EXHIBIT 10.10
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
dated as of June 17, 1997
among
FALCON RECEIVABLE PROGRAM, INC.,
FALCON BUILDING PRODUCTS, INC.,
MARKET STREET FUNDING CORPORATION
and
PNC BANK, NATIONAL ASSOCIATION
TABLE OF CONTENTS
Page
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ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility. . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Making Purchases . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3. Purchased Interest Computation . . . . . . . . . . . . . . 3
Section 1.4. Settlement Procedures. . . . . . . . . . . . . . . . . . . 3
Section 1.5. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.6. Payments and Computations, Etc.. . . . . . . . . . . . . . 8
Section 1.7. Dividing or Combining Portions of the
Capital of the Purchased Interest. . . . . . . . . . . . 9
Section 1.8. Increased Costs. . . . . . . . . . . . . . . . . . . . . . 9
Section 1.9. Requirements of Law. . . . . . . . . . . . . . . . . . . .10
Section 1.10. Inability to Determine Eurodollar Rate . . . . . . . . . .11
ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants. . . . . . . . .12
Section 2.2. Termination Events . . . . . . . . . . . . . . . . . . . .12
ARTICLE III.
INDEMNIFICATION
Section 3.1. Indemnities by the Seller. . . . . . . . . . . . . . . . .12
Section 3.2. Indemnities by the Servicer. . . . . . . . . . . . . . . .14
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer. . . . . . . . . . . . . . . .15
Section 4.2. Duties of the Servicer . . . . . . . . . . . . . . . . . .16
Section 4.3. Lock-Box Arrangements. . . . . . . . . . . . . . . . . . .17
Section 4.4. Enforcement Rights . . . . . . . . . . . . . . . . . . . .18
Section 4.5. Responsibilities of the Seller . . . . . . . . . . . . . .19
Section 4.6. Servicing Fee. . . . . . . . . . . . . . . . . . . . . . .19
Section 4.7. Letter of Credit . . . . . . . . . . . . . . . . . . . . .20
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ARTICLE V.
MISCELLANEOUS
Section 5.1. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . .21
Section 5.2. Notices, Etc.. . . . . . . . . . . . . . . . . . . . . . .21
Section 5.3. Assignability. . . . . . . . . . . . . . . . . . . . . . .21
Section 5.4. Costs, Expenses and Taxes. . . . . . . . . . . . . . . . .22
Section 5.5. No Proceedings; Limitation on Payments . . . . . . . . . .23
Section 5.6. Confidentiality. . . . . . . . . . . . . . . . . . . . . .23
Section 5.7. GOVERNING LAW AND JURISDICTION . . . . . . . . . . . . . .24
Section 5.8. Execution in Counterparts. . . . . . . . . . . . . . . . .24
Section 5.9. Survival of Termination. . . . . . . . . . . . . . . . . .24
Section 5.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . .25
Section 5.11. Entire Agreement . . . . . . . . . . . . . . . . . . . . .25
Section 5.12. Headings . . . . . . . . . . . . . . . . . . . . . . . . .25
Section 5.13. Issuer's Liabilities . . . . . . . . . . . . . . . . . . .25
EXHIBIT I DEFINITIONS
EXHIBIT II CONDITIONS OF PURCHASES
EXHIBIT III REPRESENTATIONS AND WARRANTIES
EXHIBIT IV COVENANTS
EXHIBIT V TERMINATION EVENTS
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RECEIVABLES PURCHASE AGREEMENT
This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this "AGREEMENT") is
entered into as of June 17, 1997 among FALCON RECEIVABLE PROGRAM, INC., a
Delaware corporation, as seller (previously known as Centrally Held Eagle
Receivables Program, Inc., the "SELLER"), FALCON BUILDING PRODUCTS, INC., a
Delaware corporation ("FALCON"), 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 (together with its
successors and permitted assigns, the "ISSUER"), and PNC BANK, NATIONAL
ASSOCIATION, a national banking association ("PNC"), as administrator (in such
capacity, together with its successors and assigns in such capacity, the
"ADMINISTRATOR"), and as issuer of Letters of Credit (in such capacity, together
with its successors and assigns in such capacity, the "LETTER OF CREDIT
ISSUER").
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in EXHIBIT I to this Agreement.
References in the Exhibits hereto to "the Agreement" refer to this Agreement, as
amended, modified or supplemented from time to time.
The Seller desires to sell, transfer and assign an undivided variable
percentage interest in a pool of receivables, and the Issuer desires to acquire
such undivided variable 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 and additional incremental payments made to the Seller.
The parties hereto have entered into a Receivables Purchase Agreement (Non-
Designated Receivables), dated as of May 2, 1996 (the "ORIGINAL RPA"), which
agreement the parties wish to amend and restate hereby.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree that the Original RPA is hereby
amended and restated 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, and make
reinvestments of, undivided percentage ownership interests with regard to the
Purchased Interest from the Seller 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, the aggregate outstanding Capital of the Purchased Interest would
exceed the Purchase Limit.
(b) The Seller may, upon at least 30 days' written notice to the
Administrator, terminate the purchase facility provided in this SECTION 1.1 in
whole or, 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
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): (i) at
least three Business Days before the requested purchase date, in the case of a
purchase to be funded at the Alternate Rate and based upon the Eurodollar Rate,
(ii) at least two Business Days before the requested purchase date, in the case
of a purchase to be funded at the Alternate Rate and based upon the Base Rate,
and (iii) at least two Business Days before the requested purchase date, in the
case of a purchase to be funded at the CP Rate, which notice shall specify: (A)
the amount requested to be paid to the Seller (such amount, which shall not be
less than $5,000,000, 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) the desired funding basis for such purchase
(which shall be based upon the Eurodollar Rate, the Base Rate or the CP Rate).
If the Seller has requested that the purchase be funded at the CP Rate, the
Administrator shall promptly thereafter notify the Seller whether the Issuer has
exercised its discretion not to fund such purchase with 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, in which case the Seller shall be
deemed to have requested that the purchase be funded at the Alternate Rate and
based upon the Base Rate.
(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 hereto, make available to the Seller in same day funds, at Xxxxxx
Trust and Savings Bank, account # 000-000-0, ABA # 000-000-000, an amount equal
to the Capital relating to the undivided percentage ownership interest then
being purchased.
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(c) Effective on the date of each purchase pursuant to this SECTION
1.2 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 on its
own behalf and as agent, 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 its Sale Agreement with Falcon (including the rights of Falcon
against the Originators under the other Sale Agreement), 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 Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. The Purchased Interest as computed (or deemed
recomputed) as of the day before the Termination Date shall thereafter remain
constant. 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) Collection of the Pool
Receivables shall be administered by the Servicer in accordance with this
Agreement. The Seller shall provide to the Servicer on a timely basis all
information needed for such administration, including notice of the occurrence
of any Termination Day and current computations of the Purchased Interest.
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(b) The Servicer shall, on each day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or the Servicer:
(i) set aside and hold in trust (and, at the request of the
Administrator, segregate in a separate account approved by the
Administrator if, at the time of such request, there exists an Unmatured
Termination Event or a Termination Event or if the failure to so segregate
reasonably could be expected to cause a Material Adverse Effect) for the
Issuer, out of the Issuer's Share of such Collections, 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
Issuer's Share of such Collections; 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 the
Purchased Interest would exceed 100%, then the Servicer shall not reinvest,
but shall set aside and hold in trust for the Issuer (and shall, at the
request of the Administrator, segregate in a separate account approved by
the Administrator if, at the time of such request, there exists an
Unmatured Termination Event or a Termination Event or if the failure to so
segregate reasonably could be expected to cause a Material Adverse Effect)
a portion of such Collections that, together with the other Collections set
aside pursuant to this CLAUSE (ii), shall equal the amount necessary to
reduce the Purchased Interest to 100%; AND PROVIDED FURTHER, that any
Collections received from a Letter of Credit Obligor for which
disbursements have been made under a Letter of Credit shall be reimbursed
to the Letter of Credit Issuer pursuant to SECTION 4.7(b);
(iii) if such day is a Termination Day, set aside, segregate
and hold in trust for the Issuer the entire remainder of the Issuer's Share
of the Collections; PROVIDED, that if amounts are set aside and held in
trust on any Termination Day of the type described in clause (a) of the
definition of "Termination Day" and, thereafter, the conditions set forth
in Section 2 of EXHIBIT II are satisfied or waived by the Administrator,
such previously set aside amounts shall be reinvested in accordance with
CLAUSE (ii) above on the day of such subsequent satisfaction or waiver of
conditions; AND PROVIDED FURTHER, that any Collections received from a
Letter of Credit Obligor for
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which disbursements have been made under a Letter of Credit shall be
reimbursed to the Letter of Credit Issuer pursuant to SECTION 4.7(b); and
(iv) subject to the Issuer's security interest under SECTION
1.2(d), release to the Seller (subject to SECTION 1.4(f)) for its own
account any Collections in excess of: (x) amounts required to be
reinvested in accordance with CLAUSE (ii) or the first proviso to CLAUSE
(iii) PLUS (y) the amounts that are required to be set aside pursuant to
CLAUSE (i), the first proviso to CLAUSE (ii) and CLAUSE (iii) PLUS (z) the
Seller's Share of the Servicing Fee accrued and unpaid through such day and
all reasonable and appropriate out-of-pocket costs and expenses of the
Servicer for servicing, collecting and administering the Pool Receivables
PLUS (aa) amounts required to be reimbursed to the issuer of a Letter of
Credit in accordance with the second proviso to CLAUSE (ii) and/or the
second proviso to CLAUSE (iii) PLUS (bb) any amounts reimbursable by the
Seller to the issuer of a Letter of Credit pursuant to SECTION 4.7(b).
(c) The Servicer shall deposit into the Administration Account (or
such other account designated by the Administrator), on the last day of each
Settlement Period (or on the Alternative Settlement Date, if applicable)
relating to a Portion of Capital, Collections held for the Issuer pursuant to
SECTION 1.4(b)(i) or SECTION 1.4(f) with respect to such Portion of Capital PLUS
the lesser of: (i) the amount of Collections then held for the Issuer pursuant
to SECTION 1.4(b)(ii) and SECTION 1.4(b)(iii) and (ii) such Portion of Capital;
PROVIDED, that if Falcon is the Servicer and the Administrator has not notified
Falcon that such right is revoked, Falcon may retain the portion of the
Collections set aside pursuant to SECTION 1.4(b)(i) that represents the Issuer's
Share of the Servicing Fee. On the last day of each Settlement Period (or on
the Alternative Settlement Date, if applicable) relating to a Portion of
Capital, the Administrator will notify the Servicer by facsimile of the amount
of Discount accrued with respect to such Portion of Capital during such
Settlement Period or portion thereof.
(d) Upon receipt of funds deposited into the Administration Account
pursuant to SECTION 1.4(c), 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 such Portion of Capital, and SECOND, if the
Servicer has set aside amounts in respect of the Servicing Fee pursuant to
SECTION 1.4(b)(i) and has not retained such amounts pursuant to SECTION
1.4(c), to the Servicer (payable
5
in arrears on the last day of each Settlement Period) in payment in full of
the Issuer's Share of accrued Servicing Fees so set aside with respect to
such Portion of Capital; and
(ii) if such distribution occurs on a Termination Day or on a
day when the Purchased Interest exceeds 100%, FIRST to the Issuer in payment
in full of all accrued Discount with respect to such Portion of Capital,
SECOND to the Issuer in payment in full of such Portion of Capital (or, if
such day is not a Termination Day, the amount necessary to reduce the
Purchased Interest to 100%), THIRD, if Falcon or an Affiliate thereof is
not the Servicer, to the Servicer in payment in full of all accrued
Servicing Fees with respect to such Portion of Capital, 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 Falcon 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, unless such amount has been retained by the
Servicer pursuant to SECTION 1.4(c), then to the Servicer (if the Servicer
is Falcon or an Affiliate thereof) in payment in full of the Issuer's Share
of all accrued Servicing Fees.
Notwithstanding the foregoing, if the Seller has elected to reduce a Portion of
the Capital as of an Alternative Settlement Date pursuant to SECTION 1.4(f), on
such Alternative Settlement Date the Servicer shall deposit into the
Administration Account (or such other account designated by the Administrator)
the portion of the Collections set aside pursuant to SECTION 1.4(f), and such
amount shall be distributed to the Issuer in reduction of a Portion of the
Capital, as selected by the Issuer. 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 Seller or
any Affiliate of the Seller, or any setoff or dispute between the Seller or
any Affiliate of the Seller and an Obligor, or the Seller shall have
received a Deemed Collection under the Sale Agreements (in each case, other
than in respect of any
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Special Program Allowances), the Seller shall be deemed to have received on
such day a Collection of such Pool Receivable in the amount of such
reduction, adjustment or Deemed Collection;
(ii) if on any day any of the representations or warranties in
Section 1(h) or (o) 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;
(iii) except as provided in CLAUSE (i) or (ii) above, or as
otherwise 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;
(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; and
(v) on the Termination Date, the Seller shall be deemed to have
received on such day Collections of Pool Receivables equal to: (A) the
aggregate amount by which the Pool Receivables relating to the Special
Program Allowances have been discounted, adjusted or otherwise reduced as
noted in CLAUSE (i) MINUS (b) the Special Program Allowances.
(f) If at any time the Seller shall wish to cause the reduction of a
Portion of Capital (but not to commence the liquidation, or reduction to zero,
of the entire Capital of the Purchased Interest), the Seller may do so as
follows:
(i) the Seller shall give the Administrator and the Servicer at
least two Business Days' prior written notice thereof (or at least three
Business Days with regard to an Alternative Settlement Date) (including the
amount of such proposed reduction and the proposed date on which such
reduction will commence),
(ii) on the proposed date of commencement of such reduction and
on each day thereafter, the Servicer shall cause Collections with respect
to such Portion of Capital
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not to be reinvested until the amount thereof not so reinvested shall equal
the desired amount of reduction, and
(iii) the Servicer shall hold such Collections in trust for
the Issuer, for payment to the Administrator on the last day of the current
Settlement Period relating to such Portion of Capital or on the next
Alternative Settlement Date (as specified by the Seller), and the
applicable Portion of 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
$1,000,000 and shall be an integral multiple of $250,000, and the entire
Capital of the Purchased Interest after giving effect to such reduction
shall be not less than $20,000,000 and shall be in an integral multiple of
$250,000,
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 Settlement Period, and
C. if two or more Portions of Capital are outstanding at the time of
any proposed reduction, such proposed reduction shall be applied, unless
the Seller shall otherwise specify in the notice given pursuant to CLAUSE
(f)(i), to the Portion of Capital with the shortest remaining Settlement
Period (or, if all such Portions of Capital have the same Settlement
Period, pro rata).
Section 1.5. FEES. The Seller shall pay to the Administrator certain fees
in the amounts and on the dates set forth in a letter, dated the date hereof,
among Falcon, the Seller and the Administrator (as such letter agreement may be
amended, supplemented or otherwise modified from time to time, 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 paid or deposited
no later than noon (New York City time) on the day when due in same day funds to
the Administration Account. All amounts received after noon (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.
8
(c) All computations of interest under SUBSECTION (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
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. DIVIDING OR COMBINING PORTIONS OF THE CAPITAL OF THE
PURCHASED INTEREST. The Seller may, on the last day of any Settlement Period,
pursuant to written notice delivered to the Administrator in accordance with
SECTION 5.2: (a) at least three Business Days before such last day in the case
of a Portion of Capital to be funded based upon the Eurodollar Rate and (b) at
least two Business Days before such last day in all other cases, either: (i)
divide the Capital of the Purchased Interest into two or more portions (each, a
"PORTION OF CAPITAL"), which Portions of Capital may accrue Discount by
reference to different rates, equal, in aggregate, to the Capital of the
Purchased Interest; PROVIDED, that after giving effect to such division the
amount of each such Portion of Capital shall be not less than $1,000,000 and
shall be an integral multiple of $250,000, or (ii) combine any two or more
Portions of Capital outstanding on such last day and having Settlement Periods
ending on such last day into a single Portion of Capital equal to the aggregate
of the Capital of such Portions of Capital.
Section 1.8. INCREASED COSTS. (a) If the Administrator, the Issuer, any
Purchaser, 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 or regulation or any change therein or in
the interpretation or application thereof, in each case adopted, issued or
occurring after the date hereof, or (ii) any request, guideline or directive
from any central bank or other Governmental Authority (whether or not having the
force of law) issued or occurring after the date of this Agreement, 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
related to this Agreement 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 immediately
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
9
the existence of any of such commitments. 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, 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 in respect of which
Discount is computed by reference to the Eurodollar Rate, then, upon demand by
such Affected Person, the Seller shall immediately 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 1.9. REQUIREMENTS OF LAW. If any Affected Person reasonably
determines that the existence of or compliance with: (i) any law or regulation
or any change therein or in the interpretation or application thereof, in each
case adopted, issued or occurring after the date hereof, or (ii) any request,
guideline or directive from any central bank or other Governmental Authority
(whether or not having the force of law) issued or occurring after the date of
this Agreement:
(a) 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 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 pre-tax net 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);
(b) 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
10
that are not otherwise included in the determination of the Eurodollar Rate
or the Base Rate hereunder; or
(c) does or shall impose on such Affected Person any other condition;
and the result of any of the foregoing is: (x) to increase the cost to such
Affected Person of acting as Administrator, or 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 (y) to reduce any amount receivable hereunder (whether
directly or indirectly), then, in any such case, upon demand by such Affected
Person, the Seller shall immediately 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 from such Affected Person to the Seller and the Administrator
certifying, in reasonably specific detail, the basis for, calculation of, and
amount of such additional costs or reduced amount receivable shall be conclusive
and binding for all purposes, absent manifest error; PROVIDED, HOWEVER, that no
Affected Person shall be required to disclose any confidential or tax planning
information in any such certificate.
Section 1.10. INABILITY TO DETERMINE EURODOLLAR RATE. If the
Administrator shall have determined before the first day of any Settlement
Period (which determination shall be conclusive and binding upon the parties
hereto), by reason of circumstances affecting the interbank Eurodollar market,
either that: (a) dollar deposits in the relevant amounts and for the relevant
Settlement Period are not available, (b) adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Settlement Period or (c) the
Eurodollar Rate determined pursuant hereto does not accurately reflect the cost
to the Issuer (as conclusively determined by the Administrator) of maintaining
any Portion of Capital during such Settlement Period, the Administrator shall
promptly give telephonic notice of such determination, confirmed in writing, to
the Seller before the first day of such Settlement Period. Upon delivery of
such notice: (i) no Portion of Capital shall be funded thereafter at the
Alternate Rate determined by reference to the Eurodollar Rate unless and until
the Administrator shall have given notice to the Seller that the circumstances
giving rise to such determination no longer exist, and (ii) with respect to any
outstanding Portions of Capital then funded at the Alternate Rate determined by
reference to the Eurodollar Rate, such Alternate Rate shall automatically be
converted to the Alternate Rate determined by reference to the Base Rate at the
respective last days of the then-current Settlement Periods relating to such
Portions of Capital.
11
ARTICLE II.
REPRESENTATIONS AND WARRANTIES;
COVENANTS; TERMINATION EVENTS
Section 2.1. REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
Seller, Falcon 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 (at the direction of, or
with the consent of, the Majority Purchasers under the Liquidity Facility;
PROVIDED, that no such direction or consent shall be necessary if there are no
outstanding purchases under the Liquidity Facility), 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)(i) 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 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 Letter of Credit Issuer, any Program
Support Provider or any of their respective Affiliates, employees, agents,
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, losses
and liabilities (including Attorney Costs) (all of the foregoing being
collectively referred to as "INDEMNIFIED AMOUNTS") 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
Receivables that are uncollectible due to the inability of the Obligor to pay,
or (c) any overall net income taxes or franchise taxes imposed on such
Indemnified Party by the jurisdiction under the laws of which such Indemnified
Party is
12
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 (which demand shall be
accompanied by documentation of the Indemnified Amounts, in reasonable detail)
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 an Information
Package 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 statement 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 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 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, and (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 Obligor) of the 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
13
goods or services or relating to collection activities with respect to such
Receivable (if such collection activities were performed by the Seller or
any of its Affiliates acting as Servicer or by any agent or independent
contractor retained by the Seller or any of its Affiliates);
(vii) any failure of the Seller (or any of its Affiliates acting
as the Servicer) to perform its duties or obligations in accordance with
the provisions hereof or under the Contracts;
(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, 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 an Information Package to be true and correct, or
the failure of any other information provided to the Issuer or the Administrator
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 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.
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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 Falcon (in accordance with
this Section) of the designation of a new Servicer, Falcon 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, the
Administrator may designate as Servicer any Person (including itself) to succeed
Falcon 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), Falcon 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 Falcon
shall cooperate with and assist such new Servicer. Such cooperation shall
include access to and transfer of records and use by the new Servicer of all
licenses, hardware or software necessary or desirable to collect the Pool
Receivables and the Related Security.
(c) Falcon acknowledges that, in making their decision to execute and
deliver this Agreement, the Administrator and the Issuer have relied on Falcon's
agreement to act as Servicer hereunder. Accordingly, Falcon agrees that it will
not voluntarily resign as Servicer.
(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 Originator,
the Administrator shall have consented in writing in advance to such delegation.
15
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 the Collections to which each is entitled in accordance with ARTICLE
II. The Servicer may, in accordance with the applicable Credit and Collection
Policy, extend the maturity of any Pool Receivable (but not beyond 30 days) and
extend the maturity or adjust the Outstanding Balance of any Defaulted
Receivable as the Servicer may determine to be appropriate to maximize
Collections thereof; PROVIDED, HOWEVER, that: (i) such extension or adjustment
shall not alter the status of such Pool Receivable as a Delinquent Receivable or
a Defaulted Receivable or limit the rights of the Issuer or the Administrator
under this Agreement and (ii) if a Termination Event has occurred and Falcon or
an Affiliate thereof is serving as the Servicer, Falcon or such Affiliate may
make such extension or adjustment only upon the prior written approval of the
Administrator. The Seller shall deliver to the Servicer and the Servicer shall
hold for the benefit of the Seller and the Administrator (for the benefit of the
Issuer and individually), 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 Falcon 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: (x) a
Termination Event has occurred or (y) the Administrator believes in good faith
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 Falcon 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; PROVIDED, HOWEVER, if Falcon or an Affiliate thereof is not the
Servicer, the Servicer shall not be under any obligation to remit any such funds
to the Seller unless and until the Servicer has received from the Seller
evidence satisfactory to the Administrator and the Servicer that the Seller is
entitled to such funds hereunder and under applicable law. The Servicer, if
other than Falcon 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
16
copies of records in its possession that evidence or relate to any indebtedness
that is a Pool Receivable.
(c) Notwithstanding anything to the contrary contained in this
Article, the Servicer, if not Falcon or an Affiliate thereof, shall have no
obligation to collect, enforce or take any other action described in this
Article with respect to any indebtedness that is not a Pool Receivable other
than to deliver to the Seller the collections and documents with respect to any
such indebtedness as described in CLAUSE (b). It is expressly understood and
agreed by the parties that such Servicer's duties in respect of any indebtedness
that is not a Pool Receivable are set forth in this Section in their entirety.
Upon delivery by such Servicer to the Seller of funds or records relating to any
indebtedness that is not a Pool Receivable, such Servicer shall have discharged
in full all of its responsibilities to make any such delivery.
(d) The Servicer's obligations hereunder shall terminate on the later
of: (i) the Facility Termination Date and (ii) the date on which all amounts
required to be paid to the Issuer, the Administrator and any other Indemnified
Party or Affected Person hereunder shall have been paid in full.
After such termination, if Falcon 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. LOCK-BOX ARRANGEMENTS. Before the initial purchase
hereunder, the Seller shall enter into Lock-Box Agreements with all of the
Lock-Box Banks and deliver original counterparts thereof to the Administrator.
Upon the occurrence of a Termination Event, the Administrator may at any time
thereafter 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: (a) to have the exclusive ownership and control of the Lock-Box
Accounts transferred to the Administrator and to exercise exclusive dominion and
control over the funds deposited therein, (b) to have the proceeds that are sent
to the respective Lock-Box Accounts be redirected pursuant to the
Administrator's instructions rather than deposited in the applicable Lock-Box
Account, and (c) 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
17
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 the Administrator shall distribute or cause to be distributed such
funds in accordance with SECTION 4.2(b) (including the proviso thereto) and
ARTICLE II (in each case as if such funds were held by the Servicer thereunder).
Section 4.4. ENFORCEMENT RIGHTS. (a) At any time following the occurrence
of a Termination Event:
(i) the Administrator may direct the Obligors that payment of
all amounts payable under any Pool Receivable is to be made directly to the
Administrator or its designee;
(ii) the Administrator may instruct the Seller or the Servicer
to give notice of the Issuer's interest in Pool Receivables to each Obligor,
which notice shall direct that payments be made directly to the
Administrator or its designee, and the Seller or the Servicer, as the case
may be, shall give such notice at the expense of the Seller or the
Servicer, as the case may be; PROVIDED, that if the Seller or the Servicer,
as the case may be, fails to so notify each Obligor, the Administrator (at
the Seller's or the Servicer's, as the case may be, expense) may so notify
the Obligors; and
(iii) the Administrator may request the Servicer to, and upon
such request the Servicer shall: (A) assemble all of the records necessary
or desirable to collect the Pool Receivables and the Related Security, and
transfer or license to a successor Servicer the use of all software
necessary or desirable to collect the Pool Receivables and the Related
Security, and make the same available to the Administrator or its designee
at a place selected by the Administrator, and (B) segregate all cash,
checks and other instruments received by it from time to time constituting
Collections in a manner acceptable to the Administrator and, promptly upon
receipt, remit all such cash, checks and instruments, duly endorsed or with
duly executed instruments of transfer, to the Administrator or its
designee.
(b) The Seller hereby authorizes the Administrator, and irrevocably
appoints the Administrator as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of the Seller, which
appointment is coupled with an interest, to take any and all steps in the name
of the Seller and on behalf of the Seller necessary or desirable, in the
determination of the Administrator, after the occurrence of a Termination Event,
to collect any and all amounts or portions thereof due under any and all Pool
Assets, including endorsing
18
the name of the Seller on checks and other instruments representing Collections
and enforcing such Pool Assets. 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: (i) perform all of its obligations
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
either of them be obligated to perform any of the obligations of the Seller,
Falcon or the Originators thereunder.
(b) Falcon 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,
Falcon shall conduct the data-processing functions of the administration of the
Receivables and the Collections thereon in substantially the same way that
Falcon 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 0.25% PER ANNUM of the 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 by the Seller.
(b) If the Servicer ceases to be Falcon 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.
Section 4.7. LETTER OF CREDIT. (a) Pursuant to each Letter of Credit, the
Issuer may, in certain circumstances, request disbursements thereunder with
respect to the Defaulted Receivables of the applicable Letter of Credit Obligor.
Such disbursements shall be deemed to be Collections with respect to
19
such Defaulted Receivables and shall be applied in accordance with the
allocation provisions of SECTION 1.4(d)(ii).
(b) Upon the receipt of any Collections with respect to such
Defaulted Receivables after any disbursements under a Letter of Credit have been
made, such Collections shall be reimbursed to the Letter of Credit Issuer until
the Letter of Credit Issuer has received an amount equal to the aggregate amount
of all disbursements. Should such amounts prove to be insufficient to reimburse
the Letter of Credit Issuer in full, the Letter of Credit Issuer shall be
reimbursed for any such shortfall by the Servicer (on behalf of the Seller) from
the amounts, if any, payable to the Seller pursuant to SECTION 1.4(b)(iv).
(c) The Seller shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. The payment of
drafts under any Letter of Credit shall be made in accordance with the terms of
such Letter of Credit and, in that connection, the Letter of Credit Issuer shall
be entitled to honor any drafts and accept any documents presented to it by the
beneficiary of such Letter of Credit in accordance with the terms of such Letter
of Credit and believed by the Letter of Credit Issuer in good faith to be
genuine. The Letter of Credit Issuer shall not have any duty to inquire as to
the accuracy or authenticity of any draft or other drawing documents which may
be presented to it, but shall be responsible only to determine that the
documents delivered in connection with a drawing under such Letter of Credit
comply on their face with the requirements of that Letter of Credit. In
furtherance and extension and not in limitation or derogation of any of the
foregoing, any action taken or omitted to be taken by the Letter of Credit
Issuer in good faith in connection with the foregoing shall not put the Letter
of Credit Issuer under any resulting liability to the Seller or any other
Person.
(d) Notwithstanding anything in this Agreement to the contrary, upon
any payment made by the Letter of Credit Issuer under any Letter of Credit
honoring a demand for payment made by the beneficiary thereof, the Letter of
Credit Issuer shall not be liable to any other Person for or in respect of any
amounts paid or disbursed for any reason whatsoever, including, without
limitation, the failure of such Person to receive or any delay by such Person in
receiving all or any part of the amount so paid or disbursed, or any non-
application or misapplication by such beneficiary of the proceeds of such
payment or disbursement.
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
the Seller or the
20
Servicer therefrom, shall be effective unless in a writing signed by the
Administrator, 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 no such 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. ASSIGNABILITY. (a) 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), any
Purchaser or other Program Support Provider 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 (that shall have agreed to be bound by
SECTION 5.6) any information relating to the Servicer, the Seller or the Pool
Receivables furnished to such assignor by or on behalf of the Servicer, the
Seller, the Issuer or the Administrator.
(b) The Issuer may at any time grant to one or more banks or other
institutions (each a "PURCHASER") 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 Purchaser or other Program Support Provider, the Issuer shall
remain responsible for the performance of its obligations hereunder. The Seller
agrees that each Purchaser or other
21
Program Support Provider shall be entitled to the benefits of SECTIONS 1.8 and
1.9.
(c) 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.
(d) Except as provided in SECTION 4.1(d), neither the Seller nor the
Servicer may assign its rights or delegate its obligations hereunder or any
interest herein without the prior written consent of the Administrator.
(e) Without limiting any other rights that may be available under
applicable law, the rights of the Issuer may be enforced through it or by its
agents.
(f) Notwithstanding the other provisions of this Section, no assignee
pursuant to CLAUSE (a) or grantee pursuant to CLAUSE (b) (other than, in either
case, any Affiliate of PNC, any Purchaser that was party to the Liquidity
Agreement on the date hereof or any other Person as to which the Seller has
provided its consent pursuant to CLAUSE (a)) shall be entitled to receive any
greater amount pursuant to SECTIONS 1.8 or 1.9 than the assignor or grantor, as
applicable, would have been entitled to receive in respect of the Purchased
Interest or rights and obligations herein.
Section 5.4. COSTS, EXPENSES AND TAXES. (a) In addition to the rights of
indemnification granted under SECTION 3.1, and subject to the Engagement Letter
and the Fee Letter, the Seller agrees to pay on demand (which demand shall be
accompanied by documentation thereof in reasonable detail) all costs and
expenses in connection with the preparation, execution, delivery and
administration (including periodic internal audits by the Administrator of Pool
Receivables) of this Agreement, the other Transaction Documents and the other
documents and agreements to be delivered hereunder (and all costs and expenses
in connection with any amendment, waiver or modification of any thereof),
including: (i) Attorney Costs for the Administrator, the Issuer and their
respective Affiliates and agents with respect thereto and with respect to
advising the Administrator, the Issuer and their respective Affiliates and
agents as to their rights and remedies under this Agreement and the other
Transaction Documents, and (ii) all costs and expenses (including Attorney
Costs), if any, of the Administrator, the Issuer and their respective Affiliates
and agents in connection with the enforcement of this Agreement and the other
Transaction Documents; PROVIDED, HOWEVER, that the Seller shall not be
responsible for the costs and expenses (including Attorney Costs)
22
of Purchasers (in their capacities as such) under the Liquidity Agreement other
than such costs and expenses in connection with the enforcement of this
Agreement or any other Transaction Document.
(b) In addition, the Seller shall pay on demand any and all stamp and
other taxes and fees payable in connection with the execution, delivery, filing
and recording of this Agreement or the other documents or agreements to be
delivered hereunder, and agrees to save each Indemnified Party harmless from and
against any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
Section 5.5. NO PROCEEDINGS; LIMITATION ON PAYMENTS. Each of the Seller,
the Servicer, the Administrator, the Letter of Credit Issuer, each assignee of
the Purchased Interest or any interest therein, and each Person that enters into
a commitment to purchase the Purchased Interest or interests 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.
Section 5.6. CONFIDENTIALITY. Unless otherwise required by applicable
law, 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 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 Seller's legal counsel and
auditors if they agree to hold it confidential and (c) third parties to the
extent such disclosure is required by the Credit Facility. Unless otherwise
required by applicable law, each of the Administrator and the Issuer agrees to
maintain the confidentiality of non-public financial information regarding
Falcon and its Subsidiaries and other non-public information marked as
confidential by the Servicer or the Seller; PROVIDED, that such information may
be disclosed to: (i) third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to Falcon, (ii) legal counsel and auditors of the Issuer
or the Administrator if they agree to hold it confidential, (iii) the rating
agencies rating the Notes, (iv) any Program Support Provider or potential
Program Support Provider, (v) any placement agent placing the Notes and (vi) any
regulatory authorities having jurisdiction over PNC, the Issuer, any Program
Support Provider or any Purchaser.
Section 5.7. GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
23
THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF), EXCEPT TO THE EXTENT THAT THE PERFECTION (OR THE EFFECT OF
PERFECTION OR NON-PERFECTION) OF THE INTERESTS OF THE ISSUER IN THE POOL ASSETS
IS 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 FOR
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 NEW YORK 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 1.8,
1.9, 3.1, 3.2, 4.7(b), 5.4, 5.5, 5.6, 5.7, 5.10 and 5.13 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, except for any prior arrangements made with respect to
24
the payment by the Issuer of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the
Seller, the Servicer and the Administrator.
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.
Section 5.13. ISSUER'S LIABILITIES. The obligations of the Issuer under
the Transaction Documents are solely the corporate obligations of the Issuer.
No recourse shall be had for any obligation or claim arising out of or based
upon any Transaction Document against any stockholder, employee, officer,
director or incorporator of the Issuer; PROVIDED, HOWEVER, that this Section
shall not relieve any such Person of any liability it might otherwise have for
its own gross negligence or willful misconduct.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
25
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
FALCON RECEIVABLE PROGRAM, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Address:
Falcon Receivable Program, Inc.
Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
FALCON BUILDING PRODUCTS, INC.
By: /s/ Xxx X. Xxxxx
-----------------------------------
Name: Xxx X. Xxxxx
Title: Senior Vice President
Address:
Falcon Building Products, Inc.
Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
00
XXXXXX XXXXXX FUNDING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------------
Title: President
-----------------------------
Address:
Market Street Funding Corporation
c/o AMACAR Group, L.L.C.
0000-X Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
PNC Bank, National Association
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Xx.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Attorney-in-Fact
Address:
PNC Bank, National Association
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Xx.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
27
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.
"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 the Issuer or the Administrator
(for the benefit of the Issuer) shall not constitute an Adverse Claim.
"AFFECTED PERSON" has the meaning set forth in Section 1.8 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), except that with
respect to the Issuer, Affiliate shall mean the holder(s) of its capital
stock. 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.
"AGREEMENT" has the meaning set forth in the preamble to the
Agreement.
"ALTERNATE RATE" for any Settlement Period for any Portion of
Capital of the Purchased Interest means an interest rate PER ANNUM equal to,
at the Seller's option: (a) 1.50% PER ANNUM above the Eurodollar Rate for
such Settlement Period, or (b) the Base Rate for such Settlement Period;
PROVIDED, HOWEVER, that in the case of:
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-1
(i) any Settlement Period on or before the first
day of which the Administrator shall have been notified by the
Issuer, a Purchaser or any other Program Support Provider 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
the Issuer, such Purchaser or other Program Support Provider, as
applicable, to fund any Portion of Capital based on the
Eurodollar Rate (and the Issuer, such Purchaser or other Program
Support Provider shall not have subsequently notified the
Administrator that such circumstances no longer exist),
(ii) any Settlement Period of one to (and including)
15 days,
(iii) any Settlement Period as to which: (A) the
Administrator does not receive notice before noon (New York City
time) on: (1) the second Business Day preceding the first day
of such Settlement Period that the Seller desires that the
related Portion of Capital be funded at the CP Rate or (2)
the third Business Day preceding the first day of such
Settlement Period that the Seller desires that the related
Portion of Capital be funded at the Alternate Rate and based
on the Eurodollar Rate, or (B) the Seller has given the notice
contemplated by CLAUSE (A)(1) and the Administrator shall have
notified the Seller that funding the related Portion of Capital
at the CP Rate is (in the Administrator's sole discretion)
economically inadvisable to the Issuer, the Administrator,
the Seller or any similarly situated Person or the Issuer is not
permitted to issue Notes to fund the Purchased Interest
hereunder, or
(iv) any Settlement Period relating to a Portion of
Capital that is less than $5,000,000,
the "ALTERNATE RATE" for each such Settlement Period shall be an interest
rate PER ANNUM equal to the Base Rate in effect on each day of such
Settlement Period. The "ALTERNATE RATE" for any day while a Termination
Event or Unmatured Termination Event exists shall be an interest rate equal
to 2% PER ANNUM above the Base Rate in effect on such day.
"ALTERNATIVE SETTLEMENT DATE" means the last Business Day of a
Fiscal Month.
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost
of internal legal services and all 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.
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-2
"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.
"BENEFIT PLAN" means any employee benefit pension plan as
defined in Section 3(2) of ERISA in respect of which the Seller, any
Originator, Falcon 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 New York City,
New York or Pittsburgh, Pennsylvania, and (b) if this definition of "Business
Day" is utilized in connection with the Eurodollar Rate, dealings are carried
out in the London interbank market.
"BUYER NOTE" has the meaning set forth in the Sale Agreement
between the Seller and Falcon.
"CAPITAL" means the amount paid to the Seller in respect of
the Purchased Interest by the Issuer pursuant to the Agreement, or such
amount divided or combined in accordance with Section 1.7 of the Agreement,
in each case reduced from time to time by Collections distributed and applied
on account of such Capital pursuant to Section 1.4(d) of 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:
(a) Falcon ceases to own, directly or indirectly, 100% of
the capital stock of the Seller, or a majority of the capital
stock of any Originator, free and clear of all Adverse Claims,
(b) at any time before an IPO by Falcon, the Investors or
any of their Affiliates (PROVIDED, that, for purposes of this
definition only, the reference to 25% in the definition
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-3
of Affiliate shall be deemed to be 51%) shall cease to own,
directly or indirectly, in the aggregate, at least 51% of the
issued and outstanding voting stock of Falcon, free and clear
of all Liens,
(c) at any time after an IPO of Falcon, if any Person
(other than the Investors, any of their Affiliates, any Person
that is a member of senior management of Falcon, any entity the
majority of the equity ownership interests of which is owned by
such senior management of Falcon or any Person acting in the
capacity of an underwriter), whether singly or in concert with
one or more Persons, shall, directly or indirectly, have
acquired: (i) 30% or more, on a fully diluted basis, of the
outstanding common stock of Falcon, or (ii) by voting power,
contract or otherwise: (A) the power to vote or direct the
voting of 30% or more, on a fully diluted basis, of the
outstanding common stock of Falcon or (B) the power to elect or
designate for election a majority of the Board of Directors
of Falcon,
(d) Falcon shall directly or indirectly transfer, assign,
convey or lease, whether in one transaction or in a series of
transactions, all or substantially all of its assets (whether
now owned or hereafter acquired) to any other Person(s), or
(e) Falcon shall be a party to any merger or consolidation
in which Falcon is not a surviving entity.
"COLLECTIONS" means, with respect to any Pool Receivable:
(a) all funds that are received by any Originator, Falcon, 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 the payment of
such Pool Receivable and available to be applied thereon), (b)
all Collections deemed to have been received pursuant to
Section 1.4(e) of the Agreement and (c) all other proceeds of
such Pool Receivable.
"CONCENTRATION PERCENTAGE" means: (a) for any Group A
Obligor, 100%, (b) for any Group B Obligor, 10%, except for Sears, Xxxxxxx &
Co., whose Concentration Percentage shall be 20% so long as Sears, Xxxxxxx &
Co. qualifies as a Group B Obligor, and Xxxx'x Companies, Inc., whose
Concentration Percentage shall be 20% so long as Xxxx'x Companies, Inc.
qualifies as a Group B Obligor; (c) for any Group C Obligor, 7% and (d) for
any Group D Obligor, 5%.
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-4
"CONCENTRATION RESERVE" means, at any time: (a) the aggregate
Capital at such time MULTIPLIED BY (b) (i) the Concentration Reserve
Percentage DIVIDED BY (ii) 100% MINUS the Concentration Reserve Percentage.
"CONCENTRATION RESERVE PERCENTAGE" means, at any time, the
largest of: (a) the sum of the four largest Group D Obligor Percentages, (b)
the sum of the two largest Group C Obligor Percentages and (c) the largest
Group B Obligor Percentage.
"CONSOLIDATED ORIGINATOR" means a group of Originators, which
may consist of one Originator, comprised of all those Originators that are
consolidated together for the purposes of one of such Originator's financial
statements.
"CONTRACT" means, with respect to any Receivable, any and all
contracts, understandings, 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" for any Settlement Period for any Portion of Capital
means a rate PER ANNUM calculated by the Administrator equal to: (a) the
rate (or if more than one rate, the weighted average of the rates) at which
Notes of the Issuer on each day during such period have been sold by any
placement agent or commercial paper dealer selected by the Administrator on
behalf of the Issuer; PROVIDED, that if such rate(s) is a discount rate(s),
then the CP Rate shall be the rate (or if more than one rate, the weighted
average of the rates) resulting from converting such discount rate(s) to an
interest-bearing equivalent rate PER ANNUM, PLUS (b) the commissions and
charges charged by such placement agent or commercial paper dealer with
respect to such Notes, expressed as a percentage of the face amount of such
Notes and converted to an interest-bearing equivalent rate PER ANNUM. The
"CP RATE" for any day while a Termination Event or Unmatured Termination
Event exists shall be an interest rate equal to 2% PER ANNUM above the Base
Rate in effect on such day.
"CREDIT AND COLLECTION POLICY" means, as the context may
require, those receivables credit and collection policies and practices of
each Originator in effect on the date of the Agreement and described in
Schedule I to the Agreement, as modified in compliance with the Agreement.
"CREDIT FACILITY" means the Credit Agreement, dated as of June
17, 1997, among Falcon, as Borrower, the lenders from time to time party
thereto, Chase Securities, Inc., as Arranger, Bankers Trust Company, as
Documentation Agent, and The Chase Manhattan Bank, as Administrative Agent.
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-5
"DAYS' SALES OUTSTANDING" means, for any Settlement Period:
(a) the Outstanding Balance of all Pool Receivables at the end of such
Settlement Period DIVIDED BY (b) (i) the aggregate credit sales made by all
the Originators during the three Fiscal Months ended on or before the last
day of such Settlement Period DIVIDED BY (ii) the number of days in such
three-month period.
"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, (d) obligations as lessee under leases that shall have been or
should be, in accordance with generally accepted accounting principles,
recorded as capital leases, (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), and (f) liabilities in respect of unfunded vested
benefits under plans covered by Title IV of ERISA.
"DEEMED COLLECTION" has the meaning assigned thereto in the Sale
Agreements.
"DEFAULT RATIO" means the ratio (expressed as a percentage and
rounded to the nearest 1/100 of 1%, with 5/1000 of 1% rounded upward) computed
as of the last day of each Fiscal Month by dividing: (a) the aggregate
Outstanding Balance of all Pool Receivables that became Defaulted Receivables
during such month PLUS, without double counting, the aggregate Outstanding
Balance of all Pool Receivables as to which a payment, or part thereof,
remained unpaid for less than 91 days from the original due date for such
payment and that was written off as uncollectible during such month, by
(b) the aggregate credit sales made by all the Originators during the month
that is five Fiscal Months before such month. For purposes of calculating the
Loss Reserve Percentage (Originator) for any Consolidated Originator, the
Default Ratio will be calculated as if such Consolidated Originator were the
only Originator hereunder.
"DEFAULTED RECEIVABLE" means a Receivable:
(a) as to which any payment, or part thereof, remains
unpaid for more than 90 days from the original due date for such
payment; or
(b) as to which the Obligor thereof or any other Person
obligated thereon or owning any Related Security in respect
thereof has taken any action, or suffered any event to occur, of
the type described in paragraph (f) of Exhibit V to the
Agreement and that, consistent with the applicable Credit and
Collection Policy, would be written off the Seller's books as
uncollectible.
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-6
"DELINQUENCY RATIO" means the ratio (expressed as a percentage
and rounded to the nearest 1/100 of 1%, with 5/1000 of 1% rounded upward)
computed as of the last day of each Fiscal 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 Pool 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 Fiscal Month, the ratio
(expressed as a percentage and rounded to the nearest 1/100th of 1%, with
5/1000 of 1% rounded upward) of: (a) the aggregate credit sales made by all
the Originators during the most recent Fiscal Month and the preceding 15 days
to (b) the aggregate Outstanding Balance of the Eligible Receivables at the
last day of such Fiscal Month.
"DILUTION RATIO" means, for any Fiscal Month, the ratio
(expressed as a percentage and rounded to the nearest 1/100th of 1%, with
5/1000 of 1% rounded upward) of: (a) the aggregate amount of payments made or
owed by the Seller pursuant to Section 1.4 (e)(i) of the Agreement during such
Fiscal Month to (b) the aggregate credit sales made by all the Originators
during the prior Fiscal Month. For purposes of calculating the Dilution
Reserve Percentage (Originator) and the Spike Factor for any Consolidated
Originator, the Dilution Ratio will be calculated as if such Consolidated
Originator were the only Originator hereunder.
"DILUTION RESERVE" means, on any day, an amount equal to: (a)
the 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) 100%
MINUS the Dilution Reserve Percentage on such date.
"DILUTION RESERVE PERCENTAGE" means, as of any date, the
greater of: (a) 5% and (b) the Dilution Horizon TIMES the sum of: (i) the
weighted average of each Consolidated Originator's Dilution Reserve
Percentage (Originator) and (ii) the weighted average of each Consolidated
Originator's Spike Factor, both calculated based upon the ratio of each
Consolidated Originator's originated Pool Receivables to the total Pool
Receivables.
"DILUTION RESERVE PERCENTAGE (ORIGINATOR)" means a percentage
(calculated for each Consolidated Originator as of the end of each Fiscal
Month) equal to: (a) 2 TIMES (b) the rolling average Dilution Ratio
(calculated as if such Consolidated Originator were the only Originator
hereunder) for the twelve Fiscal Months then ended.
"DISCOUNT" means:
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-7
(a) for the Portion of Capital for any Settlement Period
to the extent the Issuer will be funding such Portion of Capital
on the first day of such Settlement Period through the issuance
of Notes,
CPR x C x ED/360 + TF
(b) for the Portion of Capital for any Settlement Period
to the extent the Issuer will not be funding such Portion of
Capital on the first day of such Settlement Period through the
issuance of Notes:
AR x C x ED/Year + TF
where:
AR = the Alternate Rate for the Portion of Capital for
such Settlement Period,
C = the Portion of Capital during such Settlement
Period,
CPR = the CP Rate for the Portion of Capital for such
Settlement Period,
ED = the actual number of days during such Settlement
Period,
Year = if such Portion of Capital is funded based upon:
(i) the Eurodollar Rate, 360 days, and (ii) the
Base Rate, 365 or 366 days, as applicable, and
TF = the Termination Fee, if any, for the Portion of
Capital for such Settlement Period;
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.
"EBITDA" means, with respect to Falcon and its consolidated
Subsidiaries for any period: (a) consolidated net income for such period
(excluding undistributed earnings in Persons that are 50% or less owned,
directly or indirectly, by Falcon, the effect of any extraordinary or
non-recurring gains or losses and any gains or losses from the sale of
assets) PLUS (b) to the extent reflected in the consolidated income statement
of Falcon for such period, without duplication, the sum of: (i) Net Interest
Expense, (ii) federal, state and local income and franchise taxes, (iii)
depreciation expense, (iv) amortization expense
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-8
(including amortization of prepaid management fees), (v) all transaction fees
and expenses incurred in connection with effecting any merger or acquisition
permitted by the Transaction Documents and (vi) any other noncash items that had
the effect of reducing consolidated net income for such period (but MINUS any
noncash items that had the effect of increasing consolidated net income for such
period).
"ELIGIBLE RECEIVABLE" means, at any time, a Pool Receivable:
(a) the Obligor of which is: (i) a United States
resident or a resident of such other jurisdiction as has been
approved in writing by the Administrator; PROVIDED, HOWEVER,
that if the Obligor of such Receivable is a resident of a
jurisdiction other than the United States, the Outstanding
Balance of such Receivable when added to the Outstanding
Balance of all other Receivables of Obligors that are not
residents of the United States shall not exceed 2.5% of the
Net Receivables Pool Balance, (ii) not a government or a
governmental subdivision or agency and (iii) not subject to
any action of the type described in paragraph (f) of Exhibit V
to the Agreement;
(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 due date of such Receivable; PROVIDED,
HOWEVER, that, if permitted pursuant to the applicable Credit
and Collection Policy, a Receivable may have a stated maturity
of up to 120 days after the original due date of such
Receivable so long as the Outstanding Balance of such
Receivable, when added to the Outstanding Balance of all other
Receivables with a stated maturity of greater than 60 days
from the original due date of such Receivable, shall not
exceed 3% of the Net Receivables Pool Balance.
(d) that arises from the sale and delivery of goods and
services in the ordinary course of an 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, Adverse Claim or other claim;
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-9
(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
and that is freely assignable by the Seller;
(k) for which the Issuer shall have a valid and
enforceable undivided percentage ownership 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 as defined in the UCC, and
that is not evidenced by instruments or chattel paper;
(m) that is not a Defaulted Receivable or a Delinquent
Receivable;
(n) for which neither the 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 25% 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 Originator thereof.
"ENGAGEMENT LETTER" means the Engagement Letter, dated April 18,
1997, between PNC Capital Markets, Inc. and Falcon relating to the transactions
contemplated herein.
"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 Falcon,
(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 Falcon, (c) a member of the same affiliated service
group (within the meaning of Section 414(m) of
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-10
the Internal Revenue Code) as the Seller, any Originator, Falcon, any
corporation described in CLAUSE (a) or any trade or business described in CLAUSE
(b), or (d) as to the Seller or any of its Affiliates, Eagle Industrial Products
Corporation and all other Person(s) that are members of Eagle Industrial
Products Corporation's controlled group or under common control therewith
(within the meaning of Sections 414(b) and (c) of the Internal Revenue Code),
but only until the termination of the Agreement dated as of October 24, 1994
among the Pension Benefit Guaranty Corporation, Falcon and certain of its
Affiliates.
"EURODOLLAR RATE" means, for any Settlement Period, an interest
rate PER ANNUM (rounded upward to the nearest 1/16th of 1%) determined pursuant
to the following formula:
LIBOR
-----------------------------------------
100% - Eurodollar Rate Reserve Percentage
where "EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Settlement Period, the
maximum reserve percentage (expressed as a decimal, rounded upward to the
nearest 1/100th of 1%) in effect on the date LIBOR for such Settlement Period is
determined under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
"Eurocurrency" funding (currently referred to as "Eurocurrency liabilities")
having a term comparable to such Settlement Period.
"EXCESS CONCENTRATION" means, for each Obligor, the aggregate
amount by which the Outstanding Balance of Eligible Receivables of such
Obligor then in the Receivables Pool exceeds: (a) the Concentration
Percentage for such Obligor MULTIPLIED BY (b) the Outstanding Balance of all
Eligible Receivables then in the Receivables Pool.
"EXISTING SHAREHOLDERS" shall mean the shareholders and
management of Falcon existing immediately before the recapitalization/merger
referenced in clause 1(iv) of Exhibit II to the Agreement.
"FACILITY TERMINATION DATE" means the earliest to occur of:
(a) June 17, 2002, (b) the date determined pursuant to Section 2.2 of the
Agreement and (c) the date the Purchase Limit reduces to zero pursuant to
Section 1.1(b) of the Agreement.
"FALCON" has the meaning set forth in the preamble to the
Agreement.
"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
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-11
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" has the meaning set forth in Section 1.5 of the
Agreement.
"FISCAL MONTH" means those periods described on Schedule IV to
the Agreement.
"FORM S-4" means the Registration Statement on Form S-4
[AMENDMENT NO. 2, DATED MAY 21, 1997], filed by Falcon with the Securities
and Exchange Commission.
"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 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" shall mean either Wal-Mart or Home Depot
provided such Obligor maintains a short-term rating of: (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 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 debt securities PROVIDED, that
if the ratings for any Obligor are split between the definition of "Group A
Obligor" and "Group B Obligor," such Obligor shall be considered a Group B
Obligor.
"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
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-12
Standard & Poor's, a rating of "BBB+" to "A" by Standard & Poor's on its
long-term senior unsecured debt securities, and (b) "P-2" by Moody's, or if
such Obligor does not have a short-term rating from Moody's, "Baa1" to "A2"
by Moody's on its long-term senior unsecured debt securities; PROVIDED, that
if the ratings for any Obligor are split between the definition of "Group B
Obligor" and "Group C Obligor," such Obligor shall be considered a Group C
Obligor.
"GROUP B OBLIGOR PERCENTAGE" means, at any time, for each
Group B Obligor, the percentage equivalent of: (a) the total Eligible
Receivables of such Group B Obligor less any Excess Concentrations of such
Obligor; PROVIDED, that, with respect to any Group B Obligor that is a Letter
of Credit Obligor, the lesser of: (i) the amount of the Letter of Credit
issued for such Letter of Credit Obligor and (ii) the total Eligible
Receivables of such Letter of Credit Obligor, shall not be included, DIVIDED
BY (b) the aggregate Eligible Receivables at such time.
"GROUP C OBLIGOR" means an 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 "BBB-" to "BBB" by
Standard & Poor's on its long-term senior unsecured debt securities, and (b)
"P-3" by Moody's, or if such Obligor does not have a short-term rating from
Moody's, "Baa3" to "Baa2" by Moody's on its long-term senior unsecured debt
securities; PROVIDED, that if the ratings for any Obligor are split between
the definition of "Group C Obligor" and "Group D Obligor," such Obligor shall
be considered a Group D Obligor.
"GROUP C OBLIGOR PERCENTAGE" means, at any time, for each
Group C Obligor, the percentage equivalent of: (a) the total Eligible
Receivables of such Group C Obligor less any Excess Concentrations of such
Obligor; PROVIDED, that, with respect to any Group C Obligor that is a Letter
of Credit Obligor, the lesser of: (i) the amount of the Letter of Credit
issued for such Letter of Credit Obligor and (ii) the total Eligible
Receivables of such Letter of Credit Obligor, shall not be included, DIVIDED
BY (b) the aggregate Eligible Receivables at such time.
"GROUP D OBLIGOR" means an Obligor whose long-term senior
unsecured debt securities either are not Investment Grade or are not rated by
either Standard & Poor's or Moody's.
"GROUP D OBLIGOR PERCENTAGE" means, at any time, for each
Group D Obligor: (a) the total Eligible Receivables of such Group D Obligor
less any Excess Concentrations of such Obligor; PROVIDED, that, with respect
to any Group D Obligor that is a Letter of Credit Obligor, the lesser of:
(i)the amount of the Letter of Credit issued for such Letter of Credit
Obligor and (ii)the total Eligible Receivables of such Letter of Credit
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-13
Obligor, shall not be included, DIVIDED BY (b) the aggregate Eligible
Receivables at such time.
"INDEMNIFIED AMOUNTS" has the meaning set forth in Section3.1
of the Agreement.
"INDEPENDENT DIRECTOR" has the meaning set forth in
paragraph 3(c) of ExhibitIV to the Agreement.
"INFORMATION PACKAGE" means a report, in substantially the
form of Annex B to the Agreement, furnished to the Administrator pursuant to
the Agreement.
"INSOLVENCY PROCEEDING" means: (a) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidations, receivership,
dissolution, winding-up or relief of debtors, or (b) any general assignment
for the benefit of creditors, composition, marshaling of assets for
creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; in each case
undertaken under U.S. Federal, state or foreign law, including the Bankruptcy
Code.
"INTEREST COVERAGE RATIO" means, with respect to Falcon and
its consolidated Subsidiaries for any period, the ratio of: (a) EBITDA for
such period to (b) Net Cash Interest Expense for such period.
"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.
"INVESTMENT GRADE" means, with respect to any Person, a rating
on its long-term senior unsecured debt securities of: (a) at least "BBB-",
or, if such Person's long-term senior unsecured debt securities are not rated
by Standard & Poor's, a short-term rating of at least "A-3" by Standard &
Poor's, and (b) at least "Baa3" by Moody's, or, if such Person's long-term
senior unsecured debt securities are not rated by Moody's, a short-term
rating of at least "P-3" by Moody's. However, if only one of Standard &
Poor's and Moody's maintains a rating on such Person's securities, such
rating shall be no lower than the ratings applied for the purposes of
CLAUSES (a) and (b).
"INVESTORS" shall mean Investcorp, S.A., certain affiliated
entities and the other initial investors in FBP Acquisition Corp., Inc.
"IPO" means any sale by Falcon through a public offering of
its common (or other voting) stock pursuant to an effective registration
statement (other than a registration statement on
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-14
any of Forms X-0, X-0 or any successor or similar form) filed under the
Securities Act of 1933, as amended.
"ISSUER" has the meaning set forth in the preamble to the
Agreement.
"ISSUER'S SHARE" of any amount means such amount TIMES the
Purchased Interest at the time of determination.
"LETTER OF CREDIT" means: (a) the letter of credit number
A-309206 dated June 17, 1997, issued by PNC Bank, National Association, at
the request of the Seller and for the benefit of the Issuer, in connection
with certain Defaulted Receivables of the Letter of Credit Obligor identified
therein, or (b) any future letter of credit issued in connection with other
Letter of Credit Obligors.
"LETTER OF CREDIT OBLIGOR" means any Obligor for which draws
under a Letter of Credit are permitted, under certain circumstances, in
connection with such Obligor's Defaulted Receivables.
"LIBOR" means the rate of interest PER ANNUM determined by the
Administrator to be the arithmetic mean (rounded upward to the nearest 1/16th
of 1%) of the rates of interest PER ANNUM notified to the Administrator by
each Reference Bank as the rate of interest at which dollar deposits in the
approximate amount of the Capital associated with such Settlement Period
would be offered by major banks in the London interbank market to such
Reference Bank at its request at or about 11:00 a.m. (London time) on the
second Business Day before the commencement of such Settlement Period.
"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 May 2, 1996 (and as amended by Amendment No. 1 to
Liquidity Agreement, dated as of the date hereof), between the purchasers
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.
"LOCK-BOX ACCOUNT" means an account maintained at a bank or
other financial institution for the purpose of receiving Collections.
"LOCK-BOX AGREEMENT" means an agreement, in substantially the
form of Annex A to the Agreement, among the Seller, the Servicer and a
Lock-Box Bank.
"LOCK-BOX BANK" means any of the banks or other financial
institutions holding one or more Lock-Box Accounts.
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-15
"LOSS 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 Loss Reserve Percentage on such date DIVIDED BY (ii) 100% MINUS the
Loss Reserve Percentage on such date.
"LOSS RESERVE PERCENTAGE" means, on any date, the greater of:
(a) 4% or (b) the weighted average (calculated based upon the ratio of each
Consolidated Originator's originated Pool Receivables to the total Pool
Receivables) of each Consolidated Originator's Loss Reserve Percentage
(Originator).
"LOSS RESERVE PERCENTAGE (ORIGINATOR)" means a percentage
(calculated for each Consolidated Originator as of the end of each Fiscal
Month) equal to: (a) 2 TIMES (b) the highest average of the Default Ratios for
any three consecutive Fiscal Months during the twelve Fiscal Months then
ended TIMES (c) the aggregate credit sales made during the four Fiscal Months
then ended DIVIDED BY (d) the aggregate Outstanding Balance of Eligible
Receivables as of such date; all calculated as if such Consolidated
Originator were the only Originator hereunder.
"MATERIAL ADVERSE EFFECT" means, with respect to any event or
circumstance, a material adverse effect on:
(a) the assets, operations, business or financial
condition of the Seller, the Originators (taken together) or
the Servicer, in each case on a consolidated basis;
(b) the ability of any of the Seller, the Originators
(taken together) or the Servicer, in each case on a
consolidated basis, to perform its obligations under this
Agreement or any other Transaction Document to which it is a
party;
(c) the validity or enforceability of this Agreement or
any other Transaction Document, or the validity,
enforceability or collectibility of a material portion of the
Pool Receivables; or
(d) the status, perfection, enforceability or priority
of the Issuer's or the Seller's interest in the Pool Assets;
PROVIDED, that the occurrence or resolution of any event or circumstance that
has been specifically disclosed in the Form S-4 or the 1996 Form 10-K shall not
constitute a Material Adverse Effect.
"MONTHLY SETTLEMENT DATE" means the twelfth Business Day after
each Fiscal Month.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-16
"NET CASH INTEREST EXPENSE" means: (a) interest paid in cash
in such period MINUS (b) interest received in cash in the United States during
such period.
"NET INTEREST EXPENSE" means: (a) interest expense for such
period (excluding the amortization of all fees payable in connection with the
incurrence of Debt) PLUS (b) capitalized interest paid during such period
MINUS (c) interest received in cash in the United States during such period.
"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 MINUS (c) the aggregate amount of Special
Program Allowances for all Originators at such time.
"1996 FORM 10-K" means Falcon's annual report filed on Form
10-K with the Securities and Exchange Commission on March 20, 1997.
"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" has the meaning set forth in the Sale Agreements.
"OUTSTANDING BALANCE" of any Receivable at any time means the
then outstanding principal balance thereof.
"PERMITTED DEBT" has the meaning set forth in Section 1(o) of
Exhibit IV to the Agreement.
"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" has the meaning set forth in Section 1.7
of the Agreement. In addition, at any time when the
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-17
Capital of the Purchased Interest is not divided into two or more such
portions, "Portion of Capital" means 100% of the Capital.
"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 Receivables-securitization program
contemplated in the Agreement, 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 Purchaser
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, or issuing a letter of
credit, surety bond or other instrument to support any obligations arising
under or in connection with the Issuer's securitization program.
"PURCHASE LIMIT" means $100,000,000, as such amount may be
reduced pursuant to Section 1.1(b) of the Agreement. References to the unused
portion of the Purchase Limit shall mean, at any time, the Purchase Limit
MINUS 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, other than any Pool Receivable that arises on
or after the Facility Termination Date, (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.
"PURCHASER" has the meaning set forth in Section 5.3(b) of the
Agreement.
"PURCHASER'S YIELD" means, for any Settlement Period, the
Discount PLUS all Fees payable under the Fee Letter accrued or to accrue
during such Settlement Period, expressed as a percentage
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-18
of Capital and converted to an interest-bearing equivalent rate PER ANNUM.
"RECEIVABLE" means any indebtedness and other obligations owed
to the Seller, Falcon or any Originator by, or any right of the Seller,
Falcon or any Originator to payment from or on behalf of, an Obligor, whether
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of goods or the rendering of services by
an Originator, and includes the obligation to pay any finance charges, fees
and other charges with respect thereto. Indebtedness and other obligations
arising from any one transaction, including indebtedness and other
obligations represented by an individual invoice or agreement, shall
constitute a Receivable separate from a Receivable consisting of the
indebtedness and other obligations arising from any other transaction.
"RECEIVABLES POOL" means, at any time, all of the then
outstanding Receivables purchased by the Seller pursuant to the Sale
Agreement between the Seller and Falcon.
"REFERENCE BANK" means PNC.
"RELATED SECURITY" means, with respect to any Receivable:
(a) all of the Seller's, Falcon's and the Originator
thereof's interest in any goods (including returned goods),
and documentation of title evidencing the shipment or storage
of any goods (including returned goods), relating to any sale
giving rise to such Receivable;
(b) all other security interests or liens and property
subject thereto from time to time purporting to secure payment
of such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise, together with all UCC
financing statements or similar filings relating thereto; and
(c) all of the Seller's, Falcon's and any 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.
"SALE AGREEMENT" means any of: (a) the Contribution and Sale
Agreement, dated as of May 2, 1996, between the Seller and Falcon, and (b) the
Receivables Sale and Servicing Agreement, dated as of May 2, 1996, between
Falcon and the Originators, as either such agreement may be amended, amended
and restated, supplemented or otherwise modified from time to time.
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-19
"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.
"SERVICING FEE" shall mean the fee referred to in Section 4.6
of the Agreement.
"SETTLEMENT PERIOD" for each Portion of Capital means:
(a) before the Termination Date: (i) initially the period commencing on the
date of a purchase pursuant to Section 1.2 of the Agreement and ending on (but
not including) the next Monthly Settlement Date (or Alternative Settlement
Date, if applicable), and (ii) thereafter, each period commencing on such
Monthly Settlement Date (or Alternative Settlement Date, if applicable) and
ending on (but not including) the next Monthly Settlement Date, and (b) on and
after the Termination Date, such period (including a period of one day) as
shall be selected from time to time by the Administrator or, in the absence
of any such selection, each period of 30 days from the last day of the
preceding Settlement Period.
"SPECIAL PROGRAM ALLOWANCE" means, with respect to the Pool
Receivables originated by any Originator at any time, the aggregate amount of
such Pool Receivables attributable to cash discounts, volume rebates or
advertising allowances permitted to be set-off against payments due in
respect of such Pool Receivables as reflected in the books and records of
such Originator at such time.
"SPIKE FACTOR" means, for any Fiscal Month for each
Consolidated Originator, the positive difference, if any, between: (a) the
highest average Dilution Ratio for any two consecutive Fiscal Months during
the twelve previous Fiscal Months and (b) the average Dilution Ratio for such
twelve months, both calculated as if such Consolidated Originator were the
only Originator hereunder.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc.
"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
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-20
of such Person or (c) by such Person and one or more Subsidiaries of such
Person.
"TERMINATION DATE" means the earlier of: (a) the Business Day
that the Seller so designates by written notice to the Administrator pursuant
to Section 1.1 (b) of the Agreement and (b) the Facility Termination Date.
"TERMINATION DAY" means: (a) each day on which the conditions
set forth in Section 2 of Exhibit II to the Agreement are not satisfied or
(b) each day that occurs on or after the Termination Date.
"TERMINATION EVENT" has the meaning specified in Exhibit V to
the Agreement.
"TERMINATION FEE" means, for any Settlement Period during
which a Termination Day occurs, the amount, if any, by which: (a) the
additional Discount (calculated without taking into account any Termination
Fee or any shortened duration of such Settlement Period pursuant to the
definition thereof) that would have accrued during such Settlement Period on
the reductions of Capital relating to such Settlement Period had such
reductions not been made, exceeds (b) the income, if any, received by the
Issuer from investing the proceeds of such reductions of Capital, as
determined by the Administrator, which determination shall be binding and
conclusive for all purposes, absent manifest error.
"TOTAL RESERVES" means, at any time: (a) the Yield Reserve at
such time PLUS (b) the greater of: (i) the Loss Reserve at such time PLUS the
Dilution Reserve at such time and (ii) the Concentration Reserve.
"TRANSACTION DOCUMENTS" means the Agreement, the Letters of
Credit, the Lock-Box Agreements, the Liquidity Agreement, the Fee Letter, the
Engagement Letter, the Sale Agreements 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 (it being understood that any nonpayment, event or condition of the
type described in paragraph (j) of EXHIBITV that permits the acceleration of
the maturity of any Permitted Debt, which acceleration has not been required,
shall constitute an Unmatured Termination Event).
"YIELD RESERVE" means, at any time:
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-21
(PY/360 x 2(DSO) x Capital) + SF
where:
PY = the Purchaser's Yield computed for the most
recent Settlement Period,
DSO = the most recent Days' Sales Outstanding, and
SF = the accrued and unpaid Servicing Fee.
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.
RECEIVABLES PURCHASE AGREEMENT
Exhibit I-22
EXHIBIT II
CONDITIONS OF PURCHASES
1. CONDITIONS PRECEDENT TO EFFECTIVENESS. The effectiveness
of the Agreement is subject to the conditions precedent that:
(i) the Credit Facility shall be in full force and effect
and shall be in form and substance reasonably satisfactory to
PNC,
(ii) Falcon shall have received:
(A) at least $134,600,000 in gross cash proceeds
from the sale to the Investors of newly issued common stock
of FBP Acquisition Corp., Inc., and
(B) at least $245,000,000 in gross cash
proceeds from an issuance by Falcon of: (1) subordinated
unsecured loans, (2) at least $145,000,000 in gross cash
proceeds of senior subordinated notes and at least
$100,000,000 in gross cash proceeds of senior subordinated
discount notes or (3) such other amounts of such senior
subordinated indebtedness, in each case on terms and
conditions reasonably satisfactory to PNC,
(iii) the value of: (A) the common stock of Falcon
held by Existing Shareholders (valued at a price per share
equal to the price at which the Investors purchased their
common stock) PLUS (B) the amount referred to in CLAUSE (ii)(a)
shall equal at least $152,900,000,
(iv) the recapitalization of Falcon and its Subsidiaries
shall have been consummated in accordance with applicable law
and pursuant to the Agreement and Plan of Merger, dated as of
March 20, 1997, between Falcon and FBP Acquisition Corp, Inc.
shall have been consummated, and no provision of such
agreement shall have been waived, amended, supplemented or
otherwise modified in any material respect without the consent
of PNC,
(v) all of the existing indebtedness of Falcon and its
Subsidiaries (except for certain industrial revenue bonds and
capitalized leases in an amount not to exceed $4,000,000 and
intra-company debt in connection with the Transaction
Documents) shall have been repaid on satisfactory terms,
(vi) the aggregate amount (exclusive of fees and
expenses): (A) expended by the Investors to purchase shares of
Falcon's common stock from Existing Shareholders and to
RECEIVABLES PURCHASE AGREEMENT
Exhibit II-1
refinance existing indebtedness (including in connection with
the Transaction Documents) and (B) represented by the value
attributable to the common stock of Falcon retained by the
Existing Shareholders (as calculated pursuant to
CLAUSE (iii)(A)), shall not have been greater than $585,000,000,
(vii) Falcon shall have expended (or be obligated to
expend) no more than $60,000,000 in respect of fees and
expenses related to the merger/recapitalization referenced in
CLAUSE(iv) and the financings and other transactions related
thereto (including the amendments to the Transaction
Documents),
(viii) the Investors shall have acquired approximately
85% of Falcon's voting stock (after giving effect to the
merger of FBP Acquisition Corp, Inc. and Falcon),
(ix) the corporate and capital structure of Falcon and
each of its Subsidiaries (including the organization documents
and capitalization for each of them, and the ownership profile
of each of them (but excluding the identity and amount of
equity contribution of any Investor)) after the
merger/recapitalization referenced in CLAUSE (iv) shall be
reasonably satisfactory to PNC in all respects,
(x) PNC shall have received unaudited interim
consolidated financial statements for Falcon for the month of
April 1997 and the quarter ended March 1997,
(xi) PNC shall have received a satisfactory PRO FORMA
consolidated balance sheet for Falcon as at the end of April
1997 after giving effect to the financings and other
transactions contemplated thereby (including the amendments to
the Transaction Documents),
(xii) no litigation, inquiry, injunction or
restraining order shall be pending, entered or threatened,
other than what has been disclosed in the Form S-4 or the 1996
Form 10-K, copies of which shall have been provided to PNC:
(1) with respect to the merger/recapitalization
referenced in CLAUSE (iv) and the financing arrangements
and the other transactions contemplated thereby (including
the amendments to the Transaction Documents), or
(2) that, if there is a probability of an adverse
determination, is reasonably likely to have a Material
Adverse Effect,
RECEIVABLES PURCHASE AGREEMENT
Exhibit II-2
(xiii) there shall not have been any change,
development or event since December 31, 1996 that has had, or
could reasonably be expected to have, a Material Adverse
Effect,
(xiv) PNC shall be reasonably satisfied with the
status of all employee benefit and environmental matters
involving Falcon and/or its Subsidiaries, and
(xv) PNC shall have received an opinion of
Xxxxxx, Xxxxxx & Co., in form and substance reasonably
satisfactory to PNC, which shall document the solvency of
Falcon and its Subsidiaries after giving effect to the
consummation of the merger/recapitalization referenced in
CLAUSE (iv) and the financings and other transactions
contemplated thereby (including the amendments to the
Transaction Documents), and
the Administrator shall have received on or before the date of such purchase
the following, each in form and substance (including the date thereof)
satisfactory to the Administrator:
(a) A counterpart of the Agreement duly executed by the
Seller and the Servicer, and, except to the extent already
delivered in connection with the Original RPA, a counterpart
of the Sale Agreements duly executed by the Seller, Falcon and
the Originators, as applicable.
(b) Certified copies of: (i) the resolutions of the
Board of Directors of each of the Seller, the Originators
(except to the extent already delivered in connection with the
Original RPA) and Falcon authorizing the execution, delivery
and performance by the Seller, such Originator and Falcon, as
the case may be, of the Agreement and the other Transaction
Documents to which it is a party, (ii) all documents evidencing
other necessary corporate action and governmental approvals,
if any, with respect to the Agreement and the other
Transaction Documents and (iii) except to the extent already
delivered in connection with the Original RPA (unless since
modified) the certificate of incorporation and by-laws of each
of the Seller, each Originator and Falcon.
(c) Except to the extent already delivered in connection
with the Original RPA, a certificate of the Secretary or
Assistant Secretary of each of the Seller, the Originators and
Falcon 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, an
Originator or Falcon, as the case may be, the Administrator
shall be entitled to rely on the last such certificate
delivered to it by the Seller, an Originator or Falcon, as the
case may be.
RECEIVABLES PURCHASE AGREEMENT
Exhibit II-3
(d) Except to the extent already delivered in connection
with the Original RPA, acknowledgment copies, or time stamped
receipt copies, of proper financing statements, duly filed on
or before the date of such initial purchase under the UCC of
all jurisdictions that the Administrator may deem necessary or
desirable in order to perfect the interests of the Seller,
Falcon and the Issuer contemplated by the Agreement and the
Sale Agreements, including amendments to certain UCC financing
statements filed in connection with the Original RPA, which
amendments (including to reflect the change in the Seller's
name from Centrally Held Eagle Receivables Program, Inc. to
Falcon Receivable Program, Inc.) to such UCC financing
statements shall have been executed by the applicable Persons
and delivered to the Administrator or its representative for
filing.
(e) Acknowledgment copies, or time-stamped receipt
copies, of proper financing statements, if any, necessary to
release all security interests and other rights of any Person
in the Receivables, Contracts or Related Security previously
granted by the Originators, Falcon or the Seller, including
terminations of certain UCC financing statements filed in
connection with the Receivables Purchase Agreement (Designated
Receivables) entered into concurrently with the Original RPA,
which terminations to such UCC financing statements shall have
been executed by the applicable Persons and delivered to the
Administrator or its representative for filing.
(f) (i) Except to the extent already delivered in
connection with the Original RPA, completed UCC search
reports, dated on or shortly before the date of the initial
purchase under the Original RPA, listing the financing
statements referred to in SUBSECTION (e) above (other than with
respect to the termination statements to be filed in
connection with the Receivables Purchase Agreement (Designated
Receivables) referred to in SUBSECTION (e) above) and all other
effective financing statements filed in the jurisdictions
referred to in SUBSECTION (e) above that name the Originators,
Falcon 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.
(ii) Completed UCC search reports, dated on or
shortly before the date of effectiveness of this Agreement,
listing all effective financing statements filed in all
applicable jurisdictions that name 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
RECEIVABLES PURCHASE AGREEMENT
Exhibit II-4
Corporation in such jurisdictions, as the Administrator may
request, showing no Adverse Claims on any Pool Assets.
(g) Except to the extent already delivered in connection
with the Original RPA, copies of executed Lock-Box Agreements
with the Lock-Box Banks.
(h) Favorable opinions, in form and substance reasonably
satisfactory to the Administrator, of: (i) Xxxxxx, Xxxx &
Xxxxxxxx, counsel for the Seller and the Servicer, and
(ii) Xxx X. Xxxxx, General Counsel for the Seller and the
Servicer.
(i) Except to the extent already completed in connection
with the Original RPA (except to the extent further review or
audit is determined to be necessary by the Administrator in
connection herewith), 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 each Originator,
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.
(j) A pro forma Information Package representing the
performance of the Receivables Pool for the Fiscal Month
before closing.
(k) 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, in each case, payable in accordance with the Engagement
Letter and the Fee Letter.
(l) The Fee Letter duly executed by the Seller and the
Servicer.
(m) Good standing certificates with respect to each of
the Seller, the Originators and the Servicer issued by the
Secretaries of State (or similar official) of the states of
each such Person's organization and principal place of
business.
(n) Letters from each of the rating agencies then rating
the Notes confirming the rating of such Notes after giving
effect to the transaction contemplated by the Agreement.
(o) Except to the extent already delivered in connection
with the Original RPA, the Liquidity Agreement
RECEIVABLES PURCHASE AGREEMENT
Exhibit II-5
and all other Transaction Documents duly executed by the
parties thereto, including the amendments to the Liquidity
Agreement and the Sale Agreements to be entered into
concurrently herewith.
(p) The Letter of Credit for Sears, Xxxxxxx & Co. shall
have been issued and be in full force and effect, and Letter
of Credit Issuer, in connection with its issuance of such
Letter of Credit, shall have received a legal, valid and
enforceable security interest in certain Defaulted Receivables
of such Letter of Credit Obligor.
(q) Such other approvals, opinions or documents as the
Administrator or Issuer may reasonably request.
2. CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS.
Each purchase (except as to CLAUSE (a), including the initial purchase) and each
reinvestment shall be subject to the further conditions precedent that:
(a) in the case of each purchase, the Servicer shall
have delivered to the Administrator on or before such
purchase, in form and substance satisfactory to the
Administrator, a completed pro forma Information Package to
reflect the level of Capital and related reserves after such
subsequent purchase;
(b) on the date of such purchase or reinvestment 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
ExhibitIII to the Agreement are true and correct in all
material respects on and as of the date of such purchase or
reinvestment as though made on and as of such date; and
(ii) no event has occurred and is continuing, or would
result from such purchase or reinvestment, that constitutes a
Termination Event or an Unmatured Termination Event;
PROVIDED, HOWEVER, that the existence of an Unmatured Termination Event (other
than an Unmatured Termination Event of the type described in clause (i) of
Exhibit V to the Agreement or resulting from the failure of the Seller or the
Servicer to deliver any Information Package when due) shall not prohibit any
reinvestment or purchase on any day that does not cause the Capital, after
giving effect to such reinvestment or purchase, to exceed the Capital as of the
opening of business on such day.
RECEIVABLES PURCHASE AGREEMENT
Exhibit II-6
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants as follows:
(a) The Seller is a corporation duly incorporated,
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 corporation in every jurisdiction where the nature of its business
requires it to be so qualified, except where the failure to be so qualified
would not 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 the Seller's use of the proceeds of purchases and
reinvestments: (i) are within the Seller's corporate powers, (ii) have been
duly authorized by all necessary corporate action, (iii) do not contravene or
result in a default under or conflict with: (1)the Seller's charter or
by-laws, (2) any law, rule or regulation applicable to the Seller, (3) any
contractual restriction binding on or affecting the Seller or its property or
(4) any order, writ, judgment, award, injunction or decree binding on or
affecting the Seller or 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 ExhibitII to the
Agreement, all of which shall have been filed on or before the date of the
first purchase hereunder, and the approval of the Administrative Agent under
the Credit Facility, which approval has been obtained and continues in full
force and effect.
(d) Each of the Agreement and the other Transaction
Documents to which it 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.
RECEIVABLES PURCHASE AGREEMENT
Exhibit III-1
(e) The balance sheets of the Seller as at December 31,
1996, and the related statements of income and retained earnings of the
Seller for the fiscal year then ended, copies of which have been furnished to
the Administrator, fairly present the financial condition of the Seller as at
such date and the results of the operations of the Seller for the period
ended on such date, all in accordance with generally accepted accounting
principles consistently applied, and since December 31, 1996 there has been
no Material Adverse Effect.
(f) There is no pending or, to the best knowledge of the
Seller, threatened action or proceeding affecting the Seller before any
Governmental Authority or arbitrator.
(g) No proceeds of any purchase or reinvestment will be
used to acquire any equity security of a class that is registered pursuant to
Section 12 of the Securities Exchange Act of 1934.
(h) The Seller is the legal and beneficial owner of the
Pool Receivables and Related Security, free and clear of any Adverse Claim.
Upon each purchase or reinvestment, the Issuer shall acquire a valid and
enforceable perfected undivided percentage ownership interest, to the extent
of the Purchased Interest, in each Pool Receivable then existing or
thereafter arising and in the Related Security, Collections and other
proceeds with respect thereto, free and clear of any Adverse Claim. The
Agreement creates a security interest in favor of the Issuer in the Pool
Assets, and the Issuer has a first priority perfected security interest in
the Pool Assets, free and clear of any Adverse Claims. No effective
financing statement or other instrument similar in effect covering any Pool
Asset is on file in any recording office, except those filed in favor of the
Seller and Falcon pursuant to the Sale Agreements and the Issuer relating to
the Agreement.
(i) Each Information Package (if prepared by the Seller
or one of its Affiliates, or to the extent that information contained therein
is supplied by the Seller or an Affiliate), 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 in connection
with the Agreement or any other Transaction Document to which it is a party
is or will be complete and accurate in all material respects as of its date
or (except as otherwise disclosed to the Administrator at such time) as of
the date so furnished.
(j) The principal place of business and chief executive
office (as such terms are used in the UCC) of the Seller and the office where
the Seller keeps its records concerning the Receivables are located at the
address referred to in Sections 1(b) and 2(b) of Exhibit IV to the Agreement.
RECEIVABLES PURCHASE AGREEMENT
Exhibit III-2
(k) 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.
(l) The Seller is not in violation of any order of any
court, arbitrator or Governmental Authority.
(m) Neither the Seller nor any Affiliate of the Seller
has any direct or indirect ownership or other financial interest in the
Issuer.
(n) No proceeds of any purchase or reinvestment will be
used for any purpose that violates any applicable law, rule or regulation,
including Regulations G or U of the Federal Reserve Board.
(o) Each Pool Receivable included as an Eligible
Receivable in the calculation of the Net Receivables Pool Balance is an
Eligible Receivable.
(p) No event has occurred and is continuing, or would
result from a purchase in respect of, or reinvestment in respect of, the
Purchased Interest or from the application of the proceeds therefrom, that
constitutes a Termination Event or an Unmatured Termination Event.
(q) The Seller has accounted for each sale of undivided
percentage ownership interests in Receivables in its books and financial
statements as sales, consistent with generally accepted accounting principles.
(r) The Seller has complied in all material respects
with the Credit and Collection Policy of each Originator with regard to each
Receivable originated by such Originator.
(s) 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.
(t) The Seller's complete corporate name is set forth in
the preamble to the Agreement, and the Seller does not use and has not during
the last six years used any other corporate name, trade name, doing-business
name or fictitious name, except as set forth on Schedule III to the Agreement
and except for names first used after the date of the Agreement and set forth
in a notice delivered to the Administrator pursuant to Section 1(l)(v) of
Exhibit IV to the Agreement.
RECEIVABLES PURCHASE AGREEMENT
Exhibit III-3
2. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer represents and warrants as follows:
(a) The Servicer is a corporation duly incorporated,
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 corporation in every jurisdiction where the nature of its business
requires it to be so qualified, except where the failure to be so qualified
would not 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, including the Servicer's use of the proceeds of purchases and
reinvestments: (i) are within the Servicer's corporate powers, (ii) have been
duly authorized by all necessary corporate action, (iii) do not contravene or
result in a default under or conflict with: (1) the Servicer's charter or
by-laws, (2) any law, rule or regulation applicable to the Servicer, (3) any
contractual restriction binding on or affecting the Servicer or its property
or (4) any order, writ, judgment, award, injunction or decree binding on or
affecting the Servicer or 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 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.
(d) Each of the Agreement and the other Transaction
Documents to which it 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 December 31, 1996, and the related statements
of income and retained earnings of the Servicer and its consolidated
Subsidiaries for the fiscal year then ended, copies of which have been
furnished to the Administrator, fairly present 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
RECEIVABLES PURCHASE AGREEMENT
Exhibit III-4
applied, and since December 31, 1996 there has been no Material Adverse
Effect.
(f) Except as disclosed in the most recent audited
financial statements of Falcon furnished to the Administrator, there is no
pending or, to the best knowledge of the Servicer, threatened action or
proceeding affecting the Servicer or any of its Subsidiaries before any
Governmental Authority or arbitrator that could have a Material Adverse
Effect.
(g) No proceeds of any purchase or reinvestment will be
used to acquire any equity security of a class that is registered pursuant to
Section12 of the Securities Exchange Act of 1934.
(h) Each Information Package (if prepared by the
Servicer or one of its Affiliates, or to the extent that information
contained therein is supplied by the Servicer or an Affiliate), 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
Administrator in connection with the Agreement is or will be complete and
accurate in all material respects as of its date or (except as otherwise
disclosed to the Administrator at such time) as of the date so furnished.
(i) The principal place of business and chief executive
office (as such terms are used in the UCC) of the Servicer and the office
where the Servicer keeps its records concerning the Receivables are located
at the address referred to in Section 2(b) of Exhibit IV to the Agreement.
(j) The Servicer is not in violation of any order of any
court, arbitrator or Governmental Authority.
(k) Neither the Servicer nor any Affiliate of the
Servicer has any direct or indirect ownership or other financial interest in
the Issuer.
(l) The Servicer has complied in all material respects
with the Credit and Collection Policy of each Originator with regard to each
Receivable originated by such Originator.
(m) 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.
RECEIVABLES PURCHASE AGREEMENT
Exhibit III-5
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 the Issuer, 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 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 rights, franchises, qualifications and
privileges would not have a Material Adverse Effect.
(b) OFFICES, RECORDS AND BOOKS OF ACCOUNT, ETC. The
Seller: (i) shall keep its principal place of business and chief executive
office (as such terms or similar terms are used in the UCC) and the office
where it keeps its records concerning the Receivables at the address of the
Seller set forth under its name on the signature page to the Agreement or,
pursuant to CLAUSE (l)(v) below, at any other locations in jurisdictions where
all actions reasonably requested by the Administrator to protect and perfect
the interest of the Issuer in the Receivables and related items (including
the Pool Assets) have been taken and completed and (ii) shall provide the
Administrator with at least 30 days' written notice before making any change
in the Seller's name or making any other change in the Seller's identity or
corporate structure (including a Change in Control) that could render any UCC
financing statement filed in connection with this Agreement "seriously
misleading" as such term (or similar term) is used in the UCC; each notice to
the Administrator pursuant to this sentence shall set forth the applicable
change and the effective date thereof. The Seller also will 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
Receivables (including records adequate to permit the daily identification of
each Receivable and all Collections of and adjustments to each existing
Receivable). Notwithstanding the above, in no event shall the Seller have or
maintain, or be a partner in any partnership that has or maintains, its
jurisdiction of organization, principal place of business
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-1
or principal assets in any of the states of Colorado, Kansas, New Mexico,
Oklahoma, Utah or Wyoming.
(c) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT
AND COLLECTION POLICY. The Seller shall (and shall cause the Servicer to),
at its expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it under
the Contracts related to the Receivables, and timely and fully comply in all
material respects with the applicable Credit and Collection Policies with
regard to each Receivable and the related Contract.
(d) 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 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 Issuer, through the Administrator, may
reasonably request.
(e) 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 Receivable, Related Security or
Collections, or upon or with respect to any account to which any Collections
of any Receivables are sent), or assign any right to receive income in
respect of any items contemplated by this paragraph.
(f) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as
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.
(g) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY.
The Seller shall not make (or permit any Originator to make) any material
change in the character of its business or in any Credit and Collection
Policy, or any change in any Credit and Collection Policy that would have a
Material Adverse Effect. The Seller shall not make (or permit any Originator
to make) any other change in any Credit and Collection Policy without giving
prior written notice thereof to the Administrator.
(h) AUDITS. The Seller shall (and shall cause Falcon
and each Originator to), from time to time during regular business hours as
reasonably requested in advance (unless a Termination Event or Unmatured
Termination Event exists) by the
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-2
Administrator, permit the Administrator, or its agents or representatives:
(i) 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 (or Falcon or any such Originator) relating to
Receivables and the Related Security, including the related Contracts, and
(ii) to visit the offices and properties of the Seller, Falcon or the
Originators for the purpose of examining such materials described in
CLAUSE (i) above, and to discuss matters relating to Receivables and the
Related Security or the Seller's, Falcon's or the Originators' performance
hereunder or under the Contracts with any of the officers, employees, agents
or contractors of the Seller, Falcon or the Originators having knowledge of
such matters.
(i) CHANGE IN LOCK-BOX BANKS, LOCK-BOX ACCOUNTS AND
PAYMENT INSTRUCTIONS TO OBLIGORS. The Seller shall not, and shall not permit
the Servicer, Falcon (if not 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 ScheduleII 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.
(j) DEPOSITS TO LOCK-BOX ACCOUNTS. The Seller shall (or
shall cause the Servicer to): (i) instruct all Obligors (other than Obligors
on a Receivable originated by Ex-Cell Manufacturing Company, Inc.) to make
payments of all 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 Lock-Box Accounts not later than one Business Day after receipt thereof.
Each Lock-Box Account (other than the Lock-Box Account to which Collections
are deposited by Ex-Cell Manufacturing Company, Inc.) shall at all times be
subject to a 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.
(k) 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, including with a
legend evidencing 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
Falcon
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-3
and each Originator so to xxxx their master data processing records pursuant
to the Sale Agreements.
(l) 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 105
days after the end of each fiscal year of the Seller, a copy
of the annual report for such year for the Seller, containing
unaudited financial statements 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 five
days after 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 sending or filing thereof,
copies of all reports that the Seller sends to any of its
security holders, and copies of all reports and registration
statements that the Seller or any Subsidiary files with the
Securities and Exchange Commission or any national securities
exchange;
(iv) promptly after the filing or receiving thereof,
copies of all reports and notices that the Seller or any
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 the assessment of withdrawal liability or
an event or condition that could, in the aggregate, result in
the imposition of liability on the Seller and/or any such
Affiliate;
(v) at least thirty days before any change in the
Seller's name or any other change requiring the amendment of
UCC financing statements, a notice setting forth such changes
and the effective date thereof;
(vi) 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 Person
or (B) litigation or proceeding relating to any Transaction
Document;
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-4
(vii) promptly after the occurrence thereof, notice
of a material adverse change in the business, operations,
property or financial or other condition of the Seller, the
Servicer or any Originator; and
(viii) such other information respecting the
Receivables or the condition or operations, financial or
otherwise, of the Seller or any of its Affiliates as the
Administrator may from time to time reasonably request;
(m) CERTAIN AGREEMENTS. Without the prior written
consent of the Administrator, the Seller will not (and will not permit Falcon
or any Originator to) amend, modify, waive, revoke or terminate any
Transaction Document to which it is a party or any provision of its
certificate of incorporation or by-laws.
(n) RESTRICTED PAYMENTS. (i) Except pursuant to
CLAUSE(ii) below, the Seller will not: (A) purchase or redeem
any shares of its capital stock, (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").
(ii) 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 Buyer Note in accordance with
its terms, and (B) if no amounts are then outstanding under the
Buyer Note, the Seller may declare and pay dividends.
(iii) The Seller may make Restricted Payments only
out of the funds it receives pursuant to Sections 1.4(b)(ii)
and (iv) 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
$5,000,000, 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.
(o) 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 this Agreement or the Sale
Agreement between the Seller and Falcon (the "PERMITTED DEBT"), 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
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-5
of the Seller (such as expenses for stationery, audits, maintenance of legal
status, etc.).
(p) 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 Buyer Note and (iii) other legal and valid corporate purposes.
(q) PURCHASED INTEREST. Both before and after each
purchase or reinvestment pursuant to the Agreement, the Purchased Interest
will not be greater than 100%.
(r) TANGIBLE NET WORTH. The Seller will not permit its
tangible net worth, at any time, to be less than $5,000,000.
(s) INTEREST COVERAGE RATIO. Falcon will not permit the
Interest Coverage Ratio calculated at the end of each fiscal quarter
beginning on the fiscal quarter ended during September 1997 (as calculated
for the four fiscal quarters then ended) to be less than 2.0 to 1.0;
PROVIDED, that with respect to the first three such quarters ending in
September 1997, December 1997 and March 1998, such determination shall be
made as calculated for the one, two or three fiscal quarters then ended,
respectively.
2. COVENANTS OF THE SERVICER AND FALCON. 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:
(a) COMPLIANCE WITH LAWS, ETC. The Servicer and, to the
extent that it ceases to be the Servicer, Falcon shall comply (and shall
cause each Originator to 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 would not have a Material Adverse Effect.
(b) OFFICES, RECORDS AND BOOKS OF ACCOUNT, ETC. The
Servicer and, to the extent that it ceases to be the Servicer, Falcon shall
keep (and shall cause each Originator to keep) its principal place of
business and chief executive office (as such terms or similar terms are used
in the UCC) and the office where it keeps its records concerning the
Receivables at the address of the Servicer set forth under its name on the
signature page to the Agreement or, upon at least 30 days' prior written
notice of a proposed change to the Administrator, at any other locations in
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-6
jurisdictions where all actions reasonably requested by the Administrator to
protect and perfect the interest of the Issuer in the Receivables and related
items (including the Pool Assets) have been taken and completed. The
Servicer and, to the extent that it ceases to be the Servicer, Falcon also
will (and will cause each Originator 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 all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Receivables (including
records adequate to permit the daily identification of each Receivable and
all Collections of and adjustments to each existing Receivable).
(c) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT
AND COLLECTION POLICY. The Servicer and, to the extent that it ceases to be
the Servicer, Falcon shall (and shall cause each Originator to), at its
expense, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Contracts related to the Receivables, and timely and fully comply in all
material respects with the Credit and Collection Policy with regard to each
Receivable and the related Contract.
(d) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as
provided in the Agreement, the Servicer and, to the extent that it ceases to
be the Servicer, Falcon shall not extend (and shall not permit any Originator
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.
(e) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY.
The Servicer and, to the extent that it ceases to be the Servicer, Falcon
shall not make (and shall not permit any Originator to make) any material
change in the character of its business or in any Credit and Collection
Policy, or any change in any Credit and Collection Policy that would have a
Material Adverse Effect. The Servicer and, to the extent that it ceases to
be the Servicer, Falcon shall not make (and shall not permit any Originator
to make) any other change in any Credit and Collection Policy without giving
prior written notice thereof to the Administrator.
(f) AUDITS. The Servicer and, to the extent that it
ceases to be the Servicer, Falcon shall (and shall cause each Originator to),
from time to time during regular business hours as reasonably requested in
advance (unless a Termination Event or Unmatured Termination Event exists) by
the Administrator, permit the Administrator, or its agents or
representatives: (i) to examine and make copies of and abstracts from all
books, records and documents (including computer tapes and disks) in its
possession or under its control relating to Receivables and the
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-7
Related Security, including the related Contracts, and (ii) to visit its
offices and properties for the purpose of examining such materials described
in CLAUSE(i) above, and to discuss matters relating to Receivables and the
Related Security or its performance hereunder or under the Contracts with any
of its officers, employees, agents or contractors having knowledge of such
matters.
(g) CHANGE IN LOCK-BOX BANKS, LOCK-BOX ACCOUNTS AND
PAYMENT INSTRUCTIONS TO OBLIGORS. The Servicer and, to the extent that it
ceases to be the Servicer, Falcon shall not (and shall not permit 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 ScheduleII to the Agreement, or make
any change in its instructions to Obligors regarding payments to be made to
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 (other than Obligors on a Receivable originated by
Ex-Cell Manufacturing Company, Inc.) to make payments of all 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 into
Lock-Box Accounts not later than one Business Day after receipt thereof.
Each Lock-Box Account (other than the Lock-Box Account to which Collections
are deposited by Ex-Cell Manufacturing Company, Inc.) 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) MARKING OF RECORDS. At its expense, the Servicer
shall xxxx its master data processing records relating to Pool Receivables
and related Contracts, including with a legend evidencing 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.
(j) REPORTING REQUIREMENTS. The Servicer and, to the
extent that it ceases to be the Servicer, Falcon 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 50 days
after the end of the first three quarters of each
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-8
fiscal year of such Person, balance sheets of such Person and
its consolidated Subsidiaries as of the end of such quarter
and statements of income and retained earnings of such Person
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 (which financial statements the Administrator will
furnish to Xxxxx'x);
(ii) as soon as available and in any event within 105
days after the end of each fiscal year of such Person, a copy
of the annual report for such year for such Person and its
consolidated Subsidiaries, containing financial statements for
such year audited by independent certified public accountants
of nationally recognized standing;
(iii) as to the Servicer only, as soon as available and
in any event not later than the twelfth Business Day after the
last day of each Fiscal Month, an Information Package as of
the last day of such month; within six Business Days of a
request by the Administrator, an Information Package for such
period as is specified by the Administrator (but in no event
more frequently then weekly);
(iv) as soon as possible and in any event within five
days after the occurrence of each Termination Event or
Unmatured Termination Event, a statement of the chief
financial officer of such Person 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 such Person sends to any of its
security holders, and copies of all reports and registration
statements that such Person or any Subsidiary files with the
Securities and Exchange Commission or any national securities
exchange; PROVIDED, that any filings with the Securities and
Exchange Commission that have been granted "confidential"
treatment shall be provided promptly after such filings have
become publicly available;
(vi) promptly after the filing or receiving thereof,
copies of all reports and notices that such Person or any of
its 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 the assessment of withdrawal liability
or an event or condition that could, in
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-9
the aggregate, result in the imposition of liability on such
Person and/or any such Affiliate;
(vii) at least thirty days before any change in such
Person's or any Originator's name or any other change
requiring the amendment of UCC financing statements, a notice
setting forth such changes and the effective date thereof;
(viii) promptly after such Person obtains knowledge
thereof, notice of any: (A) litigation, investigation or
proceeding that may exist at any time between such Person or
any of its Subsidiaries and any Governmental Authority that,
if not cured or if adversely determined, as the case may be,
would have a Material Adverse Effect, (B) litigation or
proceeding adversely affecting such Person or any of its
Subsidiaries in which the amount involved is $5,000,000 or
more and not covered by insurance or in which injunctive or
similar relief is sought, or (C) litigation or proceeding
relating to any Transaction Document;
(ix) promptly after the occurrence thereof, notice
of a material adverse change in the business, operations,
property or financial or other condition of such Person or any
of its Subsidiaries;
(x) promptly after the occurrence thereof, notice
of any default under the Credit Facility (which notice Falcon
will furnish to Xxxxx'x); and
(xi) such other information respecting the
Receivables or the condition or operations, financial or
otherwise, of such Person or any of its Affiliates as the
Administrator may from time to time reasonably request.
3. SEPARATE EXISTENCE. Each of the Seller and Falcon hereby
acknowledges that the Purchasers, 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 Falcon. Therefore, from and after the date hereof, each
of the Seller and Falcon 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 Falcon and any other Person, and is not a division of Falcon 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 Falcon shall take such actions as shall be required in order
that:
(a) The Seller will be a limited purpose corporation whose
primary activities are restricted in its certificate
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-10
of incorporation to: (i) purchasing or otherwise acquiring
from Falcon, 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 Falcon or any of its Affiliates. The certificate of
incorporation 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, Falcon or any
Affiliate thereof;
(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 will pay
the Servicer the Servicing Fee pursuant hereto. The Seller
will not incur any material indirect or overhead expenses for
items shared with Falcon (or any other Affiliate thereof) that
are not reflected in the Servicing Fee or the fee to Falcon in
its role as manager for the Seller. 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
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-11
of services rendered, and otherwise on a basis reasonably
related to the actual use or the value of services rendered;
it being understood that Falcon shall pay all expenses
relating to the preparation, negotiation, execution and
delivery of the Transaction Documents, including legal, agency
and other fees;
(g) The Seller's operating expenses will not be paid by
Falcon or any other 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 Falcon and any other Affiliate thereof;
(j) All financial statements of Falcon or any Affiliate
thereof that are consolidated to include Seller will contain
detailed notes clearly stating that: (i) a special purpose
corporation exists as a Subsidiary of Falcon, and (ii) Falcon
has 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 Falcon or any Affiliate thereof;
(l) The Seller will strictly observe corporate
formalities in its dealings with Falcon or any Affiliate
thereof, and funds or other assets of the Seller will not be
commingled with those of Falcon or any Affiliate 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
Falcon or any Affiliate thereof (other than Falcon 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 Falcon or any
Subsidiary or other Affiliate of Falcon. The Seller will pay
to the appropriate Affiliate the marginal increase or, in the
absence of such increase, the market amount of its portion of
the premium payable with respect to any insurance policy that
covers the Seller and such Affiliate; and
(m) The Seller will maintain arm's-length relationships
with Falcon (and any Affiliate 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.
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-12
Neither the Seller nor Falcon 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 and Falcon 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.
RECEIVABLES PURCHASE AGREEMENT
Exhibit IV-13
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "TERMINATION EVENT":
(a) (i) The Seller, Falcon or the Servicer (if Falcon or
any of its Affiliates) shall fail to perform or observe any
term, covenant or agreement under the Agreement or any other
Transaction Document and, except as set forth in CLAUSE(ii) or
(iii) or CLAUSE(b), such failure shall continue for 30 days,
(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 payment or deposit shall remain unmade for two Business
Days or (iii) Falcon shall resign as Servicer, and no successor
Servicer reasonably satisfactory to the Administrator shall
have been appointed;
(b) Falcon shall fail to transfer to any successor
Servicer when required any rights pursuant to the Agreement
that Falcon then has as Servicer;
(c) Any representation or warranty made or deemed made
by the Seller or the Servicer (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 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, and shall remain incorrect
or untrue 30 days after notice to the Seller or the Servicer
of such inaccuracy;
(d) The Seller or the Servicer shall fail to deliver the
Information Package pursuant to the Agreement, and such
failure shall remain unremedied for five 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 perfected undivided percentage
ownership 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 or Falcon shall generally not pay
its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall
RECEIVABLES PURCHASE AGREEMENT
Exhibit V-1
make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Seller or
Falcon 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 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 the Seller or Falcon shall
take any corporate action to authorize any of the actions set
forth above in this paragraph; or
(ii) Any Originator shall generally not pay its debts as
such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be
instituted by or against such 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 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
such Originator shall take any corporate action to authorize
any of the actions set forth above in this paragraph;
(g) (i) The Default Ratio shall exceed 1.50% or the
Delinquency Ratio shall exceed 3.95%, or (ii) the average for
three consecutive Fiscal Months of: (a) the Default Ratio
shall exceed 1.05%, (B) the Delinquency Ratio shall exceed
3.75%, or (C) the Dilution Ratio shall exceed 6.75%;
(h) A Change in Control shall occur;
RECEIVABLES PURCHASE AGREEMENT
Exhibit V-2
(i) The Purchased Interest shall exceed 100% and such
circumstance shall not have been cured within five Business Days;
(j) Falcon or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any of its Permitted 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 Permitted Debt
(and shall have not been waived); or any other event shall occur
or condition shall exist under any agreement, mortgage, indenture
or instrument relating to any such Permitted Debt and shall
continue after the applicable grace period, if any, specified in
such agreement, mortgage, indenture or instrument (and shall
have not been waived), if, in either case: (a) the effect of such
non-payment, event or condition is to give the applicable
debtholders the right (whether acted upon or not) to accelerate
the maturity of such Permitted Debt, or (b)any such Permitted
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 Permitted Debt shall
be required to be made, in each case before the stated maturity
thereof; or
(k) Either: (i) a contribution failure shall occur with
respect to any Benefit Plan sufficient to give rise to a lien
under Section 302(f) of ERISA, (ii) the Internal Revenue
Service shall, or shall indicate its intention in writing to
the Seller, any Originator, Falcon or any ERISA Affiliate to,
file a notice of lien asserting a claim or claims of $100,000
or more in the aggregate pursuant to the Internal Revenue Code
with regard to any of the assets of Seller, any Originator,
Falcon or any ERISA Affiliate and such lien shall have been
filed and not released within 10 days, or (iii) the Pension
Benefit Guaranty Corporation shall, or shall indicate its
intention in writing to the Seller, any Originator, Falcon or
any ERISA Affiliate to, either file a notice of lien asserting
a claim pursuant to ERISA with regard to any assets of the
Seller, any Originator, Falcon or any ERISA Affiliate or
terminate any Benefit Plan that has unfunded benefit
liabilities, or any steps shall have been taken to terminate
any Benefit Plan subject to Title IV of ERISA so as to result
in any liability in excess of $1,000,000 and such lien shall
have been filed and not released within 10 days.
RECEIVABLES PURCHASE AGREEMENT
Exhibit V-3