EXHIBIT 4.15
EXECUTION COPY
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RECEIVABLES SALE AGREEMENT
Dated as of May 7, 2004
Between
VITRO AMERICA, INC.,
as Originator,
and
VVP FUNDING CORPORATION,
as Buyer
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TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE........................1
Section 1.1. Initial Contribution of Receivables......................1
Section 1.2. Purchase of Receivables..................................2
Section 1.3. Payment for the Purchase.................................3
Section 1.4. Purchase Price Credit Adjustments........................4
Section 1.5. Payments and Computations, Etc...........................5
Section 1.6. Transfer of Records......................................5
Section 1.7. Characterization; Power of Attorney......................5
ARTICLE II REPRESENTATIONS AND WARRANTIES...........................6
Section 2.1. Representations and Warranties of Originator.............6
ARTICLE III CONDITIONS OF PURCHASE..................................10
Section 3.1. Conditions Precedent to Purchase........................10
Section 3.2. Conditions Precedent to Subsequent Payments.............10
ARTICLE IV COVENANTS...............................................11
Section 4.1. Affirmative Covenants of Originator.....................11
Section 4.2. Negative Covenants of Originator........................15
Section 4.3. Post Office Boxes.......................................17
ARTICLE V TERMINATION EVENTS......................................17
Section 5.1. Termination Events......................................17
Section 5.2. Remedies................................................19
ARTICLE VI INDEMNIFICATION.........................................20
Section 6.1. Indemnities by Originator...............................20
Section 6.2. Other Costs and Expenses................................22
ARTICLE VII MISCELLANEOUS...........................................22
Section 7.1. Waivers and Amendments..................................22
Section 7.2. Notices.................................................23
Section 7.3. Protection of Ownership Interests of Buyer..............23
Section 7.4. Confidentiality.........................................24
Section 7.5. Bankruptcy Petition.....................................25
Section 7.6. Limitation of Liability.................................25
Section 7.7. Choice of Law...........................................25
Section 7.8. Consent to Jurisdiction.................................25
Section 7.9. Waiver of Jury Trial....................................26
Section 7.10. Integration; Binding Effect; Survival of Terms..........26
Section 7.11. Counterparts; Severability; Section References..........27
EXHIBITS
Exhibit I Definitions
Exhibit II Jurisdiction of Organization, Principal Place of Business;
Chief Executive Office; Location(s) of Records; Federal
Employer Identification Number; Other Names
Exhibit III Lock-Boxes; Collection Accounts; Collection Banks;
Exhibit IV Form of Compliance Certificate
Exhibit V Copy of Credit and Collection Policy
Exhibit VI Form of Purchase Report
Exhibit VII Form of Power of Attorney
Exhibit VIII Form of Subordinated Note
Exhibit IX Form of Postal Power of Attorney
Exhibit XIV Form of Direction Letter
SCHEDULES
Schedule A Closing Documents
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RECEIVABLES SALE AGREEMENT
RECEIVABLES SALE AGREEMENT, dated as of May 7, 2004, by and between VITRO
AMERICA, INC., a Delaware corporation ("Originator"), and VVP FUNDING
CORPORATION, a Delaware corporation ("Buyer"). Unless defined elsewhere
herein, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in Exhibit I hereto (or, if not defined in Exhibit I
hereto, the meaning assigned to such term in Exhibit I to the Purchase
Agreement).
PRELIMINARY STATEMENTS
Originator now owns, and from time to time hereafter will own,
Receivables. Originator wishes to sell, assign, contribute or otherwise
transfer to Buyer, and Buyer wishes to purchase from Originator, all of
Originator's right, title and interest in and to such Receivables, together
with the Related Security and Collections with respect thereto.
Originator and Buyer intend the transactions contemplated hereby to be
true sales of the Receivables from Originator to Buyer, providing Buyer with
the full benefits of ownership of the Receivables, and Originator and Buyer do
not intend these transactions to be, or for any purpose to be characterized
as, loans from Buyer to Originator.
Following the purchase of Receivables from Originator, Buyer will sell
undivided interests therein and in the associated Related Security and
Collections pursuant to that certain Receivables Purchase Agreement dated as
of May 7, 2004 (as the same may from time to time hereafter be amended,
supplemented, restated or otherwise modified, the "Purchase Agreement") among
Buyer, Originator, as initial Servicer, Windmill Funding Corporation as the
Conduit (the "Conduit"), the Committed Purchasers from time to time party
thereto and ABN AMRO Bank N.V., as Agent (in such capacity, the "Agent").
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1. Initial Contribution of Receivables. On the date hereof,
Originator does hereby contribute, assign, transfer, set-over and otherwise
convey to Buyer, and Buyer does hereby accept from Originator, Receivables
originated by Originator and existing as of the close of business on April 30,
2004 (the "Initial Cutoff Date") having an aggregate Outstanding Balance of up
to $63,926,196.90 (the "Initial Contributed Receivables"), together with all
Related Security relating thereto and all Collections thereof.
Section 1.2. Purchase of Receivables. (a) Effective on the date
hereof, in consideration for the Purchase Price and upon the terms and subject
to the conditions set forth herein,
Originator does hereby sell, assign, transfer, set-over and otherwise convey
to Buyer, without recourse (except to the extent expressly provided herein),
and Buyer does hereby purchase from Originator, all of Originator's right,
title and interest in and to all Receivables existing as of the close of
business on the Initial Cutoff Date (other than the Initial Contributed
Receivables) and all Receivables thereafter arising through and including the
Termination Date, together, in each case, with all Related Security relating
thereto and all Collections thereof. In accordance with the preceding
sentence, on the date hereof Buyer shall acquire all of Originator's right,
title and interest in and to all Receivables existing as of the Initial Cutoff
Date and thereafter arising through and including the Termination Date,
together with all Related Security relating thereto and all Collections
thereof. Buyer shall be obligated to pay the Purchase Price for the
Receivables purchased hereunder in accordance with Section 1.3.
(b) On each Monthly Reporting Date, Originator shall (or shall
require the Servicer to) deliver to Buyer a report in substantially the form
of Exhibit VI hereto (each such report being herein called a "Purchase
Report") with respect to the Receivables sold and/or contributed by Originator
to Buyer during the Settlement Period then most recently ended. In addition
to, and not in limitation of, the foregoing, in connection with the payment of
the Purchase Price for any Receivables purchased hereunder, Buyer may request
that Originator deliver, and Originator shall deliver, such approvals,
opinions, information or documents as Buyer may reasonably request.
(c) It is the intention of the parties hereto that the Purchase of
Receivables made hereunder shall constitute a sale and/or contribution, which
sale and/or contribution, as the case may be, is absolute and irrevocable and
provides Buyer with the full benefits of ownership of the Receivables. Except
for the Purchase Price Credits owed pursuant to Section 1.4, the transfer of
Receivables hereunder is made without recourse to Originator; provided,
however, that (i) Originator shall be liable to Buyer for all representations,
warranties, covenants and indemnities made by Originator pursuant to the terms
of the Transaction Documents to which Originator is a party, and (ii) such
transfer does not constitute and is not intended to result in an assumption by
Buyer or any assignee thereof of any obligation of Originator or any other
Person arising in connection with the Receivables, the related Contracts
and/or other Related Security or any other obligations of Originator. In view
of the intention of the parties hereto that the Purchase of Receivables made
hereunder shall constitute a sale and/or contribution of such Receivables
rather than loans secured thereby, Originator agrees that it will, on or prior
to the date hereof and in accordance with Section 4.1(e)(ii), xxxx its master
data processing records relating to the Receivables with a legend acceptable
to Buyer and to the Agent (as Buyer's assignee), evidencing that Buyer has
acquired such Receivables as provided in this Agreement and to note in its
financial statements that its Receivables have been absolutely transferred to
Buyer. Upon the request of Buyer or the Agent (as Buyer's assignee),
Originator will execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate to perfect and maintain the
perfection of Buyer's ownership interest in the Receivables and the Related
Security and Collections with respect thereto, or as Buyer or the Agent (as
Buyer's assignee) may reasonably request.
Section 1.3. Payment for the Purchase. (a) The Purchase Price for the
Purchase of Receivables in existence as of the close of business on the
Initial Cutoff Date (other than the
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Initial Contributed Receivables) shall be payable in full by Buyer to
Originator on the date hereof, and shall be paid to Originator in the
following manner:
(i) by delivery of immediately available funds, to the extent of
funds made available to Buyer in connection with its subsequent sale of
an interest in such Receivables under the Purchase Agreement; and
(ii) the balance, by delivery of the proceeds of a subordinated
revolving loan from Originator to Buyer (a "Subordinated Loan") in an
amount not to exceed the least of (A) the remaining unpaid portion of
such Purchase Price, (B) the maximum Subordinated Loan (aggregated with
all Subordinated Loans then outstanding to Originator) that could be
borrowed without rendering Buyer's Net Worth less than the Required
Capital Amount, and (C) fifteen percent (15%) of such Purchase Price.
Originator is hereby authorized by Buyer to endorse on the schedule
attached to the Subordinated Note an appropriate notation evidencing the
date and amount of each advance thereunder, as well as the date of each
payment with respect thereto, provided that the failure to make such
notation shall not affect any obligation of Buyer thereunder.
The Purchase Price for each Receivable coming into existence after the
Initial Cutoff Date shall be due and owing in full by Buyer to Originator or
its designee on the date each such Receivable came into existence (except that
Buyer may, with respect to any such Purchase Price, offset against such
Purchase Price any amounts owed by Originator to Buyer hereunder and which
have become due but remain unpaid) and shall be paid to Originator in the
manner provided in the following paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into existence after the
Initial Cutoff Date, on each Settlement Date, Buyer shall pay the Purchase
Price therefor in accordance with Section 1.3(d) and in the following manner:
first, by delivery of immediately available funds, to the extent of
funds available to Buyer from its subsequent sale of an interest in the
Receivables under the Purchase Agreement or other cash on hand;
second, by delivery of the proceeds of a Subordinated Loan, provided
that the making of any such Subordinated Loan shall be subject to the
provisions set forth in Section 1.3(a)(ii); and
third, by accepting a contribution to its capital in an amount equal
to the remaining unpaid balance of such Purchase Price. From and after
the Termination Date, Originator shall not: (i) sell Receivables to
Buyer, or (ii) contribute Receivables to Buyer's capital.
Subject to the limitations set forth in Section 1.3(a)(ii), Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to the Termination Date. The Subordinated Loans shall be evidenced by,
and shall be payable in accordance with the terms and provisions of the
Subordinated Note and shall be payable solely from funds which Buyer is not
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required under the Purchase Agreement to set aside for the benefit of, or
otherwise pay over to, the Agent for the benefit of the Secured Parties.
(c) Although the Purchase Price for each Receivable coming into existence
after the Initial Cutoff Date shall be due and payable in full by Buyer to
Originator on the date such Receivable came into existence, settlement of the
Purchase Price between Buyer and Originator shall be effected on a monthly
basis on Settlement Dates with respect to all Receivables coming into
existence during the same Calculation Period and based on the information
contained in the Purchase Report delivered by Originator for the Calculation
Period then most recently ended. Although settlement shall be effected on
Settlement Dates, increases or decreases in the amount owing under the
Subordinated Note made pursuant to Section 1.3 and any contribution of capital
by Originator to Buyer made pursuant to Section 1.3(b) shall be deemed to have
occurred and shall be effective as of the last Business Day of the Calculation
Period to which such settlement relates.
Section 1.4. Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any defective or rejected or
returned goods or services, any cash discount or any adjustment or
otherwise by Originator or any Affiliate thereof, or as a result of
any tariff or other governmental action, or
(ii) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same
or a related transaction or an unrelated transaction), or
(iii) reduced on account of the obligation of Originator or any
Affiliate thereof to pay the related Obligor any rebate or refund,
or
(iv) less than the amount included in the calculations in any
Purchase Report (for any reason other than receipt of Collections or
such Receivable becoming a Defaulted Receivable), or
(b) any of the representations and warranties set forth in Section
2.1(g), Section 2.1(i), Section 2.1(j), Section 2.1(r), Section 2.1(s),
Section 2.1(t) or Section 2.1(u) are not true when made or deemed made
with respect to any Receivable,
then, in such event, Buyer shall be entitled to a credit (each, a "Purchase
Price Credit") against the Purchase Price otherwise payable hereunder equal to
the amount of such reduction or cancellation of the Outstanding Balance of
such Receivable (calculated before giving effect to the applicable reduction
or cancellation). If such Purchase Price Credit exceeds the Original Balance
of the Receivables coming into existence on any day, then Originator shall pay
the remaining amount of such Purchase Price Credit in cash immediately.
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Section 1.5. Payments and Computations, Etc. All amounts to be paid or
deposited by Buyer hereunder shall be paid or deposited in accordance with the
terms hereof on the day when due in immediately available funds to the account
of Originator designated from time to time by Originator or as otherwise
directed by Originator. In the event that any payment owed by any Person
hereunder becomes due on a day that is not a Business Day, then such payment
shall be made on the next succeeding Business Day. If any Person fails to pay
any amount hereunder when due, such Person agrees to pay, on demand, the
Default Fee in respect thereof until paid in full; provided, however, that
such Default Fee shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made
on the basis of a year of 360 days for the actual number of days (including
the first but excluding the last day) elapsed.
Section 1.6. Transfer of Records. (a) In connection with the Purchase of
Receivables hereunder, Originator hereby sells, transfers, assigns and
otherwise conveys to Buyer all of Originator's right and title to and interest
in the Records relating to all Receivables sold or contributed hereunder,
without the need for any further documentation in connection with the
Purchase. In connection with such transfer, Originator hereby grants to each
of Buyer, the Agent and the Servicer an irrevocable, non-exclusive license to
use, without royalty or payment of any kind, all software used by Originator
to account for the Receivables, to the extent necessary to administer the
Receivables, whether such software is owned by Originator or is owned by
others and used by Originator under license agreements with respect thereto,
provided that should the consent of any licensor of such software be required
for the grant of the license described herein, to be effective, Originator
hereby agrees that upon the request of Buyer (or Buyer's assignee), Originator
will use its reasonable efforts to obtain the consent of such third-party
licensor. The license granted hereby shall be irrevocable until the
indefeasible payment in full of the Aggregate Unpaids, and shall terminate on
the date this Agreement terminates in accordance with its terms.
(b) Originator (i) shall take such action requested by Buyer and/or the
Agent (as Buyer's assignee), from time to time hereafter, that may be
necessary or appropriate to ensure that Buyer and its assigns under the
Purchase Agreement have an enforceable ownership interest in the Records
relating to the Receivables purchased from Originator hereunder, and (ii)
shall use its reasonable efforts to ensure that Buyer, the Agent and the
Servicer each has an enforceable right (whether by license or sublicense or
otherwise) to use all of the computer software used to account for the
Receivables and/or to recreate such Records.
Section 1.7. Characterization; Power of Attorney. (a) If,
notwithstanding the intention of the parties expressed in Section 1.2(c), any
sale or contribution by Originator to Buyer of Receivables hereunder shall be
characterized as a secured loan and not a sale or contribution or such sale or
contribution, as the case may be, shall for any reason be ineffective or
unenforceable, then this Agreement shall be deemed to constitute a security
agreement under the UCC and other applicable law. For this purpose and without
being in derogation of the parties' intention that the sale of Receivables
hereunder shall constitute a true sale and absolute assignment thereof,
Originator hereby grants to Buyer a duly perfected security interest in all of
Originator's right, title and interest, whether now owned or hereafter
acquired, in, to and under all Receivables now existing and hereafter arising,
all Collections and Related Security with respect thereto, all other rights
and payments relating to the Receivables and all proceeds of the foregoing
(collectively,
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the "Originator Collateral") to secure the prompt and complete payment of a
loan deemed to have been made in an amount equal to the Purchase Price of the
Receivables together with all other obligations of Originator hereunder.
Originator shall take such action as may be necessary or appropriate to ensure
that such security interest is duly perfected and prior to all other Adverse
Claims thereto. Buyer and its assigns shall have, in addition to the rights
and remedies which they may have under this Agreement, all rights and remedies
provided to a secured creditor under the UCC and other applicable law, which
rights and remedies shall be cumulative.
(b) On the Closing Date, Originator shall execute and deliver to the
Agent a power of attorney substantially in the form attached hereto as Exhibit
VII (a "Power of Attorney"). The power of attorney granted pursuant to such
Power of Attorney is a power coupled with an interest and shall be irrevocable
until all Aggregate Unpaids are indefeasibly paid or otherwise satisfied in
full. The powers conferred on the Buyer (or its assigns) under the Power of
Attorney are solely to protect the Buyer's (and its assigns') and shall not
impose any duty upon the Buyer (or its assigns) to exercise any such powers.
The Buyer (or its assigns) shall not be accountable for any amount other than
amounts that it actually receives as a result of the exercise of such powers
and none of the Buyer's (and its assigns') officers, directors, employees,
agents or representatives shall be responsible to Originator for any act or
failure to act, except in respect of damages attributable solely to their own
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction. The Buyer (and its assigns) shall exercise its rights
and remedies under the Power of Attorney only to the extent otherwise
permitted under the Transaction Documents.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of Originator. Originator
hereby represents and warrants to Buyer on the date hereof, on the date of the
Purchase and on each date that any Receivable comes into existence that:
(a) Existence and Power. Its jurisdiction of organization is correctly
set forth in Exhibit II to this Agreement. It is duly organized under the laws
of such jurisdiction and is a "registered organization" as defined in the UCC
in effect in such jurisdiction. It is validly existing and in good standing
under the laws of its jurisdiction of organization. It is duly qualified to do
business and is in good standing as a foreign entity, and has and holds all
organizational power and all governmental licenses, authorizations, consents
and approvals required to carry on its business in each jurisdiction in which
its business is conducted except where the failure to do so qualify or so hold
could not reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery. Its
execution and delivery of this Agreement and each other Transaction Document
to which it is a party, and the performance of its obligations hereunder and
thereunder and, its use of the proceeds of the Purchase made hereunder, are
within its organizational powers and authority and have been duly
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authorized by all necessary organizational action on its part. This Agreement
and each other Transaction Document to which it is a party has been duly
executed and delivered by it.
(c) No Conflict. Its execution and delivery of this Agreement and each
other Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder do not contravene or violate (i) its
Organizational Documents, (ii) any law, rule or regulation applicable to it,
(iii) any restrictions under any agreement, contract or instrument to which it
is a party or by which it or any of its property is bound, or (iv) any order,
writ, judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on its assets or the assets of its Subsidiaries (except as created hereunder)
except, in any case, where such contravention or violation could not
reasonably be expected to have a Material Adverse Effect; and no transaction
contemplated hereby requires compliance with any bulk sales act or similar
law.
(d) Governmental Authorization. Other than the filing of the UCC
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for its due execution and delivery of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings pending,
or to the best of its knowledge, threatened, against or affecting it, or any
of its properties, in or before any court, arbitrator or other body, that
could reasonably be expected to have a Material Adverse Effect. It is not in
default with respect to any order of any court, arbitrator or governmental
body that could reasonably be expected to have a Material Adverse Effect.
(f) Binding Effect. This Agreement and each other Transaction Document to
which it is a party constitute its legal, valid and binding obligations,
enforceable against it in accordance with their respective terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(g) Accuracy of Information. All information (other than any projections,
forecasts or other forward-looking information) heretofore furnished by it or
any of its Affiliates to Buyer (or its assigns) for purposes of or in
connection with this Agreement, any of the other Transaction Documents or any
transaction contemplated hereby or thereby is, and all such information (other
than any projections, forecasts or other forward-looking information)
hereafter furnished by it or any of its Affiliates to Buyer (or its assigns)
will be, true, complete and accurate in every material respect on the date
such information is stated or certified and does not and will not contain any
material misstatement of fact.
(h) Use of Proceeds. No portion of any Purchase Price payment hereunder
will be used (i) for a purpose that violates any law, rule or regulation
applicable to it or (ii) to acquire any security in any transaction which is
subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as
amended.
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(i) Title. Immediately prior to each Purchase hereunder and upon the
creation of each Receivable coming into existence after the Initial Cutoff
Date, it owns and has legal and equitable title to the Originator Collateral,
free and clear of any Adverse Claim, except as created by the Transaction
Documents. There have been duly filed all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable
law) of all appropriate jurisdictions to perfect Buyer's ownership interest in
the Originator Collateral.
(j) Perfection.
(i) This Agreement creates a valid and continuing security interest
(as defined in the UCC) in the Originator Collateral in favor of Buyer,
which security interest is prior to all other Liens and is enforceable as
such as against creditors and purchasers from Originator.
(ii) All actions necessary under the UCC (or any comparable law) of
all appropriate jurisdictions have been taken including, without
limitation, the execution of the Collection Account Agreements and the
filing of UCC financing statements or other similar instruments or
documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect (A) its security interest in each
Receivable, its Collections and the Related Security and (B) the Buyer's
security interest in the Originator Collateral.
(iii) Other than the security interest granted to Buyer pursuant to
this Agreement and security interests that have been terminated or become
ineffective on or prior to the date hereof, Originator has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any
of the Originator Collateral.
(iv) Originator has not authorized the filing of and is not aware of
any financing statements against Originator that include a description of
collateral covering the Originator Collateral other than any financing
statement relating to the security interest granted to Buyer hereunder or
that has been terminated or otherwise becomes ineffective on or prior to
the date hereof. Originator is not aware of any judgment or tax lien
filings against Originator.
(v) Each Receivable constitutes an "account" within the meaning of
the UCC.
(k) Places of Business and Locations of Records. Its jurisdiction of
organization, principal places of business and chief executive office and the
offices where it keeps all of its Records are located at the address(es)
listed on Exhibit II attached hereto or such other locations of which Buyer
has been notified in accordance with Section 4.2(a) in jurisdictions where all
action required by Section 4.2(a) has been taken and completed. Its Federal
Employer Identification Number is correctly set forth on Exhibit II attached
hereto.
(l) Collections. The conditions and requirements set forth in Section
4.1(i) have at all times been satisfied and duly performed. The names and
addresses of all Collection Banks, together with the account numbers of its
Collection Accounts at each Collection Bank and the
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post office box number of each Lock-Box, are listed on Exhibit III attached
hereto. It has not granted any Person, other than Buyer (and its assigns), as
contemplated by this agreement, dominion and control of any Lock-Box or
Collection Account, or the right to take dominion and control of any such
Lock-Box or Collection Account at a future time or upon the occurrence of a
future event.
(m) Material Adverse Effect. Since December 31, 2003, no event has
occurred that would have a Material Adverse Effect.
(n) Names. The name in which it has executed this Agreement is identical
to its name as indicated on the public record of its jurisdiction of
organization which shows it to have been organized. In the past five (5)
years, it has not used any organizational names, trade names or assumed names
other than the name in which it has executed this Agreement and as listed on
Exhibit II attached hereto.
(o) Ownership of Buyer. It owns, directly or indirectly, 100% of the
issued and outstanding equity interests of Buyer, free and clear of any
Adverse Claim. Such equity interests are validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Buyer.
(p) Not a Holding Company or an Investment Company. It is not a "holding
company" or a "subsidiary holding company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended, or any
successor statute. It is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or any successor statute.
(q) Compliance with Law. It has complied in all respects with all
applicable laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect.
Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (including,
without limitation, laws, rules and regulations relating to truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity, fair
debt collection practices and privacy), and no part of such Contract is in
violation of any such law, rule or regulation, except where such contravention
or violation could not reasonably be expected to have a Material Adverse
Effect.
(r) Compliance with Credit and Collection Policy. It has complied in all
material respects with the Credit and Collection Policy with regard to each
Receivable and the related Contract, and has not made any change to such
Credit and Collection Policy, except such change as to which Buyer (or its
assigns) has been notified in accordance with Section 4.1(a)(vii).
(s) Payments to Originator. With respect to each Receivable transferred
to Buyer hereunder, the Purchase Price received by it constitutes reasonably
equivalent value in consideration therefor. No transfer by it of any
Receivable hereunder is or may be voidable under any section of the Bankruptcy
Reform Act of 1978 (11 U.S.C. xx.xx. 101 et seq.), as amended.
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(t) Enforceability of Contracts. Each Contract with respect to each
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable reflected in any Purchase
Report as an Eligible Receivable was an Eligible Receivable on the date of its
acquisition by Buyer hereunder.
(v) Accounting. Originator will account for the transactions contemplated
by this Agreement as true sales.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1. Conditions Precedent to Purchase. The Purchase under this
Agreement is subject to the conditions precedent that (a) Buyer shall have
been capitalized with the Initial Contributed Receivables, (b) Buyer shall
have received on or before the Closing Date those documents listed on Schedule
A attached hereto and (c) all of the conditions to the effectiveness of the
Purchase Agreement shall have been satisfied or waived in accordance with the
terms thereof.
Section 3.2. Conditions Precedent to Subsequent Payments. Buyer's
obligation to pay for Receivables coming into existence after the Initial
Cutoff Date shall be subject to the further conditions precedent that: (a) the
Facility Termination Date shall not have occurred under the Purchase
Agreement; (b) Buyer (or its assigns) shall have received such other
approvals, opinions or documents as it may reasonably request and (c) on the
date such Receivable came into existence, the following statements shall be
true (and acceptance of the proceeds of any payment for such Receivable shall
be deemed a representation and warranty by Originator that such statements are
then true):
(i) the representations and warranties set forth in Article II are
true and correct on and as of the date such Receivable came into
existence as though made on and as of such date, except to the extent
such representations and warranties are expressly limited to an earlier
date; and
(ii) no event has occurred and is continuing that will constitute a
Termination Event or an Unmatured Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the
Purchase Price for any Receivable (whether by payment of cash and/or by
capital contribution), title to such Receivable
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and the Related Security and Collections with respect thereto shall vest in
Buyer, whether or not the conditions precedent to Buyer's obligation to pay
for such Receivable were in fact satisfied.
ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of Originator. Until the date on which
this Agreement terminates in accordance with its terms, Originator hereby
covenants, as to itself, as set forth below:
(a) Financial Reporting. It will maintain, for itself and each of its
Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and will furnish or cause to be furnished to Buyer (or
its assigns):
(i) Annual Reporting. As soon as available and in any event within
one hundred twenty (120) days after the end of each of its fiscal years,
the audited balance sheet and the related audited consolidated statements
of income and cash flows for Originator and its consolidated Subsidiaries
as at the end of such fiscal year, setting forth in each case in
comparative form the figures for such fiscal year, all reported in
conformity with GAAP, with the unqualified opinion of independent public
accountants of recognized international standing.
(ii) Quarterly Reporting. As soon as available and in any event
within sixty (60) days after the end of each quarter of each of its
fiscal years, the unaudited consolidated balance sheet of Originator and
the related unaudited consolidated statements of income and cash flows of
Originator and its consolidated Subsidiaries for such quarter and for the
period from the beginning of the then current fiscal year to the end of
such quarter, setting forth in each case in comparative form the figures
for the corresponding quarter in the previous fiscal year, all certified
as to the fairness of presentation and conformity with GAAP by an
Authorized Officer of Originator.
(iii) Compliance Certificate. Together with the financial statements
required hereunder, a compliance certificate in substantially the form of
Exhibit IV attached hereto, signed by its Authorized Officer and dated
the date of such annual financial statement or such quarterly financial
statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to its shareholders, copies of all financial
statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which it or any of its Subsidiaries files with the Securities and
Exchange Commission.
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(vi) Copies of Notices. Promptly upon its receipt of any notice,
request for consent, financial statements, certification, report or other
communication under or in connection with any Transaction Document from
any Person other than Buyer or the Agent, copies of the same.
(vii) Change in Credit and Collection Policy. At least thirty (30)
days prior to the effectiveness of any change in or amendment to the
Credit and Collection Policy, a copy of the Credit and Collection Policy
then in effect and a notice (A) indicating such proposed change or
amendment, and (B) if such proposed change or amendment would be
reasonably likely to adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created
Receivables, requesting Buyer's (and the Agent's, as Buyer's assignee)
consent thereto.
(viii) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables or
the financial condition or results of operations, financial, of it as
Buyer (or its assigns) may from time to time reasonably request in order
to protect the interests of Buyer (and its assigns) under or as
contemplated by this Agreement.
(b) Notices. It will notify Buyer (or its assigns) in writing of any of
the following promptly upon learning of the occurrence thereof, describing the
same and, if applicable, the steps being taken with respect thereto:
(i) Termination Events or Unmatured Termination Events. The
occurrence of each Termination Event and each Unmatured Termination
Event, by a statement of its Authorized Officer.
(ii) Judgment and Proceedings. (A) The entry of any judgment or
decree against it or any of its Subsidiaries if the aggregate amount of
all judgments and decrees then outstanding against it and its
Subsidiaries exceeds $500,000 after deducting (1) the amount with respect
to which it or any such Subsidiary is insured and with respect to which
the insurer has assumed responsibility in writing, and (2) the amount for
which it or any such Subsidiary is otherwise indemnified if the terms of
such indemnification are reasonably satisfactory to Buyer (or its
assigns), and (B) the institution of any litigation, arbitration
proceeding or governmental proceeding against it which, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(iii) Material Adverse Effect. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
(iv) Defaults Under Other Agreements. The occurrence of a default or
an event of default under any other financing arrangement pursuant to
which it is a debtor or an obligor.
(v) ERISA Events. The occurrence of any ERISA Event.
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(vi) Downgrade. If its Indebtedness shall be rated by any
Rating Agency, any downgrade in, or withdrawal of, the rating of any
of its Indebtedness by such Rating Agency, setting forth the
Indebtedness affected and the nature of such change.
(c) Compliance with Laws and Preservation of Existence. It will comply in
all respects with all applicable laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. It will preserve and maintain its legal existence,
rights, franchises and privileges in the jurisdiction of its organization, and
qualify and remain qualified in good standing as a foreign entity in each
jurisdiction where its business is conducted, except where the failure to so
preserve and maintain or qualify could not reasonably be expected to have a
Material Adverse Effect.
(d) Audits. It will furnish to Buyer (or its assigns) from time to time
such information with respect to it and the Receivables as Buyer (or its
assigns) may reasonably request. It will, from time to time during regular
business hours as requested by Buyer (or its assigns), upon reasonable notice
and at its sole cost, permit Buyer (or its assigns) or their respective agents
or representatives, (i) to examine and make copies of and abstracts from all
Records in the possession or under its control relating to the Receivables and
the Related Security, including, without limitation, the related Contracts,
and (ii) to visit its offices and properties for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to
its financial condition or the Receivables and the Related Security or its
performance under any of the Transaction Documents or its performance under
the Contracts and, in each case, with any of its officers or employees having
knowledge of such matters (each of the foregoing examinations and visits, a
"Review"); provided, however, that if an Unmatured Termination Event or a
Termination Event shall have occurred and be continuing, then Originator shall
permit Buyer (or its assigns) to conduct a Review at any time and without
advance notice.
(e) Keeping and Marking of Records and Books.
(i) It will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate records
evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit
the immediate identification of each new Receivable and all Collections
of and adjustments to each existing Receivable). It will give Buyer (or
its assigns) notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
(ii) It will (A) on or prior to the date hereof, xxxx its master
data processing records and other books and records relating to the
Receivables with a legend, reasonably acceptable to Buyer (or its
assigns), describing Buyer's ownership interests in the Receivables and
further describing the Receivable Interests of the Agent (on behalf of
the Secured Parties) under the Purchase Agreement and (B) upon the
request of Buyer (or its assigns): (1) xxxx each Contract with a legend
describing Buyer's ownership interests in
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the Receivables and further describing the Receivable Interests of the
Agent (on behalf of the Secured Parties) and (2) assemble and make
available to Buyer (or its assigns) at its sole expense all Contracts
(including, without limitation, all multiple originals of any such
Contract) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. It will
timely and fully (i) perform and comply with all provisions, covenants and
other promises required to be observed by it under the Contracts related to
the Receivables, and (ii) comply with the Credit and Collection Policy in
regard to each Receivable and the related Contract.
(g) Ownership. It will take all necessary action to establish and
maintain, irrevocably in Buyer, (A) legal and equitable title to the
Receivables and the Collections and (B) all of its right, title and interest
in the Related Security associated with the Receivables, in each case, free
and clear of any Adverse Claims other than Adverse Claims in favor of Buyer
(and its assigns) (including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under the UCC
(or any comparable law) of all appropriate jurisdictions to perfect Buyer's
security interest in such Receivables, Related Security and Collections and
such other action to perfect, protect or more fully evidence the security
interest of Buyer as Buyer (or its assigns) may reasonably request).
(h) Secured Parties' Reliance. It acknowledges that the Agent and the
Secured Parties are entering into the transactions contemplated by the
Purchase Agreement in reliance upon Buyer's identity as a legal entity that is
separate from it and any Affiliates thereof. Therefore, from and after the
date of execution and delivery of this Agreement, it will take all reasonable
steps including, without limitation, all steps that Buyer or any assignee of
Buyer may from time to time reasonably request to maintain Buyer's identity as
a separate legal entity and to make it manifest to third parties that Buyer is
an entity with assets and liabilities distinct from those of it and any
Affiliates thereof and not just a division of it or any such Affiliate.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, it will not hold itself out to third parties as
liable for the debts of Buyer nor purport to own the Receivables and other
assets acquired by Buyer, (ii) will take all other actions necessary on its
part to ensure that Buyer is at all times in compliance with the "separateness
covenants" set forth in Section 7.1(i) of the Purchase Agreement and (iii)
will cause all tax liabilities arising in connection with the transactions
contemplated herein or otherwise to be allocated between it and Buyer on an
arm's-length basis and in a manner consistent with the procedures set forth in
U.S. Treasury Regulations ss.ss.1.1502-33(d) and 1.1552-1.
(i) Collections. It will cause (i) all cash, checks, money orders or
other proceeds of the Receivables and Related Security received by it, in the
form so received (with all necessary endorsements), not later than the close
of business on the first Business Day following receipt thereof to be
deposited into a Depositary Account or Lock-Box, (ii) all proceeds of the
Receivables and Related Security received in any Depositary Account or
Lock-Box to be transferred to a Concentration Account on each Business Day in
same day funds, (iii) each Collection Bank maintaining each Concentration
Account to deposit on each Business Day in one day funds, all available funds
in each Concentration Account to the Facility Account and (iv) each Collection
Account to be subject at all times to a Collection Account Agreement that is
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in full force and effect. At all times prior to remittance to a Collection
Account, it will itself hold or, if applicable, will cause such payments to be
held in trust for the exclusive benefit of Buyer and its assigns. It will
transfer exclusive ownership, dominion and control of each Lock-Box and
Collection Account to Buyer and shall not grant the right to take dominion and
control of any Lock-Box or Collection Account at a future time or upon the
occurrence of a future event to any Person, except to Buyer (or its assigns)
as contemplated by this Agreement and the Purchase Agreement.
(j) Taxes. It will file all tax returns and reports required by law to be
filed by it and promptly pay all taxes and governmental charges at any time
owing, except any such taxes which are not yet delinquent or are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books. It will pay when due any taxes payable in connection with the
Receivables, exclusive of taxes on or measured by income or gross receipts of
Buyer and its assigns.
Section 4.2. Negative Covenants of Originator. Until the date on which
this Agreement terminates in accordance with its terms, Originator hereby
covenants that:
(a) Change in Name, Jurisdiction of Organization, Offices and Records. It
will not change (i) its name as it appears in official filings in the
jurisdiction of its organization, (ii) its status as a "registered
organization" (within the meaning of Article 9 of any applicable enactment of
the UCC) in such jurisdiction, (iii) its organizational identification number,
if any, issued by its jurisdiction of organization, or (iv) its jurisdiction
of organization unless it shall have: (A) given Buyer (or its assigns) at
least forty-five (45) days' prior written notice thereof; (B) at least ten
(10) days prior to such change, delivered to Buyer (or its assigns) all
financing statements, instruments and other documents requested by Buyer (or
its assigns) in connection with such change or relocation and (C) caused an
opinion of counsel acceptable to Buyer and its assigns to be delivered to
Buyer and its assigns that Buyer's security interest is perfected and of first
priority, such opinion to be in form and substance acceptable to Buyer and its
assigns in their sole discretion.
(b) Change in Payment Instructions to Obligors. It will not add or
terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless Buyer (or its assigns) shall have received, at
least ten (10) days before the proposed effective date therefor, (i) written
notice of such addition, termination or change and (ii) with respect to the
addition of a Collection Bank or a Collection Account or Lock-Box, an executed
Collection Account Agreement with respect to the new Collection Account or
Lock-Box; provided, however, that it may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. It will
not make any change to the Credit and Collection Policy unless, at least 30
days prior to such change or amendment, it has delivered to the Buyer (and its
assigns), a copy of the Credit and Collection Policy then in effect and a
notice (i) indicating such proposed change or amendment and (ii) if such
proposed change or amendment would be reasonably likely to adversely affect
the
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collectibility of the Receivables or decrease the credit quality of any
newly created Receivables, requesting for the Buyer's (and its assigns')
consent thereto and in connection therewith, prior to such proposed change or
amendment Originator has received Buyer's (and its assigns') consent thereto.
Except as otherwise permitted in its capacity as Servicer pursuant to the
Purchase Agreement, it will not extend, amend or otherwise modify the terms of
any Receivable or any Contract related thereto other than in accordance with
the Credit and Collection Policy.
(d) Sales, Liens. It will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other
than, in each case, the creation of a security interest therein in favor of
Buyer provided for herein), and it will defend the right, title and interest
of Buyer in, to and under any of the foregoing property, against all claims of
third parties claiming through or under it. It shall not create or suffer to
exist any mortgage, pledge, security interest, encumbrance, lien, charge or
other similar arrangement on any of its inventory, the financing or lease of
which gives rise to any Receivable. Notwithstanding the foregoing, the
Originator may create and permit to exist the security interests described in
the Intercreditor Agreement and granted to Bank of America, N.A., pursuant to
the Amended and Restated Loan and Security Agreement dated as of June 27,
2003, among Bank of America, N.A., as Lender, and the Originator, VVP Finance
Corporation and Super Sky Products, Inc., as Borrowers.
(e) Accounting for Purchase. It will not, and will not permit any
Affiliate to, account for or treat (whether in financial statements or
otherwise) the transactions contemplated hereby in any manner other than the
sale and/or contribution and absolute assignment of the Receivables and the
Related Security by it to Buyer or in any other respect account for or treat
the transactions contemplated hereby in any manner other than as a sale and/or
contribution and absolute assignment of the Receivables and the Related
Security by it to Buyer except to the extent that such transactions are not
recognized on account of consolidated financial reporting in accordance with
GAAP.
Section 4.3. Post Office Boxes. (a) The parties hereto acknowledge that
certain Collections may be remitted by Obligors directly to the Originator (at
a field office or otherwise) or to any Post-Office Box. The Originator agrees
that it will instruct each of its employees that is responsible for receiving
any Collections that the Originator and such employee (i) are acting as
servicer for the Buyer, (ii) owe a duty of due care to the Buyer in all of
their actions relating to the handling and deposit of such Collections and
(iii) are liable to the Buyer for breaches such duty of due care.
(b) On the Closing Date, the Originator execute a Postal Direction Letter
with respect to each Post-Office Box and no later than ten (10) Business Days
after the Closing Date, the Seller shall execute a Postal Power of Attorney
for each Post Office Box. The Originator shall not establish new Post-Office
Boxes without delivering to Buyer (and its assigns) a Postal Power of Attorney
and a Postal Direction Letter with respect thereto and a revised Exhibit XI.
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(c) The Originator shall not establish new Depositary Accounts into which
Collections are deposited unless such account is (i) in the name of the Seller
and (ii) either (A) an account maintained with Bank of America, National
Association which is automatically swept to a Concentration Account on a daily
basis or (B) an account with respect to which NDC has been instructed to
direct funds to be swept into a Concentration Account on a daily basis.
(d) Without the prior written consent of the Agent, the Originator shall
not change any sweep instructions given to Bank of America, National
Association or NDC.
(e) The Originator shall not engage any Person other than NDC to give
instructions with respect to bank accounts (other than accounts maintained
with Bank of America, National Association) into which Collections are
deposited without the prior written consent of the Agent; provided, that any
successor to NDC shall agree to comply with the provisions of this Agreement
and the other Transaction Documents with respect to the handling of
Collections.
ARTICLE V
TERMINATION EVENTS
Section 5.1. Termination Events. The occurrence of any one or more of the
following events shall constitute a Termination Event:
(a) Originator shall fail (i) to make any payment or deposit required
hereunder when due or fail to perform or observe any term, covenant or
agreement under any of Section 4.1(i), Section 4.2(b) and/or Section 4.3 and
in any such case, such failure shall continue for one (1) Business Day, or
(ii) to perform or observe any term, covenant or agreement hereunder (other
than as referred to in clause (i) of this paragraph (a)) or any other
Transaction Document to which it is a party and such failure shall continue
for ten (10) consecutive Business Days.
(b) Any representation, warranty, certification or statement made by
Originator in this Agreement, any other Transaction Document or in any other
document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made; provided that no such event shall
constitute an Amortization Event unless such event is unremedied for a period
of ten (10) days after the earlier to occur of (i) written notice thereof
shall have been given by the Buyer (or its assigns) to Originator or (ii) an
Authorized Officer of Originator shall have actual knowledge thereof or should
have had knowledge thereof if such Authorized Officer had exercised reasonable
care in the performance of his or her duties provided, further that no grace
period shall apply to Sections 2.1(f), 2.1(i), 2.1(j), 2.1(n), 2.1(p) and
2.1(u); and provided further no such event shall constitute an Amortization
Event if the Seller have timely paid to the Agent the Purchase Price Credit
required to be paid as a result of such event in accordance with Section 1.4.
(c) Failure of Originator or any of its Subsidiaries to pay any
Indebtedness when due (after giving effect to any applicable grace periods
with respect thereto) in excess of $1,000,000; or the default by Originator or
any of its Subsidiaries in the performance of any term, provision
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or condition contained in any agreement under which any such Indebtedness was
created or is governed if the effect of such default is to cause, or permit
the holder of such Indebtedness to cause such Indebtedness to become due and
payable prior to the date of maturity thereof; or any such Indebtedness of
Originator or its Subsidiaries other than Buyer shall be declared to be due
and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the date of maturity thereof.
(d) An Event of Bankruptcy shall occur with respect to Originator or any
of its Subsidiaries.
(e) A Change of Control shall occur.
(f) One or more final judgments for the payment of money in an amount in
excess of $1,000,000, individually or in the aggregate, shall be entered
against Originator or any of its Subsidiaries on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and such judgment shall continue unsatisfied and in effect for forty-five (45)
consecutive days without a stay of execution.
(g) The Internal Revenue Service shall file notice of a lien pursuant to
Section 6323 of the Tax Code against the Originator or any of its Affiliates
and such lien shall continue until the earlier of (i) seven (7) days after
inception and (ii) knowledge by any Secured Party of such lien, or the PBGC
shall, or shall indicate its intention to, file notice of a lien pursuant to
Section 4068 of ERISA against the Originator or any of its ERISA Affiliates
with regard to any of the Receivables and Related Security.
(h) Any Plan of Originator or any of its respective ERISA Affiliates:
(i) shall fail to be funded in accordance with the minimum funding
standard required by applicable law, the terms of such Plan, Section 412
of the Tax Code or Section 302 of ERISA for any plan year or a waiver of
such standard is sought or granted with respect to such Plan under
applicable law, the terms of such Plan or Section 412 of the Tax Code or
Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of termination
proceedings under applicable law or the terms of such Plan; or
(iii) shall require Originator or any of its ERISA Affiliates to
provide security under applicable law, the terms of such Plan, Section
401 or 412 of the Tax Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to Originator or any of its ERISA
Affiliates under applicable law, the terms of such Plan, or Title IV
ERISA,
and there shall result from any such failure, waiver, termination or other
event a liability to the PBGC or a Plan that would have a Material Adverse
Effect.
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(i) An ERISA Event shall occur which has resulted or could reasonably be
expected to result in a Material Adverse Effect.
(j) Originator shall cease to have the legal capacity or ability to
transfer, Receivables to Buyer hereunder.
(k) The Purchase Agreement shall become unenforceable or the Agent (or
its assigns) shall fail to maintain a valid and perfected ownership interest
or first priority security interest in and to the Receivables under the
Purchase Agreement.
(l) Any event shall occur which (i) materially and adversely impairs the
ability of Originator to originate Receivables of credit quality that is at
least equal to the credit quality of the Receivables sold or contributed to
Buyer on the date of the Purchase Agreement or (ii) has, or reasonably could
be expected to have a Material Adverse Affect.
Section 5.2. Remedies. Upon the occurrence and during the continuation of
a Termination Event, Buyer may take any of the following actions: (a) declare
the Termination Date to have occurred, whereupon the Termination Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by Originator; provided, however, that upon
the occurrence of a Termination Event described in Section 5.1(e), or of an
actual or deemed entry of an order for relief with respect to Originator under
the Federal Bankruptcy Code, the Termination Date shall automatically occur,
without demand, protest or any notice of any kind, all of which are hereby
expressly waived by Originator and (b) to the fullest extent permitted by
applicable law, declare that the Default Fee shall accrue with respect to any
amounts then due and owing by Originator to Buyer. The aforementioned rights
and remedies shall be without limitation and shall be in addition to all other
rights and remedies of Buyer and its assigns otherwise available under any
other provision of this Agreement, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC, all of which
rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnities by Originator. Without limiting any other rights
that Buyer may have hereunder or under applicable law, Originator hereby
agrees to indemnify (and pay upon demand to) Buyer and its assigns, officers,
directors, agents and employees (each an "Indemnified Party") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and
for all other amounts payable, including reasonable attorneys' fees pursuant
to an invoice in reasonable detail and disbursements (all of the foregoing
being collectively referred to as "Indemnified Amounts") awarded against or
incurred by any of them arising out of or as a result of this Agreement or the
acquisition, either directly or indirectly, by Buyer of an interest in the
Receivables, excluding, however:
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(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified
Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related
Obligor;
(c) taxes imposed by any jurisdiction in which such Indemnified
Party is organized, its principal executive office is located or it does
business, on or measured by the net income of such Indemnified Party,
other than any taxes on or measured by net income as a result of such
Indemnified Party's having executed, delivered or performed its
obligations, or received payment under or enforced, this Agreement or any
of the other Transaction Documents; or
(d) taxes imposed on any Committed Purchaser (and any Eligible
Assignee thereof) that is not incorporated under the laws of the United
States of America, any state thereof or the District of Columbia, if and
to the extent that such Committed Purchaser or Eligible Assignee shall
not have furnished to Originator, at the time or times prescribed by
applicable law, such properly completed and executed documentation
reasonably requested by Originator as will permit payments under this
Agreement to be made without deduction or withholding, including, without
limitation, United States Internal Revenue Service Form W-9, W-8BEN or
W-8ECI, as applicable, certifying that such Committed Purchaser or
Eligible Assignee is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income tax;
provided, however, that nothing contained in this sentence shall limit the
liability of Originator or limit the recourse of Buyer to Originator for
amounts otherwise specifically provided to be paid by Originator under the
terms of this Agreement. Without limiting the generality of the foregoing
indemnification, but subject in each case to clauses (a), (b) and (c) above,
Originator shall indemnify Buyer for Indemnified Amounts relating to or
resulting from:
(i) any representation or warranty made by Originator (or any
officers of Originator) under or in connection with any Purchase Report,
this Agreement, any other Transaction Document or any other information
or report delivered by Originator pursuant hereto or thereto for which
Buyer has not received a Purchase Price Credit that shall have been false
or incorrect when made or deemed made;
(ii) the failure by Originator, to comply with any applicable law,
rule or regulation with respect to any Receivable or Contract related
thereto, or the nonconformity of any Receivable or Contract included
therein with any such applicable law, rule or regulation or any failure
of Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
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(iii) any failure of Originator to perform its duties, covenants or
other obligations in accordance with the provisions of this Agreement or
any other Transaction Document;
(iv) any products liability, personal injury or damage, suit or
other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any
Receivable;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale of the merchandise or
service related to such Receivable or the furnishing or failure to
furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time with
other funds;
(vii) any failure of a Collection Bank to comply with the terms of
the applicable Collection Account Agreement;
(viii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of the Purchase
hereunder, the ownership of the Receivables or any other investigation,
litigation or proceeding relating to Originator in which any Indemnified
Party becomes involved as a result of any of the transactions
contemplated hereby;
(ix) any Termination Event other than a Voluntary Termination;
(x) any failure to vest and maintain vested in Buyer, or to transfer
to Buyer, legal and equitable title to, and ownership of, the Receivables
and the Collections, and all of Originator's right, title and interest in
the Related Security associated with the Receivables, in each case, free
and clear of any Adverse Claim;
(xi) the failure by the Originator to have filed, or any delay in
filing, financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other applicable laws
with respect to any Receivable, the Related Security and Collections with
respect thereto, and the proceeds of any thereof, whether at the time of
the Purchase or at any subsequent time;
(xii) any action or omission by Originator which reduces or impairs
the rights of Buyer with respect to any Receivable or the value of any
such Receivable; and
(xiii) any attempt by any Person to void the Purchase hereunder
under statutory provisions or common law or equitable action.
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Section 6.2. Other Costs and Expenses. Originator shall pay to Buyer on
demand all reasonable costs and out-of-pocket expenses in connection with the
preparation, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered
hereunder. Originator shall pay to Buyer on demand any and all costs and
expenses of Buyer, if any, including reasonable counsel fees and expenses
pursuant to an invoice in reasonable detail in connection with the enforcement
of this Agreement and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following a Termination
Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Waivers and Amendments. (a) No failure or delay on the part
of Buyer (or its assigns) in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The
rights and remedies herein provided shall be cumulative and nonexclusive of
any rights or remedies provided by law. Any waiver of this Agreement shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No provision of this Agreement may be amended, supplemented, modified
or waived except in writing signed by Originator, Buyer and Agent and, to the
extent required under the Purchase Agreement, the Committed Purchasers or the
Required Committed Purchasers. Any material amendment, supplement,
modification of waiver will required satisfaction of the Rating Agency
Condition.
Section 7.2. Notices. All communications and notices provided for
hereunder shall be in writing (including bank wire, or electronic facsimile
transmission or similar writing) and shall be given to the other parties
hereto at their respective addresses or facsimile numbers set forth on the
signature pages hereof or at such other address or facsimile number as such
Person may hereafter specify for the purpose of notice to each of the other
parties hereto. Each such notice or other communication shall be effective (a)
if given by facsimile, upon the receipt thereof, (b) if given by mail, three
(3) Business Days after the time such communication is deposited in the mail
with first class postage prepaid or (c) if given by any other means, when
received at the address specified in this Section 7.2.
Section 7.3. Protection of Ownership Interests of Buyer. (a) Originator
agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that Buyer (or its assigns) may reasonably request,
to perfect, protect or more fully evidence the interest of Buyer hereunder and
the Receivable Interests, or to enable Buyer (or its assigns) to exercise and
enforce their rights and remedies hereunder. After the occurrence of a
Termination Event or Unmatured Termination Event, Buyer (or its assigns) may,
at Originator's sole cost and expense, direct Originator to
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notify the Obligors of Receivables of the ownership interests of Buyer under
this Agreement and may also direct that payments of all amounts due or that
become due under any or all Receivables be made directly to Buyer or its
designee.
(b) If Originator fails to perform any of its obligations hereunder,
Buyer (or its assigns) may (but shall not be required to) perform, or cause
performance of, such obligations, and Buyer's (or such assigns') costs and
expenses incurred in connection therewith shall be payable by Originator as
provided in Section 6.2. Originator irrevocably authorizes Buyer (and its
assigns) at any time and from time to time in the sole discretion of Buyer (or
its assigns), and appoints Buyer (and its assigns) as its attorney(s)-in-fact,
to act on behalf of Originator (i) to execute on behalf of Originator as
debtor and to file financing statements necessary or desirable in Buyer's (or
its assigns') sole discretion to perfect and to maintain the perfection and
priority of the interest of Buyer in the Receivables and associated Related
Security and Collections and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Receivables as a financing statement in such offices as Buyer (or its assigns)
in their sole discretion deem necessary or desirable to perfect and to
maintain the perfection and priority of Buyer's interests in the Receivables.
This appointment is coupled with an interest and is irrevocable.
(c) (i) Originator hereby authorizes Buyer (or its assigns) to file
financing statements and other filing or recording documents with respect to
the Receivables and Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the signature or
other authorization of Originator, in such form and in such offices as Buyer
(or any of its assigns) reasonably determines appropriate to perfect or
maintain the perfection of the ownership or security interests of Buyer (or
its assigns) hereunder, (ii) Originator acknowledges and agrees that it is not
authorized to, and will not, file financing statements or other filing or
recording documents with respect to the Receivables or Related Security
(including any amendments thereto, or continuation or termination statements
thereof), without the express prior written approval by the Agent (as Buyer's
assignee), consenting to the form and substance of such filing or recording
document, and (iii) Originator approves, authorizes and ratifies any filings
or recordings made by or on behalf of the Agent (as Buyer's assign) in
connection with the perfection of the ownership or security interests in favor
of Buyer or the Agent (as Buyer's assign).
Section 7.4. Confidentiality. (a) Originator shall maintain and shall
cause each of its employees and officers to maintain the confidentiality of
this Agreement and the other confidential or proprietary information with
respect to the Agent, the Committed Purchasers and the Conduit and their
respective businesses obtained by it or them in connection with the
structuring, negotiating and execution of the transactions contemplated
herein, except that Originator and its officers and employees may disclose
such information to Originator's external accountants and attorneys and as
required by any applicable law, rule, regulation, direction, request or order
of any judicial, administrative or regulatory authority or proceeding (whether
or not having the force or effect of law).
(b) Anything herein to the contrary notwithstanding, Originator hereby
consents to the disclosure of any nonpublic information with respect to it (i)
to Buyer, the Agent, the Committed
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Purchasers or the Conduit by each other, (ii) by Buyer, the Agent, the
Committed Purchasers or the Conduit (or any of their respective permitted
assigns) to any prospective or actual assignee or participant of any of them
and (iii) by the Agent to any Rating Agency, Commercial Paper dealer or
provider of a surety, guaranty or credit or liquidity enhancement to the
Conduit or any entity organized for the purpose of purchasing, or making loans
secured by, financial assets for which the Agent acts as the administrative
agent and to any officers, directors, employees, outside accountants and
attorneys of any of the foregoing, provided each such Person is informed of
the confidential nature of such information. In addition, the Conduit, the
Committed Purchasers and the Agent may disclose any such nonpublic information
as required by any law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings (whether or
not having the force or effect of law).
(c) Buyer (and its assigns) shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of this Agreement and
the other confidential or proprietary information with respect to Originator,
the Obligors and their respective businesses obtained by it in connection with
the due diligence evaluations, structuring, negotiating and execution of the
Transaction Documents, and the consummation of the transactions contemplated
herein and any other activities of Buyer arising from or related to the
transactions contemplated herein provided, however, that each of Buyer and its
employees and officers shall be permitted to disclose such confidential or
proprietary information: (i) to the Agent, the Conduit and the Committed
Purchasers, the Conduit, (ii) to any prospective or actual assignee or
participant of the Agent, the Conduit or the Committed Purchasers who execute
a confidentiality agreement for the benefit of Originator and Buyer on terms
comparable to those required of Buyer hereunder with respect to such disclosed
information, (iii) to any Rating Agency, provider of a surety, guaranty or
credit or liquidity enhancement to the Conduit, (iv) to any officers,
directors, employees, outside accountants and attorneys of any of the
foregoing, and (v) to the extent required pursuant to any applicable law,
rule, regulation, direction, request or order of any judicial, administrative
or regulatory authority or proceedings with competent jurisdiction (whether or
not having the force or effect of law) so long as such required disclosure is
made under seal to the extent permitted by applicable law or by rule of court
or other applicable body; provided each such Person is informed of the
confidential nature of such information.
(d) Notwithstanding any other express or implied agreement to the
contrary, the parties agree and acknowledge that each of them and each of
their employees, representatives, and other agents may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure
of the transaction and all materials of any kind (including opinions or other
tax analyses) that are provided to any of them relating to such tax treatment
and tax structure, except to the extent that confidentiality is reasonably
necessary to comply with U.S. federal or state securities law. For purposes of
this paragraph, the terms "tax treatment" and "tax structure" have the
meanings specified in Treasury Regulation section 1.6011-4(c).
Section 7.5. Bankruptcy Petition. (a) Originator and Buyer each hereby
covenants and agrees that, prior to the date that is one year and one day
after the payment in full of all outstanding senior indebtedness of the
Conduit, it will not institute against, or join any other Person in
instituting against, the Conduit any bankruptcy, reorganization, arrangement,
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insolvency or liquidation proceedings or other similar proceeding under the
laws of the United States or any state of the United States.
(b) Originator covenants and agrees that, prior to the date that is one
year and one day after the payment in full of all outstanding obligations of
Buyer under the Purchase Agreement, it will not institute against, or join any
other Person in instituting against, Buyer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
Section 7.6. Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of the Conduit, the
Agent or any Committed Purchaser, no claim may be made by Originator or any
other Person against the Conduit, the Agent or any Committed Purchaser or
their respective Affiliates, directors, officers, employees, attorneys or
agents for any special, indirect, consequential or punitive damages in respect
of any claim for breach of contract or any other theory of liability arising
out of or related to the transactions contemplated by this Agreement, or any
act, omission or event occurring in connection therewith; and Originator
hereby waives, releases, and agrees not to xxx upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
Section 7.7. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (AND
NOT THE LAW OF CONFLICTS, OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
Section 7.8. Consent to Jurisdiction. ORIGINATOR HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW
YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT AND ORIGINATOR
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER (OR ITS
ASSIGNS) TO BRING PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY ORIGINATOR AGAINST BUYER (OR ITS
ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT
OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE
BROUGHT ONLY IN A COURT IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK.
Section 7.9. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO
THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
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Section 7.10. Integration; Binding Effect; Survival of Terms. (a) This
Agreement and each other Transaction Document contain the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of
Originator, Buyer and their respective successors and permitted assigns
(including any trustee in bankruptcy). Originator may not assign any of its
rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of Originator. Without limiting the foregoing, Originator acknowledges
that Buyer, pursuant to the Purchase Agreement, may assign to the Agent, for
the benefit of the Secured Parties, its rights, remedies, powers and
privileges hereunder and that the Agent may further assign such rights,
remedies, powers and privileges to the extent permitted in the Purchase
Agreement. Originator agrees that the Agent, as the assignee of Buyer, shall,
subject to the terms of the Purchase Agreement, have the right to enforce this
Agreement and to exercise directly all of Buyer's rights and remedies under
this Agreement (including, without limitation, the right to give or withhold
any consents or approvals of Buyer to be given or withheld hereunder) and
Originator agrees to cooperate fully with the Agent in the exercise of such
rights and remedies. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall
remain in full force and effect until terminated in accordance with its terms;
provided, however, that the rights and remedies with respect to (i) any breach
of any representation and warranty made by Originator pursuant to Article II;
(ii) the indemnification and payment provisions of Article VI; and (iii)
Section 7.5 shall be continuing and shall survive any termination of this
Agreement.
Section 7.11. Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same Agreement. Delivery of an executed counterpart of
a signature page by fax or other electronic transmission shall be effective as
delivery of a manually executed counterpart of this Agreement. Any provisions
of this Agreement which are prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction. Unless otherwise expressly indicated, all references herein to
"Article," "Section," "Schedule" or "Exhibit" shall mean articles and sections
of, and schedules and exhibits to, this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
hereof.
VITRO AMERICA, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
--------------------------
Title: Vice President/Finance
-------------------------
Address: 000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
VVP FUNDING CORPORATION
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
--------------------------
Title: President
-------------------------
Address: 000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
EXHIBIT I
DEFINITIONS
This is Exhibit I to the Agreement (as hereinafter defined). As used in
the Agreement and the Exhibits and Schedules thereto, capitalized terms have
the meanings set forth in this Exhibit I (such meanings to be equally
applicable to the singular and plural forms thereof). If a capitalized term is
used in the Agreement, or any Exhibit or Schedule thereto, and is not
otherwise defined therein or in this Exhibit I, such term shall have the
meaning assigned thereto in Exhibit I to the Purchase Agreement (as
hereinafter defined).
"Agent" -- As defined in the Preliminary Statements to the Agreement.
"Agreement" -- The Receivables Sale Agreement, dated as of May 7, 2004,
between Originator and Buyer, as the same may be amended, restated or
otherwise modified.
"Applicable Rate" -- The Yield Rate or the rate used to determine CP
Costs, as applicable, payable by Buyer with respect to the Aggregate Invested
Amount.
"Buyer" -- As defined in the preamble.
"Calculation Period" -- Each calendar month or portion thereof which
elapses during the term of the Agreement. The first Calculation Period shall
commence on the date of the Purchases hereunder and the final Calculation
Period shall terminate on the Termination Date.
"Conduit" -- As defined in the Preliminary Statements to the Agreement.
"Credit and Collection Policy" -- Originator's credit and collection
policies and practices relating to Contracts and Receivables existing on the
date hereof and summarized in Exhibit V hereto, as modified from time to time
in accordance with the Agreement.
"Default Fee" -- A per annum rate of interest equal to the sum of (i) the
Prime Rate, plus (ii) 2% per annum.
"Discount Factor" -- A percentage calculated to provide Buyer with a
reasonable return on its investment in the Receivables after taking account of
(i) the time value of money based upon the anticipated dates of collection of
the Receivables and the cost to Buyer of financing its investment in the
Receivables during such period and (ii) the risk of nonpayment by the
Obligors. Originator and Buyer may agree from time to time to change the
Discount Factor based on changes in one or more of the items affecting the
calculation thereof, provided that any change to the Discount Factor shall
take effect as of the commencement of a Calculation Period, shall apply only
prospectively and shall not affect the Purchase Price payment made prior to
the Calculation Period during which Originator and Buyer agree to make such
change.
"Initial Contributed Receivables"-- As defined in Section 1.1.
"Initial Cutoff Date"-- As defined in Section 1.1.
"Net Worth" -- As of the last Business Day of each Calculation Period
preceding any date of determination, the excess, if any, of (i) the aggregate
Outstanding Balance of the Receivables at such time, over (ii) the sum of (A)
the Aggregate Invested Amount outstanding at such time, plus (B) the aggregate
outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date of determination).
"Original Balance" -- With respect to any Receivable coming into
existence after the Initial Cutoff Date, the Outstanding Balance of such
Receivable on the date it was created.
"Originator" -- As defined in the preamble to the Agreement.
"Originator Collateral" -- As defined in Section 1.7.
"Purchase" -- The purchase pursuant to Section 1.2(a) of the Agreement by
Buyer from Originator of the Receivables and the Related Security and
Collections related thereto, together with all related rights in connection
therewith.
"Purchase Agreement" -- As defined in the Preliminary Statements to the
Agreement.
"Purchase Price" -- With respect to the Purchase, the aggregate price to
be paid by Buyer to Originator for such Purchase in accordance with Section
1.3 of the Agreement for the Receivables, Collections and Related Security
being sold to Buyer, which price shall equal on any date (i) the product of
(A) the Outstanding Balance of such Receivables on such date, multiplied by
(B) one minus the Discount Factor in effect on such date, minus (ii) any
Purchase Price Credits to be credited against the Purchase Price otherwise
payable in accordance with Section 1.4 of the Agreement.
"Purchase Price Credit" -- As defined in Section 1.4.
"Purchase Report" -- As defined in Section 1.2(b).
"Related Security" -- With respect to any Receivable:
(i) Originator's interest in the inventory and goods (including
returned or repossessed inventory or goods), if any, the sale, financing
or lease of which gave rise to such Receivable, and all insurance
contracts with respect thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable
or otherwise, together with all financing statements and security
agreements describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of
I-2
such Receivable whether pursuant to the Contract related to such
Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of Originator's right, title and interest in each post
office box and account containing Collections, including, without
limitation, each Lock-Box and each Collection Account, and
(vii) all proceeds of any of the foregoing.
"Reportable Event" -- Any of the events set forth in Section 4043(c) of
ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
"Required Capital Amount" -- As of any date of determination, an amount
equal to the greater of (i) 3% of the Purchase Limit under the Purchase
Agreement, and (ii) the product of (A) 1.5 times the product of the Default
Ratio times the Default Horizon Ratio, each as determined from the most recent
Monthly Report received from the Servicer under the Purchase Agreement, and
(B) the Outstanding Balance of all Receivables as of such date, as determined
from the most recent Monthly Report received from the Servicer under the
Purchase Agreement.
"Subordinated Loan" -- As defined in Section 1.3(a)(ii) of the Agreement.
"Subordinated Note" -- A promissory note in substantially the form of
Exhibit VIII hereto as more fully described in Section 1.3 of the Agreement,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.
"Termination Date" -- The earliest to occur of (i) the Facility
Termination Date (as defined in the Purchase Agreement), (ii) the Business Day
immediately prior to the occurrence of a Termination Event set forth in
Section 5.1(e), (iii) the Business Day specified in a written notice from
Buyer to Originator following the occurrence of any other Termination Event,
and (iv) the date which is 10 Business Days after Buyer's receipt of written
notice from Originator that it wishes to terminate the facility evidenced by
this Agreement.
"Termination Event" -- As defined in Section 5.1 of the Agreement.
"Unmatured Termination Event" -- An event which, with the passage of time
or the giving of notice, or both, would constitute a Termination Event.
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State
of New York, and not specifically defined herein, are used herein as defined
in such Article 9.
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