EXHIBIT 10.38
EXECUTION COPY
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This RECEIVABLES PURCHASE AGREEMENT, dated as of April 19, 2000, is entered
into by and between Aurora Foods Inc., a Delaware corporation (the "Seller"),
and The Chase Manhattan Bank, a New York banking corporation (the "Purchaser").
WHEREAS, Seller desires to sell, transfer, assign and convey Pools (as
defined in Exhibit A) of certain Eligible Receivables (as defined in Exhibit A)
from time to time to Purchaser on the terms and conditions set forth herein;
WHEREAS, Purchaser has agreed to buy such Pools of Eligible Receivables
from Seller on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Seller and Purchaser agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. The terms defined in Exhibit A are
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used in this Agreement as so defined.
SECTION 1.02. Terms Generally. The definitions of terms herein shall
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apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
subsections, Exhibits and Schedules shall be construed to refer to Articles and
subsections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly
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provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP.
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ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
Section 2.01. Purchase and Sale of Receivables. On the terms and subject
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to the conditions of this Agreement and without recourse (except to the extent
specifically provided herein), Seller may sell, transfer, assign and convey (but
shall have no obligation to sell, transfer, assign and convey) to Purchaser, and
Purchaser shall purchase from Seller from time to time on a Funding Date prior
to the Termination Date, Eligible Receivables; provided, however, that (i) the
Initial Installment of the Purchase Price of each Pool to be sold and purchased
shall be at least $1,000,000, and (ii) after giving effect to such sale and
purchase on any such Funding Date, Net Investment shall not exceed the Facility
Limit. Eligible Receivables to be sold hereunder on a Funding Date shall be
identified on a Schedule of Eligible Receivables (substantially in the form of
Exhibit C) and attached to a Xxxx of Sale (substantially in the form of Exhibit
B).
(a) Sale of Pools of Eligible Receivables. On each Funding Date, Seller
shall sell, transfer, assign and otherwise convey to Purchaser, without recourse
to Seller (except as specifically provided herein) (i) all right, title and
interest of Seller in and to the Pool of Eligible Receivables identified on the
Schedule of Eligible Receivables attached to the applicable Xxxx of Sale, and
all moneys due or to become due with respect thereto; and (ii) the Related
Security of such Eligible Receivables ((i) and (ii) collectively, the "Conveyed
Property").
(b) Purchaser Does Not Assume Obligations. The foregoing sales, transfers,
assignments, and conveyances do not constitute and are not intended to result in
a creation or an assumption by Purchaser of any obligation of Seller in
connection with the Purchased Receivables or any agreement or instrument
relating thereto, including, without limitation, any obligation to any Obligors.
(c) Purchase of Pools. In consideration of the sale of the Purchased
Receivables and other Conveyed Property sold by Seller to Purchaser on the
Closing Date and on each Funding Date, as the case may be, Purchaser shall pay
to Seller the Purchase Price of each Pool of Purchased Receivables in the manner
set forth below. The Purchaser shall pay the Initial Installment of the Purchase
Price for each Pool on the Funding Date for such Pool. The Balance Payment
portion of the Purchase Price for a Pool shall be payable as follows: (i) if on
any date prior to Completion of such Pool, the aggregate amount of Collections
with respect to such Pool of Purchased Receivables received and actually paid to
Purchaser is equal to or greater than the sum of the Initial Installment of the
Purchase Price plus the Discount Fee with respect to such Pool of Purchased
Receivables (each such Pool, a "Zero Net Investment Pool"), (A) within two (2)
Business Days of such date, Purchaser shall pay to Seller in cash the portion of
the Balance Payment, if any, with respect to such Pool which has been collected
as of such date and (B) thereafter, Purchaser shall pay to Seller (without
duplication) in cash on each Business Day the portion of the Balance Payment, if
any, with respect to such Pool which was collected on such Business Day and is
available to Purchaser (if not already paid pursuant to preceding clause (A)),
and (ii) without duplication, within two (2) Business Days of Completion,
Purchaser shall pay to Seller in cash the balance of the Balance Payment due
after giving effect to all previous payments in respect of the Balance Payment
for such Pool under clause (i) above; provided that,
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notwithstanding anything to the contrary contained above, no portion of the
Balance Payment owing in respect of any Pool shall be payable until all prior
Pools have reached Completion or have become Zero Net Investment Pools; and
provided, further, that if Seller is not in compliance with Section 5.01(l)(i),
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any Balance Payment that would otherwise be payable to Seller shall be applied
first to the Administrative Fee Account as provided for in Section 5.01(1)(ii).
If the aggregate Dilution Shortfall for a Pool exceeds the aggregate Balance
Difference for such Pool then the Purchaser may offset against such amount any
Balance Payment in respect of any other Pool that is or may become due to the
Seller hereunder.
(d) Determination of the Initial Installment of the Purchase Price. (i)
The Initial Installment of the Purchase Price of each Receivable in a Pool will
be determined as follows: The Purchaser shall purchase Receivables for the
Purchase Advance Percentage of the Aggregate Amount thereof (such amount, the
"Reserve Adjusted Amount" of such Receivable). The "Initial Installment of the
Purchase Price" for a Receivable will be an amount equal to (x) the Reserve
Adjusted Amount of such Receivable minus (y) a discount fee (the "Discount Fee")
equal to the Target Yield Percentage of such Reserve Adjusted Amount. The
"Target Yield Percentage" is the percentage of the Reserve Adjusted Amount of a
Receivable that, when subtracted from such amount, will cause the effective per
annum yield on the Initial Installment of the Purchase Price of such Receivable,
when collected by the Purchaser, to equal the Target Yield per annum, assuming
such Receivable is collected in accordance with the Collection Cycle Assumption
then in effect for such Receivable. Initially the Target Yield will be
calculated on the assumption that the weighted average number of days from the
Funding Date to the date on which the Collections in respect of the Receivables
in a particular Pool equal the sum of the Initial Installment of the Purchase
Price and the Discount Fee applicable thereto will be collected is 18 days (such
assumption, the "Collection Cycle Assumption"). The Purchaser will have the
right to adjust the Collection Cycle Assumption for Pools sold on a day other
than a Tuesday. In addition the Purchaser shall adjust the Collection Cycle
Assumption for subsequent Pools to reflect the actual collection experience for
previously sold Pools and the Seller's historical collection experience, such
adjustments to be made based upon Pools most recently Completed, or if not then
Completed, that did not Complete within the Collection Cycle Assumption
applicable thereto. The "Target Yield" for each Pool is a rate per annum equal
to the ABR determined on the relevant Funding Date plus 2.50%, calculated on the
basis of a year of 365 days and actual days elapsed. The Seller and the
Purchaser acknowledge that all of the Purchase Price adjustments are prospective
in nature and will not affect the Purchase Price of Pools sold prior to any such
adjustment. The Initial Installment of the Purchase Price and the Discount Fee
in respect of each Pool shall be allocated to each Purchased Receivable in such
Pool ratably based on the Reserve Adjusted Amount of such Receivable.
(e) Accounting Records. In connection with the sale and assignment of
Purchased Receivables hereunder, Seller agrees, at its own expense, on each
Funding Date, to indicate or cause to be indicated clearly and unambiguously in
its accounting records that such Purchased Receivables and the other Conveyed
Property described in Section 2.01 have been sold to Purchaser pursuant to this
Agreement as of the applicable Funding Date.
(f) True Sale. It is the express intent of Seller and Purchaser that the
assignment and conveyance of the Purchased Receivables and other Conveyed
Property by Seller to Purchaser
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pursuant to this Agreement be construed as an absolute sale of such Purchased
Receivables and Conveyed Property by Seller to Purchaser.
(g) Taxation. Both Seller and Purchaser agree that neither of them will
take or assert any position on any filings made with any federal or state taxing
authorities which is inconsistent with the characterization of the assignment
and conveyance of the Purchased Receivables and other Conveyed Property as a
sale, provided that Purchaser shall not be requested to contest any adverse
determination by any such taxing authorities unless it has received an indemnity
reasonably satisfactory to it.
(h) Additional Rights as Purchaser. As further confirmation of the sale of
the Receivables, it is understood and agreed that the Purchaser shall have the
following rights:
(i) the Purchaser shall have the right at any time to notify,
or require that Seller at its own expense notify, the respective Obligors
of the Purchaser's ownership of the Purchased Receivables or to otherwise
verify the Purchased Receivables directly with the relevant Obligors and
may direct that payment of all amounts due or to become due under the
Purchased Receivables be made directly to the Purchaser or its designee;
(ii) the Purchaser shall have the right to (A) xxx for
collection on any Purchased Receivables or (B) sell any Purchased
Receivables to any Person for a price that is acceptable to the Purchaser;
(iii) Seller shall, upon the Purchaser's written request and at
Seller's expense, (A) assemble all of Seller's documents, instruments and
other records (including credit files and computer tapes or disks) that (1)
evidence or will evidence or record Receivables sold by Seller and (2) are
otherwise necessary or desirable to effect Collections of such Purchased
Receivables (collectively, the "Documents") and (B) deliver the Documents
to the Purchaser or its designee at a place designated by the Purchaser. In
recognition of Seller's need to have access to any Documents which may be
transferred to the Purchaser hereunder, whether as a result of its
continuing business relationship with any Obligor for Receivables purchased
hereunder, the Purchaser hereby grants to Seller an irrevocable license to
access the Documents transferred by Seller to the Purchaser and to access
any such transferred computer software in connection with any activity
arising in the ordinary course of Seller's business; provided, that Seller
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shall not disrupt or otherwise interfere with the Purchaser's use of and
access to the Documents and its computer software during such license
period; and
(iv) Seller hereby grants to the Purchaser an irrevocable power
of attorney (coupled with an interest) to take any and all steps in
Seller's name necessary or desirable, in the reasonable opinion of the
Purchaser, to collect all amounts due under the Purchased Receivables,
including, without limitation, enforcing the Purchased Receivables and
exercising all rights and remedies in respect thereof and endorsing
Seller's name on checks and other instruments representing Collections.
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(i) No Repurchase. Except to the extent expressly set forth herein, Seller
shall not have any right or obligation under this Agreement, by implication or
otherwise, to repurchase from Purchaser any Purchased Receivables or to rescind
or otherwise retroactively effect any purchase of any Purchased Receivables
after the Funding Date relating thereto.
(j) Application of Collections. Purchaser and Seller agree that payments
received from an Obligor will be applied as follows (notwithstanding any
agreement with such Obligor):
(A) if such Obligor specifies a particular invoice to which a
particular amount is to be paid or deducted, then such payment or deduction
will be applied to such invoice;
(B) if such Obligor specifies multiple invoices to which payment
or deductions are to be made, but fails to specify the particular amount to
be paid or deducted from each particular invoice, then the payment or
deductions shall be made on a pro rata basis against all such specified
invoices; and
(C) if such Obligor fails to specify an invoice to which payment
or deductions are to be made, then such payment or deductions will be
applied against the oldest invoice of such Obligor first;
in each case without regard to whether the Receivable evidenced by such invoice
is a Purchased Receivable.
ARTICLE III
CONDITIONS OF PURCHASE AND SALE OF RECEIVABLES
SECTION 3.01. Conditions Precedent to the Initial Purchase and Sale of
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Receivables. The purchase and sale of the first Pool of Eligible Receivables
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hereunder is subject to the condition precedent that Purchaser shall have
received, or waived the receipt of, on or before the Closing Date the following,
each (unless otherwise indicated) in form and substance reasonably acceptable to
Purchaser:
(a) Certified copies of Seller's Certificate of Incorporation,
together with a good standing certificate from the Secretary of State of
the State of Delaware and each other state in which Seller is qualified as
a foreign corporation to do business, each dated a recent date prior to the
Closing Date;
(b) Copies of Seller's Bylaws certified as of the Closing Date by
its corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment;
(c) Resolutions of Seller's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement and
the other Transaction Documents to which it is a party, certified as of the
Closing Date by its corporate secretary
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or an assistant secretary as being in full force and effect without
modification or amendment;
(d) Signature and incumbency certificates of Seller's officers
executing this Agreement and the other Transaction Documents to which it is
a party (on which certificate Purchaser may conclusively rely until such
time as it shall receive from Seller a revised certificate meeting the
requirements of this subsection (d));
(e) Executed originals of this Agreement;
(f) Such other documents as Purchaser may reasonably request;
(g) Evidence reasonably satisfactory to Purchaser of the filing of
Financing Statements (Form UCC-1) naming Seller as debtor and Purchaser as
secured party and covering the Purchased Receivables and Related Security,
in form and substance satisfactory to the Purchaser, or other similar
instruments or documents as may be necessary or appropriate under the UCC
of all appropriate jurisdictions or any comparable law to transfer Seller's
interests in all Purchased Receivables and Related Security to the
Purchaser;
(h) Certified copies of Requests for Information or Copies (Form UCC-
11) (or a similar search report certified by a party acceptable to
Purchaser), dated a date reasonably close to the Closing Date, listing all
effective financing statements which name Seller (under its present name
and any previous names) as debtor and which are filed in the jurisdictions
in which filings were made pursuant to subsection (g) above, together with
copies of such financing statements (none of which shall cover any Eligible
Receivables or Contracts other than those subject to the release referred
to below);
(i) A release, in form and substance satisfactory to the Purchaser,
of the security interests of the lenders under the Seller's bank credit
facility in Purchased Receivables and Related Security;
(j) Opinions of (1) Ropes & Xxxx, counsel to Seller, in form and
substance satisfactory to Purchaser and (2) White & Case, special New York
counsel to Seller, in form and substance satisfactory to Purchaser;
(k) Evidence of payment to Purchaser of all transaction fees payable
by Seller on or prior to the Closing Date as set forth in the Fee Letter;
(l) Payment of all reasonable legal fees and other fees and out-of-
pocket expenses as to which Purchaser has presented bills or invoices on or
prior to the Closing Date;
(m) Schedule of Approved Obligors;
(n) An executed participation agreement, entered into by the
Subordinated Participants, in form and substance satisfactory to the
Purchaser, pursuant to which such
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Subordinated Participants agree to purchase a subordinated participation in
the Pools in an amount equal to $9,000,000 on a Net Investment basis (the
"Participation Agreement");
(o) An executed Receivables Management Services agreement, entered
into by the Administrator and Purchaser, in form and substance satisfactory
to the Purchaser, pursuant to which Administrator shall have agreed to
perform certain administrative functions for the Purchaser hereunder (the
"Administration Agreement"); and
(p) Evidence of the establishment of the Administrative Fee Account
and the availability of funds deposited in such account to be applied
towards the Administrative Fee pursuant to Section 5.01(l).
SECTION 3.02. Conditions Precedent to each Purchase and Sale of Eligible
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Receivables. Each purchase and sale of Eligible Receivables hereunder shall be
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subject to the conditions precedent that:
(a) At least one (1) Business Day prior to a Funding Date, Seller
shall deliver to Purchaser, with a copy to the Administrator, a written
statement in the form of Exhibit D (the "Funding Certificate") designating
such Funding Date, setting forth Eligible Receivables to be sold on such
Funding Date (indicating the name of each Approved Obligor, the Related
Security, if any, to each Eligible Receivable and listing separately the
Aggregate Amount of each such Eligible Receivable and of the Pool).
(b) On each Funding Date the following statements shall be true after
giving effect to the purchase and sale of each Pool on such Funding Date
(and Seller by accepting the Initial Installment of the Purchase Price for
each such Pool shall be deemed to have certified that):
(i) The representations and warranties contained in
Section 4.01 are correct on and as of such Funding Date as though
specifically made on and as of such Funding Date;
(ii) No event has occurred and is continuing, or would
result from such purchase and sale of the Pool, which constitutes an
Event of Termination or would constitute an Event of Termination but
for the requirement that notice be given or time elapse or both;
(iii) After giving effect to the proposed purchase and sale
the Net Investment does not exceed the Facility Limit.
(c) A Xxxx of Sale covering the Eligible Receivables as set forth in
the Schedule of Eligible Receivables to be sold and purchased on that
Funding Date shall be duly executed by Seller and delivered to Purchaser.
(d) Seller shall have delivered to Purchaser or its designee an
invoice register in connection with the particular Pool of Eligible
Receivables to be sold and purchased, in
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the form of a diskette or magnetic tape, or in such other form and
substance reasonably acceptable to Purchaser, showing each Approved
Obligor's name, the invoice date, invoice number and net invoice amount of
each Eligible Receivable to be sold and purchased and any other information
concerning each such account as Purchaser may reasonably require.
(e) The Collections on the Eligible Receivables in the Pool to be
sold and purchased shall be payable through a system of post office lock-
boxes and blocked accounts satisfactory to Purchaser.
(f) In the case of any Receivables to be sold hereunder which are
Government Receivables, Seller shall have taken all steps necessary to
comply with the Assignment of Claims Act of 1940, as amended, and all
other applicable law prior to such sale.
(g) The Subordinated Participants shall be in compliance with their
obligations under the Participation Agreement.
(h) The Administration Agreement shall be in full force and effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of Seller. Seller represents
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and warrants as follows:
(a) Seller is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and is duly
qualified to transact business, and is in good standing, in every
jurisdiction where the failure to be so qualified would materially
adversely affect (i) the collectibility of any Purchased Receivable or (ii)
the ability of Seller to perform its obligations hereunder.
(b) The execution, delivery and performance by Seller of this
Agreement, each Xxxx of Sale and all other instruments and documents to be
delivered hereunder, and the transactions contemplated hereby and thereby,
are within Seller's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene Seller's charter, bylaws or
any contractual restriction binding on or affecting Seller, do not
contravene or require compliance with (except to the extent Seller has
complied therewith) any applicable law and do not result in or require the
creation of any Lien (excluding any Lien created hereunder) upon or with
respect to any of its properties.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by Seller of this
Agreement, any Xxxx of Sale or any other document or instrument to be
delivered hereunder except for the filing of the UCC Financing Statements
referred to in Article III and any approvals, authorizations and filings
related to
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Government Receivables referred to in Section 3.02, all of which, either at
the Closing Date or at any Funding Date, as the case may require, shall
have been duly made and shall be in full force and effect.
(d) This Agreement constitutes, and each Xxxx of Sale when delivered
hereunder shall constitute, the legal, valid and binding obligation of
Seller enforceable against Seller in accordance with its respective terms,
subject to the effect of general principles of equity (regardless of
whether considered in a proceeding in equity or at law) and of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar
law affecting creditors' rights generally.
(e) Seller is not engaged in, or a party to or, to its knowledge
threatened with, any legal action, suit, investigation or other proceeding
by or before any court, arbitrator or administrative agency, which in any
manner may materially adversely affect the performance of its obligations
under this Agreement, and Seller does not know of any basis for any such
legal action, suit, investigation or proceeding. There are no outstanding
or, to Seller's knowledge, threatened or contemplated governmental orders,
directives or actions, rulings, decrees, judgments or stipulations which in
any manner may materially adversely affect the performance of Seller's
obligations under this Agreement.
(f) Each Scheduled Receivable and each Purchased Receivable shall be
an Eligible Receivable and no effective financing statement or other
instrument similar in effect covering any Scheduled Receivable or Purchased
Receivable shall at any time be on file in any recording office except such
as may be filed in favor of Purchaser in accordance with this Agreement or
such as shall be covered by the release referred to in Section 3.01(i).
(g) All Related Security is free and clear of any Adverse Claim
except as created hereby and no effective financing statement or other
instrument similar in effect covering any Related Security shall at any
time be on file in any recording office except such as may be filed in
favor of Purchaser in accordance with this Agreement or such as shall be
covered by the release referred to in Section 3.01(i).
(h) No Weekly Settlement Report (if prepared by Seller or to the
extent that information contained therein is supplied by Seller),
information, exhibit, financial statement, document, book, record or report
or other materials furnished or to be furnished by Seller to Purchaser in
connection with this Agreement is or shall be inaccurate in any material
respect as of the date it is or shall be dated or as of the date so
furnished, or contains or shall contain any material misstatement of fact
or omits or shall omit to state a material fact or any fact necessary to
make the statements contained therein not materially misleading.
(i) The chief executive offices of Seller are located at the address
of Seller referred to in Section 11.02 and the principal place of business
and the offices where Seller keeps all its books, records and documents
evidencing Eligible Receivables, the related Contracts and Related
Security, if any, are located at the addresses specified in
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Exhibit E (or at such other locations, notified to Purchaser in accordance
with Section 5.01(f)).
(j) No change has or shall have occurred in Seller's property,
assets, business or financial condition or capital, organization or legal
structure since April 14, 2000 which would have a Material Adverse Effect.
(k) All Receivables sold hereunder to Purchaser have been and will be
transferred to Purchaser in good faith and for fair consideration or
reasonably equivalent value and without intent to hinder, delay or defraud
creditors of Seller.
(l) Seller is not an "investment company" as defined in, or subject
to regulation under, the Investment Company Act of 1940, as amended.
(m) No transaction contemplated hereby with respect to Seller
requires compliance with, or will be subject to avoidance under, any bulk
sales act or similar law.
(n) The Purchase Price of the Purchased Receivables is equivalent to
the fair market value of such Purchased Receivables.
ARTICLE V
GENERAL COVENANTS OF SELLER
SECTION 5.01. Affirmative Covenants of Seller. So long as Purchaser shall
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have any interest in any Purchased Receivables or until the Termination Date,
whichever is later, Seller shall, unless Purchaser shall otherwise consent in
writing:
(a) Compliance with Laws, Etc. Comply with all applicable laws,
rules, regulations, orders and provisions with respect to it, its business
and properties and all Purchased Receivables, related Contracts and Related
Security except to the extent such noncompliance would not have a Material
Adverse Effect.
(b) Preservation of Corporate Existence. Preserve and maintain
Seller's corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify to transact business and
remain so qualified and in good standing as a foreign corporation in each
jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualification would have a Material
Adverse Effect on (i) the interests of Purchaser, (ii) the collectibility
of any Purchased Receivable or (iii) the ability of Seller to perform its
obligations hereunder.
(c) Audits. As often as is commercially reasonable, following three
(3) Business Days' prior written notice to Seller, during regular business
hours, permit Purchaser, or its agents or representatives, (i) to examine
and make abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession or
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under the control of Seller relating to the Purchased Receivables,
including, without limitation, the related Contracts, and to make copies of
any of the foregoing with respect to Purchased Receivables and (ii) to
visit the principal place of business of Seller for the purpose of
examining such materials described in clause (i) above, and to discuss
matters relating to Purchased Receivables and Conveyed Property or Seller's
performance hereunder with any of the officers or employees of Seller
having knowledge of such matters.
(d) Keeping of Records and Books of Account. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Seller's Receivables in the event of
the destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables.
(e) Performance and Compliance with Receivables and Contracts. At
Seller's expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by Seller
under the Contracts related to Purchased Receivables.
(f) Location of Records. Keep its principal place of business and
chief executive offices, and the offices where it keeps its records
concerning its Receivables and all Contracts and Related Security related
thereto (and all original documents relating thereto), at the address(es)
of Seller referred to in Section 4.01(i) or, upon 30 days' prior written
notice to Purchaser, at such other locations in a jurisdiction where all
action required by Section 5.01(j) shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all material respects
with its Credit and Collection Policy in regard to each Purchased
Receivable, Related Security and related Contracts.
(h) Collections. Instruct all Approved Obligors to cause all
Collections with respect to Purchased Receivables to be deposited directly
with the appropriate Lock-Box Provider(s) (in substantially the form
attached hereto as Exhibit F). If any Approved Obligor causes any
Collections with respect to Purchased Receivables to be deposited with
Seller, rather than the appropriate Lock-Box Provider(s), Seller shall
promptly cause such Collections to be re-deposited with the appropriate
Lock-Box Provider(s).
(i) Repurchase of Nonperforming Receivables. Seller hereby covenants
and agrees to repurchase from Purchaser each Nonperforming Receivable
within three Business Days of its becoming a Nonperforming Receivable (the
"Repurchase Date"), but in any event before the Completion of the
applicable Pool at the "Repurchase Amount". The Repurchase Amount as to any
Nonperforming Receivable shall be equal to the sum of the portion of the
Initial Installment of the Purchase Price allocable to such Nonperforming
Receivable and the portion of the Discount Fee allocable to such
Nonperforming Receivable. Subject to Section 11.08, all payments referred
to in this Section 5.01(i) shall be made in cash. Purchaser agrees that,
after payment by Seller to Purchaser of the
12
Repurchase Amount for such Nonperforming Receivable, Purchaser will return
to Seller any documents relating to such Nonperforming Receivable and, upon
request by Seller, take any steps reasonably necessary to effect the
transfer of such Nonperforming Receivable to Seller.
(j) Further Action. Seller agrees that from time to time, at its
expense, it will promptly execute and deliver all further instruments and
documents, and take all further action that Purchaser may reasonably
request in order to perfect, protect or more fully evidence the Purchased
Receivables held by Purchaser hereunder, or to enable Purchaser to exercise
or enforce any of its rights hereunder. Without limiting the generality of
the foregoing, Seller will, upon the request of Purchaser: (i) execute and
file such financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be
necessary or appropriate, (ii) xxxx conspicuously each Contract with a
legend, acceptable to Purchaser, evidencing the interests of Purchaser in
each of the Purchased Receivables and (iii) xxxx its master data processing
records evidencing such Purchased Receivables and related Contracts with
such legend. The Seller hereby authorizes Purchaser, if Seller fails to do
so pursuant to clause (i) of the preceding sentence, to file one or more
financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Purchased Receivables
and the Related Security now existing or hereafter arising without the
signature of the Seller where permitted by law. If Seller fails to perform
any of its agreements or obligations under this Agreement, Purchaser may
(but shall not be required to) itself perform, or cause performance of,
such agreement or obligation, and the reasonable expenses of Purchaser
incurred in connection therewith shall be payable by Seller.
(k) Taxes. Pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or
profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials
and supplies or otherwise which, if unpaid, might give rise to a Lien upon
such properties or any part thereof; provided, however,that such payment
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and discharge shall not be required with respect to any such tax,
assessment, charge, levy or claim so long as (i) the validity or amount
thereof shall be contested in good faith by appropriate proceedings and
Seller shall set aside on its books adequate reserves as required by GAAP
with respect thereto and (ii) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse
Effect.
(l) Administrative Fee Account. (i) Seller agrees that it shall
establish an account (the "Administrative Fee Account") with a bank or
other financial institution satisfactory to Purchaser, for the benefit of
Purchaser and solely for the purpose of paying the "Administrative Fee".
The Administrative Fee means, on any date of determination, the amount that
would be payable by Purchaser to the Administrator if the Administration
Agreement were to be terminated on such date, assuming that Completion of
Pools outstanding on the date of termination will take place ninety days
following such termination date. Seller shall, at all times, maintain on
deposit in the Administrative Fee Account an amount equal to the greater of
(A) the Administrative Fee and (B) $70,000.
13
Seller agrees that Purchaser shall have exclusive control and the sole
right to issue withdrawal instructions over the Administrative Fee Account.
Except for Purchaser, no other Person shall have any legal or beneficial
interest in the Administrative Fee Account; (ii) If Seller fails to comply
with clause (i) hereto, Seller hereby authorizes Purchaser to transfer any
Balance Payment otherwise payable to the Seller into the Administrative Fee
Account, in an amount equal to any outstanding Administrative Fee.
(m) Assistance to Administrator. Seller agrees that, at the request
of Purchaser, Seller will assist in servicing the Receivables and will
furnish to the Administrator any information reasonably required by the
Administrator to assist the Administrator in performing its duties under
the Administration Agreement.
SECTION 5.02. Reporting Requirements of Seller. So long as Purchaser shall
--------------------------------
any interest in any Purchased Receivables or until the Termination Date,
whichever is later, Seller shall, unless Purchaser consents in writing, furnish
to Purchaser and to each Subordinated Participant:
(a) promptly after the filing thereof, copies of all filings by
Seller or any Subsidiary of Seller of any notice of a "Reportable Event" as
defined in subsections (b)(4), (b)(5) and (b)(6) of Section 4043 of ERISA,
but excluding any such filings which relate to a Reportable Event
reasonably expected to not have a material adverse effect on the financial
condition and operations of Seller and the consolidated Subsidiaries of
Seller and promptly after receipt thereof, copies of any written
communication from the Pension Benefit Guaranty Corporation or any other
agency of the federal government with respect to any filing described
above;
(b) as soon as possible and in any event within five (5) Business
Days after the occurrence of each Event of Termination or each event which,
with the giving of notice or lapse of time or both, would constitute an
Event of Termination, the statement of the chief financial officer of
Seller setting forth details of such Event of Termination or event and the
remedial action which Seller proposes to take with respect thereto;
(c) (i) except as otherwise provided below, as soon as available and
in any event within 30 days after each fiscal month-end (other than March,
June, September and December), the consolidated and consolidating
statements of income (through the "Earnings Before Tax" line) of Seller and
its Subsidiaries and balance sheet, cash flow statements and a cash flow
forecast of at least four weeks' duration of the Seller and its
Subsidiaries for such fiscal month and for the period from the beginning of
the then current fiscal year to the end of such month, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding
figures from the monthly consolidated and consolidating plan and financial
forecast for such fiscal year prepared by the Seller, all in reasonable
detail and certified by the chief financial officer of Seller as being
fairly stated in all material respects, subject to changes resulting from
audit and normal year-end adjustments; provided, that with respect to
--------
statements delivered pursuant to this section for the Seller's fiscal year
ending December 31, 2000, such statements shall set forth in each case in
comparative form solely the corresponding figures
14
from the monthly consolidated and consolidating plan and financial forecast
for such fiscal year, all in reasonable detail and certified by the chief
financial officer of Company as being fairly stated in all material
respects, subject to changes resulting from audit and normal year-end
adjustments; and, provided, further, that with respect to the delivery of
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consolidated financial statements of the Seller and its Subsidiaries for
the fiscal months ended (A) January 31, 2000 and February 29, 2000, such
statements shall be delivered by May 15, 2000 and (B) April 30, 2000, such
statements shall be delivered by May 31, 2000;
(ii) except as otherwise provided below, as soon as available and in
any event within 45 days after the end of each fiscal quarter (other than
any fiscal quarter ending December 31), the consolidated and consolidating
balance sheets of Seller and its Subsidiaries as at the end of such fiscal
quarter and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows of Seller and its Subsidiaries
for such fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding
figures from the monthly consolidated and consolidating plan and financial
forecast for such fiscal year prepared by the Seller, all in reasonable
detail and certified by the chief financial officer of Seller that they
fairly present, in all material respects, the financial condition of Seller
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments; provided,
--------
that with respect to the delivery of consolidated financial statements of
the Seller and its Subsidiaries for the fiscal quarter ended March 31,
2000, such statements shall be delivered by May 31, 2000;
(iii) except as otherwise provided below, as soon as available and in
any event within 90 days after the end of each fiscal year, (a) the
consolidated and consolidating balance sheets of Seller and its
Subsidiaries as at the end of such fiscal year and the related consolidated
and consolidating statements of income, stockholders' equity and cash flows
of Seller and its Subsidiaries for such fiscal year, setting forth in each
case in comparative form the corresponding figures for the previous fiscal
year and the corresponding figures from the monthly consolidated and
consolidating plan and financial forecast for such fiscal year prepared by
the Seller, all in reasonable detail and certified by the chief financial
officer of Seller that they fairly present, in all material respects, the
financial condition of Seller and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated and (b) in the case of such consolidated financial
statements, a report thereon of independent certified public accountants of
recognized national standing selected by Seller and reasonably satisfactory
to Purchaser, which report shall be unqualified as to scope of audit, and
shall state that such consolidated financial statements fairly present, in
all material respects, the consolidated financial position of Seller and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the examination
by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards; provided, that with respect to the delivery of consolidated
--------
financial
15
statements of the Seller and its Subsidiaries for the fiscal year ended
December 31, 1999, such statements shall be delivered by April 17, 2000;
(iv) together with each delivery of financial statements of Seller and
its Subsidiaries pursuant to subdivisions (ii) and (iii) above, a
certificate of the chief financial officer of Seller stating that the
signer has reviewed the terms of this Agreement and has made, or caused to
be made under his supervision, a review in reasonable detail of the
transactions and condition of Seller and its Subsidiaries during the
accounting period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such accounting
period, and that the signer does not have knowledge of the existence as at
the date of such certificate, of any condition or event that constitutes an
Event of Termination or would constitute an Event of Termination but for
the requirement that notice be given or time elapse or both, or, if any
such condition or event existed or exists, specifying the nature and period
of existence thereof and what action Seller has taken, is taking and
proposes to take with respect thereto;
(d) immediate written notice of the occurrence of (i) any breach of
Seller's representations and warranties, including but not limited to any
assertion by any Approved Obligor of any dispute (bona fide or otherwise)
or other defense to payment of Purchased Receivables contained in Pools
which have not reached Completion and (ii) Seller's intention to permit
(after the applicable Funding Date) any new or additional credit, discount,
allowance or offset to any Obligor such that when aggregated with all other
credits, discounts, allowances or offsets previously permitted with respect
to other Purchased Receivables in the same Pool, and with any Approved
Obligor's return of, or desire to return any merchandise purchased from
Seller in connection with any Purchased Receivable(s) exceeds 15% of the
Aggregate Amount of all Purchased Receivables in such Pool which have not
previously become Nonperforming Receivables. If any of the foregoing
results in a Purchased Receivable becoming a Nonperforming Receivable such
notice shall indicate the manner in which the Repurchase Amount shall be
paid and the date of repurchase (which shall not be later than the
Completion of the applicable Pool);
(e) [reserved];
(f) promptly, from time to time, such other information, documents,
records or reports respecting any Eligible Receivable(s), Approved
Obligor(s), Contract(s), Adverse Claim(s), current Credit and Collection
Policy, Related Security or the financial condition or operations of Seller
as Purchaser may from time to time reasonably request.
SECTION 5.03. Negative Covenants of Seller. So long as Purchaser shall
----------------------------
have any interest in any Purchased Receivables or until the Termination Date,
whichever is later, Seller shall not, without the prior written consent of
Purchaser:
(a) Sales, Liens, Etc. Except as otherwise provided herein, (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon or with respect to any
Purchased Receivable, related Contract or Related Security, to the extent
of Purchaser's interest in such Related Security, or any Xxxx-
00
Xxx Xxxxxxxx account to which any Collections of any Purchased Receivable
are sent other than (A) liens for taxes, assessments or levies not yet due
and payable, (B) materialmen's, workmen's and similar liens imposed by
operation of law, or (ii) assign any right to receive income in respect of
any of the foregoing except an assignment under the Seller's bank credit
facilities of the right to receive the Balance Payment.
(b) Change in Payment Instructions to Obligors. Without the consent
of the Purchaser, add any institution as a Lock-Box Provider (other than an
institution named in the definition of the term Lock-Box Provider) with
respect to Purchased Receivables or terminate any existing Lock-Box
Agreement or Blocked Account Agreement relating to Purchased Receivables or
make any change in its instructions to Obligors, Approved Obligors or Lock-
Box Providers regarding payments relating to Purchased Receivables.
(c) Change in Corporate Name. Make any change to Seller's corporate
name, identity or corporate structure unless, prior to the effective date
of any such name change, Seller delivers to Purchaser such Financing
Statements (Forms UCC-1 and UCC-3) duly executed by Seller which Purchaser
may request to reflect such name change, together with such other documents
and instruments that Purchaser may reasonably request in connection with
such name change.
(d) Accounting Treatment. Prepare any financial statements that shall
account for the transactions contemplated hereby, nor will it in any other
respect account for the transactions contemplated hereby, in a manner that
is inconsistent with Purchaser's ownership interest in the Purchased
Receivables.
SECTION 5.04. Changes in Fundamental Policies and Procedures. (a) So long
----------------------------------------------
as Purchaser shall have any interest in any Purchased Receivables or until the
Termination Date, whichever is later, this Section 5.04 shall govern Seller's
right to:
(i) (A) Extend, amend or otherwise modify the terms of any Purchased
Receivable, or (B) amend, modify or waive any term or condition of any
Contract related thereto which would impair the collectibility of any
Purchased Receivable; and
(ii) Make any change in (A) any material Credit and Collection Policy
(except as required to take into account the duties and activities of the
Administrator under the Administration Agreement) or (B) any form of
Contract, if any, related to Receivables which change would, in any case,
impair the collectibility of any Purchased Receivable.
Any change, amendment, modification or extension described in clauses (i) and
(ii) above is hereinafter referred to as a "Fundamental Change."
(b) On or before the effective date of each Fundamental Change occurring
prior to the Termination Date, Seller shall promptly notify Purchaser in writing
of the complete details of such Fundamental Change. Such notice shall include
the statement that Purchaser will either have to grant its consent or indicate
its disapproval of such Fundamental Change within five (5) Business Days
following the receipt of such notice. Purchaser shall not unreasonably withhold
its consent
17
to any Fundamental Change. In the event Purchaser does not consent to such
Fundamental Change, then and at all times prior to the Termination Date, all
Receivables to which such Fundamental Change applies or which are affected
thereby shall cease to be Eligible Receivables as of the date of Purchaser's
disapproval of such Fundamental Change. In the event Purchaser does not respond
within such five (5) Business Day period, Purchaser shall be deemed to have
consented to such Fundamental Change.
(c) At all times on or after the Termination Date, Seller shall make no
Fundamental Change which might affect any Purchased Receivable still outstanding
without the prior written consent of Purchaser.
ARTICLE VI
OBLIGORS
SECTION 6.01. Concentration Limit. On any Funding Date, with respect to
-------------------
each Approved Obligor, the ratio of (i) the Aggregate Amount of the outstanding
Purchased Receivables of such Approved Obligor under the Receivables Purchase
Agreement (taking into account the Eligible Receivables of such Approved Obligor
to be included in any Pool to be purchased on such Funding Date) to (ii) the
Aggregate Amount of the outstanding Purchased Receivables of all Approved
Obligors under the Receivables Purchase Agreement (taking into account the
Eligible Receivables of all Approved Obligors to be included in any Pool to be
purchased on such Funding Date) shall not exceed the Concentration Limit
applicable to such Approved Obligor.
SECTION 6.02. Additional Approved Obligors. Seller may request of
----------------------------
Purchaser in writing that additional Obligors of Seller become Approved
Obligors. Purchaser shall have the right to accept or decline in good faith any
such request. Purchaser shall also have the right at any time upon one (1)
Business Day advance written notice to Seller to disapprove of any Approved
Obligor whenever Purchaser shall determine in good faith that such Approved
Obligor does not meet Purchaser's reasonable eligibility requirements for credit
approval. Purchaser's good faith exercises of its acceptance or declination of
Obligors of Seller as Approved Obligors and Purchaser's determinations of
eligibility requirements for Purchaser's credit approval shall be based on
standards no different than Purchaser would otherwise apply in connection with
Purchaser's other clients.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Events of Termination. If any of the following events (each
---------------------
an "Event of Termination") shall occur:
(a) Seller shall fail to make any payment to be made by it hereunder
when due; or
18
(b) Any representation or warranty made or deemed to be made by
Seller (or any of its officers) under or in connection with this Agreement
or any certificate or report delivered pursuant hereto shall prove to have
been false or incorrect in any material respect when made (excluding any
representation or warranty made in Section 4.01(f) or 4.01(g), so long as
Seller is in compliance with its obligations under Section 5.01(i)); or
(c) (i) Seller shall fail to perform or observe any term, covenant or
agreement contained in Section 5.03 or 5.04 on its part to be performed or
observed by it; or (ii) Seller shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement on its part to be
performed or observed by it and any such failure shall remain unremedied
for ten (10) Business Days after written notice thereof shall have been
given by Purchaser to Seller; or (iii) Seller shall fail to perform or
observe any term, covenant or agreement contained in any other Transaction
Document on its part to be performed or observed by it and any such failure
shall remain unremedied after notice and for any applicable grace period;
or
(d) (i) Failure of Seller or any of its Subsidiaries to pay when due
(a) any principal of or interest on any Indebtedness in an individual
principal amount of $2,500,000 or more or any items of Indebtedness with an
aggregate principal amount of $5,000,000 or more or (b) any Contingent
Obligation in an individual principal amount of $2,500,000 or more or any
Contingent Obligations with an aggregate principal amount of $5,000,000 or
more, in each case beyond the end of any grace period provided therefor; or
(ii) breach or default by Seller or any of its Subsidiaries with respect to
any other material term of (a) any evidence of any Indebtedness in an
individual principal amount of $2,500,000 or more or any items of
Indebtedness with an aggregate principal amount of $5,000,000 or more or
any Contingent Obligation in an individual principal amount of $2,500,000
or more or any Contingent Obligations with an aggregate principal amount of
$5,000,000 or more or (b) any loan agreement, mortgage, indenture or other
agreement relating to such Indebtedness or Contingent Obligation(s), if in
any case under this clause (ii) the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders)
to cause, that Indebtedness or Contingent Obligation(s) to become or be
declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be (upon the giving
or receiving of notice, lapse of time, both, or otherwise); provided, that
--------
any breach or default existing on the Closing Date under the Credit
Agreement which has been waived or under any Indenture pursuant to which no
notice of acceleration has been delivered shall not constitute an Event of
Termination under this clause (ii) during the period for which such waiver
is in effect or prior to any such notice of acceleration, as the case may
be; or
(e) (i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Seller or any of its Subsidiaries
(other than Immaterial Subsidiaries) in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, which decree or order is not
stayed; or any other similar relief shall be granted under any applicable
federal or state law; or (ii) an involuntary case shall be commenced
against Seller or any of its Subsidiaries (other than Immaterial
Subsidiaries) under the Bankruptcy Code or under any other applicable
19
bankruptcy, insolvency or similar law now or hereafter in effect; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Seller or any of its Subsidiaries
(other than Immaterial Subsidiaries), or over all or a substantial part of
its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian
of Seller or any of its Subsidiaries (other than Immaterial Subsidiaries)
for all or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial
part of the property of Seller or any of its Subsidiaries (other than
Immaterial Subsidiaries), and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or discharged; or
(f) (i) Seller or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of
or taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Seller or any of its Subsidiaries
(other than Immaterial Subsidiaries) shall make any assignment for the
benefit of creditors; or (ii) Seller or any of its Subsidiaries (other than
Immaterial Subsidiaries) shall be unable, or shall fail generally, or shall
admit in writing its inability, to pay its debts as such debts become due;
or the Board of Directors of Seller or any of its Subsidiaries (other than
Immaterial Subsidiaries) (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
(g) Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of
$2,500,000 or (ii) in the aggregate at any time an amount in excess of
$5,000,000 (in either case not adequately covered by insurance as to which
a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against Seller or any of its Subsidiaries or any
of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days; or
(h) There shall have occurred any event which materially adversely
affects the collectibility of any material portion of Purchased Receivables
or there shall have occurred any other event which materially adversely
affects the ability of Seller to perform hereunder (including, without
limitation, the ability of Seller to collect the Purchased Receivables); or
(i) Any Person other than a Sponsor, including a "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934) which includes such Person, shall, after the Closing Date, purchase
or otherwise acquire, directly or indirectly, beneficial ownership of
securities of Seller and, as a result of such purchase or acquisition, any
Person (together with its associates and Affiliates), shall directly or
20
indirectly beneficially own in the aggregate securities representing more
than 35% of the combined voting power of Seller voting securities; or
(j) The Administration Agreement shall terminate;
then, and in any such event, Purchaser may by notice to Seller declare the
Termination Date to have occurred, except that, in the case of any event
described in subsection (e) or (f) above, the Termination Date shall be deemed
to have occurred automatically upon the occurrence of such event. Upon the
occurrence of the Termination Date, Purchaser shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies, if any, provided under the UCC of the applicable jurisdiction and
other applicable laws, which rights shall be cumulative.
ARTICLE VIII
PARTICIPATIONS AND ASSIGNMENTS
Purchaser retains the right at any time and from time to time to sell or
assign the Receivables, in whole or in part, or to sell participation interests
in any amount in any Pool of Purchased Receivables to one or more participants
as Purchaser may deem desirable.
ARTICLE IX
INDEMNIFICATION
In addition to the payment of expenses pursuant to Section 11.07, whether
or not the transactions contemplated hereby shall be consummated, Seller agrees
to defend, indemnify, pay and hold harmless Purchaser, each Person that acquires
a participation interest in the Receivables, and the officers, directors,
trustees, partners, employees, agents (including the Administrator), attorneys
and affiliates of Purchaser and each such Person (collectively called the
"Indemnitees") from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including, without limitation,
securities and commercial laws, statutes, rules or regulations), on common law
or equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of this Agreement or the other Transaction Documents or the
transactions contemplated hereby or thereby (including, without limitation,
Purchaser's agreement to purchase Receivables hereunder or the use or intended
use of the proceeds of any of such purchase) (collectively called the
"Indemnified Liabilities"); provided that Seller shall not have any obligation
to any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent, and only to the extent, of any particular liability, obligation,
21
loss, damage, penalty, claim, cost, expense or disbursement that arose from the
gross negligence or willful misconduct of that Indemnitee as determined by a
final judgment of a court of competent jurisdiction; provided, further, that
Seller shall have no obligation under this Article IX to Indemnitees with
respect to, and Indemnified Liabilities shall in no event include losses arising
from a delay in payment, or a default, by an Obligor with respect to any
Purchased Receivable. The agreements in this Article IX shall survive the
collection of all Purchased Receivables, the termination of this Agreement and
the payment of all amounts payable hereunder.
To the extent that the undertaking to defend, indemnify, pay and hold
harmless set forth in the preceding paragraph may be unenforceable because it is
violative of any law or public policy, Seller shall contribute the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
ARTICLE X
TERM; OPTION FEES
SECTION 10.01. Term. This Agreement shall have a term of 364 days from the
----
date hereof provided that Seller shall have the right to terminate this
Agreement at any time upon five Business Days' prior written notice to
Purchaser. Termination of the Agreement shall also constitute a reduction of the
Facility Limit to zero as of the effective date of such termination.
SECTION 10.02. Partial Reductions of Facility Limit. Seller may, upon not
------------------------------------
less than five Business Days' prior written notice to Purchaser, at any time and
from time to time terminate in whole or permanently reduce in part, without
premium or penalty, the Facility Limit; provided that any such partial reduction
--------
of the Facility Limit shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $250,000 in excess of that amount. Seller's notice to
Purchaser shall designate the effective date (which shall be a Business Day) of
such termination or reduction and the amount of any partial reduction, and such
termination or reduction of the Facility Limit shall be effective on the date
specified in such notice.
SECTION 10.03. Option Fee. Seller agrees to pay to Purchaser an option fee
----------
for the period from and including the date hereof to but excluding the
Termination Date equal to 1/2 of 1% per annum on the average of the daily excess
of the Facility Limit over the greater of (i) the Net Investment and (ii)
$9,000,000, for the period for which such fee is paid. Such Option Fee shall be
calculated on the basis of a 365-day year and the actual number of days elapsed
and shall be payable monthly in arrears on the last day of each month and on the
Termination Date, commencing on April 30, 2000.
SECTION 10.04. Payments Due on Non-Business Days; Past Due Amounts.
---------------------------------------------------
Whenever any payment to be made under this Agreement shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day. Amounts not paid when due in accordance with the terms
of this Agreement shall bear interest at a rate equal at all times to the ABR
plus 2%, payable on demand.
22
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments and Waivers. No amendment, modification, or
----------------------
termination, or waiver or consent of any provision of this Agreement, shall be
effective unless the same shall be in writing and signed by Seller and
Purchaser, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 11.02. Notices. Any notice or other communication required shall be
-------
in writing addressed to the respective party as set forth below and may be
personally served, telecopied, sent by overnight courier service or U.S. mail
and shall be deemed to have been given when received by any person at the
address specified below.
Notices shall be addressed as follows:
If to Seller: Aurora Foods Inc.
0000 Xx. Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
ATTN: Xxxxxxxxxxx X. Xxxxxxxx,
Chief Financial Officer
Telecopy: (000) 000-0000
with copies to: Fenway Partners, Inc.
000 Xxxx 00/xx/ Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
ATTN: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
and
XxXxxx De Leeuw & Co.
00 Xxxx 00/xx/ Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
ATTN: Xxxxx Xx Xxxxx
Telecopy: (000) 000-0000
If to Purchaser: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
with copies to: Fenway Partners, Inc.
000 Xxxx 00/xx/ Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
23
ATTN: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
and
XxXxxx De Leeuw & Co.
00 Xxxx 00/xx/ Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
ATTN: Xxxxx Xx Xxxxx
Telecopy: (000) 000-0000
SECTION 11.03. No Waiver; Remedies. No failure or delay on the part of
-------------------
Purchaser to exercise, or any partial exercise of, any power, right, or
privilege hereunder or under any other Transaction Document shall impair such
power, right, or privilege or be construed to be a waiver of any default or
Event of Termination. All rights and remedies existing hereunder or under any
other Transaction Document are cumulative to and not exclusive of any rights or
remedies otherwise available.
SECTION 11.04. Binding Effect; Assignability. This Agreement shall be
-----------------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns except that Seller shall not assign its rights or
obligations hereunder.
SECTION 11.05. Survival. All agreements, representations and warranties
--------
made herein shall survive the execution and delivery of this Agreement and the
termination of this Agreement. Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of Seller set forth in Section
5.04(c) and Article IX shall survive any termination of this Agreement, the
Closing Date or any Funding Date, as the case may be.
SECTION 11.06. Governing Law. This Agreement shall be governed by, and
-------------
shall be construed and interpreted in accordance with, the laws of the State of
New York.
SECTION 11.07. Costs, Expenses and Taxes. In addition to the rights of
-------------------------
indemnification granted to Purchaser and each Person that acquires a
participation interest in the Receivables under Article IX, Seller agrees to pay
all reasonable out-of-pocket costs and expenses incurred by Purchaser and the
Subordinated Participants in connection with the preparation, execution,
delivery and administration (including periodic auditing not to exceed two times
in any twelve (12) month period) of this Agreement, the other documents to be
delivered in connection herewith and any amendments thereto including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel (including
fees allocable to in-house counsel) for Purchaser and the Subordinated
Participants with respect thereto and with respect to advising Purchaser and the
Subordinated Participants as to their respective rights and remedies under this
Agreement and any other applicable Transaction Documents, and all reasonable
costs and expenses (including such reasonable counsel fees and expenses)
incurred in connection with the enforcement of this Agreement and/or the other
documents to be delivered in connection herewith.
SECTION 11.08. Netting of Payments. Payments hereunder may be made on a net
-------------------
basis.
24
SECTION 11.09. Acknowledgment of Administrator. Seller and Purchaser
-------------------------------
acknowledge that as of the date hereof, The CIT Group/Commercial Services, Inc.
is the Administrator. For purposes of determining when Purchaser has received
Collections, such Collections shall be deemed to be received by Purchaser when
the Administrator has credited Purchaser's accounts with immediately available
funds.
SECTION 11.10. Execution in Counterparts. This Agreement may be executed in
-------------------------
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same Agreement.
SECTION 11.11. Consent to Jurisdiction. SELLER AND PURCHASER HEREBY
-----------------------
IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK
STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND SELLER AND PURCHASER HEREBY IRREVOCABLY
AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVE ANY OBJECTION EITHER OF THEM
MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
SECTION 11.12. Waiver of Jury Trial. SELLER AND PURCHASER HEREBY WAIVE
--------------------
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT, OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT. SELLER AND PURCHASER ALSO WAIVE ANY BOND
OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF PURCHASER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. SELLER AND PURCHASER ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE
TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. SELLER AND PURCHASER
FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
25
SECTION 11.13. Severability. The invalidity, illegality, or
------------
unenforceability in any jurisdiction of any provision of this Agreement shall
not affect or impair the remaining provisions of this Agreement, or such
provision or obligation in any other jurisdiction.
SECTION 11.13. Headings. Section and subsection headings are included
--------
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purposes or be given substantive effect.
26
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
AURORA FOODS INC.
By: __________________________
Name:
Title:
THE CHASE MANHATTAN BANK
By: __________________________
Name:
Title:
27
Table of Exhibits
Exhibit A Definitions
Exhibit B Xxxx of Sale
Exhibit C Form of Schedule of Eligible Receivables
Exhibit D Funding Certificate
Exhibit E Address List
Exhibit F Notification Letter
EXHIBIT A
As used in the Receivables Purchase Agreement and the Administration
Agreement, unless otherwise specified, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on such day plus
1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest
per annum publicly announced from time to time by Purchaser as its prime
rate in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the Purchaser
in connection with extensions of credit to debtors); "Base CD Rate" shall
mean the sum of (a) the product of (i) the Three-Month Secondary CD Rate
and (ii) a fraction, the numerator of which is one and the denominator of
which is one minus the CD Reserve Percentage and (b) the CD Assessment
Rate; and "Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as
being in effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York (which
rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following
such day), or, if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in New
York City received at approximately 10:00 A.M., New York City time, on such
day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by Purchaser from three New York City negotiable certificate
of deposit dealers of recognized standing selected by it. Any change in the
ABR due to a change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the Three-
Month Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Administration Agreement" has the meaning assigned to such term in
Section 3.01(o) of the Receivables Purchase Agreement.
"Administrative Fee" has the meaning assigned to such term in Section
5.01(l) of the Receivables Purchase Agreement.
"Administrator" means, initially, The CIT Group/Commercial Services,
Inc.
"Adverse Claim" means a lien, security interest or similar charge or
encumbrance or any other right or claim of any Person.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and
"under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to
2
direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract
or otherwise.
"Aggregate Amount" means the aggregate net invoice dollar amount of a
Pool of Eligible Receivables or of one or more Eligible Receivables, as the
case may be (i.e., as reduced by any credits, discounts, allowances or
deductions then entitled and expected to be taken by the Approved Obligor
of any such Eligible Receivable) as estimated by Seller on the Funding Date
for such Pool and, with respect to the initial Pool to be purchased,
satisfactory to Purchaser, which amount is set forth in the Funding
Certificate relating to such Pool of Purchased Receivables.
"Agreement" means the agreement in which the term is used (including
all schedules, exhibits, annexes and appendices thereto).
"Approved Obligor" means each of Seller's customers approved by
Purchaser as of the Closing Date and every other customer who is approved
by Purchaser thereafter pursuant to Section 6.02 of the Receivables
Purchase Agreement.
"Balance Payment" means with respect to any Pool of Purchased
Receivables an amount equal to the excess, if any, of:
(i) the sum of the Balance Difference for all Receivables in such
Pool over
(ii) the sum of the Dilution Shortfall for all Receivables in such
Pool.
"Balance Difference" means, with respect to each Purchased Receivable,
an amount equal to the positive difference, if any, of (x) the amount of
Collections actually received in respect of such Receivable over (y) the
sum of (A) the portion of the Initial Installment of the Purchase Price for
such Pool allocable to such Receivable and (B) the portion of the Discount
Fee for such Pool allocable to such Receivable.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended from time to time or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect and all rules
and regulations promulgated thereunder.
"Xxxx of Sale" means a document (substantially in the form of Exhibit
B attached to the Receivables Purchase Agreement) evidencing the sale,
transfer and assignment of Eligible Receivables and Related Security from
Seller to Purchaser.
"Blocked Account" means each demand deposit account into which the
Lock-Box Providers deposit items pursuant to the respective Lock-Box
Agreements and as to which Purchaser is authorized to issue a Control
Election pursuant to the Blocked Account Agreements, as in effect from time
to time.
3
"Blocked Account Agreements" means an agreement entered into between
Seller and Purchaser with respect to each Blocked Account and acknowledged
by each Lock-Box Provider, respectively, as in effect from time to time.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by
law to close.
"CD Assessment Rate" means for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
maintained by the Federal Deposit Insurance Corporation (the "FDIC")
classified as well-capitalized and within supervisory subgroup "B" (or a
comparable successor assessment risk classification) within the meaning of
12 C.F.R. (S) 327.4 (or any successor provision) to the FDIC (or any
successor) for the FDIC's (or such successor's) insuring time deposits at
offices of such institution in the United States.
"CD Reserve Percentage" means for any day, that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System of the United States, or any
successor (the "Board"), for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board as in
effect from time to time) in respect of new non-personal time deposits in
U.S. Dollars having a maturity of 30 days or more.
"Closing Date" means April 19, 2000.
"Collection Cycle Assumption" has the meaning assigned to such term in
Section 2.01(d) of the Receivables Purchase Agreement.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of any Related Security with respect to such
Receivable.
"Completion" means, with respect to a Pool, the earliest of (i) the
date all amounts due on the Purchased Receivables in such Pool have been
(x) collected, (y) deemed uncollectible due to the Obligor's financial
inability to pay and/or (z) determined to be Nonperforming Receivables,
(ii) 90 days after the Funding Date of the Pool and (iii) the date on which
Purchaser has received, in respect of such Pool, an amount equal to the
Initial Installment of the Purchase Price and the Discount Fee for each
Receivable in such Pool, other than any such Receivable deemed
uncollectible due to the Obligor's financial inability to pay.
"Concentration Limit" means 15%.
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person
(i) with respect to any Indebtedness, lease, dividend or other
obligation of another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to
the obligee of such obligation of another that such obligation of
4
another will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof, (ii) with
respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or
(iii) under any interest rate agreements. Contingent Obligations shall
include, without limitation, (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the ordinary
course of business), comaking, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to
make take-or-pay or similar payments if required regardless of non-
performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (x) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise) or
(y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described
under subclauses (x) or (y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"Contract" means any agreement, if any, between Seller and any Obligor
pursuant to or under which such Obligor shall be obligated to pay for
merchandise or services from time to time.
"Control Election" has the meaning assigned to that term in the
Blocked Account Agreements.
"Conveyed Property" has the meaning assigned to that term in Section
2.01(a) of the Receivables Purchase Agreement.
"Credit Agreement" means the Fifth Amended and Restated Credit
Agreement, dated as of November 1, 1999, entered into by and among Seller,
the financial institutions listed on the signature pages thereof,
Purchaser, as administrative agent, National Westminster Bank plc, as
syndication agent, and UBS AG, Stamford Branch, as documentation agent.
"Credit and Collection Policy" means those credit and collection
policies and practices of Seller relating to Contracts existing on the
Closing Date, all as modified from time to time in compliance with Section
5.04 of the Receivables Purchase Agreement.
"Defaulted Receivable" means any Receivable: (i) as to which any
payment, or part thereof, remains unpaid for 45 days from the original due
date for such payment, or (ii) as to which the Obligor thereof has taken
any action, or suffered any event, of the type described in Section 7.01(e)
of the Receivables Purchase Agreement or (iii) which, consistent with the
Credit and Collection Policy, would be written off Seller's books as
uncollectible.
5
"Dilution Shortfall" means, with respect to each Purchased Receivable,
an amount equal to the positive difference, if any, of
(x) the sum of
(A) the portion of the Initial Installment of the Purchase
Price for such Pool allocable to such Receivable, and
(B) the portion of the Discount Fee for such Pool allocable
to such Receivable over
(y) the sum of
(A) the amount of any credit, discount, allowance or offset
granted by Seller with respect to any Purchased Receivable
subsequent to determining the Aggregate Amount of the related
Pool and the amount which relates to any merchandise sold to
and returned by an Approved Obligor as to any Purchased
Receivable included in such Pool (to the extent such Purchased
Receivable does not become a Nonperforming Receivable by
virtue thereof), both to the extent that such amounts reduce
the amount of such Purchased Receivable below the sum of (i)
the portion of the Initial Installment of the Purchase Price
of such Pool allocable to such Purchased Receivable and (ii)
the portion of the Discount Fee of such Pool allocable to such
Purchased Receivable, and
(B) an amount equal to the Repurchase Amount of such
Receivable if such Receivable becomes a Nonperforming
Receivable (to the extent such Repurchase Amount has not
theretofore been settled pursuant to Section 5.01(i)).
"Discount Fee" has the meaning assigned to that term in Section
2.01(d) of the Receivables Purchase Agreement.
"Disputed Receivable" means any Receivable which is subject to (i) any
bona fide dispute, claim, offset or defense asserted by the Obligor to
payment thereof (other than any protection provided to debtors under the
operation of bankruptcy or other insolvency laws), or (ii) any other claim
resulting from the sale of merchandise or rendering of services related to
such Receivable or the furnishing of or failure to furnish such merchandise
or services, but excluding any cash discount, if any, available to the
Obligor of a Receivable pursuant to the Credit and Collection Policy.
"Eligible Receivable" means a Receivable:
(i) the Obligor of which is one of Seller's Approved Obligors;
6
(ii) which is a Receivable representing the extension of credit
by Seller under a Contract in connection with the credit sale by
Seller to an Approved Obligor of merchandise or services;
(iii) which is not a Defaulted Receivable;
(iv) which is a Receivable of an Approved Obligor required to
be paid in full within 30 days of the original invoice date thereof;
(v) which is an "account" or a "general intangible" within
the meaning of Section 9-106 of the UCC;
(vi) which is denominated and payable only in United States
dollars in the United States;
(vii) which is not a Disputed Receivable on the applicable
Funding Date;
(viii) which arises under a Contract which has been duly
authorized and which, together with such Receivable, is in full force
and effect and constitutes the legal, valid and binding obligation of
the Approved Obligor of such Receivable enforceable against such
Approved Obligor in accordance with its terms;
(ix) which, together with the Contract related thereto, does
not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to 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 related thereto is in violation of any such law, rule or
regulation in any material respect;
(x) which satisfies substantially all applicable requirements
of the Credit and Collection Policy;
(xi) owned by Seller free and clear of any Adverse Claim,
except as created by the Receivables Purchase Agreement;
(xii) as to which Purchaser has not notified Seller that
Purchaser has determined, in accordance with Section 6.02 of the
Receivables Purchase Agreement that such Receivable (or class of
Receivables) is not acceptable for purchase thereunder;
(xiii) which is not a Government Receivable or a receivable owed
by an Obligor domiciled outside of the United States; and
(xiv) the goods of which have been shipped or the services
related to it shall have been performed.
7
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974 and
all Regulations relating to it, as amended from time to time.
"Event of Termination" has the meaning assigned to that term in Section
7.01 of the Receivables Purchase Agreement.
"Facility Limit" means $60,000,000, as such amount may be reduced from time
to time pursuant to Section 10.02 of the Receivable Purchase Agreement.
"Federal Funds Effective Rate" means for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by Purchaser from three
federal funds brokers of recognized standing selected by it.
"Fee Letter" means the Fee Letter, dated as of April 19, 2000, between
Seller, Purchaser and Chase Securities Inc.
"Fundamental Change" has the meaning assigned to such term in Section
5.04(a) of the Receivables Purchase Agreement.
"Funding Certificate" has the meaning assigned to such term in Section
3.02(a) of the Receivables Purchase Agreement.
"Funding Date" shall mean each date on which any Pool is purchased under
the Receivables Purchase Agreement.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time.
"Government Receivables" means a Receivable evidencing a claim against the
United States Government which is subject to the Assignment of Claims Act of
1940, 31 USC Section 3727.
"Immaterial Subsidiaries" means, with respect to any Person, any Subsidiary
or Subsidiaries of such Person the assets of which constitute, individually or
in the aggregate, less than 5% of the total assets of such Person and its
Subsidiaries.
"Indebtedness" means, as applied to any Person, (i) all indebtedness for
borrowed money, (ii) that portion of obligations with respect to capital leases
that is properly classified as a liability on a balance sheet in conformity with
GAAP, (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money (other than accounts
payable incurred in the ordinary course of business and accrued expenses
incurred in the ordinary course of business), (iv) any obligation owed for all
or any part of the deferred purchase price of property or services (excluding
any such obligations incurred under ERISA), which purchase price is (a) due more
than six months from
8
the date of incurrence of the obligation in respect thereof or (b) evidenced by
a note or similar written instrument, and (v) all indebtedness secured by any
Lien on any property or asset owned or held by that Person regardless of whether
the indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person.
"Indenture" means each of the (i) Indenture, dated as of February 10, 1997,
between Seller and Wilmington Trust Company, as Trustee, (ii) Indenture, dated
as of July 1, 1997, between Seller and Wilmington Trust Company, as Trustee, and
(iii) Indenture, dated as of July 1, 1998, between Seller and Wilmington Trust
Company, as Trustee.
"Initial Installment of the Purchase Price" has the meaning assigned to
that term in Section 2.01(d) of the Receivables Purchase Agreement.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary, (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest).
"Lock-Box Agreement" means those agreement(s), in form and substance
reasonably acceptable to Purchaser, entered into from time to time among Seller
and the Lock-Box Providers providing for the maintenance of lock boxes with the
U.S. Post Office.
"Lock-Box Provider" means any bank or other financial institution
satisfactory to the Purchaser with whom Seller enters into a Lock-Box Agreement
and a Blocked Account Agreement, in either case, at such time as Seller and such
bank have executed both a Lock-Box Agreement and a Blocked Account Agreement.
"Material Adverse Effect" means (a) a material adverse effect upon the
business, operations, material properties, assets or financial condition of
Seller and its Subsidiaries taken as a whole or (b) the material impairment of
the ability of Seller to perform its obligations under the Receivables Purchase
Agreement or (c) the impairment of the ability of Purchaser to enforce the
Receivables Purchase Agreement or collect any of the Purchased Receivables.
"Net Investment" means at any date the sum of the Initial Installments of
the Purchase Price less the aggregate amount of Collections actually received by
the Purchaser other than Collections allocated by the Purchaser to (i) the
Discount Fee and (ii) Balance Payments to the extent paid or payable to Seller.
"Nonperforming Receivable" means a Purchased Receivable (a) with respect to
which there has occurred any breach of Seller's representations and warranties
under Section 4.01 of the Receivables Purchase Agreement with respect thereto,
or (b) that becomes a Disputed Receivable subsequent to the Funding Date on
which it became a Purchased Receivable, or (c) with respect to which Seller has
granted after the applicable Funding Date any credit, discount, allowance or
offset or that relates to any merchandise
9
sold to and returned by an Approved Obligor if the aggregate amount of all such
discounts, allowances and offsets and reductions due to the returns of
merchandise with respect to all Purchased Receivables in the same Pool exceeds
15% of the Aggregate Amount of all Purchased Receivables in such Pool, which are
not deemed Nonperforming Receivables pursuant to clauses (a) or (b) hereof.
"Obligor" means a Person obligated to make payments to Seller pursuant to a
Contract.
"Participation Agreement" has the meaning assigned to such term in Section
3.01(t) of the Receivables Purchase Agreement.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof
and their respective permitted successors and assigns (or in the case of a
governmental person, the successor functional equivalent of such Person).
"Pool" means one or more Eligible Receivables sold on a Funding Date and
identified in the same Xxxx of Sale.
"Purchase Advance Percentage" of any Pool means 85%; provided, however,
that the Purchaser may reduce such percentage in its discretion if, in the
Purchaser's judgement, actual dilution experienced in respect of the Purchased
Receivables other than on account of credit losses exceeds the amounts assumed
by the Purchaser in deriving the original percentage.
"Purchase Price" means for any Pool of Purchased Receivables, an amount
equal to the Initial Installment of the Purchase Price for such Pool plus the
Balance Payment, if any, for such Pool.
"Purchased Receivable" means an Eligible Receivable due from an Approved
Obligor and purchased under the Receivables Purchase Agreement.
"Purchaser" has the meaning assigned to that term in the recitals of the
Receivables Purchase Agreement.
"Receivable" means the indebtedness of any Obligor under a Contract,
whether constituting an account or general intangible, arising from a sale of
merchandise and/or services by Seller to such Obligor, and includes the right to
payment of any interest or finance charges, if any, and other obligations of
such Obligor with respect thereto.
"Receivables Purchase Agreement" means the Receivables Purchase Agreement
entered into between Aurora Foods Inc., as Seller, and The Chase Manhattan Bank,
as
10
Purchaser, dated April 19, 2000, as the same may be amended, supplemented or
otherwise modified from time to time.
"Related Security" means with respect to any Receivable:
(i) all of Seller's interest in the merchandise (including returned
merchandise and rights of reclamation and replevin), if any, relating to
the sale which gave rise to such Receivable;
(ii) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise;
(iii) the assignment to Purchaser of all UCC financing statements
covering any collateral securing payment of such Receivable;
(iv) all guaranties, insurance proceeds and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Receivable whether pursuant to the Contract related to such
Receivable or otherwise; and
(v) all proceeds of the foregoing.
"Repurchase Amount" has the meaning assigned to such term in Section
5.01(i) of the Receivables Purchase Agreement.
"Repurchase Date" has the meaning assigned to such term in Section 5.01(i)
of the Receivables Purchase Agreement.
"Reserve Adjusted Amount" has the meaning assigned to such term in Section
2.01(d) of the Receivables Purchase Agreement.
"Scheduled Receivable" means any Eligible Receivable listed in a Funding
Certificate.
"Schedule of Eligible Receivables" means a document substantially in the
form of Exhibit C attached to the Receivables Purchase Agreement listing the
Eligible Receivables, the respective Approved Obligors, the Related Security, if
any, and the Aggregate Amount of each Eligible Receivable to be sold on any
given Funding Date.
"Seller" has the meaning assigned to that term in the recitals of the
Receivables Purchase Agreement.
"Sponsor" means any of Fenway Partners, Inc., XxXxxx XxXxxxx & Co., UBS
Capital, LLC and Tiger Oats, Ltd. and any Affiliates thereof.
11
"Subordinated Participants" means each of the signatories listed on the
signature pages of the Participation Agreement as a subordinated participant.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, or other entity the outstanding securities or interests of which
having ordinary voting power to elect a majority of the board of directors or
similar governing body of such corporation, partnership or other entity (whether
or not any other class of securities has or might have voting power by reason of
the happening of a contingency) are at the time owned or controlled directly or
indirectly by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries together.
"Target Yield" has the meaning assigned to such term in Section 2.01(d) of
the Receivables Purchase Agreement.
"Target Yield Percentage" has the meaning assigned to such term in Section
2.01(d) of the Receivables Purchase Agreement.
"Termination Date" means the earlier to occur of (i) the date of
termination of the Receivables Purchase Agreement pursuant to its Section 7.01,
or (ii) the date of termination of the Receivables Purchase Agreement pursuant
to its Section 10.01.
"Transaction Documents" means the Receivables Purchase Agreement, the
Participation Agreement and the Administration Agreement.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of New York, as amended from time to time, and any successor statute;
provided that, if by reason of mandatory provisions of law, the perfection or
the effect of perfection or non-perfection of the security interests in any
collateral is governed by the Uniform Commercial Code as in effect on or after
the date hereof in any other jurisdiction, "UCC" means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provision
hereof relating to such perfection or effect of perfection or non-perfection.
"Weekly Reporting Period" means a seven-day period commencing on Saturday
and ending on Friday of the following week.
"Weekly Settlement Report" means a report to be delivered by Purchaser or
by Administrator on behalf of Purchaser to Seller each Wednesday, or in case
such day is not a Business Day then the next succeeding Business Day, for the
most recently ended Weekly Reporting Period showing, as to all Purchased
Receivables, all amounts collected and deposited with the Lock-Box Provider(s)
during such Weekly Reporting Period, all amounts transferred from the Lock-Box
Provider(s) to Seller, all amounts remitted by Seller to Purchaser and the
amount of any checks that are returned or otherwise dishonored and as to which
the Lock-Box Provider(s) had previously made funds available.
Exhibit B
XXXX OF SALE
The undersigned hereby sells, transfers, assigns and conveys on the
date hereof all its right, title and interest in and to the Eligible Receivables
identified in the attached Schedule of Eligible Receivables, including all
Related Security, if any, in existence as of the date hereof and as described in
the attached Schedule of Eligible Receivables and all moneys due or to become
due with respect thereto, to The Chase Manhattan Bank, ("Purchaser") pursuant to
the Receivables Purchase Agreement between Aurora Foods Inc. ("Seller") and
Purchaser, dated as of April 19, 2000 (the "Receivables Purchase Agreement").
This Xxxx of Sale is made in consideration of the payment of $______.
This sale is made without recourse except with regard to Nonperforming
Receivables and except that the undersigned hereby represents and warrants that
it is the owner of the Eligible Receivables and the Related Security referred to
above and that there exists no Adverse Claim upon or with respect to such
Eligible Receivables and Related Security.
All the capitalized terms used and not otherwise defined herein have
the same meaning as they have in Exhibit A to the Receivables Purchase
Agreement.
This Xxxx of Sale shall be governed by, and construed and interpreted
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Xxxx of Sale to be
duly executed and delivered by its duly authorized officer on the date specified
below.
AURORA FOODS INC.
By:________________________________
Name:
Title:
[Date]
Exhibit C
SCHEDULE OF ELIGIBLE RECEIVABLES SOLD AND PURCHASED AS OF _________
Capitalized terms used herein without definition have the meanings ascribed
thereto in Exhibit A of the Receivables Purchase Agreement between Aurora Foods
Inc. and The Chase Manhattan Bank dated as of April 19, 2000.
*Aggregate Amount Only
The information required on this form may be computer generated.
EXHIBIT D
FUNDING CERTIFICATE
Notice is hereby given pursuant to Section 3.02(a) of the Receivables
Purchase Agreement dated as of April 19, 2000 between Aurora Foods Inc.
("Seller") and The Chase Manhattan Bank ("Purchaser") that on _________________,
200_, Seller will sell to Purchaser the Pool of Eligible Receivables identified
on Schedule I* attached hereto.
Dated:
Very truly yours,
AURORA FOODS INC.
By:_______________________________
Name:
Title:
_______________________________
* Schedule I shall be in the form of Exhibit C to the Receivable Purchase
Agreement.
Exhibit E
ADDRESS LIST
Chief Executive Office: Aurora Foods Inc.
0000 Xx. Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
ATTN: Xxxxxxxxxxx X. Xxxxxxxx, Chief Financial
Officer
Telecopy: (000) 000-0000
Principal Place of Business: Aurora Foods Inc.
0000 Xx. Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
ATTN: Xxxxxxxxxxx X. Xxxxxxxx, Chief Financial
Officer
Telecopy: (000) 000-0000
Exhibit F
NOTIFICATION LETTER
Re: Notice of Purchase and Sale of Receivables
Dear Customer:
We have sold, transferred, assigned and conveyed to The Chase Manhattan
Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000 all of our right to receive payments
from you for the invoices listed on Exhibit A hereto. Please be further advised
that we have sold, transferred, assigned and conveyed all of our security
interests securing the aforementioned payment.
On behalf of The Chase Manhattan Bank we request you to send, from the
date hereof, all payments due based on the aforementioned invoices listed on
Exhibit A and only those invoices so listed and all proceeds of the related
security to [NAME AND ADDRESS OF LOCK-BOX PROVIDER] for the credit and advice of
The Chase Manhattan Bank [INSERT WIRE INSTRUCTIONS] for the benefit of Aurora
Foods Inc. Any other correspondence regarding such payment should be forwarded
to The Chase Manhattan Bank at the aforementioned address. You are authorized to
rely on a photocopy of this letter.
Very truly yours,
Title:
