tax structure.
Section 5.6. No Proceedings; Limitation on Payments. (a) Each of the
Seller, the Servicer, the Administrator and each assignee of the Purchased
Interest or any interest therein, hereby covenants and agrees that it will not
institute against, or join any other Person in instituting against, the Issuer
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and one day after the latest maturing Note issued by the
Issuer is paid in full. The provisions of this Section 5.6(a) shall survive any
termination of this Agreement.
(b) Notwithstanding any provisions contained in this Agreement to the
contrary, except with respect to the Issuer's commitment to make purchases and
reinvestments pursuant to and in accordance with the terms of this Agreement,
the Issuer shall not, and shall not be obligated to, pay any amount, if any,
payable by it pursuant to this Agreement or any other Transaction Document
unless (i) the Issuer has received funds which may be used to make such payment
and which funds are not required to repay the Notes when due and (ii) after
giving effect to such payment, either (x) the Issuer could issue Notes to
refinance all outstanding Notes (assuming such outstanding Notes matured at such
time) in accordance with the program documents governing the Issuer's
securitization program or (y) all Notes are paid in full. Any amount which the
Issuer does not pay pursuant to the operation of the preceding sentence shall
not constitute a claim (as defined in Section 101 of the Bankruptcy Code)
against or company obligation of the Issuer for any such insufficiency unless
and until the Issuer satisfies the provisions of clauses (i) and (ii) above. The
provisions of this Section 5.6(b) shall survive any termination of this
Agreement.
Section 5.7. GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FEDERAL
COURT SITTING IN THE SOUTHERN DISTRICT OF NEW YORK; AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED
BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH
OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED BY APPLICABLE
LAW.
Section 5.8. Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement.
Section 5.9. Survival of Termination. The provisions of Sections 1.7, 1.8,
3.1, 3.2, 5.4, 5.5, 5.6, 5.7 and 5.10 shall survive any termination of this
Agreement.
Section 5.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO
AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO
FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 5.11. Entire Agreement. This Agreement and the other Transaction
Documents embody the entire agreement and understanding between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof.
Section 5.12. Headings. The captions and headings of this Agreement and in
any Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
EXP FUNDING, LLC
By: /s/ Xxxxxx X. Xxxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President -
Finance and Treasurer
Address:
0000 X. Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attention: Art Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
New address information to be effective on
or about March 8, 2004:
Address:
0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Art Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Receivables Purchase Agreement
S-1
EAGLE MATERIALS INC.,
as initial Servicer
By: /s/ Xxxxxx X. Xxxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President -
Finance and Treasurer
Address:
0000 X. Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attention: Art Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
New address information to be effective on
or about March 8, 2004:
Address:
0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Art Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Receivables Purchase Agreement
S-2
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Address:
PNC Bank, National Association
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
MARKET STREET FUNDING CORPORATION,
as Issuer
By: /s/ Xxxxxx Xxxxxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President
Address:
c/o AMACAR Group, LLC
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Receivables Purchase Agreement
S-3
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits, Schedules and Annexes),
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references
in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to the
Agreement.
"Administration Account" means the account (account number 1002422076) of
the Administrator maintained at the office of PNC at One PNC Plaza, 000 Xxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or such other account as may be so
designated in writing by the Administrator to the Servicer.
"Administrative Services Agreement" means the Administrative Services and
Lease Agreement, dated as of February 20, 2004 between Eagle Materials and the
Seller, as such agreement may be amended, supplemented or otherwise modified
from time to time.
"Administrator" has the meaning set forth in the preamble to the
Agreement.
"Adverse Claim" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement; it being understood
that any thereof in favor of Eagle Materials as against the Affiliate
Originators, in favor of the Seller as against Eagle Materials or in favor of
the Issuer, in each case pursuant to the Transaction Documents, shall not
constitute an Adverse Claim.
"Affected Person" has the meaning set forth in Section 1.7 of the
Agreement.
"Affiliate" means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a). For purposes of this definition, control of
a Person shall mean the power, direct or indirect: (x) to vote 25% or more of
the securities having ordinary voting power for the election of directors of
such Person or (y) to direct or cause the direction of the management and
policies of such Person, in either case whether by ownership of securities,
contract, proxy or otherwise.
"Affiliate Originator" means each Affiliate of Eagle Materials from time
to time party to the Purchase and Sale Agreement as originator or transferor
thereunder, in accordance with the terms thereof.
"Agreement" has the meaning set forth in the preamble to the Agreement.
"Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel and all reasonable disbursements of
internal counsel.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978
(11 U.S.C. Section 101, et seq.), as amended from time to time.
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"Base Rate" means for any day, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate shall be at all times equal to
the higher of:
(a) the rate of interest in effect for such day as publicly
announced from time to time by PNC in Pittsburgh, Pennsylvania as its
"prime rate." Such "prime rate" is set by PNC based upon various factors,
including PNC's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above or below such announced rate, and
(b) 0.50% per annum above the latest Federal Funds Rate.
"Base Rate Portion of Capital" shall mean a Portion of Capital the
Discount with respect to which is calculated at a per annum rate based on the
Yield Rate determined by reference to the Base Rate.
"BBA" means the British Bankers' Association.
"Benefit Plan" means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller, any Originator, Eagle
Materials or any ERISA Affiliate is, or at any time during the immediately
preceding six years was, an "employer" as defined in Section 3(5) of ERISA.
"Business Day" means any day (other than a Saturday or Sunday) on which:
(a) banks are not authorized or required to close in Dallas, Texas, New York,
New York or Pittsburgh, Pennsylvania, and (b) if this definition of "Business
Day" is utilized in connection with the Euro-Rate, dealings are carried out in
the London interbank market.
"Capital" means the aggregate amounts paid to the Seller in respect of the
Purchased Interest by the Issuer pursuant to Section 1.2 of the Agreement, as
reduced from time to time by amounts actually distributed and applied on account
of the principal of the Purchased Interest pursuant to the Agreement; provided,
that if such Capital shall have been reduced by any distribution and thereafter
all or a portion of such distribution is rescinded or must otherwise be returned
for any reason, such Capital shall be increased by the amount of such rescinded
or returned distribution as though it had not been made.
"Change in Control" means that Eagle Materials ceases to own, directly or
indirectly, 100% of the limited liability company interests or capital stock of
the Seller or any Affiliate Originator free and clear of all Adverse Claims.
"Closing Date" means February 20, 2004.
"Collections" means, with respect to any Pool Receivable: (a) all funds
that are received by any Originator, Eagle Materials, the Seller or the Servicer
in payment of any amounts owed in respect of such Receivable (including purchase
price, finance charges, interest and all other charges), or applied to amounts
owed in respect of such Receivable (including insurance payments and net
proceeds of the sale or other disposition of repossessed goods or other
collateral or property of the related Obligor or any other Person directly or
indirectly liable for
I-2
the payment of such Pool Receivable and available to be applied thereon), (b)
all Deemed Collections and (c) all other proceeds of such Pool Receivable.
"Company Note" has the meaning set forth in the Purchase and Sale
Agreement.
"Concentration Percentage" means: (a) for any Group A Obligor, 15%, (b)
for any Group B Obligor, 10%, (c) for any Group C Obligor, 7.5% and (d) for any
Group D Obligor, 6.0%.
"Concentration Reserve" means, on any date, the outstanding Capital at the
close of business of the Servicer on such date multiplied by (a) the
Concentration Reserve Percentage divided by (b) 1 minus the Concentration
Reserve Percentage at such time.
"Concentration Reserve Percentage" means, on any date, the largest of: (a)
the sum of four largest Group D Obligor Percentages, (b) the sum of the two
largest Group C Obligor Percentages and (c) the greater of (i) the largest Group
B Obligor Percentage or (ii) the largest Group A Obligor Percentage.
"Contract" means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.
"CP Rate" means, for any Yield Period for any Portion of Capital, the per
annum rate equivalent to the weighted average cost (as determined by or on
behalf of the Issuer and which shall include commissions of placement agents and
dealers, incremental carrying costs incurred with respect to Notes maturing on
dates other than those on which corresponding funds are received by the Issuer,
other borrowings by the Issuer (other than under any Program Support Agreement)
and any other costs associated with the issuance of Notes) of or related to the
issuance of Notes that are allocated, in whole or in part, by or on behalf of
the Issuer to fund or maintain such Portion of Capital (and which may be also
allocated in part to the funding of other assets of the Issuer); provided,
however, that if any component of such rate is a discount rate, in calculating
the "CP Rate" for such Portion of Capital for such Yield Period, the Issuer
shall for such component use the rate resulting from converting such discount
rate to an interest bearing equivalent rate per annum. Notwithstanding the
foregoing, the "CP Rate" for any day while a Termination Event exists, shall be
an interest rate equal to 2.0% above the Base Rate in effect on such day.
"Credit and Collection Policy" means, those receivables credit and
collection policies and practices of Eagle Materials and the other Originators
in effect on the date of the Agreement and described in Schedule I to the
Agreement, as modified from time to time in compliance with the Agreement.
"Days' Sales Outstanding" means, for any calendar month: (a) the average,
for the three most recently ended calendar months, of the Outstanding Balance of
all Pool Receivables (determined as of the last day of each such calendar month)
divided by (b)(i) the aggregate credit sales made by the Originator during such
calendar months, divided by (ii) 90.
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"Debt" means: (a) indebtedness for borrowed money, (b) obligations
evidenced by bonds, debentures, notes or other similar instruments, (c)
obligations to pay the deferred purchase price of property or services
(exclusive of trade payables incurred in the ordinary course of business and
payables according to ordinary business terms), (d) obligations as lessee under
leases that shall have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases, and (e) obligations under
direct or indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (d).
"Deemed Collections" has the meaning set forth in Section 1.4(e)(ii) of
the Agreement.
"Defaulted Receivable" means a Receivable:
(a) as to which any payment, or part thereof, remains unpaid for
more than 60 days from the original due date thereof, or
(b) without duplication, (i) as to which an Event of Bankruptcy
shall have occurred with respect to the Obligor thereof or any other
Person obligated thereon or owning any Related Security with respect
thereto or (ii) that has been written off the Seller's books as
uncollectible.
"Default Ratio" means the ratio, (expressed as a percentage and rounded to
the nearest 1/100 of 1%) computed as of the last day of each calendar month by
dividing: (a) the aggregate Outstanding Balance of all Pool Receivables that
became Defaulted Receivables during such calendar month (other than as a result
of an event of the type described in clause (b)(i) of the definition of
"Defaulted Receivable" herein), by (b) the aggregate credit sales made by the
Originators during the calendar month that is three calendar months before such
calendar month.
"Delinquency Ratio" means the ratio (expressed as a percentage and rounded
to the nearest 1/100 of 1%) computed as of the last day of each calendar month
by dividing: (a) the aggregate Outstanding Balance of all Pool Receivables that
were Delinquent Receivables on such day by (b) the aggregate Outstanding Balance
of all Pool Receivables on such day.
"Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for more than 60 days from the original due date
for such payment.
"Dilution Horizon" means, for any calendar month, the ratio (expressed as
a percentage and rounded to the nearest 1/100th of 1%) computed as of the last
day of such calendar month of: (a) the aggregate credit sales made by the
Originator during the most recent two calendar months, to (b) the Net
Receivables Pool Balance at the last day of such calendar month.
"Dilution Ratio" means the ratio (expressed as a percentage and rounded to
the nearest 1/100th of 1%), computed as of the last day of each calendar month
by dividing: (a) the aggregate amount of payments made or owed by the Seller
pursuant to Section 1.4(e)(i) of the Agreement during such calendar month (other
than in respect of cash discounts for all Originators, and rebates of American
Gypsum Company during such month, of the type described in clause (ii) of the
definition of "Specifically Reserved Dilution Amount" herein) by
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(b) the aggregate credit sales made by the Originator during the calendar month
that is one calendar month prior to such calendar month.
"Dilution Reserve" means, on any date, an amount equal to: (a) the
outstanding Capital at the close of business of the Servicer on such date
multiplied by (b) (i) the Dilution Reserve Percentage on such date, divided by
(ii) 1 minus the Dilution Reserve Percentage on such date.
"Dilution Reserve Percentage" means on any date, the greater of: (a) 2.0%
and (b) the product of (i) the Dilution Horizon multiplied by (ii) the sum of
(x) 2 times the average of the Dilution Ratios for the twelve most recent
calendar months and (y) the Dilution Spike Factor.
"Dilution Spike Factor" means, for any calendar month, the product of (a)
the positive difference, if any, between: (i) the highest Dilution Ratio for any
calendar month during the twelve most recent calendar months and (ii) the
arithmetic average of the Dilution Ratios for such twelve months and (b) (i) the
highest Dilution Ratio for any calendar month during the twelve most recent
calendar months, divided by (ii) the arithmetic average of the Dilution Ratios
for such twelve months.
"Discount" means:
(a) with respect to any Portion of Capital for any Yield Period to
the extent the Issuer will be funding such Portion of Capital during such
Yield Period through the issuance of Notes:
CPR x C x ED/360 + YPF
(b) with respect to any Portion of Capital for any Yield Period to
the extent the Issuer will not be funding such Portion of Capital during
such Yield Period through the issuance of Notes:
YR x C x ED/Year + YPF
where:
C = such Portion of Capital during such Yield Period,
CPR = the CP Rate for the Portion of Capital for such Yield
Period,
ED = the actual number of days during such Yield Period,
Year = if such Portion of Capital is funded based upon: (i)
the Euro-Rate, 360 days, and (ii) the Base Rate, 365 or
366 days, as applicable,
YPF = the Yield Protection Fee, if any, for the Portion of
Capital for such Yield Period,
YR = the Yield Rate for the Portion of Capital for such
Yield Period,
I-5
provided, that no provision of the Agreement shall require the payment or permit
the collection of Discount in excess of the maximum permitted by applicable law;
and provided further, that Discount for the Portion of Capital shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
"Eagle Materials" has the meaning set forth in the preamble.
"Eligible Receivable" means, at any time, a Pool Receivable:
(a) the Obligor of which is:
(i) a United States resident or, so long as the foreign currency
rating of Canada is a least A by Standard & Poor's and A2 by Moody's, a
resident of Canada;
(ii) not subject to any proceeding of the type described in
paragraph (f) of Exhibit V to the Agreement, except, solely in the case of
L&W Supply Corporation as an Obligor, and solely (x) with respect to
post-petition Receivables of L&W Supply Corporation for which the
Administrator has received evidence satisfactory to it, in its sole
discretion, of the final order of the applicable bankruptcy or federal
district court in L&W Supply Corporation's bankruptcy case confirming or
reconfirming, as the case may be, payments made and to be made on amounts
payable or that become payable by L&W Supply Corporation to third party
vendors or suppliers (including the Originators in respect to any
applicable Contracts) and (y) to the extent that such bankruptcy case of
L&W Supply Corporation is and remains a case under the provisions of
Chapter 11 of the Bankruptcy Code and has not been converted to a case
under Chapter 7 of the Bankruptcy Code; and
(iii) not an Affiliate of Eagle Materials or any Originator,
(b) that is denominated and payable only in U.S. dollars in the United
States,
(c) that has a stated maturity that is not more than 60 days after the
original invoice date of such Receivable,
(d) that arises under a duly authorized Contract for the sale and
delivery of goods and services in the ordinary course of the applicable
Originator's business,
(e) that arises under a duly authorized Contract that is in full force
and effect and that is a legal, valid and binding obligation of the related
Obligor, enforceable against such Obligor in accordance with its terms,
(f) that conforms in all material respects with all applicable laws,
rulings and regulations in effect,
(g) that is not the subject of any asserted dispute, offset, hold back
defense or Adverse Claim,
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(h) that satisfies all applicable requirements of the applicable Credit
and Collection Policy,
(i) that has not been modified, waived or restructured since its
creation, except as permitted pursuant to Section 4.2 of the Agreement,
(j) in which the Seller owns good and marketable title, free and clear
of any Adverse Claims, and that is freely assignable by the Seller (including
without any consent of the related Obligor),
(k) for which the Issuer shall have a valid and enforceable undivided
percentage ownership or security interest, to the extent of the Purchased
Interest, and a valid and enforceable first priority perfected security interest
therein and in the Related Security and Collections with respect thereto, in
each case free and clear of any Adverse Claim,
(l) that constitutes an account or payment intangible as defined in the
UCC, and that is not evidenced by instruments or chattel paper,
(m) that is neither a Defaulted Receivable nor a Delinquent Receivable,
(n) for which neither the applicable Originator thereof, the Seller nor
the Servicer has established any offset arrangements with the related Obligor,
(o) for which Defaulted Receivables of the related Obligor do not exceed
35% of the Outstanding Balance of all such Obligor's Receivables, and
(p) that represents amounts earned and payable by the Obligor that are
not subject to the performance of additional services by the applicable
Originator thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"ERISA Affiliate" means: (a) any corporation that is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Seller, any Originator or Eagle Materials, (b) a
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Seller, any
Originator or Eagle Materials, or (c) a member of the same affiliated service
group (within the meaning of Section 414(m) of the Internal Revenue Code) as the
Seller, any Originator, Eagle Materials, any corporation described in clause (a)
or any trade or business described in clause (b).
"Euro-Rate" means with respect to any Yield Period the interest rate per
annum determined by the Administrator by dividing (the resulting quotient
rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the
rate of interest determined by the Administrator in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the average of the London interbank market offered rates for U.S.
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dollars quoted by the British Bankers' Association ("BBA") as set forth on Dow
Xxxxx Markets Service (formerly known as Telerate) (or appropriate successor, if
BBA or its successor ceases to provide display page 3750 (or such other display
page on the Dow Xxxxx Markets Service system as may replace display page 3750)),
at or about 11:00 a.m. (London time) on the Business Day which is two (2)
Business Days prior to the first day of such Yield Period for an amount
comparable to the Euro-Rate Portion of Capital during such Yield Period by (ii)
a number equal to 1.00 minus the Euro-Rate Reserve Percentage. The Euro-Rate may
also be expressed by the following formula:
Average of London interbank offered rates quoted by BBA as
shown on Dow Xxxxx Markets Service display page 3750 or
appropriate successor
Euro-Rate = ______________________________________________________________
1.00 - Euro-Rate Reserve Percentage
where "Euro-Rate Reserve Percentage" means, the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including without limitation, supplemental, marginal, and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities"). The Euro-Rate shall be adjusted with respect to any
Euro-Rate Portion of Capital that is outstanding on the effective date of any
change in the Euro-Rate Reserve Percentage as of such effective date. The
Administrator shall give prompt notice to the Seller of the Euro-Rate as
determined or adjusted in accordance herewith (which determination shall be
conclusive absent manifest error).
"Euro-Rate Portion of Capital" shall mean a Portion of Capital the
Discount with respect to which is calculated at a per annum rate based on the
Yield Rate determined by reference to the Euro-Rate.
"Event of Bankruptcy" means (a) any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors or (b) any general assignment for the benefit of creditors of a Person,
or composition or marshalling of assets for creditors of a Person, or other
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; in each of cases (a) and (b) undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Excess Concentration" means the sum of:
(i) the sum of the amounts by which the Outstanding Balance of
Eligible Receivables of each Obligor then in the Receivables Pool exceeds
an amount equal to: (a) the Concentration Percentage for such Obligor
multiplied by (b) the Outstanding Balance of all Eligible Receivables then
in the Receivables Pool, plus
(ii) the amount by which the aggregate Outstanding Balance of all
Eligible Receivables, the Obligors of which are residents of Canada,
exceeds an amount equal to 3.0% of all Eligible Receivables then in the
Receivables Pool, plus
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(iii) the amount by which the aggregate Outstanding Balance of all
Eligible Receivables, the Obligors of which are governments or
governmental subdivisions, affiliates or agencies, exceeds an amount equal
to 1.0% of all Eligible Receivables then in the Receivables Pool, plus
(iv) the amount by which the aggregate Outstanding Balance of all
Eligible Receivables that have a stated maturity that is greater than 30
days after the original invoice date of any such Receivable (but not more
than 60 days), exceeds an amount equal to 25.0% of all Eligible
Receivables then in the Receivables Pool.
"Facility" shall mean the facility under the Agreement for revolving
purchases of undivided interests in the Pool Receivables by the Issuer.
"Facility Termination Date" means the earliest to occur of: (a) February
19, 2007, (b) the date determined pursuant to Section 2.2 of the Agreement, (c)
the date the Purchase Limit reduces to zero pursuant to Section 1.1(b) of the
Agreement and (d) the date the commitments of all Liquidity Banks terminate
under the Liquidity Agreement (which date shall initially be February 18, 2005,
as such date may be extended from time to time).
"Federal Funds Rate" means, for any day, the per annum rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate." If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the Administrator of the rates for the last
transaction in overnight Federal funds arranged before 9:00 a.m. (New York time)
on that day by each of three leading brokers of Federal funds transactions in
New York City selected by the Administrator.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any entity succeeding to any of its principal functions.
"Fee Letter" means that certain fee letter agreement dated as of the
Closing Date among the Seller, the Servicer, the Issuer and the Administrator,
relating to the fees payable by the Seller to the Issuer and the Administrator
under the Agreement, as amended, supplemented or otherwise modified from time to
time.
"GAAP" shall mean generally accepted accounting principles as set forth
from time to time in the opinions and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by significant segments of the accounting profession.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any
I-9
body or entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including any court,
and any Person owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Group A Obligor" means any Obligor with a short-term rating of at least:
(a) "A-1" by Standard & Poor's, or if such Obligor does not have a short-term
rating from Standard & Poor's, a rating of "A+" or better by Standard & Poor's
on its long-term senior unsecured and uncredit-enhanced debt securities, and (b)
"P-1" by Moody's, or if such Obligor does not have a short-term rating from
Xxxxx'x, "X0" or better by Moody's on its long-term senior unsecured and
uncredit-enhanced debt securities.
"Group A Obligor Percentage" means, at any time, for each Group A Obligor,
the percentage equivalent of: (a) the aggregate Outstanding Balance of the
Eligible Receivables of such Group A Obligor less any Excess Concentrations of
such Obligor, divided by (b) the aggregate Outstanding Balance of all Eligible
Receivables at such time.
"Group B Obligor" means an Obligor, not a Group A Obligor, with a
short-term rating of at least: (a) "A-2" by Standard & Poor's, or if such
Obligor does not have a short-term rating from Standard & Poor's, a rating of at
least "BBB+" by Standard & Poor's on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) "P-2" by Moody's, or if such Obligor
does not have a short-term rating from Moody's, at least "Baa1" by Moody's on
its long-term senior unsecured and uncredit-enhanced debt securities.
"Group B Obligor Percentage" means, at any time, for each Group B Obligor,
the percentage equivalent of: (a) the aggregate Outstanding Balance of the
Eligible Receivables of such Group B Obligor less any Excess Concentrations of
such Obligor, divided by (b) the aggregate Outstanding Balance of all Eligible
Receivables at such time.
"Group C Obligor" means an Obligor, not a Group A Obligor or Group B
Obligor, with a short-term rating of at least: (a) "A-3" by Standard & Poor's,
or if such Obligor does not have a short-term rating from Standard & Poor's, a
rating of at least "BBB-" by Standard & Poor's on its long-term senior unsecured
and uncredit-enhanced debt securities, and (b) "P-3" by Moody's, or if such
Obligor does not have a short-term rating from Moody's, at least "Baa3" by
Moody's on its long-term senior unsecured and uncredit-enhanced debt
securities."
"Group C Obligor Percentage" means, at any time, for each Group C Obligor,
the percentage equivalent of: (a) the aggregate Outstanding Balance of the
Eligible Receivables of such Group C Obligor less any Excess Concentrations of
such Obligor, divided by (b) the aggregate Outstanding Balance of all Eligible
Receivables at such time.
"Group D Obligor" means any Obligor that is not a Group A Obligor, Group B
Obligor or Group C Obligor.
"Group D Obligor Percentage" means, at any time, for each Group D Obligor:
(a) the aggregate Outstanding Balance of the Eligible Receivables of such Group
D Obligor less any Excess Concentrations of such Obligor, divided by (b) the
aggregate Outstanding Balance of all Eligible Receivables at such time.
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"Indemnified Amounts" has the meaning set forth in Section 3.1 of the
Agreement.
"Indemnified Party" has the meaning set forth in Section 3.1 of the
Agreement.
"Independent Director" has the meaning set forth in Section 3(c) of
Exhibit IV to the Agreement.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code also refer to any successor
sections.
"Issuer" has the meaning set forth in the preamble to the Agreement.
"Issuer's Share" of any amount means such amount multiplied by the
Purchased Interest at the time of determination.
"JPMorgan Credit Agreement" means the Credit Agreement, dated as of
December 18, 2003, among Eagle Materials, JPMorgan Chase Bank, Bank of America,
N.A., PNC Bank, N.A., Bank One, N.A., SunTrust Bank, other lenders from time to
time party thereto, and X.X. Xxxxxx Securities Inc., as such agreement may be
amended, supplemented or otherwise modified from time to time; it being
understood that if the JPMorgan Credit Agreement is ever terminated, cancelled,
replaced (solely to the extent PNC Bank, N.A. or any affiliate thereof, is not a
party to such replacement) or otherwise released, any reference thereto in the
Transaction Documents shall be deemed to be to the JPMorgan Credit Agreement as
in effect on the date immediately prior to the date of such termination,
cancellation, replacement or release.
"Liquidity Agent" means PNC in its capacity as the Liquidity Agent
pursuant to the Liquidity Agreement.
"Liquidity Agreement" means the Liquidity Asset Purchase Agreement, dated
as of February 20, 2004 between the Liquidity Banks from time to time party
thereto, the Issuer and PNC, as Administrator and Liquidity Agent, as the same
may be further amended, supplemented or otherwise modified from time to time.
"Liquidity Bank" shall have the meaning set forth in Section 5.3(c) of the
Agreement.
"Lock-Box Account" means, each account listed on Schedule II to the
Agreement, maintained at a bank or other financial institution for the purpose
of receiving Collections.
"Lock-Box Agreement" means an agreement, in form and substance
satisfactory to the Administrator, among the Seller, the Servicer, the
Administrator and a Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.
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"Lock-Box Sale and Assignment Agreement" means the Lock-Box Account Sale
and Assignment Agreement dated as of February 20, 2004, between Eagle Materials,
as buyer, and CXP Funding, LLC, as seller.
"Loss Reserve" means, on any date, an amount equal to: (a) the outstanding
Capital as at the close of business of the Servicer on such date multiplied by
(b)(i) the Loss Reserve Percentage on such date divided by (ii) 1 minus the Loss
Reserve Percentage on such date.
"Loss Reserve Percentage" means, on any date, the greater of: (a) 10.0% or
(b) (i) the product of (A) 2 times the highest average of the Default Ratios for
any three consecutive calendar months during the twelve most recent calendar
months multiplied by (B) the aggregate credit sales made during the four most
recent calendar months divided by (ii) the Net Receivables Pool Balance as of
such date.
"Material Adverse Effect" means, relative to any Person with respect to
any event or circumstance, a material adverse effect on:
(a) the assets, operations, business or financial condition of
such Person and, to the extent they are parties to the transactions
contemplated by the Agreement and the other Transaction Documents, its
Subsidiaries, taken as a whole,
(b) the ability of such Person to perform its obligations under
the Agreement or any other Transaction Document to which it is a party,
(c) the validity or enforceability of the Agreement or any other
Transaction Document, or the validity, enforceability or collectibility of
the Pool Receivables or
(d) the status, perfection, enforceability or priority of the
Issuer's or the Seller's interest in the Pool Assets.
"Monthly Settlement Date" means the 20th day of each calendar month or, if
such day is not a Business Day, the next succeeding Business Day.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Receivables Pool Balance" means, at any time: (a) the Outstanding
Balance of Eligible Receivables then in the Receivables Pool minus (b) the
Excess Concentration.
"Notes" means short-term promissory notes issued, or to be issued, by the
Issuer to fund its investments in accounts receivable or other financial assets.
"Obligor" means, with respect to any Receivable, the Person obligated to
make payments pursuant to the Contract relating to such Receivable.
"Originator" means, as the context may require, any or all of Eagle
Materials as originator or transferor under the Sale and Contribution Agreement,
and each Affiliate Originator as originator or transferor under the Purchase and
Sale Agreement.
I-12
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Permitted Investments" means certificates of deposit that are not
represented by instruments, have a maturity of one week or less and are issued
by any Lock-Box Bank or PNC; provided, however, that the Administrator (on
behalf of Issuer) may, from time to time, upon three Business Days' prior
written notice to Servicer, remove from the scope of "Permitted Investments"
certificates of deposit of any such bank(s) and specify to be within such scope,
certificates of deposit of any other bank; provided, further, however, that any
such notice of removal shall apply only to Permitted Investments that are
invested in following the receipt of such notice by the Servicer.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"PNC" has the meaning set forth in the preamble to the Agreement.
"Pool Assets" has the meaning set forth in Section 1.2(d) of the
Agreement.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Portion of Capital" shall mean a portion of the outstanding Capital which
accrues Discount according to the same Yield Rate and as to which a single Yield
Period is in effect.
"Program Support Agreement" means and includes the Liquidity Agreement and
any other agreement entered into by any Program Support Provider providing for:
(a) the issuance of one or more letters of credit for the account of the Issuer,
(b) the issuance of one or more surety bonds for which the Issuer is obligated
to reimburse the applicable Program Support Provider for any drawings
thereunder, (c) the sale by the Issuer to any Program Support Provider of the
Purchased Interest (or portions thereof) and/or (d) the making of loans and/or
other extensions of credit to the Issuer in connection with the Issuer's
securitization program, together with any letter of credit, surety bond or other
instrument issued thereunder (but excluding any discretionary advance facility
provided by the Administrator).
"Program Support Provider" means and includes any Liquidity Bank and any
other Person (other than any customer of the Issuer) now or hereafter extending
credit or having a commitment to extend credit to or for the account of, or to
make purchases from, the Issuer pursuant to any Program Support Agreement.
"Purchase and Sale Agreement" means the Purchase and Sale Agreement dated
as of February 20, 2004, between each Affiliate Originator from time to time
party thereto as originator or transferor, and Eagle Materials, as buyer, as
such agreement may be amended, supplemented or otherwise modified from time to
time.
"Purchase Limit" means the lesser of (a) $50,000,000, as such amount may
be reduced pursuant to Section 1.1(b) of the Agreement and (b) the aggregate of
the liquidity commitments of all then existing Liquidity Banks under the
Liquidity Agreement, divided by 102% (which
I-13
commitments on the date hereof equal in the aggregate $51,000,000). References
to the unused portion of the Purchase Limit shall mean, at any time, the
Purchase Limit minus the sum of the then outstanding Capital.
"Purchased Interest" means, at any time, the undivided percentage
ownership interest in: (a) each and every Pool Receivable now existing or
hereafter arising, (b) all Related Security with respect to such Pool
Receivables and (c) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security. Such undivided percentage interest shall
be computed as:
Capital + Total Reserves
------------------------
Net Receivables Pool Balance
The Purchased Interest shall be determined from time to time pursuant to Section
1.3 of the Agreement.
"Rating Agency" means, each of Moody's, Standard & Poor's, and any other
nationally recognized rating agency then rating the Issuer's Notes.
"Rating Agency Condition" means, with respect to any event or occurrence,
receipt by the Administrator of written confirmation from each Rating Agency
that such event or occurrence shall not cause the rating on the Issuer's then
outstanding Notes to be downgraded or withdrawn.
"Receivable" means any indebtedness and other obligations owed to any
Originator or the Seller by an Obligor or any right of the Seller or any
Originator to payment from or on behalf of an Obligor, or any right to
reimbursement for funds paid or advanced by the Seller or any Originator on
behalf of an Obligor, whether constituting an account, chattel paper, payment
intangible, instrument or general intangible, however arising (whether or not
earned by performance), and includes, without limitation, the obligation to pay
any finance charges, fees and other charges with respect thereto, that arises
under a Contract for the sale and delivery of goods or services in the ordinary
course of an Originator's business. Indebtedness and other obligations arising
from any one transaction, including, without limitation, indebtedness and other
obligations represented by an individual invoice or agreement, shall constitute
a Receivable separate from a Receivable consisting of the indebtedness and other
obligations arising from any other transaction.
"Receivables Pool" means, at any time, all of the then outstanding
Receivables purchased by the Seller pursuant to the Sale and Contribution
Agreement.
"Related Security" means, with respect to any Receivable:
(a) all of the Seller's and the related Originator's interest in any
goods (including returned goods), and documentation of title evidencing the
shipment or storage of any goods (including returned goods), relating to any
sale giving rise to such Receivable,
(b) all instruments and chattel paper that may evidence such Receivable,
I-14
(c) all other security interests or liens and property subject thereto
from time to time purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together with
all UCC financing statements or similar filings relating thereto,
(d) all of the Seller's and the related Originator's rights, interests
and claims under the Contracts and all guaranties, indemnities, insurance and
other agreements (including the related Contract) or arrangements of whatever
character from time to time supporting or securing payment of such Receivable or
otherwise relating to such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise, and
(e) all of Seller's and the related Originator's rights, interests and
claims under the Sale Agreements, any Contract and any other agreement or
document between such Originator and the related Obligor.
"Sale Agreements" means, collectively, the Purchase and Sale Agreement and
the Sale and Contribution Agreement.
"Sale and Contribution Agreement" means the Sale and Contribution
Agreement, dated as of February 20, 2004, between the Seller and Eagle
Materials, as originator or transferor, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Seller" has the meaning set forth in the preamble to the Agreement.
"Seller's Share" of any amount means the greater of: (a) $0 and (b) such
amount minus the Issuer's Share.
"Servicer" has the meaning set forth in the preamble to the Agreement.
"Servicer Report" shall mean a report, in the form of Annex C to the
Agreement, prepared by the Servicer and delivered to the Administrator pursuant
to Section 2(i) of Exhibit IV to the Agreement.
"Servicing Fee" shall mean the fee referred to in Section 4.6 of the
Agreement.
"Servicing Fee Rate" shall mean the rate referred to in Section 4.6 of the
Agreement.
"Settlement Date" means (a) with respect to any Portion of Capital not
being funded or maintained by the issuance of Notes, two (2) Business Days
following the last Business Day of the Yield Period for such Portion of Capital
and (b) with respect to any Portion of Capital funded or maintained by the
issuance of Notes, and any fees payable under the Agreement, the Monthly
Settlement Date; provided, however, that on and after the occurrence and
continuation of any Termination Event, the Settlement Date with respect to any
Portion of Capital (or fees) shall be the date selected as such by the
Administrator from time to time (it being understood that the Administrator may
select such Settlement Date to occur as frequently as daily) or, in the absence
of any such selection, the date which would be the Settlement Date for such
Portion of Capital (or fees) pursuant to clause (a) or (b) of this definition.
I-15
"Solvent" means, with respect to any Person at any time, a condition under
which:
(i) the fair value and present fair saleable value of such
Person's total assets is, on the date of determination, greater than such
Person's total liabilities (including contingent and unliquidated
liabilities) at such time;
(ii) the fair value and present fair saleable value of such
Person's assets is greater than the amount that will be required to pay
such Person's probable liability on its existing debts as they become
absolute and matured ("debts," for this purpose, includes all legal
liabilities, whether matured or unmatured, liquidated or unliquidated,
absolute, fixed, or contingent);
(iii) such Person is and shall continue to be able to pay all of its
liabilities as such liabilities mature; and
(iv) such Person does not have unreasonably small capital with
which to engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Person's contingent or unliquidated
liabilities at any time shall be that amount which, in light of all
the facts and circumstances then existing, represents the amount
which can reasonably be expected to become an actual or matured
liability;
(B) the "fair value" of an asset shall be the amount which
may be realized within a reasonable time either through collection
or sale of such asset at its regular market value;
(C) the "regular market value" of an asset shall be the
amount which a capable and diligent business person could obtain for
such asset from an interested buyer who is willing to Purchase such
asset under ordinary selling conditions; and
(D) the "present fair saleable value" of an asset means the
amount which can be obtained if such asset is sold with reasonable
promptness in an arm's-length transaction in an existing and not
theoretical market.
"Specifically Reserved Dilution Amount" means, on any date, an amount
equal to the sum of:
(i) the product of (x) 1.0% and (y) the aggregate Outstanding
Balance of all Pool Receivables reported as "current to 30 days past due"
on the aging schedule of the Servicer as of the last day of the most
recently ended calendar month; plus
(ii) the amount recorded on the books and records of American
Gypsum Company on such date (or the books and records of the Servicer on
its behalf), as the
I-16
aggregate of the accrued liability of American Gypsum Company for all
future rebate payments.
"Standard & Poor's" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
"Subordinated Note" has the meaning set forth in the Sale and Contribution
Agreement.
"Subsidiary" means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.
"Termination Day" means: (a) each day on which the conditions set forth in
Section 2 of Exhibit II are not satisfied or (b) each day that occurs on or
after the Facility Termination Date.
"Termination Event" has the meaning specified in Exhibit V to the
Agreement.
"Total Reserves" means, on any date, the sum of : (a) the Yield Reserve,
plus (b) the Dilution Reserve, plus (c) the Specifically Reserved Dilution
Amount, plus (d) the greater of the Loss Reserve or the Concentration Reserve.
"Transaction Documents" means the Agreement, the Lock-Box Agreements, the
Sale Agreements, the Fee Letter, the Administrative Services Agreement, the
Lock-Box Sale and Assignment Agreement, the Company Notes, the Subordinated Note
and all other certificates, instruments, UCC financing statements, reports,
notices, agreements and documents executed or delivered under or in connection
with the Agreement, in each case as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the Agreement.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction.
"Unmatured Termination Event" means an event that, with the giving of
notice or lapse of time, or both, would constitute a Termination Event.
"Yield Period" means (a) with respect to any Portion of Capital funded by
the issuance of Notes, (i) initially the period commencing on (and including)
the date of the initial purchase or funding of such Portion of Capital and
ending on (but not including) the next Monthly Settlement Date, and (ii)
thereafter, each period commencing on (and including) such Monthly Settlement
Date and ending on (but not including) the next Monthly Settlement Date; and (b)
with respect to any Portion of Capital not funded by the issuance of Notes, (i)
initially the period commencing on (and including) the date of the initial
purchase or funding of such Portion of Capital and ending such number of days
later (including a period of one day) as the Administrator shall select, and
(ii) thereafter, each period commencing on the last day of the
I-17
immediately preceding Yield Period for such Portion of Capital and ending such
number of days later (including a period of one day) as the Administrator shall
select; provided, that
(i) any Yield Period (other than of one day) which would otherwise
end on a day which is not a Business Day shall be extended to the next
succeeding Business Day; provided, however, if Discount in respect of such
Yield Period is computed by reference to the Euro-Rate, and such Yield
Period would otherwise end on a day which is not a Business Day, and there
is no subsequent Business Day in the same calendar month as such day, such
Yield Period shall end on the next preceding Business Day;
(ii) in the case of any Yield Period of one day, (A) if such Yield
Period is the initial Yield Period for a purchase hereunder (other than a
reinvestment), such Yield Period shall be the day of such purchase; (B)
any subsequently occurring Yield Period which is one day shall, if the
immediately preceding Yield Period is more than one day, be the last day
of such immediately preceding Yield Period, and, if the immediately
preceding Yield Period is one day, be the day next following such
immediately preceding Yield Period; and (C) if such Yield Period occurs on
a day immediately preceding a day which is not a Business Day, such Yield
Period shall be extended to the next succeeding Business Day; and
(iii) in the case of any Yield Period for any Portion of Capital
which commences before the Facility Termination Date and would otherwise
end on a date occurring after the Facility Termination Date, such Yield
Period shall end on such Facility Termination Date and the duration of
each Yield Period which commences on or after the Facility Termination
Date shall be of such duration as shall be selected by the Administrator.
"Yield Protection Fee" means, for any Yield Period, with respect to any
Portion of Capital, to the extent that (i) any payments are made by the Seller
to the Issuer or any applicable Program Support Provider in respect of such
Capital hereunder prior to the applicable maturity date of any Notes or other
instruments or obligations used or incurred by such Person to fund or maintain
such Portion of Capital or (ii) without duplication of any amounts payable by
the Seller pursuant to Section 1.10 of the Agreement, any failure by the Seller
to borrow, continue or prepay any Portion of Capital on the date specified in
any Purchase Notice delivered pursuant to Section 1.2 of the Agreement, the
amount, if any, by which: (a) the additional Discount related to such Portion of
Capital that would have accrued through the maturity date of such Notes or other
instruments on the portion thereof for which payments were received from the
Seller (or with respect to which the Seller failed to borrow such amounts),
exceeds (b) the income, if any, received by the Issuer or any applicable Program
Support Provider from investing the proceeds so received in respect of such
Portion of Capital, as determined by the Administrator, which determination
shall be binding and conclusive for all purposes, absent manifest error.
"Yield Rate" for any Yield Period for any Portion of Capital of the
Purchased Interest, to the extent the Issuer is not funding such Portion of
Capital through the issuance of Notes, means the rate per annum, selected by the
Administrator equal to: (a) 1.75% per annum above the Euro-Rate for such Yield
Period, or (b) the Base Rate for such Yield Period; provided, however, that in
the case of:
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(i) any Yield Period on or before the first day of which the
Administrator shall have been notified by any Liquidity Bank that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other Governmental
Authority asserts that it is unlawful, for such Liquidity Bank, to fund
any Euro-Rate Portion of Capital (and such Liquidity Bank shall not have
subsequently notified the Administrator that such circumstances no longer
exist),
(ii) any Yield Period of one to (and including) 29 days,
(iii) any Yield Period as to which the Administrator does not
receive a notice of funding pursuant to the Agreement before noon (New
York City time) on the third Business Day preceding the date of such
requested date of such funding or drawing, or
(iv) any Yield Period relating to a Portion of Capital that is less
than $1,000,000,
the "Yield Rate" for each such Yield Period shall be an interest rate per annum
equal to the Base Rate in effect on each day of such Yield Period.
Notwithstanding anything to the contrary in this definition or otherwise in the
Agreement, the "Yield Rate" for any day while a Termination Event exists shall
be an interest rate equal to 2% per annum above the Base Rate in effect on such
day.
"Yield Reserve" means, on any date, an amount equal to (a) the Capital at
the close of business of the Servicer on such date, multiplied by (b) (i) the
Yield Reserve Percentage on such date, divided by (ii) 1 minus the Yield Reserve
Percentage on such date.
"Yield Reserve Percentage" means, at any time:
(BR + SFR) x 1.5 x DSO
--------
360
where:
BR = the Base Rate in effect at such time,
SFR = the Servicing Fee Rate,
DSO = the Days' Sales Outstanding.
Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in the State of New York, and not specifically
defined herein, are used herein as defined in such Article 9. Unless the context
otherwise requires, "or" means "and/or," and "including" (and with correlative
meaning "include" and "includes") means including without limiting the
generality of any description preceding such term.
I-19
EXHIBIT II
CONDITIONS PRECEDENT
1. Conditions Precedent to Effectiveness. The effectiveness of this
Agreement is subject to the conditions precedent that the Administrator shall
have received on or before the Closing Date the following, each in form and
substance (including the date thereof) satisfactory to the Administrator:
(a) A counterpart of the Agreement and the other Transaction Documents
executed by the parties thereto.
(b) Certified copies of: (i) all documents evidencing necessary
governmental approvals, if any, with respect to the Agreement and the other
Transaction Documents and (ii) the applicable organizational documents of the
Seller, the Servicer and each Originator.
(c) A certificate of the Secretary or Assistant Secretary of the Seller,
the Servicer and each Originator certifying the names and true signatures of its
officers who are authorized to sign the Agreement and the other Transaction
Documents. Until the Administrator receives a subsequent incumbency certificate
from the Seller, the Servicer and each Originator, as the case may be, the
Administrator shall be entitled to rely on the last such certificate delivered
to it by the Seller, the Servicer, and each Originator, as the case may be.
(d) Evidence that the proper financing statements, under the UCC of all
relevant jurisdictions necessary or desirable in order to perfect the interests
of Eagle Materials, the Seller and the Issuer contemplated by the Agreement, the
Purchase and Sale Agreement and the Sale and Contribution Agreement, as the case
may be, have been duly filed in each such jurisdiction.
(e) Completed UCC search reports, dated on or shortly before the date of
the initial purchase hereunder, listing the financing statements filed in all
applicable jurisdictions that name any Originator, Eagle Materials or the Seller
as debtor, together with copies of such other financing statements, and similar
search reports with respect to judgment liens, federal tax liens and liens of
the Pension Benefit Guaranty Corporation in such jurisdictions, as the
Administrator may request, showing no Adverse Claims on any Pool Assets.
(f) Favorable opinions, in form and substance reasonably satisfactory to
the Administrator, of Xxxxxxxxx Traurig, LLP, as counsel for the Seller, the
Originators and the Servicer as to various corporate, enforceability, UCC
(including creation, perfection and priority), bankruptcy and other matters as
the Administrator may reasonably request.
(g) Satisfactory results of a review and audit (performed by
representatives of the Administrator) of the Servicer's collection, operating
and reporting systems, the Credit and Collection Policy of the Originators,
historical receivables data and accounts, including satisfactory results of a
review of the Servicer's operating location(s) and satisfactory review and
approval of the Eligible Receivables in existence on the date of the initial
purchase under the Agreement.
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(h) A pro forma Servicer Report representing the performance of the
anticipated Receivables Pool for the calendar month before closing.
(i) Evidence of payment by the Seller of all accrued and unpaid fees
(including those contemplated by the Fee Letter), costs and expenses to the
extent then due and payable on the date thereof, including any such costs, fees
and expenses arising under or referenced in Section 5.4 of the Agreement and the
Fee Letter.
(j) Good standing certificates with respect to the Seller, the Servicer
and each Originator issued by the Secretaries of State (or similar official) of
the states of each such Person's organization and principal place of business.
(k) A computer file containing all information with respect to the
Receivables as the Administrator may reasonably request.
(l) Such other approvals, opinions or documents as the Administrator may
reasonably request.
2. Conditions Precedent and Condition Subsequent to all Purchases and
Reinvestment. Each purchase (including the initial purchase) and each
reinvestment shall be subject to the further conditions precedent and condition
subsequent, as the case may be, that:
(a) in the case of each purchase, the Servicer shall have delivered to
the Administrator, in form and substance satisfactory to the Administrator on or
before such purchase, a completed pro forma Servicer Report as of such date to
reflect the level of the Capital, the Total Reserves and the Receivables Pool;
(b) on the date of such purchase or reinvestment, as the case may be,
the following statements shall be true (and acceptance of the proceeds of such
purchase or reinvestment shall be deemed a representation and warranty by the
Seller that such statements are then true):
(i) the representations and warranties contained in Exhibit III to
the Agreement are true and correct in all material respects on and as of
the date of such purchase or reinvestment, as the case may be, as though
made on and as of such date;
(ii) no event has occurred and is continuing, or would result from
such purchase or reinvestment, as the case may be, that constitutes a
Termination Event or an Unmatured Termination Event; and
(iii) the Capital, after giving effect to any such purchase or
reinvestment, as the case may be, shall not be greater than the Purchase
Limit, and the Purchased Interest shall not exceed 100%; and
(c) On or prior to sixty (60) days from the date hereof, the Seller
shall have provided the Administrator with evidence, in form and substance
satisfactory to the Administrator, of (i) the termination and/or partial release
of financing statement number 03-0034472467 filed against Centex Construction
Products, Inc. (the entity now called Eagle Materials Inc.) in favor of Xxxxxx
Creek Office II, Inc. with the office of the Secretary of State of the State of
Texas, which
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financing statement purports to cover all or part of the Receivables and Related
Security of Centex Construction Products, Inc. (it being understood that the
Seller hereby represents and warrants that the underlying grant of security
interest by Centex Construction Products, Inc. to Xxxxxx Creek Office II, Inc.
in connection with the transactions contemplated by the documentation to which
such filed financing statement relates does not extend to any Receivables or
Related Security and such financing statement is, therefore, ineffective and
unenforceable as to any Pool Assets), (ii) a lien search (including judgment,
ERISA and tax lien searches) performed in the office of the Secretary of State
of the State of New Mexico against Centex Eagle Gypsum Company, LLC (an entity
previously merged into one of the Affiliate Originators) and (iii) a full and
complete copy (with all applicable attachments) of financing statement number
2002010072721 filed against Republic Gypsum Company (a trade name of one of the
Affiliate Originators) in favor of Signode Packaging Systems in Oklahoma County
(Central Filing), Oklahoma.
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EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. Representations and Warranties of the Seller. The Seller represents
and warrants as follows:
(a) The Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, and is
duly qualified to do business, and is in good standing, as a foreign limited
liability company in every jurisdiction where the nature of its business
requires it to be so qualified, except where the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by the Seller of the
Agreement and the other Transaction Documents to which it is a party, including
its use of the proceeds of purchases and reinvestments: (i) are within its
organizational powers, (ii) have been duly authorized by all necessary action,
(iii) do not contravene or result in a default under or conflict with: (A) its
organizational documents, (B) any law, rule or regulation applicable to it, (C)
any contractual restriction binding on or affecting it or any of its property or
(D) any order, writ, judgment, award, injunction or decree binding on or
affecting it or any of its property, and (iv) do not result in or require the
creation of any Adverse Claim upon or with respect to any of its properties. The
Agreement and the other Transaction Documents to which it is a party have been
duly executed and delivered by the Seller.
(c) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority or other Person is required for the due
execution, delivery and performance by the Seller of the Agreement or any other
Transaction Document to which it is a party, other than the Uniform Commercial
Code filings referred to in Exhibit II to the Agreement.
(d) Each of the Agreement and the other Transaction Documents to which
the Seller is a party constitutes the legal, valid and binding obligation of the
Seller enforceable against the Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws from time to time in effect affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) There is no pending or, to the knowledge of the Seller, threatened
action or proceeding affecting Seller or any of its properties before any court
or any other Governmental Authority or arbitrator, except any such pending or
threatened proceeding which could not be reasonably expected to have a Material
Adverse Effect.
(f) [Reserved].
(g) Each Servicer Report, information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by or
on behalf of the Seller to the Administrator or the Issuer in connection with
the Agreement or any other Transaction
III-1
Document to which it is a party is or will be complete and accurate in all
material respects as of its date or as of the date so furnished.
(h) The Seller is "located" (as such term is defined in the applicable
UCC) in Delaware. The Seller's chief executive office and the office where the
Seller keeps its records concerning the Receivables is at the address set forth
below its signature to the Agreement or at such other address as to which the
Administrator has been notified, in writing, in accordance with the Agreement.
(i) The names and addresses of all the Lock-Box Banks together with the
account numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified
in Schedule II to the Agreement (or at such other Lock-Box Banks and/or with
such other Lock-Box Accounts as have been notified to the Administrator in
accordance with the Agreement), and all Lock-Box Accounts are subject to
Lock-Box Agreements.
(j) The Seller is not in violation of any order of any court, arbitrator
or Governmental Authority that could be reasonably expected to have a Material
Adverse Effect.
(k) No proceeds of any purchase or reinvestment will be used for any
purpose that violates any applicable law, rule or regulation, including
Regulations T, U or X of the Federal Reserve Board.
(l) Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable.
(m) To the knowledge of the Seller, no event has occurred and is
continuing, or would result from a purchase in respect of the Purchased Interest
or from the application of the proceeds therefrom, that constitutes a
Termination Event or an Unmatured Termination Event.
(n) The Seller has complied in all material respects with the Credit and
Collection Policy of each Originator with regard to each Pool Receivable
originated by such Originator.
(o) The Seller has complied in all material respects with all of the
terms, covenants and agreements contained in the Agreement and the other
Transaction Documents that are applicable to it.
(p) The Seller's complete company name is set forth in the preamble to
the Agreement, and it does not use and has not during the last five years used
any other company name, trade name, doing-business name or fictitious name.
(q) The Seller is not an "investment company," or a company "controlled"
by an "investment company," within the meaning of the Investment Company Act of
1940, as amended. In addition, the Seller is not a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
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2. Representations and Warranties of the Servicer. The Servicer,
represents and warrants as follows:
(a) The Servicer is duly organized, validly existing and in good
standing under the laws of the State of Delaware, and is duly qualified to do
business, and is in good standing, as a foreign organization in every
jurisdiction where the nature of its business requires it to be so qualified,
except where the failure to be so qualified could not reasonably be expected to
have a Material Adverse Effect.
(b) The execution, delivery and performance by the Servicer of the
Agreement and the other Transaction Documents to which it is a party: (i) are
within its organizational powers, (ii) have been duly authorized by all
necessary organizational action, (iii) do not contravene or result in a default
under or conflict with: (A) its organizational documents, (B) any law, rule or
regulation applicable to it, (C) any contractual restriction binding on or
affecting it or any of its property or (D) any order, writ, judgment, award,
injunction or decree binding on or affecting it or any of its property, and (iv)
do not result in or require the creation of any Adverse Claim upon or with
respect to any of its properties. The Agreement and the other Transaction
Documents to which the Servicer is a party have been duly executed and delivered
by the Servicer.
(c) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority or other Person is required for the due
execution, delivery and performance by the Servicer of the Agreement or any
other Transaction Document to which it is a party, other than the Uniform
Commercial Code filings referred to in the Sale Agreements.
(d) Each of the Agreement and the other Transaction Documents to which
the Servicer is a party constitutes the legal, valid and binding obligation of
the Servicer enforceable against the Servicer in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws from time to time in effect affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(e) The balance sheets of the Servicer and its consolidated Subsidiaries
as at March 31, 2003, and the related statements of income and retained earnings
for the fiscal year then ended, copies of which have been furnished to the
Administrator, fairly present in all material respects the financial condition
of the Servicer and its consolidated Subsidiaries as at such date and the
results of the operations of the Servicer and its Subsidiaries for the period
ended on such date, all in accordance with generally accepted accounting
principles consistently applied.
(f) There is no pending or, to the knowledge of the Servicer, threatened
action or proceeding affecting the Servicer or any of its properties before any
court or other Governmental Authority or arbitrator, except any such pending or
threatened proceeding which could not reasonably be expected to have a Material
Adverse Effect.
(g) Each Servicer Report, information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by or
on behalf of the Servicer to the
III-3
Administrator in connection with the Agreement is or will be complete and
accurate in all material respects as of its date or as of the date so furnished.
(h) The Servicer is not in violation of any order of any court,
arbitrator or Governmental Authority, which could reasonably be expected to have
a Material Adverse Effect.
(i) The Servicer has complied in all material respects with the Credit
and Collection Policy of each Originator with regard to each Pool Receivable
originated by such Originator.
(j) The Servicer has complied in all material respects with all of the
terms, covenants and agreements contained in the Agreement and the other
Transaction Documents that are applicable to it.
(k) The Servicer is not an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended. In addition, the Servicer is not a "holding
company," a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
3. Representations, Warranties and Agreements Relating to the Security
Interest. The Seller hereby makes the following representations, warranties and
agreements with respect to the Receivables and Related Security:
(a) The Receivables.
(i) Creation. This Agreement creates a valid and continuing
security interest (as defined in the applicable UCC) in the Pool
Receivables in favor of the Issuer, which security interest is prior to
all other Adverse Claims, and is enforceable as such as against creditors
of and purchasers from the Seller.
(ii) Nature of Receivables. The Pool Receivables constitute either
"accounts," "general intangibles" or "tangible chattel paper" within the
meaning of the applicable UCC.
(iii) Ownership of Receivables. The Seller owns and has good and
marketable title to the Pool Receivables and Related Security free and
clear of any Adverse Claim.
(iv) Perfection and Related Security. Seller has caused (and will
cause each Originator to cause), within ten days after the Closing Date,
the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law in order to
perfect the sale of the Receivables and Related Security from such
Originator to Eagle Materials (in the case of the Affiliate Originators
under the Purchase and Sale Agreement), from Eagle Materials to the Seller
(in the case of the Sale and Contribution Agreement), and the sale and
security interest therein from the Seller to the Issuer under this
Agreement, to the extent that such collateral constitutes "accounts,"
"general intangibles," or "tangible chattel paper."
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(v) Tangible Chattel Paper. With respect to any Pool Receivables
that constitute "tangible chattel paper", if any, the Seller (or the
Servicer on its behalf) has in its possession the original copies of such
tangible chattel paper that constitute or evidence such Pool Receivables,
and the Seller has caused (and will cause the applicable Originator to
cause), within ten days after the Closing Date, the filing of financing
statements described in clause (iv), above, each of which will contain a
statement that: "A purchase of, or security interest in, any collateral
described in this financing statement will violate the rights of the
Issuer." The Pool Receivables to the extent they are evidenced by
"tangible chattel paper" do not have any marks or notations indicating
that they have been pledged, assigned or otherwise conveyed to any Person
other than the Seller or the Issuer, as the case may be, as contemplated
by the Transaction Documents.
(b) The Accounts.
(i) Nature of Lock-Box Accounts. Each Lock-Box Account constitutes
a "deposit account" within the meaning of the applicable UCC.
(ii) Ownership. The Seller owns and has good and marketable title
to the Lock-Box Accounts free and clear of any Adverse Claim.
(iii) Perfection. The Seller has delivered to the Administrator a
fully executed Lock-Box Agreement relating to each Lock-Box Account
pursuant to which each applicable Lock-Box Bank has agreed, following the
occurrence and continuation of a Termination Event or Unmatured
Termination Event, to comply with all instructions originated by the
Administrator (on behalf of the Issuer) directing the disposition of funds
in such Lock-Box Account without further consent by the Seller or the
Servicer.
(c) Priority.
(i) Other than the transfer of the Receivables to Eagle Materials,
the Seller and the Issuer under the Purchase and Sale Agreement, the Sale
and Contribution Agreement and this Agreement, respectively, and/or the
security interest granted to Eagle Materials, the Seller and the
Administrator pursuant to the Purchase and Sale Agreement, the Sale and
Contribution Agreement and this Agreement, respectively, none of Eagle
Materials, the Seller or any Originator has pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the
Receivables, the Lock-Box Accounts or any subaccounts thereof, except for
any such pledge, grant or other conveyance which has been released or
terminated. None of Eagle Materials, the Seller or any Originator has
authorized the filing of, or is aware of any financing statements against
Eagle Materials, the Seller or any such Originator that include a
description of Receivables, the Lock-Box Accounts or any subaccounts
thereof, other than any financing statement (i) relating to the sale
thereof by the Originators under the applicable Sale Agreement, (ii)
relating to the security interest granted to the Issuer under this
Agreement, or (iii) that has been released or terminated.
(ii) As of the Closing Date, the Seller is not aware of any
judgment, ERISA or tax lien filings against either the Seller or any
Originator. As of any other date, the Seller
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is not aware of any judgment, ERISA or tax lien filings against either the
Seller or any Originator, other than as disclosed to the Administrator in
writing.
(iii) No Lock-Box Account is in the name of any person other than
the Seller, the Issuer or the Administrator. Neither the Seller nor the
Servicer has consent to any bank maintaining such account to comply with
instructions of any person other than the Administrator.
(d) Survival of Supplemental Representations. Notwithstanding any other
provision of the Agreement or any other Transaction Document, the
representations contained in this Section shall be continuing, and remain in
full force and effect until such time as the Purchased Interest and all other
obligations under the Agreement have been finally and fully paid and performed.
(e) No Waiver. The parties to the Agreement: (i) shall not, without
obtaining a confirmation of the then-current rating of the Notes, waive any of
the representations set forth in this Section; (ii) shall provide the Ratings
Agencies with prompt written notice of any breach of any representations set
forth in this Section, and shall not, without obtaining a confirmation of the
then-current rating of the Notes (as determined after any adjustment or
withdrawal of the ratings following notice of such breach) waive a breach of any
of the representations set forth in this Section.
(f) Servicer to Maintain Perfection and Priority. In order to evidence
the interests of the Issuer and the Administrator under the Agreement, the
Servicer shall, from time to time take such action, or execute and deliver such
instruments as may be reasonably necessary or advisable (including, without
limitation, such actions as are reasonably requested by the Administrator) to
maintain and perfect, as a first-priority interest, the Issuer's security
interest in the Pool Receivables, Related Security and Collections. The Servicer
shall, from time to time and within the time limits established by law, prepare
and present to the Issuer for the Issuer's authorization and approval, all
financing statements, amendments, continuations or initial financing statements
in lieu of a continuation statement, or other filings necessary to continue,
maintain and perfect the Issuer's security interest as a first-priority
interest. The Issuer's approval of such filings shall authorize the Servicer to
file such financing statements under the UCC without the signature of the
Seller, any Originator or the Issuer where allowed by applicable law.
Notwithstanding anything else in the Transaction Documents to the contrary, the
Servicer shall not have any authority to file a termination, partial
termination, release, partial release, or any amendment that deletes the name of
a debtor or excludes collateral of any such financing statements, without the
prior written consent of the Administrator.
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EXHIBIT IV
COVENANTS
1. Covenants of the Seller. Until the latest of the Facility
Termination Date, the date on which no Capital of or Discount in respect of the
Purchased Interest shall be outstanding or the date all other amounts owed by
the Seller under the Agreement to any Liquidity Bank, the Administrator and any
other Indemnified Party or Affected Person shall be paid in full:
(a) Compliance with Laws, Etc. The Seller shall comply in all material
respects with all applicable laws, rules, regulations and orders, and preserve
and maintain its limited liability company existence, rights, franchises,
qualifications and privileges, except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such rights, franchises, qualifications and privileges could not
reasonably be expected to have a Material Adverse Effect.
(b) Location and Name or Structural Changes. The Seller shall provide
the Administrator with at least 30 days' prior written notice before making any
change in the Seller's name, location (other than a change in the address of the
offices of the Seller to one of the addresses already set forth under its name
on the signature page to the Agreement) or making any other change in the
Seller's identity or limited liability company structure that could impair or
otherwise render any UCC financing statement filed in connection with this
Agreement "seriously misleading" as such term (or similar term) is used in the
applicable UCC; each notice to the Administrator pursuant to this sentence shall
set forth the applicable change and the proposed effective date thereof. The
Seller will also maintain and implement (or cause the Servicer to maintain and
implement) administrative and operating procedures (including an ability to
recreate records evidencing Receivables and related Contracts in the event of
the destruction of the originals thereof), and keep and maintain (or cause the
Servicer to keep and maintain) all documents, books, records, computer tapes and
disks and other information reasonably necessary or advisable for the collection
of all Pool Receivables (including records adequate to permit the daily
identification of each Pool Receivable and all Collections of and adjustments to
each existing Pool Receivable).
(c) Ownership Interest, Etc. The Seller shall (and shall cause the
Servicer to), at its expense, take all action necessary or desirable to
establish and maintain a valid and enforceable undivided percentage ownership or
security interest, to the extent of the Purchased Interest, in the Pool
Receivables, the Related Security and Collections with respect thereto, and a
first priority perfected security interest in the Pool Assets, in each case free
and clear of any Adverse Claim, in favor of the Issuer, including taking such
action to perfect, protect or more fully evidence the interest of the Issuer as
the Administrator may reasonably request.
(d) Sales, Liens, Etc. The Seller shall not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, any or all of its right, title or
interest in, to or under any Pool Assets (including the Seller's undivided
interest in any Pool Receivable, Related Security or Collections, or upon or
with respect to any account to which any Collections of any Pool Receivables are
sent), or assign any right to receive income in respect of any items
contemplated by this paragraph.
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(e) Extension or Amendment of Receivables. Except as otherwise provided
in the Agreement, the Seller shall not, and shall not permit the Servicer to,
extend the maturity or adjust the Outstanding Balance or otherwise modify the
terms of any Pool Receivable, or amend, modify or waive any term or condition of
any related Contract.
(f) Change in Business or Credit and Collection Policy. The Seller shall
not (i) make any material change in the character of its business or (ii) make
any material change in any Credit and Collection Policy, or any other change
thereto that could reasonably be expected to adversely affect the collectibility
of the Pool Receivables, the enforceability of any related Contract or its
ability to perform its obligations under the related Contract or the Transaction
Documents, in the case of either (i) or (ii) above, without the prior written
consent of the Administrator. The Seller shall not make any change in any Credit
and Collection Policy without giving prior written notice thereof to the
Administrator.
(g) Audits. (i) The Seller shall, at the Seller's expense, from time to
time during regular business hours as reasonably requested in advance by the
Administrator, permit the Administrator, or its agents or representatives: (A)
to examine and make copies of and abstracts from all books, records and
documents (including computer tapes and disks) in the possession or under the
control of the Seller relating to Pool Receivables and the Related Security,
including the related Contracts, and (B) to visit the offices and properties of
the Seller for the purpose of examining such materials described in clause (A)
above, and to discuss matters relating to Pool Receivables and the Related
Security or the Seller's, the Servicer's or any Originator's performance under
the Transaction Documents or under the Contracts with any of the officers,
employees or outside accountants of the Seller having knowledge of such matters
and (ii) without limiting the provisions of clause (i) above, from time to time
during regular business hours, at the Seller's expense, upon reasonable prior
written notice from the Administrator, permit certified public accountants or
other auditors acceptable to the Administrator to conduct a review of its books
and records with respect to the Pool Receivables.
(h) Change in Lock-Box Banks or Lock-Box Accounts and Payment
Instructions to Obligors. The Seller shall not, and shall not permit the
Servicer or any Originator to, add or terminate any bank as a Lock-Box Bank or
any account as a Lock-Box Account from those listed in Schedule II to the
Agreement, or make any change in its instructions to Obligors regarding payments
to be made to the Seller, the Originators, the Servicer or any Lock-Box Account
(or related post office box), unless the Administrator shall have consented
thereto in writing and the Administrator shall have received copies of all
agreements and documents (including Lock-Box Agreements) that it may request in
connection therewith.
(i) Deposits to Lock-Box Accounts. The Seller shall (or shall cause the
Servicer to): (i) instruct all Obligors to make payments of all Pool Receivables
to one or more Lock-Box Accounts or to post office boxes to which only Lock-Box
Banks have access (and shall instruct the Lock-Box Banks to cause all items and
amounts relating to such Receivables received in such post office boxes to be
removed and deposited into a Lock-Box Account on a daily basis), and (ii)
deposit, or cause to be deposited, any Collections received by it, the Servicer
or any Originator into a Lock-Box Account not later than one Business Day after
receipt thereof (or, in the case of amounts received by such Person after 3:00
p.m. on any Business Day, the second Business Day following such receipt). Each
Lock-Box Account shall at all times be subject to a
IV-2
Lock-Box Agreement. The Seller will not (and will not permit the Servicer to)
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to any Lock-Box Account cash or cash proceeds other than Collections.
(j) Marking of Records. At its expense, the Seller shall: (i) xxxx (or
cause the Servicer to xxxx) its master data processing records relating to Pool
Receivables and related Contracts to indicate that the undivided percentage
ownership interests with regard to the Purchased Interest related to such
Receivables and related Contracts have been sold in accordance with the
Agreement, and (ii) cause each Originator to so xxxx its master data processing
records pursuant to the applicable Sale Agreement.
(k) Reporting Requirements. The Seller will provide to the Administrator
(in multiple copies, if requested by the Administrator) the following:
(i) as soon as available and in any event within 120 days after
the end of each fiscal year of the Seller, a copy of the unaudited
financial statements of the Seller for such year certified as to accuracy
by the chief financial officer or treasurer of the Seller;
(ii) as soon as possible and in any event within two Business Days
after becoming aware of the occurrence of each Termination Event or
Unmatured Termination Event, a statement of the chief financial officer of
the Seller setting forth details of such Termination Event or Unmatured
Termination Event and the action that the Seller has taken and proposes to
take with respect thereto;
(iii) promptly after the filing or receiving thereof, copies of all
reports and notices that the Seller or any ERISA Affiliate files under
ERISA with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or that the Seller or any
Affiliate receives from any of the foregoing or from any multiemployer
plan (within the meaning of Section 4001(a)(3) of ERISA) to which the
Seller or any of its Affiliates is or was, within the preceding five
years, a contributing employer, in each case in respect of any Reportable
Event (as defined in ERISA) that could, in the aggregate, result in the
imposition of liability on the Seller and/or any such Affiliate;
(iv) promptly after the Seller obtains knowledge thereof, notice of
any: (A) litigation, investigation or proceeding that may exist at any
time between the Seller and any Governmental Authority or other Person or
(B) litigation or proceeding relating to any Transaction Document;
(v) promptly after the Seller obtains knowledge thereof, notice of
any Material Adverse Effect with respect to the Seller, the Servicer or
any Originator; and
(vi) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of the Seller, Eagle
Materials or the other Originators as the Administrator may from time to
time reasonably request.
(l) Certain Agreements. Without the prior written consent of the
Administrator, the Seller will not amend, modify, waive, revoke or terminate any
Transaction Document to which it
IV-3
is a party or any provision of Seller's organizational documents which requires
the consent of the "Independent Director" (as defined in the Seller's limited
liability company agreement).
(m) Restricted Payments. (i) Except pursuant to clauses (ii) and (iii)
below, the Seller will not: (A) purchase or redeem any of its membership
interests, (B) declare or pay any dividend or set aside any funds for any such
purpose, (C) prepay, purchase or redeem any Debt, (D) lend or advance any funds
or (E) repay any loans or advances to, for or from any of its Affiliates (the
amounts described in clauses (A) through (E) being referred to as "Restricted
Payments").
(i) Subject to the limitations set forth in clause (iii) below,
the Seller may make Restricted Payments so long as such Restricted
Payments are made only in one or more of the following ways: (A) the
Seller may make cash payments (including prepayments) on the Subordinated
Note in accordance with its terms, and (B) if no amounts are then
outstanding under the Subordinated Note, the Seller may declare and pay
dividends.
(ii) The Seller may make Restricted Payments only out of the funds,
if any, it receives pursuant to Sections 1.4(b)(ii) and (iv) and 1.4(c) of
the Agreement. Furthermore, the Seller shall not pay, make or declare: (A)
any dividend if, after giving effect thereto, the Seller's tangible net
worth would be less than $1,500,000, or (B) any Restricted Payment
(including any dividend) if, after giving effect thereto, any Termination
Event or Unmatured Termination Event shall have occurred and be
continuing.
(n) Other Business. The Seller will not: (i) engage in any business
other than the transactions contemplated by the Transaction Documents, (ii)
create, incur or permit to exist any Debt of any kind (or cause or permit to be
issued for its account any letters of credit or bankers' acceptances) other than
pursuant to the Transaction Documents or the Subordinated Note, or (iii) form
any Subsidiary or make any investments in any other Person; provided, however,
that the Seller shall be permitted to incur minimal obligations to the extent
necessary for the day-to-day operations of the Seller (such as expenses for
stationery, audits, maintenance of legal status, etc.) (not to exceed $11,625,
in the aggregate, outstanding at any one time).
(o) Use of Seller's Share of Collections. The Seller shall apply the
Seller's Share of Collections to make payments in the following order of
priority: (i) the payment of its expenses (including all obligations payable to
the Issuer and the Administrator under the Agreement and under the Fee Letter),
(ii) the payment of accrued and unpaid interest on the Subordinated Note and
(iii) other legal and valid corporate purposes.
(p) Tangible Net Worth. The Seller will not permit its tangible net
worth, at any time, to be less than $1,500,000.
2. Covenants of the Servicer. Until the latest of the Facility
Termination Date, the date on which no Capital of or Discount in respect of the
Purchased Interest shall be outstanding or the date all other amounts owed by
the Seller under the Agreement to the Issuer, the Administrator and any other
Indemnified Party or Affected Person shall be paid in full:
IV-4
(a) Compliance with Laws, Etc. The Servicer shall comply in all material
respects with all applicable laws, rules, regulations and orders, and preserve
and maintain its corporate existence, rights, franchises, qualifications and
privileges, except to the extent that the failure so to comply with such laws,
rules and regulations or the failure so to preserve and maintain such existence,
rights, franchises, qualifications and privileges could not reasonably be
expected to have a Material Adverse Effect.
(b) Offices, Records and Books of Account, Etc. The Servicer shall keep
the office where it keeps its records concerning the Pool Receivables at the
address of the Servicer set forth under its name on the signature page to the
Agreement or, such other location (other than a change in the address of the
offices of the Servicer to one of the addresses already set forth under its name
on the signature page to the Agreement) as identified by the Servicer to the
Administrator in writing at least 30 days' prior to such proposed change. The
Servicer also will maintain and implement administrative and operating
procedures (including an ability to recreate records evidencing Pool Receivables
and related Contracts in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records, computer tapes and disks
and other information reasonably necessary or advisable for the collection of
all Pool Receivables (including records adequate to permit the daily
identification of each Pool Receivable and all Collections of and adjustments to
each existing Pool Receivable).
(c) Performance and Compliance with Contracts and Credit and Collection
Policy. The Servicer shall at its expense, timely and fully perform and comply
in all material respects with all provisions, covenants and other promises
required to be observed by it under the Contracts related to the Pool
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy with regard to each Pool Receivable and the related
Contract.
(d) Extension or Amendment of Receivables. Except as otherwise provided
in the Agreement, the Servicer shall not extend the maturity or adjust the
Outstanding Balance or otherwise modify the terms of any Pool Receivable, or
amend, modify or waive any term or condition of any related Contract.
(e) Change in Business or Credit and Collection Policy. The Servicer
shall not (i) make any material change in the character of its business that
could reasonably be expected to adversely affect the collectibility of the
Receivables, the enforceability of any related Contract or its ability to
perform its obligations under the related Contract or the Transaction Documents
or (ii) make any material change in any Credit and Collection Policy or any
other change thereto that could reasonably be expected to adversely affect the
collectibility of the Receivables, the enforceability of any related Contract or
its ability to perform its obligations under the related Contract or the
Transaction Documents, in the case of either (i) or (ii) above, without the
prior written consent of the Administrator. The Servicer shall not make any
change in any Credit and Collection Policy without giving prior written notice
thereof to the Administrator.
(f) Audits. (i) The Servicer shall, at the Servicer's expense, from time
to time during regular business hours as reasonably requested in advance by the
Administrator, permit the Administrator, or its agents or representatives: (A)
to examine and make copies of and abstracts from all books, records and
documents (including computer tapes and disks) in its possession or
IV-5
under its control relating to Pool Receivables and the Related Security,
including the related Contracts, and (B) to visit its offices and properties for
the purpose of examining such materials described in clause (A) above, and to
discuss matters relating to Pool Receivables and the Related Security or its
performance hereunder or under the Contracts with any of its officers, employees
or outside accountants having knowledge of such matters and (ii) without
limiting the provisions of clause (i) above, from time to time during regular
business hours, at the Servicer's expense, upon reasonable prior written notice
from the Administrator, permit certified public accountants or other auditors
acceptable to the Administrator to conduct, a review of its books and records
with respect to the Pool Receivables.
(g) Change in Lock-Box Banks or Lock-Box Accounts and Payment
Instructions to Obligors. The Servicer shall not add or terminate any bank as a
Lock-Box Bank or any account as a Lock-Box Account from those listed in Schedule
II to the Agreement, or make any change in its instructions to Obligors
regarding payments to be made to the Originators, the Servicer or any Lock-Box
Account (or related post office box), unless the Administrator shall have
consented thereto in writing and the Administrator shall have received copies of
all agreements and documents (including Lock-Box Agreements) that it may request
in connection therewith.
(h) Deposits to Lock-Box Accounts. The Servicer shall: (i) instruct all
Obligors to make payments of all Pool Receivables to one or more Lock-Box
Accounts or to post office boxes to which only Lock-Box Banks have access (and
shall instruct the Lock-Box Banks to cause all items and amounts relating to
such Receivables received in such post office boxes to be removed and deposited
into a Lock-Box Account on a daily basis), and (ii) deposit, or cause to be
deposited, any Collections received by it or any Originator into a Lock-Box
Account not later than one Business Day after receipt thereof (or, in the case
of amounts received by such Person after 3:00 p.m. on any Business Day, the
second Business Day following such receipt). Each Lock-Box Account shall at all
times be subject to a Lock-Box Agreement. The Servicer will not deposit or
otherwise credit, or cause or permit to be so deposited or credited, to any
Lock-Box Account cash or cash proceeds other than Collections.
(i) Reporting Requirements. The Servicer shall provide to the
Administrator (in multiple copies, if requested by the Administrator) the
following:
(i) as soon as publicly available and in any event within 60 days
after the end of the first three quarters of each fiscal year of the
Servicer, balance sheets of the Servicer and its consolidated Subsidiaries
as of the end of such quarter and statements of income, retained earnings
and cash flow of the Servicer and its consolidated Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with
the end of such quarter, certified by the chief financial officer of such
Person;
(ii) as soon as publicly available and in any event within 120
days after the end of each fiscal year of the Servicer, a copy of the
annual report for such year for the Servicer and its consolidated
Subsidiaries, containing financial statements for such year audited by
independent certified public accountants of nationally recognized
standing;
(iii) as soon as available and in any event not later than the
second Business Day prior to each Monthly Settlement Date, a Servicer
Report as of the last day of the
IV-6
calendar month immediately preceding the calendar month during which such
Monthly Settlement Date occurs;
(iv) as soon as possible and in any event within two Business Days
after becoming aware of the occurrence of each Termination Event or
Unmatured Termination Event, a statement of the chief financial officer of
the Servicer setting forth details of such Termination Event or Unmatured
Termination Event and the action that such Person has taken and proposes
to take with respect thereto;
(v) promptly after the sending or filing thereof, copies of all
reports that the Servicer sends to its security holders generally, and
copies of all Form 10-K, Form 10-Q and Form 8-K reports that the Servicer
files with the Securities and Exchange Commission;
(vi) promptly after the filing or receiving thereof, copies of all
reports and notices that the Servicer or any of its ERISA Affiliate files
under ERISA with the Internal Revenue Service, the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or that such Person
or any of its Affiliate receives from any of the foregoing or from any
multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA) to
which such Person or any of its Affiliate is or was, within the preceding
five years, a contributing employer, in each case in respect of any
Reportable Event (as defined in ERISA) that could, in the aggregate,
result in the imposition of liability on the Servicer and/or any such
Affiliate;
(vii) promptly after the Servicer obtains knowledge thereof, notice
of any: (A) litigation, investigation or proceeding that may exist at any
time between the Servicer or any of its Subsidiaries and any Governmental
Authority or other Person that could reasonably be expected to have a
Material Adverse Effect, or (B) litigation or proceeding relating to any
Transaction Document; and
(viii) such other information respecting the Pool Receivables or the
condition or operations, financial or otherwise, of the Servicer or any of
its Subsidiaries as the Administrator may from time to time reasonably
request.
(j) Xxxxxx Creek Financings. Until the conditions subsequent to
purchases and reinvestments set forth in Section 2(c) of Exhibit II to the
Agreement have been satisfied, Eagle shall not enter into any new or further
lease agreements, credit agreements or other financial arrangements with Xxxxxx
Creek Office II, Inc.
3. Separate Existence. Each of the Seller and the Servicer hereby
acknowledges that the Issuer and the Administrator are entering into the
transactions contemplated by this Agreement and the other Transaction Documents
in reliance upon the Seller's identity as a legal entity separate from Eagle
Materials, the Originators and their respective Affiliates. Therefore, from and
after the date hereof, each of the Seller and the Servicer shall take all steps
specifically required by the Agreement or reasonably required by the
Administrator to continue the Seller's identity as a separate legal entity and
to make it apparent to third Persons that the Seller is an entity with assets
and liabilities distinct from those of Eagle Materials, any Originator and any
IV-7
other Person, and is not a division of Eagle Materials, any Originator or any
other Person. Without limiting the generality of the foregoing and in addition
to and consistent with the other covenants set forth herein, each of the Seller
and the Servicer shall take such actions as shall be required in order that:
(a) The Seller will be a limited liability company whose primary
activities are restricted in its organizational documents to: (i) purchasing or
otherwise acquiring from Eagle Materials and/or the other Originators, owning,
holding, granting security interests or selling interests in Pool Assets, (ii)
entering into agreements for the selling and servicing of the Receivables Pool,
and (iii) conducting such other activities as it deems necessary or appropriate
to carry out its primary activities;
(b) The Seller shall not engage in any business or activity, or incur
any indebtedness or liability, other than as expressly permitted by the
Transaction Documents;
(c) Not less than one member of the Seller's Board of Directors (the
"Independent Director") shall be an individual who is not a direct, indirect or
beneficial stockholder, officer, director, employee, affiliate, associate or
supplier of Eagle Materials, any other Originator or any of their respective
Affiliates. The organizational documents of the Seller shall provide that: (i)
the Seller's Board of Directors shall not approve, or take any other action to
cause the filing of, a voluntary bankruptcy petition with respect to the Seller
unless the Independent Director shall approve the taking of such action in
writing before the taking of such action, and (ii) such provision cannot be
amended without the prior written consent of the Independent Director;
(d) The Independent Director shall not at any time serve as a trustee in
bankruptcy for the Seller, Eagle Materials, any other Originator or any of their
respective Affiliates;
(e) Any employee, consultant or agent of the Seller will be compensated
from the Seller's funds for services provided to the Seller. The Seller will not
engage any agents other than its attorneys, auditors and other professionals,
and a servicer and any other agent contemplated by the Transaction Documents for
the Receivables Pool, which servicer will be fully compensated for its services
by payment of the Servicing Fee, and a manager, which manager will be fully
compensated from the Seller's funds;
(f) The Seller will contract with the Servicer to perform for the Seller
all operations required on a daily basis to service the Receivables Pool. The
Seller and the Issuer will pay the Servicer the Servicing Fee pursuant to
Sections 1.4 and 4.6. Except as contemplated by the Administrative Services
Agreement, the Seller will not incur any material indirect or overhead expenses
for items shared with Eagle Materials or any Originator (or any other Affiliate
thereof) that are not reflected in the Servicing Fee. To the extent, if any,
that the Seller (or any Affiliate thereof) shares items of expenses not
reflected in the Servicing Fee or the manager's fee, such as legal, auditing and
other professional services, such expenses will be allocated to the extent
practical on the basis of actual use or the value of services rendered, and
otherwise on a basis reasonably related to the actual use or the value of
services rendered; it being understood that Eagle Materials, in its capacity as
Servicer, shall pay all expenses relating to the preparation, negotiation,
execution and delivery of the Transaction Documents, including legal, agency and
other fees;
IV-8
(g) The Seller's operating expenses will not be paid by Eagle Materials
or any other Originator or any Affiliate thereof;
(h) The Seller will have its own separate stationery;
(i) The Seller's books and records will be maintained separately from
those of Eagle Materials, each Originator and any other Affiliate thereof;
(j) All financial statements of Eagle Materials or any Originator or any
Affiliate thereof that are consolidated to include Seller will contain detailed
notes clearly stating that: (i) a special purpose limited liability company
exists as a Subsidiary of Eagle Materials, and (ii) certain Subsidiaries of
Eagle Materials have, directly or indirectly, sold receivables and other related
assets to such special purpose Subsidiary that, in turn, has sold undivided
interests therein to certain financial institutions and other entities;
(k) The Seller's assets will be maintained in a manner that facilitates
their identification and segregation from those of Eagle Materials, the
Originators or any Affiliates thereof;
(l) The Seller will strictly observe corporate formalities in its
dealings with Eagle Materials, the Originators or any Affiliates thereof, and
funds or other assets of the Seller will not be commingled with those of Eagle
Materials, the Originators or any Affiliates thereof except as permitted by the
Agreement in connection with servicing the Pool Receivables. The Seller shall
not maintain joint bank accounts or other depository accounts to which Eagle
Materials or any Affiliate thereof (other than Eagle Materials in its capacity
as the Servicer) has independent access. The Seller is not named, and has not
entered into any agreement to be named, directly or indirectly, as a direct or
contingent beneficiary or loss payee on any insurance policy with respect to any
loss relating to the property of Eagle Materials, the Originators or any
Subsidiaries or other Affiliates thereof; and
(m) The Seller will maintain arm's-length relationships with Eagle
Materials, the other Originators (and any Affiliates thereof). Any Person that
renders or otherwise furnishes services to the Seller will be compensated by the
Seller at market rates for such services it renders or otherwise furnishes to
the Seller. Neither the Seller on the one hand, nor Eagle Materials or any other
Originator, on the other hand, will be or will hold itself out to be responsible
for the debts of the other or the decisions or actions respecting the daily
business and affairs of the other. The Seller, Eagle Materials and the other
Originators will immediately correct any known misrepresentation with respect to
the foregoing, and they will not operate or purport to operate as an integrated
single economic unit with respect to each other or in their dealing with any
other entity.
IV-9
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
(a) (i) the Seller, any Originator or the Servicer shall fail to perform
or observe any term, covenant or agreement under the Agreement or any other
Transaction Document and, except as otherwise provided herein, such failure
shall continue for ten (10) Business Days after knowledge or notice thereof or
(ii) the Seller or the Servicer shall fail to make when due any payment or
deposit to be made by it under the Agreement, and such failure shall remain
unremedied for one (1) Business Day;
(b) Eagle Materials (or any Affiliate thereof) shall fail to transfer to
any successor Servicer, when required, any rights pursuant to the Agreement that
Eagle Materials (or such Affiliate) then has as Servicer;
(c) any representation or warranty made or deemed made by the Seller,
the Servicer or any Originator (or any of their respective officers) under or in
connection with the Agreement or any other Transaction Document, or any
information or report delivered by the Seller, any Originator or the Servicer
pursuant to the Agreement or any other Transaction Document, shall prove to have
been incorrect or untrue in any material respect when made or deemed made or
delivered; provided, however, that if any such representation or warranty is of
a type described in Section 1.4(e) and related to a Receivable in connection
with which the Seller has satisfied in full its obligation with respect thereto
pursuant to such Section 1.4(e), then such breach shall not give rise to a
Termination Event under this paragraph (c);
(d) the Seller or the Servicer shall fail to deliver any Servicer Report
when due pursuant to the Agreement, and such failure shall remain unremedied for
two (2) Business Days;
(e) the Agreement or any purchase or reinvestment pursuant to the
Agreement shall for any reason: (i) cease to create, or the Purchased Interest
shall for any reason cease to be, a valid and enforceable first priority
perfected undivided percentage ownership or security interest to the extent of
the Purchased Interest in each Pool Receivable, the Related Security and
Collections with respect thereto, free and clear of any Adverse Claim, or (ii)
cease to create with respect to the Pool Assets, or the interest of the Issuer
with respect to such Pool Assets shall cease to be, a valid and enforceable
first priority perfected security interest, free and clear of any Adverse Claim;
(f) (i) the Seller, the Servicer or any Originator shall generally not
pay its debts as such debts become due, 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 the Seller,
the Servicer or any Originator seeking to adjudicate it a 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 or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted
V-1
by it), either such proceeding shall remain undismissed or unstayed for a period
of 60 days, or any of the actions sought in such proceeding (including the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or (iii) the Seller, the Servicer or any Originator shall
take any corporate action to authorize any of the actions set forth above in
this paragraph;
(g) (i) the (A) Default Ratio shall exceed 7.0% or (B) Delinquency Ratio
shall exceed 13.0% or (ii) the average for three consecutive calendar months of:
(A) the Default Ratio shall exceed 6.0%, (B) the Delinquency Ratio shall exceed
10.0%, or (C) the Dilution Ratio shall exceed 4.0%;
(h) a Change in Control shall occur;
(i) the Purchased Interest shall exceed 100%, and such condition shall
remain unremedied for two consecutive Business Days;
(j) the Seller, any Originator or Eagle Materials shall fail to pay any
principal of or premium or interest on any of its Debt that is outstanding in a
principal amount of at least $10,000,000 in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement, mortgage, indenture
or instrument relating to such Debt (whether or not such failure shall have been
waived under the related agreement); or any other event shall occur or condition
shall exist under any agreement, mortgage, indenture or instrument relating to
any such Debt and shall continue after the applicable grace period, if any,
specified in such agreement, mortgage, indenture or instrument (whether or not
such failure shall have been waived under the related agreement), if the effect
of such event or condition is to give the applicable debtholders the right
(whether acted upon or not) to accelerate the maturity of such Debt, or (b) any
such Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), redeemed, purchased
or defeased, or an offer to repay, redeem, purchase or defease such Debt shall
be required to be made, in each case before the stated maturity thereof;
(k) either the Internal Revenue Service or the Pension Benefit Guaranty
Corporation shall have filed one or more notices of lien asserting a claim or
claims pursuant to the Internal Revenue Code, or ERISA, as applicable, against
the assets of Seller, any Originator or any ERISA Affiliate;
(l) the Seller shall, at any time, fail to (i) cause to become
effective, any amendment or modification to any Transaction Document or (ii)
cause to be delivered, any opinions or modifications to opinions, in either
case, as required by Moody's and/or Standard & Poor's (in order to maintain the
then current rating by each such Rating Agency of the Issuer's Notes), and such
failure shall continue unremedied for 30 days following a request is made
therefor by the Issuer or the Administrator; or
(m) the Days' Sales Outstanding shall, at any time, exceed 55 days.
V-2
SCHEDULE I
CREDIT AND COLLECTION POLICY
Sch. I-1
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
LOCK-BOX BANKS LOCK-BOX ACCOUNTS
-------------- -----------------
Sch. II-1
ANNEX A
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF PURCHASE NOTICE
________, [20__]
PNC Bank, National Association
One PNC Plaza, 3rd Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement, dated as
of February 20, 2004 (as amended, supplemented or otherwise modified, the
"Receivables Purchase Agreement"), among EXP Funding, LLC, as Seller, Eagle
Materials Inc., as Servicer, Market Street Funding Corporation, as Issuer and
PNC Bank, National Association, as Administrator. Capitalized terms used in this
Purchase Notice and not otherwise defined herein shall have the meanings
assigned thereto in the Receivables Purchase Agreement.
This letter constitutes a Purchase Notice pursuant to Section 1.2(a) of
the Receivables Purchase Agreement. Seller desires to sell an undivided
percentage interest in a pool of receivables on ___________, [20__], for a
purchase price of $____________. Subsequent to this purchase, the aggregate
outstanding Capital will be $___________.
Seller hereby represents and warrants as of the date hereof, and as of the
date of such proposed purchase, as follows:
(i) the representations and warranties contained in Exhibit III to the
Agreement are true and correct in all material respects, as though made on
and as of each such date;
(ii) no event has occurred and is continuing, or would result from such
purchase, that constitutes a Termination Event or an Unmatured Termination
Event; and
(iii) the Capital, after giving effect to such purchase, shall not be greater
than the Purchase Limit, and the Purchased Interest shall not exceed 100%.
Annex A-1
IN WITNESS WHEREOF, the undersigned has caused this Purchase Notice to be
executed by its duly authorized officer as of the date first above written.
EXP FUNDING, LLC
By: _____________________________________
Name Printed:________________________
Title:_______________________________
Annex A-2
ANNEX B
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF PAYDOWN NOTICE
______________, _____
PNC Bank, National Association
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement, dated as
of February 20, 2004 (as amended, supplemented or otherwise modified, the
"Receivables Purchase Agreement"), among EXP Funding, LLC, as Seller, Eagle
Materials Inc., as Servicer, Market Street Funding Corporation, as Issuer and
PNC Bank, National Association, as Administrator. Capitalized terms used in this
Paydown Notice and not otherwise defined herein shall have the meanings assigned
thereto in the Receivables Purchase Agreement.
This letter constitutes a Paydown Notice pursuant to Section 1.4(f)(i) of
the Receivables Purchase Agreement. The Seller desires to reduce the aggregate
Capital on ____________, _____(1) by the application of $___________ in cash to
pay Capital and Discount to accrue (until such cash can be used to pay
commercial paper notes) with respect to such Capital, together with all costs
related to such reduction of Capital. Subsequent to this paydown, the aggregate
outstanding Capital will be $___________.
-----------------------
(1) Notice must be given at least two Business Days' prior to the requested
paydown date.
Annex B-1
IN WITNESS WHEREOF, the undersigned has caused this Paydown Notice to be
executed by its duly authorized officer as of the date first above written.
EXP FUNDING, LLC
By:___________________________________
Name:_________________________________
Title:________________________________
Annex B-2
ANNEX C
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF SERVICER REPORT
Annex C-1
