EXHIBIT 10.5
EXECUTION COPY
RECEIVABLES PURCHASE AND SERVICING AGREEMENT
DATED AS OF DECEMBER 26, 2002,
BY AND AMONG
CASTLE SPFD, LLC,
AS SELLER,
A.M. CASTLE & CO.,
AS MASTER SERVICER,
TOTAL PLASTICS, INC. AND XXXXXX STEEL PLATE CO.,
EACH AS A SERVICER,
CASTLE IND MGR, INC.,
AS INDEPENDENT MEMBER,
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS PURCHASER AND AS ADMINISTRATIVE AGENT
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND INTERPRETATION........................................... 2
Section 1.01. Definitions........................................................... 2
Section 1.02. Rules of Construction................................................. 2
ARTICLE II. AMOUNTS AND TERMS OF PURCHASES.......................................... 2
Section 2.01. Purchases............................................................. 2
Section 2.02. Optional Changes in Maximum Purchase Limit............................ 2
Section 2.03. Investment Base Certificates; Notices Relating to Purchases........... 3
Section 2.04. Conveyance of Receivables and Related Security........................ 4
Section 2.05. Facility Termination Date............................................. 6
Section 2.06. Daily Yield........................................................... 6
Section 2.07. Fees.................................................................. 6
Section 2.08. Time and Method of Payments........................................... 6
Section 2.09. Capital Requirements; Additional Costs; Illegality.................... 8
Section 2.10. Breakage Costs........................................................ 9
Section 2.11. Purchase Excess....................................................... 9
ARTICLE III. CONDITIONS PRECEDENT................................................... 9
Section 3.01. Conditions to Effectiveness of Agreement.............................. 9
Section 3.02. Conditions Precedent to All Purchases................................. 11
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.......................................... 13
Section 4.01. Representations and Warranties of the Seller.......................... 13
Section 4.02. Representations and Warranties of the Servicers....................... 20
Section 4.03. Representations and Warranties of the Independent Member.............. 20
ARTICLE V. GENERAL COVENANTS OF THE SELLER AND THE
INDEPENDENT MEMBER................................................ 24
Section 5.01. Affirmative Covenants of the Seller................................... 24
Section 5.02. Reporting Requirements of the Seller; Bringdown Certificates.......... 26
Section 5.03. Negative Covenants of the Seller...................................... 27
Section 5.04. Affirmative Covenants of Independent Member........................... 29
Section 5.05. Negative Covenants of Independent Member.............................. 30
ARTICLE VI. COLLECTIONS AND DISBURSEMENTS........................................... 32
Section 6.01. Establishment of Accounts............................................. 32
Section 6.02. Funding of Collection Account......................................... 35
Section 6.03. Daily Disbursements From the Collection Account; Revolving Period..... 35
Section 6.04. [Reserved]............................................................ 36
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Section 6.05. Liquidation Settlement Procedures............................................ 36
Section 6.06. Termination Procedures....................................................... 37
ARTICLE VII. SERVICER PROVISIONS........................................................... 38
Section 7.01. Appointment of the Servicers................................................. 38
Section 7.02. Duties and Responsibilities of the Servicers................................. 38
Section 7.03. Collections on Receivables and the Related Security.......................... 38
Section 7.04. Authorization of the Servicers............................................... 39
Section 7.05. Servicing Fees............................................................... 40
Section 7.06. Representations and Warranties of the Servicers.............................. 41
Section 7.07. Covenants of the Servicers................................................... 42
Section 7.08. Reporting Requirements of the Servicers...................................... 42
ARTICLE VIII. GRANT OF SECURITY INTERESTS.................................................. 43
Section 8.01. Seller's Grant of Security Interest.......................................... 43
Section 8.02. Seller's Certification....................................................... 43
Section 8.03. [Reserved]................................................................... 44
Section 8.04. Delivery of Collateral....................................................... 44
Section 8.05. Seller Remains Liable........................................................ 44
Section 8.06. Covenants of the Seller and the Servicers Regarding the Seller Collateral.... 45
ARTICLE IX. TERMINATION EVENTS............................................................. 48
Section 9.01. Termination Events........................................................... 48
Section 9.02. Events of Servicer Termination............................................... 52
ARTICLE X. REMEDIES........................................................................ 54
Section 10.01. Actions Upon Termination Event.............................................. 54
Section 10.02. Exercise of Remedies........................................................ 56
Section 10.03. Power of Attorney........................................................... 56
Section 10.04. Continuing Security Interest................................................ 56
ARTICLE XI. SUCCESSOR SERVICER PROVISIONS.................................................. 56
Section 11.01. Servicers Not to Resign..................................................... 56
Section 11.02. Appointment of the Successor Servicer....................................... 57
Section 11.03. Duties of the Servicer...................................................... 57
Section 11.04. Effect of Termination or Resignation........................................ 57
ARTICLE XII. INDEMNIFICATION............................................................... 58
Section 12.01. Indemnities by the Seller................................................... 58
Section 12.02. Indemnities by the Servicers................................................ 59
Section 12.03. Limitation of Damages; Indemnified Persons.................................. 60
ARTICLE XIII. AGENT........................................................................ 61
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Section 13.01. Authorization and Action..................................................... 61
Section 13.02. Reliance..................................................................... 61
Section 13.03. GE Capital and Affiliates.................................................... 62
ARTICLE XIV. MISCELLANEOUS.................................................................. 62
Section 14.01. Notices...................................................................... 62
Section 14.02. Binding Effect; Assignability by Seller and the Servicers; Assignment and
Participations by the Purchaser.............................................. 62
Section 14.03. Termination; Survival of Seller Secured Obligations Upon Facility
Termination Date............................................................. 65
Section 14.04. Costs, Expenses and Taxes.................................................... 65
Section 14.05. Confidentiality.............................................................. 67
Section 14.06. Complete Agreement; Modification of Agreement................................ 68
Section 14.07. Amendments and Waivers....................................................... 68
Section 14.08. No Waiver; Remedies.......................................................... 68
Section 14.09. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL................................................................ 68
Section 14.10. Counterparts................................................................. 70
Section 14.11. Severability................................................................. 70
Section 14.12. Section Titles............................................................... 70
Section 14.13. Further Assurances........................................................... 70
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EXHIBITS, SCHEDULES AND ANNEXES
Exhibit 2.02(a) Form of Commitment Reduction Notice
Exhibit 2.02(b) Form of Commitment Termination Notice
Exhibit 2.03(a)(i) Form of Investment Base Certificate
Exhibit 2.03(a)(ii) Form of Monthly Report
Exhibit 2.03(b) Form of Capital Purchase Request
Exhibit 2.03(c) Form of Repayment Notice
Exhibit 2.04(a) Form of Purchase Assignment
Exhibit 5.02 Form of Bringdown Certificate
Exhibit 10.03 Form of Power of Attorney
Exhibit A Credit and Collection Policy
Exhibit B Form of Extended Term Promissory Note
Schedule 4.01(b) Seller's Executive Offices; Collateral Locations; Legal or Other
Names
Schedule 4.01(c)(v)
Schedule 4.01(h) Outstanding Equity Interests
Schedule 4.01(i) Taxes
Schedule 4.01(r) Deposit and Disbursement Accounts
Annex 5.02 Reporting Requirements of the Seller
Annex 7.02 Investment Reports
Annex X Definitions
Annex Y Schedule of Documents
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THIS RECEIVABLES PURCHASE AND SERVICING AGREEMENT (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement") is entered into as of December 26, 2002, by and among Castle SPFD,
LLC, a Delaware limited liability company (the "Seller"), A. M. CASTLE & CO., a
Maryland corporation (the "Parent" and, in its capacity as the master servicer
hereunder, the "Master Servicer"), xxxxxx steel plate co., a Delaware
corporation ("Xxxxxx Steel"), TOTAL PLASTICS, INC., a Michigan corporation
("Total Plastics"), each in its capacity as servicer hereunder (each, a
"Servicer" and, together with the Master Servicer, the "Servicers"), CASTLE IND
MGR, INC., a Delaware corporation (the "Independent Member"), and GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as the purchaser (together
with its successors and assigns, the "Purchaser") and as administrative agent
for the Purchaser hereunder (in such capacity, the "Administrative Agent").
RECITALS
A. The Seller is a special purpose limited liability company owned
by the Parent, Xxxxxx Steel, KEYSTONE TUBE COMPANY, LLC, a Delaware limited
liability company ("Keystone Tube"), Total Plastics (each, an "Originator" and
collectively, the "Originators") and the Independent Member (the Independent
Member, the Originators, the Seller, and the Parent as performance guarantor
being sometimes hereinafter referred to collectively as the "Seller Parties").
B. The Seller has been formed for the purpose of purchasing, or
otherwise acquiring by capital contribution, all trade receivables of the Parent
and the other Originators other than certain designated receivables.
C. The Seller intends to sell, and subject to the terms and
conditions hereof, the Purchaser intends to purchase, undivided percentage
interests in such trade receivables from time to time as described herein.
D. The Administrative Agent has been requested and is willing to act
as administrative agent on behalf of the Purchaser in connection with the making
of such purchases.
E. In order to effectuate the purposes of this Agreement, the
Purchaser desires to appoint the Parent, as the Master Servicer, and Xxxxxx
Steel and Total Plastics, each as a Servicer, to service, administer and collect
the receivables acquired by the Purchaser pursuant to this Agreement and each of
the Parent, Xxxxxx Steel and Total Plastics is willing to act in such capacity
as Servicers hereunder on the terms and conditions set forth herein.
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AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in Annex X.
Section 1.02. Rules of Construction. For purposes of this Agreement,
the rules of construction set forth in Annex X shall govern. All Appendices
hereto, or expressly identified to this Agreement, are incorporated herein by
reference and, taken together with this Agreement, shall constitute but a single
agreement.
ARTICLE II.
AMOUNTS AND TERMS OF PURCHASES
Section 2.01. Purchases. From and after the Closing Date and until
the Facility Termination Date and subject to the terms and conditions hereof,
the Purchaser agrees to purchase Purchaser Interests (each such purchase
hereunder, a "Purchase") from the Seller from time to time, and the Seller
agrees to sell the Purchaser Interests to the Purchaser. Under no circumstances
shall the Purchaser make any Purchase if, after giving effect thereto, a
Purchase Excess would exist. Each purchase of the Purchaser Interest by the
Purchaser hereunder shall consist of either (i) a purchase made by the Purchaser
with new funds provided by the Purchaser (each, a "Capital Purchase") or (ii) a
purchase made by the Purchaser with funds consisting of Collections allocated to
the Purchaser Interests pursuant to the terms of this Agreement (each, a
"Reinvestment Purchase").
Section 2.02. Optional Changes in Maximum Purchase Limit.
(a) So long as no Incipient Termination Event or Termination Event
shall have occurred and be continuing, the Seller may, not more than twice
during each calendar year, reduce the Maximum Purchase Limit permanently;
provided that (i) the Seller shall give ten Business Days' prior written notice
of any such reduction to the Administrative Agent substantially in the form of
Exhibit 2.02(a) (each such notice, a "Commitment Reduction Notice"), (ii) any
partial reduction of the Maximum Purchase Limit shall be in a minimum amount of
$5,000,000 or an integral multiple thereof, (iii) no such reduction shall reduce
the Maximum Purchase Limit below the greater of (x) Capital Investment at such
time and
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(y) $40,000,000, and (iv) any such reduction must be accompanied by payment of
the fee required by Section 2.02(c).
(b) The Seller may at any time on at least 90 days' prior written
notice by the Seller to the Administrative Agent irrevocably terminate the
Maximum Purchase Limit; provided that (i) such notice of termination shall be
substantially in the form of Exhibit 2.02(b) (the "Commitment Termination
Notice"), (ii) the Seller shall reduce the Capital Investment to zero and make
all payments required by Section 2.03(c) at the time and in the manner specified
therein, and (iii) such reduction must be accompanied by payment of the fees
required by Section 2.02(c) and other fees required to be paid in accordance
with the Fee Letter. Upon such termination, the Seller's right to request that
the Purchaser make Purchases hereunder shall simultaneously terminate and the
Facility Termination Date shall automatically occur.
(c) If all or any portion of the Maximum Purchase Limit is reduced
or terminated in accordance with this Section 2.02 or if the Seller has received
an Election Notice pursuant to Section 2.01 of the Sale Agreement (i) prior to
the first anniversary of the Closing Date, the Seller shall pay the
Administrative Agent, for the account of the Purchaser, the First Year Early
Termination Fee and (ii) on or after the first anniversary of the Closing Date
but prior to the second anniversary of the Closing Date, the Seller shall pay
the Administrative Agent, for the account of the Purchaser, an amount equal to
the Second Year Early Termination Fee.
(d) Each written notice required to be delivered pursuant to
Sections 2.02(a) and (b) shall be irrevocable, shall be promptly delivered by
the Administrative Agent to the Purchaser and shall be effective (i) on the day
of receipt if received by the Administrative Agent not later than 1:00 p.m. (New
York time) on any Business Day and (ii) on the immediately succeeding Business
Day if received by the Administrative Agent after such time on such Business Day
or if any such notice is received on a day other than a Business Day (regardless
of the time of day such notice is received). Each such notice of termination or
reduction shall specify, respectively, the amount of, or the amount of the
proposed reduction in, the Maximum Purchase Limit.
Section 2.03. Investment Base Certificates; Notices Relating to
Purchases.
(a) Investment Base Certificates.
(i) Not later than 11:00 a.m. (New York time) on Wednesday of
each week, the Master Servicer, on behalf of itself and each other
Servicer, shall deliver to the Administrative Agent for distribution to
the Purchaser an Officer's Certificate for the period of the immediately
preceding week in the form of Exhibit 2.03(a)(i) hereto (each, an
"Investment Base Certificate"); provided that if (i) an Incipient
Termination Event or a Termination Event shall have occurred and be
continuing or (ii) the Administrative Agent, in good faith, believes that
an Incipient Termination Event or a Termination Event is imminent or deems
the Purchaser's rights or interests in the Transferred Receivables,
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the Related Security or the Seller Collateral insecure, the Parent shall
deliver an Investment Base Certificate to the Administrative Agent for
distribution to the Purchaser at such more frequent intervals as the
Administrative Agent may request from time to time.
(ii) Not later than the 15th day of each month, commencing
with January 15, 2003 (or if any such day is not a Business Day, the next
succeeding Business Day thereafter), the Parent shall deliver to the
Administrative Agent for distribution to the Purchaser a Monthly Report in
the form of Exhibit 2.03(a)(ii) hereto.
(iii) Capital Investment Available shall be determined by the
Administrative Agent based on information related to the Seller Collateral
available to it, including (A) any information obtained in connection with
any audit or reflected in the most recent Investment Base Certificate or
any other Investment Report delivered to the Administrative Agent for
distribution to the Purchaser or (B) any other information that may be
available to the Purchaser and the Administrative Agent.
(b) Notices Relating to Purchases. Each Purchase resulting in an
increase in Capital Investment shall be made upon the provision of notice by the
Seller to the Administrative Agent in the manner provided herein. Any such
notice must be given in writing so that it is received no later than 1:00 p.m.
(New York time) (i) one (1) Business Day immediately preceding the proposed
Purchase Date set forth therein if a Purchase at the Index Rate is being
requested, or (ii) at least two (2) LIBOR Business Days immediately preceding
the proposed Purchase Date set forth therein if a Purchase at the LIBOR Rate is
being requested. Each such notice (a "Capital Purchase Request") shall (i) be
substantially in the form of Exhibit 2.03(b) hereto, (ii) be irrevocable and
(iii) specify the amount of the requested increase in Capital Investment (which
shall be in an amount not less than $500,000) and the proposed Purchase Date
(which shall be a Business Day), and shall include such other information as may
be required by the Administrative Agent.
(c) Repayment Notice. The Seller may at any time reduce the Capital
Investment; provided that (i) the Seller shall give one Business Day's prior
written notice of any such reduction to the Administrative Agent substantially
in the form of Exhibit 2.03(c) hereto (each such notice, a "Repayment Notice"),
(ii) each such notice shall be irrevocable, (iii) each such notice shall specify
the amount of the requested reduction in the Capital Investment and the proposed
date of such reduction (which shall be a Business Day) and (iv) any such
reduction must be accompanied by payment of (A) all Daily Yield accrued and
unpaid on the Capital Investment being reduced through but excluding the date of
such reduction and (B) the Breakage Costs, if any, required by Section 2.10. Any
such notice of reduction must be received by the Administrative Agent no later
than 4:00 p.m. (New York time) on the Business Day immediately preceding the
date of the proposed reduction in Capital Investment.
Section 2.04. Conveyance of Receivables and Related Security.
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(a) Purchase Assignment. On or prior to the Closing Date, the Seller
shall complete, execute and deliver to the Administrative Agent for the benefit
of the Purchaser an assignment substantially in the form of Exhibit 2.04(a) (the
"Purchase Assignment") in order to evidence the Purchases.
(b) Funding of Collection Account; Increases in Capital Investment.
(i) Funding of Collection Account by Purchaser. Following
receipt of any Capital Purchase Request, and subject to satisfaction of
the conditions set forth in Section 3.02, the Purchaser shall make
available to or on behalf of the Seller on the Purchase Date specified
therein the lesser of the requested increase in Capital Investment
specified in such Capital Purchase Request and Capital Investment
Available by depositing such amount in same day funds into the Collection
Account.
(ii) Payment of Purchase Price. The Purchaser shall, or shall
cause the Administrative Agent to, deposit into the Seller Account on each
Business Day during the Revolving Period, in same day funds, all amounts
on deposit in the Collection Account that are to be disbursed to or on
behalf of the Seller pursuant to Section 6.03(d) as payment for the
Purchaser Interests.
(c) Vesting of Ownership.
(i) Effective on and as of each Purchase Date, the
Administrative Agent on behalf of the Purchaser shall own the Purchaser
Interests sold by the Seller hereunder on such Purchase Date. The Seller
shall not take any action inconsistent with such ownership and shall not
claim any ownership interest in the Purchaser Interests.
(ii) The Seller shall indicate in its Records that interests
in the Transferred Receivables and the Related Security have been sold
hereunder and that ownership of such interests is vested in the
Administrative Agent on behalf of the Purchaser. In addition, the Seller
shall respond to any inquiries with respect to the ownership of any
Transferred Receivable or the Related Security by stating that interests
therein have been sold hereunder and that ownership of such interests is
vested in the Administrative Agent for the benefit of the Purchaser. The
Seller and the Master Servicer shall hold all Contracts and other
documents and incidents relating to such Transferred Receivables and the
Related Security in trust for the benefit of the Administrative Agent on
behalf of the Purchaser, as the owner thereof, and for the sole purpose of
facilitating the servicing of such Transferred Receivables. The Seller and
the Master Servicer hereby acknowledge that their retention and possession
of such Contracts and documents shall at all times be at the sole
discretion of the Administrative Agent and in a custodial capacity for the
Administrative Agent's (on behalf of the Purchaser) benefit only.
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(d) Repurchases of Transferred Receivables and Related Security. If
any Originator is required to repurchase Transferred Receivables and the Related
Security from the Seller pursuant to Section 4.05 of the Sale Agreement, the
Purchaser shall sell and reconvey the Purchaser Interests in such Transferred
Receivables and the Related Security to the Seller for cash in an amount equal
to the Outstanding Balance of the Receivables being repurchased.
Section 2.05. Facility Termination Date. Notwithstanding anything to
the contrary set forth herein, the Purchaser shall not have any obligation to
purchase any additional Purchaser Interests from and after the Facility
Termination Date.
Section 2.06. Daily Yield.
(a) The Seller shall pay Daily Yield to the Administrative Agent,
for the account of the Purchaser, for each day on which any Capital Investment
is outstanding, in the manner and at the times specified in Sections 6.03 and
6.05.
(b) Notwithstanding the foregoing, the Seller shall pay interest at
the applicable Daily Yield Rate on unpaid Daily Yield and on any other amount
payable by the Seller hereunder (to the extent permitted by law) that shall not
be paid in full when due (whether at stated maturity, by acceleration or
otherwise) for the period commencing on the due date thereof to (but excluding)
the date the same is indefeasibly paid in full.
(c) Solely for purposes of calculating Daily Yield, funds will be
deemed to be credited to the outstanding Capital Investment one day after
receipt thereof.
Section 2.07. Fees.
(a) The Seller shall pay to the Administrative Agent, for the
account of itself and/or the Purchaser, such fees as set forth in the Fee
Letter, in the amounts, at the times and in the manner specified therein.
(b) On each Settlement Date, the Seller shall pay to the Master
Servicer or to its Successor Servicer, as applicable, the Servicing Fee or the
Successor Servicing Fees and Expenses, respectively, in each case to the extent
of available funds therefor as provided in Section 6.03(b). On each Settlement
Date, the Master Servicer or its Successor Servicer shall pay to each other
Servicer or Successor Servicer the Applicable Servicing Fee.
Section 2.08. Time and Method of Payments.
(a) Subject to the provisions of Sections 6.02, 6.03, and 6.05, all
payments in reduction of Capital Investment and all payments of Daily Yield,
fees and other amounts payable by the Seller hereunder shall be made in Dollars,
in immediately available funds, to the Administrative Agent (for its account or
the account of the Purchaser, the Affected Parties or Indemnified Persons) not
later than 11:00 a.m. (New York time) on the due date therefor. Any
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such payment made on such date but after such time shall be deemed to have been
made on, and Daily Yield shall continue to accrue and be payable thereon until,
the next succeeding Business Day. If any such payment becomes due on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day and Daily Yield thereon shall be payable during such
extension. The Administrative Agent is hereby authorized to add the amount of
any Daily Yield, fees and other amounts payable by the Seller hereunder which
are not paid when due to the Capital Investment.
(b) Any and all payments by the Seller hereunder shall be made in
accordance with this Section 2.08 without setoff or counterclaim and free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, excluding taxes on or measured by
the net income of any Affected Party imposed by the United States, the Affected
Party's jurisdiction of organization (or, in the case of an individual, the
jurisdiction in which such individual's primary residence is located) or any
other jurisdiction in which such Affected Party has established a taxable nexus,
other than in connection with the transactions contemplated hereby, and by the
Sale Agreement on or measured by the overall net income of such Affected Party
to the extent that the computation of such taxes is consistent with the Intended
Characterization (such non-excluded taxes, levies, imposts, deductions, charges
and withholdings being "Indemnified Taxes"). If the Seller shall be required by
law to deduct any Indemnified Taxes from or in respect of any sum payable
hereunder, (i) the sum payable shall be increased as much as shall be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.08) the Affected Party entitled to
receive any such payment receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Seller shall make such
deductions, and (iii) the Seller shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law. The Seller
may contest in good faith, by appropriate proceedings, the validity or amount of
any charges or claims to a taxing authority as long as (A) adequate reserves
with respect to such contest are maintained on the books of the Seller, in
accordance with GAAP, (B) such contest is maintained and prosecuted continuously
and with diligence, (C) none of the Seller Collateral becomes subject to
forfeiture or loss as a result of such contest, (D) no Lien shall be imposed to
secure payment of such charges or claims other than inchoate tax liens and (E)
none of the Purchaser or the Administrative Agent has advised the Seller in
writing that such Affected Party reasonably believes that failure to pay or to
discharge such claims or charges could have or result in a Material Adverse
Effect. Within 30 days after the date of any payment of Indemnified Taxes, the
Seller shall furnish to the Administrative Agent the original or a certified
copy of a receipt evidencing payment thereof. The Seller shall indemnify any
Affected Party from and against, and, within ten days of demand therefor, pay
any Affected Party for, the full amount of Indemnified Taxes (together with any
taxes imposed by any jurisdiction on amounts payable under this Section 2.08)
paid by such Affected Party and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally asserted.
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Section 2.09. Capital Requirements; Additional Costs; Illegality.
(a) If the Administrative Agent on behalf of any Affected Party
shall have determined that the adoption after the date hereof of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by such Affected Party with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law) from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Affected Party against
commitments made by it under this Agreement or any other Related Document and
thereby reducing the rate of return on such Affected Party's capital as a
consequence of its commitments hereunder or thereunder, then the Seller shall
from time to time upon demand by the Administrative Agent pay to the
Administrative Agent on behalf of such Affected Party additional amounts
sufficient to compensate such Affected Party for such reduction together with
interest thereon from the date of any such demand until payment in full at the
applicable Daily Yield Rate. A certificate as to the amount of that reduction
and showing the basis of the computation thereof submitted by the Administrative
Agent to the Seller shall be final, binding and conclusive on the parties hereto
(absent manifest error) for all purposes.
(b) If, due to any Regulatory Change, there shall be any increase in
the cost to any Affected Party of agreeing to make or making, funding or
maintaining any commitment hereunder, under any other Related Document,
including with respect to any Purchases or Capital Investment, or any reduction
in any amount receivable by such Affected Party hereunder or thereunder,
including with respect to the Purchases or Capital Investment (any such increase
in cost or reduction in amounts receivable are hereinafter referred to as
"Additional Costs"), then the Seller shall, from time to time upon demand by the
Administrative Agent, pay to the Administrative Agent on behalf of such Affected
Party additional amounts sufficient to compensate such Affected Party for such
Additional Costs together with interest thereon from the date demanded until
payment in full thereof at the applicable Daily Yield Rate. Such Affected Party
agrees that, as promptly as practicable after it becomes aware of any
circumstance referred to above that would result in any such Additional Costs,
it shall, to the extent not inconsistent with its internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by the Seller pursuant to this Section 2.09(b).
(c) Notwithstanding anything to the contrary contained herein, if
the introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for the Purchaser to
agree to make or to make or to continue to fund or maintain any Purchase at the
LIBOR Rate, then, unless the Purchaser is able to make or to continue to fund or
to maintain such Purchase at the LIBOR Rate at another branch or office of the
Purchaser without, in Purchaser's opinion, adversely affecting it or its
Purchases or the income obtained therefrom, on notice thereof and demand
therefor by the Purchaser to Seller, Seller shall forthwith
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(i) repurchase all outstanding Purchases at the LIBOR Rate; or (ii) convert all
Purchases at the LIBOR Rate into the Purchases at the Index Rate.
(d) Determinations by any Affected Party for purposes of this
Section 2.09 of the effect of any Regulatory Change on its costs of making,
funding or maintaining any commitments hereunder, under any other Related
Document or on amounts receivable by it hereunder or thereunder or of the
additional amounts required to compensate such Affected Party in respect of any
Additional Costs shall be set forth in a written notice to the Seller in
reasonable detail and shall be final, binding and conclusive on the Seller
(absent manifest error) for all purposes.
Section 2.10. Breakage Costs. The Seller shall pay to the
Administrative Agent for the account of the Purchaser, upon request of the
Purchaser, such amount as shall compensate the Purchaser for any loss, cost or
expense incurred by the Purchaser (as determined by the Purchaser) as a result
of any reduction by the Seller in Capital Investment at the LIBOR Rate (and
accompanying loss of Daily Yield thereon) other than on the maturity date of the
financing used to fund such Capital Investment, which compensation shall include
an amount equal to any loss or expense incurred by the Purchaser during the
period from the date of such reduction to (but excluding) such maturity date if
the rate of interest obtainable by the Purchaser upon the redeployment of funds
in an amount equal to such reduction is less than the interest rate applicable
to such financing source (any such loss, cost or expense, "Breakage Costs"). The
determination by the Purchaser of the amount of any such loss or expense shall
be set forth in a written notice to the Seller in reasonable detail and shall be
final, binding and conclusive on the Seller (absent manifest error) for all
purposes.
Section 2.11. Purchase Excess. On each Business Day during the
Revolving Period and after completion of the disbursements specified in Section
6.03, the Administrative Agent shall notify the Seller and the Master Servicer
of any Purchase Excess on such day, and the Seller shall deposit the amount of
such Purchase Excess in the Collection Account by 11:00 a.m. (New York time) on
the immediately succeeding Business Day.
ARTICLE III.
CONDITIONS PRECEDENT
Section 3.01. Conditions to Effectiveness of Agreement. The
Purchaser shall not be obligated to purchase Purchaser Interests hereunder on
the occasion of the initial Purchase, nor shall the Purchaser or the
Administrative Agent be obligated to take, fulfill or perform any other action
hereunder, until the following conditions have been satisfied, in the sole
discretion of, or waived in writing by, the Purchaser and the Administrative
Agent:
(a) Purchase Agreement; Other Related Documents. This Agreement
shall have been duly executed by, and delivered to, the parties hereto and the
Purchaser and the
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Administrative Agent shall have received such other documents, instruments,
agreements and legal opinions as the Purchaser and the Administrative Agent
shall request in connection with the transactions contemplated by this
Agreement, including all those listed in the Schedule of Documents, each in form
and substance satisfactory to the Purchaser and the Administrative Agent.
(b) Governmental Approvals. Each of the Seller Parties shall have
obtained all required consents and approvals of all Persons, including all
requisite Governmental Authorities, to the execution, delivery and performance
of this Agreement and the other Related Documents to which such Seller Party is
a party and the consummation of the transactions contemplated hereby or thereby
and the Administrative Agent shall have received an Officer's Certificate from
each of the Seller and the Master Servicer, in form and substance satisfactory
to the Administrative Agent, affirming that all such consents and approvals have
been obtained or that no such consents or approvals are required, as the case
may be.
(c) Compliance with Laws. Each of the Seller Parties shall be in
compliance with all applicable foreign, federal, state and local laws and
regulations, including those specifically referenced in Section 5.01(a), where
failure to so comply could not reasonably be expected to have or result in a
Material Adverse Effect.
(d) Payment of Fees. The Seller shall have paid all fees required to
be paid by it on the Closing Date, including all fees required hereunder and the
Fee Letter, and shall have reimbursed the Purchaser for all fees, costs and
expenses of closing the transactions contemplated hereunder and under the other
Related Documents, including the Purchaser's legal and audit expenses, and other
document preparation costs.
(e) Representations and Warranties. Each representation and warranty
by any of the Seller Parties contained herein and in each other Related Document
to which such Seller Party is a party shall be true and correct as of the
Closing Date, except to the extent that such representation or warranty
expressly relates solely to an earlier date.
(f) No Termination Event. No Incipient Termination Event or
Termination Event hereunder or any "Event of Default" under (and as defined in)
the Permitted Outstanding Debt Documents shall have occurred and be continuing
or would result after giving effect to any of the transactions contemplated on
the Closing Date.
(g) [Reserved]
(h) Consents. The Administrative Agent shall have received, in form
and substance satisfactory to Administrative Agent, fully executed copies of all
consents required from the holders of the Permitted Outstanding Debt necessary
to permit the transactions contemplated by the Sale Agreement and hereby and an
Officer's Certificate, in form and substance reasonably satisfactory to the
Administrative Agent, affirming that no additional
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consents or approvals are required or that no such consents or approvals are
required, as the case may be, and that the execution, delivery and performance
of the Sale Agreement and this Agreement do not violate any term or provision of
any Permitted Outstanding Debt Document.
(i) [Reserved].
(j) Landlord Waivers. The Administrative Agent shall have received,
in form and substance satisfactory to the Administrative Agent, fully executed
landlord waivers for each leased location of Originators, Servicers and Seller
where such Person maintains (i) books, records, Contracts, Servicing Software or
other information regarding the Transferred Receivables or the Related Security
or (ii) chattel paper or instruments that are Transferred Receivables or the
Related Security.
(k) Consummation of Related Transactions. The Administrative Agent
shall have received fully executed copies of all agreements and documents
pursuant to which the Parent has issued its preferred Equity Interest and
evidence that Parent received no less than $10,000,000 of the capital
contribution in cash therefor.
(l) Opening Available Accounts Receivables. The Capital Investment
Available (calculated without giving effect to the establishment of the
Availability Reserve) on the Closing Date shall be at least $12,000,000.
(m) Opening Reports. The Administrative Agent shall have received,
in form and substance satisfactory to the Administrative Agent, (i) a Monthly
Report for the month ending on or most recently ending prior to the Closing Date
and (ii) the Investment Base Certificates for the two-week period ended on or
most recently ended prior to the Closing Date.
(n) Credit and Collection Policies. The Credit and Collection Policy
of each Originator shall be in form and substance reasonably satisfactory to the
Administrative Agent.
(o) Termination of Existing Securitization. The Administrative Agent
shall have received duly executed payoff, transfer, reassignment and termination
agreements, each in form and substance reasonably satisfactory to the
Administrative Agent, by and between parties to the PNC Bank National
Association receivables purchase documents, evidencing repayment in full of all
obligations thereunder, together with (i) UCC-3 or other appropriate termination
statements, in form and substance satisfactory to the Administrative Agent,
releasing all liens of PNC Bank National Association and others upon any of the
personal property of each Originator, and (i) termination of all blocked account
agreements, bank agency agreements or other similar agreements or arrangements
or arrangements in favor of PNC Bank National Association or relating to the
obligations to PNC Bank National Association.
Section 3.02. Conditions Precedent to All Purchases. The Purchaser
shall not be obligated to purchase Purchaser Interests hereunder on any Purchase
Date if, as of the date thereof:
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(a) any representation or warranty of the Seller, any Servicer or
the Independent Member contained herein or in any of the other Related Documents
shall be untrue or incorrect as of such date, either before or after giving
effect to the Purchase of Purchaser Interests on such date and to the
application of the proceeds therefrom, except to the extent that such
representation or warranty expressly relates to an earlier date and except for
changes therein expressly permitted by this Agreement;
(b) any event shall have occurred, or would result from the Purchase
of Purchaser Interests on such Purchase Date or from the application of the
proceeds therefrom, that constitutes (i) a Termination Event or an Event of
Servicer Termination, or (ii) except in the case of Reinvestment Purchases, an
Incipient Servicer Termination Event or an Incipient Termination Event;
(c) the Seller or any Servicer is not in compliance with any of its
covenants or other agreements set forth herein;
(d) the Facility Termination Date shall have occurred;
(e) either before or after giving effect to such Purchase and to the
application of the proceeds therefrom, a Purchase Excess would exist;
(f) the Purchaser Interests sold hereunder would, after giving
effect to such purchase, exceed 100%;
(g) any of the Seller Parties shall fail to have taken such other
action, including delivery of approvals, consents, opinions, documents and
instruments to the Administrative Agent (on behalf of the Purchaser), as the
Purchaser or the Administrative Agent may reasonably request;
(h) the Administrative Agent has not received any of the Monthly
Reports and Investment Base Certificates in accordance with Section 2.03 or any
of the Financial Statements, notices or other information in accordance with
Section 5.02;
(i) the aggregate Outstanding Balance of Transferred Receivables
exceeds $85,000,000; or
(j) the Administrative Agent shall have determined that any event or
condition has occurred that has had, or could reasonably be expected to have or
result in, a Material Adverse Effect.
The delivery by the Seller of a Capital Purchase Request and the acceptance by
the Seller of the funds from such Capital Purchase on any Purchase Date shall be
deemed to constitute, as of any such Purchase Date, a representation and
warranty by the Seller that the conditions in this Section 3.02 have been
satisfied.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Seller. To
induce the Purchaser to purchase the Purchaser Interests and the Administrative
Agent to take any action hereunder, the Seller makes the following
representations and warranties to the Purchaser and the Administrative Agent as
of the Closing Date and, except to the extent provided otherwise below, as of
each Purchase Date, each and all of which shall survive the execution and
delivery of this Agreement.
(a) Legal Existence; Compliance with Law. The Seller (i) is a
limited liability company duly organized, validly existing and in good standing
under the laws of Delaware (which is Seller's only state of organization); (ii)
is duly qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification; (iii) has the requisite limited liability
company power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it operates
under lease, and to conduct its business, in each case, as now, heretofore and
proposed to be conducted; (iv) has all licenses, permits, consents or approvals
from or by, and has made all filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct; (v) is in compliance with its certificate of
formation and limited liability company agreement; and (vi) subject to specific
representations set forth herein regarding ERISA, tax and other laws, is in
compliance with all applicable provisions of law, except where the failure to
comply, individually or in the aggregate, could not reasonably be expected to
have or result in a Material Adverse Effect.
(b) Executive Offices; Collateral Locations; Legal or Other Names;
Organizational Identification Number; FEIN. As of the Closing Date, the current
location of the Seller's chief executive office, principal place of business,
other offices, the warehouses and premises within which any Seller Collateral is
stored or located, and the locations of its records concerning the Seller
Collateral (including originals of the Seller Assigned Agreements) are set forth
in Schedule 4.01(b) and none of such locations has changed within the past 12
months (or such shorter time as the Seller has been in existence). During the
prior five years (or such shorter time as the Seller has been in existence),
except as set forth in Schedule 4.01(b), the Seller has not been known as or
used any legal, fictitious or trade name. In addition, Schedule 4.01(b) lists
the organizational identification number issued by Seller's state of
organization or states that no such number has been issued and lists the federal
employer identification number of the Seller.
(c) Power, Authorization, Enforceable Obligations. The execution,
delivery and performance by the Seller of this Agreement and the other Related
Documents to which it is a party, the creation and perfection of all Liens and
ownership interests provided for therein: (i) are
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within the Seller's limited liability company powers; (ii) have been duly
authorized by all necessary or proper limited liability company and Equity
Holder action; (iii) do not contravene any provision of the Seller's certificate
of formation or limited liability company agreement; (iv) do not violate any law
or regulation, or any order or decree of any court or Governmental Authority;
(v) except as set forth on Schedule 4.01(c)(v), do not conflict with or result
in the breach or termination of, constitute a default under or accelerate or
permit the acceleration of any performance required by, any indenture, mortgage,
deed of trust, lease, agreement or other instrument to which the Seller or any
Originator is a party or by which the Seller or any Originator or any of the
property of the Seller or any Originator is bound; (vi) do not result in the
creation or imposition of any Adverse Claim upon any of the property of the
Seller or any Originator; and (vii) do not require the consent or approval of
any Governmental Authority or any other Person, except those which have been
duly obtained, made or complied with prior to the Closing Date as provided in
Section 3.01(b). The exercise by the Purchaser, the Seller or the Administrative
Agent of any of its rights and remedies under any Related Document to which it
is a party, do not require the consent or approval of any Governmental Authority
or any other Person (other than consents or approvals solely relating to or
required to be obtained by the Purchaser or the Administrative Agent, and
subject to the Bankruptcy Code), except those which will have been duly
obtained, made or complied with prior to the Closing Date as provided in Section
3.01(b). On or prior to the Closing Date, each of the Related Documents to which
the Seller is a party shall have been duly executed and delivered by the Seller
and each such Related Document shall then constitute a legal, valid and binding
obligation of the Seller enforceable against it in accordance with its terms.
(d) No Litigation. No Litigation is now pending or, to the knowledge
of the Seller, threatened against the Seller that (i) challenges the Seller's
right or power to enter into or perform any of its obligations under the Related
Documents to which it is a party, or the validity or enforceability of any
Related Document or any action taken thereunder, (ii) seeks to prevent the
transfer, sale, pledge or contribution of any Receivable or the Related Security
or the consummation of any of the transactions contemplated under this Agreement
or the other Related Documents, or (iii) could reasonably be expected to have or
result in, either individually or in the aggregate, a Material Adverse Effect.
As of the Closing Date there is no Litigation pending or threatened that seeks
damages or injunctive relief against, or alleges criminal misconduct by, the
Seller.
(e) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Agreement and the other Related Documents and
(ii) the payment and accrual of all transaction costs in connection with the
foregoing, the Seller is and will be Solvent.
(f) Material Adverse Effect. Since the date of the Seller's
organization, (i) the Seller has not incurred any obligations, contingent or
non-contingent liabilities, liabilities for charges, long-term leases or unusual
forward or long-term commitments that, alone or in the aggregate, could
reasonably be expected to have or result in a Material Adverse Effect, (ii) no
contract, lease or other agreement or instrument has been entered into by the
Seller or has
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become binding upon the Seller's assets and no law or regulation applicable to
the Seller has been adopted that has had or could reasonably be expected to have
or result in a Material Adverse Effect and (iii) the Seller is not in default
and no third party is in default under any material contract, lease or other
agreement or instrument to which the Seller is a party that alone or in the
aggregate could reasonably be expected to have or result in a Material Adverse
Effect. Since the date of the Seller's organization, no event has occurred that
alone or together with other events could reasonably be expected to have or
result in a Material Adverse Effect.
(g) Ownership of Property; Liens. No Transferred Receivable or the
Related Security is subject to any Adverse Claim, none of the other properties
and assets of the Seller are subject to any Adverse Claims other than Permitted
Seller Encumbrances, and there are no facts, circumstances or conditions known
to the Seller that may result in (i) with respect to the Transferred Receivables
and the Related Security, any Adverse Claims (including Adverse Claims arising
under Environmental Laws) and (ii) with respect to its other properties and
assets, any Adverse Claims (including Adverse Claims arising under Environmental
Laws) other than Permitted Seller Encumbrances. The Seller has received all
assignments, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect the Seller's right, title and interest in and to the Transferred
Receivables and the Related Security and its other properties and assets. The
Seller has rights in and the power to transfer the Transferred Receivables and
the Related Security. The Seller has rights in and the power to transfer each
item of the Seller Collateral upon which it purports to xxxxx x Xxxx hereunder
free and clear of any and all Liens other than Permitted Seller Encumbrances.
The Liens granted to the Administrative Agent for the benefit of the Purchaser
pursuant to Section 8.01 will at all times be fully perfected first priority
Liens in and to the Seller Collateral.
(h) Ventures, Subsidiaries and Affiliates; Outstanding Equity
Interests and Debt. The Seller has no Subsidiaries, is not engaged in any joint
venture or partnership with any other Person, and is not an Affiliate of any
Person other than the Originators and the Independent Member. All of the issued
and outstanding Equity Interests of the Seller are owned by the Originators and
the Independent Member. There are no outstanding rights to purchase, options,
warrants or similar rights or agreements pursuant to which the Seller may be
required to issue, sell, repurchase or redeem any of its Equity Interests or
other equity securities. All outstanding Debt of the Seller as of the Closing
Date is described in Section 5.03(i).
(i) Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by the
Seller and each of its Affiliates included in the Parent Group have been filed
with the appropriate Governmental Authority and all charges have been paid prior
to the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof (or any such fine, penalty, interest, late charge
or loss has been paid), excluding charges or other amounts being contested in
accordance with Section 5.01(e). Proper and accurate amounts have been withheld
by the Seller or such Affiliate from its respective employees for all periods in
full and complete compliance with all applicable federal, state, local and
foreign laws and such withholdings have been timely paid to the
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respective Governmental Authorities. Schedule 4.01(i) sets forth as of the
Closing Date (i) those taxable years for which the Seller's or such Affiliates'
tax returns are currently being audited by the IRS or any other applicable
Governmental Authority and (ii) any assessments or threatened assessments in
connection with any such audit or otherwise currently outstanding. As of the
Closing Date, except as described on Schedule 4.01(i), neither the Seller nor
any such Affiliate has executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any charges. The Seller is
not liable for any charges: (A) under any agreement (including any tax sharing
agreements) or (B) to the best of the Seller's knowledge, as a transferee. As of
the Closing Date, neither the Seller nor any of its Affiliates included in the
Parent Group has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, that
would have a Material Adverse Effect.
(j) Full Disclosure. All information contained in this Agreement,
any Investment Base Certificate or any of the other Related Documents, or any
written statement furnished by Seller or by the Servicers or any other Seller
Party on behalf of the Seller to the Administrative Agent for the benefit of the
Purchaser pursuant to the terms of this Agreement or any of the other Related
Documents is true and accurate in every material respect, and none of this
Agreement, any Investment Base Certificate or any of the other Related
Documents, or any written statement furnished by Seller or by the Servicers or
any other Seller Party on behalf of the Seller to the Administrative Agent for
distribution to the Purchaser pursuant to the terms of this Agreement or any of
the other Related Documents is misleading as a result of the failure to include
therein a material fact. The parties understand that the Projections, which
shall be prepared in accordance with Section 4.01(f) of the Sale Agreement, are
not a guaranty of future performance, and actual results may materially differ
from the Projections.
(k) ERISA. The Seller is in compliance with ERISA and has not
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC under
ERISA.
(l) Brokers. No broker or finder acting on behalf of the Seller
other than Xxxxxxx Xxxxx & Company was employed or utilized in connection with
this Agreement or the other Related Documents or the transactions contemplated
hereby or thereby and the Seller has no obligation to any Person in respect of
any finder's or brokerage fees in connection therewith.
(m) Margin Regulations. The Seller is not engaged in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security," as such terms are defined in Regulation U of the Federal Reserve
Board as now and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). The Seller owns no Margin Stock, and no
portion of the proceeds of the purchase price for Transferred Receivables and
the Related Security sold hereunder will be used, directly or indirectly, for
the purpose of purchasing or carrying any Margin Stock, for the purpose of
reducing or retiring any Debt that was originally incurred to purchase or carry
any Margin Stock or for any other purpose that might
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cause any portion of such proceeds to be considered a "purpose credit" within
the meaning of Regulations T, U or X of the Federal Reserve Board. The Seller
will not take or permit to be taken any action that might cause any Related
Document to violate any regulation of the Federal Reserve Board.
(n) Nonapplicability of Bulk Sales Laws. No transaction contemplated
by this Agreement or any of the Related Documents requires compliance with any
bulk sales act or similar law.
(o) Securities Act and Investment Company Act Exemptions. Each
Purchase of Purchaser Interests under this Agreement will constitute (i) a
"current transaction" within the meaning of Section 3(a)(3) of the Securities
Act and (ii) a purchase or other acquisition of notes, drafts, acceptances, open
accounts receivable or other obligations representing part or all of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act.
(p) Government Regulation. The Seller is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act.
The Purchase of Purchaser Interests by the Purchaser hereunder, the application
of the proceeds thereof and the consummation of the transactions contemplated by
this Agreement and the other Related Documents will not violate any provision of
any such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
(q) Nonconsolidation. The Seller is operated in such a manner that
the separate legal existence of the Seller, on the one hand, and any member of
the Parent Group, on the other hand, would not be disregarded in the event of
the bankruptcy or insolvency of any member of the Parent Group and, without
limiting the generality of the foregoing:
(i) the Seller is a limited purpose limited liability company
whose activities are restricted in its limited liability company agreement
to those activities expressly permitted hereunder and under the other
Related Documents and the Seller has not engaged, and does not presently
engage, in any activity other than those activities expressly permitted
hereunder and under the other Related Documents, nor has the Seller
entered into any agreement other than this Agreement, the other Related
Documents to which it is a party and, with the prior written consent of
the Purchaser and the Administrative Agent, any other agreement necessary
to carry out more effectively the provisions and purposes hereof or
thereof;
(ii) no member of the Parent Group or any individual at the
time he or she is acting as an officer of any such member is or has been
involved in the day-to-day management of the Seller; provided that nothing
herein shall prohibit any individual from
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being at the same time an officer of the Seller and any member of the
Parent Group or any Originator;
(iii) other than the purchase and acceptance through capital
contribution of Transferred Receivables and the Related Security, the
payment of dividends and the return of capital to the Originators, the
payment of Servicing Fees to the Master Servicer, the payment of
Applicable Servicing Fee to each other Servicer under this Agreement and
the transactions evidenced by the Ancillary Services and Lease Agreement,
the Seller engages and has engaged in no inter-entity transactions with
any member of the Parent Group;
(iv) the Seller maintains limited liability company records and
books of account separate from that of each member of the Parent Group,
holds regular limited liability company meetings and otherwise observes
limited liability company formalities and has a business office separate
from that of each member of the Parent Group;
(v) the financial statements and books and records of the Seller and
the Originators reflect the separate legal existence of the Seller;
(vi) (A) the Seller maintains its assets separately from the assets
of each member of the Parent Group (including through the maintenance of
separate bank accounts and except for any Records to the extent necessary
to assist the Servicers in connection with the servicing of the
Transferred Receivables), (B) the Seller's funds (including all money,
checks and other cash proceeds) and assets, and records relating thereto,
have not been and are not commingled with those of any member of the
Parent Group and (C) the separate creditors of the Seller will be entitled
to be satisfied out of the Seller's assets prior to any value in the
Seller becoming available to the Seller's Equity Holders or any of the
creditors of the Seller's Equity Holders;
(vii) except as otherwise expressly permitted hereunder, under the
other Related Documents and under the Seller's organizational documents,
no member of the Parent Group (A) pays the Seller's expenses, (B)
guarantees the Seller's obligations, or (C) advances funds to the Seller
for the payment of expenses or otherwise;
(viii) all business correspondence and other communications of the
Seller are conducted in the Seller's own name, on its own stationery and
through a separately-listed telephone number;
(ix) the Seller does not act as agent for any member of the Parent
Group, but instead presents itself to the public as a limited liability
company separate from each such member and independently engaged in the
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(x) the Seller maintains at least (A) one Independent Member
(as defined in Seller's limited liability company agreement as in effect
on the date hereof) that has two Independent Directors (as defined in
Seller's limited liability company agreement as in effect on the date
hereof) and (B) two Independent Managers (as defined in Seller's limited
liability company agreement as in effect on the date hereof);
(xi) the Seller's limited liability company agreement requires
(A) the affirmative vote of each manager, including the Independent
Managers, and each member (including the Independent Member, pursuant to
the authorization of its board of directors including the affirmative
votes of its Independent Directors) before a voluntary petition under
Section 301 of the Bankruptcy Code may be filed by the Seller, and (B) the
Seller to maintain (1) correct and complete books and records of account
and (2) minutes of the meetings and other proceedings of its Equity
Holders and managers.
(r) Deposit and Disbursement Accounts. Schedule 4.01(r) lists all
banks and other financial institutions at which the Seller maintains deposit or
other bank accounts as of the Closing Date, including any Lockbox Accounts, and
such schedule correctly identifies the name, address and telephone number of
each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.
(s) Transferred Receivables and Related Security.
(i) Transfers. Each Transferred Receivable and the Related
Security was purchased by or contributed to the Seller on the relevant
Transfer Date pursuant to the Sale Agreement.
(ii) Eligibility. Each Transferred Receivable designated as an
Eligible Receivable in each Investment Base Certificate constitutes an
Eligible Receivable as of the date specified in such Investment Base
Certificate.
(iii) No Material Adverse Effect. The Seller has no knowledge
of any fact (including any defaults by the Obligor thereunder on any other
Receivable or the Related Security) that would cause it or should have
caused it to expect that any payments on each Transferred Receivable
designated as an Eligible Receivable in any Investment Base Certificate
will not be paid in full when due or to expect any other Material Adverse
Effect.
(iv) Nonavoidability of Transfers. The Seller shall (A) have
received each Contributed Receivable and the Related Security as a
contribution to the capital of the Seller by the applicable Originator and
(B) (1) have purchased each Sold Receivable and the Related Security from
the applicable Originator for cash consideration and (2) have accepted
assignment of any Eligible Receivables and the Related Security
transferred pursuant to Section 2.01 of the Sale Agreement, in each case
in an amount
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that constitutes fair consideration and reasonably equivalent value
therefor. Each Sale of a Sold Receivable and the Related Security effected
pursuant to the terms of the Sale Agreement shall not have been made for
or on account of an antecedent debt owed by any Originator to the Seller
and no such Sale is or may be avoidable or subject to avoidance under any
bankruptcy laws, rules or regulations.
(t) Representations and Warranties in Other Related Documents. Each
of the representations and warranties of the Seller contained in the Related
Documents (other than this Agreement) is true and correct in all respects and
the Seller hereby makes each such representation and warranty to, and for the
benefit of, the Purchaser and the Administrative Agent as if the same were set
forth in full herein.
(u) Servicing Software. The Seller has all necessary licenses and
rights to use the Servicing Software and such Servicing Software is commercially
available.
Section 4.02. Representations and Warranties of the Servicers. To
induce the Purchaser to purchase the Purchaser Interests and the Administrative
Agent to take any action required to be performed by it hereunder, each Servicer
represents and warrants to the Purchaser and the Administrative Agent, which
representation and warranty shall survive the execution and delivery of this
Agreement, that each of the representations and warranties of such Servicer made
in its capacity as a Servicer contained in any Related Document is true and
correct.
Section 4.03. Representations and Warranties of the Independent
Member. To induce the Purchaser to purchase the Purchaser Interests and the
Administrative Agent to take any action hereunder, the Independent Member makes
the following representations and warranties to the Purchaser and the
Administrative Agent as of the Closing Date and, except to the extent provided
otherwise below, as of each Purchase Date, each and all of which shall survive
the execution and delivery of this Agreement.
(a) Legal Existence; Compliance with Law. The Independent Member (i)
is a corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation; (ii) is duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification;
(iii) has the requisite corporate power and authority and the legal right to
own, pledge, mortgage or otherwise encumber and operate its properties, to lease
the property it operates under lease, and to conduct its business, in each case,
as now, heretofore and proposed to be conducted; (iv) has all licenses, permits,
consents or approvals from or by, and has made all filings with, and has given
all notices to, all Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct; (v) is in compliance with
its certification of incorporation; and (vi) subject to specific representations
set forth herein regarding ERISA, tax and other laws, is in compliance with all
applicable provisions of law, except where the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
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(b) Power, Authorization, Enforceable Obligations. The execution,
delivery and performance by the Independent Member of this Agreement and the
other Related Documents to which it is a party: (i) are within the Independent
Member's corporate powers; (ii) have been duly authorized by all necessary or
proper corporate and shareholder action; (iii) do not contravene any provision
of the Independent Member's certificate of incorporation; (iv) do not violate
any law or regulation, or any order or decree of any court or Governmental
Authority; (v) do not conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the acceleration of any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which the Independent Member is a party or by
which the Independent Member or any of the property of the Independent Member is
bound; (vi) do not result in the creation or imposition of any Adverse Claim
upon any of the property of the Independent Member; and (vii) do not require the
consent or approval of any Governmental Authority or any other Person, except
those which have been duly obtained, made or complied with prior to the Closing
Date as provided in Section 3.01(b). The exercise by the Purchaser or the
Administrative Agent of any of its rights and remedies under any Related
Document to which it is a party, do not require the consent or approval of any
Governmental Authority or any other Person (other than consents or approvals
solely relating to or required to be obtained by the Purchaser or the
Administrative Agent, and subject to the Bankruptcy Code), except those which
will have been duly obtained, made or complied with prior to the Closing Date as
provided in Section 3.01(b). On or prior to the Closing Date, each of the
Related Documents to which the Independent Member is a party shall have been
duly executed and delivered by the Independent Member and each such Related
Document shall then constitute a legal, valid and binding obligation of the
Independent Member enforceable against it in accordance with its terms.
(c) No Litigation. No Litigation is now pending or, to the knowledge
of the Independent Member, threatened against the Independent Member that (i)
challenges the Independent Member's right or power to enter into or perform any
of its obligations under the Related Documents to which it is a party, or the
validity or enforceability of any Related Document or any action taken
thereunder, or (ii) has a reasonable risk of being determined adversely to the
Independent Member and that, if so determined, could have a Material Adverse
Effect. As of the Closing Date there is no Litigation pending or threatened that
seeks damages or injunctive relief against, or alleges criminal misconduct by,
the Independent Member.
(d) Solvency. Both before and after giving effect to the
transactions contemplated by this Agreement and the other Related Documents, the
Independent Member is and will be Solvent.
(e) Material Adverse Effect. Since the date of the Independent
Member's organization, (i) the Independent Member has not incurred any
obligations, contingent or non-contingent liabilities, liabilities for charges,
long-term leases or unusual forward or long-term commitments that, alone or in
the aggregate, could reasonably be expected to have or result in a Material
Adverse Effect, (ii) no contract, lease or other agreement or instrument has
been entered
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into by the Independent Member or has become binding upon the Independent
Member's assets and no law or regulation applicable to the Independent Member
has been adopted that has had or could reasonably be expected to have or result
in a Material Adverse Effect and (iii) the Independent Member is not in default
and no third party is in default under any material contract, lease or other
agreement or instrument to which the Independent Member is a party that alone or
in the aggregate could reasonably be expected to have or result in a Material
Adverse Effect. Since the date of the Independent Member's incorporation, no
event has occurred that alone or together with other events could reasonably be
expected to have a Material Adverse Effect.
(f) Ownership of Property; Liens. No asset of the Independent Member
is subject to any Adverse Claim other than Permitted Independent Member
Encumbrances, and there are no facts, circumstances or conditions known to the
Independent Member that may result in any Adverse Claims (including Adverse
Claims arising under Environmental Laws) other than Permitted Independent Member
Encumbrances.
(g) Ventures, Subsidiaries and Affiliates; Outstanding Equity
Interests and Debt. The Independent Member has no Subsidiaries and is not
engaged in any joint venture or partnership with any other Person. All of the
issued and outstanding Equity Interests of the Independent Member are owned by
the Parent. There are no outstanding rights to purchase, options, warrants or
similar rights or agreements pursuant to which the Independent Member may be
required to issue, sell, repurchase or redeem any of its Equity Interests or
other equity securities or any Equity Interest or other equity securities of the
Seller. As of the Closing Date, the Independent Member has no outstanding Debt
other than as described in Section 5.05(f).
(h) Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by the
Independent Member have been filed with the appropriate Governmental Authority
on or before the applicable due date (including any extensions thereof) and all
charges have been paid prior to the date on which any fine, penalty, interest or
late charge may be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding charges or
other amounts being contested in accordance with Section 5.04(c). Proper and
accurate amounts have been withheld by the Independent Member from its employees
for all periods in full and complete compliance with all applicable federal,
state, local and foreign laws and such withholdings have been timely paid to the
respective Governmental Authorities. The Independent Member has not executed or
filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for assessment
or collection of any charges.
(i) Full Disclosure. All information contained in this Agreement or
any of the other Related Documents, or any written statement furnished by or on
behalf of the Independent Member to either the Administrative Agent or the
Purchaser pursuant to the terms of this Agreement or any of the other Related
Documents is true and accurate in every material respect, and none of this
Agreement or any of the other Related Documents, or any written statement
furnished by or on behalf of the Independent Member to either the Administrative
Agent or the
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Purchaser pursuant to the terms of this Agreement or any of the other Related
Documents is misleading as a result of the failure to include therein a material
fact.
(j) ERISA. The Independent Member is in compliance with ERISA and
has not incurred and does not expect to incur any liabilities (except for
premium payments arising in the ordinary course of business) payable to the PBGC
under ERISA.
(k) Nonconsolidation. The Independent Member is operated in such a
manner that the separate legal existence of the Independent Member, on the one
hand, and any other member of the Parent Group or Seller, on the other hand,
would not be disregarded in the event of the bankruptcy or insolvency of any
such other member of the Parent Group or Seller and, without limiting the
generality of the foregoing:
(i) the Independent Member is a limited purpose corporation
whose activities are restricted in its certificate of incorporation to
those activities expressly permitted hereunder and under the other Related
Documents, and the Independent Member has not engaged, and does not
presently engage, in any activity other than those activities expressly
permitted hereunder and under the other Related Documents, nor has the
Independent Member entered into any agreement other than this Agreement,
the other Related Documents to which it is a party and, with the prior
written consent of the Purchaser and the Administrative Agent, any other
agreement necessary to carry out more effectively the provisions and
purposes hereof or thereof;
(ii) none of the Seller, any member of the Parent Group nor
any individual at the time he or she is acting as an officer of the Seller
or any such member is or has been involved in the day-to-day management of
the Independent Member; provided that nothing herein shall prohibit any
individual from being at the same time an officer of the Independent
Member and any member of the Parent Group or the Seller;
(iii) other than with respect to the acquisition of membership
interests of the Seller, the Independent Member engages and has engaged in
no inter-entity transactions with any member of the Parent Group or the
Seller;
(iv) the Independent Member maintains corporate records and
books of account separate from that of each member of the Parent Group and
the Seller, holds regular corporate meetings and otherwise observes
corporate formalities and has a business office separate from that of each
member of the Parent Group and the Seller;
(v) the financial statements and books and records of the
Independent Member, each member of the Parent Group and the Seller reflect
the separate legal existence of the Independent Member;
(vi) (A) the Independent Member maintains its assets
separately from the assets of each member of the Parent Group and the
Seller, (B) the Independent
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Member's funds (including all money, checks and other cash proceeds) and
assets, and records relating thereto, have not been and are not commingled
with those of any member of the Parent Group or the Seller and (C) the
separate creditors of the Independent Member will be entitled to be
satisfied out of the Independent Member `s assets prior to any value in
the Independent Member becoming available to the Independent Member's
Equity Holders;
(vii) except as otherwise expressly permitted hereunder, under
the other Related Documents and under the Independent Member's Organic
Documents, none of the Seller or any member of the Parent Group (A) pays
the Independent Member's expenses, (B) guarantees the Independent Member's
obligations, or (C) advances funds to the Independent Member for the
payment of expenses or otherwise;
(viii) all business correspondence and other communications of
the Independent Member are conducted in the Independent Member's own name,
on its own stationery and through a separately-listed telephone number;
(ix) the Independent Member does not act as agent for any
member of the Parent Group or the Seller, but instead presents itself to
the public as a corporation separate from the Seller and from each such
member;
(x) the Independent Member maintains at least two Independent
Directors (as defined in Independent Member's certificate of
incorporation);
(xi) the Organic Documents of the Independent Member require
(A) the affirmative vote of each independent director before a voluntary
petition under Section 301 of the Bankruptcy Code may be filed by the
Independent Member, and (B) the Independent Member to maintain (1) correct
and complete books and records of account and (2) minutes of the meetings
and other proceedings of its Equity Holders and board of directors.
ARTICLE V.
GENERAL COVENANTS OF THE SELLER AND THE INDEPENDENT MEMBER
Section 5.01. Affirmative Covenants of the Seller. The Seller
covenants and agrees that from and after the Closing Date and until the
Termination Date:
(a) Compliance with Agreements and Applicable Laws. The Seller shall
perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
applicable to it, the Transferred Receivables and the Related Security,
including those relating to truth in lending, retail installment sales, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices, privacy, licensing, taxation, ERISA and labor matters and
Environmental Laws and
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Environmental Permits, except to the extent that the failure to so comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. The Seller shall comply in all respects with the Credit
and Collection Policies with respect to each Transferred Receivable and the
Related Security, except to the extent that such noncompliance could not
reasonably be expected to have a Material Adverse Effect.
(b) Maintenance of Existence and Conduct of Business. The Seller
shall: (i) do or cause to be done all things necessary to preserve and keep in
full force and effect its legal existence and its rights and franchises; (ii)
continue to conduct its business substantially as now conducted or as otherwise
permitted hereunder and in accordance with (1) the terms of its certificate of
formation and limited liability company agreement, (2) Section 4.01(q) and
Section 4.01(r) (as Schedule 4.01(r) referred to therein will be amended to
reflect closing of certain accounts (and establishment of replacement accounts)
in accordance with Section 5.01(g) and Section 5.01(h)),and (3) the assumptions
set forth in each legal opinion of Sidley Xxxxxx Xxxxx & Xxxx or other counsel
to the Seller from time to time delivered pursuant to Section 3.02(d) of the
Sale Agreement with respect to issues of substantive consolidation and true sale
and absolute transfer; (iii) at all times maintain, preserve and protect all of
its assets and properties used or useful in the conduct of its business,
including all licenses, permits, charters and registrations, and keep the same
in good repair, working order and condition in all material respects (taking
into consideration ordinary wear and tear) and from time to time make, or cause
to be made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices; and (iv) transact business only in
its legal name as reflected in the records of the Secretary of State of the
State of Delaware. The Seller shall keep adequate books and records with respect
to its business activities in which proper entries, reflecting all financial
transactions, are made in accordance with GAAP and on a basis consistent with
the financial statements delivered pursuant to Section 5.02(a).
(c) Deposit of Collections. The Seller shall request in writing and
otherwise take such reasonable steps to ensure that all Obligors forward payment
directly to a Lockbox Account and shall deposit or cause to be deposited
promptly into a Lockbox Account, and in any event no later than the first
Business Day after receipt thereof, all Collections Seller may receive with
respect to any Transferred Receivable.
(d) Use of Proceeds. The Seller shall utilize the proceeds of the
Purchases made hereunder solely for (i) the purchase of Receivables and the
Related Security from the Originators pursuant to the Sale Agreement, (ii) the
payment of lawful distributions to its economic Equity Holders, and (iii) the
payment of administrative fees or Servicing Fees or Applicable Servicing Fees or
expenses to the Servicers or routine administrative or operating expenses, in
each case only as expressly permitted by and in accordance with the terms of
this Agreement and the other Related Documents.
(e) Payment, Performance and Discharge of Obligations.
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(i) Subject to Section 5.01(e)(ii), the Seller shall pay,
perform and discharge or cause to be paid, performed and discharged
promptly all charges payable by it, including (A) charges imposed upon it,
its income and profits, or any of its property (real, personal or mixed)
and all charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (B) lawful claims for
labor, materials, supplies and services or otherwise before any thereof
shall become past due.
(ii) The Seller may in good faith contest, by appropriate
proceedings, the validity or amount of any charges or claims described in
Section 5.01(e)(i); provided that (A) adequate reserves with respect to
such contest are maintained on the books of the Seller, in accordance with
GAAP, (B) such contest is maintained and prosecuted continuously and with
diligence, (C) none of the Seller Collateral becomes subject to forfeiture
or loss as a result of such contest, (D) no Lien shall be imposed to
secure payment of such charges or claims other than inchoate tax liens and
(E) none of the Purchaser or the Administrative Agent has advised the
Seller in writing that such Affected Party reasonably believes that
failure to pay or to discharge such claims or charges could have or result
in a Material Adverse Effect.
(f) ERISA. The Seller shall give the Administrative Agent prompt
written notice of any event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA.
(g) Concentration Account. Not later than January 23, 2003, the
Seller shall establish the Concentration Account with a depository institution
satisfactory to the Administrative Agent pursuant to an agreement covering the
Concentration Account that is satisfactory to the Administrative Agent in all
respects.
(h) Certain Lockbox Accounts. Not later than January 26, 2003, the
Seller shall close all Lockbox Accounts with Bank of America, N.A. and The
Northern Trust Company and establish replacement Lockbox Accounts with a
depository institution satisfactory to the Administrative Agent pursuant to an
agreement covering the Lockbox Accounts that is satisfactory to the
Administrative Agent in all respects.
Section 5.02. Reporting Requirements of the Seller; Bringdown
Certificates. The Seller hereby agrees that, from and after the Closing Date and
until the Termination Date, it shall deliver or cause to be delivered to the
Administrative Agent for distribution to the Purchaser, the financial
statements, notices and other information at the times, to the Persons and in
the manner set forth in Annex 5.02 hereto. With each delivery of the annual
audited Financial Statements pursuant to and in accordance with paragraph (a) of
Annex 5.02 hereto, each of the Seller, each Servicer and Independent Member
shall deliver to the Administrative Agent an Officer's Certificate in the form
of Exhibit 5.02 hereto ("Bringdown Certificate").
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Section 5.03. Negative Covenants of the Seller. The Seller covenants
and agrees that, without the prior written consent of the Purchaser and the
Administrative Agent, from and after the Closing Date until the Termination
Date:
(a) Sale of Equity Interests and Assets. The Seller shall not sell,
transfer, convey, assign or otherwise dispose of, or assign any right to receive
income in respect of, any of its properties or other assets, including its
Equity Interests (whether in a public or a private offering or otherwise), any
Transferred Receivable or Related Security or any of its rights with respect to
any Lockbox or any Lockbox Account, the Collection Account or any other deposit
account in which any Collections of any Transferred Receivable are deposited
except as otherwise expressly permitted by this Agreement or any of the other
Related Documents or, in the case of a pledge to the Permitted Outstanding Debt
holders of the Equity Interest of the Seller held by the Originators, on terms
and conditions which are satisfactory to the Administrative Agent in all
respects and in its sole discretion and only as long as such terms and
conditions are set forth in an intercreditor agreement with such Permitted
Outstanding Debt holders that is in form and substance satisfactory to the
Administrative Agent.
(b) Liens. The Seller shall not create, incur, assume or permit to
exist (i) any Adverse Claim on or with respect to its Transferred Receivables or
the Related Security or (ii) any Adverse Claim on or with respect to its other
properties or assets (whether now owned or hereafter acquired) except for
Permitted Seller Encumbrances. In addition, the Seller shall not become a party
to any agreement, note, indenture or instrument or take any other action that
would prohibit the creation of a Lien on any of its properties or other assets
in favor of the Administrative Agent for the benefit of the Purchaser as
additional collateral for the Seller Secured Obligations, except as otherwise
expressly permitted by this Agreement or any of the other Related Documents.
(c) Modifications of Receivables, Related Security, Contracts or
Credit and Collection Policies. The Seller shall not, without the prior written
consent of the Administrative Agent (i) extend, amend, rescind, forgive,
discharge, compromise, waive, cancel or otherwise modify the terms of any
Transferred Receivable or the Related Security or amend, modify or waive any
term or condition of any Contract related thereto, provided that the Seller may
authorize the Master Servicer to take such actions as are expressly permitted by
the terms of any Related Document or the Credit and Collection Policies, or (ii)
amend, modify or waive any term or provision of the Credit and Collection
Policies to the extent such action would be a material change to its Credit and
Collection Policies or would negatively affect the timing or amount collected of
Receivables or the Related Security in any material respect.
(d) Changes in Instructions to Obligors. The Seller shall not make
any change in its instructions to Obligors regarding the deposit of Collections
with respect to the Transferred Receivables without the prior written consent of
the Administrative Agent.
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(e) Capital Structure and Business. The Seller shall not (i) make
any changes in any of its business objectives, purposes or operations that could
have or result in a Material Adverse Effect, (ii) make any change in its capital
structure as described on Schedule 4.01(h), including the issuance of any Equity
Interests or other securities convertible into Equity Interests or any revision
of the terms of its outstanding Equity Interests, (iii) reorganize itself under
the laws of any jurisdiction other than the jurisdiction in which it is
organized as of the date hereof without the prior written consent of
Administrative Agent, or (iv) permit the Independent Member to amend its
certificate of incorporation or by-laws. The Seller shall not engage in any
business other than as provided in its organizational documents and the Related
Documents.
(f) Mergers, Subsidiaries, Etc. The Seller shall not directly or
indirectly, by operation of law or otherwise, (i) form or acquire any
Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially
all of the assets or Equity Interests of, or otherwise combine with or acquire,
any Person.
(g) Sale Characterization; Sale Agreement. The Seller shall not make
statements or disclosures, prepare any financial statements or in any other
respect account for or treat the transactions contemplated by the Sale Agreement
(including for accounting, tax and reporting purposes) in any manner other than
(i) with respect to each Sale of each Sold Receivable and the Related Security
effected pursuant to the Sale Agreement, as a true sale and absolute assignment
of the title to and sole record and beneficial ownership interest of the
Transferred Receivables and the Related Security by the Originators to the
Seller and (ii) with respect to each contribution of Contributed Receivables and
the Related Security thereunder, as an increase in the stated capital of the
Seller.
(h) Restricted Payments. The Seller shall not enter into any lending
transaction with any other Person. The Seller shall not at any time (i) advance
credit to any Person or (ii) declare any dividends, repurchase any Equity
Interest, return any capital, or make any other payment or distribution of cash
or other property or assets in respect of the Seller's Equity Interests if,
after giving effect to any such advance or distribution, a Purchase Excess,
Incipient Termination Event or Termination Event would exist or otherwise result
therefrom.
(i) Debt. The Seller shall not create, incur, assume or permit to
exist any Debt, except (i) Debt of the Seller to any Affected Party, Indemnified
Person, the Servicers or any other Person expressly permitted by this Agreement
or any other Related Document, (ii) deferred taxes, (iii) unfunded pension fund
and other employee benefit plan obligations and liabilities to the extent they
are permitted to remain unfunded under applicable law, and (iv) indorser
liability in connection with the indorsement of negotiable instruments for
deposit or collection in the ordinary course of business.
(j) Prohibited Transactions. The Seller shall not enter into, or be
a party to, any transaction with any Person except as expressly permitted
hereunder or under any other Related Document.
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(k) Investments. Except as otherwise expressly permitted hereunder
or under the other Related Documents, the Seller shall not make any investment
in, or make or accrue loans or advances of money to, any Person, including any
Equity Holder, director, manager, officer or employee of the Seller or any
member of the Parent Group, through the direct or indirect lending of money,
holding of securities or otherwise, except with respect to the Transferred
Receivables, Related Security and Permitted Investments.
(l) Commingling. The Seller shall not deposit or permit the deposit
of any funds that do not constitute Collections of Transferred Receivables into
any Lockbox Account. If such funds are nonetheless deposited into a Lockbox
Account and the Seller so notifies the Administrative Agent, the Administrative
Agent shall promptly remit any such amounts to the applicable Originator.
(m) ERISA. The Seller shall not, and shall not cause or permit any
of its ERISA Affiliates to, cause or permit to occur an event that could result
in the imposition of a Lien under Section 412 of the IRC or Section 302 or 4068
of ERISA.
(n) Related Documents. The Seller shall not amend, modify or waive
any term or provision of any Related Document without the prior written consent
of the Administrative Agent.
(o) Board Policies. The Seller shall not modify the terms of any
policy or resolutions of its board of managers if such modification could have
or result in a Material Adverse Effect.
Section 5.04. Affirmative Covenants of Independent Member.
Independent Member covenants and agrees that from and after the Closing Date and
until the Termination Date:
(a) Compliance with Agreements and Applicable Laws. Independent
Member shall perform each of its obligations under this Agreement and the other
Related Documents and comply with all federal, state and local laws and
regulations applicable to it, including those relating to truth in lending,
retail installment sales, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices, privacy, licensing,
taxation, ERISA and labor matters and Environmental Laws and Environmental
Permits, except to the extent that the failure to so comply, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(b) Maintenance of Existence and Conduct of Business. Independent
Member shall: (i) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its rights and
franchises; (ii) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder and in accordance with (A) the terms of its
Organic Documents, (B) Sections 4.03(k) and (C) the assumptions set forth
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in each legal opinion of Sidley Xxxxxx Xxxxx & Xxxx or other counsel to
Independent Member from time to time delivered pursuant to Section 3.02(d) of
the Sale Agreement with respect to issues of substantive consolidation; (iii) at
all times maintain, preserve and protect all of its assets and properties used
or useful in the conduct of its business, including all licenses, permits,
charters and registrations, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; and (iv) transact business only in its legal name as
reflected in the records of the Secretary of State of the State of Delaware.
(c) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 5.04(c)(ii), Independent Member shall
pay, perform and discharge or cause to be paid, performed and discharged
promptly all charges payable by it, including (A) charges imposed upon it,
its income and profits, or any of its property (real, personal or mixed)
and all charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (B) lawful claims for
labor, materials, supplies and services or otherwise before any thereof
shall become past due.
(ii) Independent Member may in good faith contest, by
appropriate proceedings, the validity or amount of any charges or claims
described in Section 5.04(c)(i); provided that (A) adequate reserves with
respect to such contest are maintained on the books of Independent Member,
in accordance with GAAP, (B) such contest is maintained and prosecuted
continuously and with diligence, (C) no Lien shall be imposed to secure
payment of such charges or claims other than inchoate tax liens and (D)
none of the Purchaser or the Administrative Agent has advised Independent
Member in writing that such Affected Party reasonably believes that
failure to pay or to discharge such claims or charges could have or result
in a Material Adverse Effect.
(d) ERISA. Independent Member shall give the Administrative Agent
prompt written notice of any event that could result in the imposition of a Lien
under Section 412 of the IRC or Section 302 or 4068 of ERISA.
Section 5.05. Negative Covenants of Independent Member. Independent
Member covenants and agrees that, without the prior written consent of the
Purchaser and the Administrative Agent, from and after the Closing Date until
the Termination Date:
(a) Sale of Equity Interests and Assets. Independent Member shall
not sell, transfer, convey, assign or otherwise dispose of, or assign any right
to receive income in respect of, any of its properties or other assets,
including its Equity Interests (whether in a public or a private offering or
otherwise), except as otherwise expressly permitted by this Agreement or any of
the other Related Documents.
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(b) Liens. Independent Member shall not create, incur, assume or
permit to exist any Adverse Claim on or with respect to its other properties or
assets (whether now owned or hereafter acquired) except for the Permitted
Independent Member Encumbrances.
(c) Capital Structure and Business. Independent Member shall not (i)
make any changes in any of its business objectives, purposes or operations that
could have or result in a Material Adverse Effect, (ii) make any change in its
capital structure as described on Schedule 4.01(h), including the issuance of
any Equity Interest or any securities convertible into Equity Interests or any
revision of the terms of its outstanding Equity Interests, or (iii) amend its
Organic Documents. Independent Member shall not change its jurisdiction of
incorporation, legal name, identity or organizational structure. Independent
Member shall not change its organization identification number, if any, issued
by its state of incorporation. Independent Member shall not engage in any
business other than as provided in its Organic Documents and the applicable
Related Documents.
(d) Mergers, Subsidiaries, Etc. Independent Member shall not
directly or indirectly, by operation of law or otherwise, (i) form or acquire
any Subsidiary, or (ii) merge with, consolidate with, acquire all or
substantially all of the assets or Equity Interests of, or otherwise combine
with or acquire, any Person.
(e) Restricted Payments. Independent Member shall not enter into any
lending transaction with any other Person. Independent Member shall not at any
time (i) advance credit to any Person or (ii) declare any dividends, repurchase
any Equity Interest, return any capital, or make any other payment or
distribution of cash or other property or assets in respect of Independent
Member's Equity Interests if, after giving effect to any such advance or
distribution, an Incipient Termination Event or Termination Event would exist or
otherwise result therefrom.
(f) Debt. Independent Member shall not create, incur, assume or
permit to exist any Debt, except (i) Debt of Independent Member expressly
permitted by this Agreement or any other Related Document, (ii) deferred taxes,
(iii) unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law, and (iv) indorser liability in connection with the indorsement of
negotiable instruments for deposit or collection in the ordinary course of
business.
(g) Prohibited Transactions. Independent Member shall not enter
into, or be a party to, any transaction with any Person except as expressly
permitted hereunder or under any other Related Document.
(h) Investments. Except as otherwise expressly permitted hereunder
or under the other Related Documents, Independent Member shall not make any
investment in, or make or accrue loans or advances of money to, any Person,
including any Equity Holder, director, officer or employee of Independent
Member, the Parent or any of the Parent's other Subsidiaries,
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through the direct or indirect lending of money, holding of securities or
otherwise, except with respect to its membership interest in the Seller and
Permitted Investments.
(i) ERISA. Independent Member shall not, and shall not cause or
permit any of its ERISA Affiliates to, cause or permit to occur an event that
could result in the imposition of a Lien under Section 412 of the IRC or Section
302 or 4068 of ERISA.
(j) Related Documents. Independent Member shall not amend, modify or
waive any term or provision of any Related Document without the prior written
consent of the Administrative Agent.
(k) Board Policies. Independent Member shall not modify the terms of
any policy or resolutions of its board of managers if such modification could
have or result in a Material Adverse Effect.
ARTICLE VI.
COLLECTIONS AND DISBURSEMENTS
Section 6.01. Establishment of Accounts.
(a) The Lockbox Accounts.
(i) The Seller has established with each Lockbox Account Bank one or
more Lockbox Accounts. The Seller shall establish the Concentration Account with
the Concentration Account Bank in accordance with Section 5.01(g). The Seller
agrees that the Administrative Agent shall have exclusive dominion and control
of each Lockbox Account and the Concentration Account and all monies,
instruments and other property from time to time on deposit therein. The Seller
shall not make or cause to be made, or have any ability to make or cause to be
made, any withdrawals from any Lockbox Account except as provided in Section
6.01(b)(ii).
(ii) The Seller and the Master Servicer have instructed all existing
Obligors of Transferred Receivables, and shall instruct all future Obligors of
such Transferred Receivables, to make payments in respect thereof only (A) by
check or money order mailed to one or more lockboxes or post office boxes under
the control of the Administrative Agent (each, a "Lockbox" and, collectively,
the "Lockboxes") or (B) by wire transfer or moneygram directly to a Lockbox
Account. Schedule 4.01(r) lists all Lockboxes and all Lockbox Account Banks at
which the Seller maintains Lockbox Accounts as of the Closing Date, and such
schedule correctly identifies (1) with respect to each such Lockbox Account
Bank, the name, address and telephone number thereof, (2) with respect to each
Lockbox Account, the name in which such account is held and the complete account
number therefor, and (3) with respect to each Lockbox, the lockbox number and
address thereof. The Seller and the applicable Servicer shall endorse, to the
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extent necessary, all checks or other instruments received in any Lockbox so
that the same can be deposited in the Lockbox Account, in the form so received
(with all necessary endorsements), on the first Business Day after the date of
receipt thereof. In addition, each of the Seller and the applicable Servicer
shall deposit or cause to be deposited into a Lockbox Account all cash, checks,
money orders or other proceeds of Transferred Receivables, Related Security or
Seller Collateral received by it other than in a Lockbox or a Lockbox Account,
in the form so received (with all necessary endorsements), not later than the
close of business on the first Business Day following the date of receipt
thereof, and until so deposited all such items or other proceeds shall be held
in trust for the benefit of the Administrative Agent. Neither the Seller nor the
applicable Servicer shall make any deposits into a Lockbox or any Lockbox
Account except in accordance with the terms of this Agreement or any other
Related Document.
(iii) If, for any reason, a Lockbox Agreement terminates or any
Lockbox Account Bank fails to comply with its obligations under the Lockbox
Agreement to which it is a party, then the Seller shall promptly notify all
Obligors of Transferred Receivables who had previously been instructed to make
wire payments to a Lockbox Account maintained at any such Lockbox Account Bank
to make all future payments to a new Lockbox Account in accordance with this
Section 6.01(a)(iii). The Seller shall not close any such Lockbox Account unless
it shall have (A) received the prior written consent of the Administrative
Agent, (B) established a new account with the same Lockbox Account Bank or with
a new depositary institution satisfactory to the Administrative Agent, (C)
entered into an agreement covering such new account with such Lockbox Account
Bank or with such new depositary institution substantially in the form of such
Lockbox Agreement or that is satisfactory in all respects to the Administrative
Agent (whereupon, for all purposes of this Agreement and the other Related
Documents, such new account shall become a Lockbox Account, such new agreement
shall become a Lockbox Agreement and any new depositary institution shall become
a Lockbox Account Bank), and (D) taken all such action as the Administrative
Agent shall require to grant and perfect a first priority Lien in such new
Lockbox Account to the Administrative Agent for the benefit of the Purchaser
under Section 8.01 of this Agreement. Except as permitted by this Section
6.01(a),neither the Seller nor any of the Servicers shall open any new Lockbox
or Lockbox Account without the prior written consent of the Administrative
Agent.
(iv) Schedule 4.01(r) shall be amended to correctly identify the
Concentration Account, the name, address and telephone number of the
Concentration Account Bank, and the name in which the Concentration Account is
held and the complete account number therefor. If, for any reason, the Lockbox
Account Agreement applicable to the Concentration Account terminates or the
Concentration Account Bank fails to comply with its obligations under such
Lockbox Account Agreement, then the Administrative Agent may direct the Lockbox
Account Banks to forward all Collections received in the Lockbox Accounts to the
Collection Account; it being understood and
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agreed that, as long as the Concentration Account has not been established, all
Lockbox Account Banks shall be directed on the Closing Date to forward all
Collections to the Collection Account. The Seller shall not close the
Concentration Account unless it shall have (A) received the prior written
consent of the Administrative Agent, (B) established a new account with the same
Concentration Account Bank or with a new depositary institution satisfactory to
the Administrative Agent, (C) entered into an agreement covering such new
account with such Concentration Account Bank or with such new depositary
institution substantially in the form of a Lockbox Account Agreement or that is
satisfactory in all respects to the Administrative Agent (whereupon, for all
purposes of this Agreement and the other Related Documents, such new account
shall become a Concentration Account, such new agreement shall become a Lockbox
Account Agreement and any new depositary institution shall become a
Concentration Account Bank), and (D) taken all such action as the Administrative
Agent shall require to grant and perfect a first priority Lien in such new
Concentration Account to the Purchaser under Section 8.01 of this Agreement.
Except as permitted by this Section 6.01(a), neither the Seller nor the Servicer
shall open any Concentration Account without the prior written consent of the
Administrative Agent.
(b) Collection Account.
(i) The Administrative Agent has established and shall maintain the
Collection Account with the Depositary. The Collection Account shall be
registered in the name of the Administrative Agent and the Administrative Agent
shall, subject to the terms of this Agreement, have exclusive dominion and
control thereof and of all monies, instruments and other property from time to
time on deposit therein.
(ii) Pursuant to Section 6.02, the Seller shall instruct the
Concentration Account Bank to transfer, and the Seller hereby grants the
Administrative Agent the authority to instruct the Concentration Account Bank to
transfer, on each Business Day in same day funds, all available funds in the
Concentration Account to the Collection Account. The Purchaser and the
Administrative Agent may deposit into the Collection Account from time to time
all monies, instruments and other property received by any of them as proceeds
of the Transferred Receivables or the Related Security. On each Business Day the
Administrative Agent shall instruct and cause the Depositary (which instruction
may be in writing or by telephone confirmed promptly thereafter in writing) to
release funds on deposit in the Collection Account in the order of priority set
forth in Section 6.03 or Section 6.05, as applicable.
(iii) If, for any reason, the Depositary wishes to resign as
depositary of the Collection Account or fails to carry out the instructions of
the Administrative Agent, then the Administrative Agent shall promptly notify
the Purchaser. Neither the Purchaser nor the Administrative Agent shall close
the Collection Account unless (A) a new deposit account has been established
with the Depositary, (B) the Purchaser and the
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Administrative Agent have entered into an agreement covering such new
account with such new depositary institution satisfactory in all respects
to the Administrative Agent (whereupon such new account shall become the
Collection Account for all purposes of this Agreement and the other
Related Documents), and (C) all action has been taken for the
Administrative Agent to obtain a perfected first priority Lien in such new
Collection Account.
Section 6.02. Funding of Collection Account. As soon as practicable,
and in any event no later than 12:00 noon (New York time) on each Business Day:
(a) the Administrative Agent shall transfer or cause to be
transferred, to the extent then available, all Collections deposited in any
Lockbox Account prior to such Business Day to the Concentration Account and all
accounts subsequently on deposit in the Concentration Account to the Collection
Account;
(b) the Purchaser or the Administrative Agent shall deposit in the
Collection Account the amount, if any, required pursuant to Section 2.04(b)(i);
(c) if, on the immediately preceding Business Day, the
Administrative Agent shall have notified the Seller of any Purchase Excess, then
the Seller shall deposit cash in the amount of such Purchase Excess in the
Collection Account;
(d) if on such Business Day the Seller is required to make other
payments under this Agreement not previously paid out of Collections (including
Additional Amounts and Indemnified Amounts not previously paid), then the Seller
shall deposit an amount equal to such payments in the Collection Account;
(e) if, on the immediately preceding Business Day, an Originator
made a capital contribution or repurchased a Transferred Receivable or Related
Security pursuant to Section 4.05 of the Sale Agreement or made a payment as a
result of any Dilution Factors pursuant to Section 4.02(p) of the Sale
Agreement, then the Seller shall deposit in the Collection Account cash in the
amount so received from such Originator for such contribution or for such
repurchase or payment;
(f) each Servicer shall deposit in the Collection Account the
Outstanding Balance of any Transferred Receivable such Servicer elects to pay
pursuant to Section 7.04; and
(g) the Seller shall deposit in the Collection Account the
Outstanding Balance of any Transferred Receivable the Seller elects to pay
pursuant to Section 8.06(d).
Section 6.03. Daily Disbursements From the Collection Account;
Revolving Period. On each Business Day no later than 1:00 p.m. (New York time)
during the Revolving Period, and following the transfers made pursuant to
Section 6.02, the Administrative Agent shall disburse all Collections then on
deposit in the Collection Account in the following priority:
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(a) to the Administrative Agent on behalf of the Purchaser:
(i) an amount equal to the sum of:
(A) if such Business Day is a first Business Day of a
Settlement Period, the unpaid Daily Yield accrued
during the Settlement Period then most recently
ended;
(B) if such Business Day is a first Business Day of a
Settlement Period, the unpaid Unused Facility Fee
accrued during the Settlement Period then most
recently ended; and
(C) any Additional Amounts or Indemnified Amounts then
due and not paid;
(b) if such Business Day is a Settlement Date, to the Master
Servicer, the accrued and unpaid Servicing Fee (calculated assuming that the
Servicing Fee Rate is the applicable rate);
(c) to the Purchaser:
(i) an amount equal to any Purchase Excess to be applied in
reduction of Capital Investment; and
(ii) if, pursuant to a Repayment Notice, the Seller has
requested a reduction of the Capital Investment, then to the Purchaser the
lesser of (A) the amount of such requested reduction of Capital Investment
and (B) such balance;
(d) to the Seller Account, the balance of any amounts remaining
after making the foregoing disbursements.
Section 6.04. [Reserved]
Section 6.05. Liquidation Settlement Procedures. On each Business
Day from and after the Facility Termination Date until the Termination Date, the
Administrative Agent shall, as soon as practicable, transfer all amounts in the
Collection Account in the following priority:
(a) if a Successor Servicer has assumed the responsibilities and
obligations of any Servicer in accordance with Section 11.02, then to the
Successor Servicer an amount equal to its accrued and unpaid Successor Servicing
Fees and Expenses;
(b) to the Purchaser, an amount equal to accrued and unpaid Daily
Yield;
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(c) to the Purchaser, an amount equal to the unpaid Capital
Investment;
(d) to the Administrative Agent, an amount equal to accrued and
unpaid portion of the Unused Facility Fees;
(e) to the Administrative Agent, an amount equal to accrued and
unpaid portion of the fees under the Fee Letter;
(f) all Additional Amounts and Indemnified Amounts incurred and
payable to any Indemnified Person;
(g) if an Event of Servicer Termination shall not have occurred, to
the Master Servicer, an amount equal to the accrued and unpaid Servicing Fee;
(h) to the Administrative Agent, an amount equal to any unpaid
portion of the Early Termination Fee; and
(i) to the Seller Account, the balance of any funds remaining after
payment in full of all amounts set forth in this Section 6.05.
Section 6.06. Termination Procedures.
(a) On the earlier of (i) the first Business Day after the Facility
Termination Date on which the Capital Investment has been reduced to zero or
(ii) the Final Purchase Date, if the Seller Secured Obligations have not been
paid in full, the Seller shall immediately deposit in the Collection Account an
amount sufficient to make such payments in full.
(b) On the Termination Date, all amounts on deposit in the
Collection Account shall be disbursed to the Seller and all ownership interests
or Liens of the Administrative Agent for the benefit of the Purchaser in and to
all Transferred Receivables and the Related Security and all Liens of the
Administrative Agent for the benefit of the Purchaser in and to the Seller
Collateral shall be released by the Administrative Agent. Such disbursement
shall constitute the final payment to which the Seller is entitled pursuant to
the terms of this Agreement.
(c) Seller acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement without the written consent of the Administrative Agent and
agrees that it will not do so without the prior written consent of the
Administrative Agent, subject to Seller's rights under Section 9-509(d)(2) of
the UCC.
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ARTICLE VII.
SERVICER PROVISIONS
Section 7.01. Appointment of the Servicers. The Purchaser hereby
appoints the Master Servicer as its agent, and the Seller hereby acknowledges
such appointment, to service the Transferred Receivables (whether originated by
the Master Servicer or the other Originators) and enforce its (and the other
applicable Originator's) rights and interests in and under each Transferred
Receivable and the Related Security and to serve in such capacity until the
termination of its responsibilities pursuant to Sections 9.02 or 11.01. The
Purchaser hereby further appoints each other Servicer as its agent, and the
Seller hereby acknowledges such appointment, to service the Transferred
Receivables originated by such Servicer and enforce its rights and interests in
and under each Transferred Receivable and the Related Security and to serve in
such capacity until the termination of its responsibilities pursuant to Section
9.02 or 11.01. In connection therewith, each of the Master Servicer and each
other Servicer hereby accepts such appointment and agrees to perform the duties
and obligations set forth herein. Each Servicer may, with the prior written
consent of the Purchaser and the Administrative Agent, subcontract with a
Sub-Servicer for the collection, servicing or administration of the Transferred
Receivables and the Related Security; provided that (a) the Master Servicer and
such assigning Servicer shall remain liable for the performance of the duties
and obligations of such Sub-Servicer pursuant to the terms hereof and (b) any
Sub-Servicing Agreement that may be entered into and any other transactions or
services relating to the Transferred Receivables and the Related Security
involving a Sub-Servicer shall be deemed to be between the Sub-Servicer and such
Servicer alone, and the Purchaser and the Administrative Agent shall not be
deemed parties thereto and shall have no obligations, duties or liabilities with
respect to the Sub-Servicer.
Section 7.02. Duties and Responsibilities of the Servicers. Subject
to the provisions of this Agreement, the Master Servicer shall prepare and
deliver the Investment Reports in the manner set forth in Annex 7.02 when and as
required under Section 2.03 and shall conduct the servicing, administration and
collection of the Transferred Receivables and the Related Security and shall
take, or cause to be taken, all actions that (i) may be necessary or advisable
to service, administer and collect each Transferred Receivable and the Related
Security from time to time, (ii) the Master Servicer would take if the
Transferred Receivables and the Related Security were owned by the Master
Servicer, and (iii) are consistent with industry practice for the servicing of
such Transferred Receivables and the Related Security. Each Servicer shall
conduct the servicing, administration and collection of the Transferred
Receivables and the Related Security and shall take, or cause to be taken, all
actions that (i) may be necessary or advisable to service, administer and
collect each Transferred Receivable and the Related Security from time to time,
(ii) such Servicer would take if the Transferred Receivables and the Related
Security were owned by such Servicer, and (iii) are consistent with industry
practice for the servicing of such Transferred Receivables.
Section 7.03. Collections on Receivables and the Related Security.
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(a) In the event that any Servicer is unable to determine the
specific Transferred Receivables on which Collections have been received from
the Obligor thereunder, the parties agree for purposes of this Agreement only
that such Collections shall be deemed to have been received on such Receivables
in the order in which they were originated with respect to such Obligor. In the
event that any Servicer is unable to determine the specific Transferred
Receivables on which discounts, offsets or other non-cash reductions have been
granted or made with respect to the Obligor thereunder, the parties agree for
purposes of this Agreement only that such reductions shall be deemed to have
been granted or made (i) prior to a Termination Event, on such Receivables as
determined by such Servicer, and (ii) from and after the occurrence of a
Termination Event, in the reverse order in which they were originated with
respect to such Obligor.
(b) If any Servicer determines that amounts unrelated to the
Transferred Receivables (the "Unrelated Amounts") have been deposited in the
Collection Account, then such Servicer shall provide written evidence thereof to
the Administrative Agent no later than the first Business Day following the day
on which such Servicer had actual knowledge thereof, which evidence shall be
provided in writing and shall be otherwise satisfactory to each such Affected
Party. Upon receipt of any such notice and if, after a reasonable period for the
review of the written evidence, such written evidence is reasonably satisfactory
to the Administrative Agent, the Administrative Agent shall segregate the
Unrelated Amounts and deliver such Unrelated Amounts to the applicable
Originator, as directed by the related Servicer, and the same shall not be
deemed to constitute Collections on Transferred Receivables and shall not be
subject to the provisions of Article VI.
Section 7.04. Authorization of the Servicers. The Purchaser hereby
authorizes each Servicer, and the Seller acknowledges such authorization, to
take any and all reasonable steps in its name and on its behalf necessary or
desirable and not inconsistent with the ownership of the Purchaser Interests
purchased by the Purchaser hereunder, in the determination of such Servicer, to
(a) collect all amounts due under any Transferred Receivable or the Related
Security (or, with respect to each Servicer other than the Master Servicer, any
Transferred Receivable originated by it), including endorsing its name on checks
and other instruments representing Collections on such Transferred Receivable,
and execute and deliver any and all instruments of satisfaction or cancellation
or of partial or full release or discharge and all other comparable instruments
with respect to any such Transferred Receivable or the Related Security and (b)
after any Transferred Receivable (or, with respect to each Servicer other than
the Master Servicer, any Transferred Receivable originated by it) becomes a
Defaulted Receivable and to the extent permitted under and in compliance with
applicable law and regulations, commence proceedings with respect to the
enforcement of payment of any such Transferred Receivable and the Related
Security and adjust, settle or compromise any payments due thereunder, in each
case to the same extent as the applicable Originator could have done if it had
continued to own such Transferred Receivable and the Related Security. Each
Originator, the Seller, the Administrative Agent and the Purchaser shall furnish
each Servicer with any powers of attorney and other documents necessary or
appropriate to enable such Servicer to carry out its servicing and
administrative
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duties hereunder. Notwithstanding anything to the contrary contained herein, the
Administrative Agent shall have the absolute and unlimited right to direct the
Servicers (whether the Servicer is the Parent or otherwise) (i) to commence or
settle any legal action to enforce collection of any Transferred Receivable and
the Related Security or (ii) to foreclose upon, repossess or take any other
action that the Administrative Agent deems necessary or advisable with respect
thereto; provided that in lieu of commencing any such action or taking other
enforcement action, such Servicer may, at its option, elect to pay to the
Purchaser the Capital Investment with respect to the Purchaser Interest in such
Transferred Receivable. In the event any Servicer elects to pay the Purchaser
the Capital Investment with respect to the Purchaser Interest in such
Transferred Receivable as provided above, the Administrative Agent, on behalf of
the Purchaser, shall transfer to such Servicer the Purchaser Interest in such
Transferred Receivable and the Related Security. In no event shall any Servicer
be entitled to make any Affected Party a party to any Litigation without such
Affected Party's express prior written consent, or to make the Seller a party to
any Litigation without the Administrative Agent's consent.
Section 7.05. Servicing Fees
(a) As compensation for their servicing activities and as
reimbursement for their reasonable expenses in connection therewith, the Master
Servicer shall be entitled to receive the Servicing Fees in accordance with
Sections 6.03 and 6.05, and each Servicer shall be entitled to receive the
Applicable Servicing Fees in accordance with Section 2.07(b). Each Servicer
shall be required to pay for all expenses incurred by it in connection with its
activities hereunder (including any payments to accountants, counsel or any
other Person) and shall not be entitled to any payment therefor other than the
Servicing Fees or the Applicable Servicing Fees.
(b) For any period that the Parent or any Affiliate of the Parent is
the Master Servicer, the Seller agrees that it shall pay to the Master Servicer
on each Settlement Date the Servicing Fees, as applicable, to the extent of
funds available to the Seller on such Settlement Date. The Seller agrees that it
will pay the Servicing Fee to the Master Servicer prior to using any funds
available to it on such Settlement Date for any other purpose, including,
without limitation, the purchase of additional Receivables and the Related
Security. If the Seller does not have sufficient funds available to so pay the
Servicing Fee in full on any Settlement Date, the shortfall shall be paid on the
next Business Day on which the Seller does have available funds but only to the
extent that funds are then available to the Seller in accordance to the
provisions of Article VI. Each Servicer waives any right it has or may at any
time have to demand payment and/or take any action to or in furtherance of
payment of any shortfall in the payment of the Servicing Fee and agrees that it
shall not have a "claim" under Section 101(5) of the Bankruptcy Code for the
payment of any such shortfall, except for, and only to the extent of, any excess
available funds, as described above.
(c) On each Settlement Date, an Authorized Officer of the Seller
shall deliver to the Administrative Agent a certificate certifying that the
Servicing Fee payable for the preceding Settlement Period has been paid in
accordance with this Section 7.05.
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Section 7.06. Representations and Warranties of the Servicers. To
induce the Purchaser to purchase the Purchaser Interests and the Administrative
Agent to take any action required to be performed by it hereunder, each Servicer
represents and warrants to the Purchaser and the Administrative Agent, which
representation and warranty shall survive the execution and delivery of this
Agreement:
(a) Existence; Compliance with Law. Such Servicer (i) is a limited
liability company or corporation, as the case may be, duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; (ii) is duly qualified to conduct business and is in good standing
in each other jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification, except where the failure to
be so qualified would not have a Material Adverse Effect; (iii) has the
requisite power and authority and the legal right to own and operate its
properties, to lease the property it operates under lease, and to conduct its
business as now, heretofore and proposed to be conducted; (iv) has all licenses,
permits, consents or approvals from or by, and has made all filings with, and
has given all notices to, all Governmental Authorities having jurisdiction, to
the extent required for such ownership, operation and conduct, except where the
failure to do so would not have a Material Adverse Effect; (v) is in compliance
with its Organic Documentss; and (vi) subject to specific representations set
forth herein regarding ERISA, tax and other laws, is in compliance with all
applicable provisions of law, except where the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(b) Power, Authorization, Enforceable Obligations. The execution,
delivery and performance by such Servicer of this Agreement and the other
Related Documents to which it is a party and, solely with respect to clause
(vii) below, the exercise by the Purchaser, the Seller or the Administrative
Agent of any of its rights and remedies under any Related Document to which it
is a party: (i) are within such Servicer's power; (ii) have been duly authorized
by all necessary or proper corporate, limited liability company or shareholder
action; (iii) do not contravene any provision of the Servicer's Organic
Documentss; (iv) do not violate any law or regulation, or any order or decree of
any court or Governmental Authority; (v) do not conflict with or result in the
breach or termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Servicer is a party or
by which such Servicer or any of the property of such Servicer is bound; (vi) do
not result in the creation or imposition of any Adverse Claim upon any of the
property of such Servicer; and (vii) do not require the consent or approval of
any Governmental Authority or any other Person, except those referred to in
Section 3.01(b), all of which will have been duly obtained, made or complied
with prior to the Closing Date. On or prior to the Closing Date, each of the
Related Documents to which such Servicer is a party shall have been duly
executed and delivered by such Servicer and each such Related Document shall
then constitute a legal, valid and binding obligation of such Servicer
enforceable against it in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights and by general principles of equity.
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(c) No Litigation. No Litigation is now pending or, to the knowledge
of such Servicer, threatened against such Servicer that (i) challenges such
Servicer's right or power to enter into or perform any of its obligations under
the Related Documents to which it is a party, or the validity or enforceability
of any Related Document or any action taken thereunder, (ii) seeks to prevent
the transfer, sale, pledge or contribution of any Receivable or the Related
Security or the consummation of any of the transactions contemplated under this
Agreement or the other Related Documents, or (iii) has a reasonable risk of
being determined adversely to such Servicer and that, if so determined, could
have a Material Adverse Effect.
(d) Full Disclosure. No information contained in this Agreement, any
Investment Report or any of the other Related Documents, or any written
statement furnished by or on behalf of such Servicer to the Purchaser or the
Administrative Agent pursuant to the terms of this Agreement or any of the other
Related Documents contains any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made.
(e) Other Representations and Warranties. Each of the
representations and warranties of such Servicer made in its capacity as a
Servicer contained in any Related Document is true and correct.
Section 7.07. Covenants of the Servicers. Each Servicer covenants
and agrees that from and after the Closing Date and until the Termination Date:
(a) Ownership of Transferred Receivables and the Related Security.
Such Servicer shall identify the Transferred Receivables and the Related
Security clearly and unambiguously in its Servicing Records to reflect that such
Transferred Receivables and the Related Security have been sold or contributed
to the Seller and, following the Purchase of Purchaser Interests in such
Transferred Receivables and the Related Security under this Agreement, are owned
by the Administrative Agent for the benefit of the Purchaser.
(b) Compliance with Credit and Collection Policies. Such Servicer
shall comply in all respects with the Credit and Collection Policies with
respect to each Transferred Receivable and the Related Security and the Contract
therefor, except to the extent that such noncompliance could not reasonably be
expected to have a Material Adverse Effect. Such Servicer shall not amend, waive
or modify any term or provision of the Credit and Collection Policies without
the prior written consent of the Administrative Agent.
Section 7.08. Reporting Requirements of the Servicers. Each Servicer
hereby agrees that, from and after the Closing Date and until the Termination
Date, it shall deliver or cause to be delivered to the Purchaser and the
Administrative Agent the financial statements, notices, and other information at
the times, to the Persons and in the manner set forth in Annex 5.02 hereto.
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ARTICLE VIII.
GRANT OF SECURITY INTERESTS
Section 8.01. Seller's Grant of Security Interest. The parties
hereto intend that each Purchase of Purchaser Interests to be made hereunder
shall constitute a purchase and sale of undivided percentage ownership interests
in the Transferred Receivables and the Related Security and not a loan.
Notwithstanding the foregoing, in addition to and not in derogation of any
rights now or hereafter acquired by the Purchaser or the Administrative Agent
hereunder, the parties hereto intend that this Agreement shall constitute a
security agreement under applicable law. In such regard and, in any event, to
secure the prompt and complete payment, performance and observance of all Seller
Secured Obligations, and to induce the Purchaser to enter into this Agreement
and perform the obligations required to be performed by it hereunder in
accordance with the terms and conditions thereof, the Seller hereby grants,
assigns, conveys, pledges, hypothecates and transfers to the Administrative
Agent, for the benefit of itself and the Purchaser, a Lien upon and security
interest in all of its right, title and interest in, to and under, but none of
its obligations arising from, the following property, whether now owned by or
owing to, or hereafter acquired by or arising in favor of, the Seller (including
under any trade names, styles or derivations of the Seller), and regardless of
where located (all of which being hereinafter collectively referred to as the
"Seller Collateral"):
(a) all Receivables and the Related Security;
(b) the Sale Agreement, all Lockbox Agreements and all other Related
Documents now or hereafter in effect relating to the purchase, servicing or
processing of Receivables or the Related Security (collectively, the "Seller
Assigned Agreements"), including (i) all rights of the Seller to receive moneys
due and to become due thereunder or pursuant thereto, (ii) all rights of the
Seller to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect thereto, (iii) all claims of the Seller for damages or breach with
respect thereto or for default thereunder and (iv) the right of the Seller to
amend, waive or terminate the same and to perform and to compel performance and
otherwise exercise all remedies thereunder;
(c) all other property that may from time to time hereafter be
granted and pledged by the Seller or by any Person on its behalf under this
Agreement, including any deposit with the Purchaser or the Administrative Agent
of additional funds by the Seller; and
(d) to the extent not otherwise included, all proceeds and products
of the foregoing and all accessions to, substitutions and replacements for, and
profits of, each of the foregoing Seller Collateral (including proceeds that
constitute property of the types described in Sections 8.01(a) through (c).
Section 8.02. Seller's Certification. The Seller hereby certifies
that (a) the benefits of the representations, warranties and covenants of each
Originator and member of the
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Parent Group to the Seller under the Sale Agreement shall have been assigned by
the Seller to the Administrative Agent on behalf of the Purchaser hereunder; (b)
the rights of the Seller to receive a capital contribution from the Originators
or to require payment of a Rejected Amount from an Originator under the Sale
Agreement may be enforced by the Administrative Agent on behalf of the
Purchaser; and (c) the Sale Agreement provides that the representations,
warranties and covenants described in Sections 4.01, 4.02 and 4.04 thereof, the
indemnification and payment provisions of Article V thereof and the provisions
of Sections 4.04(j), 9.03 and 9.14 thereof shall survive the sale of the
Transferred Receivables and the Related Security (and undivided percentage
ownership interests therein) and the termination of the Sale Agreement and this
Agreement.
Section 8.03. [Reserved].
Section 8.04. Delivery of Collateral. All certificates or
instruments representing or evidencing the Seller Collateral shall be delivered
to and held by or on behalf of the Administrative Agent and shall be in suitable
form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Administrative Agent. The Administrative Agent shall have
the right (a) at any time to exchange certificates or instruments representing
or evidencing Seller Collateral for certificates or instruments of smaller or
larger denominations and (b) at any time in its discretion following the
occurrence and during the continuation of a Termination Event and without notice
to the Seller, to transfer to or to register in the name of the Administrative
Agent or its nominee any or all of the Seller Collateral. The Seller will, (A)
at all times from and after the date hereof, clearly and conspicuously xxxx its
computer and master data processing books and records with a legend describing
the Administrative Agent's interest (on behalf of the Purchaser) in the
Receivables and the Related Security, (B) segregate (from all other receivables
then owned or being serviced by the Seller, including any Excluded Receivables)
all the Related Security relating to each Receivable, and (C) execute or cause
to be executed an endorsement for each Extended Term Promissory Note and any
other instrument representing a Receivable or the Related Security and deliver
the original Extended Term Promissory Note and such endorsement and other
instruments and appropriate endorsements to the Administrative Agent.
Section 8.05. Seller Remains Liable. It is expressly agreed by the
Seller that, anything herein to the contrary notwithstanding, the Seller shall
remain liable under any and all of the Transferred Receivables and the Related
Security, the Seller Assigned Agreements and any other agreements constituting
the Seller Collateral to which it is a party to observe and perform all the
conditions and obligations to be observed and performed by it thereunder.
Neither the Purchaser nor the Administrative Agent shall have any obligation or
liability under any such Receivables, the Related Security or agreements by
reason of or arising out of this Agreement or the granting herein of a Lien
thereon or the receipt by the Administrative Agent or the Purchaser of any
payment relating thereto pursuant hereto. The exercise by the Purchaser or the
Administrative Agent of any of its respective rights under this Agreement shall
not release any Originator, the Seller or any Servicer from any of their
respective duties or obligations under
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any such Receivables, the Related Security or other agreements. Neither the
Purchaser nor the Administrative Agent shall be required or obligated in any
manner to perform or fulfill any of the obligations of any Originator, the
Seller or any Servicer under or pursuant to any such Receivable, the Related
Security, or other agreement, or to make any payment, or to make any inquiry as
to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any such Receivable, the
Related Security, or other agreement, or to present or file any claims, or to
take any action to collect or enforce any performance or the payment of any
amounts that may have been assigned to it or to which it may be entitled at any
time or times.
Section 8.06. Covenants of the Seller and the Servicers Regarding
the Seller Collateral.
(a) Offices and Records. The Seller shall maintain its principal
place of business and chief executive office and the office at which it stores
its Records at the respective locations specified in Schedule 4.01(b) or, upon
30 days' prior written notice to the Administrative Agent, at such other
location in a jurisdiction where all action requested by the Administrative
Agent pursuant to Section 14.14 shall have been taken with respect to the Seller
Collateral. Each of the Seller and each Servicer shall, at its own cost and
expense, maintain adequate and complete records of the Transferred Receivables,
the Related Security and the Seller Collateral, including records of any and all
payments received, credits granted and merchandise returned with respect thereto
and all other dealings therewith. Each of the Seller and each Servicer shall
xxxx conspicuously with a legend, in form and substance satisfactory to the
Administrative Agent, its books and records, computer tapes, computer disks and
credit files pertaining to the Seller Collateral, and its file cabinets or other
storage facilities where it maintains information pertaining thereto, to
evidence this Agreement and the assignment and Liens granted pursuant to this
Article VIII. Upon the occurrence and during the continuance of a Termination
Event, the Seller and each Servicer shall deliver and turn over such books and
records to the Administrative Agent or its representatives at any time on demand
of the Administrative Agent. Prior to the occurrence of a Termination Event and
upon notice from the Administrative Agent, the Seller and each Servicer shall
permit any representative of the Administrative Agent to inspect such books and
records and shall provide photocopies thereof to the Administrative Agent that
are reasonably related to the general purpose of such inspection and as more
specifically set forth in Section 8.06(b).
(b) Access. Each of the Seller and each Servicer shall, at its own
expense, during normal business hours, from time to time upon one Business Day's
prior notice as frequently as the Administrative Agent determines to be
appropriate: (i) provide the Purchaser, the Administrative Agent and any of
their respective officers, employees and agents access to its properties
(including properties utilized in connection with the collection, processing or
servicing of the Transferred Receivables and the Related Security), facilities,
advisors and employees (including officers) and to the Seller Collateral, (ii)
permit the Purchaser, the Administrative Agent and any of their respective
officers, employees and agents to inspect, audit and make
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extracts from its books and records, including all Records, reasonably related
to the general purposes of such inspection and audit, (iii) permit the Purchaser
or the Administrative Agent and their respective officers, employees and agents
to inspect, review and evaluate the Transferred Receivables, the Related
Security, and the Seller Collateral and (iv) permit the Purchaser or the
Administrative Agent and their respective officers, employees and agents to
discuss matters relating to the Transferred Receivables or their performance
under this Agreement or the other Related Documents or its affairs, finances and
accounts with any of its officers, directors, employees, representatives or
agents (in each case, with those persons having knowledge of such matters) and
with its independent certified public accountants. If (A) an Incipient
Termination Event or a Termination Event shall have occurred and be continuing
or (B) the Administrative Agent, in good faith, believes that an Incipient
Termination Event or a Termination Event is imminent or deems the Purchaser's
rights or interests in the Transferred Receivables, the Related Security, the
Seller Assigned Agreements or any other Seller Collateral insecure, then each of
the Seller and each Servicer shall, at its own expense, provide such access at
reasonably extended business hours and without advance notice and provide the
Purchaser or the Administrative Agent with access to its suppliers and
customers. Each of the Seller and each Servicer shall make available to the
Administrative Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records, including Records,
that the Administrative Agent may request. Each of the Seller and each Servicer
shall deliver any document or instrument necessary for the Administrative Agent,
as the Administrative Agent may from time to time request, to obtain records
from any service bureau or other Person that maintains records for the Seller or
such Servicer, and shall maintain duplicate records or supporting documentation
on media, including computer tapes and disks owned by the Seller or such
Servicer.
(c) Communication with Accountants. Each of the Seller and each
Servicer authorizes the Purchaser and the Administrative Agent to communicate
directly with its independent certified public accountants and authorizes and
shall instruct those accountants and advisors to disclose and make available to
the Purchaser and the Administrative Agent any and all financial statements and
other completed supporting financial documents, schedules and information
relating to the Seller or such Servicer (including copies of any issued
management letters) with respect to its business, results of operations and
financial condition.
(d) Collection of Transferred Receivables and the Related Security.
Except as otherwise provided in this Section 8.06(d), each Servicer shall
continue to collect or cause to be collected, at its sole cost and expense, all
amounts due or to become due to the Seller under the Transferred Receivables and
the Related Security, the Seller Assigned Agreements and any other Seller
Collateral. In connection therewith, the Seller and each Servicer shall take
such action as it, and from and after the occurrence and during the continuance
of a Termination Event, the Administrative Agent, may deem necessary or
desirable to enforce collection of the Transferred Receivables, the Related
Security, the Seller Assigned Agreements and the other Seller Collateral;
provided that the Seller or such Servicer may, rather than commencing any such
action or taking any other enforcement action, at its option, elect to pay to
the Administrative
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Agent, for the account of the Purchaser (in accordance with its Purchaser
Interests), the Outstanding Balance of any such Transferred Receivable; provided
further, that if (i) an Incipient Termination Event or a Termination Event shall
have occurred and be continuing or (ii) the Administrative Agent, in good faith
believes in its reasonable judgment that an Incipient Termination Event or a
Termination Event is imminent or deems in its reasonable judgment the
Purchaser's rights or interests in the Transferred Receivables, the Related
Security, the Seller Assigned Agreements or any other Seller Collateral
insecure, then the Administrative Agent may, without prior notice to the Seller
or any Servicer, notify or cause the applicable Servicer to notify any Obligor
under any Transferred Receivable or obligors under the Seller Assigned
Agreements of the assignment of such Transferred Receivables, Related Security,
or Seller Assigned Agreements, as the case may be, to the Administrative Agent
on behalf of the Purchaser hereunder and direct that payments of all amounts due
or to become due to the Seller thereunder be made directly to the Administrative
Agent or any servicer, collection agent or lockbox or other account designated
by the Administrative Agent and, upon such notification and at the sole cost and
expense of the Seller and the Servicers, the Administrative Agent may enforce
collection of any such Transferred Receivable, the Related Security, or the
Seller Assigned Agreements and adjust, settle or compromise the amount or
payment thereof.
(e) Performance of Seller Assigned Agreements. Each of the Seller
and each Servicer shall (i) perform and observe all the terms and provisions of
the Seller Assigned Agreements to be performed or observed by it, maintain the
Seller Assigned Agreements in full force and effect, enforce the Seller Assigned
Agreements in accordance with their terms and take all action as may from time
to time be requested by the Administrative Agent in order to accomplish the
foregoing, and (ii) upon the request of and as directed by the Administrative
Agent, make such demands and requests to any other party to the Seller Assigned
Agreements as are permitted to be made by the Seller or the Servicers
thereunder.
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ARTICLE IX.
TERMINATION EVENTS
Section 9.01. Termination Events. If any of the following events
(each, a "Termination Event") shall occur (regardless of the reason therefor):
(a) (i) the Seller shall fail to make any payment of any Seller
Secured Obligation when due and payable and the same shall remain unremedied for
one Business Day or more, or (ii) the Seller or Independent Member shall fail or
neglect to perform, keep or observe any other provision of this Agreement or the
other Related Documents to which it is a party (other than any provision
embodied in or covered by any other clause of this Section 9.01) and the same
shall remain unremedied for two Business Days or more after written notice
thereof shall have been given by the Administrative Agent to the Seller; or
(b) a default or breach shall occur under any other agreement,
document or instrument to which Independent Member, any member of the Parent
Group or the Seller is a party or by which any such Person or its property is
bound, and such default or breach (i) involves the failure to make any payment
when due in respect of any Debt (other than the Seller Secured Obligations) that
is in excess of a principal amount of $1,000,000 to any Person or $2,500,000 in
the aggregate (the "Material Debt") which is not cured within any applicable
grace period therefor, (ii) which, except for the technical defaults under the
XxXxxxx Bonds documents and Mecklenburg Bonds documents defined and described on
Schedule 4.01(c)(v) hereto, would permit any holder of a Material Debt or a
portion thereof or a trustee or agent to cause such Material Debt or a portion
thereof, except with respect to the Seller, to become due prior to its stated
maturity or prior to its regularly scheduled dates of payment or (iii) causes a
Material Debt or a portion thereof, except with respect to the Seller, to become
due prior to its stated maturity or prior to its regularly scheduled dates of
payment; in each case, regardless of whether such default is waived or whether
such default is disclosed to the Administrative Agent (including the disclosure
of the technical defaults referenced in Schedule 4.01(c)(v)), or such right is
exercised, by such holder, trustee or agent (including by any of the trustees
under the the XxXxxxx Bonds documents and Mecklenburg Bonds documents referenced
in Schedule 4.01(c)(v)); it being understood that Material Debt shall not
include trade payables incurred in the ordinary course of business that are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP; or
(c) a case or proceeding shall have been commenced against
Independent Member, any member of the Parent Group or the Seller seeking a
decree or order in respect of any such Person (i) under the Bankruptcy Code or
any other applicable federal, state or foreign bankruptcy or other similar law,
(ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any such Person or for any substantial
part of such Person's assets, or (iii) ordering the winding-up or liquidation of
the affairs of any such Person; or
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(d) Independent Member, any member of the Parent Group or the Seller
shall (i) file a petition seeking relief under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii)
consent or fail to object in a timely and appropriate manner to the institution
of proceedings thereunder or to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any such Person or
for any substantial part of such Person's assets, (iii) make an assignment for
the benefit of creditors, or (iv) take any action in furtherance of any of the
foregoing; or
(e) (i) Independent Member, any member of the Parent Group or the
Seller generally does not pay its debts as such debts become due or admits in
writing its inability to, or is generally unable to, pay its Debt as such Debt
becomes due or (ii) the fair market value of any Originator's or the Seller's
liabilities exceeds the fair market value of its assets; or
(f) a final judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate at any time outstanding shall be rendered against
any member of the Parent Group or any Affiliate thereof and the same shall not
have been discharged or execution thereof stayed or bonded pending appeal, or
shall not have been discharged prior to the expiration of any such stay within
the earlier of 60 days after the entry thereof or 30 days after any officer of
such Person has actual knowledge of the entry thereof; or
(g) a judgment or order for the payment of money shall be rendered
against the Seller or Independent Member; or
(h) (i) any information contained in any Investment Base Certificate
is untrue or incorrect in any respect other than (x) inadvertent, immaterial
errors not exceeding $50,000 in the aggregate in any Investment Base or (y)
errors understating the Investment Base or (ii) any representation or warranty
of any member of the Parent Group, Independent Member, or the Seller herein or
in any other Related Document or in any written statement, report, financial
statement or certificate (other than an Investment Base Certificate) made or
delivered by or on behalf of any member of the Parent Group or the Seller hereto
or thereto is untrue or incorrect in any material respect as of the date when
made or deemed made; provided, however, that the materiality standard in the
foregoing clause (ii) shall not apply to any representation or warranty that
itself contains a materiality qualifier; or
(i) any Governmental Authority (including the IRS or the PBGC) shall
file notice of a Lien with regard to any assets of any member of the Parent
Group (other than a Lien (i) limited by its terms to assets other than
Transferred Receivables and the Related Security and (ii) not materially
adversely affecting the financial condition of such member of the Parent Group
or the Parent Group considered as a whole or the ability of the applicable
member of the Parent Group to perform as a Servicer hereunder); or
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(j) any Governmental Authority (including the IRS or the PBGC) shall
file notice of a Lien with regard to any of the assets of the Seller or
Independent Member; or
(k) there shall have occurred any event which materially adversely
impairs, in the credit judgment of the Administrative Agent exercised in good
faith, the ability of any Originator to originate Receivables of a credit
quality which are at least of the credit quality of the Receivables in the
initial Purchase, or the Administrative Agent shall have determined (and so
notified the Seller) that any event or condition that has had or could
reasonably be expected to have or result in a Material Adverse Effect has
occurred; or
(l) a Concentration Account or a replacement Lockbox Account shall
not have been established within the time period and in accordance with Section
5.01(g) and Section 5.01(h), respectively; or
(m) (i) a violation, default or breach shall occur under any
provision of Sections 4.02(p), 4.05, 5.01, 9.14 or Annex 4.04(l) of the Sale
Agreement that is not cured within any applicable grace period therefor, (ii) a
violation, default or breach shall occur under any other provision of the Sale
Agreement that is not cured within any applicable grace period therefor or (iii)
the Sale Agreement shall for any reason cease to evidence the transfer to the
Seller of the legal and equitable title to, and ownership of, the Transferred
Receivables or the Related Security; or
(n) except as otherwise expressly provided herein, any Lockbox
Agreement or the Sale Agreement shall have been modified, amended or terminated
without the prior written consent of the Purchaser and the Administrative Agent;
or
(o) an Event of Servicer Termination shall have occurred; or
(p) with respect to the Transferred Receivables and the Related
Security, (i) prior to the Purchase of Purchaser Interests therein hereunder,
the Seller shall cease to hold valid and properly perfected title to and sole
record and beneficial ownership in such Transferred Receivables or the Related
Security or (ii) after the Purchase of Purchaser Interests hereunder, the
Administrative Agent (on behalf of the Purchaser) shall cease to hold either
valid and properly perfected title to and sole record and beneficial ownership
in the related Transferred Receivables or the Related Security or a first
priority, perfected Lien in the related Transferred Receivables or the Related
Security or any of the Seller Collateral; or
(q) a Change of Control shall occur with respect to the Parent, any
Originator, the Seller or the Independent Member; or
(r) the Seller or Independent Member shall amend its Organic
Documents without the express prior written consent of the Purchaser and the
Administrative Agent; or
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(s) the Seller shall have received an Election Notice pursuant to
Section 2.01(d) of the Sale Agreement; or
(t) (i) the Default Ratio shall exceed 5.5%; or (ii) the Delinquency
Ratio shall exceed 7.5% or (iii) the Dilution Ratio shall exceed 3.5% or (iv)
the Seller's Net Worth Percentage shall be less than 5%; or
(u) the Receivables Collection Turnover shall be greater than 50
days for three (3) consecutive Settlement Periods; or
(v) any material provision of any Related Document shall for any
reason cease to be valid, binding and enforceable in accordance with its terms
(or any Originator, Independent Member, or the Seller shall challenge the
enforceability of any Related Document or shall assert in writing, or engage in
any action or inaction based on any such assertion, that any provision of any of
the Related Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms); or
(w) the Parent shall fail to perform or observe any term, covenant
or agreement required to be performed by it under the Sale Agreement, or the
Performance Undertaking shall cease to be effective or to be the legally valid,
binding and enforceable obligation of Parent, or Parent shall directly or
indirectly contest in any manner such effectiveness, validity, binding nature or
enforceability; or
(x) the Permitted Outstanding Debt Documents in effect as of the
date hereof shall (i) terminate or be repaid other than by reason of regularly
scheduled principal payments, prepayment, redemption or purchase or similar
payment permitted under Section 4.04(n) of the Sale Agreement or (ii) fail to be
refinanced at least ninety (90) days prior to the maturity dates thereunder,
which refinancing does not have the effect of increasing the principal amount
thereof or changing the amortization thereof (other than to extend the same) and
is otherwise on terms and conditions no less favorable to any Seller Party or
the Administrative Agent, as determined by the Administrative Agent, than the
terms of the Debt being refinanced, and in conjunction with which the
refinancier thereof shall have entered into an intercreditor agreement on terms
and conditions no less favorable to the Administrative Agent and the Purchaser
than the Intercreditor Agreement; or
(y) the Purchaser Interests exceed 100%; or
(z) a Person other than the Originators and the Independent Member
owns the economic or the voting rights associated with the Equity Interest of
the Seller; or
(aa) the aggregate Outstanding Balance of all Transferred
Receivables at any one time exceeds $85,000,000; or
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(bb) any member of the Parent Group shall fail or neglect to
perform, keep or observe provisions in Sections 4.04(n) and 4.04(o) of the Sale
Agreement;
then, and in any such event, the Administrative Agent shall, at the request of,
or may, with the consent of, the Purchaser or the Administrative Agent, by
notice to the Seller, declare the Facility Termination Date to have occurred
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Seller; provided that the Facility Termination Date
shall automatically occur upon the occurrence of any of the Termination Events
described in Sections 9.01(a)(i), (c), (d), (e) or (s), in each case without
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Seller.
Section 9.02. Events of Servicer Termination. If any of the
following events (each, an "Event of Servicer Termination") shall occur
(regardless of the reason therefor):
(a) any Servicer shall (i) fail to make any payment or deposit
required to be made by it under this Agreement or any other Related Document,
(ii) fail to deliver any reports required to be delivered by it under this
Agreement or any other Related Document and such failure shall remain unremedied
for two (2) Business Days or more, or (iii) fail or neglect to perform, keep or
observe any other provision of this Agreement or the other Related Documents
(whether in its capacity as an Originator or as a Servicer) and the same shall
remain unremedied for two (2) Business Days or more after written notice thereof
shall have been given by the Administrative Agent to such Servicer; or
(b) a default or breach shall occur under any other agreement,
document or instrument to which a Servicer is a party or by which a Servicer or
its property is bound, and such default or breach (i) involves the failure to
make any payment when due in respect of any Material Debt which is not cured
within any applicable grace period therefor, (ii) permits any holder of Material
Debt or a trustee or agent to cause such Debt or a portion thereof, except with
respect to the Seller, to become due prior to its stated maturity or prior to
its regularly scheduled dates of payment or (iii) causes any Material Debt or a
portion thereof, except with respect to the Seller, to become due prior to its
stated maturity or prior to its regularly scheduled dates of payment; in each
case, regardless of whether such default is waived, or such right is exercised,
by such holder, trustee or agent; it being understood that Material Debt shall
not include trade payables incurred in the ordinary course of business that are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP; or
(c) a case or proceeding shall have been commenced against any
Servicer or any Affiliate thereof which acts as a Sub-Servicer seeking a decree
or order in respect of any such Person (i) under the Bankruptcy Code or any
other applicable federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for any such Person or for any substantial part of such
Person's assets, or (iii) ordering the winding-up or liquidation of the affairs
of any such Person; or
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(d) any Servicer or any Affiliate thereof which acts as a
Sub-Servicer shall (i) file a petition seeking relief under the Bankruptcy Code
or any other applicable federal, state or foreign bankruptcy or other similar
law, (ii) consent or fail to object in a timely and appropriate manner to the
institution of proceedings thereunder or to the filing of any such petition or
to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any such Person or
for any substantial part of such Person's assets, (iii) make an assignment for
the benefit of creditors, or (iv) take any action in furtherance of any of the
foregoing; or
(e) (i) any Servicer or any Affiliate thereof which acts as a
Sub-Servicer generally does not pay its debts as such debts become due or admits
in writing its inability to, or is generally unable to, pay its Debt as such
Debt becomes due or (ii) the fair market value of the liabilities of any
Servicer exceeds the fair market value of its assets; or
(f) a final judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate at any time outstanding shall be rendered against
any member of the Parent Group or any Affiliate thereof and the same shall not
have been discharged or execution thereof stayed or bonded pending appeal, or
shall not have been discharged prior to the expiration of any such stay within
the earlier of 60 days after the entry thereof or 30 days after any officer of
such Person has actual knowledge of the entry thereof; or
(g) (i) any information contained in any Investment Base Certificate
is untrue or incorrect in any respect other than (x) inadvertent, immaterial
errors not exceeding $50,000 in the aggregate in any Investment Base or (y)
errors understating the Investment Base, or (ii) any representation or warranty
of any Servicer herein or in any other Related Document or in any written
statement, report, financial statement or certificate (other than an Investment
Base Certificate) made or delivered by a Servicer to any Affected Party hereto
or thereto is untrue or incorrect in any material respect as of the date when
made or deemed made; provided, however, that the materiality standard in the
foregoing clause (ii) shall not apply to any representation or warranty that
itself contains a materiality qualifier; or
(h) the Administrative Agent shall have determined in its reasonable
judgment that any event or condition that materially adversely affects the
ability of any Servicer to collect the Transferred Receivables or to otherwise
perform hereunder has occurred; or
(i) a Termination Event shall have occurred or this Agreement shall
have been terminated; or
(j) a deterioration has taken place in the quality of servicing of
Transferred Receivables or other Receivables serviced by any Servicer that the
Administrative Agent, in its sole discretion, determines to be material, and
such material deterioration has not been eliminated within 30 days after written
notice thereof shall have been given by the Administrative Agent to such
Servicer; or
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(k) any Originator shall, or any Servicer shall, assign or purport
to assign any of their respective obligations hereunder or under the Sale
Agreement without the prior written consent of the Administrative Agent; or
(l) a Change of Control shall occur; or
(m) the Seller's board of managers/Equity Holders shall have
determined that it is in the best interests of the Seller to terminate the
duties of any Servicer hereunder and shall have given such Servicer, the
Purchaser and the Administrative Agent at least 30 days' written notice thereof;
then, and in any such event, the Administrative Agent shall, at the
request of, or may, with the consent of, the Purchaser, by delivery of a
Servicer Termination Notice to the Seller terminate the servicing
responsibilities of all of the Servicers hereunder (or, in its discretion, any
of them), without demand, protest or further notice of any kind, all of which
are hereby waived by each Servicer. Upon the delivery of any such notice, all
authority and power of the Servicers, or any of them, as the case may be, under
this Agreement and the Sale Agreement shall pass to and be vested in the
Successor Servicer acting pursuant to Section 11.02; provided that
notwithstanding anything to the contrary herein, each Servicer agrees to
continue to follow the procedures set forth in Section 7.02 with respect to
Collections on the Transferred Receivables until a Successor Servicer has
assumed the responsibilities and obligations of the Servicers in accordance with
Section 11.02.
ARTICLE X.
REMEDIES
Section 10.01. Actions Upon Termination Event. If any Termination
Event shall have occurred and be continuing and the Administrative Agent shall
have declared the Facility Termination Date to have occurred or the Facility
Termination Date shall be deemed to have occurred pursuant to Section 9.01, then
the Administrative Agent may exercise in respect of the Seller Collateral, in
addition to any and all other rights and remedies granted to it hereunder, under
any other Related Document or under any other instrument or agreement securing,
evidencing or relating to the Seller Secured Obligations or otherwise available
to it, all of the rights and remedies of a secured party upon default under the
UCC (such rights and remedies to be cumulative and nonexclusive), and, in
addition, may take the following actions:
(a) The Administrative Agent may, without notice to the Seller
except as required by law and at any time or from time to time, charge, offset
or otherwise apply amounts payable to the Seller from the Collection Account,
any Lockbox Account or any part of such accounts in accordance with the
priorities set forth in Section 6.03 and 6.05 against all or any part of the
Seller Secured Obligations.
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(b) The Administrative Agent may, without notice except as specified
below, solicit and accept bids for and sell the Seller Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or any of the Purchaser's or the Administrative Agent's offices
or elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Administrative Agent may deem commercially reasonable. The
Administrative Agent shall have the right to conduct such sales on the Seller's
premises or elsewhere and shall have the right to use any of the Seller's
premises without charge for such sales at such time or times as the
Administrative Agent deems necessary or advisable. The Seller agrees that, to
the extent notice of sale shall be required by law, at least ten Business Days'
notice to the Seller of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Administrative Agent shall not be obligated to make any sale of Seller
Collateral regardless of notice of sale having been given. The Administrative
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed for such sale, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Every such
sale shall operate to divest all right, title, interest, claim and demand
whatsoever of the Seller in and to the Seller Collateral so sold, and shall be a
perpetual bar, both at law and in equity, against each Originator, the Seller,
any Person claiming the Seller Collateral sold through any Originator or the
Seller, and their respective successors or assigns. The Administrative Agent
shall deposit the net proceeds of any such sale in the Collection Account and
such proceeds shall be disbursed in accordance with Section 6.03 and 6.05.
(c) Upon the completion of any sale under Section 10.01(b), the
Seller or the Servicers, or any of them, shall deliver or cause to be delivered
to the purchaser or purchasers at such sale on the date thereof, or within a
reasonable time thereafter if it shall be impracticable to make immediate
delivery, all of the Seller Collateral sold on such date, but in any event full
title and right of possession to such property shall vest in such purchaser or
purchasers upon the completion of such sale. Nevertheless, if so requested by
the Administrative Agent or by any such purchaser, the Seller shall confirm any
such sale or transfer by executing and delivering to such purchaser all proper
instruments of conveyance and transfer and releases as may be designated in any
such request.
(d) At any sale under Section 10.01(b), the Purchaser or the
Administrative Agent may bid for and purchase the property offered for sale and,
upon compliance with the terms of sale, may hold, retain and dispose of such
property without further accountability therefor.
(e) The Administrative Agent may exercise, at the sole cost and
expense of the Seller, any and all rights and remedies of the Seller under or in
connection with the Seller Assigned Agreements or the other Seller Collateral,
including any and all rights of the Seller to demand or otherwise require
payment of any amount under, or performance of any provisions of, the Seller
Assigned Agreements.
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Section 10.02. Exercise of Remedies. No failure or delay on the part
of the Administrative Agent in exercising any right, power or privilege under
this Agreement and no course of dealing between any member of the Parent Group
or the Seller, on the one hand, and the Administrative Agent, on the other hand,
shall operate as a waiver of such right, power or privilege, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. The rights and remedies under
this Agreement are cumulative, may be exercised singly or concurrently, and are
not exclusive of any rights or remedies that the Administrative Agent would
otherwise have at law or in equity. No notice to or demand on any party hereto
shall entitle such party to any other or further notice or demand in similar or
other circumstances, or constitute a waiver of the right of the party providing
such notice or making such demand to any other or further action in any
circumstances without notice or demand.
Section 10.03. Power of Attorney. On the Closing Date, each of the
Seller and each Servicer shall execute and deliver a power of attorney
substantially in the form attached hereto as Exhibit 10.03 (each, a "Power of
Attorney"). The power of attorney granted pursuant to each Power of Attorney is
a power coupled with an interest and shall be irrevocable until all of the
Seller Secured Obligations are indefeasibly paid or otherwise satisfied in full.
The powers conferred on the Administrative Agent under each Power of Attorney
are solely to protect the Administrative Agent's Liens upon and interests in the
Seller Collateral and shall not impose any duty upon the Administrative Agent to
exercise any such powers. The Administrative Agent shall not be accountable for
any amount other than amounts that it actually receives as a result of the
exercise of such powers and none of the Administrative Agent's officers,
directors, employees, agents or representatives shall be responsible to the
Seller or any Servicer for any act or failure to act, except in respect of
damages attributable solely to their own gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction.
Section 10.04. Continuing Security Interest. This Agreement shall
create a continuing Lien in the Seller Collateral until the release of the Liens
of the Administrative Agent thereon in accordance with Section 6.06(b).
ARTICLE XI.
SUCCESSOR SERVICER PROVISIONS
Section 11.01. Servicers Not to Resign. No Servicer shall resign
from the obligations and duties hereby imposed on it except upon a determination
that (a) the performance of its duties hereunder has become impermissible under
applicable law or regulation and (b) there is no reasonable action that such
Servicer could take to make the performance of its duties hereunder become
permissible under applicable law. Any such determination shall (i) with respect
to clause (a) above, be evidenced by an opinion of counsel to such effect and
(ii) with respect to clause (b) above, be evidenced by an Officer's Certificate
to such effect, in each
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case delivered to the Administrative Agent for distribution to the Purchaser. No
such resignation shall become effective until a Successor Servicer shall have
assumed the responsibilities and obligations of the applicable Servicer in
accordance with Section 11.02.
Section 11.02. Appointment of the Successor Servicer. In connection
with the termination of a Servicer's responsibilities or the resignation by a
Servicer under this Agreement pursuant to Sections 9.02 or 11.01, the
Administrative Agent shall (a) succeed to and assume all of the applicable
Servicer's responsibilities, rights, duties and obligations as a Servicer (but
not in any other capacity, it being specifically understood that the
Administrative Agent shall not assume any of the obligations of any Servicer set
forth in Section 12.02) under this Agreement (and except that the Administrative
Agent makes no representations and warranties pursuant to Section 4.02) and (b)
may at any time appoint a successor servicer to the applicable Servicer that
shall be acceptable to the Administrative Agent and shall succeed to all rights
and assume all of the responsibilities, duties and liabilities of the applicable
Servicer under this Agreement (the Administrative Agent, in such capacity, or
such successor servicer being referred to as the "Successor Servicer"); provided
that the Successor Servicer shall have no responsibility for any actions of the
applicable Servicer prior to the date of its appointment or assumption of duties
as Successor Servicer. In selecting a Successor Servicer, the Administrative
Agent may obtain bids from any potential Successor Servicer and may agree to any
bid it deems appropriate. The Successor Servicer shall accept its appointment by
executing, acknowledging and delivering to the Administrative Agent an
instrument in form and substance acceptable to the Administrative Agent.
Section 11.03. Duties of the Servicer. Each Servicer covenants and
agrees that, following the appointment of, or assumption of duties by, a
Successor Servicer:
(a) Such Servicer shall terminate its activities as Servicer
hereunder in a manner that facilitates the transfer of servicing duties to the
Successor Servicer and is otherwise acceptable to the Purchaser and the
Administrative Agent and, without limiting the generality of the foregoing,
shall timely deliver (i) any funds to the Administrative Agent that were
required to be remitted to the Administrative Agent for deposit in the
Collection Account and (ii) all Servicing Records and other information with
respect to the Transferred Receivables and the Related Security to the Successor
Servicer at a place selected by the Successor Servicer. Such Servicer shall
account for all funds and shall execute and deliver such instruments and do such
other things as may be required to vest and confirm in the Successor Servicer
all rights, powers, duties, responsibilities, obligations and liabilities of
such Servicer.
(b) Such Servicer shall terminate each existing Sub-Servicing
Agreement and the Successor Servicer shall not be deemed to have assumed any of
such Servicer's interests therein or to have replaced such Servicer as a party
thereto.
Section 11.04. Effect of Termination or Resignation. Any termination
of or resignation by a Servicer hereunder shall not affect any claims that the
Seller, the Purchaser or
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the Administrative Agent may have against such Servicer for events or actions
taken or not taken by such Servicer arising prior to any such termination or
resignation.
ARTICLE XII.
INDEMNIFICATION
Section 12.01. Indemnities by the Seller.
(a) Without limiting any other rights that the Purchaser, the
Administrative Agent or any of their respective officers, directors, employees,
attorneys, agents or representatives (each, an "Indemnified Person") may have
hereunder or under applicable law, the Seller hereby agrees to indemnify and
hold harmless each Indemnified Person from and against any and all Indemnified
Amounts that may be claimed or asserted against or incurred by any such
Indemnified Person in connection with or arising out of the transactions
contemplated under this Agreement or under any other Related Document or any
actions or failures to act in connection therewith, including any and all legal
costs and expenses arising out of or incurred in connection with disputes
between or among any parties to any of the Related Documents; provided that the
Seller shall not be liable for any indemnification to an Indemnified Person to
the extent that any such Indemnified Amount (x) results from (i) such
Indemnified Person's gross negligence or (ii) such Indemnified Person's willful
misconduct, in each case as finally determined by a court of competent
jurisdiction or (y) constitutes recourse for uncollectible or uncollected
Transferred Receivables and the Related Security. Without limiting the
generality of the foregoing, the Seller shall pay on demand to each Indemnified
Person any and all Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made or deemed
made by the Seller (or any of its officers) under or in connection with
this Agreement or any other Related Document or on any other information
delivered by the Seller pursuant hereto or thereto that shall have been
incorrect in any material respect when made or deemed made or delivered;
(ii) the failure by the Seller to comply with any term,
provision or covenant contained in this Agreement, any other Related
Document or any agreement executed in connection herewith or therewith,
any applicable law, rule or regulation with respect to any Transferred
Receivable or the Related Security, or the nonconformity of any
Transferred Receivable or the Related Security with any such applicable
law, rule or regulation; or
(iii) (1) the failure to vest and maintain vested in the
Seller or the Administrative Agent valid and properly perfected title to
and sole record and beneficial ownership of the Receivables and the
Related Security that constitute Transferred Receivables and the Related
Security, together with all Collections in respect thereof, free
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and clear of any Adverse Claim and (2) the failure to maintain or transfer
to the Administrative Agent for the benefit of the Purchaser a first,
priority, perfected Lien in the Seller Collateral;
(iv) any dispute, claim, offset or defense of any Obligor
(other than its discharge in bankruptcy) to the payment of any Transferred
Receivable or the Related Security that is the subject of a Purchase
hereunder (including a defense based on such Receivable or the Related
Security not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or services giving rise to such
Receivable or the furnishing of or failure to furnish such merchandise or
services or relating to collection activities with respect to such
Receivable or the Related Security (if such collection activities were
performed by any of its Affiliates acting as Servicer), except to the
extent that such dispute, claim, offset or defense results solely from any
action or inaction on the part of any Indemnified Person or is otherwise
based on the inability of the Obligor to pay;
(v) any products liability claim or other claim arising out of
or in connection with merchandise, insurance or services that is the
subject of any Contract with respect to any Transferred Receivable;
(vi) the commingling of Collections with respect to
Transferred Receivables by the Seller at any time with its other funds or
the funds of any other Person;
(vii) any failure by the Seller to cause the filing of, or any
delay in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or any other
applicable laws with respect to any Transferred Receivable or the Related
Security that is the subject of a Purchase hereunder, whether at the time
of any such Purchase or at any subsequent time; or
(viii) any failure of a Lockbox Account Bank or a
Concentration Account Bank to comply with the terms of the applicable
Lockbox Agreement.
(b) Any Indemnified Amounts subject to the indemnification
provisions of this Section 12.01 not paid in accordance with Article VI shall be
paid by the Seller to the Indemnified Person entitled thereto within five
Business Days following demand therefor.
Section 12.02. Indemnities by the Servicers.
(a) Without limiting any other rights that an Indemnified Person may
have hereunder or under applicable law, each Servicer hereby agrees to indemnify
and hold harmless each Indemnified Person from and against any and all
Indemnified Amounts that may be claimed or asserted against or incurred by any
such Indemnified Person in connection with or arising out
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of any breach by such Servicer of its obligations hereunder or under any other
Related Document; provided that such Servicer shall not be liable for any
indemnification to an Indemnified Person to the extent that any such Indemnified
Amount (x) results solely from with respect to any Indemnified Person, (i) such
Indemnified Person's gross negligence or (ii) such Indemnified Person's willful
misconduct, in each case as finally determined by a court of competent
jurisdiction, or (y) constitutes recourse for uncollectible or uncollected
Transferred Receivables or the Related Security. Without limiting the generality
of the foregoing, such Servicer shall pay on demand to each Indemnified Person
any and all Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made or deemed
made by such Servicer (or any of its officers) in its capacity as a
Servicer under or in connection with this Agreement or any other Related
Document or on any other information delivered by such Servicer pursuant
hereto or thereto that shall have been incorrect in any material respect
when made or deemed made or delivered;
(ii) the failure by such Servicer in its capacity as a
Servicer to comply with any term, provision or covenant contained in this
Agreement, any other Related Document or any agreement executed in
connection herewith or therewith, any applicable law, rule or regulation
with respect to any Transferred Receivable or the Related Security, or the
nonconformity of any Transferred Receivable or the Related Security with
any such applicable law, rule or regulation;
(iii) the imposition of any Adverse Claim with respect to any
Transferred Receivable, the Related Security or the Seller Collateral as a
result of any action taken by such Servicer; or
(iv) the commingling of Collections with respect to
Transferred Receivables by such Servicer at any time with its other funds
or the funds of any other Person.
(b) Any Indemnified Amounts subject to the indemnification
provisions of this Section 12.02 not paid in accordance with Article VI shall be
paid by the applicable Servicer to the Indemnified Person entitled thereto
within five Business Days following demand therefor.
Section 12.03. Limitation of Damages; Indemnified Persons. NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.
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ARTICLE XIII.
AGENT
Section 13.01. Authorization and Action. The Administrative Agent
may take such action and carry out such functions under this Agreement as are
authorized to be performed by it pursuant to the terms of this Agreement, any
other Related Document or otherwise contemplated hereby or thereby or are
reasonably incidental thereto; provided that the duties of the Administrative
Agent hereunder shall be determined solely by the express provisions of this
Agreement, and, other than the duties set forth in Section 13.02, any permissive
right of the Administrative Agent hereunder shall not be construed as a duty.
Section 13.02. Reliance. None of the Administrative Agent, any of
its Affiliates or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or the other Related Documents,
except for damages solely caused by its or their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. Without
limiting the generality of the foregoing, and notwithstanding any term or
provision hereof to the contrary, each of the Seller, each Servicer, and the
Purchaser hereby acknowledges and agrees that the Administrative Agent (a) acts
as agent hereunder for the Purchaser and has no duties or obligations to, shall
incur no liabilities or obligations to, and does not act as an agent in any
capacity for, the Seller (other than, with respect to the Administrative Agent,
under the Power of Attorney with respect to remedial actions) or the
Originators, (b) may consult with legal counsel, independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts, (c) makes no representation or warranty
hereunder to any Affected Party and shall not be responsible to any such Person
for any statements, representations or warranties made in or in connection with
this Agreement or the other Related Documents, (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement, or the other Related Documents on the
part of the Seller, any Servicer or the Purchaser or to inspect the property
(including the books and records) of the Seller, any Servicer or the Purchaser,
(e) shall not be responsible to the Seller, any Servicer or the Purchaser for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Related Documents or any other
instrument or document furnished pursuant hereto or thereto, (f) shall incur no
liability under or in respect of this Agreement or the other Related Documents
by acting upon any notice, consent, certificate or other instrument or writing
believed by it to be genuine and signed, sent or communicated by the proper
party or parties and (g) shall not be bound to make any investigation into the
facts or matters stated in any notice or other communication hereunder and may
rely on the accuracy of such facts or matters. Notwithstanding the foregoing,
the Administrative Agent acknowledges that it has a duty to transfer funds
between and among the Accounts and the Collection Account, in accordance with
Article VI and the instructions of the applicable Servicer.
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Section 13.03. GE Capital and Affiliates. GE Capital and its
Affiliates may generally engage in any kind of business with any Obligor, the
Originators, the Seller, any Servicer or the Purchaser, any of their respective
Affiliates and any Person who may do business with or own securities of such
Persons or any of their respective Affiliates, all as if GE Capital were not the
Administrative Agent and without the duty to account therefor to any Obligor,
any Originator, the Seller, any Servicer, the Purchaser or any other Person.
ARTICLE XIV.
MISCELLANEOUS
Section 14.01. Notices. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other parties, or whenever any of the parties
desires to give or serve upon any other parties any communication with respect
to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (a) upon the earlier of actual
receipt and three Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by facsimile (with such facsimile
promptly confirmed by delivery of a copy by personal delivery or United States
Mail as otherwise provided in this Section 14.01), (c) one Business Day after
deposit with a reputable overnight courier with all charges prepaid or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile number set forth
under its name on the signature page hereof or to such other address (or
facsimile number) as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than the Purchaser and the Administrative Agent) designated
in any written notice provided hereunder to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication. Notwithstanding the foregoing,
whenever it is provided herein that a notice is to be given to any other party
hereto by a specific time, such notice shall only be effective if actually
received by such party prior to such time, and if such notice is received after
such time or on a day other than a Business Day, such notice shall only be
effective on the immediately succeeding Business Day.
Section 14.02. Binding Effect; Assignability by Seller and the
Servicers; Assignment and Participations by the Purchaser.
(a) This Agreement shall be binding upon and inure to the benefit of
the Seller, each Servicer, the Purchaser, and the Administrative Agent and their
respective successors and permitted assigns.
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(b) Neither the Seller nor any Servicer may assign, transfer,
hypothecate or otherwise convey any of their respective rights or obligations
hereunder or interests herein without the express prior written consent of the
Purchaser and the Administrative Agent. Any such purported assignment, transfer,
hypothecation or other conveyance by the Seller or any Servicer without the
prior express written consent of the Purchaser and the Administrative Agent
shall be void ab initio.
(c) Subject to the terms of this Section 14.02, the Purchaser may
make an assignment to a Person (x) that is an Affiliate of any Purchaser, or (y)
has a rating of BBB or higher from S&P and a rating of Baa2 or higher from
Xxxxx'x at the date that it becomes a Purchaser, or (z) that is organized under
the laws of the United States, or any state thereof, and has a combined capital
and surplus of at least $100,000,000 (any such Person being referred to herein
as a "Qualified Assignee") of, or sale of participations in, at any time or
times, the Related Documents, the Purchaser Interests and its Commitment or any
portion thereof or interest therein, including the Purchaser's rights, title,
interests, remedies, powers or duties thereunder. Any assignment by the
Purchaser shall: (i) require the consent of Administrative Agent (which consent
shall not be unreasonably withheld or delayed with respect to a Qualified
Assignee and the execution of an assignment agreement in form and substance
reasonably satisfactory to, and acknowledged by, the Administrative Agent (an
"Assignment Agreement"); (ii) be conditioned on such assignee Purchaser
representing to the assigning Purchaser and the Administrative Agent that it is
purchasing the Purchaser Interest to be assigned to it for its own account, for
investment purposes and not with a view to the distribution thereof; (iii) after
giving effect to any such partial assignment, the assignee Purchaser shall have
Commitments in an amount at least equal to $5,000,000 and the assigning
Purchaser shall have retained Commitments in an amount at least equal to
$5,000,000; and (iv) include a payment to Administrative Agent of an assignment
fee of $3,500. In the case of an assignment by the Purchaser under this Section
14.02(a), the assignee shall have, to the extent of such assignment, the same
rights, benefits and obligations as all other Purchaser hereunder. The assigning
Purchaser shall be relieved of its obligations hereunder with respect to its
Commitments or assigned portion thereof from and after the date of such
assignment. Seller hereby acknowledges and agrees that any assignment shall give
rise to a direct obligation of Seller to the assignee and that the assignee
shall be considered to be a "Purchaser". In all instances, each Purchaser's
liability to invest in the Purchaser Interests hereunder shall be several and
not joint and shall be limited to such Purchaser's Commitment. In the event
Administrative Agent or the Purchaser assigns or otherwise transfers all or any
part of the Seller Secured Obligations, Administrative Agent or any the
Purchaser shall so notify Seller. Notwithstanding the foregoing provisions of
this Section 14.02(c), the Purchaser may at any time pledge the Seller Secured
Obligations held by it and the Purchaser's rights under this Agreement and the
other Related Documents to a Federal Reserve Bank, and the Purchaser that is an
investment fund may assign the Seller Secured Obligations held by it and the
Purchaser's rights under this Agreement and the other Related Documents to
another investment fund managed by the same investment advisor; provided, that
no such pledge to a Federal Reserve Bank shall release the Purchaser from the
Purchaser's obligations hereunder or under any other Relevant Document.
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(d) Any participation by the Purchaser of all or any part of its
Commitment shall be made with the understanding that all amounts payable by
Seller hereunder shall be determined as if the Purchaser had not sold such
participation, and that the holder of any such participation shall not be
entitled to require the Purchaser to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Seller Secured Obligations
in which such holder participates, (ii) any extension of the scheduled
amortization of the principal amount of the Purchaser Interest in which such
holder participates or the final maturity date thereof, and (iii) any release of
all or substantially all of the Seller Collateral (other than in accordance with
the terms of this Agreement or the other Related Documents). Solely for purposes
of Sections 2.09 and 2.10, Seller acknowledges and agrees that a participation
shall give rise to a direct obligation of Seller to the participant and the
participant shall be considered to be a "Purchaser". Except as set forth in the
preceding sentence none of Seller, the Originators or the Servicers shall have
any obligation or duty to any participant. Neither Administrative Agent nor the
Purchaser (other than the Purchaser selling a participation) shall have any duty
to any participant and may continue to deal solely with the Purchaser selling a
participation as if no such sale had occurred.
(e) Except as expressly provided in this Section 14.02, no Purchaser
shall, as between Seller and that Purchaser, or Administrative Agent and that
Purchaser, be relieved of any of its obligations hereunder as a result of any
sale, assignment, transfer or negotiation of, or granting of participation in,
all or any part of the Purchaser Interests or Seller Secured Obligations owed to
such Purchaser.
(f) Each of Seller and each Servicer shall assist the Purchaser
permitted to sell assignments or participations under this Section 14.02 as
reasonably required to enable the assigning or selling Purchaser to effect any
such assignment or participation, including the execution and delivery of any
and all agreements, notes and other documents and instruments as shall be
requested and the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each of Seller and each Servicer shall certify the correctness,
completeness and accuracy of all descriptions of Seller, such Servicer and their
respective affairs contained in any selling materials provided by it and all
other information provided by it and included in such materials.
(g) The Purchaser may furnish any information concerning Seller or
any Servicer in the possession of the Purchaser from time to time to assignees
and participants (including prospective assignees and participants); provided
that the Purchaser shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 14.05.
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Section 14.03. Termination; Survival of Seller Secured Obligations
Upon Facility Termination Date.
(a) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until the Termination Date.
(b) Except as otherwise expressly provided herein or in any other
Related Document, no termination or cancellation (regardless of cause or
procedure) of any commitment made by any Affected Party under this Agreement
shall in any way affect or impair the obligations, duties and liabilities of the
Seller or the rights of any Affected Party relating to any unpaid portion of the
Seller Secured Obligations, due or not due, liquidated, contingent or
unliquidated or any transaction or event occurring prior to such termination, or
any transaction or event, the performance of which is required after the
Facility Termination Date. Except as otherwise expressly provided herein or in
any other Related Document, all undertakings, agreements, covenants, warranties
and representations of or binding upon the Seller or any Servicer, and all
rights of any Affected Party hereunder, all as contained in the Related
Documents, shall not terminate or expire, but rather shall survive any such
termination or cancellation and shall continue in full force and effect until
the Termination Date; provided that the rights and remedies provided for herein
with respect to any breach of any representation or warranty made by the Seller
or any Servicer pursuant to Article IV, the indemnification and payment
provisions of Article XII and Sections 14.04, 14.05 and 14.06 shall be
continuing and shall survive the Termination Date.
Section 14.04. Costs, Expenses and Taxes. (a) The Seller shall
reimburse the Administrative Agent for all out-of-pocket expenses incurred in
connection with the negotiation and preparation of this Agreement and the other
Related Documents (including the reasonable fees and expenses of all of its
special counsel, advisors, consultants and auditors retained in connection with
the transactions contemplated thereby and advice in connection therewith). The
Seller shall reimburse the Purchaser and the Administrative Agent for all fees,
costs and expenses, including the fees, costs and expenses of counsel or other
advisors (including environmental and management consultants and appraisers) for
advice, assistance, or other representation in connection with:
(i) the forwarding to the Seller or any other Person on behalf
of the Seller by the Purchaser of any payments for Purchases made by it
hereunder;
(ii) any amendment, modification or waiver of, consent with
respect to, or termination of this Agreement or any of the other Related
Documents or advice in connection with the administration thereof or their
respective rights hereunder or thereunder;
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(iii) any Litigation, contest or dispute (whether instituted
by the Seller, the Purchaser, the Administrative Agent or any other Person
as a party, witness, or otherwise in any way relating to the Seller
Collateral, any of the Related Documents or any other agreement to be
executed or delivered in connection herewith or therewith, including any
Litigation, contest, dispute, suit, case, proceeding or action, and any
appeal or review thereof, in connection with a case commenced by or
against the Seller or any other Person that may be obligated to the
Purchaser or the Administrative Agent by virtue of the Related Documents,
including any such Litigation, contest, dispute, suit, proceeding or
action arising in connection with any work-out or restructuring of the
transactions contemplated hereby during the pendency of one or more
Termination Events, provided, that, notwithstanding anything in this
Agreement to the contrary, in any cause of action brought by the
Administrative Agent, the Seller shall not be liable for such fees, costs
and expenses in the event the Seller is the prevailing party in such
action;
(iv) any attempt to enforce any remedies of the Purchaser or
the Administrative Agent against the Seller or any other Person that may
be obligated to them by virtue of any of the Related Documents, including
any such attempt to enforce any such remedies in the course of any
work-out or restructuring of the transactions contemplated hereby during
the pendency of one or more Termination Events;
(v) any work-out or restructuring of the transactions
contemplated hereby during the pendency of one or more Termination Events;
and
(vi) efforts to (A) monitor the Purchases or any of the Seller
Secured Obligations, (B) evaluate, observe or assess the Originators, the
Seller or the Servicers or their respective affairs, and (C) verify,
protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise
dispose of any of the Seller Collateral;
including all attorneys' and other professional and service
providers' fees arising from such services, including those in connection with
any appellate proceedings, and all expenses, costs, charges and other fees
incurred by such counsel and others in connection with or relating to any of the
events or actions described in this Section 14.04, all of which shall be
payable, on demand, by the Seller to the Purchaser or the Administrative Agent,
as applicable. Without limiting the generality of the foregoing, such expenses,
costs, charges and fees may include: fees, costs and expenses of accountants,
environmental advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or facsimile charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.
(b) In addition, the Seller shall pay on demand any and all stamp,
sales, excise and other taxes (excluding income taxes that are excluded from
Indemnified Taxes in accordance
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with Section 2.08(b)) and fees payable or determined to be payable in connection
with the execution, delivery, filing or recording of this Agreement or any other
Related Document, and the Seller agrees to indemnify and save each Indemnified
Person harmless from and against any and all liabilities with respect to or
resulting from any delay or failure to pay such taxes and fees.
Section 14.05. Confidentiality.
(a) Except to the extent otherwise required by applicable law, as
required to be filed publicly with the Securities and Exchange Commission, or
unless the Administrative Agent shall otherwise consent in writing, the Seller
and each Servicer each agrees to maintain the confidentiality of this Agreement
(and all drafts hereof and documents ancillary hereto) in its communications
with third parties other than any Affected Party or any Indemnified Person and
otherwise and not to disclose, deliver or otherwise make available to any third
party (other than its directors, officers, employees, accountants or counsel)
the original or any copy of all or any part of this Agreement (or any draft
hereof and documents ancillary hereto) except to an Affected Party or an
Indemnified Person or a current or future holder of the Permitted Outstanding
Debt.
(b) The Seller and each Servicer each agrees that it shall not (and
shall not permit any of its Subsidiaries to) issue any news release or make any
public announcement pertaining to the transactions contemplated by this
Agreement and the other Related Documents without the prior written consent of
the Purchaser and the Administrative Agent (which consent shall not be
unreasonably withheld) unless such news release or public announcement is
required by law, in which case the Seller or such Servicer, as applicable, shall
consult with the Purchaser and the Administrative Agent prior to the issuance of
such news release or public announcement. The Seller may, however, disclose the
general terms of the transactions contemplated by this Agreement and the other
Related Documents to trade creditors, suppliers and other similarly-situated
Persons so long as such disclosure is not in the form of a news release or
public announcement.
(c) The Administrative Agent and Purchaser agree to exercise their
best efforts to keep confidential any non-public information delivered pursuant
to this Agreement and the Related Documents and identified as such by Seller (or
provided to the Administrative Agent or the Purchaser by the Seller's
independent public accountants or attorneys) and not to disclose such
information to Persons other than to potential assignees or participants or to
Persons employed by or engaged by the Administrative Agent, Purchaser or the
Purchaser's assignees or participants including attorneys, auditors,
professional consultants, rating agencies, insurance industry associations and
portfolio management services. The confidentiality provisions contained in this
Section 14.05(c) shall not apply to disclosures (i) required to be made by the
Administrative Agent or the Purchaser to any regulatory or governmental agency
or pursuant to legal process or (ii) consisting of general portfolio information
that does not identify any Seller Party. The obligations of the Administrative
Agent and the Purchaser under this Section 14.05(c) shall supersede and replace
the obligations of the Administrative Agent and the
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Purchaser under any confidentiality agreement executed and delivered by the
Administrative Agent or the Purchaser prior to the date hereof.
Section 14.06. Complete Agreement; Modification of Agreement. This
Agreement and the other Related Documents constitute the complete agreement
among the parties hereto with respect to the subject matter here of and thereof,
supersede all prior agreements and understandings relating to the subject matter
hereof and thereof, and may not be modified, altered or amended except as set
forth in Section 14.07.
Section 14.07. Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement or any of the other
Related Documents, or any consent to any departure by the Seller or any Servicer
therefrom, shall in any event be effective unless the same shall be in writing
and signed by each of the parties hereto or thereto.
Section 14.08. No Waiver; Remedies. The failure by the Purchaser or
the Administrative Agent, at any time or times, to require strict performance by
the Seller or any Servicer of any provision of this Agreement or any Purchase
Assignment shall not waive, affect or diminish any right of the Purchaser or the
Administrative Agent thereafter to demand strict compliance and performance
herewith or therewith. Any suspension or waiver of any breach or default
hereunder shall not suspend, waive or affect any other breach or default whether
the same is prior or subsequent thereto and whether the same or of a different
type. None of the undertakings, agreements, warranties, covenants and
representations of the Seller or any Servicer contained in this Agreement or any
Purchase Assignment, and no breach or default by the Seller or any Servicer
hereunder or thereunder, shall be deemed to have been suspended or waived by the
Purchaser or the Administrative Agent unless such waiver or suspension is by an
instrument in writing signed by an officer of or other duly authorized signatory
of the Purchaser and the Administrative Agent and directed to the Seller or the
applicable Servicer, as applicable, specifying such suspension or waiver. The
rights and remedies of the Purchaser and the Administrative Agent under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that the Purchaser and the Administrative Agent may have under any other
agreement, including the other Related Documents, by operation of law or
otherwise. Recourse to the Seller Collateral shall not be required.
Section 14.09. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL.
(a) THIS AGREEMENT AND EACH OTHER RELATED DOCUMENT (EXCEPT TO THE
EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL
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OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES)
EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF
THE INTERESTS OF THE ADMINISTRATIVE AGENT IN THE RECEIVABLES AND THE RELATED
SECURITY OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT; PROVIDED THAT EACH PARTY HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY; PROVIDED FURTHER,
THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE
PURCHASER OR THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE SELLER COLLATERAL OR ANY
OTHER SECURITY FOR THE SELLER SECURED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE PURCHASER OR THE ADMINISTRATIVE AGENT. EACH
PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION
OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY
OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH
PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH BENEATH ITS NAME ON THE
SIGNATURE PAGES HEREOF AND SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON SUCH
PARTY'S ACTUAL RECEIPT THEREOF. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT
OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
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(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 14.10. Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and separately
constitute one agreement.
Section 14.11. Severability. Wherever possible, each provision of
this Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
Section 14.12. Section Titles. The section titles and table of
contents contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.
Section 14.13. Further Assurances.
(a) Each of the Seller and each Servicer shall, at its sole cost and
expense, upon request of the Purchaser or the Administrative Agent, promptly and
duly execute and deliver any and all further instruments and documents and take
such further action that may be necessary or desirable or that the Purchaser or
the Administrative Agent may request to (i) perfect, protect, preserve, continue
and maintain fully the Purchases made and the right, title and interests
(including Liens) granted to the Administrative Agent under this Agreement, (ii)
enable the Purchaser or the Administrative Agent to exercise and enforce its
rights under this Agreement or any of the other Related Documents or (iii)
otherwise carry out more effectively the provisions and purposes of this
Agreement or any other Related Document. Without limiting the generality of the
foregoing, the Seller shall, upon request of the Purchaser or the Administrative
Agent, (A) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or notices
that may be necessary or desirable or
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that the Purchaser or the Administrative Agent may request to perfect, protect
and preserve the Purchases made and the Liens granted pursuant to this
Agreement, free and clear of all Adverse Claims, (B) xxxx, or cause each
Servicer to xxxx, each Contract evidencing each Transferred Receivable and the
Related Security with a legend, acceptable to the Purchaser and the
Administrative Agent evidencing that the Administrative Agent on behalf of the
Purchaser has purchased an undivided percentage ownership interest in all right
and title thereto and interest therein as provided herein (for example, "This
writing and the obligations evidenced or secured hereby have been sold to
General Electric Capital Corporation for itself and as Administrative Agent"),
(C) xxxx, or cause each Servicer to xxxx, its master data processing records
evidencing such Transferred Receivables and the Related Security with such a
legend and (D) notify or cause each Servicer to notify Obligors of the sale of
undivided percentage ownership interests in the Transferred Receivables and the
Related Security effected hereunder.
(b) Without limiting the generality of the foregoing, the Seller
hereby authorizes the Purchaser and the Administrative Agent, and the Purchaser
hereby authorizes the Administrative Agent, to file one or more financing or
continuation statements, or amendments thereto or assignments thereof, relating
to all or any part of the Transferred Receivables and the Related Security,
including Collections with respect thereto, or the Seller Collateral without the
signature of the Seller or, as applicable, the Administrative Agent or the
Purchaser to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Agreement or of any notice or financing statement
covering the Transferred Receivables, the Related Security, the Seller
Collateral or any part thereof shall be sufficient as a notice or financing
statement where permitted by law.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Receivables
Purchase and Servicing Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
CASTLE SPFD, LLC, as the Seller
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Print Name: Xxxxxx X. Xxxxxxxx
Title: President
Address:
0000 X. Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telephone: 847/000-0000
Facsimile: 847/455-7136
A. M. CASTLE & co., as the Master
Servicer and a Servicer
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Print Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
Address:
0000 X. Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Corporate Counsel
Telephone: 847/000-0000
Facsimile: 847/455-7136
[SIGNATURE PAGE TO THE RECEIVABLES PURCHASE AND SERVICING AGREEMENT]
XXXXXX STEEL PLATE CO., as a Servicer
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Print Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
Address:
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
Telephone: 330/000-0000
Facsimile: 330/425-7300
TOTAL PLASTICS, INC., as a Servicer
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Print Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
Address:
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: President
Telephone: 616/000-0000
Facsimile: 616/344-0711
[SIGNATURE PAGE TO THE RECEIVABLES PURCHASE AND SERVICING AGREEMENT]
CASTLE IND MGR, INC., as the Independent Member
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Print Name: Xxxxxx X. Xxxxxxxx
Title: President
Address:
0000 X. Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention:Xxxxx X. Xxxxx
Telephone: 847/000-0000
Facsimile: 847/455-7136
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Purchaser
By /s/ Xxxx X. Xxxx
--------------------------------------------
Print Name: Xxxx X. Xxxx
Duly Authorized Signatory
Address:
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: A.M. Castle Account Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Administrative Agent
By /s/ Xxxx X. Xxxx
--------------------------------------------
Print Name: Xxxx X. Xxxx
Duly Authorized Signatory
Address:
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: A.M. Castle Account Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO THE RECEIVABLES PURCHASE AND SERVICING AGREEMENT]
Annex X
DEFINITIONS
EXECUTION COPY
ANNEX X
to
RECEIVABLES SALE AND CONTRIBUTION AGREEMENT
and
RECEIVABLES PURCHASE AND SERVICING AGREEMENT,
each dated as of December 26, 2002,
Definitions and Interpretation
A.M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
SECTION 1. Definitions and Conventions. Capitalized terms used in
the Sale Agreement and the Purchase Agreement shall have (unless otherwise
provided elsewhere therein) the following respective meanings:
"ACCOUNTING CHANGES" shall mean, with respect to any Person, (a)
changes in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion of the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants (or any successor
thereto or any agency with similar functions); (b) changes in accounting
principles concurred in by such Person's certified public accountants; (c)
purchase accounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and the
application of the accounting principles set forth in FASB 109, including the
establishment of reserves pursuant thereto and any subsequent reversal (in whole
or in part) of such reserves; and (d) the reversal of any reserves established
as a result of purchase accounting adjustments.
"ACCOUNTS" shall mean the Collection Account, the Concentration
Account and the Lockbox Accounts, collectively.
"ACCOUNT COLLATERAL" shall have the meaning assigned to it in clause
(f) of the definition of the term "Related Security".
"ACCRUED SERVICING FEE" shall mean, as of any date of determination
within a Settlement Period, the sum of the Servicing Fees calculated for each
day from and including the first day of the Settlement Period through and
including such date.
"ACCRUED UNUSED FACILITY FEE" shall mean, as of any date of
determination within a Settlement Period, the sum of the Unused Facility Fees
calculated for each day from and including the first day of the Settlement
Period through and including such date.
"ACCUMULATED FUNDING DEFICIENCY" shall mean an "accumulated funding
deficiency" as defined in Section 412 of the IRC and Section 302 of ERISA,
whether or not waived.
"ADDITIONAL AMOUNTS" shall mean any amounts payable to any Affected
Party under Sections 2.09 or 2.10 of the Purchase Agreement.
"ADDITIONAL COSTS" shall have the meaning assigned to it in Section
2.09(b) of the Purchase Agreement.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
Preamble of the Purchase Agreement.
"ADVERSE CLAIM" shall mean any claim of ownership or any Lien, other
than any ownership interest or Lien created under the Sale Agreement or the
Purchase Agreement.
"AFFECTED PARTY" shall mean each of the following Persons: the
Purchaser, the Administrative Agent, the Depositary and each Affiliate of the
foregoing Persons.
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Annex X
2
"AFFILIATE" shall mean, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, five percent (5%) or more of the Equity
Interests having ordinary voting power in the election of directors of such
Person, (b) each Person that controls, is controlled by or is under common
control with such Person, or (c) each of such Person's officers, directors,
joint venturers and partners. For the purposes of this definition, "control" of
a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.
"AFFILIATED PARTY" shall have the meaning assigned to it in Recital
G of the Sale Agreement.
"ANCILLARY SERVICES AND LEASE AGREEMENT" shall mean that certain
Ancillary Services and Lease Agreement dated as of December 26, 2002 between the
Parent and the Seller.
"APPENDICES" shall mean, with respect to any Related Document, all
exhibits, schedules, annexes and other attachments thereto, or expressly
identified thereto.
"APPLICABLE SERVICING FEE" shall mean, as of any Settlement Date,
with respect to each Servicer other than the Master Servicer, an amount equal to
(a) the Servicing Fee received by the Master Servicer or its Successor Servicer
on such Settlement Date pursuant to Section 2.07(b) of the Purchase Agreement
less the Master Servicer's portion of such Servicing Fee, multiplied by (b) a
percentage equal to (i) the Outstanding Balance of Transferred Receivables, as
of the last day of the related Settlement Period, sold by such Servicer in its
capacity as an Originator under the Sale Agreement divided by (ii) the
Outstanding Balance of all Transferred Receivables as of the last day of the
related Settlement Period.
"ASSIGNMENT AGREEMENT" shall have the meaning assigned to it in
Section 14.02(c) of the Purchase Agreement.
"AUTHORIZED OFFICER" shall mean, with respect to any corporation or
limited liability company, as the case may be, the Chief Executive Officer,
Chief Financial Officer, Treasurer, Chairman or Vice-Chairman of the Board, the
President, any Vice President, the Secretary, the Treasurer, any Assistant
Secretary, any Assistant Treasurer and each other officer of such corporation or
limited liability company specifically authorized in resolutions of the Board of
Directors or Board of Managers of such corporation or limited liability company,
as the case may be, to sign agreements, instruments or other documents on behalf
of such corporation in connection with the transactions contemplated by the Sale
Agreement, the Purchase Agreement and the other Related Documents.
"AVAILABILITY" shall mean, as of any date of determination, the
amount equal to the lesser of: (a) the Available Accounts Receivables minus (ii)
the Discount Reserve and minus (iii) the Availability Reserve and (b) the
Maximum Purchase Limit.
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Annex X
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"AVAILABILITY RESERVE" shall mean, as of any date of determination,
(i) $10,000,000, if the Fixed Charge Coverage Ratio for the Parent and its
Subsidiaries on a consolidated basis at the end of a Settlement Period for the
12-month period then ended is less than 1.1 to 1.0, or (ii) zero, if the Fixed
Charge Coverage Ratio for the Parent and its Subsidiaries on a consolidated
basis at the end of any Settlement Period in the 12-month period then most
recently ended is equal to or greater than 1.1 to 1.0.
"AVAILABLE ACCOUNTS RECEIVABLES" shall mean the Investment Base
multiplied by the Dynamic Purchase Discount Rate.
"BANKRUPTCY CODE" shall mean the provisions of title 11 of the
United States Code, 11 U.S.C. Sections 101 et seq.
"BILLED AMOUNT" shall mean, with respect to any Receivable, the
amount billed on the Billing Date to the Obligor thereunder.
"BILLING DATE" shall mean, with respect to any Receivable, the date
on which the invoice with respect thereto was generated and billed to the
Obligor.
"BREAKAGE COSTS" shall have the meaning assigned to it in Section
2.10 of the Purchase Agreement.
"BRINGDOWN CERTIFICATE" shall have the meaning assigned to it in
Section 5.02 of the Purchase Agreement.
"BUSINESS DAY" shall mean any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in any of the
States of Illinois or New York.
"BUYER" shall mean the Seller in its capacity as the purchaser under
the Sale Agreement.
"BUYER INDEMNIFIED PERSON" shall have the meaning assigned to it in
Section 5.01 of the Sale Agreement.
"CAPITAL EXPENDITURES" shall mean, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Debt) by such
Person during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP.
"CAPITAL INVESTMENT" shall mean, as of any date of determination,
the amount equal to (a) the aggregate deposits made by the Purchaser to the
Collection Account pursuant to Section 2.04(b)(i) of the Purchase Agreement on
or before such date, minus (b) the aggregate amounts disbursed to the Purchaser
in reduction of Capital Investment pursuant to the Purchase Agreement on or
before such date.
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Annex X
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"CAPITAL INVESTMENT AVAILABLE" shall mean, as of any date of
determination, the amount, if any, by which Availability exceeds Capital
Investment, in each case as of the end of the immediately preceding day.
"CAPITAL LEASE" shall mean, with respect to any Person, any lease of
any property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"CAPITAL LEASE OBLIGATION" shall mean, with respect to any Capital
Lease of any Person, the amount of the obligation of the lessee thereunder that,
in accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease.
"CAPITAL PURCHASE" shall have the meaning assigned to it in Section
2.01 of the Purchase Agreement.
"CAPITAL PURCHASE REQUEST" shall have the meaning assigned to it in
Section 2.03(b) of the Purchase Agreement.
"CHANGE OF CONTROL" shall mean any event, transaction or occurrence
as a result of which (a) any person or group of persons (within the meaning of
the Securities Exchange Act of 1934, as amended) (other than any Person or group
of Persons that owns of record or beneficially, in the aggregate, on the Closing
Date, 15% or more of the issued and outstanding shares of capital stock of the
Parent) shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities Exchange Commission under the Securities
Exchange Act of 1934, as amended) of 20% or more of the issued and outstanding
shares of capital stock of the Parent having the right to vote for the election
of directors of the respective entity under ordinary circumstances; (b) during
any twelve (12) consecutive calendar months ending after the Closing Date,
individuals who at the beginning of such twelve-month period constituted the
board of directors of the Parent (together with any new directors whose election
by such board or whose nomination for election by the shareholders of the Parent
was approved by a vote of a majority of the directors still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) shall cease for any reason to
constitute a majority of the board of directors of the Parent then in office;
(c) the Parent shall cease to own and control, directly or indirectly, all of
the economic and voting rights associated with all of the outstanding Equity
Interests of the other Originators, of the Independent Member or of the Seller;
or (d) the Parent has sold, transferred, conveyed, assigned or otherwise
disposed of all or substantially all of the assets of the Parent.
"CLOSING DATE" shall mean December 26, 2002.
"COLLECTIONS" shall mean, with respect to any Receivable, all cash
collections and other proceeds of such Receivable, including, without
limitation, all late charges, fees and interest arising thereon, all recoveries
with respect to any such Receivable that has been written off as uncollectible,
and any payments (whether by a scrap mill, an Originator or any other
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Annex X
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Person) with respect to Returned Goods or Scrapped Goods, BUT EXCLUDING,
HOWEVER, any purchase price paid to the Originators by the Buyer with respect to
and as consideration for the sale of the Transferred Receivables by any of the
Originators to the Buyer.
"COLLECTION ACCOUNT" shall mean Deutsche Bank Trust Company
Americas, New York, New York, ABA No. 021 001 033, Account No. 502 328 54,
Account Name: GE Capital/CAF Depository, Reference: A. M. Castle CFN 4963,
established by the Administrative Agent pursuant to the requirements set forth
in Section 6.01(b) of the Purchase Agreement.
"COMMITMENT" shall mean, with respect to the Purchaser, its
commitment to purchase the Purchaser Interest under the Purchase Agreement in
the amount set forth opposite its name on the signature pages of the Purchase
Agreement or any Assignment Agreement executed pursuant thereto.
"COMMITMENT REDUCTION NOTICE" shall have the meaning assigned to it
in Section 2.02(a) of the Purchase Agreement.
"COMMITMENT TERMINATION NOTICE" shall have the meaning assigned to
it in Section 2.02(b) of the Purchase Agreement.
"COMPLIANCE CERTIFICATE" means a certificate in the form of Schedule
CC to this Annex X delivered to the Administrative Agent and the Purchaser by
the Parent pursuant to the provisions of the Sale Agreement and covering, among
other things, its compliance with the financial covenants contained in Annex
4.04(l) to the Sale Agreement.
"CONCENTRATION ACCOUNT" shall mean that certain concentration
account listed on Schedule 4.01(r) to the Purchase Agreement established in the
name of the Seller and held at the Concentration Account Bank.
"CONCENTRATION ACCOUNT BANK" shall mean any bank or other financial
institution at which the Concentration Account is maintained.
"CONCENTRATION DISCOUNT AMOUNT" shall mean, with respect to any
Obligor, and as of any date of determination after giving effect to all Eligible
Receivables to be transferred on such date, the amount by which the Outstanding
Balance of Eligible Receivables owing by such Obligor exceeds the product of (a)
the percentage set forth in the table below based upon the short-term unsecured
debt rating assigned to such Obligor's short-term debt at such time by S&P and
Xxxxx'x (and, if such Obligor is rated by both agencies and has a split rating
(except for an A-1+/P-1 rating), the applicable rating will be the lower of the
two) and (b) the Outstanding Balance of all Eligible Receivables on such date.
A.M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
6
ALLOWABLE % OF ELIGIBLE
S&P RATING XXXXX'X RATING RECEIVABLES
---------- -------------- -----------
A-1+ P-1 5%
A-1 P-1 5%
A-2 P-2 5%
A-3 P-3 3%
Below A-3 or Not Rated Below P-3 or Not Rated by 3%
by either S&P or Xxxxx'x either S&P or Xxxxx'x
"CONSOLIDATED EBITDA" shall mean, for any period, on a consolidated
basis for the Parent and its Subsidiaries, the sum of the amounts for such
period, without duplication of
(a) consolidated net income of the Parent and Subsidiaries for such
period, minus
(b) the sum, without duplication, of (i) income tax credits, (ii)
interest income, (iii) gain from extraordinary items for such period, (iv) any
aggregate net gain (but not any aggregate net loss) during such period arising
from the sale, exchange or other disposition of capital assets (including any
fixed assets, whether tangible or intangible, all inventory sold in conjunction
with the disposition of fixed assets and all securities) by the Parent or its
Subsidiaries, and (v) any other non-cash gains which have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of the Servicers for such period in
accordance with GAAP, plus
(c) the sum, without duplication, of (i) any provision for income
taxes, (ii) Interest Expense, (iii) loss from extraordinary items for such
period, (iv) any aggregate net loss during such period arising from the sale,
exchange or other disposition of capital assets (including any fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities) by the Parent or its
Subsidiaries, (v) the amount of non-cash charges (including depreciation and
amortization) for such period, (vi) amortized debt discount for such period and
(vii) any cash income or losses occurred in respect to any joint venture or
business partnership, in each case to the extent included in the calculation of
consolidated net income of the Servicers for such period in accordance with
GAAP.
"CONTAMINANT" shall mean any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste,
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Annex X
7
asbestos, polychlorinated biphenyls ("PCBs"), or any constituent of any such
substance or waste, and includes but is not limited to these terms as defined in
Environmental Laws.
"CONTRACT" shall mean any agreement (including any invoice, draft or
promissory note) pursuant to, or under which, an Obligor shall be obligated to
make payments with respect to any Receivable.
"CONTRIBUTED RECEIVABLES" shall have the meaning assigned to it in
Section 2.01(d) of the Sale Agreement.
"CREDIT AND COLLECTION POLICIES" shall mean the credit, collection,
customer relations and service policies of the Originators in effect on the
Closing Date and as set forth on Exhibit A to the Purchase Agreement, as the
same may from time to time be amended, restated, supplemented or otherwise
modified with the written consent of the Administrative Agent.
"CREDIT MEMO LAG" shall mean the weighted average number of days, as
determined by the Administrative Agent pursuant to the results of the most
recent field examination, between the date a credit is applied to the aged trial
balance and the applicable original invoice date.
"CREDIT MEMO RESERVE" shall mean, the product of (i) the aggregate
Dilution Factors during the twelve (12) Settlement Periods most recently ended
on or prior to the date of determination, divided by (ii) three hundred and
sixty (360) days, multiplied by (iii) the Credit Memo Lag less thirty (30) days.
For the purposes of Availability on the Closing Date, the Credit Memo Reserve
shall equal the amount calculated as set forth in the Monthly Report.
"DAILY DEFAULT MARGIN" shall mean, for any day on which a
Termination Event has occurred and is continuing, two percent (2.0%) divided by
360.
"DAILY MARGIN" shall mean, for any day, the Per Annum Daily Margin
on such day divided by 360.
"DAILY YIELD" shall mean, for any day, the aggregate of the
following for each portion of the Capital Investment: the product of (a) the
portion of the Capital Investment outstanding on such day at a given Daily Yield
Rate, multiplied by (b) the sum of (i) such Daily Yield Rate, plus (ii) the
applicable Daily Margin on such day for such Daily Yield Rate, plus (iii) if a
Termination Event has occurred and is continuing, the Daily Default Margin.
"DAILY YIELD RATE" shall mean, for any day during a Settlement
Period, (a) the LIBOR Rate or Index Rate, as applicable, on such day, divided by
(b) 360.
"DEBT" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services payment for which is deferred 90 days or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than 90 days unless being contested in
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Annex X
8
good faith, (b) all reimbursement and other obligations with respect to letters
of credit, bankers' acceptances and surety bonds, whether or not matured, (c)
all obligations evidenced by notes, bonds, debentures or similar instruments (d)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured (g) all obligations of such Person under
any foreign exchange contract, currency swap agreement, interest rate swap, cap
or collar agreement or other similar agreement or arrangement designed to alter
the risks of that Person arising from fluctuations in currency values or
interest rates, in each case whether contingent or matured, (h) all liabilities
of such Person under Title IV of ERISA, (i) all Guaranteed Indebtedness of such
Person, (j) all indebtedness referred to in clauses (a) through (i) above
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property or other
assets (including accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness, (k) all obligations, indebtedness and liabilities constituting the
Permitted Outstanding Debt or arising pursuant thereto, and (k) the Seller
Secured Obligations.
"DEFAULTED RECEIVABLE" shall mean (a) with respect to any Receivable
that is not an Extended Term Receivable, a Receivable: (i) with respect to which
any payment, or part thereof, remains unpaid for more than 60 days from its
Maturity Date, (ii) with respect to which the Obligor thereunder has taken any
action, or suffered any event to occur, of the type described in Sections
9.01(c) or 9.01(d) of the Purchase Agreement or (iii) that otherwise is or
should be determined to be uncollectible and is or should be written off in
accordance with the Credit and Collection Policies and (b) with respect to any
Receivable that is an Extended Term Receivable, a Receivable that (i) remains
unpaid for more than four (4) Business Days after its Extended Maturity Date,
(ii) with respect to which the Obligor thereunder has taken any action, or
suffered any event to occur, of the type described in Sections 9.01(c) or
9.01(d) of the Purchase Agreement or (iii) that otherwise is or should be
determined to be uncollectible and is or should be written off in accordance
with the Credit and Collection Policies.
"DEFAULT RATIO" shall mean, as of any date of determination, the
ratio (expressed as a percentage) of:
(a) (i) the average of the respective Outstanding Balances of all
Transferred Receivables which constituted Defaulted Receivables as of the last
day of the three Settlement Periods immediately preceding such date, plus (ii)
the average Outstanding Balance of Transferred Receivables that were written off
as uncollectible during such three Settlement Periods.
to
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Annex X
9
(b) the average of the respective Outstanding Balances of all
Transferred Receivables as of the last day of the three Settlement Periods
immediately preceding such date.
"DELINQUENCY RATIO" shall mean, as of any date of determination, the
ratio (expressed as a percentage) of:
(a) the average of the respective Outstanding Balances of all
Transferred Receivables which remain unpaid for more than 30 days but less than
61 days from their respective Maturity Date as of the last day of the three
Settlement Periods immediately preceding such date
to
(b) the average of the Outstanding Balances of all Transferred
Receivables as of the last day of the three Settlement Periods immediately
preceding such date.
"DEPOSIT INVESTMENTS" shall mean, with respect to any Account
Collateral, the certificates, instruments, investment property or other
investments in which amounts constituting such collateral are invested from time
to time.
"DEPOSITARY" shall mean Deutsche Bank Trust Company Americas, in its
capacity as the depositary for GE Capital.
"DILUTION FACTORS" shall mean, with respect to any Receivable, any
credits, rebates, freight charges, cash discounts, volume discounts, cooperative
advertising expenses, royalty payments, warranties, cost of parts required to be
maintained by agreement (whether express or implied), warehouse and other
allowances, disputes, setoffs, chargebacks, credits issued on account of
returned defective goods or other returned or repossessed goods or scrapped
goods, inventory transfers, allowances for early payments and other similar
allowances that are reflected on the books of each Originator and made or
coordinated with the usual practices of the Originator thereof; PROVIDED THAT
any allowances or adjustments in accordance with the Credit and Collection
Policies made on account of the insolvency of the Obligor thereunder or such
Obligor's inability to pay shall not constitute a Dilution Factor.
"DILUTION RATIO" shall mean, as of any date of determination, the
ratio (expressed as a percentage) of:
(a) the sum of (i) the aggregate Dilution Factors during the three
(3) consecutive Settlement Periods most recently ended on or prior to the date
of determination, plus, without duplication (ii) gross write-offs in connection
with Credit and Collection Policies (without deduction of any debit memos or
recoveries) during such three (3) consecutive Settlement Periods,
to
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Annex X
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(b) the aggregate gross Billed Amount of all Transferred Receivables
originated during the third, fourth and fifth Settlement Periods preceding the
Settlement Period then most recently ended.
"DILUTION RESERVE RATIO" shall mean, as of any date of
determination, the sum of (a) the product of (i) two multiplied by (ii) the
Dilution Ratio for the Settlement Period most recently ended plus (b) 5%.
Notwithstanding the foregoing, the Dilution Reserve Ratio may be changed at any
time at the sole discretion of the Administrative Agent, exercised in good
faith.
"DOL" shall mean the United States Department of Labor and any
Person succeeding to the functions thereof.
"DISCOUNT RESERVE" shall mean, at any time, the product of (a) 1.5,
(b) the Index Rate, (c) Capital Investment and (d) a fraction, the numerator of
which is the higher of (i) 30 and (ii) the most recently reported Receivables
Collection Turnover, and the denominator of which is 360; PROVIDED THAT, the
Discount Reserve may be changed at any time at the sole discretion of the
Administrative Agent, exercised in good faith.
"DISTRICT" shall mean the geographic location of the office of the
Originator which generates the Contract with respect to any Receivable.
"DOLLARS" or "$" shall mean lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY" shall mean a Subsidiary organized under the
laws of a jurisdiction located in the United States of America.
"DYNAMIC PURCHASE DISCOUNT RATE" shall mean, as of any date of
determination, the rate equal to the lesser of (i) Purchase Discount Rate Cap
and (ii) 100% minus the Dilution Reserve Ratio.
"EARLY TERMINATION FEE" shall mean the First Year Early Termination
Fee and the Second Year Early Termination Fee.
"ELECTION NOTICE" shall have the meaning assigned to it in Section
2.01(d) of the Sale Agreement.
"ELIGIBLE EXTENDED TERM RECEIVABLE" shall mean, as of any date of
determination, an Extended Term Receivable (i) that is evidenced by an Extended
Term Instrument, the original of which, together with all requisite
endorsements, is delivered to the Administrative Agent pursuant to Section 8.04
of the Purchase Agreement, (ii) that is not a Defaulted Receivable or an
Unapproved Receivable, (iii) that satisfies all criteria of eligibility of a
Transferred Receivable other than clause (n) of the definition of "Eligible
Receivable" and (iv) that is a liability of an Extended Term Receivable Obligor;
PROVIDED THAT the aggregate Outstanding Balance of the Extended Term Receivables
that exceeds 5% of the aggregate Outstanding Balance of all Eligible Receivables
shall be ineligible; and PROVIDED, FURTHER, THAT if
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Annex X
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any of the Extended Term Receivables of an Obligor is a Defaulted Receivable (i)
all Eligible Extended Term Receivables, if any, of such Obligor shall be
ineligible and (ii) such Obligor shall no longer be an Extended Term Receivable
Obligor and Schedule 3 to this Annex X shall be deemed amended by deleting such
Obligor therefrom without any further action of the parties; it being understood
that no Extended Term Receivable of such Obligor shall be eligible.
"ELIGIBLE RECEIVABLE" shall mean, as of any date of determination,
(i) an Eligible Extended Term Receivable and (ii) a Transferred Receivable:
(a) that is not a liability of an Obligor (i) organized under the
laws of any jurisdiction outside of the United States of America (including the
District of Columbia but otherwise excluding its territories and possessions),
(ii) having its principal place of business outside of the United States of
America (including the District of Columbia but otherwise excluding its
territories and possessions), (iii) that is an Affiliate of the Seller or the
applicable Originator, (iv) that is the United States government or a political
subdivision thereof, or any state, county or municipality or department, agency
or instrumentality thereof unless the applicable Originator, if necessary or
desirable, has complied with respect to that obligation with the Federal
Assignment of Claims Act of 1940, or any applicable state, county or municipal
law restricting the assignment or enforcement thereof, or (v) that is a natural
person; PROVIDED THAT, Transferred Receivables owing from an Obligor organized
under the laws of Canada or any province thereof which has its principal place
of business in Canada may be eligible as long as the other criteria of
eligibility hereunder with respect to such Transferred Receivables are
satisfied, and PROVIDED FURTHER that the aggregate Outstanding Balance of such
Transferred Receivables that are eligible shall not exceed five percent (5%) of
the aggregate Outstanding Balance of all Eligible Receivables;
(b) that is only denominated and payable in Dollars in the United
States of America;
(c) that is not and will not be subject to any deposit or right of
rescission, set-off, recoupment, counterclaim, dispute or defense, whether
arising out of transactions concerning the Contract therefor or otherwise or is
subject to a claim by the Obligor thereunder for consequential damages;
(d) that is not a Defaulted Receivable or an Unapproved Receivable;
(e) which is not the liability of an Obligor as to which more than
25% of the aggregate Outstanding Balance of all Receivables owing from such
Obligor are Defaulted Receivables;
(f) that, does not represent "billed but not yet shipped," "xxxx and
hold" or "progress-billed" goods or merchandise, unperformed services, consigned
goods or "sale or return" goods and does not arise from a transaction for which
any additional performance by the Originator thereof, or acceptance by or other
act of the Obligor thereunder, remains to be performed as a condition to any
payments on such Receivable;
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(g) as to which the representations and warranties of Sections
4.01(x)(ii)-(iv) of the Sale Agreement are true and correct in all respects as
of the Transfer Date therefor and has been transferred to the Seller pursuant to
the Sale Agreement in a transaction constituting a true sale or other outright
conveyance and contribution;
(h) that is not the liability of an Obligor that has any claim of a
material nature against or affecting any Originator or the property of any
Originator;
(i) that is a true and correct statement of a bona fide indebtedness
incurred in the amount of the Billed Amount of such Receivable for merchandise
or goods sold to or services rendered and accepted by the Obligor thereunder;
(j) that was originated by an Originator in accordance with and
satisfies all applicable requirements of the Credit and Collection Policies,
except to the extent that the failure to satisfy such requirements could not
reasonably be expected to have a material adverse effect on the collectibility
or enforceability of such Receivable;
(k) that represents the genuine, legal, valid and binding obligation
of the Obligor thereunder enforceable by the holder thereof in accordance with
its terms;
(l) that is entitled to be paid pursuant to the terms of the
Contract therefor, has not been paid in full or been compromised, adjusted,
extended, satisfied, subordinated, rescinded or modified, and is not subject to
compromise, adjustment, extension, satisfaction, subordination, rescission, or
modification by the Originator thereof (except for adjustments to the
Outstanding Balance thereof to reflect Dilution Factors made in accordance with
the Credit and Collection Policy);
(m) with respect to which the Originator thereof has submitted all
necessary documentation for payment to the Obligor thereunder and such
Originator has fulfilled all of its other obligations in respect thereof;
(n) the stated term of which, if any, is not greater than 30 days
after its Billing Date (other than with respect to Extended Term Receivables);
(o) that was created in compliance with and otherwise does not
contravene any laws, rules or regulations applicable thereto (including laws,
rules and regulations relating to usury, consumer protection, truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party to the
Contract therefor is in violation of any such law, rule or regulation, in each
case except to the extent that such noncompliance or contravention could not
reasonably be expected to have a material adverse effect on the collectibility,
enforceability, value or payment terms of such Receivable;
(p) with respect to which no proceedings or investigations are
pending or threatened before any Governmental Authority (i) asserting the
invalidity of such Receivable or
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the Contract therefor, (ii) asserting the bankruptcy or insolvency of the
Obligor thereunder, (iii) seeking payment of such Receivable or payment and
performance of such Contract or (iv) seeking any determination or ruling that
might materially and adversely affect the validity or enforceability of such
Receivable or such Contract;
(q) with respect to which the Obligor thereunder is not: (i)
bankrupt or insolvent, (ii) unable to make payment of its obligations when due,
(iii) a debtor in a voluntary or involuntary bankruptcy proceeding, or (iv) the
subject of a comparable receivership or insolvency proceeding;
(r) that (other than in the case of Eligible Extended Term
Receivables) is an "account" (and is not evidenced by a draft, promissory note
or other instrument and does not constitute chattel paper) within the meaning of
the UCC of the jurisdictions in which each of the Originators, the Parent and
the Seller are organized;
(s) that is payable solely and directly to an Originator and not to
any other Person (including any shipper of the merchandise or goods that gave
rise to such Receivable), except to the extent that payment thereof may be made
to the Collection Account or otherwise as directed pursuant to Article VI of the
Purchase Agreement;
(t) with respect to which all material consents, licenses, approvals
or authorizations of, or registrations with, any Governmental Authority required
to be obtained, effected or given in connection with the creation of such
Receivable or the Contract therefor have been duly obtained, effected or given
and are in full force and effect;
(u) that is created through the provision of merchandise, goods or
services by the Originator thereof in the ordinary course of its business in a
current transaction;
(v) that complies with such other criteria and requirements as the
Administrative Agent may from time to time, in its reasonable credit judgment,
specify to the Seller or the Originator thereof upon not less than three (3)
Business Days' prior written notice;
(w) that is not the liability of an Obligor that is receiving or,
under the terms of the Credit and Collection Policies, should receive
merchandise, goods or services on a "cash on delivery" basis;
(x) that does not constitute a rebilled amount arising from a
deduction taken by an Obligor with respect to a previously arising Receivable or
the balance owed on a Receivable with respect to which one or more partial
payments have been made;
(y) with respect to which no check, draft or other item of payment
has previously been received which was returned unpaid or otherwise dishonored;
(z) no portion of which constitutes sales tax, excise tax or
commission, late fees, service charges or similar charges;
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(aa) that is not subject to any Lien, right, claim, security
interest or other interest of any other Person, other than Liens in favor of the
Administrative Agent and the Purchaser; and
(bb) which is not an indebtedness or a liability of a scrap mill
(whether or not a supplier) or any other Person with respect to Scrapped Goods.
"ENVIRONMENTAL LAWS" shall mean all applicable federal, state, local
and foreign laws, statutes, ordinances, codes, rules, standards and regulations,
now or hereafter in effect, and in each case as amended or supplemented from
time to time, and any applicable judicial or administrative interpretation
thereof, including any applicable judicial or administrative order, consent
decree, order or judgment, imposing liability or standards of conduct for or
relating to the regulation and protection of human health, safety, the
environment and natural resources (including ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation). Environmental Laws include, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C.Sections 9601 et seq.); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C.Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C.Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C.Sections 2601 et seq.); the Clean Air Act (42
U.S.C.Sections 7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C.Sections 1251 et seq.); the Occupational Safety and Health Act (29
U.S.C.Sections 651 et seq.); the Safe Drinking Water Act (42 U.S.C.Sections
300(f) et seq.); and the Resource Conservation and Recovery Act of 1976, 42
U.S.C.Sections 6901 et seq., each as from time to time amended, and any and all
regulations promulgated thereunder, and all analogous state, local and foreign
counterparts or equivalents and any transfer of ownership notification or
approval statutes.
"ENVIRONMENTAL LIEN" shall mean a lien in favor of any Governmental
Authority for (a) any liability under Environmental Law, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to a release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment,
including the movement of Contaminants through or in the air, soil, surface
water or groundwater (a "RELEASE") or threatened Release of a Contaminant into
the environment.
"ENVIRONMENTAL PERMITS" shall mean all permits, licenses,
authorizations, certificates, approvals, registrations or other written
documents required by any Governmental Authority under any Environmental Laws.
"EQUITY INTEREST" shall mean all shares, options, warrants, member
interests, general or limited partnership interests or other equivalents
(regardless of how designated) of or in a corporation, limited liability
company, partnership or equivalent entity whether voting or nonvoting, including
common stock, preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act).
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"EQUITY HOLDERS" shall mean, with respect to any Person, each holder
of Equity Interests of such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974 and any regulations promulgated thereunder.
"ERISA AFFILIATE" shall mean, with respect to any Originator, any
trade or business (whether or not incorporated) that, together with such
Originator, are treated as a single employer within the meaning of Sections
414(b), (c), (m) or (o) of the IRC.
"ERISA EVENT" shall mean, with respect to any Originator or any
ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Originator or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a "substantial employer," as defined in Section 4001(a)(2)
of ERISA; (c) the complete or partial withdrawal of any Originator or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any
Originator or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition that might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 of
ERISA; (i) the loss of a Qualified Plan's qualification or tax exempt status; or
(j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" shall mean a Plan that is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"EVENT OF SERVICER TERMINATION" shall have the meaning assigned to
it in Section 9.02 of the Purchase Agreement.
"EXCLUDED RECEIVABLE" shall mean any indebtedness of Obligors
(whether constituting an account, general intangible, instrument or otherwise)
arising from the sale of merchandise, goods or services by any District of any
Originator to its Obligors (including the right to payment of any interest or
finance charges and other obligations of such Obligors with respect thereto)
designated in writing by the Administrative Agent to the Originators at any time
that the aggregate principal amount of Transferred Receivables at any one time
outstanding exceeds $75,000,000 and arising after the date of such written
designation.
"EXTENDED MATURITY DATE" shall mean, with respect to any Receivable,
the due date for payment thereof which is extended by an agreement between an
Originator and an
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Obligor beyond the original Maturity Date, which is not, in any event, later
than 124 days after its original Billing Date.
"EXTENDED TERM INSTRUMENT" shall mean a draft executed by an Obligor
in favor of an Originator evidencing the Extended Term Receivable substantially
in the form attached as Exhibit B to the Purchase Agreement.
"EXTENDED TERM INSTRUMENT REPORT" shall have the meaning set forth
in Annex 5.02(a) to the Purchase Agreement.
"EXTENDED TERM RECEIVABLE" shall mean a Receivable that has an
Extended Maturity Date and is a liability of those Obligors that are listed on
Schedule 3 attached to this Annex X (each, an "EXTENDED TERM RECEIVABLE OBLIGOR"
and collectively, the "EXTENDED TERM RECEIVABLE OBLIGORS"), as Schedule 3 may be
amended from time to time by deletion of such Obligors pursuant to the
definition of "Eligible Extended Term Receivables".
"FACILITY TERMINATION DATE" shall mean the earliest of (a) the date
so designated pursuant to Section 9.01 of the Purchase Agreement, (b) the Final
Purchase Date, and (c) the date of termination of the Maximum Purchase Limit
specified in a notice from Seller to the Purchaser delivered pursuant to and in
accordance with Section 2.02(b) of the Purchase Agreement.
"FAIR LABOR STANDARDS ACT" shall mean the provisions of the Fair
Labor Standards Act, 29 U.S.C. Sections 201 et seq.
"FEDERAL FUNDS RATE" shall mean, for any day, a floating rate equal
to the weighted average of the rates on overnight federal funds transactions
among members of the Federal Reserve System, as determined by the Administrative
Agent.
"FEDERAL RESERVE BOARD" shall mean the Board of Governors of the
Federal Reserve System.
"FEE LETTER" shall mean that certain letter agreement dated December
26, 2002, between the Seller and the Administrative Agent.
"FINAL PURCHASE DATE" shall mean December 26, 2005.
"FINANCIAL STATEMENTS" shall mean, consolidated and consolidating
income statements, statements of cash flows and balance sheets of the Parent
delivered in accordance with Section 4.01(f) of the Sale Agreement, Annex
4.03(a) and Annex 4.03(b) to the Sale Agreement and separate income statements,
statements of cash flows and balance sheets of the Seller delivered in
accordance with Section 5.02 of the Purchase Agreement.
"FIRST YEAR EARLY TERMINATION FEE" shall have the meaning assigned
to it in the Fee Letter.
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"FIXED CHARGES" shall mean, with respect to the Parent and its
Subsidiaries, on a consolidated basis, for any fiscal period, (a) the aggregate
of all Interest Expense payable in cash during such period, plus (b) scheduled
payments of principal payable in cash with respect to Debt during such period.
"FIXED CHARGE COVERAGE RATIO" shall mean, with respect to the Parent
and its Subsidiaries, on a consolidated basis, for any fiscal period, the ratio
of (a) the Consolidated EBITDA, minus Capital Expenditures (other than that
portion of such Capital Expenditures that are financed) during such period and
minus, to the extent not already deducted in the calculation of the Consolidated
EBITDA, income taxes payable in cash with respect to such period (without adding
back any tax credit received) and minus the aggregate of all redemptions,
purchases, retirements, defeasances, or similar payments or acquisitions for
value with respect to Debt (other than refinancing of any Permitted Outstanding
Debt expressly permitted under the Purchase Agreement) and minus dividends paid
in cash to (b) Fixed Charges.
"FOREIGN SUBSIDIARY" shall mean a Subsidiary which is not a Domestic
Subsidiary.
"GAAP" shall mean (i) generally accepted accounting principles in
the United States of America as in effect on the Closing Date for the purpose of
calculating the Fixed Charge Coverage Ratio and (ii) generally accepted
accounting principles in the United States of America as in effect from time to
time for all other purposes.
"GE CAPITAL" shall mean General Electric Capital Corporation, a
Delaware corporation, and its successors and assigns.
"GENERAL TRIAL BALANCE" shall mean, with respect to any Originator
and as of any date of determination, such Originator's accounts receivable trial
balance (whether in the form of a computer printout, magnetic tape or diskette)
as of such date, listing Obligors and the Receivables owing by such Obligors as
of such date together with the aged Outstanding Balances of such Receivables, in
form and substance satisfactory to the Seller and the Purchaser.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEED INDEBTEDNESS" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("primary obligation") of any other Person (the "primary
obligor") in any manner, including any obligation or arrangement of such Person
to (a) purchase or repurchase any such primary obligation, (b) advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for the
purpose of assuring the owner of any such
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primary obligation of the ability of the primary obligor to make payment of such
primary obligation, or (d) indemnify the owner of such primary obligation
against loss in respect thereof. The amount of any Guaranteed Indebtedness at
any time shall be deemed to be the amount equal to the lesser at such time of
(x) the stated or determinable amount of the primary obligation in respect of
which such Guaranteed Indebtedness is incurred and (y) the maximum amount for
which such Person may be liable pursuant to the terms of the instrument
embodying such Guaranteed Indebtedness; or, if not stated or determinable, the
maximum reasonably anticipated liability (assuming full performance) in respect
thereof.
"GUARANTEED OBLIGATIONS" shall mean, collectively: (a) all
covenants, agreements, terms, conditions and indemnities to be performed and
observed by each of the Affiliated Party under and pursuant to the Sale
Agreement and each other document executed and delivered by each of the
Affiliated Party pursuant to the Sale Agreement, including, without limitation,
the due and punctual payment of all sums which are or may become due and owing
by any of the Affiliated Parties under the Sale Agreement, whether for fees,
expenses (including counsel fees), indemnified amounts or otherwise, whether
upon any termination or for any other reason and (b) all obligations of
Affiliated Parties under the Purchase Agreement, or which arise pursuant to the
Purchase Agreement as a result of their termination as Servicers.
"INCIPIENT SERVICER TERMINATION EVENT" shall mean any event that,
with the passage of time or notice or both, would, unless cured or waived,
become an Event of Servicer Termination.
"INCIPIENT TERMINATION EVENT" shall mean any event that, with the
passage of time or notice or both, would, unless cured or waived, become a
Termination Event.
"INDEMNIFIED AMOUNTS" shall mean, with respect to any Person, any
and all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including attorneys' fees and disbursements and other costs of
investigation or defense, including those incurred upon any appeal).
"INDEMNIFIED PERSON" shall have the meaning assigned to it in
Section 12.01(a) of the Purchase Agreement.
"INDEMNIFIED TAXES" shall have the meaning assigned to it in Section
2.08(b) of the Purchase Agreement.
"INDEPENDENT MEMBER" shall mean Castle IND MGR, Inc., a Delaware
corporation.
"INDEX RATE" shall mean, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected
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Interest Rates" as the Bank prime loan rate or its equivalent), and (ii) the
Federal Funds Rate plus fifty (50) basis points per annum. Each change in any
interest rate provided for in the Purchase Agreement based upon the Index Rate
shall take effect at the time of such change in the Index Rate.
"INTENDED CHARACTERIZATION" shall mean, for income tax purposes, the
characterization of the acquisition by the Purchaser of Purchaser Interests
under the Purchase Agreement as a loan or loans by the Purchaser to the Seller
secured by the Receivables and the Related Security.
"INTEREST EXPENSE" shall mean, with respect to the Parent and its
Subsidiaries and any period, the interest expense of such Person, determined on
a consolidated basis for such period, including in any event the interest
portion or payments under Capital Lease Obligations and interest expense for the
relevant period that has been capitalized on the balance sheet of such Person
and yield or other amounts due and payable (other than upfront fees) under any
accounts receivable securitization facility to which any such Person is a party
as seller or issuer.
"INVESTMENT BASE" shall mean, as of any date of determination, the
amount equal to the aggregate Outstanding Balance of all Eligible Receivables
minus the Reserves with respect thereto, in each case as disclosed in the most
recently submitted Investment Base Certificate or as otherwise determined by the
Purchaser or the Administrative Agent based on Seller Collateral information
available to any of them, including any information obtained from any audit or
from any other reports with respect to the Seller Collateral, which
determination shall be final, binding and conclusive on all parties to the
Purchase Agreement (absent manifest error).
"INVESTMENT BASE CERTIFICATE" shall have the meaning assigned to it
in Section 2.03(a)(i) of the Purchase Agreement.
"INVESTMENT COMPANY ACT" shall mean the provisions of the Investment
Company Act of 1940, 15 U.S.C. Sections 80a et seq., and any regulations
promulgated thereunder.
"INVESTMENT REPORTS" shall mean, collectively, the Investment Base
Certificates, the Monthly Reports and each of the reports with respect to the
Transferred Receivables, the Related Security and the Seller Collateral referred
to in Annex 7.02 of the Purchase Agreement.
"IRC" shall mean the Internal Revenue Code of 1986 and any
regulations promulgated thereunder.
"IRS" shall mean the Internal Revenue Service.
"LENDERS" shall mean the lenders from time to time party to
Permitted Outstanding Debt Documents.
"LIBOR BUSINESS DAY" shall mean a Business Day on which banks in the
City of London are generally open for interbank or foreign exchange
transactions.
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"LIBOR PERIOD" shall mean, with respect to any LIBOR Tranche, each
period commencing on a LIBOR Business Day selected by Seller pursuant to the
Purchase Agreement and ending one, two or three months thereafter, as selected
by Seller's irrevocable notice to Administrative Agent as set forth in the
Purchase Agreement; PROVIDED THAT the foregoing provision relating to LIBOR
Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Facility
Termination Date shall end 2 LIBOR Business Days prior to such date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) Seller shall select LIBOR Periods so as not to require a payment
or prepayment of any LIBOR Tranche during a LIBOR Period for such LIBOR
Tranche; and
(e) Seller shall select LIBOR Periods so that there shall be no more
than 5 separate LIBOR Tranches in existence at any one time.
"LIBOR RATE" shall mean for each LIBOR Period, a rate of interest
determined by the Administrative Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00
a.m. (London time), on the second full LIBOR Business Day next preceding
the first day of such LIBOR Period (unless such date is not a Business
Day, in which event the next succeeding Business Day will be used);
divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental,
marginal and emergency reserves under any regulations of the Federal
Reserve Board or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation
D of the Federal Reserve Board that are required to be maintained by a
member bank of the Federal Reserve System.
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If such interest rates shall cease to be available from Telerate
News Service, the LIBOR Rate shall be determined from such financial
reporting service or other information as shall be mutually acceptable to
Administrative Agent and Seller.
"LIBOR TRANCHE" shall mean each portion of the Capital Investment
(if any) that is accruing Daily Yield at a LIBOR Rate for a LIBOR Period.
"LIEN" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the UCC or comparable law of any jurisdiction).
"LITIGATION" shall mean, with respect to any Person, any action,
claim, lawsuit, demand, investigation or proceeding pending or threatened
against such Person before any court, board, commission, agency or
instrumentality of any federal, state, local or foreign government or of any
agency or subdivision thereof or before any arbitrator or panel of arbitrators.
"LOCKBOX" shall have the meaning assigned to it in Section
6.01(a)(ii) of the Purchase Agreement.
"LOCKBOX ACCOUNT" shall mean each lockbox account or blocked account
listed on Schedule 4.01(r) to the Purchase Agreement as amended from time to
time established in the name of the Seller and held at a Lockbox Account Bank,
together with any other segregated deposit account established by the Seller for
the deposit of Collections pursuant to and in accordance with Section 6.01(a) of
the Purchase Agreement.
"LOCKBOX ACCOUNT AGREEMENT" shall mean any agreement among any one
or more Originators, the Seller, the Administrative Agent, a Lockbox Account
Bank and/or Concentration Account Bank with respect to a Lockbox, Lockbox
Account and/or Concentration Account that provides, among other things, that (a)
all items of payment deposited in such Lockbox, Lockbox Account or Concentration
Account are held by such Lockbox Account Bank or such Concentration Account
Bank, as the case may be, as custodian for GE Capital, as Administrative Agent,
(b) neither the Lockbox Account Bank nor the Concentration Account Bank, as
applicable, has any rights of setoff or recoupment or any other claim against
such Lockbox Account or Concentration Account, as the case may be, other than
for payment of its service fees and other charges directly related to the
administration of such Account and for returned checks or other items of payment
and (c) such Lockbox Account Bank agrees to forward all Collections received in
such Lockbox Account to the Concentration Account within one Business Day of
receipt of available funds, and such Concentration Account Bank agrees to
forward all Collections received in the Concentration Account to the Collection
Account within one Business Day of receipt of available funds, and is otherwise
in form and substance acceptable to the Administrative Agent.
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"LOCKBOX ACCOUNT BANK" shall mean any bank or other financial
institution at which one or more Lockbox Accounts are maintained.
"MARGIN STOCK" shall have the meaning set forth in Regulation U
promulgated by the Board of Governors of the Federal Reserve System, as from
time to time in effect.
"MASTER SERVICER" shall mean the Parent in its capacity as Master
Servicer under the Purchase agreement, or any other Person designated as a
Successor Servicer to the Master Servicer.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the business, assets, liabilities, operations, prospects or financial or
other condition of (i) any Originator or the Originators considered as a whole,
(ii) the Seller or (iii) the Master Servicer and its Subsidiaries considered as
a whole, (b) the ability of any Originator, the Seller or any Servicer to
perform any of its obligations under the Related Documents in accordance with
the terms thereof, (c) the validity or enforceability of any Related Document or
the rights and remedies of the Seller, the Purchaser or the Administrative Agent
under any Related Document, (d) the federal income tax attributes of the sale,
contribution or pledge of the Transferred Receivables and the Related Security
pursuant to any Related Document or (e) the Transferred Receivables, the Related
Security, the Originator Collateral, the Seller Collateral or the ownership
interests or Liens of the Seller or the Purchaser or the Administrative Agent
thereon or the priority of such interests or Liens.
"MATERIAL DEBT" shall have the meaning assigned to it in Section
9.01(b) of the Purchase Agreement.
"MATURITY DATE" shall mean, with respect to any Receivable, the due
date for payment therefor specified in the Contract therefor, or, if no date is
so specified, 30 days from the Billing Date.
"MAXIMUM PURCHASE LIMIT" shall mean $60,000,000 as such amount may
be reduced in accordance with Section 2.02(a) of the Purchase Agreement.
"MONTHLY REPORT" shall mean a report in substantially the form of
Exhibit 2.03(a)(ii) to the Purchase Agreement.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc. or any
successor thereto.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA with respect to which any Originator or ERISA
Affiliate is making, is obligated to make, or has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.
"NET WORTH PERCENTAGE" shall mean a fraction (expressed as a
percentage) (a) the numerator of which equals the excess of assets over
liabilities, in each case determined in
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accordance with GAAP consistently applied and (b) the denominator of which
equals the Outstanding Balance of Transferred Receivables.
"NOTE AGREEMENTS" shall mean (i) that certain Note Agreement, dated
as of May 15, 1997, as amended and in effect on the Closing Date, among the
Parent and the holder of the Parent's Reset Rate Senior Secured Notes due 2009,
(ii) that certain Note Agreement, dated as of March 1, 1998, as amended and in
effect on the Closing Date, among the Parent, the holders of the Parent's Reset
Rate Series A Senior Secured Notes due 2008, the holders of the Parent's Reset
Rate Series B Senior Secured Notes due 2010, and the holders of the Parent's
Reset Rate Series C Senior Secured Notes due 2012, and (iii) that certain Note
Agreement, dated as of April 1, 1996, as amended and in effect on the Closing
Date, among the Parent and the holders of the Parent's Reset Rate Senior Secured
Notes due 2008.
"NOTE DOCUMENTS" shall mean, the Note Agreements, the Senior Notes
and all notes, security agreements, guaranties, pledge agreements, mortgages and
related collateral documents executed pursuant to any of the foregoing.
"NOTEHOLDER" shall mean each holder of a Senior Note pursuant to a
Note Agreement, and its successors and assigns.
"OBLIGOR" shall mean, with respect to any Receivable, the Person
primarily obligated to make payments in respect thereof.
"OFFICER'S CERTIFICATE" shall mean, with respect to any Person, a
certificate signed by an Authorized Officer of such Person.
"ORGANIC DOCUMENTS" shall mean, relative to any Person, its
certificate of incorporation, its by-laws, its partnership agreement, its
memorandum and articles of association, its certificate of formation or articles
of organization and limited liability company agreement and/or operating
agreement, share designations or similar organization documents and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of its authorized Equity Interest.
"ORIGINATOR" shall mean each of A. M. Castle & Co., a Maryland
corporation, Xxxxxx Steel Plate Co., a Delaware corporation, Keystone Tube
Company, llc, a Delaware limited liability company, and Total Plastics, Inc., a
Michigan corporation.
"ORIGINATOR COLLATERAL" shall have the meaning assigned to it in
Section 7.01 of the Sale Agreement.
"OUTSTANDING BALANCE" shall mean, with respect to any Receivable and
as of any date of determination, the amount (which amount shall not be less than
zero) equal to (a) the Billed Amount thereof, minus (b) all Collections received
from the Obligor thereunder, minus (c) all discounts to or any other
modifications that reduce such Billed Amount; PROVIDED THAT if the
Administrative Agent or the Master Servicer makes a determination that all
payments by such
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Obligor with respect to such Billed Amount have been made, the Outstanding
Balance shall be zero.
"PARENT" shall mean A. M. Castle & Co., a Maryland corporation.
"PARENT GROUP" shall mean the Parent and each of its Affiliates
(other than the Seller and the Independent Member).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PENSION PLAN" shall mean a Plan described in Section 3(2) of ERISA.
"PER ANNUM DAILY MARGIN" shall have the meaning assigned to it in
the Fee Letter:
"PERFORMANCE UNDERTAKING" shall mean the provisions of Article VIII
of the Sale Agreement.
"PERMITTED INDEPENDENT MEMBER ENCUMBRANCES" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental charges
not yet due and payable (other than with respect to environmental matters); (b)
deposits securing statutory obligations of the Independent Member; and (c)
presently existing or hereinafter created Liens in favor of the Collateral
Administrative Agent on the Independent Member's Equity Interest in the Seller.
"PERMITTED INVESTMENTS" shall mean any of the following:
(a) obligations of, or guaranteed as to the full and timely payment
of principal and interest by, the federal government of the United States or
obligations of any agency or instrumentality thereof if such obligations are
backed by the full faith and credit of the federal government of the United
States, in each case with maturities of not more than 90 days from the date
acquired;
(b) repurchase agreements on obligations of the type specified in
clause (a) of this definition; provided, that the short-term debt obligations of
the party agreeing to repurchase are rated at least A-1 or the equivalent by S&P
and P-1 or the equivalent by Moody's;
(c) federal funds, certificates of deposit, time deposits and
bankers' acceptances of any depository institution or trust company incorporated
under the federal laws of the United States or any state, in each case with
original maturities of not more than 90 days or, in the case of bankers'
acceptances, original maturities of not more than 365 days; provided, that the
short-term obligations of such depository institution or trust company are rated
at least A-1 or the equivalent by S&P and P-1 or the equivalent by Moody's;
(d) commercial paper of any corporation incorporated under the laws
of the United States of America or any state thereof with original maturities of
not more than 30 days
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that on the date of acquisition are rated at least A-1 or the equivalent by S&P
and P-1 or the equivalent by Moody's; and
(e) securities of money market funds rated at least Aam or the
equivalent by S&P and P-1 or the equivalent by Moody's.
"PERMITTED ORIGINATOR ENCUMBRANCES" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental charges
not yet due and payable (other than with respect to environmental matters); (b)
pledges or deposits securing obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits securing
bids, tenders, contracts (other than contracts for the payment of money) or
leases to which any Originator, the Seller or any Servicer is a party as lessee
made in the ordinary course of business; (d) deposits securing statutory
obligations of any Originator, the Seller or any Servicer; (e) inchoate and
unperfected workers', mechanics', suppliers' or similar Liens arising in the
ordinary course of business; (f) carriers', warehousemen's or other similar
possessory Liens arising in the ordinary course of business and securing
liabilities in an outstanding aggregate amount not in excess of $500,000 at any
one time; (g) deposits securing, or in lieu of, surety, appeal or customs bonds
in proceedings to which any Originator, the Seller or any Servicer is a party;
(h) any attachment or judgment Lien not constituting a Termination Event under
Section 9.01(f) of the Purchase Agreement; (i) Liens existing on the Closing
Date and listed on Schedule 4.04(b) of the Sale Agreement; (j) [reserved]; (k)
[reserved]; (l) Liens securing Debt which is incurred to extend, refinance,
renew, replace, defease or refund Debt which has been secured by a Lien
permitted under the Sale Agreement and is permitted to be extended, refinanced,
renewed, replaced, defeased or refunded under the Sale Agreement but only to the
extent that such Lien is limited to the same collateral as that covered by the
prior Lien; (m) Liens securing the Permitted Outstanding Debt so long as such
Liens (A) do not encumber Originator Collateral or Seller Collateral, (B) are
granted to one or more holders of the Permitted Outstanding Debt pursuant to
agreements, instruments or documents which have been reviewed by the
Administrative Agent and which are reasonably satisfactory to the Administrative
Agent, and (C) an intercreditor agreement satisfactory to the Administrative
Agent has been entered into between the Administrative Agent and such holders of
the Permitted Outstanding Debt or an agent authorized to act on their behalf;
and (n) presently existing or hereinafter created Liens in favor of the Buyer,
the Seller, the Purchaser or the Administrative Agent.
"PERMITTED OUTSTANDING DEBT" shall mean existing Debt described in
Schedule 2 to this Annex X with the holders of such Debt as described in that
Schedule (or with any other future holder of such Debt reasonably satisfactory
to the Administrative Agent) and refinancings thereof or amendments or
modifications thereof that do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to extend the
same and other than as expressly permitted in the Purchase Agreement) and that
are otherwise on terms and conditions no less favorable to any Seller Party or
the Administrative Agent, as determined by the Administrative Agent, than the
terms of the Debt being refinanced, amended or modified.
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"PERMITTED OUTSTANDING DEBT DOCUMENTS" shall mean the agreements,
indentures, and related documents and instruments evidencing the Permitted
Outstanding Debt, each in effect as of the Closing Date.
"PERMITTED SELLER ENCUMBRANCES" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental charges
not yet due and payable (other than with respect to environmental matters); (b)
deposits securing statutory obligations of the Seller; and (c) presently
existing or hereinafter created Liens in favor of the Purchaser or the
Administrative Agent.
"PERSON" shall mean any individual, sole proprietorship,
partnership, joint venture, unincorporated organization, trust, association,
corporation (including a business trust), limited liability company,
institution, public benefit corporation, joint stock company, Governmental
Authority or any other entity of whatever nature.
"PLAN" shall mean, at any time, an "employee benefit plan," as
defined in Section 3(3) of ERISA, that any Originator or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any Originator or ERISA Affiliate.
"PROJECTIONS" shall mean Parent Group's forecasted consolidated and
consolidating: (a) balance sheets; (b) income statements; and (c) cash flow
statements, all prepared on a Subsidiary-by-Subsidiary or division-by-division
basis, if applicable, and otherwise consistent with the historical Financial
Statements of Parent, together with appropriate supporting details and a
statement of underlying assumptions.
"PURCHASE" shall have the meaning assigned to it in Section 2.01 of
the Purchase Agreement.
"PURCHASE AGREEMENT" shall mean that certain Receivables Purchase
and Servicing Agreement dated as of December 26, 2002, among the Seller, the
Independent Member, the Purchaser, the Servicers and the Administrative Agent.
"PURCHASE ASSIGNMENT" shall mean that certain Purchase Assignment,
dated as of December 26, 2002, by and between the Seller and the Purchaser in
the form attached as Exhibit 2.04(a) to the Purchase Agreement.
"PURCHASE DATE" shall mean each day on which a Purchase is made.
"PURCHASE DISCOUNT RATE CAP" shall mean a rate equal to eighty-five
percent (85%); PROVIDED THAT the Purchase Discount Rate Cap may be changed at
any time as determined by the Administrative Agent in its reasonable credit
judgment exercised in good faith.
"PURCHASE EXCESS" shall mean, as of any date of determination, the
extent to which the Capital Investment exceeds the Availability, in each case as
disclosed in the most
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recently submitted Investment Base Certificate or as otherwise determined by the
Purchaser or the Administrative Agent based on Seller Collateral information
available to any of them, including any information obtained from any audit or
from any other reports with respect to the Seller Collateral, which
determination shall be final, binding and conclusive on all parties to the
Purchase Agreement (absent manifest error).
"PURCHASE REQUEST" shall have the meaning assigned to it in Section
2.03(b) of the Purchase Agreement.
"PURCHASER" shall mean GE Capital, its successors and assigns.
"PURCHASER INTEREST" shall mean the undivided percentage ownership
interest of the Purchaser in the Transferred Receivables and the Related
Security which are purchased under the Purchase Agreement. The Purchaser
Interest of the Purchaser shall be expressed as a fraction of the total
Transferred Receivables computed as follows:
PI = C + DR / IB x DPR
where:
PI = the Purchaser Interest at the time of determination;
C = the aggregate Capital Investment at such time;
DR = the Discount Reserve plus the Availability Reserve;
IB = the Investment Base at such time; and
DPR = the Dynamic Purchase Discount Rate at such time.
The Purchaser Interest shall be calculated (or deemed to be calculated) on each
Business Day from the Closing Date through the Facility Termination Date; from
and after the Facility Termination Date, the Purchaser Interest of the Purchaser
shall be the Purchaser Interest of such Purchaser as calculated on the Business
Day immediately preceding the Facility Termination Date until the Termination
Date, at which time the Purchaser Interest shall equal zero.
"QUALIFIED PLAN" shall mean a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"RATIOS" shall mean, collectively, the Dilution Ratio, the Default
Ratio, the Delinquency Ratio, the Receivables Collection Turnover and Net Worth
Percentage.
"RECEIVABLE" shall mean, with respect to any Obligor, indebtedness
of such Obligor (whether constituting an account, a payment intangible, an
instrument or otherwise)
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arising from the sale of merchandise, goods or services by an Originator to such
Obligor, including the right to payment of any interest or finance charges and
other obligations of such Obligor with respect thereto; PROVIDED THAT the
definition of "Receivable" shall exclude the Excluded Receivables.
"RECEIVABLES COLLECTION TURNOVER" shall mean, as of any date of
determination, the amount (expressed in days) equal to:
(a) a fraction, (i) the numerator of which is equal to the average
of the Outstanding Balances of Transferred Receivables on the first day of the
three (3) Settlement Periods immediately preceding such date and (ii) the
denominator of which is equal to aggregate Collections received during such
three (3) Settlement Periods with respect to all Transferred Receivables,
multiplied by
(b) the number of days contained in such three (3) Settlement
Periods.
"RECORDS" shall mean all Contracts and other documents, books,
records and other information (including computer programs, tapes, disks, data
processing software and related property and rights) prepared and maintained by
any Originator, any Servicer, any Sub-Servicer or the Seller with respect to the
Receivables and the Obligors thereunder, the Originator Collateral and the
Seller Collateral.
"REGULATORY CHANGE" shall mean any change after the Closing Date in
any federal, state or foreign law or regulation (including Regulation D of the
Federal Reserve Board) or the adoption or making after such date of any
interpretation, directive or request under any federal, state or foreign law or
regulation (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof that, in
each case, is applicable to any Affected Party.
"REINVESTMENT PURCHASE" shall have the meaning assigned to it in
Section 2.01 of the Purchase Agreement.
"REJECTED AMOUNT" shall have the meaning assigned to it in Section
4.05 of the Sale Agreement.
"RELATED DOCUMENTS" shall mean each Lockbox Account Agreement, the
Sale Agreement (including, without limitation, the Performance Undertaking
contained therein), the Purchase Agreement, the Purchase Assignment, the Fee
Letter and all other agreements, instruments, documents and certificates
identified in the Schedule of Documents and including all other pledges, powers
of attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of any
Person, or any employee of any Person, and delivered in connection with either
Sale Agreement, the Purchase Agreement or the transactions contemplated thereby.
Any reference in either Sale
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Agreement, the Purchase Agreement or any other Related Document to a Related
Document shall include all Appendices thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to such Related
Document as the same may be in effect at any and all times such reference
becomes operative.
"RELATED SECURITY" shall mean with respect to any Receivable:
(a) all supporting obligations (as defined in Article 9 of the UCC),
security interests or Liens and property subject thereto from time to time
securing or purporting to secure the payment of such Receivable by the Person
obligated thereon;
(b) all guaranties, indemnities and warranties, insurance policies,
financing statements and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Receivable;
(c) all right, title and interest of the Parent or any Subsidiary in
and to any goods (including Returned Goods) the sale of which gave rise to such
Receivable and all right, title and interest of the Parent or any Subsidiary in
and to payments made on account of Scrapped Goods; provided that Related
Security will not include Returned Goods from and after the time, if any, when
the Seller shall have received full cash payment required to be made under the
Sale Agreement on account of the reduction of the Outstanding Balance of the
Receivable related to such Returned Good);
(d) all Collections;
(e) all Records;
(f) all of the following (collectively, the "ACCOUNT COLLATERAL")
(A) in the case of any Originator, all deposit accounts and/or lockboxes
established for collection of Receivables and all funds on deposit therein and
all certificates and instruments, if any, at any time or evidencing such
accounts, lockboxes or such funds and (B) in the case of Seller:
(1) all deposit accounts, including the Lockbox Accounts, the
Lockboxes, and all funds on deposit therein and all
certificates and instruments, if any, from time to time
representing or evidencing any deposit account, the Lockbox
Accounts, the Lockboxes or such funds,
(2) the Collection Account, the Concentration Account and all
funds on deposit therein and all certificates and instruments,
if any, from time to time representing or evidencing the
Collection Account, the Concentration Account or such funds,
(3) all Deposit Investments from time to time of amounts in
the Collection Account, and all certificates, instruments and
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investment property, if any, from time to time representing or
evidencing such Deposit Investments,
(4) all notes, certificates of deposit and other instruments
in substitution for or relating to any of the then existing
Account Collateral, and
(5) all interest, dividends, cash, instruments, investment
property and other property from time to time received,
receivable or otherwise distributed with respect to or in
exchange for any and all of the then existing Account
Collateral; and
(g) all proceeds of such Receivable and with respect to any of the
foregoing.
"REPAYMENT NOTICE" shall have the meaning assigned to it in Section
2.03(c) of the Purchase Agreement.
"RESERVES" shall mean the aggregate Concentration Discount Amount
for all Obligors of Transferred Receivables plus the Credit Memo Reserve and any
other reserves as the Administrative Agent may establish from time to time in
its credit judgment exercised in good faith.
"RETIREE WELFARE PLAN" shall mean, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"RETURNED GOODS" shall mean goods, the sale of which gave rise to a
Receivable, that are returned to an Originator by an Obligor for any reason.
"REVOLVING PERIOD" shall mean the period from and including the
Closing Date through and including the day immediately preceding the Facility
Termination Date.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"SALE" shall mean with respect to a sale of Receivables under the
Sale Agreement, a sale of Receivables by an Originator to the Seller in
accordance with the terms of the Sale Agreement.
"SALE AGREEMENT" shall mean that certain Receivables Sale and
Contribution Agreement dated as of December 26, 2002, among the Originators, as
sellers, the Parent, and the Seller, as buyer thereunder.
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"SALE PRICE" shall mean, with respect to any Sale of Sold
Receivables, the price calculated by the Seller and approved from time to time
by the Administrative Agent equal to:
(a) the Outstanding Balance of such Sold Receivable, minus
(b) the expected costs to be incurred by the Seller in financing the
purchase of such Sold Receivables until the Outstanding Balance of such Sold
Receivables is paid in full, minus
(c) the portion of such Sold Receivables that are reasonably
expected by such Originator to become Defaulted Receivables, minus
(d) the portion of such Sold Receivables that are reasonably
expected by such Originator to be reduced by means other than the receipt of
Collections thereon or pursuant to clause (c) above, minus
(e) amounts expected to be paid to the Servicers with respect to the
servicing, administration and collection of such Sold Receivables;
PROVIDED THAT such calculations shall be determined based on the historical
experience of (y) such Originator, with respect to the calculations required in
each of clauses (c) and (d) above, and (z) the Seller, with respect to the
calculations required in clauses (b) and (e) above.
"SCHEDULE OF DOCUMENTS" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Sale Agreement, the Purchase
Agreement and the other Related Documents and the transactions contemplated
thereunder, substantially in the form attached as Annex Y to the Purchase
Agreement and the Sale Agreement.
"SCRAPPED GOODS" shall mean goods, the sale of which gave rise to a
Receivable, which are rejected by the applicable Obligor for any reason but
which are scrapped rather than being returned to the applicable Originator or
any of its Affiliates.
"SECOND YEAR EARLY TERMINATION FEE" shall have the meaning assigned
to it in the Fee Letter.
"SECURITIES ACT" shall mean the provisions of the Securities Act of
1933, 15 U.S.C. Sections 77a et seq., and any regulations promulgated
thereunder.
"SECURITIES EXCHANGE ACT" shall mean the provisions of the
Securities Exchange Act of 1934, 15 U.S.C. Sections 78a et seq., and any
regulations promulgated thereunder.
"SELLER" shall mean Castle SPFD, LLC, a Delaware limited liability
company, in its capacity as seller under the Purchase Agreement.
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"SELLER ACCOUNT" shall mean a deposit account maintained in the name
of the Seller at a commercial bank in the United States of America, as
designated by the Seller from time to time.
"SELLER ASSIGNED AGREEMENTS" shall have the meaning assigned to it
in Section 8.01(b) of the Purchase Agreement.
"SELLER COLLATERAL" shall have the meaning assigned to it in Section
8.01 of the Purchase Agreement.
"SELLER PARTIES" shall have the meaning assigned to it in the
recitals of the Purchase Agreement.
"SELLER SECURED OBLIGATIONS" shall mean all loans, advances, debts,
liabilities, indemnities and obligations for the performance of covenants, tasks
or duties or for payment of monetary amounts (whether or not such performance is
then required or contingent, or such amounts are liquidated or determinable)
owing by the Seller to any Affected Party under the Purchase Agreement and any
document or instrument delivered pursuant thereto, and all amendments,
extensions or renewals thereof, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising thereunder, including Capital
Investment, Daily Yield, Unused Facility Fees, amounts in reduction of Purchase
Excess, Successor Servicing Fees and Expenses, Additional Amounts and
Indemnified Amounts. This term includes all principal, interest (including all
interest that accrues after the commencement of any case or proceeding by or
against the Seller in bankruptcy, whether or not allowed in such case or
proceeding), fees, charges, expenses, attorneys' fees and any other sum
chargeable to the Seller thereunder, whether now existing or hereafter arising,
voluntary or involuntary, whether or not jointly owed with others, direct or
indirect, absolute or contingent, liquidated or unliquidated, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations that are paid to the extent
all or any portion of such payment is avoided or recovered directly or
indirectly from any Purchaser or the Administrative Agent or any transferee of
the Purchaser or the Administrative Agent as a preference, fraudulent transfer
or otherwise.
"SENIOR NOTE" shall mean any of the Parent's Reset Rate Senior
Secured Notes, due May 30, 2009, Reset Rate Series A Senior Secured Notes, due
March 1, 2008, Reset Rate Series B Senior Secured Notes, due March 1, 2010,
Reset Rate Series C Senior Secured Notes, due March 1, 2012, or Reset Rate
Senior Secured Notes, due April 15, 2008.
"SERVICER" shall mean each of the Master Servicer, Xxxxxx Steel
Plate Co., a Delaware corporation and Total Plastics, Inc., a Michigan
corporation, each in its capacity as a Servicer under the Purchase Agreement, or
any other Person designated as a Successor Servicer.
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"SERVICER TERMINATION NOTICE" shall mean any notice by the
Administrative Agent to any Servicer that (a) an Event of Servicer Termination
has occurred and (b) the Servicers' appointment under the Purchase Agreement has
been terminated.
"SERVICING FEE" shall mean, for any day within a Settlement Period,
the amount equal to (a)(i) the Servicing Fee Rate divided by (ii) 360,
multiplied by (b) the Transferred Receivables on such day.
"SERVICING FEE RATE" shall mean 1.00%.
"SERVICING RECORDS" shall mean all documents, books, Records and
other information (including computer programs, tapes, disks, data processing
software and related property and rights) prepared and maintained by the Master
Servicer with respect to the Transferred Receivables and the Related Security
and the Obligors thereunder.
"SERVICING SOFTWARE" shall mean the data processing software used by
the Originators, Master Servicer and/or Seller for the purpose of servicing,
monitoring, and retaining data regarding the Transferred Receivables and the
Related Security and the Obligors thereunder.
"SETTLEMENT DATE" shall mean the tenth Business Day following the
end of each Settlement Period.
"SETTLEMENT PERIOD" shall mean (a) solely for purposes of
determining the Ratios, (i) with respect to all Settlement Periods other than
the final Settlement Period, each calendar month, whether occurring before or
after the Closing Date, and (ii) with respect to the final Settlement Period,
the period ending on the Termination Date and beginning with the first day of
the calendar month in which the Termination Date occurs, and (b) for all other
purposes, (i) with respect to the initial Settlement Period, the period from and
including the Closing Date through and including the last day of the calendar
month in which the Closing Date occurs, (ii) with respect to the final
Settlement Period, the period ending on the Termination Date and beginning with
the first day of the calendar month in which the Termination Date occurs, and
(iii) with respect to all other Settlement Periods, each calendar month.
"SOLD RECEIVABLE" shall have the meaning assigned to it in Section
2.01(b) of the Sale Agreement.
"SOLVENT" shall mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including contingent liabilities,
of such Person; (b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its Indebtedness as they become absolute and matured; (c) such
Person does not intend to, and does not believe that it will, incur Indebtedness
or liabilities beyond such Person's ability to pay as such Indebtedness and
liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent
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liabilities (such as Litigation, guaranties and pension plan liabilities) at any
time shall be computed as the amount that, in light of all the facts and
circumstances existing at the time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"SUB-SERVICER" shall mean any Person with whom any Servicer enters
into a Sub-Servicing Agreement.
"SUB-SERVICING AGREEMENT" shall mean any written contract entered
into between any Servicer and any Sub-Servicer pursuant to and in accordance
with Section 7.01 of the Purchase Agreement relating to the servicing,
administration or collection of the Transferred Receivables.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation
or other entity (a) of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or indirectly
owned by such Person or (b) that is directly or indirectly controlled by such
Person within the meaning of control under Section 15 of the Securities Act.
"SUCCESSOR SERVICER" shall have the meaning assigned to it in
Section 11.02 of the Purchase Agreement.
"SUCCESSOR SERVICING FEES AND EXPENSES" shall mean the fees and
expenses payable to the Successor Servicer as agreed to by the Seller, the
Purchaser and the Administrative Agent.
"TERMINATION DATE" shall mean the date on which (a) Capital
Investment has been permanently reduced to zero, (b) all other Seller Secured
Obligations under the Purchase Agreement and the other Related Documents have
been indefeasibly repaid in full and completely discharged and (c) the Maximum
Purchase Limit has been irrevocably terminated in accordance with the provisions
of Section 2.02(b) of the Purchase Agreement.
"TERMINATION EVENT" shall have the meaning assigned to it in Section
9.01 of the Purchase Agreement.
"TITLE IV PLAN" shall mean a Pension Plan (other than a
Multiemployer Plan) that is covered by Title IV of ERISA and that any Originator
or ERISA Affiliate maintains, contributes to or has an obligation to contribute
to on behalf of participants who are or were employed by any of them.
"TRANSFER" shall mean any Sale or capital contribution of
Transferred Receivables and the Related Security to the Seller pursuant to the
terms of the Sale Agreement.
"TRANSFER DATE" shall have the meaning assigned to it in Section
2.01(a) of the Sale Agreement.
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"TRANSFERRED RECEIVABLE" shall mean any Sold Receivable or
Contributed Receivable; PROVIDED THAT any Receivable repurchased by an
Originator thereof pursuant to Section 4.05 of the Sale Agreement shall not be
deemed to be a Transferred Receivable from and after the date of such repurchase
unless such Receivable has subsequently been repurchased by or contributed to
the Seller.
"UCC" shall mean, with respect to any jurisdiction, the Uniform
Commercial Code as the same may, from time to time, be enacted and in effect in
such jurisdiction.
"UNAPPROVED RECEIVABLE" shall mean any Receivable (a) with respect
to which the Obligor thereunder is not an Obligor on any Transferred Receivable
and whose customer relationship with an Originator arises as a result of the
acquisition by such Originator of another Person, (b) that was originated in
accordance with standards established by another Person acquired by an
Originator, in each case, solely with respect to any such acquisitions that have
not been approved in writing by the Administrative Agent and then only for the
period prior to any such approval, or (c) with respect to which the Obligor
thereunder is not creditworthy, as determined by the Administrative Agent in its
reasonable credit judgment.
"UNDERFUNDED PLAN" shall mean any Plan that has an Underfunding.
"UNDERFUNDING" shall mean, with respect to any Plan, the excess, if
any, of (a) the present value of all benefits under the Plan (based on the
assumptions used to fund the Plan pursuant to Section 412 of the IRC) as of the
most recent valuation date over (b) the fair market value of the assets of such
Plan as of such valuation date.
"UNFUNDED LIABILITY" shall mean, at any time, the aggregate amount,
if any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of five years following a transaction
that might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Originator or
any ERISA Affiliate as a result of such transaction.
"UNITED STATES" shall mean the United States of America (including
the District of Columbia but otherwise excluding its territories and
possessions).
"UNUSED FACILITY FEE" shall mean, as of any date of determination, a
fee equal to the product of (a) the applicable Per Annum Daily Margin for Unused
Facility Fees multiplied by (b) the excess (if any) of the Maximum Purchase
Limit over the aggregate Capital Investment.
"WELFARE PLAN" shall mean a Plan described in Section 3(1) of ERISA.
SECTION 2. Other Terms and Rules of Construction.
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(a) Accounting Terms. Rules of construction with respect to
accounting terms used in any Related Document shall be as set forth in Annex
4.04(l) to the Sale Agreement. Unless otherwise specifically provided therein,
any accounting term used in any Related Document shall have the meaning
customarily given such term in accordance with GAAP, and all financial
computations thereunder shall be computed in accordance with GAAP consistently
applied. That certain items or computations are explicitly modified by the
phrase "in accordance with GAAP" shall in no way be construed to limit the
foregoing.
(b) Other Terms. All other undefined terms contained in any of the
Related Documents shall, unless the context indicates otherwise, have the
meanings provided for by the UCC as in effect in the State of New York from time
to time to the extent the same are used or defined therein.
(c) Rules of Construction. Unless otherwise specified, references in
any Related Document or any of the Appendices thereto to a Section, subsection
or clause refer to such Section, subsection or clause as contained in such
Related Document. The words "herein," "hereof" and "hereunder" and other words
of similar import used in any Related Document refer to such Related Document as
a whole, including all annexes, exhibits and schedules, as the same may from
time to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in such Related Document or
any such annex, exhibit or schedule. Any reference to or definition of any
document, instrument or agreement shall, unless expressly noted otherwise,
include the same as amended, restated, supplemented or otherwise modified from
time to time. Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Related Documents) or, in the case of Governmental Authorities, Persons
succeeding to the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations.
(d) Rules of Construction for Determination of Ratios. The Ratios as
of the last day of the Settlement Period immediately preceding the Closing Date
shall be established by the Administrative Agent on or prior to the Closing Date
and the underlying calculations for periods immediately preceding the Closing
Date to be used in future calculations of the Ratios shall be established by the
Administrative Agent on or prior to the Closing Date in accordance with Schedule
1 attached to this Annex X. For purposes of calculating the Ratios, (i) averages
shall be computed by rounding to the third decimal place and (ii) the Settlement
Period in which the date of determination thereof occurs shall not be included
in the computation thereof and the first Settlement Period immediately preceding
such date of determination shall be deemed to be the Settlement Period
immediately preceding the Settlement Period in which such date of determination
occurs.
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SCHEDULE 1
RULES OF CONSTRUCTION FOR RATIOS
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SCHEDULE 2
PERMITTED OUTSTANDING DEBT
(a) Four Letters of Credit issued by Bank of America, N.A. for the
account of Parent pursuant to that certain Reimbursement Agreement, dated as of
June 1, 1994 by the Parent in favor of NBD Bank, N.A., as assigned and amended
pursuant to the terms of an Assignment and Amendment of Reimbursement Agreement,
dated as of June 12, 2001, by and among the Parent, Bank One, NA (successor to
NBD Bank, N.A.) and the Bank of America, N.A., as further amended from time to
time, and Parent's obligations pursuant to such Reimbursement Agreement;
(b) Obligations of Parent under that certain Loan Agreement, dated
June 1, 0000, xxxxxxx Xxxxxxx xx Xxxxxxxx, Xxxxxxxx and A. M. Castle & Co.;
(c) Obligations of Parent under that certain Loan Agreement, dated
June 1, 0000, xxxxxxx Xxxxxxx xx Xxxxxxxx Xxxx, Xxxxxxxx and A. M. Castle & Co.;
(d) Obligations of Parent under that certain Loan Agreement, dated
June 1, 1994, between Director of Ohio Department of Development and A. M.
Castle & Co.;
(e) Obligations of Parent under that certain Loan Agreement, dated
June 1, 1994, between The City of Kansas City, Missouri and A. M. Castle & Co.;
(f) A Letter of Credit issued by Bank of America, N.A. for the
account of Parent pursuant to that certain Reimbursement Agreement, dated as of
November 1, 1994 by the Parent in favor of NBD Bank, N.A., as assigned and
amended pursuant to the terms of an Assignment and Amendment of Reimbursement
Agreement, dated as of November 1, 2001, by and among the Parent, Bank One, NA
(successor to NBD Bank, N.A.) and the Bank of America, N.A., as further amended
from time to time, and Parent's obligations pursuant to such Reimbursement
Agreement;
(g) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by Parent and certain of its subsidiaries in favor of
the Bank of America, N.A., pursuant to which they guarantee certain payments
with respect of the Reimbursement Agreements described in items (a) and (f)
above;
(h) Obligations of Parent under that certain Loan Agreement, dated
November 1, 0000, xxxxxxx Xxxx xx Xxxxxxx, Xxxxxxx and A. M. Castle & Co.
(i) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by the Parent in favor of the Bank of America, N.A.,
pursuant to which the Parent guarantees certain payments in respect of the
Economic Development Revenue Bonds, Series 1998 (Keystone Service, Inc. Project)
issued by the City of La Porte, Indiana;
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Annex X
(j) Obligations of Keystone Service, Inc. under that certain Loan
Agreement, dated April 1, 1998, between the City of XxXxxxx, Indiana and
Keystone Service, Inc.;
(k) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by the Parent in favor of the Bank of America, N.A.,
pursuant to which the Parent guarantees certain payments in respect of the
Tax-Exempt Industrial Revenue Bonds (A. M. Castle & Co. Project Series 1996)
issued by the Mecklenburg County Industrial Facilities and Pollution Control
Financing Authority;
(l) Obligations of Parent under that certain Loan Agreement, dated
July 1, 1996, between The Mecklenburg County Industrial Facilities and Pollution
Control Financing Authority and A. M. Castle & Co.;
(m) Obligations pursuant to that certain Irrevocable Documentary
Credit No. 7273987 in the stated amount of $1,800,000 issued by the Bank of
America, N.A. for the account of Parent, as amended from time to time;
(n) Obligations pursuant to that certain Irrevocable Standby Letter
of Credit No. 7409195 in the stated amount of $5,000,000 issued by the Bank of
America, N.A. for the account of Parent pursuant to that certain Application and
Agreement for Standby Letter of Credit, dated March 15, 2002, as amended from
time to time;
(o) Obligations pursuant to that certain Amended and Restated
Limited Guaranty, dated as of March 8, 2002, by the Parent in favor of the Bank
of America, N.A., as agent on behalf of certain Lenders from time to time party
to the Xxxxxx Credit Agreement (as defined below), pursuant to which the Parent
guarantees certain Obligations (as defined in the Xxxxxx Credit Agreement) under
that certain Amended and Restated Credit Agreement, dated as of March 8, 2002
(as the same may be amended, restated, supplemented or otherwise modified and in
effect from time to time, the "Xxxxxx Credit Agreement"), among Bank of America,
N.A., Lenders and Xxxxxx Steel Company, LLC;
(p) Senior Notes issued by the Parent pursuant to that certain Note
Agreement, dated as of March 1, 1998, among the Parent, Allstate Life Insurance
Company, The Northwestern Mutual Life Insurance Company, Massachusetts Mutual
Life Insurance Company, Mutual of Omaha Insurance Company and United of Omaha
Life Insurance Company, as amended by the First Amendment and Waiver to Note
Agreement, dated as of December 1, 1998, the Second Amendment to Note Agreement
dated November 22, 2002 and the Third Amendment to Note Agreement dated as of
December 26, 2002;
(q) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by Parent and certain of its subsidiaries in favor of
Allstate Insurance Company, The Northwestern Life Insurance Company,
Massachusetts Mutual Life Insurance Company, Mutual of Omaha Insurance Company
and United of Omaha Life Insurance Company and any future noteholders pursuant
to which they guarantee certain payments in respect of the Note Agreement
described in item (p) above;
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(r) Senior Notes issued by the Parent pursuant to that certain Note
Agreement dated as of April 1, 1996 between the Parent and Nationwide Life
Insurance Company, as amended by the First Amendment and Waiver to Note
Agreement, dated as of December 1, 1998, the Second Amendment to Note Agreement
dated November 22, 2002 and the Third Amendment to Note Agreement dated as of
December 26, 2002;
(s) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by Parent and certain of its subsidiaries in favor of
Nationwide Life Insurance Company and any future noteholders pursuant to which
they guarantee certain payments in respect of the Note Agreement described in
item (r) above;
(t) Senior Notes issued by the Parent pursuant to that certain Note
Agreement dated as of May 15, 1997 among the Parent, Massachusetts Mutual Life
Insurance Company and United of Omaha Life Insurance Company, as amended by the
First Amendment and Waiver to Note Agreement, dated as of December 1, 1998, the
Second Amendment to Note Agreement dated November 22, 2002 and the Third
Amendment to Note Agreement dated as of December 26, 2002;
(u) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by Parent and certain of its subsidiaries in favor of
Massachusetts Mutual Life Insurance Company and United of Omaha Life Insurance
Company and any future noteholders pursuant to which they guarantee certain
payments in respect of the Note Agreement described in item (t) above;
(v) Obligations pursuant to that certain Trade Acceptance Purchase
Agreement dated as of August 13, 2001 between the Parent and The Northern Trust
Company, as amended by the First Amendment thereto dated as of April 29, 2002,
the Second Amendment thereto dated as of June 30, 2002, the Third Amendment
thereto dated as of November 22, 2002 and the Fourth Amendment thereto dated
December 26, 2002, in an aggregate amount not in excess of $8,000,000;
(w) Credit facilities in the aggregate amount not to exceed CDN
$30,000,000 pursuant to that certain Letter Agreement, dated November 20, 2002,
between The Bank of Nova Scotia and Parent and the Terms and Conditions attached
thereto; and
(x) Obligations of A. M. Castle & Co. (Canada), Inc. to the Manitoba
Development Corporation pursuant to that certain commitment letter dated
September 15, 1998 and the related Demand Debenture dated January 7, 1999.
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SCHEDULE 3
EXTENDED TERM RECEIVABLE OBLIGORS
B & G Manufacturing Co.
X. Xxxx Machining Inc.
C E S Machine Products Inc.
Conn Tool Mfg. Co. Inc.
Crown Equipment Corp.
Dri-Honing Corp.
Dynaquip Controls Corp.
E B C Industries
Xxxxxxxx Metals Inc.
Forest Engineering Inc.
Hall Industries Inc.
Xxxxxxxxx Boiler & Eng. Co.
Hanover Gear Manufacturing Co.
Harbor Steel & Supply Corp.
Xxxxxx'x Machine Works Inc.
Holgate Products Inc.
Hyspan Prec. Products Inc.
J P Products Inc.
Lake Engineering Inc.
Loudon Industries Inc.
XxXxxxxxxx Forge Co. Inc.
Metal Mart LLC
Xxxxx Machine & Tool Co. Inc.
Niles Machine & Tool Works Inc.
Northland Screw Prdts. Inc.
P B M Incorporated
Pace Engineering Inc.
Paughco Inc.
Xxxxxxx Corp.
Senior Aerospace - Jet Products
Southern Manufacturing Tech.
Standard - Hall Group
Xxxxxxx Xxxx. & Tool Corp.
Xxxxxxx Machine Co.
Texas Pneumatic Tools Inc.
TOG Machining Co. Inc.
Trinity Forge Inc.
Western Cutterheads Inc.
A.M Castle & Co. et al. and
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Annex X
Xxxxxxxx & Sons Mfg. Co. Inc.
Zak Inc.
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Castle SPFD, LLC
Annex X
43
SCHEDULE CC
FORM OF COMPLIANCE CERTIFICATE
[To be Attached]
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