Page 120
Exhibit 10(i)A(4)
CREDIT AND SECURITY AGREEMENT
DATED AS OF MAY 2, 2001
AMONG
NSI Funding, Inc., A DELAWARE CORPORATION, AS BORROWER,
National Service Industries, Inc., A GEORGIA CORPORATION, AS SERVICER,
BLUE RIDGE ASSET FUNDING CORPORATION,
THE LIQUIDITY BANKS FROM TIME TO TIME PARTY HERETO
AND
WACHOVIA BANK, N.A., AS AGENT
Page 121
Exhibit 10(i)A(4)
TABLE OF CONTENTS
Page
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ARTICLE I. THE ADVANCES.....................................................1
Section 1.1 Credit Facility...........................................1
Section 1.2 Increases.................................................2
Section 1.3 Decreases.................................................2
Section 1.4 Deemed Collections; Borrowing Limit.......................3
Section 1.5 Payment Requirements......................................4
Section 1.6 Ratable Loans; Funding Mechanics; Liquidity Fundings......4
ARTICLE II. PAYMENTS AND COLLECTIONS........................................5
Section 2.1 Payments..................................................5
Section 2.2 Collections Prior to Amortization; Repayment of Certain
Demand Advances...........................................5
Section 2.3 Repayment of Demand Advances on the Amortization Date;
Collections Following Amortization........................6
Section 2.4 Payment Recission.........................................7
ARTICLE III. BLUE RIDGE FUNDING.............................................7
Section 3.1 CP Costs..................................................7
Section 3.2 Calculation of CP Costs...................................7
Section 3.3 CP Costs Payments.........................................7
Section 3.4 Default Rate..............................................7
ARTICLE IV. LIQUIDITY BANK FUNDING..........................................7
Section 4.1 Liquidity Bank Funding....................................7
Section 4.2 Interest Payments.........................................8
Section 4.3 Selection and Continuation of Interest Periods............8
Section 4.4 Liquidity Bank Interest Rates.............................8
Section 4.5 Suspension of the LIBO Rate...............................8
Section 4.6 Default Rate..............................................9
ARTICLE V. REPRESENTATIONS AND WARRANTIES...................................9
Section 5.1 Representations and Warranties of the Loan Parties........9
Section 5.2 Liquidity Bank Representations and Warranties............12
ARTICLE VI. CONDITIONS OF ADVANCES.........................................13
Section 6.1 Conditions Precedent to Initial Advance..................13
Section 6.2 Conditions Precedent to All Advances.....................13
ARTICLE VII. COVENANTS.....................................................14
Section 7.1 Affirmative Covenants of the Loan Parties................14
Section 7.2 Negative Covenants of the Loan Parties...................23
ARTICLE VIII. ADMINISTRATION AND COLLECTION................................24
Section 8.1 Designation of Servicer..................................24
Section 8.2 Duties of Servicer.......................................25
Section 8.3 Collection Notices.......................................27
Section 8.4 Responsibilities of Borrower.............................27
Section 8.5 Monthly Reports..........................................27
Section 8.6 Servicing Fee............................................27
Page 122
Exhibit 10(i)A(4)
ARTICLE IX. AMORTIZATION EVENTS............................................27
Section 9.1 Amortization Events......................................27
Section 9.2 Remedies.................................................29
ARTICLE X. INDEMNIFICATION.................................................30
Section 10.1 Indemnities by the Loan Parties..........................30
Section 10.2 Increased Cost and Reduced Return........................32
Section 10.3 Other Costs and Expenses.................................33
Section 10.4 Allocations..............................................34
ARTICLE XI. THE AGENT......................................................34
Section 11.1 Authorization and Action.................................34
Section 11.2 Delegation of Duties.....................................35
Section 11.3 Exculpatory Provisions...................................35
Section 11.4 Reliance by Agent........................................35
Section 11.5 Non-Reliance on Agent and Other Lenders..................36
Section 11.6 Reimbursement and Indemnification........................36
Section 11.7 Agent in its Individual Capacity.........................36
Section 11.8 Successor Agent..........................................36
ARTICLE XII. ASSIGNMENTS; PARTICIPATIONS...................................37
Section 12.1 Assignments..............................................37
Section 12.2 Participations...........................................38
ARTICLE XIII. SECURITY INTEREST............................................38
Section 13.1 Grant of Security Interest...............................38
Section 13.2 Termination after Final Payout Date......................38
ARTICLE XIV. MISCELLANEOUS.................................................39
Section 14.1 Waivers and Amendments...................................39
Section 14.2 Notices..................................................40
Section 14.3 Ratable Payments.........................................40
Section 14.4 Protection of Agent's Security Interest..................40
Section 14.5 Confidentiality..........................................41
Section 14.6 Bankruptcy Petition......................................42
Section 14.7 Limitation of Liability..................................42
Section 14.8 CHOICE OF LAW............................................42
Section 14.9 CONSENT TO JURISDICTION..................................42
Section 14.10 WAIVER OF JURY TRIAL.....................................43
Section 14.11 Integration; Binding Effect; Survival of Terms...........43
Section 14.12 Counterparts; Severability; Section References...........43
Section 14.13 Wachovia Roles...........................................44
Section 14.14 Interest.................................................44
Section 14.15 Source of Funds -- ERISA.................................45
Page 123
Exhibit 10(i)A(4)
EXHIBITS AND SCHEDULES
Exhibit I Definitions
Exhibit II Form of Borrowing Notice
Exhibit III Places of Business of the Loan Parties; Locations of Records;
Federal Employer Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Form of Assignment Agreement
Exhibit VIII Form of Monthly Report
Exhibit IX Form of Performance Undertaking
Schedule A Commitments
Schedule B Closing Documents
Page 124
Exhibit 10(i)A(4)
CREDIT AND SECURITY AGREEMENT
This Credit and Security Agreement, dated as of May 2, 2001 is entered into
by and among:
(a) NSI Funding, Inc., a Delaware corporation ("Borrower"),
(b) National Service Industries, Inc., a Georgia corporation ("NSI
Georgia"), as initial Servicer (the Servicer together with Borrower, the
"Loan Parties" and each, a "Loan Party"),
(c) The entities listed on Schedule A to this Agreement (together with
any of their respective successors and assigns hereunder, the "Liquidity
Banks"),
(d) Blue Ridge Asset Funding Corporation, a Delaware corporation
("Blue Ridge"), and
(e) Wachovia Bank, N.A., as agent for the Lenders hereunder or any
successor agent hereunder (together with its successors and assigns
hereunder, the "Agent").
Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Borrower desires to borrow from the Lenders from time to time.
Blue Ridge may, in its absolute and sole discretion, make Advances to
Borrower from time to time.
In the event that Blue Ridge declines to make any Advance, the Liquidity
Banks shall, at the request of Borrower, make Advances from time to time.
Wachovia Bank, N.A. has been requested and is willing to act as Agent on
behalf of Blue Ridge and the Liquidity Banks in accordance with the terms
hereof.
ARTICLE I.
THE ADVANCES
Section 1.1 Credit Facility.
(a) Upon the terms and subject to the conditions hereof, from time to time
prior to the Facility Termination Date:
(i) Borrower may, at its option, request Advances from the
Lenders in an aggregate principal amount at any one time outstanding
Page 125
Exhibit 10(i)A(4)
not to exceed the lesser of the Aggregate Commitment and the Borrowing
Base (such lesser amount, the "Borrowing Limit"); and
(ii) Blue Ridge may, at its option, make the requested Advance,
or if Blue Ridge shall decline to make any Advance, except as
otherwise provided in Section 1.2, the Liquidity Banks severally agree
to make Loans in an aggregate principal amount equal to the requested
Advance.
Each of the Advances, and all other Obligations, shall be secured by the
Collateral as provided in Article XIII. It is the intent of Blue Ridge to fund
all Advances by the issuance of Commercial Paper.
(b) Borrower may, upon at least 5 Business Days' notice to the Agent,
terminate in whole or reduce in part, ratably among the Liquidity Banks, the
unused portion of the Aggregate Commitment; provided that each partial reduction
of the Aggregate Commitment shall be in an amount equal to $5,000,000 (or a
larger integral multiple of $1,000,000 if in excess thereof) and shall reduce
the Commitments of the Liquidity Banks ratably in accordance with their
respective Pro Rata Shares.
Section 1.2 Increases. Borrower shall provide the Agent with at least two
(2) Business Days' prior notice in a form set forth as Exhibit II hereto of each
Advance (each, a "Borrowing Notice"). Each Borrowing Notice shall be subject to
Section 6.2 hereof and, except as set forth below, shall be irrevocable and
shall specify the requested increase in Aggregate Principal (which shall not be
less than $1,000,000 or a larger integral multiple of $100,000) and the
Borrowing Date (which, in the case of any Advance after the initial Advance
hereunder, shall only be on a Settlement Date) and, in the case of an Advance to
be funded by the Liquidity Banks, the requested Interest Rate and Interest
Period. Following receipt of a Borrowing Notice, the Agent will determine
whether Blue Ridge agrees to make the requested Advance. If Blue Ridge declines
to make a proposed Advance, Borrower may cancel the Borrowing Notice or, in the
absence of such a cancellation, the Advance will be made by the Liquidity Banks.
On the date of each Advance, upon satisfaction of the applicable conditions
precedent set forth in Article VI, Blue Ridge or the Liquidity Banks, as
applicable, shall deposit to the Facility Account, in immediately available
funds, no later than 2:00 p.m. (New York time), an amount equal to (i) in the
case of Blue Ridge, the principal amount of the requested Advance or (ii) in the
case of a Liquidity Bank, such Liquidity Bank's Pro Rata Share of the principal
amount of the requested Advance.
Section 1.3 Decreases. Except as provided in Section 1.4, Borrower shall
provide the Agent with prior written notice in conformity with the Required
Notice Period (a "Reduction Notice") of any proposed reduction of Aggregate
Principal. Such Reduction Notice shall designate (i) the date (the "Proposed
Reduction Date") upon which any such reduction of Aggregate Principal shall
occur (which date shall give effect to the applicable Required Notice Period),
and (ii) the amount of Aggregate Principal to be reduced which shall be applied
ratably to the Loans of Blue Ridge and the Liquidity Banks in accordance with
the amount of principal (if any) owing to Blue Ridge, on the one hand, and the
amount of principal (if any) owing to the Liquidity Banks (ratably, based on
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Exhibit 10(i)A(4)
their respective Pro Rata Shares), on the other hand (the "Aggregate
Reduction"). Only one (1) Reduction Notice shall be outstanding at any time.
Section 1.4 Deemed Collections; Borrowing Limit.
(a) If on any day:
(i) the Outstanding Balance of any Receivable is reduced as a
result of any defective or rejected goods or services, any cash
discount or any other adjustment by any Originator or any Affiliate
thereof, or as a result of any tariff or other governmental or
regulatory action, or
(ii) the Outstanding Balance of any Receivable is reduced or
canceled as a result of a setoff in respect of any claim by the
Obligor thereof (whether such claim arises out of the same or a
related or an unrelated transaction), or
(iii) the Outstanding Balance of any Receivable is reduced on
account of the obligation of any Originator or any Affiliate thereof
to pay to the related Obligor any rebate or refund, or
(iv) the Outstanding Balance of any Receivable is less than the
amount included in calculating the Net Pool Balance for purposes of
any Monthly Report (for any reason other than such Receivable becoming
a Defaulted Receivable), or
(v) any of the representations or warranties of Borrower set
forth in Section 5.1(i), (j), (q), (r), (s) or (t) were not true when
made with respect to any Receivable,
then, on such day, Borrower shall be deemed to have received a Collection of
such Receivable (A) in the case of clauses (i)-(iv) above, in the amount of such
reduction or cancellation or the difference between the actual Outstanding
Balance and the amount included in calculating such Net Pool Balance, as
applicable; and (B) in the case of clause (v) above, in the amount of the
Outstanding Balance of such Receivable and, effective as of the date on which
the next succeeding Monthly Report is required to be delivered, the Borrowing
Base shall be reduced by the amount of such Deemed Collection.
(b) Borrower shall ensure that the Aggregate Principal at no time
exceeds the Borrowing Limit. If at any time the Aggregate Principal exceeds
the Borrowing Limit, Borrower shall pay to the Agent not later than the
next succeeding Settlement Date an amount to be applied to reduce the
Aggregate Principal (as allocated by the Agent), such that after giving
effect to such payment the Aggregate Principal is less than or equal to the
Borrowing Limit.
Page 127
Exhibit 10(i)A(4)
Section 1.5 Payment Requirements. All amounts to be paid or deposited by
any Loan Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 12:00 noon (New York
time) on the day when due in immediately available funds, and if not received
before 12:00 noon (New York time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Lender they shall be
paid to the Agent's Account, for the account of such Lender, until otherwise
notified by the Agent. Upon notice to Borrower, the Agent may debit the Facility
Account for all amounts due and payable hereunder. All computations of CP Costs,
Interest, per annum fees calculated as part of any CP Costs, per annum fees
hereunder and per annum fees under the Fee Letter shall be made on the basis of
a year of 360 days for the actual number of days elapsed. If any amount
hereunder shall be payable on a day which is not a Business Day, such amount
shall be payable on the next succeeding Business Day.
Section 1.6 Ratable Loans; Funding Mechanics; Liquidity Fundings.
(a) Each Advance hereunder shall consist of one or more Loans made by
Blue Ridge and/or the Liquidity Banks.
(b) Each Lender funding any Loan shall wire transfer the principal
amount of its Loan to the Agent in immediately available funds not later
than 12:00 noon (New York City time) on the applicable Borrowing Date and,
subject to its receipt of such Loan proceeds, the Agent shall wire transfer
such funds to the account specified by Borrower in its Borrowing Request
not later than 2:00 p.m. (New York City time) on such Borrowing Date.
(c) While it is the intent of Blue Ridge to fund each requested
Advance through the issuance of its Commercial Paper, the parties
acknowledge that if Blue Ridge is unable, or determines in good faith that
it is undesirable, to issue Commercial Paper to fund all or any portion of
its Loans, or is unable to repay such Commercial Paper upon the maturity
thereof, Blue Ridge may put all or any portion of its Loans to the
Liquidity Banks at any time pursuant to the Liquidity Agreement to finance
or refinance the necessary portion of its Loans through a Liquidity Funding
to the extent available. The Liquidity Fundings may be Alternate Base Rate
Loans or LIBO Rate Loans, or a combination thereof, selected by Borrower in
accordance with Article IV. Regardless of whether a Liquidity Funding
constitutes the direct funding of a Loan, an assignment of a Loan made by
Blue Ridge or the sale of one or more participations in a Loan made by Blue
Ridge, each Liquidity Bank participating in a Liquidity Funding shall have
the rights of a "Lender" hereunder with the same force and effect as if it
had directly made a Loan to Borrower in the amount of its Liquidity
Funding.
(d) Nothing herein shall be deemed to commit Blue Ridge to make Loans.
Page 128
Exhibit 10(i)A(4)
ARTICLE II.
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Borrower hereby promises to pay:
(a) the Aggregate Principal on and after the Facility Termination Date
as and when Collections are received;
(b) the fees set forth in the Fee Letter on the dates specified
therein;
(c) all accrued and unpaid Interest on the Alternate Base Rate Loans
on each Settlement Date applicable thereto;
(d) all accrued and unpaid Interest on the LIBO Rate Loans on the last
day of each Interest Period applicable thereto;
(e) all accrued and unpaid CP Costs on the CP Rate Loans on each
Settlement Date; and
(f) all Broken Funding Costs and Indemnified Amounts upon demand.
Section 2.2 Collections Prior to Amortization; Repayment of Certain Demand
Advances. Without limiting recourse to Borrower for the Obligations under
Section 2.1:
(a) On each Settlement Date prior to the Amortization Date, the
Servicer shall deposit to the Agent's Account, for distribution to the
Lenders, a portion of the Collections received by it during the preceding
Settlement Period (after deduction of its Servicing Fee) equal to the sum
of the following amounts for application to the Obligations in the order
specified:
first, ratably to the payment of all accrued and unpaid CP Costs,
Interest and Broken Funding Costs (if any) that are then due and owing,
second, ratably to the payment of all accrued and unpaid fees under
the Fee Letter (if any) that are then due and owing,
third, if required under Section 1.3 or 1.4, to the ratable reduction
of Aggregate Principal,
fourth, for the ratable payment of all other unpaid Obligations, if
any, that are then due and owing, and
fifth, the balance, if any, to Borrower or otherwise in accordance
with Borrower's instructions.
Collections applied to the payment of Obligations shall be distributed in
accordance with the aforementioned provisions, and, giving effect to each of the
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Exhibit 10(i)A(4)
priorities set forth above in this Section 2.2(a), shall be shared ratably
(within each priority) among the Agent and the Lenders in accordance with the
amount of such Obligations owing to each of them in respect of each such
priority.
(b) If the Collections are insufficient to pay the Servicing Fee and
the Obligations specified above on any Settlement Date, Borrower shall make
demand upon NSI Georgia for repayment of any outstanding Demand Advances in
an aggregate amount equal to the lesser of (i) the amount of such shortfall
in Collections, and (ii) the aggregate outstanding principal balance of the
Demand Advances, together with all accrued and unpaid interest thereon, and
NSI Georgia hereby agrees to pay such amount to the Agent's Account on such
Settlement Date.
Section 2.3 Repayment of Demand Advances on the Amortization Date;
Collections Following Amortization.
(a) On the Amortization Date, NSI Georgia hereby agrees to repay the
aggregate outstanding principal balance of all Demand Advances, together
with all accrued and unpaid interest thereon, to the Agent's Account,
without demand or notice of any kind, all of which are hereby expressly
waived by NSI Georgia.
(b) Without limiting recourse to Borrower for the Obligations under
Section 2.1, on the Amortization Date and on each day thereafter, the
Servicer shall set aside and hold in trust, for the Secured Parties, all
Collections received on such day. On and after the Amortization Date, the
Servicer shall, on each Settlement Date and on each other Business Day
specified by the Agent (after deduction of any accrued and unpaid Servicing
Fee as of such date): (i) remit to the Agent's Account the amounts set
aside pursuant to the preceding two sentences, and (ii) apply such amounts
to reduce the Obligations as follows:
first, to the reimbursement of the Agent's actual and reasonable costs
of collection and enforcement of this Agreement,
second, ratably to the payment of all accrued and unpaid CP Costs,
Interest and Broken Funding Costs,
third, ratably to the payment of all accrued and unpaid fees under the
Fee Letter,
fourth, to the ratable reduction of Aggregate Principal,
fifth, for the ratable payment of all other unpaid Obligations, and
sixth, after the Obligations have been indefeasibly reduced to zero,
to Borrower.
Collections applied to the payment of Obligations shall be distributed in
accordance with the aforementioned provisions, and, giving effect to each of the
priorities set forth above in this Section 2.3(b), shall be shared ratably
(within each priority) among the Agent and the Lenders in accordance with the
amount of such Obligations owing to each of them in respect of each such
priority.
Page 130
Exhibit 10(i)A(4)
Section 2.4 Payment Recission. No payment of any of the Obligations shall
be considered paid or applied hereunder to the extent that, at any time, all or
any portion of such payment or application is rescinded by application of law or
judicial authority, or must otherwise be returned or refunded for any reason.
Borrower shall remain obligated for the amount of any payment or application so
rescinded, returned or refunded, and shall promptly pay to the Agent (for
application to the Person or Persons who suffered such recission, return or
refund) the full amount thereof, plus Interest on such amount at the Default
Rate from the date of any such recission, return or refunding.
ARTICLE III.
BLUE RIDGE FUNDING
Section 3.1 CP Costs. Borrower shall pay CP Costs with respect to the
principal balance of Blue Ridge's Loans from time to time outstanding. Each Loan
of Blue Ridge that is funded substantially with Pooled Commercial Paper will
accrue CP Costs each day on a pro rata basis, based upon the percentage share
that the principal in respect of such Loan represents in relation to all assets
held by Blue Ridge and funded substantially with related Pooled Commercial
Paper.
Section 3.2 Calculation of CP Costs. Not later than the 3rd Business Day
immediately preceding each Monthly Reporting Date, Blue Ridge shall calculate
the aggregate amount of CP Costs applicable to its CP Rate Loans for the
Calculation Period then most recently ended and shall notify Borrower of such
aggregate amount.
Section 3.3 CP Costs Payments. On each Settlement Date, Borrower shall pay
to the Agent (for the benefit of Blue Ridge) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the principal associated with all CP
Rate Loans for the Calculation Period then most recently ended in accordance
with Article II.
Section 3.4 Default Rate. From and after the occurrence and during the
continuation of an Amortization Event, all Loans of Blue Ridge shall accrue
Interest at the Default Rate and shall cease to be CP Rate Loans.
ARTICLE IV.
LIQUIDITY BANK FUNDING
Section 4.1 Liquidity Bank Funding. Prior to the occurrence of an
Amortization Event, the outstanding principal balance of each Liquidity Funding
shall accrue interest for each day during its Interest Period at either the LIBO
Rate or the Alternate Base Rate in accordance with the terms and conditions
hereof. Until Borrower gives notice to the Agent of another Interest Rate in
accordance with Section 4.4, the initial Interest Rate for any Loan transferred
to the Liquidity Banks by Blue Ridge pursuant to the Liquidity Agreement shall
be the Alternate Base Rate (unless the Default Rate is then applicable). If the
Liquidity Banks acquire by assignment from Blue Ridge any Loan pursuant to the
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Exhibit 10(i)A(4)
Liquidity Agreement, each Loan so assigned shall each be deemed to have an
Interest Period commencing on the date of any such assignment.
Section 4.2 Interest Payments. On the Settlement Date for each Liquidity
Funding, Borrower shall pay to the Agent (for the benefit of the Liquidity
Banks) an aggregate amount equal to the accrued and unpaid Interest for the
entire Interest Period of each such Liquidity Funding in accordance with Article
II.
Section 4.3 Selection and Continuation of Interest Periods.
(a) With consultation from (and approval by) the Agent (which approval
shall not be unreasonably withheld or delayed), Borrower shall from time to
time request Interest Periods for the Liquidity Fundings, provided that if
at any time any Liquidity Funding is outstanding, Borrower shall always
request Interest Periods such that at least one Interest Period shall end
on the date specified in clause (A) of the definition of Settlement Date.
(b) Borrower or the Agent, upon notice to and consent by the other
received at least three (3) Business Days prior to the end of an Interest
Period (the "Terminating Tranche") for any Liquidity Funding, may,
effective on the last day of the Terminating Tranche: (i) divide any such
Liquidity Funding into multiple Liquidity Fundings, (ii) combine any such
Liquidity Funding with one or more other Liquidity Fundings that have a
Terminating Tranche ending on the same day as such Terminating Tranche or
(iii) combine any such Liquidity Funding with a new Liquidity Funding to be
made by the Liquidity Banks on the day such Terminating Tranche ends.
Section 4.4 Liquidity Bank Interest Rates. Borrower may select the LIBO
Rate or the Alternate Base Rate for each Liquidity Funding. Borrower shall by
12:00 noon (New York time): (i) at least three (3) Business Days prior to the
expiration of any Terminating Tranche with respect to which the LIBO Rate is
being requested as a new Interest Rate and (ii) at least one (1) Business Day
prior to the expiration of any Terminating Tranche with respect to which the
Alternate Base Rate is being requested as a new Interest Rate, give the Agent
irrevocable notice of the new Interest Rate for the Liquidity Funding associated
with such Terminating Tranche. Until Borrower gives notice to the Agent of
another Interest Rate, the initial Interest Rate for any Loan transferred to the
Liquidity Banks pursuant to the Liquidity Agreement shall be the Alternate Base
Rate (unless the Default Rate is then applicable).
Section 4.5 Suspension of the LIBO Rate
(a) If any Liquidity Bank notifies the Agent that it has reasonably
determined that funding its Pro Rata Share of the Liquidity Fundings at a
LIBO Rate would violate any applicable law, rule, regulation, or directive
of any governmental or regulatory authority, whether or not having the
force of law, or that (i) deposits of a type and maturity appropriate to
match fund its Liquidity Funding at such LIBO Rate are not available or
(ii) such LIBO Rate does not accurately reflect the cost of acquiring or
maintaining a Liquidity Funding at such LIBO Rate, then the Agent shall
suspend the availability of such LIBO Rate and require Borrower to select
the Alternate Base Rate for any Liquidity Funding accruing Interest at such
LIBO Rate.
Page 132
Exhibit 10(i)A(4)
(b) If less than all of the Liquidity Banks give a notice to the Agent
pursuant to Section 4.5(a), each Liquidity Bank which gave such a notice
shall be obliged, at the request of Borrower, Blue Ridge or the Agent, to
assign all of its rights and obligations hereunder to (i) another Liquidity
Bank or (ii) another funding entity nominated by Borrower or the Agent that
is an Eligible Assignee willing to participate in this Agreement through
the Liquidity Termination Date in the place of such notifying Liquidity
Bank; provided that (i) the notifying Liquidity Bank receives payment in
full, pursuant to an Assignment Agreement, of all Obligations owing to it
(whether due or accrued), and (ii) the replacement Liquidity Bank otherwise
satisfies the requirements of Section 12.1(b).
Section 4.6 Default Rate. From and after the occurrence and during the
continuation of an Amortization Event, all Liquidity Fundings shall accrue
Interest at the Default Rate.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Loan Parties. Each Loan
Party hereby represents and warrants to the Agent and the Lenders, as to itself,
as of the date hereof and except for such representations or warranties that are
limited to a certain date or period, as of the date of each Advance and as of
each Settlement Date that:
(a) Existence and Power. Such Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of the
state indicated in the preamble to this Agreement, is duly qualified to
transact business in every jurisdiction where, by the nature of its
business, such qualification is necessary, and where the failure to qualify
would have or could reasonably be expected to cause a Material Adverse
Effect, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
(b) Power and Authority; Due Authorization, Execution and Delivery.
The execution, delivery and performance by such Loan Party of the
Transaction Documents to which it is a party (i) are within such Loan
Party's corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) require no action by or in respect of or filing
with, any governmental body, agency or official, (iv) do not contravene, or
constitute a default under, any provision of applicable law or regulation
or of the certificate of incorporation or by-laws of such Loan Party or of
any agreement, judgment, injunction, order, decree or other instrument
binding upon such Loan Party or any of its Subsidiaries, and (v) do not
result in the creation or imposition of any Adverse Claim on any asset of
such Loan Party (except as created hereunder). This Agreement and each
other Transaction Document to which such Loan Party is a party has been
duly executed and delivered by such Loan Party.
(c) No Bulk Sale. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
Page 133
Exhibit 10(i)A(4)
(d) Governmental Authorization. Other than the filing of the 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 the due execution and delivery by such Loan
Party 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 is no action, suit or proceeding pending, or
to the knowledge of such Loan Party overtly threatened in writing, against
or affecting such Loan Party or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official which has had or is
likely to have a Material Adverse Effect.
(f) Binding Effect. This Agreement constitutes and, when executed and
delivered in accordance with this Agreement, each other Transaction
Document to which such Loan Party is a party, will constitute valid and
binding obligations of such Loan Party enforceable in accordance with their
respective terms, provided that the enforceability hereof and thereof is
subject in each case to general principles of equity and to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(g) Accuracy of Information. All information heretofore furnished by
such Loan Party to the Agent or any of the Lenders for purposes of or in
connection with this Agreement or any transaction contemplated hereby is,
and all such information hereafter furnished by such Loan Party to the
Agent or any of the Lenders will be, true and accurate in every material
respect or based on reasonable estimates on the date as of which such
information is stated or certified. Such Loan Party has disclosed to the
Agent in writing any and all facts known to its Executive Officers which
would have or reasonably would be expected to cause a Material Adverse
Effect.
(h) Use of Proceeds. Borrower is not engaged principally, or as one of
its important activities, in the business of purchasing or carrying any
Margin Stock, and no part of the proceeds of any Advance will be used to
purchase or carry any Margin Stock (except to the extent expressly
permitted under the proviso to Section 7.1(i)(L)) or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock, or be
used for any purpose which violates, or which is inconsistent with, the
provisions of Regulation T, U or X.
(i) Good Title. Borrower (i) is the legal and beneficial owner of the
Receivables and (ii) is the legal and beneficial owner of the Related
Security with respect thereto or possesses a valid and perfected security
interest therein, in each case, free and clear of any Adverse Claim, except
for Permitted Encumbrances. 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
Borrower's ownership interest in each Receivable, its Collections and the
Related Security and the Agent's security interest therein.
(j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to create in favor
of the Agent, for the benefit of the Lenders, a valid and perfected
security interest in all of Borrower's right, title and interest in and to
Page 134
Exhibit 10(i)A(4)
each Receivable existing and hereafter arising, together with all
Collections and Related Security with respect thereto, in each case, free
and clear of any Adverse Claim, except for Permitted Encumbrances.
(k) Places of Business and Locations of Records. The principal places
of business and chief executive office of each Loan Party and the offices
where it keeps all of its Records are located at the address(es) listed on
Exhibit III or such other locations of which the Agent has been notified in
accordance with Section 7.2(a) in jurisdictions where all action required
by Section 7.2(a) has been taken and completed. Borrower's Federal Employer
Identification Number is correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in Section
7.1(j) have at all times been satisfied and duly performed. The names and
addresses of all Collection Banks, together with the account numbers of the
Collection Accounts at each Collection Bank and the post office box number
of each Lock-Box, are listed on Exhibit IV. Borrower has not granted any
Person, other than the Agent under Section 8.3 hereof and the Collection
Account Agreements 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. During the period from August 31, 2000
through the Initial Cut-Off Date, in the good faith judgment of the
Executive Officers, no event has occurred that has had or could reasonably
be expected to have a Material Adverse Effect.
(n) Names. The name in which Borrower has executed this Agreement is
identical to the name of Borrower as indicated on the public record of its
state of organization which shows Borrower to have been organized. In the
past five (5) years, Borrower has not used any corporate names, trade names
or assumed names other than the name in which it has executed this
Agreement and as listed on Exhibit III.
(o) Not a Holding Company or an Investment Company. Borrower 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. Borrower is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or
any successor statute.
(p) Compliance with Law. Borrower 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.
Page 135
Exhibit 10(i)A(4)
(q) Compliance with Credit and Collection Policy. Borrower 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 material change to such Credit and Collection Policy, except such
material change as to which the Agent has been notified in accordance with
Section _7.1(a).
(r) 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).
(s) Accounting. The manner in which Borrower accounts for the
transactions contemplated by the Receivables Sale Agreement does not
jeopardize the characterization of the transactions contemplated therein as
being true sales.
(t) Eligible Receivables. Each Receivable reflected in any Monthly
Report as an Eligible Receivable was an Eligible Receivable on the date of
such Monthly Report.
(u) Borrowing Limit. Immediately after giving effect to each Advance
and each settlement on any Settlement Date hereunder, the Aggregate
Principal is less than or equal to the Borrowing Limit.
Section 5.2 Liquidity Bank Representations and Warranties. Each Liquidity
Bank hereby represents and warrants to the Agent, Blue Ridge and the Loan
Parties that:
(a) Existence and Power. Such Liquidity Bank is a banking association
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has all organizational power to perform
its obligations hereunder and under the Liquidity Agreement.
(b) No Conflict. The execution and delivery by such Liquidity Bank of
this Agreement and the Liquidity Agreement and the performance of its
obligations hereunder and thereunder are within its corporate powers, have
been duly authorized by all necessary corporate action, do not contravene
or violate (i) its certificate or articles of incorporation or association
or by-laws, (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 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. This Agreement and the Liquidity Agreement have been duly
authorized, executed and delivered by such Liquidity Bank.
(c) Governmental Authorization. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such
Page 136
Exhibit 10(i)A(4)
Liquidity Bank of this Agreement or the Liquidity Agreement and the
performance of its obligations hereunder or thereunder.
(d) Binding Effect. Each of this Agreement and the Liquidity Agreement
constitutes the legal, valid and binding obligation of such Liquidity Bank
enforceable against such Liquidity Bank 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 such enforcement is sought in a proceeding in equity or at law).
ARTICLE VI.
CONDITIONS OF ADVANCES
Section 6.1 Conditions Precedent to Initial Advance. The initial Advance
under this Agreement is subject to the conditions precedent that (a) the Agent
shall have received on or before the date of such Advance those documents listed
on Schedule A to the Receivables Sale Agreement and those documents listed on
Schedule B to this Agreement, (b) the Rating Agency Condition shall have been
satisfied, and (c) the Agent shall have received all fees and expenses required
to be paid on such date pursuant to the terms of this Agreement and the Fee
Letter.
Section 6.2 Conditions Precedent to All Advances. Each Advance and each
rollover or continuation of any Advance shall be subject to the further
conditions precedent that (a) the Servicer shall have delivered to the Agent on
or prior to the date thereof, in form and substance satisfactory to the Agent,
all Monthly Reports as and when due under Section 8.5; (b) the Facility
Termination Date shall not have occurred; (c) the Agent shall have received such
other approvals, opinions or documents as it may reasonably request; and (d) on
the date thereof, the following statements shall be true (and acceptance of the
proceeds of such Advance shall be deemed a representation and warranty by
Borrower that such statements are then true):
(i) the representations and warranties set forth in Section 5.1 are
true and correct in all material respects on and as of the date of such
Advance (or such Settlement Date, as the case may be) as though made on and
as of such date;
(ii) no event has occurred and is continuing, or would result from
such Advance (or the continuation thereof), that will constitute an
Amortization Event, and no event has occurred and is continuing, or would
result from such Advance (or the continuation thereof), that would
constitute an Unmatured Amortization Event; and
(iii) after giving effect to such Advance (or the continuation
thereof), the Aggregate Principal will not exceed the Borrowing Limit.
Page 137
Exhibit 10(i)A(4)
ARTICLE VII.
COVENANTS
Section 7.1 Affirmative Covenants of the Loan Parties. Until the Final
Payout Date, each Loan Party hereby covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Loan Party will maintain, for itself and
each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished
to the Agent:
(i) Annual Reporting. As soon as available and in any event
within 90 days (or such longer period as may be the subject of an
extension granted by the Securities and Exchange Commission) after the
end of each Fiscal Year, (A) a consolidated balance sheet of the
Performance Guarantor and its Consolidated Subsidiaries as of the end
of such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous
fiscal year, all certified by Xxxxxx Xxxxxxxx, LLP or other
independent public accountants of nationally recognized standing, with
such certification to be free of exceptions and qualifications not
acceptable to the Agent, and (B) an unaudited balance sheet and income
statement for Borrower for such Fiscal Year, certified in a manner
acceptable to the Agent by Borrower's chief financial officer.
(ii) Quarterly Reporting. As soon as available and in any event
within 45 days (or such longer period as may be the subject of an
extension granted by the Securities and Exchange Commission) after the
end of each of the first 3 Fiscal Quarters of each Fiscal Year, (A) a
consolidated balance sheet of the Performance Guarantor and its
Consolidated Subsidiaries as of the end of such Fiscal Quarter and the
related statement of income and statement of cash flows for the
portion of the Fiscal Year ended at the end of such Fiscal Quarter,
setting forth in each case in comparative form the figures for the
corresponding Fiscal Quarter and the corresponding portion of the
previous Fiscal Year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, GAAP and consistency by
the chief financial officer or the chief accounting officer of the
Performance Guarantor, and (B) an unaudited balance sheet and income
statement for Borrower for such Fiscal Quarter, certified in a manner
acceptable to the Agent by Borrower's chief financial officer.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in
substantially the form of Exhibit V signed by an Authorized Officer of
the Performance Guarantor 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
mailing thereof to the shareholders of the Performance Guarantor
generally, copies of all financial statements, reports and proxy
statements so mailed.
Page 138
Exhibit 10(i)A(4)
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of
all registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or monthly reports which the Performance Guarantor shall
have filed with the Securities and Exchange Commission.
(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 the Agent or Blue Ridge, copies of
the same.
(vii) Change in Credit and Collection Policy. At least thirty
(30) days prior to the effectiveness of any material change in or
material amendment to the Credit and Collection Policy, a copy of the
Credit and Collection Policy then in effect and a notice (A)
indicating such 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 the Agent's consent thereto.
(viii) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables
or the condition or operations, financial or otherwise, of such Loan
Party as the Agent may from time to time reasonably request in order
to protect the interests of the Agent, for the benefit of Blue Ridge,
under or as contemplated by this Agreement.
(b) Notices. Such Loan Party will notify the Agent 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) Amortization Events or Unmatured Amortization Events. Within
one (1) Business Day after any Responsible Officer learns thereof, the
occurrence of each Amortization Event and each Unmatured Amortization
Event, by a statement of an Authorized Officer of such Loan Party.
(ii) Termination Events or Unmatured Termination Events. Within
one (1) Business Day after any Responsible Officer learns thereof, the
occurrence of each Termination Event and each Unmatured Termination
Event, by a statement of an Authorized Officer of NSI Georgia.
(iii) Defaults Under Other Agreements. Within one (1) Business
Day after any Responsible Officer learns thereof, the occurrence of a
default or an event of default under any other financing arrangement
pursuant to which any Loan Party is a debtor or an obligor which
relates to debt in excess of $25,000,000.
(iv) ERISA Events. If and when any member of the Controlled Group
(i) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan
which could reasonably be expected to constitute grounds for a
termination of such Plan
Page 139
Exhibit 10(i)A(4)
under Title IV of ERISA, or knows that the plan administrator of any
Plan has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or required
to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice;
or (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer any Plan, a
copy of such notice; provided, however, that each of the foregoing
notices shall not be required to be given unless the reportable event,
withdrawal liability, plan termination or trustee appointment involved
could reasonably be expected to give rise to a liability of more than
$1,000,000 on the part of the Performance Guarantor or any of its
Subsidiaries.
(v) Termination Date. Within one (1) Business Day after any
Responsible Officer learns thereof, the occurrence of the "Termination
Date" under and as defined in the Receivables Sale Agreement or the
First-Step Sale Agreement.
(vi) Notices under Receivables Sale Agreement or the First-Step
Sale Agreement. Copies of all notices delivered under the Receivables
Sale Agreement or the First-Step Sale Agreement.
(c) Compliance with Laws and Preservation of Corporate Existence.
(i) Such Loan Party 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. Such Loan Party will preserve and
maintain its corporate existence, rights, franchises and privileges in
the jurisdiction of its incorporation, and qualify and remain
qualified in good standing as a foreign corporation in each
jurisdiction where its business is conducted, except (A) where the
failure to so preserve and maintain or qualify could not reasonably be
expected to have a Material Adverse Effect, and (B) to the extent
permitted under Section 7.1(c)(ii) below.
(ii) Notwithstanding anything herein or in any of the other
Transaction Documents to the contrary:
(A) NSI Enterprises, NSI Georgia or the Parent may merge or
consolidate with any other Person provided that (1) the surviving
corporation is the Parent or a wholly-owned Subsidiary of the Parent,
(2) the survivor executes and delivers such Uniform Commercial Code
financing statements and other documents as the Administrative Agent
may reasonably request in order to maintain the perfection of the
interests conveyed under the Transaction Documents and (3) no
Amortization Event or Unmatured Amortization Event has occurred and is
continued after giving effect to such transaction,
(B) NSI Enterprises or NSI Georgia may merge or consolidate with
the Parent provided that (1) the Parent is the corporation surviving
such merger, (2) the Parent executes and delivers such Uniform
Commercial Code financing statements and other documents as the
Page 140
Exhibit 10(i)A(4)
Administrative Agent may reasonably request in order to maintain the
perfection of the interests conveyed under the Transaction Documents
and (3) no Amortization Event or Unmatured Amortization Event has
occurred and is continued after giving effect to such transaction, and
(C) Any or all of NSI Enterprises, NSI Georgia and the Parent may
enter into a one or more other transactions (collectively, the
"Reorganization") in which such Person or Persons (each, an "Existing
NSI Party") merge or consolidate with or transfer all or a substantial
portion of their assets to another Person or Persons (each, a
"Successor NSI Party"), without any Loan Party's payment of any
additional structuring, origination or similar fees (other than fees
and costs referenced in Section 10.3), if and only if each and every
of the following conditions are fulfilled with respect to such
Reorganization:
(1) Each Successor NSI Party shall be a corporation,
partnership, limited liability company or trust incorporated or
organized under the laws of the United States or any state
thereof or the District of Columbia;
(2) Each Successor NSI Party shall expressly assume all of
the obligations of the applicable Existing NSI Party under the
Transaction Documents pursuant to a written agreement duly
executed by the Successor NSI Party in form and substance
reasonably satisfactory to the Administrative Agent;
(3) Each Successor NSI Party shall execute or deliver such
officer certificates, legal opinions, Uniform Commercial Code
financing statements and other documents as the Administrative
Agent may reasonably request in order to further evidence or give
notice of the Reorganization;
(4) After giving effect to the consummation of the
Reorganization, no Amortization Event or Unmatured Amortization
Event shall be in existence;
(5) If, as a result of the Reorganization, NSI Enterprises
or NSI Georgia is no longer a Subsidiary of the Parent, then such
Loan Party or its new parent company shall satisfy the following
additional conditions: (w) such Person shall have the same
shareholders immediately after giving effect to the consummation
of the Reorganization as the Parent had immediately prior to the
consummation of the Reorganization; (x) one or more of the
president, the chief executive officer, and the chief financial
officer of such Person shall be individuals who were directors or
officers of the Parent or one or more of its Subsidiaries or
business units prior to the effectiveness of the Reorganization,
(y) a majority of the members of the board of directors of such
Person shall be individuals who were members of the board of
directors of the Parent or one or more of its Subsidiaries prior
to the effectiveness of the Reorganization; and (z) such Person's
short term unsecured debt ratings from Xxxxx'x and S&P shall be
Page 141
Exhibit 10(i)A(4)
not less than A-3 and P-3, respectively, after giving effect to
the consummation of the Reorganization; and
(6) The Rating Agency Condition shall have been satisfied
with respect to the consummation of the Reorganization.
(d) Audits. Such Loan Party will furnish to the Agent from time to
time such information with respect to it and the Receivables as the Agent
may reasonably request. Such Loan Party will, at the sole cost of such Loan
Party from time to time upon prior written request of the Agent given
(unless an Amortization Event shall have occurred and be continuing) not
less than three (3) Business Days prior to a requested visit, permit the
Agent, or its agents or representatives (and shall cause each Originator to
permit the Agent or its agents or representatives) during normal business
hours: (i) to examine and make copies of and abstracts from all Records in
the possession or under the control of such Person relating to the
Collateral, including, without limitation, the related Contracts, and (ii)
to visit the offices and properties of such Person for the purpose of
examining such materials described in clause (i) above, and to discuss
matters relating to such Person's financial condition or the Collateral or
any Person's performance under any of the Transaction Documents or any
Person's performance under the Contracts and, in each case, with any of the
officers or employees of Borrower or the Servicer having knowledge of such
matters (each of the foregoing examinations and visits, a "Review");
provided, however, that, so long as no Amortization Event has occurred and
is continuing, (A) the Loan Parties shall only be responsible for the costs
and expenses of one (1) Review in any one calendar year, and (B) the Agent
will not request more than four (4) Reviews in any one calendar year. To
the extent that Agent, in the course of any Review, obtains possession of
any Proprietary Information pertaining to any Loan Party or any of its
Affiliates, Agent shall handle such information in accordance with the
requirements of Section 14.5 hereof.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause each Originator to)
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). The Servicer will (and will cause each Originator to)
give the Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
(ii) Such Loan Party will (and will cause each Originator to):
(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, acceptable to the Agent, describing the Agent's security
interest in the Collateral and (B) upon the request of the Agent
following the occurrence and during the continuance of an Amortization
Event: (x) xxxx each Contract with a legend describing the Agent's
Page 142
Exhibit 10(i)A(4)
security interest and (y) deliver to the Agent all Contracts
(including, without limitation, all multiple originals of any such
Contract constituting an instrument, a certificated security or
chattel paper) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such
Loan Party will (and will cause each Originator to) timely and fully (i)
perform and comply in all material respects with all provisions, covenants
and other promises required to be observed by it under the Contracts
related to the Receivables, and (ii) comply in all material respects with
the Credit and Collection Policy in regard to each Receivable and the
related Contract.
(g) Performance and Enforcement of Receivables Sale Agreement and the
First-Step Sale Agreement. Borrower will, and will require each Originator
to, perform each of their respective obligations and undertakings under and
pursuant to the Receivables Sale Agreement and the First-Step Sale
Agreement, will purchase Receivables thereunder in strict compliance with
the terms of the Receivables Sale Agreement and will vigorously enforce the
rights and remedies accorded to Borrower under the Receivables Sale
Agreement. Borrower will take all actions to perfect and enforce its rights
and interests (and the rights and interests of the Agent, as Borrower's
assignee) under the Receivables Sale Agreement and the First-Step Sale
Agreement as the Agent may from time to time reasonably request, including,
without limitation, making claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Receivables
Sale Agreement or the First-Step Sale Agreement.
(h) Ownership. Borrower will (or will cause each Originator to) take
all necessary action to (i) vest legal and equitable title to the
Collateral purchased under the Receivables Sale Agreement irrevocably in
Borrower, free and clear of any Adverse Claims (other than Permitted
Encumbrances) 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
Borrower's interest in such Collateral and such other action to perfect,
protect or more fully evidence the interest of Borrower therein as the
Agent may reasonably request), and (ii) establish and maintain, in favor of
the Agent, for the benefit of the Secured Parties, a valid and perfected
first priority security interest in all Collateral, free and clear of any
Adverse Claims (other than Permitted Encumbrances), 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 the Agent's (for the benefit of
the Secured Parties) security interest in the Collateral and such other
action to perfect, protect or more fully evidence the interest of the Agent
for the benefit of the Secured Parties as the Agent may reasonably request.
(i) Reliance. Borrower acknowledges that the Agent and Blue Ridge are
entering into the transactions contemplated by this Agreement in reliance
upon Borrower's identity as a legal entity that is separate from each
Originator. Therefore, from and after the date of execution and delivery of
this Agreement, Borrower shall take all reasonable steps, including,
without limitation, all steps that the Agent or Blue Ridge may from time to
time reasonably request, to maintain Borrower's identity as a separate
Page 143
Exhibit 10(i)A(4)
legal entity and to make it manifest to third parties that Borrower is an
entity with assets and liabilities distinct from those of each Originator
and any Affiliates thereof (other than Borrower) and not just a division of
any Originator or any such Affiliate. Without limiting the generality of
the foregoing and in addition to the other covenants set forth herein,
Borrower will:
(A) conduct its own business in its own name;
(B) compensate all employees, consultants and agents directly,
from Borrower's own funds, for services provided to Borrower by such
employees, consultants and agents and, to the extent any employee,
consultant or agent of Borrower is also an employee, consultant or
agent of any Originator or any Affiliate thereof, allocate the
compensation of such employee, consultant or agent between Borrower
and such Originator or such Affiliate, as applicable, on a basis that
reflects the services rendered to Borrower and such Originator or such
Affiliate, as applicable;
(C) clearly identify its offices (by signage or otherwise) as its
offices and, if such office is located in the offices of any
Originator, Borrower shall lease such office at a fair market rent;
(D) have a separate telephone number, which will be answered only
in its name and separate stationery and checks in its own name;
(E) conduct all transactions with each Originator and the
Servicer (including, without limitation, any delegation of its
obligations hereunder as Servicer) strictly on an arm's-length basis,
allocate all overhead expenses (including, without limitation,
telephone and other utility charges) for items shared between Borrower
and such Originator on the basis of actual use to the extent
practicable and, to the extent such allocation is not practicable, on
a basis reasonably related to actual use;
(F) at all times have a Board of Directors consisting of three
members, at least one member of which is an Independent Director;
(G) observe all corporate formalities as a distinct entity, and
ensure that all corporate actions relating to (A) the selection,
maintenance or replacement of the Independent Director, (B) the
dissolution or liquidation of Borrower or (C) the initiation of,
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Borrower,
are duly authorized by unanimous vote of its Board of Directors
(including the Independent Director);
(H) maintain Borrower's books and records separate from those of
each Originator and any Affiliate thereof and otherwise readily
identifiable as its own assets rather than assets of any Originator or
any Affiliate thereof;
(I) prepare its financial statements separately from those of
each Originator and insure that any consolidated financial statements
of any Originator or any Affiliate thereof that include Borrower and
that are filed with the Securities and Exchange Commission or any
Page 144
Exhibit 10(i)A(4)
other governmental agency have notes clearly stating that Borrower is
a separate corporate entity and that its assets will be available
first and foremost to satisfy the claims of the creditors of Borrower;
(J) except as herein specifically otherwise provided, maintain
the funds or other assets of Borrower separate from, and not
commingled with, those of any Originator or any Affiliate thereof and
only maintain bank accounts or other depository accounts to which
Borrower alone is the account party, into which Borrower alone makes
deposits and from which Borrower alone (or the Agent hereunder) has
the power to make withdrawals;
(K) pay all of Borrower's operating expenses from Borrower's own
assets (except for certain payments by any Originator or other Persons
pursuant to allocation arrangements that comply with the requirements
of this Section 7.1(i));
(L) operate its business and activities such that: it does not
engage in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement, contract,
lease or other undertaking, other than the transactions contemplated
and authorized by this Agreement and the Receivables Sale Agreement;
and does not create, incur, guarantee, assume or suffer to exist any
indebtedness or other liabilities, whether direct or contingent, other
than (1) as a result of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course
of business, (2) the incurrence of obligations under this Agreement,
(3) the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to the applicable
Originator thereunder for the purchase of Receivables from such
Originator under the Receivables Sale Agreement, and (4) the
incurrence of operating expenses in the ordinary course of business of
the type otherwise contemplated by this Agreement; provided that
Borrower may own non-passive financial assets which have a total cost
to Borrower of not more than $1,000;
(M) maintain its corporate charter in conformity with this
Agreement, such that it does not amend, restate, supplement or
otherwise modify its Certificate of Incorporation or By-Laws in any
respect that would materially impair its ability to comply with the
terms or provisions of any of the Transaction Documents, including,
without limitation, Section 7.1(i) of this Agreement;
(N) maintain the effectiveness of, and continue to perform under
the Receivables Sale Agreement and the First-Step Sale Agreement, such
that it does not amend, restate, supplement, cancel, terminate or
otherwise modify the Receivables Sale Agreement or the First-Step Sale
Agreement, or give any consent, waiver, directive or approval
thereunder or waive any default, action, omission or breach under the
Receivables Sale Agreement or the First-Step Sale Agreement or
otherwise grant any indulgence thereunder, without (in each case) the
prior written consent of the Agent;
(O) maintain its corporate separateness such that it does not
merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions, and except as otherwise contemplated herein) all or
substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of,
Page 145
Exhibit 10(i)A(4)
any Person, nor at any time create, have, acquire, maintain or hold
any interest in any Subsidiary.
(P) maintain at all times the Required Capital Amount (as defined
in the Receivables Sale Agreement) and refrain from making any
dividend, distribution, redemption of capital stock or payment of any
subordinated indebtedness which would cause the Required Capital
Amount to cease to be so maintained; and
(Q) take such other actions as are necessary on its part to
ensure that the facts and assumptions set forth in the opinion issued
by Xxxxxxxxxx Xxxxxxxx LLP, as counsel for Borrower, in connection
with the closing or initial Advance under this Agreement and relating
to substantive consolidation issues, and in the certificates
accompanying such opinion, remain true and correct in all material
respects at all times.
(j) Collections. Such Loan Party will cause (1) all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) each Lock-Box and Collection Account to be subject at all
times to a Collection Account Agreement that is in full force and effect.
In the event any payments relating to the Collateral are remitted directly
to Borrower or any Affiliate of Borrower, Borrower will remit (or will
cause all such payments to be remitted) directly to a Collection Bank and
deposited into a Collection Account within two (2) Business Days following
receipt thereof, and, at all times prior to such remittance, Borrower will
itself hold or, if applicable, will cause such payments to be held in trust
for the exclusive benefit of the Agent and Blue Ridge. Borrower will
maintain exclusive ownership, dominion and control (subject to the terms of
this Agreement) of each Lock-Box and Collection Account 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 the Agent as contemplated by this Agreement.
(k) Taxes. Such Loan Party will file all material tax returns and
reports required by law to be filed by it and will promptly pay all
material 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. Borrower will
pay when due any taxes payable in connection with the Receivables,
exclusive of taxes on or measured by income or gross receipts of the Agent
or Blue Ridge.
(l) Payment to Applicable Originator. With respect to any Receivable
purchased by Borrower from any Originator, such sale shall be effected
under, and in strict compliance with the terms of, the Receivables Sale
Agreement, including, without limitation, the terms relating to the amount
and timing of payments to be made to such Originator in respect of the
purchase price for such Receivable.
Page 146
Exhibit 10(i)A(4)
Section 7.2 Negative Covenants of the Loan Parties. Until the Final Payout
Date, each Loan Party hereby covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Loan Party will not change
its name, identity or structure (within the meaning of any applicable
enactment of the UCC), relocate its chief executive office at any time
while the location of its chief executive office is relevant to perfection
of the Agent's security interest, for the benefit of the Secured Parties,
in the Receivables, Related Security and Collections, or change any office
where Records are kept unless it shall have: (i) given the Agent at least
ten (10) days' prior written notice thereof and (ii) delivered to the Agent
all financing statements, instruments and other documents reasonably
requested by the Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be
required by the Agent pursuant to Section 8.2(b), such Loan Party 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 the Agent 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 the Servicer 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. Such
Loan Party will not, and will not permit any Originator to, make any
material change to the Credit and Collection Policy that could adversely
affect the collectibility of the Receivables or decrease the credit quality
of any newly created Receivables. Except as provided in Section 8.2(d), the
Servicer will not, and will not permit any Originator to, 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. Borrower 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
of the Collateral, or assign any right to receive income with respect
thereto (other than Permitted Encumbrances), and Borrower will defend the
right, title and interest of the Secured Parties in, to and under any of
the foregoing property, against all claims of third parties claiming
through or under Borrower or any Originator (other than Permitted
Encumbrances). Borrower will not create or suffer to exist any mortgage,
pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory.
(e) Use of Proceeds. Borrower will not use the proceeds of the
Advances for any purpose other than (i) paying for Receivables and Related
Security under and in accordance with the Receivables Sale Agreement,
including without limitation, making payments on the Subordinated Notes to
the extent permitted thereunder and under the Receivables Sale Agreement,
Page 147
Exhibit 10(i)A(4)
(ii) making Demand Advances to NSI Georgia at any time prior to the
Facility Termination Date while it is acting as Servicer and no
Amortization Event or Unmatured Amortization Event exists and is
continuing, (iii) paying its ordinary and necessary operating expenses when
and as due, (iv) making Restricted Junior Payments to the extent permitted
under this Agreement, and (v) purchasing non-passive financial assets to
the extent expressly permitted under the proviso to Section 7.1(I)(L).
(f) Termination Date Determination. Borrower will not designate the
Termination Date (as defined in the Receivables Sale Agreement), or send
any written notice to any Originator in respect thereof, without the prior
written consent of the Agent, except with respect to the occurrence of such
Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale
Agreement.
(g) Restricted Junior Payments. Borrower will not make any Restricted
Junior Payment if after giving effect thereto, Borrower's Net Worth (as
defined in the Receivables Sale Agreement) would be less than the Required
Capital Amount (as defined in the Receivables Sale Agreement).
(h) Borrower Indebtedness. Borrower will not incur or permit to exist
any Indebtedness or liability on account of deposits except: (i) the
Obligations, (ii) the Subordinated Loans, and (iii) other current accounts
payable arising in the ordinary course of business and not overdue.
(i) Prohibition on Additional Negative Pledges. No Loan Party will
enter into or assume any agreement (other than this Agreement and the other
Transaction Documents) prohibiting the creation or assumption of any
Adverse Claim upon the Collateral except as contemplated by the Transaction
Documents, or otherwise prohibiting or restricting any transaction
contemplated hereby or by the other Transaction Documents, and no Loan
Party will enter into or assume any agreement creating any Adverse Claim
upon the Subordinated Notes.
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer.
(a) The servicing, administration and collection of the Receivables
shall be conducted by such Person (the "Servicer") so designated from time
to time in accordance with this Section 8.1. NSI Georgia is hereby
designated as, and hereby agrees to perform the duties and obligations of,
the Servicer pursuant to the terms of this Agreement. The Agent may at any
time following the occurrence of an Amortization Event designate as
Servicer any Person to succeed NSI Georgia or any successor Servicer
provided that the Rating Agency Condition is satisfied.
(b) NSI Georgia may delegate, and NSI Georgia hereby advises the
Lenders and the Agent that it has delegated, to NSI Enterprises, as
sub-servicer of the Servicer, certain of its duties and responsibilities as
Page 148
Exhibit 10(i)A(4)
Servicer hereunder in respect of the Receivables originated by NSI
Enterprises. Without the prior written consent of the Agent and the
Required Liquidity Banks, NSI Georgia shall not be permitted to delegate
any of its duties or responsibilities as Servicer to any Person other than
(i) NSI Enterprises, and (ii) with respect to certain Defaulted
Receivables, outside collection agencies in accordance with its customary
practices. NSI Enterprises shall not be permitted to further delegate to
any other Person any of the duties or responsibilities of the Servicer
delegated to it by NSI Georgia. If at any time the Agent shall designate as
Servicer any Person other than NSI Georgia, all duties and responsibilities
theretofore delegated by NSI Georgia to NSI Enterprises may, at the
discretion of the Agent, be terminated forthwith on notice given by the
Agent to NSI Georgia and to Borrower.
(c) Notwithstanding any delegation pursuant to the foregoing
subsection (b): (i) NSI Georgia shall be and remain primarily liable to the
Agent and the Lenders for the full and prompt performance of all duties and
responsibilities of the Servicer hereunder and (ii) the Agent and the
Lenders shall be entitled to deal exclusively with NSI Georgia in matters
relating to the discharge by the Servicer of its duties and
responsibilities hereunder. The Agent and the Lenders shall not be required
to give notice, demand or other communication to any Person other than NSI
Georgia and Borrower in order for communication to the Servicer and its
sub-servicer or other delegate with respect thereto to be accomplished. NSI
Georgia, at all times that it is the Servicer, shall be responsible for
providing any sub-servicer or other delegate of the Servicer with any
notice given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such actions as
may be necessary or advisable to collect each Receivable from time to time,
all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and
Collection Policy.
(b) The Servicer will instruct all Obligors to pay all Collections
directly to a Lock-Box or Collection Account. The Servicer shall effect a
Collection Account Agreement substantially in the form of Exhibit VI with
each bank party to a Collection Account at any time. In the case of any
remittances received in any Lock-Box or Collection Account that shall have
been identified, to the satisfaction of the Servicer, to not constitute
Collections or other proceeds of the Receivables or the Related Security,
the Servicer shall promptly remit such items to the Person identified to it
as being the owner of such remittances. From and after the date the Agent
delivers to any Collection Bank a Collection Notice pursuant to Section
8.3, the Agent may request that the Servicer, and the Servicer thereupon
promptly shall instruct all Obligors with respect to the Receivables, to
remit all payments thereon to a new depositary account specified by the
Agent and, at all times thereafter, Borrower and the Servicer shall not
deposit or otherwise credit, and shall not permit any other Person to
deposit or otherwise credit to such new depositary account any cash or
payment item other than Collections.
(c) The Servicer shall administer the Collections in accordance with
the procedures described herein and in Article II. The Servicer shall set
aside and hold in trust for the account of Borrower and the Lenders their
Page 149
Exhibit 10(i)A(4)
respective shares of the Collections in accordance with Article II. The
Servicer shall, upon the request of the Agent, segregate, in a manner
acceptable to the Agent, all cash, checks and other instruments received by
it from time to time constituting Collections from the general funds of the
Servicer or Borrower prior to the remittance thereof in accordance with
Article II. If the Servicer shall be required to segregate Collections
pursuant to the preceding sentence, the Servicer shall segregate and
deposit with a bank designated by the Agent such allocable share of
Collections of Receivables set aside for the Lenders on the first Business
Day following receipt by the Servicer of such Collections, duly endorsed or
with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity of any Receivable or adjust the Outstanding
Balance of any Receivable as the Servicer determines to be appropriate to
maximize Collections thereof; provided, however, that such extension or
adjustment shall not alter the status of such Receivable as a Delinquent
Receivable or Defaulted Receivable or limit the rights of the Agent or the
Lenders under this Agreement. Notwithstanding anything to the contrary
contained herein, from and after the occurrence of an Amortization Event,
the Agent shall have the absolute and unlimited right to direct the
Servicer to commence or settle any legal action with respect to any
Receivable or to foreclose upon or repossess any Related Security; provided
that (i) in lieu of commencing any such action or taking other enforcement
action, the Servicer may, at its option, elect to pay to the Agent an
amount equal to the Outstanding Balance of such Receivable and (ii) the
Servicer shall not, unless indemnified to its satisfaction by the Lenders,
be obligated to commence or take any legal action that is in contravention
of applicable law or regulation, or to settle any action that would entail
an admission by the Servicer, Borrower or any Originator of legal
wrongdoing or culpability or require the payment of damages by any
Originator or the Servicer to any third party.
(e) The Servicer shall hold in trust for Borrower and the Lenders all
Records that (i) evidence or relate to the Receivables, the related
Contracts and Related Security or (ii) are otherwise necessary or desirable
to collect the Receivables and shall, as soon as practicable upon demand of
the Agent at any time when an Amortization Event exists, deliver or make
available to the Agent all such Records, at a place selected by the Agent.
The Servicer shall, as soon as practicable following receipt thereof turn
over to Borrower any cash collections or other cash proceeds received with
respect to Indebtedness not constituting Receivables. The Servicer shall,
from time to time at the request of any Lender, furnish to the Lenders
(promptly after any such request) a calculation of the amounts set aside
for the Lenders pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed by
it to Originator or Borrower shall, except as otherwise specified by such
Obligor or otherwise required by contract or law and unless otherwise
instructed by the Agent, be applied as a Collection of any Receivable of
such Obligor (starting with the oldest such Receivable) to the extent of
any amounts then due and payable thereunder before being applied to any
other receivable or other obligation of such Obligor.
Page 150
Exhibit 10(i)A(4)
Section 8.3 Collection Notices. The Agent is authorized at any time after
the occurrence and during the continuance of an Amortization Event to date and
to deliver to the Collection Banks the Collection Notices. Borrower hereby
transfers to the Agent for the benefit of the Lenders, effective when the Agent
delivers such notice, the exclusive ownership and control of each Lock-Box and
the Collection Accounts. In case any authorized signatory of Borrower whose
signature appears on a Collection Account Agreement shall cease to have such
authority before the delivery of such notice, such Collection Notice shall
nevertheless be valid as if such authority had remained in force. Borrower
hereby authorizes the Agent, and agrees that the Agent shall be entitled (i) at
any time after delivery of the Collection Notices, to endorse Borrower's name on
checks and other instruments representing Collections, (ii) at any time after
the occurrence and during the continuance of an Amortization Event, to enforce
the Receivables, the related Contracts and the Related Security, and (iii) at
any time after the occurrence and during the continuance of an Amortization
Event, to take such action as shall be necessary or desirable to cause all cash,
checks and other instruments constituting Collections of Receivables to come
into the possession of the Agent rather than Borrower.
Section 8.4 Responsibilities of Borrower. Anything herein to the contrary
notwithstanding, the exercise by the Agent and the Lenders of their rights
hereunder shall not release the Servicer, any Originator or Borrower from any of
their duties or obligations with respect to any Receivables or under the related
Contracts. The Lenders shall have no obligation or liability with respect to any
Receivables or related Contracts, nor shall any of them be obligated to perform
the obligations of Borrower.
Section 8.5 Monthly Reports. The Servicer shall prepare and forward to the
Agent (i) on each Monthly Reporting Date, a Monthly Report and an electronic
file of the data contained therein and (ii) at such times as the Agent shall
request, a listing by Obligor of all Receivables together with an aging of such
Receivables; provided, however, that if an Amortization Event shall exist and be
continuing, the Agent may request a Monthly Report be prepared and forwarded to
the Agent more frequently than monthly.
Section 8.6 Servicing Fee. As compensation for the Servicer's servicing
activities on their behalf, Borrower hereby agrees to pay the Servicer the
Servicing Fee in arrears on each Settlement Date. Notwithstanding the fact that
Sections 2.2 and 2.3 authorize the Servicer to deduct its Servicing Fee from
Collections, Borrower is and shall remain the Person who is ultimately
responsible for paying the Servicing Fee and other costs of servicing the
Receivables.
ARTICLE IX.
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of the
following events shall constitute an Amortization Event:
(a) Any Loan Party or Performance Guarantor shall fail to make any
payment or deposit required to be made by it under the Transaction
Documents when due and, for any such payment or deposit which is not in
Page 151
Exhibit 10(i)A(4)
respect of principal, such failure continues for two (2) consecutive
Business Days.
(b) Any representation, warranty, certification or statement made by
Performance Guarantor or any Loan Party in any Transaction Document to
which it is a party or in any other document delivered pursuant thereto
shall prove to have been incorrect in any material respect when made or
deemed made (it being understood and agreed that any error or omission
which results in the Aggregate Principal exceeding the Borrowing Limit
shall per se constitute a material error).
(c) Any Loan Party or Performance Guarantor shall fail to perform or
observe any covenant contained in Section 7.1(b), 7.1(j), 7.2 or 8.5 when
due.
(d) Any Loan Party or Performance Guarantor shall fail to perform or
observe any other term, covenant or agreement hereunder or any other
Transaction Document (other than a term, covenant or agreement covered by
another clause of this Section 9.1) to which it is a party and such failure
shall continue for and such failure shall not have been cured within 30
days after the earlier to occur of (i) written notice thereof has been
given by such Loan Party or Performance Guarantor to Agent or (ii) an
Executive Officer of such Loan Party or Performance Guarantor otherwise
becomes aware of any such failure; provided, however, that, except in the
case of a failure to perform or observe Section 7.1(a)(vii), such cure
period shall be extended for a period of time, not to exceed an additional
30 days, reasonably sufficient to permit such Loan Party or Performance
Guarantor to cure such failure if such failure cannot be cured within the
initial 30-day period but reasonably could be expected to be capable of
cure within such additional 30 days, such Loan Party or Performance
Guarantor has commenced efforts to cure such failure during the initial
30-day period and such Loan Party or Performance Guarantor is diligently
pursuing such cure.
(e) Failure of Borrower to pay any Debt (other than the Obligations)
when due or the default by Borrower in the performance of any term,
provision or condition contained in any agreement under which any such Debt
was created or is governed, the effect of which is to cause, or to permit
the holder or holders of such Debt to cause, such Debt to become due prior
to its stated maturity; or any such Debt of Borrower 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.
(f) An Event of Bankruptcy shall occur with respect to Parent or any
of its Material Subsidiaries.
(g) As at the end of any Calculation Period:
(i) the three-month rolling average Delinquency Ratio shall
exceed 4.25%,
(ii) the three-month rolling average Default Ratio shall exceed
2.55%, or
Page 152
Exhibit 10(i)A(4)
(iii) the three-month rolling average Dilution Ratio shall exceed
8.00%;
provided, however, that the Borrower and the Agent agree to re-negotiate
the aforementioned ratios in good faith once the Agent has received an
additional 6 months of data regarding the Receivables.
(h) A Change of Control shall occur.
(i) One or more final judgments for the payment of money in an
aggregate amount of $10,700 or more shall be entered against Borrower.
(j) The occurrence of any "Termination Event" or of the "Termination
Date" (as each of the foregoing is defined in the Receivables Sale
Agreement or the First-Step Sale Agreement).
(k) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Borrower, or any
Obligor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability, or the Agent for
the benefit of Blue Ridge shall cease to have a valid and perfected first
priority (except for Permitted Encumbrances) security interest in the
Collateral.
(l) The Internal Revenue Service shall commence enforcement of any
federal tax lien under Section 6323 of the Tax Code against any of the
Collateral, or the PBGC shall commence enforcement any lien under Section
4068 of ERISA against any of the Collateral.
(m) Any event shall occur which materially and adversely impairs (i)
the ability of the Originators to originate Receivables of a credit quality
that is at least equal to the credit quality of the Receivables sold or
contributed to Borrower on the date of this Agreement or (ii) the legality,
validity or enforceability of this Agreement or any other Transaction
Document, (iii) the Agent's security interest, for the benefit of the
Secured Parties, in the Receivables generally or in any significant portion
of the Receivables, the Related Security or the Collections with respect
thereto.
(n) On any Settlement Date, after giving effect to the turnover of
Collections by the Servicer on such date and the application thereof to the
Obligations in accordance with this Agreement, the Aggregate Principal
shall exceed the Borrowing Limit.
(o) The Performance Undertaking shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Performance
Guarantor, or Performance Guarantor shall directly or indirectly contest in
any manner such effectiveness, validity, binding nature or enforceability
of its obligations thereunder.
Section 9.2 Remedies. Upon the occurrence and during the continuation of an
Amortization Event, the Agent may, or upon the direction of the Required
Liquidity Banks shall, upon notice to Borrower and the Servicer, take any of the
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Exhibit 10(i)A(4)
following actions: (i) replace the Person then acting as Servicer (ii) declare
the Amortization Date to have occurred, whereupon the Aggregate Commitment shall
immediately terminate and the Amortization Date shall forthwith occur, all
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by each Loan Party; provided, however, that upon the occurrence
of an Event of Bankruptcy with respect to any Loan Party, the Amortization Date
shall automatically occur, without demand, protest or any notice of any kind,
all of which are hereby expressly waived by each Loan Party, (iii) deliver the
Collection Notices to the Collection Banks, (iv) exercise all rights and
remedies of a secured party upon default under the UCC and other applicable
laws, and (v) notify Obligors of the Agent's security interest in the
Receivables and other Collateral. The aforementioned rights and remedies shall
be without limitation, and shall be in addition to all other rights and remedies
of the Agent and the Lenders 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 X.
INDEMNIFICATION
Section 10.1 Indemnities by the Loan Parties. Without limiting any other
rights that the Agent or any Lender may have hereunder or under applicable law,
(A) Borrower hereby agrees to indemnify (and pay upon demand to) the Agent, Blue
Ridge, each of the Liquidity Banks and each of the respective assigns, officers,
directors, agents and employees of the foregoing (each, an "Indemnified Party")
from and against any and all damages, losses, claims, taxes, liabilities, costs,
expenses and for all other amounts payable, including actual and reasonable
attorneys' fees (which attorneys may be employees of the Agent or such Lender)
and disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or actually incurred by any of them
arising out of or as a result of this Agreement or the acquisition, either
directly or indirectly, by a Lender of an interest in the Receivables, and (B)
the Servicer hereby agrees to indemnify (and pay upon demand to) each
Indemnified Party for Indemnified Amounts awarded against or incurred by any of
them arising out of the Servicer's activities as Servicer hereunder excluding,
however, in all of the foregoing instances under the preceding clauses (A) and
(B):
(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 any Indemnified Party
seeking indemnification or by reason of such Indemnified Party's breach of
its obligations hereunder or other legal duty;
(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; or
Page 154
Exhibit 10(i)A(4)
(c) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located (including, without
limitation, in the case of the Agent or Blue Ridge, the States of North
Carolina and Georgia), on or measured by the overall net income of such
Indemnified Party to the extent that the computation of such taxes is
consistent with the characterization for income tax purposes of the
acquisition by the Lenders of Loans as a loan or loans by the Lenders to
Borrower secured by the Receivables, the Related Security, the Collection
Accounts and the Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of any Loan Party or limit the recourse of the Lenders to any Loan
Party for amounts otherwise specifically provided to be paid by such Loan Party
under the terms of this Agreement. Without limiting the generality of the
foregoing indemnification, Borrower shall indemnify the Agent and the Lenders
for Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Borrower or the Servicer) relating to or resulting from:
(i) any representation or warranty made by any Loan Party or any
Originator (or any officers of any such Person) under or in connection with
this Agreement, any other Transaction Document or any other information or
report delivered by any such Person pursuant hereto or thereto, which shall
have been false or incorrect when made or deemed made;
(ii) the failure by Borrower, the Servicer or any 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 any Originator to keep or perform any of its obligations,
express or implied, with respect to any Contract;
(iii) any failure of Borrower, the Servicer or any 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;
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Exhibit 10(i)A(4)
(vii) 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 any Advance,
the Collateral or any other investigation, litigation or proceeding
relating to Borrower, the Servicer or any Originator in which any
Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event;
(x) any failure of Borrower to acquire and maintain legal and
equitable title to, and ownership of any of the Collateral from the
applicable Originator, free and clear of any Adverse Claim (other than as
created hereunder); or any failure of Borrower to give reasonably
equivalent value to any Originator under the Receivables Sale Agreement in
consideration of the transfer by such Originator of any Receivable, or any
attempt by any Person to void such transfer under statutory provisions or
common law or equitable action;
(xi) any failure to vest and maintain vested in the Agent for the
benefit of the Lenders, or to transfer to the Agent for the benefit of the
Secured Parties, a valid first priority perfected security interests in the
Collateral, free and clear of any Adverse Claim (except as created by the
Transaction Documents);
(xii) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Collateral, and the proceeds thereof, whether at the time of any Advance or
at any subsequent time;
(xiii) any action or omission by any Loan Party which reduces or
impairs the rights of the Agent or the Lenders with respect to any
Collateral or the value of any Collateral (for any reason other than the
application of Collections thereto or charge-off of any Receivable as
uncollectible);
(xiv) any attempt by any Person to void any Advance or the Agent's
security interest in the Collateral under statutory provisions or common
law or equitable action; and
(xv) the failure of any Receivable included in the calculation of the
Net Pool Balance as an Eligible Receivable to be an Eligible Receivable at
the time so included.
Section 10.2 Increased Cost and Reduced Return.
(a) If after the date hereof, any Funding Source shall be charged any
fee, expense or increased cost on account of the adoption of any applicable
law, rule or regulation (including any applicable law, rule or regulation
regarding capital adequacy) or any change therein, or any change in the
interpretation or
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Exhibit 10(i)A(4)
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency
(a "Regulatory Change"): (i) that subjects any Funding Source to any charge
or withholding on or with respect to any Funding Agreement or a Funding
Source's obligations under a Funding Agreement, or on or with respect to
the Receivables, or changes the basis of taxation of payments to any
Funding Source of any amounts payable under any Funding Agreement (except
for changes in the rate of tax on the overall net income of a Funding
Source or taxes excluded by Section 10.1) or (ii) that imposes, modifies or
deems applicable any reserve, assessment, insurance charge, special deposit
or similar requirement against assets of, deposits with or for the account
of a Funding Source, or credit extended by a Funding Source pursuant to a
Funding Agreement or (iii) that imposes any other condition the result of
which is to increase the cost to a Funding Source of performing its
obligations under a Funding Agreement, or to reduce the rate of return on a
Funding Source's capital as a consequence of its obligations under a
Funding Agreement, or to reduce the amount of any sum received or
receivable by a Funding Source under a Funding Agreement or to require any
payment calculated by reference to the amount of interests or loans held or
interest received by it, then, upon written demand by the Agent no later
than ninety (90) days after the adoption of such Regulatory Change,
Borrower shall pay to the Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to
otherwise compensate such Funding Source for such increased cost or such
reduction. In the event that the Agent fails to give Borrower notice within
the ninety (90) day time limitation prescribed above, Borrower shall have
no obligation to pay such claim for compensation hereunder. Borrower shall
have no obligation to pay any amount with respect to claims accruing under
this Section 10.2(a) prior to the 90th day preceding written demand
therefor from Agent.
(b) The Agent and each Funding Source agrees, if requested by
Borrower, it will use reasonable efforts (subject to the overall policy
considerations of such Funding Source) to designate an alternate lending
office with respect to Loans affected by any of the matters or
circumstances prescribed in Section 10.2(a) hereof in order to reduce the
liability of Borrower or avoid the results provided thereunder, so long as
such designation is not disadvantageous to such Funding Source as
determined by such Funding Source, which determination, if made in good
faith, shall be conclusive and binding on all parties hereto. Nothing in
this Section 10.2(b) shall affect or postpone any of the obligation of
Borrower hereunder or any right of any Funding Source hereunder
Section 10.3 Other Costs and Expenses. Borrower shall pay to the Agent and
Blue Ridge on demand all reasonable costs and out-of-pocket expenses actually
incurred in connection with the preparation, execution, delivery and
administration of this Agreement, the transactions contemplated hereby and the
other documents to be delivered hereunder, including without limitation, the
cost of Blue Ridge's auditors auditing the books, records and procedures of
Borrower, reasonable fees and out-of-pocket expenses of legal counsel for Blue
Ridge and the Agent (which such counsel may be employees of Blue Ridge or the
Agent) with respect thereto and with respect to advising Blue Ridge and the
Agent as to their respective rights and remedies under this Agreement. Borrower
shall pay to the Agent on demand any and all reasonable costs and expenses of
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Exhibit 10(i)A(4)
the Agent and the Lenders, if any, including reasonable counsel fees and
expenses, actually incurred in connection with the amendment, waiver or
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 an Amortization
Event. Borrower shall reimburse Blue Ridge on demand for all other reasonable
costs and expenses actually incurred by Blue Ridge ("Other Costs"), including,
without limitation, the cost of auditing Blue Ridge's books by certified public
accountants, the cost of rating the Commercial Paper by independent financial
rating agencies, and the reasonable fees and out-of-pocket expenses of counsel
for Blue Ridge or any counsel for any shareholder of Blue Ridge with respect to
advising Blue Ridge or such shareholder as to matters relating to Blue Ridge's
operations.
Section 10.4 Allocations. Blue Ridge shall allocate the liability for (a)
increased costs covered by Section 10.2 arising under Funding Agreements that
are not specifically related solely to this Agreement ("Shared Increased Costs")
and (b) Other Costs among Borrower and other Persons with whom Blue Ridge has
entered into agreements to purchase interests in or finance receivables and
other financial assets ("Other Customers"). If any Other Costs are attributable
to Borrower and not attributable to any Other Customer or any Shared Increased
Costs are attributable to the facility evidenced by this Agreement and not to
any Other Customers' facilities, Borrower shall be solely liable for such Other
Costs or Shared Increased Costs. However, if Other Costs or Shared Increased
Costs are attributable to Other Customers and their facilities but not
attributable to Borrower or the facility evidenced hereby, such Other Customer
shall be solely liable for such Other Costs or Shared Increased Costs, as the
case may be. All allocations to be made pursuant to the foregoing provisions of
this Article X shall be made by Blue Ridge in its sole discretion and shall be
binding on Borrower and the Servicer.
ARTICLE XI.
THE AGENT
Section 11.1 Authorization and Action. Each Lender hereby designates and
appoints Wachovia to act as its agent under the Transaction Documents and under
the Liquidity Agreement, and authorizes the Agent to take such actions as agent
on its behalf and to exercise such powers as are delegated to the Agent by the
terms of the Liquidity Agreement or the Transaction Documents, together with
such powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth in the Liquidity
Agreement or in any Transaction Document, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of the Agent shall be read into the
Liquidity Agreement or any Transaction Document or otherwise exist for the
Agent. In performing its functions and duties under the Liquidity Agreement and
the Transaction Documents, the Agent shall act solely as agent for the Lenders
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for any Loan Party or any of such Loan
Party's successors or assigns. The Agent shall not be required to take any
action that exposes the Agent to personal liability or that is contrary to the
Liquidity Agreement or any Transaction Document or applicable law. The
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Exhibit 10(i)A(4)
appointment and authority of the Agent hereunder shall terminate upon the
indefeasible payment in full of all Obligations. Each Lender hereby authorizes
the Agent to execute each of the UCC financing statements, each Collection
Account Agreement on behalf of such Lender (the terms of which shall be binding
on such Lender).
Section 11.2 Delegation of Duties. The Agent may execute any of its duties
under the Liquidity Agreement and each Transaction Document by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
the Liquidity Agreement or any Transaction Document (except for its, their or
such Person's own gross negligence or willful misconduct), or (ii) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party contained in the Liquidity
Agreement, any Transaction Document or any certificate, report, statement or
other document referred to or provided for in, or received under or in
connection with, any Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Liquidity
Agreement or any Transaction Document or any other document furnished in
connection therewith, or for any failure of any Loan Party to perform its
obligations under any Transaction Document, or for the satisfaction of any
condition specified in Article VI, or for the perfection, priority, condition,
value or sufficiency of any collateral pledged in connection herewith. The Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, any Transaction Document, or to inspect the properties,
books or records of the Loan Parties. The Agent shall not be deemed to have
knowledge of any Amortization Event or Unmatured Amortization Event unless the
Agent has received notice from a Loan Party or a Lender.
Section 11.4 Reliance by Agent. The Agent shall in all cases be entitled to
rely, and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to Borrower), independent accountants
and other experts selected by the Agent. The Agent shall in all cases be fully
justified in failing or refusing to take any action under the Liquidity
Agreement or any Transaction Document unless it shall first receive such advice
or concurrence of Blue Ridge or the Required Liquidity Banks or all of the
Lenders, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Lenders, provided that unless and until
the Agent shall have received such advice, the Agent may take or refrain from
taking any action, as the Agent shall deem advisable and in the best interests
of the Lenders. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with a request of Blue Ridge or the
Required Liquidity Banks or all of the Lenders, as applicable, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders.
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Exhibit 10(i)A(4)
Section 11.5 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent, nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Agent hereafter taken, including,
without limitation, any review of the affairs of any Loan Party, shall be deemed
to constitute any representation or warranty by the Agent. Each Lender
represents and warrants to the Agent that it has and will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of Borrower and made its own decision to
enter into the Liquidity Agreement, the Transaction Documents and all other
documents related thereto.
Section 11.6 Reimbursement and Indemnification. The Liquidity Banks agree
to reimburse and indemnify the Agent and its officers, directors, employees,
representatives and agents ratably according to their Pro Rata Shares, to the
extent not paid or reimbursed by the Loan Parties (i) for any amounts for which
the Agent, acting in its capacity as Agent, is entitled to reimbursement by the
Loan Parties hereunder and (ii) for any other expenses incurred by the Agent, in
its capacity as Agent and acting on behalf of the Lenders, in connection with
the administration and enforcement of the Liquidity Agreement and the
Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with Borrower or any Affiliate of Borrower as though the Agent were not
the Agent hereunder. With respect to the making of Loans pursuant to this
Agreement, the Agent shall have the same rights and powers under the Liquidity
Agreement and this Agreement in its individual capacity as any Lender and may
exercise the same as though it were not the Agent, and the terms "Liquidity
Bank," "Lender," "Liquidity Banks" and "Lenders" shall include the Agent in its
individual capacity.
Section 11.8 Successor Agent. The Agent, upon five (5) days' notice to the
Loan Parties and the Lenders, may voluntarily resign and may be removed at any
time, with or without cause, by the Required Liquidity Banks; provided, however,
that Wachovia shall not voluntarily resign as the Agent so long as any of the
Liquidity Commitments remain in effect or Blue Ridge has any outstanding Loans.
If the Agent (other than Wachovia) shall voluntarily resign or be removed as
Agent under this Agreement, then the Required Liquidity Banks during such
five-day period shall appoint, with the consent of Borrower from among the
remaining Liquidity Banks, a successor Agent, whereupon such successor Agent
shall succeed to the rights, powers and duties of the Agent and the term "Agent"
shall mean such successor agent, effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. Upon resignation or replacement of any Agent in
accordance with this Section 11.8, the retiring Agent shall execute such UCC-3
assignments and amendments, and assignments and amendments of the Liquidity
Agreement and the Transaction Documents, as may be necessary to give effect to
its replacement by a successor Agent. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article XI and Article X shall inure
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Exhibit 10(i)A(4)
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
ARTICLE XII.
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments.
(a) Each of the Agent, the Loan Parties and the Liquidity Banks hereby
agrees and consents to the complete or partial assignment by Blue Ridge of
all or any portion of its rights under, interest in, title to and
obligations under this Agreement to the Liquidity Banks pursuant to the
Liquidity Agreement.
(b) Any Liquidity Bank may at any time and from time to time assign to
one or more Eligible Assignees (each, a "Purchasing Liquidity Bank") all or
any part of its rights and obligations under this Agreement pursuant to an
assignment agreement substantially in the form set forth in Exhibit VII
hereto (an "Assignment Agreement") executed by such Purchasing Liquidity
Bank and such selling Liquidity Bank; provided, however, that any
assignment of a Liquidity Bank's rights and obligations hereunder shall
include a pro rata assignment of its rights and obligations under the
Liquidity Agreement. The consent of Blue Ridge (and, if no Amortization
Event then exists, Borrower, which consent shall not be unreasonably
withheld or delayed) shall be required prior to the effectiveness of any
such assignment. Each assignee of a Liquidity Bank must (i) be an Eligible
Assignee and (ii) agree to deliver to the Agent, promptly following any
request therefor by the Agent or Blue Ridge, an enforceability opinion in
form and substance satisfactory to the Agent and Blue Ridge. Upon delivery
of an executed Assignment Agreement to the Agent, such selling Liquidity
Bank shall be released from its obligations hereunder and under the
Liquidity Agreement to the extent of such assignment. Thereafter the
Purchasing Liquidity Bank shall for all purposes be a Liquidity Bank party
to this Agreement and the Liquidity Agreement and shall have all the rights
and obligations of a Liquidity Bank hereunder and thereunder to the same
extent as if it were an original party hereto and thereto and no further
consent or action by Borrower, the Lenders or the Agent shall be required.
Agent shall give Borrower and NSI Georgia prior notice of each assignment
made under this Section.
(c) Each of the Liquidity Banks agrees that in the event that it shall
suffer a Downgrading Event, such Downgraded Liquidity Bank shall be obliged
to notify the Agent, Borrower and NSI Georgia thereof and shall be obliged,
at the request of Blue Ridge or the Agent, to (i) collateralize its
Commitment and its Liquidity Commitment in a manner acceptable to the
Agent, or (ii) assign all of its rights and obligations hereunder and under
the Liquidity Agreement to an Eligible Assignee nominated by the Agent or a
Loan Party and acceptable to Blue Ridge (and, if no Amortization Event then
exists, Borrower, which consent shall not be unreasonably withheld or
delayed) and willing to participate in this Agreement and the Liquidity
Agreement through the Liquidity Termination Date in the place of such
Downgraded Liquidity Bank; provided that the Downgraded Liquidity Bank
receives payment in full, pursuant to an Assignment Agreement, of an amount
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Exhibit 10(i)A(4)
equal to such Liquidity Bank's Pro Rata Share of the Obligations owing to
the Liquidity Banks.
(d) No Loan Party may assign any of its rights or obligations under
this Agreement without the prior written consent of the Agent and each of
the Lenders and without satisfying the Rating Agency Condition.
Section 12.2 Participations. Any Liquidity Bank may, in the ordinary course
of its business at any time sell to one or more Persons (each, a "Participant")
participating interests in its Pro Rata Share of the Aggregate Commitment, its
Loans, its Liquidity Commitment or any other interest of such Liquidity Bank
hereunder or under the Liquidity Agreement. Notwithstanding any such sale by a
Liquidity Bank of a participating interest to a Participant, such Liquidity
Bank's rights and obligations under this Agreement and the Liquidity Agreement
shall remain unchanged, such Liquidity Bank shall remain solely responsible for
the performance of its obligations hereunder and under the Liquidity Agreement,
and the Loan Parties, Blue Ridge and the Agent shall continue to deal solely and
directly with such Liquidity Bank in connection with such Liquidity Bank's
rights and obligations under this Agreement and the Liquidity Agreement. Each
Liquidity Bank agrees that any agreement between such Liquidity Bank and any
such Participant in respect of such participating interest shall not restrict
such Liquidity Bank's right to agree to any amendment, supplement, waiver or
modification to this Agreement, except for any amendment, supplement, waiver or
modification described in Section 14.1(b)(i).
ARTICLE XIII.
SECURITY INTEREST
Section 13.1 Grant of Security Interest. To secure the due and punctual
payment of the Obligations, whether now or hereafter existing, due or to become
due, direct or indirect, or absolute or contingent, including, without
limitation, all Indemnified Amounts, in each case pro rata according to the
respective amounts thereof, Borrower hereby grants to the Agent, for the benefit
of the Secured Parties, a security interest in, all of Borrower's right, title
and interest, whether now owned and existing or hereafter arising in and to all
of the Receivables, the Related Security, the Collections and all proceeds of
the foregoing (collectively, the "Collateral").
Section 13.2 Termination after Final Payout Date. Each of the Secured
Parties hereby authorizes the Agent, and the Agent hereby agrees, promptly after
the Final Payout Date to execute and deliver to Borrower such UCC termination
statements as may be necessary to terminate the Agent's security interest in and
Lien upon the Collateral, all at Borrower's expense. Upon the Final Payout Date,
all right, title and interest of the Agent and the other Secured Parties in and
to the Collateral shall terminate.
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Exhibit 10(i)A(4)
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 Waivers and Amendments.
(a) No failure or delay on the part of the Agent or any Lender 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 in accordance with the provisions of
this Section 14.1(b). Blue Ridge, Borrower and the Agent, at the direction
of the Required Liquidity Banks, may enter into written modifications or
waivers of any provisions of this Agreement, provided, however, that no
such modification or waiver shall:
(i) without the consent of each affected Lender, (A) extend the
Liquidity Termination Date or the date of any payment or deposit of
Collections by Borrower or the Servicer, (B) reduce the rate or extend
the time of payment of Interest or any CP Costs (or any component of
Interest or CP Costs), (C) reduce any fee payable to the Agent for the
benefit of the Lenders, (D) except pursuant to Article XII hereof,
change the amount of the principal of any Lender, any Liquidity Bank's
Pro Rata Share or any Liquidity Bank's Commitment, (E) amend, modify
or waive any provision of the definition of Required Liquidity Banks
or this Section 14.1(b), (F) consent to or permit the assignment or
transfer by Borrower of any of its rights and obligations under this
Agreement, (G) change the definition of "Eligible Receivable," "Loss
Reserve," "Dilution Reserve," "Yield Reserve," "Servicing Reserve,"
"Servicing Fee Rate," "Required Reserve" or "Required Reserve Factor
Floor" or (H) amend or modify any defined term (or any defined term
used directly or indirectly in such defined term) used in clauses (A)
through (G) above in a manner that would circumvent the intention of
the restrictions set forth in such clauses; or
(ii) without the written consent of the then Agent, amend, modify
or waive any provision of this Agreement if the effect thereof is to
affect the rights or duties of such Agent,
and any material amendment, waiver or other modification of this
Agreement shall require satisfaction of the Rating Agency Condition.
Notwithstanding the foregoing, (i) without the consent of the
Liquidity Banks, but with the consent of Borrower, the Agent may amend
this Agreement solely to add additional Persons as Liquidity Banks
hereunder and (ii) the Agent, the Required Liquidity Banks and Blue
Ridge may enter into amendments to modify any of the terms or
provisions of Article XI, Article XII, Section 14.13 or any other
provision of this Agreement without the consent of Borrower, provided
that such amendment has no negative impact upon Borrower. Any
Page 163
Exhibit 10(i)A(4)
modification or waiver made in accordance with this Section 14.1 shall
apply to each of the Lenders equally and shall be binding upon
Borrower, the Lenders and the Agent.
Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy 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 (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 14.2. Borrower hereby authorizes the Agent to effect Advances and
Interest Period and Interest Rate selections based on telephonic notices made by
any Person whom the Agent in good faith believes to be acting on behalf of
Borrower. Borrower agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by an authorized officer of
Borrower; provided, however, the absence of such confirmation shall not affect
the validity of such notice. If the written confirmation differs from the action
taken by the Agent, the records of the Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Obligations
owing to such Lender (other than payments received pursuant to Section 10.2 or
10.3) in a greater proportion than that received by any other Lender entitled to
receive a ratable share of such Obligations, such Lender agrees, promptly upon
demand, to purchase for cash without recourse or warranty a portion of such
Obligations held by the other Lenders so that after such purchase each Lender
will hold its ratable proportion of such Obligations; provided that if all or
any portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
Section 14.4 Protection of Agent's Security Interest.
(a) Borrower 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 the Agent may
reasonably request, to perfect, protect or more fully evidence the Agent's
security interest in the Collateral, or to enable the Agent or the Lenders
to exercise and enforce their rights and remedies hereunder. At any time
after the occurrence and during the continuation of an Amortization Event,
the Agent may, or the Agent may direct Borrower or the Servicer to, notify
the Obligors of Receivables, at Borrower's expense, of the ownership or
security interests of the Lenders 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 the Agent or its designee. Borrower or the
Servicer (as applicable) shall, at any Lender's request, withhold the
identity of such Lender in any such notification.
Page 164
Exhibit 10(i)A(4)
(b) If any Loan Party fails to perform any of its obligations
hereunder, the Agent or any Lender may (but shall not be required to)
perform, or cause performance of, such obligations, and the Agent's or such
Lender's actual and reasonable costs and expenses incurred in connection
therewith shall be payable by Borrower as provided in Section 10.3. Each
Loan Party irrevocably authorizes the Agent at any time and from time to
time in the sole discretion of the Agent, and appoints the Agent as its
attorney-in-fact, to act on behalf of such Loan Party (i) to execute on
behalf of Borrower as debtor and to file financing statements necessary or
desirable in the Agent's reasonable opinion to perfect and to maintain the
perfection and priority of the interest of the Lenders in the Receivables
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 the Agent in its reasonable opinion
deems necessary or desirable to perfect and to maintain the perfection and
priority of the Agent's security interest in the Collateral, for the
benefit of the Secured Parties. This appointment is coupled with an
interest and is irrevocable.
Section 14.5 Confidentiality.
(a) Each Loan Party and each Lender shall maintain and shall cause
each of its employees, officers and Affiliates to maintain the
confidentiality of the Fee Letter and the other confidential or proprietary
information with respect to the Agent and Blue Ridge and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except
that such Loan Party and such Lender and its officers and employees may
disclose such information to such Loan Party's and such Lender's external
consultants, accountants and attorneys and as required by any applicable
law, rule or regulation or order of any judicial or administrative
proceeding or to enforce its rights under the Transaction Documents.
(b) Unless otherwise agreed to in writing by the Parent, each Lender
and the Agent hereby agrees to keep all Proprietary Information
confidential and not to disclose or reveal any Proprietary Information to
any Person other than its (or its Affiliates) directors, officers,
employees, agents or representatives who reasonably require such
information in connection with their activities concerning this Agreement
or the transactions contemplated hereby and to actual or potential
Participants or Purchasing Liquidity Banks, and then only upon a
confidential basis in any such case; provided, however, that the Agent or
any Lender may disclose Proprietary Information: (i) to the Agent or any
other Lender, (ii) to the extent reasonably required in connection with any
litigation to which the Agent, any Lender or their respective Affiliates
may be a party, (iii) to the extent reasonably required in connection with
the exercise of any remedy hereunder, (iv) as required by 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), (v) to its attorneys, accountants or other consultants (but
only on a confidential basis), (vi) to bank regulatory authorities or other
governmental authorities and (vii) by Blue Ridge to any rating agency,
commercial paper dealer, or provider of a surety, guaranty or credit or
liquidity enhancement to Blue Ridge which has agreed in writing to be bound
by the provisions of this Section 14.5.
Page 165
Exhibit 10(i)A(4)
Section 14.6 Bankruptcy Petition. Borrower, the Servicer, the Agent and
each Liquidity Bank 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 Blue Ridge, it will not institute against, or join any other
Person in instituting against, Blue Ridge 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 14.7 Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of Blue Ridge, the
Agent or any Liquidity Bank, no claim may be made by any Loan Party or any other
Person against Blue Ridge, the Agent or any Liquidity Bank 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 each Loan Party 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 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, without regard to the
principles of conflicts of laws thereof (except in the case of the other
Transaction Documents, to the extent otherwise expressly stated therein) AND
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTEREST OF BORROWER
OR THE SECURITY INTEREST OF THE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES,
IN ANY OF THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF GEORGIA.
Section 14.9 CONSENT TO JURISDICTION. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN XXXXXX COUNTY, GEORGIA, IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT
EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY 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 THE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ANY LOAN PARTY AGAINST THE AGENT OR ANY LENDER OR ANY
AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT
Page 166
Exhibit 10(i)A(4)
OR ANY DOCUMENT EXECUTED BY SUCH LOAN PARTY PURSUANT TO THIS AGREEMENT SHALL BE
BROUGHT ONLY IN A COURT IN XXXXXX COUNTY, GEORGIA.
Section 14.10 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 ANY LOAN PARTY PURSUANT TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 14.11 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
the parties hereto and their respective successors and permitted assigns
(including any trustee in bankruptcy). 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 any Loan Party pursuant to Article V, (ii) the indemnification and
payment provisions of Article X, and Sections 14.5 and 14.6 shall be
continuing and shall survive any termination of this Agreement.
Section 14.12 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 to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of a signature page to 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.
Page 167
Exhibit 10(i)A(4)
Section 14.13 Wachovia Roles. Each of the Liquidity Banks acknowledges that
Wachovia acts, or may in the future act: (i) as administrative agent for Blue
Ridge or any Liquidity Bank, (ii) as an issuing and paying agent for the
Commercial Paper, (iii) to provide credit or liquidity enhancement for the
timely payment for the Commercial Paper, and/or (iv) to provide other services
from time to time for Blue Ridge or any Liquidity Bank (collectively, the
"Wachovia Roles"). Without limiting the generality of this Section 14.13, each
Liquidity Bank hereby acknowledges and consents to any and all Wachovia Roles
and agrees that in connection with any Wachovia Role, Wachovia may take, or
refrain from taking, any action that it, in its discretion, deems appropriate,
including, without limitation, in its role as administrative agent for Blue
Ridge, and the giving of notice of a mandatory purchase pursuant to the
Liquidity Agreement.
Section 14.14 Interest. In no event shall the amount of interest, and all
charges, amounts or fees contracted for, charged or collected pursuant to this
Agreement or the other Transaction Documents and deemed to be interest under
applicable law (collectively, "Interest Amounts" ) exceed the highest rate of
interest allowed by applicable law (the "Maximum Rate"), and in the event any
such payment is inadvertently received by Blue Ridge or any Liquidity Bank, then
the excess sum (the "Excess") shall be credited as a payment of principal,
unless the relevant Borrower shall notify the applicable recipient in writing
that it elects to have the Excess returned forthwith. It is the express intent
hereof that Borrower not pay and Blue Ridge and the Liquidity Banks not receive,
directly or indirectly in any manner whatsoever, interest in excess of that
which may legally be paid by such Borrower under applicable law. The right to
accelerate maturity of any of the Loans does not include the right to accelerate
any interest that has not otherwise accrued on the date of such acceleration,
and the Agent and the Liquidity Banks do not intend to collect any unearned
interest in the event of any such acceleration. All monies paid to the Agent or
the Liquidity Banks hereunder or under any of the other Transaction Documents,
whether at maturity or by prepayment, shall be subject to rebate of unearned
interest as and to the extent required by applicable law. By the execution of
this Agreement, Borrower covenants, to the fullest extent permitted by law, that
(i) the credit or return of any Excess shall constitute the acceptance by
Borrower of such Excess, and (ii) Borrower shall not seek or pursue any other
remedy, legal or equitable, against the Agent or any Liquidity Bank, based in
whole or in part upon contracting for charging or receiving any Interest Amounts
in excess of the Maximum Rate. For the purpose of determining whether or not any
Excess has been contracted for, charged or received by the Agent or any
Liquidity Bank, all interest at any time contracted for, charged or received
from such Borrower in connection with this Agreement or any of the other
Transaction Documents shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread in equal parts throughout the full
term of the Commitments. Borrower, the Agent and each Liquidity Bank shall, to
the maximum extent permitted under applicable law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as Interest
Amounts and (ii) exclude voluntary prepayments and the effects thereof. The
provisions of this Section shall be deemed to be incorporated into each of the
other Transaction Documents (whether or not any provision of this Section is
referred to therein). All such Transaction Documents and communications relating
to any Interest Amounts owed by Borrower and all figures set forth therein
shall, for the sole purpose of computing the extent of obligations hereunder and
under the other Transaction Documents be automatically recomputed by Borrower,
Page 168
Exhibit 10(i)A(4)
and by any court considering the same, to give effect to the adjustments or
credits required by this Section.
Section 14.15 Source of Funds -- ERISA. Each of Blue Ridge and the
Liquidity Banks hereby severally (and not jointly) represents to Borrower that
no part of the funds to be used by it to fund the Loans hereunder from time to
time constitutes (i) assets allocated to any separate account maintained by it
in which any employee benefit plan (or its related trust) has any interest nor
(ii) any other assets of any employee benefit plan. As used in this Section, the
terms "employee benefit plan" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
{signature pages follow}
Page 169
Exhibit 10(i)A(4)
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.
NSI Funding, Inc., A DELAWARE CORPORATION
By:_______________________________________
Name:
Title:
Address:
NSI Funding, Inc.
NSI Center
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
National Service Industries, Inc., A GEORGIA CORPORATION, AS SERVICER
By:_______________________________________
Name:
Title:
Address:
National Service Industries, Inc.
NSI Center
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Page 170
Exhibit 10(i)A(4)
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA BANK, N.A., ITS ATTORNEY-IN-FACT
By: __________________________________
Name:
Title:
Address:
Blue Ridge Asset Funding Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Blue Ridge Asset Funding Corporation
c/o AMACAR Group, L.L.C.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Page 171
Exhibit 10(i)A(4)
WACHOVIA BANK, N.A., as a Liquidity Bank and as Agent
By:__________________________________________________
Name:
Title:
Address:
Wachovia Bank, N.A.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
XX-000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Page 172
Exhibit 10(i)A(4)
EXHIBIT I
DEFINITIONS
Capitalized terms used and not otherwise defined herein shall have the
meanings attributed thereto in the Receivables Sale Agreement (hereinafter
defined) and, if not defined therein, in the First-Step Sale Agreement
(hereinafter defined).
In addition, as used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Adjusted Dilution Ratio" means, at any time, the rolling average of
the Dilution Ratio for the 12 Calculation Periods then most recently ended.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made on the same Borrowing Date.
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person or any Subsidiary of such Person.
A Person shall be deemed to control another Person if the controlling
Person owns 20% or more of any class of voting securities of the controlled
Person or possesses, directly or indirectly, the power to direct or cause
the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" has the meaning set forth in the preamble to this Agreement.
"Agent's Account" means account #8735-098787 at Wachovia Bank, N.A.,
ABA #000000000.
"Aggregate Commitment" means, on any date of determination, the
aggregate amount of the Liquidity Banks' Commitments to make Loans
hereunder. As of the date hereof, the Aggregate Commitment is $150,000,000.
"Aggregate Principal" means, on any date of determination, the
aggregate outstanding principal amount of all Advances outstanding on such
date.
"Aggregate Reduction" has the meaning specified in Section 1.3.
"Agreement" means this Credit and Security Agreement, as it may be
amended or modified and in effect from time to time.
Page 173
Exhibit 10(i)A(4)
"Alternate Base Rate" means for any day, the rate per annum equal to
the higher as of such day of (i) the Prime Rate, or (ii) one-half of one
percent (0.50%) above the Federal Funds Rate. For purposes of determining
the Alternate Base Rate for any day, changes in the Prime Rate or the
Federal Funds Rate shall be effective on the date of each such change.
"Alternate Base Rate Loan" means a Loan which bears interest at the
Alternate Base Rate or the Default Rate.
"Amortization Date" means the earliest to occur of (i) the Business
Day immediately prior to the occurrence of an Event of Bankruptcy with
respect to any Loan Party, (ii) the Business Day specified in a written
notice from the Agent following the occurrence and during the continuation
of any other Amortization Event, (iii) the date which is 10 Business Days
after the Agent's receipt of written notice from Borrower that it wishes to
terminate the facility evidenced by this Agreement, and (iv) April 23,
2004.
"Amortization Event" has the meaning specified in Article IX.
"Applicable Margin" means, for each Interest Period applicable to any
Loan for which Interest is calculated on the basis of the LIBO Rate, the
greater of the following on the first day of such Interest Period:
(a) two times the sum of (i) the Usage Fee plus (ii) the Program
Fee; or
(b) the margin then applicable to borrowings under the NSI Credit
Agreement at a London interbank offered rate or Eurodollar rate, as
the case may be.
"Assignment Agreement" has the meaning set forth in Section 12.1(b).
"Authorized Officer" means, with respect to any Person, its president,
corporate controller, treasurer or chief financial officer.
"Blue Ridge" has the meaning set forth in the preamble to this
Agreement.
"Borrower" has the meaning set forth in the preamble to this
Agreement.
"Borrowing Base" means, on any date of determination, the Net Pool
Balance as of the last day of the period covered by the most recent Monthly
Report, minus the Required Reserve as of the last day of the period covered
by the most recent Monthly Report, and minus Deemed Collections that have
occurred since the most recent Cut-Off Date to the extent that such Deemed
Collections exceed the Dilution Reserve.
"Borrowing Date" means a Business Day on which an Advance is made
hereunder.
"Borrowing Notice" has the meaning set forth in Section 1.2.
Page 174
Exhibit 10(i)A(4)
"Broken Funding Costs" means for any CP Rate Loan or LIBO Rate Loan
which: (a) in the case of a CP Rate Loan, has its principal reduced without
compliance by Borrower with the notice requirements hereunder, (b) in the
case of a CP Rate Loan or a LIBO Rate Loan, does not become subject to an
Aggregate Reduction following the delivery of any Reduction Notice, (c) in
the case of a CP Rate Loan, is assigned under the Liquidity Agreement, or
(d) in the case of a LIBO Rate Loan, is terminated or reduced prior to the
last day of its Interest Period, an amount equal to the excess, if any, of
(i) the CP Costs or Interest (as applicable) that would have accrued during
the remainder of the Interest Periods or the tranche periods for Commercial
Paper determined by the Agent to relate to such Loan (as applicable)
subsequent to the date of such reduction, assignment or termination (or in
respect of clause (b) above, the date such Aggregate Reduction was
designated to occur pursuant to the Reduction Notice) of the principal of
such Loan if such reduction, assignment or termination had not occurred or
such Reduction Notice had not been delivered, over (ii) the sum of (x) to
the extent all or a portion of such principal is allocated to another Loan,
the amount of CP Costs or Interest actually accrued during the remainder of
such period on such principal for the new Loan, and (y) to the extent such
principal is not allocated to another Loan, the income, if any, actually
received during the remainder of such period by the holder of such Loan
from investing the portion of such principal not so allocated. In the event
that the amount referred to in clause (B) exceeds the amount referred to in
clause (A), the relevant Lender or Lenders agree to pay to Borrower the
amount of such excess. All Broken Funding Costs shall be due and payable
hereunder upon demand.
"Business Day" means any day on which banks are not authorized or
required to close in New York, New York or Atlanta, Georgia, and The
Depository Trust Company of New York is open for business, and, if the
applicable Business Day relates to any computation or payment to be made
with respect to the LIBO Rate, any day on which dealings in dollar deposits
are carried on in the London interbank market.
"Calculation Period" means a Fiscal Month.
"Capital Leases" means leases which are required to be capitalized in
accordance with GAAP.
"Change of Control" means (a) a "Change of Control" under and as
defined in either the First-Step Sale Agreement or the Receivables Sale
Agreement shall occur, or (b) NSI Georgia ceases to own 100% of the
outstanding shares of voting stock of Borrower.
"Collateral" has the meaning set forth in Section 13.1.
"Collection Account" means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited and which is listed on Exhibit IV.
"Collection Account Agreement" means an agreement substantially in the
form of Exhibit VI among one or both Originators, Borrower, the Agent and a
Collection Bank.
Page 175
Exhibit 10(i)A(4)
"Collection Bank" means, at any time, any of the banks holding one or
more Collection Accounts.
"Collection Notice" means a notice, in substantially the form of Annex
A to Exhibit VI, from the Agent to a Collection Bank.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable,
including, without limitation, all Finance Charges or other related amounts
accruing in respect thereof and all cash proceeds of Related Security with
respect to such Receivable.
"Commercial Paper" means promissory notes of Blue Ridge issued by Blue
Ridge in the commercial paper market.
"Commitment" means, for each Liquidity Bank, the commitment of such
Liquidity Bank to make Loans to Borrower hereunder in the event the Blue
Ridge elects not to fund any Advance in an aggregate principal amount at
any one time outstanding not to exceed the amount set forth opposite such
Liquidity Bank's name on Schedule A to this Agreement.
"Consolidated Operating Profits" means, for any period, the Operating
Profits of the Parent and its Consolidated Subsidiaries.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Parent in its consolidated financial
statements as of such date.
"Contingent Obligation" of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses,
contingently agrees to purchase or provide funds for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or
liability of any other Person, or agrees to maintain the net worth or
working capital or other financial condition of any other Person, or
otherwise assures any creditor of such other Person against loss,
including, without limitation, any comfort letter, operating agreement,
take-or-pay contract or application for a letter of credit.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidences such Receivable.
"CP Costs" means, for each day, the sum of (i) discount or interest
accrued on Pooled Commercial Paper on such day, plus (ii) any and all
accrued commissions in respect of placement agents and Commercial Paper
dealers, and issuing and paying agent fees incurred, in respect of such
Pooled Commercial Paper for such day, plus (iii) other costs associated
with funding small or odd-lot amounts with respect to all receivable
purchase facilities which are funded by Pooled Commercial Paper for such
day, minus (iv) any accrual of income net of expenses received on such day
from investment of collections received under all receivable purchase or
financing facilities funded substantially with Pooled Commercial Paper,
Page 176
Exhibit 10(i)A(4)
minus (v) any payment received on such day net of expenses in respect of
Broken Funding Costs (or similar costs) related to the prepayment of any
investment of Blue Ridge pursuant to the terms of any receivable purchase
or financing facilities funded substantially with Pooled Commercial Paper.
In addition to the foregoing costs, if Borrower shall request any Advance
during any period of time determined by the Agent in its sole discretion to
result in incrementally higher CP Costs applicable to such Advance, the
principal associated with any such Advance shall, during such period, be
deemed to be funded by Blue Ridge in a special pool (which may include
capital associated with other receivable purchase or financing facilities)
for purposes of determining such additional CP Costs applicable only to
such special pool and charged each day during such period against such
principal.
"CP Rate Loan" means, for each Loan of Blue Ridge prior to the time,
if any, when (i) it is refinanced with a Liquidity Funding pursuant to the
Liquidity Agreement, or (ii) the occurrence of an Amortization Event and
the commencement of the accrual of Interest thereon at the Default Rate.
"Credit and Collection Policy" means each Originator's credit and
collection policies and practices relating to Contracts and Receivables
existing on the date hereof and summarized in the Exhibits to the
First-Step Sale Agreement and the Receivables Sale Agreement, as modified
from time to time in accordance with this Agreement.
"Cut-Off Date" means the last day of a Calculation Period.
"Days Sales Outstanding" means, as of any day, an amount equal to the
product of (x) 91, multiplied by (y) the amount obtained by dividing (i)
the aggregate outstanding balance of Receivables as of the most recent
Cut-Off Date, by (ii) the aggregate amount of Receivables created during
the three (3) Calculation Periods including and immediately preceding such
Cut-Off Date.
"Deemed Collections" means Collections deemed received by Borrower
under Section 1.4(a).
"Default Horizon Ratio" means, as of any Cut-Off Date, the ratio
(expressed as a decimal) computed by dividing (i) the aggregate sales
generated by the Originators during the 5 Calculation Periods ending on
such Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-off Date.
"Default Rate" means a rate per annum equal to the sum of (i) the
Alternate Base Rate plus (ii) 2.00%, changing when and as the Alternate
Base Rate changes.
"Default Ratio" means, as of any Cut-Off Date, the ratio (expressed as
a percentage) computed by dividing (x) the total amount of Receivables
which became Defaulted Receivables during the Calculation Period that
includes such Cut-Off Date, by (y) the aggregate amount of Receivables
generated by the Originators during the Calculation Period occurring 5
months prior to the Calculation Period ending on such Cut-Off Date.
Page 177
Exhibit 10(i)A(4)
"Defaulted Receivable" means a Receivable: (i) as to which the Obligor
thereof has suffered an Event of Bankruptcy; (ii) which, consistent with
the Credit and Collection Policy, would be written off Borrower's books as
uncollectible; or (iii) as to which any payment, or part thereof, remains
unpaid for 91 days or more from the original due date for such payment.
"Delinquency Ratio" means, at any time, a percentage equal to (i) the
aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (ii) the aggregate Outstanding Balance
of all Receivables at such time.
"Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 61-90 days from the original due date for
such payment.
"Demand Advance" means any advance made by Borrower to NSI Georgia at
any time while it is acting as the Servicer, which advance (a) is payable
upon demand, (b) is not evidenced by an instrument, chattel paper or a
certificated security, (c) bears interest at a market rate determined by
Borrower and the Servicer from time to time, (d) is not subordinated to any
other Debt or obligation of the Servicer, and (e) may not be offset by NSI
Georgia against amounts due and owing from Borrower to it under its
Subordinated Note; provided, however, that no Demand Advance may be made
after the Facility Termination Date or on any date prior to the Facility
Termination Date on which an Amortization Event or an Unmatured
Amortization Event exists and is continuing.
"Dilution" means the amount of any reduction or cancellation of the
Outstanding Balance of a Receivable as described in Section 1.4(a).
"Dilution Horizon Ratio" means, as of any Cut-off Date, a ratio
(expressed as a decimal), computed by dividing (i) the aggregate sales
generated by the Originators during the Calculation Period ending on such
Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-Off Date.
"Dilution Ratio" means, as of any Cut-Off Date, a ratio (expressed as
a percentage), computed by dividing (i) the total amount of decreases in
Outstanding Balances due to Dilutions during the Calculation Period ending
on such Cut-Off Date, by (ii) the aggregate dollar amount of Receivables
generated by the Originators during the Calculation Period ending 1-month
prior to the Calculation Period ending on such Cut-Off Date.
"Dilution Reserve" means, for any Calculation Period, the product
(expressed as a percentage) of:
(a) the sum of (i) two (2) times the Adjusted Dilution Ratio as
of the immediately preceding Cut-Off Date, plus (ii) the Dilution
Volatility Component as of the immediately preceding Cut-Off Date,
times
(b) the Dilution Horizon Ratio as of the immediately preceding
Cut-Off Date.
Page 178
Exhibit 10(i)A(4)
"Dilution Volatility Component" means the product (expressed as a
percentage) of (i) the difference between (a) the highest three (3)-month
rolling average Dilution Ratio over the past 12 Calculation Periods and (b)
the Adjusted Dilution Ratio, and (ii) a fraction, the numerator of which is
equal to the amount calculated in (i)(a) of this definition and the
denominator of which is equal to the amount calculated in (i)(b) of this
definition.
"Downgraded Liquidity Bank" means a Liquidity Bank which has been the
subject of a Downgrading Event.
"Downgrading Event" with respect to any Person means the lowering of
the rating with regard to the short-term securities of such Person to below
(i) A-1 by S&P, or (ii) P-1 by Xxxxx'x.
"Eligible Assignee" means a commercial bank having a combined capital
and surplus of at least $250,000,000 with a rating of its (or its parent
holding company's) short-term securities equal to or higher than (i) A-1 by
S&P and (ii) P-1 by Xxxxx'x.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a resident
of the United States or, if a corporation or other business
organization, is organized under the laws of the United States or any
political subdivision thereof and has its chief executive office in
the United States; (b) is not an Affiliate of any of the Loan Parties;
and (c) is not a government or a governmental subdivision or agency;
(ii) which is not a Defaulted Receivable,
(iii) which is not owing from an Obligor as to which more than
35% of the aggregate Outstanding Balance of all Receivables owing from
such Obligor are Defaulted Receivables,
(iv) which was not a Delinquent Receivable on the date on which
it was acquired by Borrower from the applicable Originator,
(v) which by its terms is due and payable within 60 days of the
original billing date therefor and has not had its payment terms
extended more than once (except that up to 5% of the aggregate
Outstanding Balance of all Receivables may have terms payable within
61-90 days of the original billing date therefor),
(vi) which is an "account" within the meaning of Article 9 of the
UCC of all applicable jurisdictions,
(vii) which is denominated and payable only in United States
dollars in the United States,
Page 179
Exhibit 10(i)A(4)
(viii) which arises under a Contract which, together with such
Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the related Obligor enforceable
against such Obligor in accordance with its terms,
(ix) which arises under a Contract which does not contain a
confidentiality provision that purports to restrict the ability of
Blue Ridge to exercise its rights under this Agreement, including,
without limitation, its right to review the Contract,
(x) which arises under a Contract that contains an obligation to
pay a specified sum of money, contingent only upon the sale of goods
or the provision of services by the applicable Originator,
(xi) which, together with the Contract related thereto, does not
contravene any law, rule or regulation applicable thereto (including,
without limitation, any law, rule and regulation relating to truth in
lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with
respect to which no part of the Contract related thereto is in
violation of any such law, rule or regulation,
(xii) which satisfies all applicable requirements of the Credit
and Collection Policy,
(xiii) which was generated in the ordinary course of the
applicable Originator's business,
(xiv) which arises solely from the sale of goods or the provision
of services to the related Obligor by the applicable Originator, and
not by any other Person (in whole or in part),
(xv) which is not subject to any dispute, counterclaim, right of
rescission, set-off, counterclaim or any other defense (including
defenses arising out of violations of usury laws) of the applicable
Obligor against the applicable Originator or any other Adverse Claim,
and the Obligor thereon holds no right as against such Originator to
cause such Originator to repurchase the goods or merchandise the sale
of which shall have given rise to such Receivable (except with respect
to sale discounts effected pursuant to the Contract, or defective
goods returned in accordance with the terms of the Contract);
provided, however, that if such dispute, offset, counterclaim or
defense affects only a portion of the Outstanding Balance of such
Receivable, then such Receivable may be deemed an Eligible Receivable
to the extent of the portion of such Outstanding Balance which is not
so affected, and provided, further, that Receivables of any Obligor
which has any accounts payable by the applicable Originator or by a
wholly-owned Subsidiary of such Originator (thus giving rise to a
potential offset against such Receivables) may be treated as Eligible
Receivables to the extent that the Obligor of such Receivables has
agreed pursuant to a written agreement in form and substance
satisfactory to the Agent, that such Receivables shall not be subject
to such offset,
(xvi) as to which the applicable Originator has satisfied and
fully performed all obligations on its part with respect to such
Receivable required to be fulfilled by it, and no further action is
Page 180
Exhibit 10(i)A(4)
required to be performed by any Person with respect thereto other than
payment thereon by the applicable Obligor (excluding warranty
obligations for which no claim exists),
(xvii) as to which each of the representations and warranties
contained in Sections 5.1(g), (i), (j), (q), (r), (s) and (t) is true
and correct, and
(xviii) all right, title and interest to and in which has been
validly transferred by the applicable Originator directly to Borrower
under and in accordance with the Receivables Sale Agreement, and
Borrower has good and marketable title thereto free and clear of any
Adverse Claim (other than Permitted Encumbrances).
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding
up, or composition or readjustment of debts of such Person, the
appointment of a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or substantially all
of its assets, or any similar action with respect to such Person under
any law relating to bankruptcy, insolvency, reorganization, winding up
or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of
60 consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar law now
or hereafter in effect, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee (other
than a trustee under a deed of trust, indenture or similar
instrument), custodian, sequestrator (or other similar official) for,
such Person or for any substantial part of its property, or shall make
any general assignment for the benefit of creditors, or shall be
adjudicated insolvent, or admit in writing its inability to pay its
debts generally as they become due, or, if a corporation or similar
entity, its board of directors shall vote to implement any of the
foregoing.
"Executive Officer" means any of the chief executive officer,
president, executive vice president or senior vice president of the Parent.
"Facility Account" means Borrower's account no. 00000000 at Wachovia.
"Facility Termination Date" means the earlier of (i) the Liquidity
Termination Date and (ii) the Amortization Date.
Page 181
Exhibit 10(i)A(4)
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
preceding Business Day) by the Federal Reserve Bank of New York in the
Composite Closing Quotations for U.S. Government Securities; or (b) if such
rate is not so published for any day which is a Business Day, the average
of the quotations at approximately 11:30 a.m. (New York time) for such day
on such transactions received by the Agent from three federal funds brokers
of recognized standing selected by it.
"Fee Letter" means that certain letter agreement dated as of May 2,
2001 among Borrower, NSI Georgia and the Agent, as it may be amended,
restated or otherwise modified and in effect from time to time.
"Final Payout Date" means the date on which all Obligations have been
paid in full and the Aggregate Commitment has been terminated.
"First-Step Sale Agreement" means that certain Receivables Sale
Agreement, dated as of May 2, 2001, between NSI Enterprises and Borrower,
as the same may be amended, restated or otherwise modified from time to
time.
"Finance Charges" means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor
pursuant to such Contract.
"Fiscal Month" means any fiscal month of the Performance Guarantor.
"Fiscal Quarter" means any fiscal quarter of the Performance
Guarantor.
"Fiscal Year" means any fiscal year of the Performance Guarantor.
"Funding Agreement" means (i) this Agreement, (ii) the Liquidity
Agreement and (iii) any other agreement or instrument executed by any
Funding Source with or for the benefit of Blue Ridge.
"Funding Source" means (i) any Liquidity Bank or (ii) any insurance
company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Blue Ridge.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without limiting
the generality of the foregoing, any obligation, direct or indirect,
Page 182
Exhibit 10(i)A(4)
contingent or otherwise, of such Person (i) to secure, purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness
or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or
services, to provide collateral security, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Indebtedness" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such
Person as lessee under Capital Leases, (v) all obligations of such Person
to reimburse any bank or other Person in respect of amounts payable under a
banker's acceptance, (vi) all Redeemable Preferred Stock of such Person (in
the event such Person is a corporation), (vii) all obligations of such
Person to reimburse any bank or other Person in respect of amounts paid or
to be paid under a letter of credit or similar instrument, (viii) all
Indebtedness of others secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person, and (ix) all
Indebtedness of others Guaranteed by such Person.
"Independent Director" shall mean a member of the Board of Directors
of Borrower who is not at such time, and has not been at any time during
the preceding five (5) years: (A) a director, officer, employee or
affiliate of Performance Guarantor, any Originator or any of their
respective Subsidiaries or Affiliates (other than Borrower), or (B) the
beneficial owner (at the time of such individual's appointment as an
Independent Director or at any time thereafter while serving as an
Independent Director) of any of the outstanding common shares of Borrower,
any Originator, or any of their respective Subsidiaries or Affiliates,
having general voting rights (excepting immaterial beneficial interests in
mutual funds or similar managed investment accounts which in no case shall
exceed 5% of any class of such shares).
"Initial Cutoff Date" means the Business Day immediately prior to the
date hereof.
"Interest" means for each respective Interest Period relating to Loans
of the Liquidity Banks, an amount equal to the product of the applicable
Interest Rate for each Loan multiplied by the principal of such Loan for
each day elapsed during such Interest Period, annualized on a 360 day
basis.
"Interest Period" means, with respect to any Loan held by a Liquidity
Bank:
(a) if Interest for such Loan is calculated on the basis of the
LIBO Rate, a period of one, two, three or six months, or such other
period as may be mutually agreeable to the Agent and Borrower,
commencing on a Business Day selected by Borrower or the Agent
Page 183
Exhibit 10(i)A(4)
pursuant to this Agreement. Such Interest Period shall end on the day
in the applicable succeeding calendar month which corresponds
numerically to the beginning day of such Interest Period, provided,
however, that if there is no such numerically corresponding day in
such succeeding month, such Interest Period shall end on the last
Business Day of such succeeding month; or
(b) if Interest for such Loan is calculated on the basis of the
Alternate Base Rate, a period commencing on a Business Day selected by
Borrower and agreed to by the Agent, provided that no such period
shall exceed one month.
If any Interest Period would end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that in the case of Interest Periods corresponding to the LIBO
Rate, if such next succeeding Business Day falls in a new month, such
Interest Period shall end on the immediately preceding Business Day. In the
case of any Interest Period for any Loan which commences before the
Amortization Date and would otherwise end on a date occurring after the
Amortization Date, such Interest Period shall end on the Amortization Date.
The duration of each Interest Period which commences after the Amortization
Date shall be of such duration as selected by the Agent.
"Interest Rate" means, with respect to each Loan of the Liquidity
Banks, the LIBO Rate, the Alternate Base Rate or the Default Rate, as
applicable.
"Interest Reserve" means, for any Calculation Period, the product
(expressed as a percentage) of (i) 1.5 times (ii) the Alternate Base Rate
as of the immediately preceding Cut-Off Date times (iii) a fraction the
numerator of which is the highest Days Sales Outstanding for the most
recent 12 Calculation Periods and the denominator of which is 360.
"Lender" means Blue Ridge and each Liquidity Bank.
"LIBO Rate" means, for any Interest Period, the rate per annum
determined on the basis of the offered rate for deposits in U.S. dollars of
amounts equal or comparable to the principal amount of the related Loan
offered for a term comparable to such Interest Period, which rates appear
on a Bloomberg L.P. terminal, displayed under the address "US0001M Index Q
Go" effective as of 11:00 A.M., London time, two Business Days prior to the
first day of such Interest Period, provided that if no such offered rates
appear on such page, the LIBO Rate for such Interest Period will be the
arithmetic average (rounded upwards, if necessary, to the next higher
1/100th of 1%) of rates quoted by not less than two major banks in New
York, New York, selected by the Agent, at approximately 10:00 a.m.(New York
time), two Business Days prior to the first day of such Interest Period,
for deposits in U.S. dollars offered by leading European banks for a period
comparable to such Interest Period in an amount comparable to the principal
amount of such Loan, divided by (b) one minus the maximum aggregate reserve
requirement (including all basic, supplemental, marginal or other reserves)
which is imposed against the Agent in respect of Eurocurrency liabilities,
as defined in Regulation D of the Board of Governors of the Federal Reserve
System as in effect from time to time (expressed as a decimal), applicable
to such Interest Period plus (ii) the Applicable Margin per annum. The LIBO
Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.
Page 184
Exhibit 10(i)A(4)
"LIBO Rate Loan" means a Loan which bears interest at the LIBO Rate.
"Lien" shall mean any lien, charge, claim, security interest, mortgage
or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
"Liquidity Agreement" means that certain Liquidity Asset Purchase
Agreement, dated as of May 2, 2001 by and among Blue Ridge, the Agent and
the banks from time to time party thereto, as the same may be amended,
restated and/or otherwise modified from time to time in accordance with the
terms thereof.
"Liquidity Banks" has the meaning set forth in the preamble in this
Agreement.
"Liquidity Commitment" means, as to each Liquidity Bank, its
commitment under the Liquidity Agreement (which shall equal 102% of its
Commitment hereunder).
"Liquidity Funding" means (a) a purchase made by any Liquidity Bank
pursuant to its Liquidity Commitment of all or any portion of, or any
undivided interest in, a Blue Ridge Loan, or (b) any Loan made by a
Liquidity Bank in lieu of Blue Ridge pursuant to Section 1.1.
"Liquidity Termination Date" means the earlier to occur of the
following:
(a) the date on which the Liquidity Banks' Liquidity Commitments
expire, cease to be available to Blue Ridge or otherwise cease to be
in full force and effect; or
(b) the date on which a Downgrading Event with respect to a
Liquidity Bank shall have occurred and been continuing for not less
than 30 days, and either (i) the Downgraded Liquidity Bank shall not
have been replaced by an Eligible Assignee pursuant to the Liquidity
Agreement, or (ii) the Liquidity Commitment of such Downgraded
Liquidity Bank shall not have been funded or collateralized in such a
manner that will avoid a reduction in or withdrawal of the credit
rating applied to the Commercial Paper to which such Liquidity
Agreement applies by any of the rating agencies then rating such
Commercial Paper.
"Loan" means any loan made by a Lender to Borrower pursuant to this
Agreement (including, without limitation, any Liquidity Funding). Each Loan
shall either be a CP Rate Loan, an Alternate Base Rate Loan or a Eurodollar
Rate Loan, selected in accordance with the terms of this Agreement.
"Loan Parties" has the meaning set forth in the preamble to this
Agreement.
"Lock-Box" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and which is listed on Exhibit IV.
"Loss Reserve" means, for any Calculation Period, the product
(expressed as a percentage) of (a) 2.25, times (b) the highest three-month
rolling average Default Ratio during the 12 Calculation Periods ending on
Page 185
Exhibit 10(i)A(4)
the immediately preceding Cut-Off Date, times (c) the Default Horizon Ratio
as of the immediately preceding Cut-Off Date.
"Margin Stock" means "margin stock" as defined in Regulations T, U or
X.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of the Parent and its Subsidiaries taken
as a whole, (ii) the ability of any Loan Party to perform its obligations
under this Agreement or the Performance Guarantor to perform its
obligations under the Performance Undertaking, (iii) the legality, validity
or enforceability of this Agreement or any other Transaction Document, (iv)
the Agent's security interest, for the benefit of the Secured Parties, in
the Receivables generally or in any significant portion of the Receivables,
the Related Security or the Collections with respect thereto, or (v) the
collectibility of the Receivables generally or of any significant portion
of the Receivables.
"Material Subsidiary" means (i) Borrower and NSI Georgia and (ii) each
other Consolidated Subsidiary, now existing or hereinafter established or
acquired, that at any time prior to the payment in full of all Aggregate
Unpaids under the Credit and Security Agreement either (x) has or acquires
total assets in excess of 10% of Consolidated Total Assets at the end of
the most recent Fiscal Quarter, or (y) contributed more than 10% of
Consolidated Operating Profits for the 4 most recent Fiscal Quarters then
ended (or, with respect to any Subsidiary which existed during the entire 4
Fiscal Quarter period but was acquired by the Parent during such period,
which would have contributed more than 10% of Consolidated Operating
Profits for such period had it been a Subsidiary for the entire period, as
determined on a pro forma basis in accordance with GAAP).
"Monthly Report" means a report, in substantially the form of Exhibit
VIII hereto (appropriately completed), furnished by the Servicer to the
Agent pursuant to Section 8.5.
"Monthly Reporting Date" means the 15th day of each month after the
date of this Agreement (or if any such day is not a Business Day, the next
succeeding Business Day thereafter) or such other days of each month as the
Agent shall request in connection with Section 8.5 hereof.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Pool Balance" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by the aggregate
amount by which the Outstanding Balance of all Eligible Receivables of each
Obligor and its Affiliates exceeds the Obligor Concentration Limit for such
Obligor.
"NSI Credit Agreement" means that certain Credit Agreement as of July
15, 1999 among Performance Guarantor, the other borrowers parties thereto,
the banks from time to time party thereto, Wachovia Bank, N.A., as
administrative agent and Bank One, NA (f/k/a The First National Bank of
Chicago), as Syndication Agent, as the same may be amended, restated or
replaced from time to time.
Page 186
Exhibit 10(i)A(4)
"NSI Enterprises" means NSI Enterprises, Inc., a California
corporation, and its successors and permitted assigns.
"NSI Georgia" has the meaning set forth in the preamble to the
Agreement, and such term shall include such Person's successors and
permitted assigns.
"Obligations" means, at any time, any and all obligations of either of
the Loan Parties to any of the Secured Parties arising under or in
connection with the Transaction Documents, whether now existing or
hereafter arising, due or accrued, absolute or contingent, including,
without limitation, obligations in respect of Aggregate Principal, CP
Costs, Interest, fees under the Fee Letter, Broken Funding Costs and
Indemnified Amounts.
"Obligor" means a Person obligated to make payments pursuant to a
Contract.
"Obligor Concentration Limit" means, at any time, in relation to the
aggregate Outstanding Balance of Receivables owed by any single Obligor and
its Affiliates (if any), the applicable concentration limit shall be
determined as follows for Obligors who have short term unsecured debt
ratings currently assigned to them by S&P and Moody's (or in the absence
thereof, the equivalent long term unsecured senior debt ratings), the
applicable concentration limit shall be determined according to the
following table:
Allowable % of Eligible
S&P Rating Xxxxx'x Rating Receivables
--------------------- ----------------------------- ----------------------------
A-1+ P-1 10%
A-1 P-1 8%
A-2 P-2 6%
A-3 P-3 4%
Below A-3 or Not Rated Below P-3 or Not Rated
by either S&P or Moody's by either S&P or Moody's 4%
; provided, however, that (a) if any Obligor has a split rating, the applicable
rating will be the lower of the two, (b) if any Obligor is not rated by either
S&P or Moody's, the applicable Obligor Concentration Limit shall be the one set
forth in the last line of the table above, and (c) subject to satisfaction of
the Rating Agency Condition and/or an increase in the percentage set forth in
clause (a)(i) of the definition of "Required Reserve," upon Borrower's request
from time to time, the Agent may agree to a higher percentage of Eligible
Receivables for a particular Obligor and its Affiliates (each such higher
percentage, a "Special Concentration Limit"), it being understood that any
Special Concentration Limit may be cancelled by the Agent upon not less than
five (5) Business Days' written notice to the Loan Parties.
"Operating Profits" means, as applied to any Person for any period,
the sum of (i) net revenues, less (ii) cost of goods and services sold,
less (iii) operating expenses (including depreciation and amortization) of
such Person for such period, as determined in accordance with GAAP.
Page 187
Exhibit 10(i)A(4)
"Originator" means each of (a) NSI Enterprises, in its capacity as
seller under the First-Step Sale Agreement and (b) NSI Georgia, in its
capacity as seller under the Receivables Sale Agreement.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Participant" has the meaning set forth in Section 12.2.
"Performance Guarantor" means National Service Industries, Inc., a
Delaware corporation, and its successors and permitted assigns.
"Performance Undertaking" means that certain Performance Undertaking,
dated as of May 2, 2001, by Performance Guarantor in favor of Borrower,
substantially in the form of Exhibit IX, as the same may be amended,
restated or otherwise modified from time to time.
"Permitted Encumbrances" shall mean the following: (a) Liens for taxes
or assessments or other governmental charges not yet due and payable; and
(b) Liens created by the Transaction Documents.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Pooled Commercial Paper" means Commercial Paper notes of Blue Ridge
subject to any particular pooling arrangement by Blue Ridge, but excluding
Commercial Paper issued by Blue Ridge for a tenor and in an amount
specifically requested by any Person in connection with any agreement
effected by Blue Ridge.
"Prime Rate" means a rate per annum equal to the prime rate of
interest announced from time to time by Wachovia (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime
rate changes.
"Pro Rata Share" means, for each Liquidity Bank, a percentage equal to
the Commitment of such Liquidity Bank, divided by the Aggregate Commitment.
"Program Fee" has the meaning set forth in the Fee Letter.
"Proposed Reduction Date" has the meaning set forth in Section 1.3.
"Proprietary Information" means all information about the Performance
Guarantor or any of its Subsidiaries which has been furnished to the Agent
or any Lender by or on behalf of the Performance Guarantor or any of its
Subsidiaries before or after the date hereof or which is obtained by any
Lender or the Agent in the course of any Review made pursuant to Section
7.1(d) of the Agreement; provided, however, that the term "Proprietary
Information" does not include information which (x) is or becomes publicly
available (other than as a result of a breach of Section 14.5 of the
Agreement), (y) is possessed by or available to the Agent or any Lender on
Page 188
Exhibit 10(i)A(4)
a non-confidential basis prior to its disclosure to the Agent or such
Lender by Borrower or Subsidiary or (z) becomes available to the Agent or
any Lender on a non-confidential basis from a Person which, to the
knowledge of the Agent or such Lender, as the case may be, is not bound by
a confidentiality agreement with the Performance Guarantor or any of its
Subsidiaries and is not otherwise prohibited from transmitting such
information to the Agent or such Lender. In the event the Agent or any
Lender is required to disclose any Proprietary Information by virtue of
clause (ii) (but only if and to the extent such disclosure has not been
sought by the Agent or any Lender, and if neither the Performance Guarantor
nor Borrower is a party to such litigation), (iv) or (v) above, to the
extent such Lender or the Agent (as the case may be) determines in good
faith that it is permissible by law so to do, it shall promptly notify the
Performance Guarantor of same so as to allow the Performance Guarantor or
its Subsidiaries to seek a protective order or to take other appropriate
action; provided, however, neither any Lender nor the Agent shall be
required to delay compliance with any directive to disclose any such
information so as to allow the Performance Guarantor or any of Subsidiaries
to effect any such action.
"Purchasing Liquidity Bank" has the meaning set forth in Section
12.1(b).
"Rating Agency Condition" means that Blue Ridge has received written
notice from S&P and Xxxxx'x that an amendment, a change or a waiver to the
Liquidity Agreement, this Agreement, the Receivables Sale Agreement, or the
First-Step Sale Agreement will not result in a withdrawal or downgrade of
the then current ratings on Blue Ridge's Commercial Paper.
"Receivable" means each "Receivable" under and as defined in the
Receivables Sale Agreement in which Borrower now has or hereafter acquires
any interest. Debt and other rights and obligations arising from any one
transaction, including, without limitation, indebtedness and other rights
and obligations represented by an individual invoice, shall constitute a
Receivable separate from a Receivable consisting of the indebtedness and
other rights and obligations arising from any other transaction; provided
further, that any indebtedness, rights or obligations referred to in the
immediately preceding sentence shall be a Receivable regardless of whether
the account debtor or Borrower treats such indebtedness, rights or
obligations as a separate payment obligation.
"Receivables Sale Agreement" means that certain Receivables Sale and
Contribution Agreement, dated as of May 2, 2001, between NSI Georgia and
Borrower, as the same may be amended, restated or otherwise modified from
time to time.
"Records" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Amortization Date
Page 189
Exhibit 10(i)A(4)
either (i) mandatorily redeemable (by required sinking fund or similar
payments or otherwise) or (ii) redeemable at the option of the holder
thereof.
"Reduction Notice" has the meaning set forth in Section 1.3.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulatory Change" has the meaning set forth in Section 10.2(a).
"Related Security" means (i) all "Related Security" under and as
defined in the Receivables Sale Agreement, (ii) all of Borrower's right,
title and interest in, to and under the Receivables Sale Agreement in
respect of such Receivable, (iii) all of Borrower's right, title and
interest in and to the Demand Advances, and (iv) all proceeds of any of the
foregoing.
"Required Liquidity Banks" means, at any time, Liquidity Banks with
Commitments in excess of 66-2/3% of the Aggregate Commitment.
"Required Notice Period" means the number of days required notice set
forth below applicable to the Aggregate Reduction indicated below:
Aggregate Reduction Required Notice Period
------------------- ----------------------
less than 25% of the then-current 2 Business Days
Aggregate Commitment
greater than or equal to 5 Business Days
25% but less than 50% of the
then-current
Aggregate Commitment
greater than or equal to 50% of 10 Business Days
the then-current Aggregate Commitment
Page 190
Exhibit 10(i)A(4)
"Required Reserve" means, on any day during a Calculation Period, the
product of (a) the greater of (i) the Required Reserve Factor Floor and
(ii) the sum of the Loss Reserve, the Interest Reserve, the Dilution
Reserve and the Servicing Reserve, times (b) the Net Pool Balance as of the
Cut-Off Date immediately preceding such Calculation Period.
"Required Reserve Factor Floor" means, for any Calculation Period, the
sum (expressed as a percentage) of (a) 16% plus (b) the product of the
Adjusted Dilution Ratio and the Dilution Horizon Ratio, in each case, as of
the immediately preceding Cut-Off Date.
"Responsible Officer" means any Executive Officer as well as any other
officer of the Parent who is primarily responsible for the administration
of the transactions contemplated by the Transaction Documents.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Borrower now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock or in any junior class of
stock of Borrower, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of capital stock of Borrower now or hereafter
outstanding, (iii) any payment or prepayment of principal of, premium, if
any, or interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or similar
payment and any claim for rescission with respect to the Subordinated Loans
(as defined in the Receivables Sale Agreement), (iv) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of capital stock of Borrower now or hereafter outstanding, and (v)
any payment of management fees by Borrower (except for reasonable
management fees to any Originator or its Affiliates in reimbursement of
actual management services performed).
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Secured Parties" means the Indemnified Parties.
"Servicer" means at any time the Person (which may be the Agent) then
authorized pursuant to Article VIII to service, administer and collect
Receivables.
"Servicing Fee" means, for each day in a Calculation Period:
(a) an amount equal to (i) the Servicing Fee Rate (or, at any
time while NSI Georgia or one of its Affiliates is the Servicer, such
lesser percentage as may be agreed between Borrower and the Servicer
on an arms' length basis based on then prevailing market terms for
similar services), times (ii) the aggregate Outstanding Balance of all
Receivables at the close of business on the Cut-Off Date immediately
preceding such Calculation Period, times (iii) 1/360; or
Page 191
Exhibit 10(i)A(4)
(b) on and after the Servicer's reasonable request made at any
time when NSI Georgia or one of its Affiliates is no longer acting as
Servicer hereunder, an alternative amount specified by the successor
Servicer not exceeding (i) 110% of such Servicer's reasonable costs
and expenses of performing its obligations under this Agreement during
the preceding Calculation Period, divided by (ii) the number of days
in the current Calculation Period.
"Servicing Fee Rate" means 0.25% per annum (or such higher
percentage as the Agent and Borrower may from time to time agree upon
based upon then prevailing market conditions).
"Servicing Reserve" means, for any Calculation Period, the
product (expressed as a percentage) of (a) 1.00%, times (b) a
fraction, the numerator of which is the highest Days Sales Outstanding
for the most recent 12 Calculation Periods and the denominator of
which is 360.
"Settlement Date" means (A) the 2nd Business Day after each
Monthly Reporting Date, and (B) the last day of the relevant Interest
Period in respect of each Loan of the Liquidity Banks.
"Settlement Period" means (A) in respect of each Loan of Blue
Ridge, the immediately preceding Calculation Period, and (B) in
respect of each Loan of the Liquidity Banks, the entire Interest
Period of such Loan.
"Subsidiary" means, with respect to any Person, any corporation
or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person.
"Tax Code" means the Internal Revenue Code of 1986, as the same
may be amended from time to time.
"Termination Date" has the meaning set forth in Section 2.2.
"Termination Percentage" has the meaning set forth in Section
2.2.
"Terminating Tranche" has the meaning set forth in Section
4.3(b).
"Transaction Documents" means, collectively, this Agreement, each
Borrowing Notice, the Receivables Sale Agreement, the First-Step Sale
Agreement, each Collection Account Agreement, the Performance
Undertaking, the Fee Letter, the Subordinated Note (as defined in the
Receivables Sale Agreement) and all other instruments, documents and
agreements executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
Page 192
Exhibit 10(i)A(4)
"Unmatured Amortization Event" means an event which, with the
passage of time or the giving of notice, or both, would constitute an
Amortization Event.
"Usage Fee" has the meaning set forth in the Fee Letter.
"Wachovia" means Wachovia Bank, N.A. in its individual capacity
and its capacity as agent.
Unless otherwise specified herein, all terms of an accounting character
used herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder shall
be prepared, in accordance with GAAP, applied on a basis consistent (except for
changes concurred in by the Parent's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Parent and its Consolidated Subsidiaries delivered
to the Agent unless with respect to any such change concurred in by the Parent's
independent public accountants or required by GAAP, in determining compliance
with any of the provisions of this Agreement or any of the other Transaction
Documents: (i) the Parent shall have objected to determining such compliance on
such basis at the time of delivery of such financial statements, or (ii) the
Agent shall so object in writing within 30 days after the delivery of such
financial statements, in either of which events such calculations shall be made
on a basis consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made.
All terms used in Article 9 of the UCC in the State of Georgia, and not
specifically defined herein, are used herein as defined in such Article 9.
Page 193
Exhibit 10(i)A(4)
EXHIBIT II
FORM OF BORROWING NOTICE
---
NSI Funding, Inc.
BORROWING NOTICE
dated ______________, 20__
for Borrowing on ________________, 20__
Wachovia Bank, N.A., as Agent
000 Xxxxxxxxx Xxxxxx, X.X., XX-000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx, Fax No. (000) 000-0000
Ladies and Gentlemen:
Reference is made to the Credit and Security Agreement dated as of May 2,
2001 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") among NSI Funding, Inc., a Delaware corporation (the
"Borrower"), National Service Industries, Inc., a Georgia corporation, as
initial Servicer, Blue Ridge Asset Funding Corporation, and Wachovia Bank N.A.,
individually and as Agent. Capitalized terms defined in the Credit Agreement are
used herein with the same meanings.
1. The [Servicer, on behalf of the] Borrower hereby certifies, represents
and warrants to the Agent and the Lenders that on and as of the Borrowing Date
(as hereinafter defined):
(a) all applicable conditions precedent set forth in Article VI of the
Credit Agreement have been satisfied;
(b) each of its representations and warranties contained in Section 5.1 of
the Credit Agreement will be true and correct, in all material respects, as if
made on and as of the Borrowing Date;
(c) no event will have occurred and is continuing, or would result from the
requested Advance, that constitutes an Amortization Event or Unmatured
Amortization Event;
(d) the Facility Termination Date has not occurred; and
Page 194
Exhibit 10(i)A(4)
(e) after giving effect to the Loans comprising the Advance requested
below, the Aggregate Principal will not exceed the Borrowing Limit.
2. The [Servicer, on behalf of the] Borrower hereby requests that Blue
Ridge (or their respective Liquidity Banks) make an Advance on ___________, 20__
(the "Borrowing Date") as follows:
(a) Aggregate Amount of Advance: $_____________
(b) If the Advance is not funded by Blue Ridge, [Servicer on behalf of the]
Borrower requests that the Liquidity Banks make an Alternate Base Rate Loan that
converts into LIBO Rate Loan with an Interest Period of _____ months on the
third Business Day after the Borrowing Date).
3. Please disburse the proceeds of the Loans as follows:
[Apply $________ to payment of principal and interest of existing Loans due
on the Borrowing Date]. [Apply $______ to payment of fees due on the Borrowing
Date]. [Wire transfer $________ to account no. ________ at ___________ Bank, in
[city, state], ABA No. __________, Reference: ________].
IN WITNESS WHEREOF, the [Servicer, on behalf of the] Borrower has caused
this Borrowing Request to be executed and delivered as of this ____ day of
___________, _____.
[National Service Industries, Inc., A GEORGIA
CORPORATION, AS SERVICER, on behalf of]
NSI FUNDING, INC., AS BORROWER
By: _________________________________
Name:
Title:
Page 195
Exhibit 10(i)A(4)
EXHIBIT III
PLACES OF BUSINESS OF THE LOAN PARTIES; LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
Places of Business:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Locations of Records:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxx Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxx 00000
Xxxxxxx 00 Xxxxx
Xxxxxxx, Xxxxxxx 00000
0000 Xxxxxxxx Xxxxxxxxxx Xxxx.
Xxxxxxx, Xxxxxxx 00000
Federal Employer Identification Number:
NSI Georgia: 00-0000000
NSI Enterprises: 00-0000000
Borrower: 00-0000000
Prior Borrower Legal Names, Borrower Trade and Assumed Names: None
Page 196
Exhibit 10(i)A(4)
EXHIBIT IV
NAMES OF COLLECTION BANKS; LOCK-BOXES & COLLECTION ACCOUNTS
LOCK-BOX RELATED COLLECTION ACCOUNT
-------- --------------------------
Name of Current Account Holder: Enforcer Products, a division of NSI GA
P.O. Box 945786 Account Number: Lockbox #945786, DDA #13245324
Atlanta, GA Bank Name: Wachovia Bank of Georgia
30392-5786 ABA Number: 000000000
Contact Person: Xxxxx Xxxx
Contact's Tel: 000-000-0000
Contact's Fax: 000-000-0000
----------------------------------------------- -------------------------------------------------------
Name of Current Account Holder: Zep Chemicals, a division of NSI GA
Account Number: 00000000
n/a Bank Name: Wachovia Bank of Georgia
ABA Number: 000000000
Contact Person: Xxxxx Xxxx
Contact's Tel: 000-000-0000
Contact's Fax: 000-000-0000
----------------------------------------------- -------------------------------------------------------
Name of Current Account Holder: Zep Chemicals, a division of NSI GA
Account Number: 00000000
Bank Name: Wachovia Bank of Georgia
n/a ABA Number: 000000000
Contact Person: Xxxxx Xxxx
Contact's Tel: 000-000-0000
Contact's Fax: 000-000-0000
----------------------------------------------- -------------------------------------------------------
Name of Current Account Holder: Lithonia Lighting, a division of NSI GA
P.O. Box 100863 Account Number: Lockbox #100863, DDA#0000000000
Xxxxxxx, XX 00000 Bank Name: Bank of America
ABA Number: 000000000
Contact Person: Xxxxxx Xxxxxxx
Contact's Tel: 000-000-0000
Contact's Fax: 000-000-0000
----------------------------------------------- -------------------------------------------------------
Name of Current Account Holder: Lithonia Lighting, a division of NSI
P.O. Box 360305 Account Number: DDA#0000000
Xxxxxxxxxx, XX 00000 Bank Name: Mellon Bank, Pittsburgh PA
ABA Number: 000000000
Dept. LA 21025 Contact Person: Xxxxx Xxxxxxxx
Xxxxxxxx, XX 00000-0000 Contact's Tel: 000-000-0000
Contact's Fax: 000-000-0000
Page 197
Exhibit 10(i)A(4)
----------------------------------------------- -------------------------------------------------------
P.O. Box 530737 Name of Current Account Holder: NSI Chemicals (Zep), a division of NSI, GA
Xxxxxxx, XX 00000-0000 Account Number: 0000000
Bank Name: Mellon Bank, Pittsburgh PA
Dept. CH10697 ABA Number: 000000000
Xxxxxxxx, XX 00000-0000 Contact Person: Xxxxx Xxxxxxxx
Contact's Tel: 000-000-0000
Dept. LA21294 Contact's Fax: 000-000-0000
Xxxxxxxx, XX 00000-0000
Dept. 0905
X.X. Xxx 000000
Xxxxxx, XX 00000-0000
Xxx 000000
Xxxxxxxxxx, XX 15250-8012
Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Page 198
Exhibit 10(i)A(4)
EXHIBIT V
FORM OF COMPLIANCE CERTIFICATE
To: Wachovia Bank, N.A., as Agent
This Compliance Certificate is furnished pursuant to that certain Credit
and Security Agreement dated as of May 2, 2001 among NSI Funding, Inc., a
Delaware corporation (the "Borrower"), National Service Industries, Inc., a
Georgia corporation (the "Servicer"), the Lenders party thereto and Wachovia
Bank, N.A., as agent for such Lenders (the "Agreement").
THE UNDERSIGNED HEREBY CERTIFIES IN HIS OR HER REPRESENTATIVE CAPACITY ON
BEHALF OF PERFORMANCE GUARANTOR THAT:
1. I am the duly elected _________________ of Borrower.
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of Performance Guarantor and its Subsidiaries during the
accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes an
Amortization Event or Unmatured Amortization Event, as each such term is defined
under the Agreement, during or at the end of the accounting period covered by
the attached financial statements or as of the date of this Certificate[, except
as set forth in paragraph 5 below].
4. Schedule I attached hereto sets forth financial data and computations
evidencing the compliance with certain covenants of the Agreement, all of which
data and computations are true, complete and correct.
[5. Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which Performance Guarantor has taken, is taking, or
proposes to take with respect to each such condition or event:
--------------------]
Page 199
Exhibit 10(i)A(4)
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered by the undersigned in his or her
representative capacity on behalf of the Performance Guarantor, all as of
______________, 20__.
By:___________________________
Name:
Title:
Page 200
Exhibit 10(i)A(4)
SCHEDULE I TO COMPLIANCE CERTIFICATE
A. Schedule of Compliance as of __________, 200_ with Section ___ of the
Agreement. Unless otherwise defined herein, the terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.
This schedule relates to the month ended: _______________
Page 201
Exhibit 10(i)A(4)
EXHIBIT VI
FORM OF COLLECTION ACCOUNT AGREEMENT
COLLECTION ACCOUNT AGREEMENT
_____________, 2001
[Collection Bank Name]
[Collection Bank Address]
Attn: ____________________
Fax No. (___) ______________
Re: NSI Enterprises, Inc./National Service Industries, Inc./NSI Funding, Inc.
Ladies and Gentlemen:
Reference is hereby made to each of the [departmental] post office boxes
listed on Schedule 1 hereto (each, a "Lock-Box") of which [Collection Bank
Name], a _________ banking association (hereinafter "you"), -------- --- has
exclusive control for the purpose of receiving mail and processing payments
therefrom pursuant to the [Lock-Box Service Agreement] dated _______________,
originally by and between NSI Enterprises, Inc., a California corporation (the
"Company") and you (the "Service Agreement").
1. You hereby confirm your agreement to perform the services described
therein. Among the services you have agreed to perform therein, is to endorse
all checks and other evidences of payment received in each of the Lock-Boxes,
and credit such payments to account no. _____________ (the "Lock-Box Account").
2. The Company hereby informs you that it has transferred to its affiliate,
National Service Industries, Inc., a Georgia corporation ("NSI Georgia"), and
NSI Georgia has transferred to itsn and to the items from time to time received
in the Lock-Boxes and/or deposited in the Lock-Box Account, but that NSI Georgia
and the Company have agreed to continue to service the receivables giving rise
to such items. Accordingly, the Company, NSI Georgia and Borrower hereby request
that the name of the Lock-Box Account be changed to "NSI Funding, Inc." Borrower
hereby further advises you that it has pledged the receivables giving rise to
such items to a group of lenders for whom Wachovia Bank, N.A. acts as agent (in
such capacity, the "Agent") and has granted a security interest to the Agent in
all of Borrower's right, title and interest in and to the Lock-Box Account and
the funds therein.
Page 202
Exhibit 10(i)A(4)
3. Each of the Company, NSI Georgia and Borrower hereby irrevocably
instructs you, and you hereby agree, that upon receiving notice from the Agent
in the form attached hereto as Annex A:
(i) the name of the Lock-Box Account will be changed to "Wachovia Bank,
N.A., as Agent" (or any designee of the Agent), and the Agent will have
exclusive ownership of and access to the Lock-Boxes and the Lock-Box Account,
and none of the Company, NSI Georgia, Borrower, nor any of their respective
affiliates will have any control of the Lock-Boxes or the Lock-Box Account or
any access thereto, (ii) you will either continue to send the funds from the
Lock-Boxes to the Lock-Box Account, or will redirect the funds as the Agent may
otherwise request, (iii) you will transfer monies on deposit in the Lock-Box
Account to the following account:
Bank Name: Wachovia Bank, N.A.
Location: Winston-Salem, SC
ABA Routing No.: ABA # 000000000
Credit Account No.: For credit to Blue Ridge Asset Funding Account
#8735-098787.
Reference: Blue Ridge/NSI Funding, Inc.
Attention: Xxxx Xxxxxx, tel. (000) 000-0000
or to such other account as the Agent may specify, (iv) all services to be
performed by you under the Service Agreement will be performed on behalf of the
Agent, and (v) all correspondence or other mail which you have agreed to send to
the Company, NSI Georgia or Borrower will be sent to the Agent at the following
address:
Wachovia Bank, N.A., as Agent
000 Xxxxxxxxx Xxxxxx
Mail Stop GA-423
Xxxxxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxxx, Asset-Backed Finance
FAX: (404) 000- 0000
Moreover, upon such notice, the Agent will have all rights and remedies given to
the Company (and Borrower, as the Company's and NSI Georgia's ultimate assignee)
under the Service Agreement. The Company agrees, however, to continue to pay all
fees and other assessments due thereunder at any time.
4. You hereby acknowledge that monies deposited in the Lock-Box Account or
any other account established with you by the Agent for the purpose of receiving
funds from the Lock-Boxes are subject to the liens of the Agent, and will not be
subject to deduction, set-off, banker's lien or any other right you or any other
party may have against the Company, NSI Georgia or Borrower except that you may
debit the Lock-Box Account for any items deposited therein that are returned or
Page 203
Exhibit 10(i)A(4)
otherwise not collected and for all charges, fees, commissions and expenses
incurred by you in providing services hereunder, all in accordance with your
customary practices for the charge back of returned items and expenses.
5. You will be liable only for direct damages in the event you fail to
exercise ordinary care. You shall be deemed to have exercised ordinary care if
your action or failure to act is in conformity with general banking usages or is
otherwise a commercially reasonable practice of the banking industry. You shall
not be liable for any special, indirect or consequential damages, even if you
have been advised of the possibility of these damages.
6. The parties acknowledge that you may assign or transfer your rights and
obligations hereunder solely to a wholly-owned subsidiary of [insert name of
Collection Bank's holding company].
7. Borrower agrees to indemnify you for, and hold you harmless from, all
claims, damages, losses, liabilities and expenses, including legal fees and
expenses, resulting from or with respect to this letter agreement and the
administration and maintenance of the Lock-Box Account and the services provided
hereunder, including, without limitation: (a) any action taken, or not taken, by
you in regard thereto in accordance with the terms of this letter agreement, (b)
the breach of any representation or warranty made by Borrower pursuant to this
letter agreement, (c) any item, including, without limitation, any automated
clearinghouse transaction, which is returned for any reason, and (d) any failure
of Borrower to pay any invoice or charge to you for services in respect to this
letter agreement and the Lock-Box Account or any amount owing to you from
Borrower with respect thereto or to the service provided hereunder.
8. THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF _________, WHICH STATE SHALL BE YOUR "LOCATION" FOR
PURPOSES OF THE UNIFORM COMMERCIAL CODE FROM AND AFTER JULY 1, 2001. This letter
agreement may be executed in any number of counterparts and all of such
counterparts taken together will be deemed to constitute one and the same
instrument.
9. This letter agreement contains the entire agreement between the parties,
and may not be altered, modified, terminated or amended in any respect, nor may
any right, power or privilege of any party hereunder be waived or released or
discharged, except upon execution by all parties hereto of a written instrument
so providing. In the event that any provision in this letter agreement is in
conflict with, or is inconsistent with, any provision of the Service Agreement,
this letter agreement will exclusively govern and control. Each party agrees to
take all actions reasonably requested by any other party to carry out the
purposes of this letter agreement or to preserve and protect the rights of each
party hereunder.
Page 204
Exhibit 10(i)A(4)
Please indicate your agreement to the terms of this letter agreement by
signing in the space provided below. This letter agreement will become effective
immediately upon execution of a counterpart of this letter agreement by all
parties hereto.
Very truly yours,
NSI ENTERPRISES, INC., A CALIFORNIA CORPORATION
By:
-------------------------------------------------
Name:
Title:
NATIONAL SERVICE INDUSTRIES, INC., A GEORGIA CORPORATION
By:
-------------------------------------------------
Name:
Title:
NSI FUNDING, INC., A DELAWARE CORPORATION
By:
-------------------------------------------------
Name:
Title:
Page 205
Exhibit 10(i)A(4)
Acknowledged and agreed to as of the
date first above written:
[COLLECTION BANK]
By:
------------------------------------------------
Name:
Title:
WACHOVIA BANK, N.A., AS AGENT
By:
------------------------------------------------
Name:
Title:
Page 206
Exhibit 10(i)A(4)
ANNEX A
FORM OF NOTICE
[On letterhead of the Agent]
[Date]
[Collection Bank Name]
[Collection Bank Address]
Attn: ____________________
Fax No. (___) ______________
Re: NSI Enterprises, Inc./National Service Industries, Inc./NSI Funding, Inc.
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to that
certain letter agreement dated ____________, 2001 (the "Letter Agreement") among
NSI Enterprises, Inc., National Service Industries, Inc., NSI Funding, Inc., you
and us, to have the name of, and to have exclusive ownership and control of,
account no. __________ identified in the Letter Agreement (the "Lock-Box
Account") maintained with you, transferred to us. The Lock-Box Account will
henceforth be a zero-balance account, and funds deposited in the Lock-Box
Account should be sent at the end of each day to the account specified in
Section 3(i) of the Letter Agreement, or as otherwise directed by the
undersigned. You have further agreed to perform all other services you are
performing under the "Service Agreement" (as defined in the Letter Agreement) on
our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
WACHOVIA BANK, N.A., AS AGENT
By:__________________________
Title:
Page 207
Exhibit 10(i)A(4)>
SCHEDULE 1
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Page 208
Exhibit 10(i)A(4)
EXHIBIT VII
FORM OF ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "Assignment Agreement") is entered into as
of the ___ day of ____________, ____, by and between _____________________
("Assignor") and __________________ ("Assignee").
PRELIMINARY STATEMENTS
A. This Assignment Agreement is being executed and delivered in accordance
with Section 12.1(b) of that certain Credit and Security Agreement dated as of
May 2, 2001 by and among NSI Funding, Inc., as Borrower, National Service
Industries, Inc., as Servicer, Blue Ridge Asset Funding Corporation, Wachovia
Bank, N.A., as Agent, and the Liquidity Banks party thereto (as amended,
modified or restated from time to time, the "Credit and Security Agreement") and
that certain Liquidity Asset Purchase Agreement dated as of May 2, 2001 by and
among Blue Ridge, the Liquidity Banks from time to time party thereto and
Wachovia Bank, N.A., as Agent (as amended, modified or restated from time to
time, the "Liquidity Agreement"). Capitalized terms used and not otherwise
defined herein are used with the meanings set forth or incorporated by reference
in the Credit and Security Agreement.
B. Assignor is a Liquidity Bank party to the Credit and Security Agreement
and the Liquidity Agreement, and Assignee wishes to become a Liquidity Bank
thereunder; and
C. Assignor is selling and assigning to Assignee an undivided ____________%
(the "Transferred Percentage") interest in all of Assignor's rights and
obligations under the Transaction Documents and the Liquidity Agreement,
including, without limitation, Assignor's Commitment, Assignor's Liquidity
Commitment and (if applicable) Assignor's Loans as set forth herein.
AGREEMENT
The parties hereto hereby agree as follows:
1. The sale, transfer and assignment effected by this Assignment Agreement
shall become effective (the "Effective Date") two (2) Business Days (or such
other date selected by the Agent in its sole discretion) following the date on
which a notice substantially in the form of Schedule II to this Assignment
Agreement ("Effective Notice") is delivered by the Agent to Blue Ridge,
Borrower, Servicer, Assignor and Assignee. From and after the Effective Date,
Assignee shall be a Liquidity Bank party to the Credit and Security Agreement
for all purposes thereof as if Assignee were an original party thereto and
Assignee agrees to be bound by all of the terms and provisions contained
therein.
2. If Assignor has no outstanding principal under the Credit and Security
Agreement or the Liquidity Agreement, on the Effective Date, Assignor shall be
deemed to have hereby transferred and assigned to Assignee, without recourse,
Page 209
Exhibit 10(i)A(4)
representation or warranty (except as provided in paragraph 6 below), and the
Assignee shall be deemed to have hereby irrevocably taken, received and assumed
from Assignor, the Transferred Percentage of Assignor's Commitment and Liquidity
Commitment and all rights and obligations associated therewith under the terms
of the Credit and Security Agreement and the Liquidity Agreement, including,
without limitation, the Transferred Percentage of Assignor's future funding
obligations under the Credit and Security Agreement and the Liquidity Agreement.
3. If Assignor has any outstanding principal under the Credit and Security
Agreement and Liquidity Agreement, at or before 12:00 noon, local time of
Assignor, on the Effective Date Assignee shall pay to Assignor, in immediately
available funds, an amount equal to the sum of (i) the Transferred Percentage of
the outstanding principal of Assignor's Loans and, without duplication,
Assignor's Percentage Interests (as defined in the Liquidity Agreement) (such
amount, being hereinafter referred to as the "Assignee's Principal"); (ii) all
accrued but unpaid (whether or not then due) Interest attributable to Assignee's
Principal; and (iii) accruing but unpaid fees and other costs and expenses
payable in respect of Assignee's Principal for the period commencing upon each
date such unpaid amounts commence accruing, to and including the Effective Date
(the "Assignee's Acquisition Cost"); whereupon, Assignor shall be deemed to have
sold, transferred and assigned to Assignee, without recourse, representation or
warranty (except as provided in paragraph 6 below), and Assignee shall be deemed
to have hereby irrevocably taken, received and assumed from Assignor, the
Transferred Percentage of Assignor's Commitment, Liquidity Commitment, Loans (if
applicable) and Percentage Interests (if applicable) and all related rights and
obligations under the Transaction Documents and the Liquidity Agreement,
including, without limitation, the Transferred Percentage of Assignor's future
funding obligations under the Credit and Security Agreement and the Liquidity
Agreement.
4. Concurrently with the execution and delivery hereof, Assignor will
provide to Assignee copies of all documents requested by Assignee which were
delivered to Assignor pursuant to the Credit and Security Agreement or the
Liquidity Agreement.
5. Each of the parties to this Assignment Agreement agrees that at any time
and from time to time upon the written request of any other party, it will
execute and deliver such further documents and do such further acts and things
as such other party may reasonably request in order to effect the purposes of
this Assignment Agreement.
6. By executing and delivering this Assignment Agreement, Assignor and
Assignee confirm to and agree with each other, the Agent and the Liquidity Banks
as follows: (a) other than the representation and warranty that it has not
created any Adverse Claim upon any interest being transferred hereunder,
Assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made by any other
Person in or in connection with any of the Transaction Documents or the
Liquidity Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of Assignee, the Credit and Security
Agreement, the Liquidity Agreement or any other instrument or document furnished
pursuant thereto or the perfection, priority, condition, value or sufficiency of
Page 210
Exhibit 10(i)A(4)
any Collateral; (b) Assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower, any Obligor,
any Affiliate of Borrower or the performance or observance by Borrower, any
Obligor, any Affiliate of Borrower of any of their respective obligations under
the Transaction Documents or any other instrument or document furnished pursuant
thereto or in connection therewith; (c) Assignee confirms that it has received a
copy of each of the Transaction Documents and the Liquidity Agreement, and other
documents and information as it has requested and deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement; (d)
Assignee will, independently and without reliance upon the Agent, Blue Ridge,
Borrower or any other Liquidity Bank or Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Transaction Documents
and the Liquidity Agreement; (e) Assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under the
Transaction Documents and the Liquidity Agreement as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; and (f) Assignee agrees that it will perform in accordance with their
terms all of the obligations which, by the terms of the Liquidity Agreement, the
Credit and Security Agreement and the other Transaction Documents, are required
to be performed by it as a Liquidity Bank or, when applicable, as a Lender.
7. Each party hereto represents and warrants to and agrees with the Agent
that it is aware of and will comply with the provisions of the Credit and
Security Agreement, including, without limitation, Sections 14.5 and 14.6
thereof.
8. Schedule I hereto sets forth the revised Commitment and Liquidity
Commitment of Assignor and the Commitment and Liquidity Commitment of Assignee,
as well as administrative information with respect to Assignee.
9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10. Assignee hereby covenants and agrees that, prior to the date which is
one year and one day after the payment in full of all senior indebtedness for
borrowed money of Blue Ridge, it will not institute against, or join any other
Person in instituting against, Blue Ridge 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.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers of the
date hereof.
[ASSIGNOR]
By: _________________________
Title:
Page 211
Exhibit 10(i)A(4)
[ASSIGNEE]
By: __________________________
Title:
Page 212
Exhibit 10(i)A(4)
SCHEDULE I TO ASSIGNMENT AGREEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
Date: _____________, ______
Transferred Percentage: ____________%
---------------- --------------- ----------------- --------------- ----------------- ----------------- ----------------
X-0 X-0 X-0 X-0 C-1 C-2
---------------- --------------- ----------------- --------------- ----------------- ----------------- ----------------
Assignor Commitment Commitment Outstanding Ratable Share Liquidity Liquidity
(prior to (after giving principal (if of Outstanding Commitment Commitment
giving effect effect to the any) principal (prior to (after giving
to the Assignment giving effect effect to the
Assignment Agreement) to the Assignment
Agreement) Assignment Agreement)
Agreement)
---------------- --------------- ----------------- --------------- ----------------- ----------------- ----------------
---------------- --------------- ----------------- --------------- ----------------- ----------------- ----------------
X-0 X-0 X-0 X-0 C-1 C-2
---------------- --------------- ----------------- --------------- ----------------- ----------------- ----------------
Assignee Commitment Commitment Outstanding Ratable Share Liquidity Liquidity
(prior to (after giving principal (if of Outstanding Commitment Commitment
giving effect effect to the any) principal (prior to (after giving
to the Assignment giving effect effect to the
Assignment Agreement) to the Assignment
Agreement) Assignment Agreement)
Agreement)
---------------- --------------- ----------------- --------------- ----------------- ----------------- ----------------
Address for Notices
-------------------
Attention:
Phone:
Fax:
Page 213
Exhibit 10(i)A(4)
SCHEDULE II TO ASSIGNMENT AGREEMENT
EFFECTIVE NOTICE
TO: ________________________, Assignor
TO: ________________________, Assignee
The undersigned, as Agent under the Credit and Security Agreement dated as
of May 2, 2001 by and among NSI Funding, Inc., as Borrower, National Service
Industries, Inc., as Servicer, Blue Ridge Asset Funding Corporation, Wachovia
Bank, N.A., as Agent, and the Liquidity Banks party thereto, hereby acknowledges
receipt of executed counterparts of a completed Assignment Agreement dated as of
____________, 2001 between __________________, as Assignor, and
__________________, as Assignee. Terms defined in such Assignment Agreement are
used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that the
Effective Date will be
2. Each of the undersigned hereby consents to the Assignment Agreement as
required by Section 12.1(b) of the Credit and Security Agreement.
[3. Pursuant to such Assignment Agreement, the Assignee is required to pay
$____________ to Assignor at or before 12:00 noon (local time of Assignor) on
the Effective Date in immediately available funds.]
Very truly yours,
WACHOVIA BANK, N.A., as Agent
By: __________________________
Title:_______________________
Page 214
Exhibit 10(i)A(4)
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA BANK, N.A., ITS ATTORNEY-IN-FACT
By: ____________________________
Name:
Title:
***[Borrower hereby consents to the foregoing assignment:
NSI Funding, Inc.
By: ______________________________
Name:
Title:]****
Page 215
Exhibit 10(i)A(4)
EXHIBIT VIII
FORM OF MONTHLY REPORT
-----------------------------------------------------------------------------------------------------------------
Monthly Receivables Report
For the Month Ended:
_____________, 20__
(Page 1)
-----------------------------------------------------------------------------------------------------------------
($)
-----------------------------------------------------------------------------------------------------------------
I . Portfolio Information
-----------------------------------------------------------------------------------------------------------------
1. Beginning of Month Balance: (Total A/R Outstanding)
-----------------------------------------------------------------------------------------------------------------
2. Gross Sales (Domestic & Foreign):
-----------------------------------------------------------------------------------------------------------------
3. Deduct:
-----------------------------------------------------------------------------------------------------------------
a. Total Collections:
-----------------------------------------------------------------------------------------------------------------
b. Dilution
-----------------------------------------------------------------------------------------------------------------
c. Write Offs
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
4.
-----------------------------------------------------------------------------------------------------------------
a. Calculated Ending A/R Balance [(1) + (2) - (3 a,b,c)+(3d)]:
-----------------------------------------------------------------------------------------------------------------
b. Reported Ending A/R Balance
-----------------------------------------------------------------------------------------------------------------
c. Difference (If any)
-----------------------------------------------------------------------------------------------------------------
5. Deduct:
-----------------------------------------------------------------------------------------------------------------
a. Defaulted Receivables
-----------------------------------------------------------------------------------------------------------------
b. Government
-----------------------------------------------------------------------------------------------------------------
c. Foreign
-----------------------------------------------------------------------------------------------------------------
d. Contra
-----------------------------------------------------------------------------------------------------------------
e. Bankrupt
-----------------------------------------------------------------------------------------------------------------
f. Ineligible Terms > 90 days (5% carve-out)
-----------------------------------------------------------------------------------------------------------------
g. Installment Contracts
-----------------------------------------------------------------------------------------------------------------
H. Total Ineligibles
-----------------------------------------------------------------------------------------------------------------
6. Eligible Receivables [(4 b) - (5.h.)]:
-----------------------------------------------------------------------------------------------------------------
7. Deduct: Excess Concentration:
-----------------------------------------------------------------------------------------------------------------
8. Net Pool Balance [(6) -(7)]:
-----------------------------------------------------------------------------------------------------------------
9. Aging Current One Month
-----------------------------------------------------------------------------------------------------------------
Schedule: Month % Prior
-----------------------------------------------------------------------------------------------------------------
a. #REF!
-----------------------------------------------------------------------------------------------------------------
b. #REF!
-----------------------------------------------------------------------------------------------------------------
c. #REF!
-----------------------------------------------------------------------------------------------------------------
d. #REF!
-----------------------------------------------------------------------------------------------------------------
e. #REF!
-----------------------------------------------------------------------------------------------------------------
f. #REF!
-----------------------------------------------------------------------------------------------------------------
h. Total:
-----------------------------------------------------------------------------------------------------------------
Page 216
Exhibit 10(i)A(4)
Monthly Receivables Report
For the Month Ended:
_____________, 20__
(Page 2)
$
II. Calculations Reflecting Current Activity
-----------------------------------------------------------------------------------------------------------------
10. Face Value CP Outstanding
-----------------------------------------------------------------------------------------------------------------
11. Required Reserve %
-----------------------------------------------------------------------------------------------------------------
12. Required Reserve [(8) x (11)]:
-----------------------------------------------------------------------------------------------------------------
III. Compliance
-----------------------------------------------------------------------------------------------------------------
13. Asset Interest [(10) + (12) / (8)] βΉ 100% :
-----------------------------------------------------------------------------------------------------------------
14. 3M Avg. Delinquency Ratio
-----------------------------------------------------------------------------------------------------------------
15. 3M Avg. Default Ratio
-----------------------------------------------------------------------------------------------------------------
16. 3M Avg. Dilution Ratio
-----------------------------------------------------------------------------------------------------------------
17. Facility Limit [(12)βΉ= $xxxx
-----------------------------------------------------------------------------------------------------------------
Page 217
Exhibit 10(i)A(4)
Monthly Receivables Report
For the Month Ended:
_____________, 20__
(Page 3)
$
IV. Excess Concentration: (Calculation)
-----------------------------------------------------------------------------------------------------------------
Eligible
Receivables
-----------------------------------------------------------------------------------------------------------------
Allowable Max. Credit
---------- ----- -------
Percentage Allowable Rating
---------- ---------- ------
Balance)
--------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
Largest Short-Term Allowable Total Allowable Excess
Obligors Debt Rating Percentage Receivables Receivables Receivables
-----------------------------------------------------------------------------------------------------------------
1
-----------------------------------------------------------------------------------------------------------------
2
-----------------------------------------------------------------------------------------------------------------
3
-----------------------------------------------------------------------------------------------------------------
4
-----------------------------------------------------------------------------------------------------------------
5
-----------------------------------------------------------------------------------------------------------------
6
-----------------------------------------------------------------------------------------------------------------
7
-----------------------------------------------------------------------------------------------------------------
8
-----------------------------------------------------------------------------------------------------------------
9
-----------------------------------------------------------------------------------------------------------------
10
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
Total $0 $0 $0
-----------------------------------------------------------------------------------------------------------------
The undersigned hereby represents and warrants that the foregoing is a true and accurate accounting in all
material respects with respect to outstanding Receivables as of ______________ (the "Report Date") in accordance
with the Credit and Security Agreement dated as of May 2, 2001 (it being understood that any error, inaccuracy or
omission in the foregoing that, when corrected, reveals that the Aggregate Principal exceeded the Borrowing Limit
as of the Report Date shall constitute a material error or inaccuracy herein) and that all representations and
warranties related to such Agreement are restated and reaffirmed.
Signed: ____________________________ Date: ______________________________
Name:
Title:
-----------------------------------------------------------------------------------------------------------------
Page 218
Exhibit 10(i)A(4)
EXHIBIT IX [FORM OF]
PERFORMANCE UNDERTAKING
This Performance Undertaking (this "Undertaking"), dated as of May 2, 2001,
is executed by National Service Industries, Inc., a Delaware corporation (the
"Performance Guarantor") in favor of NSI Funding, Inc., a Delaware corporation
(together with its successors and assigns, "Recipient").
RECITALS
1. NSI Enterprises, Inc., a California corporation ("NSI Enterprises"), and
National Service Industries, Inc., a Georgia corporation ("NSI Georgia"
and, together with NSI Enterprises, the "Originators") are parties to a
Receivables Sale Agreement, dated as of May 2, 2001 (as amended, restated
or otherwise modified from time to time, the "First-Step Sale Agreement"),
pursuant to which NSI Enterprises, subject to the terms and conditions
contained therein, plans to sell its right, title and interest in its
accounts receivable and certain related assets to NSI Georgia.
2. NSI Georgia and Recipient are parties to a Receivables Sale and
Contribution Agreement, dated as of May 2, 2001 (as amended, restated or
otherwise modified from time to time, the "Sale and Contribution Agreement"
and, together with the First-Step Sale Agreement, the "Sale Agreements"),
pursuant to which NSI Georgia, subject to the terms and conditions
contained therein, plans to sell or contribute its right, title and
interest in certain of its accounts receivable and certain related assets
(including NSI Georgia's rights under the First-Step Sale Agreement) to
Recipient.
3. Recipient intends to finance its purchases under the Sale and Contribution
Agreement in part by borrowing under a Credit and Security Agreement dated
as of May 2, 2001 (as the same may from time to time hereafter be amended,
supplemented, restated or otherwise modified, the "Credit and Security
Agreement" and, together with the Sale Agreements, the "Agreements") among
Recipient, as Borrower, NSI Georgia, as initial Servicer, Blue Ridge Asset
Funding Corporation ("Blue Ridge"), the banks and other financial
institutions from time to time party thereto as "Liquidity Banks" (together
with Blue Ridge, the "Lenders") and Wachovia Bank, N.A. or any successor
agent appointed pursuant to the terms of the Credit and Security Agreement,
as agent for the Lenders (in such capacity, the "Agent").
4. Performance Guarantor owns, directly or indirectly, one hundred percent
(100%) of the capital stock of each of the Originators and Recipient, and
each of the Originators (and accordingly, Performance Guarantor) is
expected to receive substantial direct and indirect benefits from their
sales and/or contributions of receivables pursuant to the Sale Agreements
(which benefits are hereby acknowledged).
5. As an inducement for Recipient to acquire Originators' accounts receivable
pursuant to the Sale Agreements, Performance Guarantor has agreed to
guaranty (a) the due and punctual performance by NSI Enterprises of its
Page 219
Exhibit 10(i)A(4)
obligations under the First-Step Sale Agreement, (b) the due and punctual
performance by NSI Georgia of its obligations under the Sale and
Contribution Agreement, and (c) the due and punctual performance by NSI
Georgia of its servicing duties, and NSI Enterprises of its sub-servicing
duties, under the Credit and Security Agreement.
6. Performance Guarantor wishes to guaranty the due and punctual performance
by NSI Enterprises and NSI Georgia of the aforesaid obligations as provided
herein.
AGREEMENT
NOW, THEREFORE, Performance Guarantor hereby agrees as follows:
Section 1. Definitions. Capitalized terms used herein and not defined
herein shall the respective meanings assigned thereto in the Agreements. In
addition:
"Guaranteed Obligations" means, collectively, (a) all covenants,
agreements, terms, conditions and indemnities to be performed and observed by
(i) NSI Enterprises as seller under the First-Step Sale Agreement or (ii) NSI
Georgia as seller and contributor under the Sale and Contribution Agreement,
including, without limitation, in each of the foregoing cases, the due and
punctual payment of all sums which are or may become due and owing by either
such Originator in its capacity as a seller or seller and contributor under the
Sale Agreements, whether for fees, expenses (including actual and reasonable
counsel fees), indemnified amounts or otherwise, whether upon any termination or
for any other reason, and (b) all Servicing-Related Obligations.
"Servicing Related Obligations" means all covenants, agreements, terms,
conditions and indemnities to be performed and observed by (i) NSI Georgia in
its capacity as Servicer under the Credit and Security Agreement, and/or (ii)
NSI Enterprises in its capacity as a sub-servicing delegate of the Servicer
under the Credit and Security Agreement.
Section 2. Guaranty of Performance of Guaranteed Obligations. Performance
Guarantor hereby guarantees to Recipient, the full and punctual payment and
performance by each Originator of its respective Guaranteed Obligations. This
Undertaking is an absolute, unconditional and continuing guaranty of the full
and punctual performance of all Guaranteed Obligations of each Originator under
the Agreements and each other document executed and delivered by either
Originator pursuant to the Agreements and is in no way conditioned upon any
requirement that Recipient first attempt to collect any amounts owing by either
Originator to Recipient, the Agent or Blue Ridge from any other Person or resort
to any collateral security, any balance of any deposit account or credit on the
books of Recipient, the Agent or Blue Ridge in favor of either Originator or any
other Person or other means of obtaining payment. Should either Originator
default in the payment or performance of any of its Guaranteed Obligations,
Recipient (or its assigns) may cause the immediate performance by Performance
Guarantor of the Guaranteed Obligations and cause any payment Guaranteed
Obligations to become forthwith due and payable to Recipient (or its assigns),
without demand or notice of any nature (other than as expressly provided
Page 220
Exhibit 10(i)A(4)
herein), all of which are hereby expressly waived by Performance Guarantor.
Notwithstanding the foregoing, this Undertaking is not a guarantee of the
payment or collection of any of the Receivables or the Loans, and Performance
Guarantor shall not be responsible for any Guaranteed Obligations to the extent
the failure to perform such Guaranteed Obligations by either Originator results
from Receivables being uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor; provided that nothing herein
shall relieve either Originator from performing in full its Guaranteed
Obligations under the Agreements or Performance Guarantor of its undertaking
hereunder with respect to the full performance of such duties.
Section 3. Performance Guarantor's Further Agreements to Pay. Performance
Guarantor further agrees, as the principal obligor and not as a guarantor only,
to pay to Recipient (and its assigns), forthwith upon demand in funds
immediately available to Recipient, all reasonable costs and expenses (including
court costs and reasonable legal expenses) actually incurred or expended by
Recipient in connection with enforcement of the Guaranteed Obligations and/or
this Undertaking, together with interest on amounts not paid by Performance
Guarantor under this Undertaking within two Business Days after such amounts
become due until payment, at a rate of interest (computed for the actual number
of days elapsed based on a 360 day year) equal to the Prime Rate plus 2% per
annum, such rate of interest changing when and as the Prime Rate changes.
Section 4. Waivers by Performance Guarantor. Performance Guarantor waives
notice of acceptance of this Undertaking, notice of any action taken or omitted
by Recipient (or its assigns) in reliance on this Undertaking, and any
requirement that Recipient (or its assigns) be diligent or prompt in making
demands under this Undertaking, giving notice of any Termination Event,
Amortization Event, other default or omission by either Originator or asserting
any other rights of Recipient under this Undertaking. Performance Guarantor
warrants that it has adequate means to obtain from each Originator, on a
continuing basis, information concerning the financial condition of such
Originator, and that it is not relying on Recipient to provide such information,
now or in the future. Performance Guarantor also irrevocably waives all defenses
(i) that at any time may be available in respect of the Guaranteed Obligations
by virtue of any statute of limitations, valuation, stay, moratorium law or
other similar law now or hereafter in effect or (ii) that arise under the law of
suretyship, including impairment of collateral. Recipient (and its assigns)
shall be at liberty, without giving notice to or obtaining the assent of
Performance Guarantor and without relieving Performance Guarantor of any
liability under this Undertaking, to deal with each Originator and with each
other party who now is or after the date hereof becomes liable in any manner for
any of the Guaranteed Obligations, in such manner as Recipient in its sole
discretion deems fit, and to this end Performance Guarantor agrees that the
validity and enforceability of this Undertaking, including without limitation,
the provisions of Section 7 hereof, shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Guaranteed Obligations or any part thereof
or any agreement relating thereto at any time; (b) any failure or omission to
enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto, or any collateral securing
the Guaranteed Obligations or any part thereof; (c) any waiver of any right,
power or remedy or of any Termination Event, Amortization Event, or default with
Page 221
Exhibit 10(i)A(4)
respect to the Guaranteed Obligations or any part thereof or any agreement
relating thereto; (d) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any other
obligation of any person or entity with respect to the Guaranteed Obligations or
any part thereof; (e) the enforceability or validity of the Guaranteed
Obligations or any part thereof or the genuineness, enforceability or validity
of any agreement relating thereto or with respect to the Guaranteed Obligations
or any part thereof; (f) the application of payments received from any source to
the payment of any payment obligations of either Originator or any part thereof
or amounts which are not covered by this Undertaking even though Recipient (or
its assigns) might lawfully have elected to apply such payments to any part or
all of the payment obligations of such Originator or to amounts which are not
covered by this Undertaking; (g) the existence of any claim, setoff or other
rights which Performance Guarantor may have at any time against either
Originator in connection herewith or any unrelated transaction; (h) any
assignment or transfer of the Guaranteed Obligations or any part thereof; or (i)
any failure on the part of either Originator to perform or comply with any term
of the Agreements or any other document executed in connection therewith or
delivered thereunder, all whether or not Performance Guarantor shall have had
notice or knowledge of any act or omission referred to in the foregoing clauses
(a) through (i) of this Section 4.
Section 5. Unenforceability of Guaranteed Obligations Against Originators.
Notwithstanding (a) any change of ownership of Performance Guarantor or either
Originator or the insolvency, bankruptcy or any other change in the legal status
of either Originator; (b) the change in or the imposition of any law, decree,
regulation or other governmental act which does or might impair, delay or in any
way affect the validity, enforceability or the payment when due of the
Guaranteed Obligations (unless the same shall be applicable to the Performance
Guarantor); (c) the failure of either Originator or Performance Guarantor to
maintain in full force, validity or effect or to obtain or renew when required
all governmental and other approvals, licenses or consents required in
connection with the Guaranteed Obligations or this Undertaking, or to take any
other action required in connection with the performance of all obligations
pursuant to the Guaranteed Obligations or this Undertaking; or (d) if any of the
moneys included in the Guaranteed Obligations have become irrecoverable from
either Originator for any other reason other than final payment in full of the
payment obligations in accordance with their terms or lawful setoff of claims
against the Purchasers, this Undertaking shall nevertheless be binding on
Performance Guarantor. This Undertaking shall be in addition to any other
guaranty or other security for the Guaranteed Obligations, and it shall not be
rendered unenforceable by the invalidity of any such other guaranty or security.
In the event that acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of
either Originator or for any other reason with respect to either Originator, all
such amounts then due and owing with respect to the Guaranteed Obligations under
the terms of the Agreements, or any other agreement evidencing, securing or
otherwise executed in connection with the Guaranteed Obligations, shall be
immediately due and payable by Performance Guarantor.
Section 6. Representations and Warranties. Performance Guarantor hereby
represents and warrants to Recipient and its assigns that (a) Performance
Page 222
Exhibit 10(i)A(4)
Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of Delaware and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, and (b) this Undertaking has been duly
executed and delivered by Performance Guarantor and constitutes its legally
valid and binding obligation, enforceable against Performance Guarantor in
accordance with its terms, provided that the enforceability hereof is subject to
general principles of equity and to bankruptcy, insolvency and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
Section 7. Subrogation. Notwithstanding anything to the contrary contained
herein, until the Guaranteed Obligations are paid in full Performance Guarantor:
(a) will not enforce or otherwise exercise any right of subrogation to any of
the rights of Recipient, the Agent or Blue Ridge against either Originator, (b)
hereby waives all rights of subrogation (whether contractual, under Section 509
of the United States Bankruptcy Code, at law or in equity or otherwise) to the
claims of Recipient, the Agent and Blue Ridge against either Originator and all
contractual, statutory or legal or equitable rights of contribution,
reimbursement, indemnification and similar rights and "claims" (as that term is
defined in the United States Bankruptcy Code) which Performance Guarantor might
now have or hereafter acquire against either Originator that arise from the
existence or performance of Performance Guarantor's obligations hereunder, (c)
will not claim any setoff, recoupment or counterclaim against either Originator
in respect of any liability of Performance Guarantor to such Originator and (d)
waives any benefit of and any right to participate in any collateral security
which may be held by Beneficiaries, the Agent or Blue Ridge.
Section 8. Termination of Performance Undertaking. Performance Guarantor's
obligations hereunder shall continue in full force and effect until all
Obligations are finally paid and satisfied in full and the Credit and Security
Agreement is terminated, provided that this Undertaking shall continue to be
effective or shall be reinstated, as the case may be, if at any time payment or
other satisfaction of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the bankruptcy, insolvency, or
reorganization of either Originator or otherwise, as though such payment had not
been made or other satisfaction occurred, whether or not Recipient (or its
assigns) is in possession of this Undertaking. No invalidity, irregularity or
unenforceability by reason of the federal bankruptcy code or any insolvency or
other similar law, or any law or order of any government or agency thereof
purporting to reduce, amend or otherwise affect the Guaranteed Obligations shall
impair, affect, be a defense to or claim against the obligations of Performance
Guarantor under this Undertaking.
Section 9. Effect of Bankruptcy. This Performance Undertaking shall survive
the insolvency of either Originator and the commencement of any case or
proceeding by or against either Originator under the federal bankruptcy code or
other federal, state or other applicable bankruptcy, insolvency or
reorganization statutes. No automatic stay under the federal bankruptcy code
with respect to either Originator or other federal, state or other applicable
bankruptcy, insolvency or reorganization statutes to which either Originator is
subject shall postpone the obligations of Performance Guarantor under this
Undertaking.
Page 223
Exhibit 10(i)A(4)
Section 10. Setoff. Regardless of the other means of obtaining payment of
any of the Guaranteed Obligations, Recipient (and its assigns) is hereby
authorized at any time and from time to time during the existence of any
Amortization Event, without notice to Performance Guarantor (any such notice
being expressly waived by Performance Guarantor) and to the fullest extent
permitted by law, to set off and apply any deposits and other sums against the
obligations of Performance Guarantor under this Undertaking then past due for
more than two Business Days.
Section 11. Taxes. All payments to be made by Performance Guarantor
hereunder shall be made free and clear of any deduction or withholding (except
for taxes excluded under Section 10.1 of the Credit and Security Agreement). If
Performance Guarantor is required by law to make any deduction or withholding on
account of any Taxes or otherwise from any such payment (except for taxes
excluded under Section 10.1 of the Credit and Security Agreement), the sum due
from it in respect of such payment shall be increased to the extent necessary to
ensure that, after the making of such deduction or withholding, Recipient
receive a net sum equal to the sum which they would have received had no
deduction or withholding been made.
Section 12. Further Assurances. Performance Guarantor agrees that it will
from time to time, at the request of Recipient (or its assigns), provide
information relating to the business and affairs of Performance Guarantor as
Recipient may reasonably request.
Section 13. Successors and Assigns. This Performance Undertaking shall be
binding upon Performance Guarantor, its successors and permitted assigns, and
shall inure to the benefit of and be enforceable by Recipient and its successors
and assigns. Without limiting the generality of the foregoing sentence,
Recipient may pledge or assign, and hereby notifies Performance Guarantor that
it has pledged and assigned, this Performance Undertaking to the Agent, for the
benefit of the Lenders, as security for the Obligations, and Performance
Guarantor hereby acknowledges that the Agent may enforce this Performance
Undertaking, on behalf of Recipient and the Lenders, with the same force and
effect as though the Agent were the Recipient hereunder. Subject to Section
7.1(c)(ii) of the Credit and Security Agreement, Performance Guarantor may not
assign or transfer any of its obligations hereunder without the prior written
consent of each of Recipient and the Agent.
Section 14. Amendments and Waivers. No amendment or waiver of any provision
of this Undertaking nor consent to any departure by Performance Guarantor
therefrom shall be effective unless the same shall be in writing and signed by
Recipient, the Agent and Performance Guarantor. No failure on the part of
Recipient to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.
Section 15. Notices. All notices and other communications provided for
hereunder shall be made in writing and shall be addressed as follows: if to
Performance Guarantor, at the address set forth beneath its signature hereto,
Page 224
Exhibit 10(i)A(4)
and if to Recipient, at the addresses set forth beneath its signature to the
Credit and Security Agreement, or at such other addresses as each of Performance
Guarantor or any Recipient may designate in writing to the other. Each such
notice or other communication shall be effective (a) if given by telecopy, upon
the receipt thereof, (b) if given by mail, five (5) 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 15.
Section 16. GOVERNING LAW. THIS UNDERTAKING SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
GEORGIA.
Section 17. CONSENT TO JURISDICTION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW: (A) EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR GEORGIA STATE COURT SITTING IN XXXXXX COUNTY, GEORGIA IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS UNDERTAKING, THE AGREEMENTS OR
ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER AND
(B) EACH OF PERFORMANCE GUARANTOR AND RECIPIENT 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.
Section 18. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF PERFORMANCE GUARANTOR AND RECIPIENT 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 UNDERTAKING, THE AGREEMENTS OR ANY OTHER
DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER OR THE
RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER
Section 19. Bankruptcy Petition. Performance Guarantor 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 owed by Blue Ridge, it will not
institute against, or join any other Person in instituting against, Blue Ridge
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 20. Miscellaneous. This Undertaking constitutes the entire
agreement of Performance Guarantor with respect to the matters set forth herein.
The rights and remedies herein provided are cumulative and not exclusive of any
Page 225
Exhibit 10(i)A(4)
remedies provided by law or any other agreement, and this Undertaking shall be
in addition to any other guaranty of or collateral security for any of the
Guaranteed Obligations. The provisions of this Undertaking are severable, and in
any action or proceeding involving any state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of Performance Guarantor hereunder
would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of Performance Guarantor's liability under this
Undertaking, then, notwithstanding any other provision of this Undertaking to
the contrary, the amount of such liability shall, without any further action by
Performance Guarantor or Recipient, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding. Any provisions of this Undertaking 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 specified, references herein to "Section"
shall mean a reference to sections of this Undertaking.
{signature page follows}
Page 226
Exhibit 10(i)A(4)
IN WITNESS WHEREOF, Performance Guarantor has caused this Undertaking to be
executed and delivered as of the date first above written.
National Service Industries, Inc., A DELAWARE CORPORATION
By: ______________________________
Name: ____________________________
Title: _____________________________
Address for Notices:
NSI Center
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Telecopier: 000-000-0000
Telephone: 000-000-0000
Page 227
Exhibit 10(i)A(4)
SCHEDULE A
COMMITMENTS OF LIQUIDITY BANKS
--------------------------------------------------------------------------------
LIQUIDITY BANK COMMITMENT
-------------- ----------
Wachovia Bank, N.A. $150,000,000
Page 228
Exhibit 10(i)A(4)
SCHEDULE B
DOCUMENTS TO BE DELIVERED TO THE AGENT
ON OR PRIOR TO THE INITIAL PURCHASE
1. Executed copies of the First-Step Sale Agreement, duly executed by NSI
Enterprises and NSI Georgia, together with all closing documents required
thereunder.
2. Executed copies of the Receivables Sale Agreement, duly executed by NSI
Georgia and Borrower, together with all closing documents required thereunder.
3. Executed copies of the Credit and Security Agreement, duly executed by
the parties thereto.
4. Copy of the Resolutions of the Board of Directors of each Loan Party and
Performance Guarantor certified by its Secretary authorizing such Person's
execution, delivery and performance of this Agreement and the other documents to
be delivered by it hereunder.
5. Articles or Certificate of Incorporation of each Loan Party and
Performance Guarantor certified by the Secretary of State of its jurisdiction of
incorporation on or within thirty (30) days prior to the initial Advance.
6. Good Standing Certificate for each Loan Party and Performance Guarantor
issued by the Secretaries of State of its state of incorporation and each
jurisdiction where it has material operations, each of which is listed below:
a. Borrower: Delaware and Xxxxxxx
x. Servicer: Xxxxxxx
x. Performance Guarantor: Delaware and Xxxxxxx
x. NSI Enterprises: California and Georgia
7. A certificate of the Secretary of each Loan Party and Performance
Guarantor certifying (i) the names and signatures of the officers authorized on
its behalf to execute this Agreement and any other documents to be delivered by
it hereunder and (ii) a copy of such Person's By-Laws.
8. Pre-filing state and federal tax lien, judgment lien and UCC lien
searches against each Loan Party from the following jurisdictions:
a. Borrower: Xxxxxx County, GA and Georgia Superior Court
Cooperative Authority
Page 229
Exhibit 10(i)A(4)
b. Servicer: Xxxxxx County, GA and Georgia Superior Court
Cooperative Authority
9. Proper financing statements, duly filed under the UCC on or before the
date of the initial Advance in all jurisdictions as may be necessary or, in the
opinion of the Agent, desirable, under the UCC of all appropriate jurisdictions
or any comparable law in order to perfect the ownership interests contemplated
by this Agreement.
10. Copies of proper UCC termination statements, if any, necessary to
release all security interests and other rights of any Person in the
Receivables, Contracts or Related Security previously granted by Borrower.
11. Executed copies of Collection Account Agreements for each Lock-Box and
Collection Account.
12. A favorable opinion of legal counsel for the Loan Parties and
Performance Guarantor reasonably acceptable to the Agent which addresses the
following matters and such other matters as the Agent may reasonably request:
(a) Each of the Loan Parties and Performance Guarantor is a corporation
duly organized, validly existing, and in good standing under the laws of the
state of ______________.
(b) Each of the Loan Parties and Performance Guarantor has all requisite
authority to conduct its business in each jurisdiction where failure to be so
qualified would have a material adverse effect on such entity's business.
(c) The execution and delivery by each of the Loan Parties and Performance
Guarantor of the Transaction Document to which it is a party and its performance
of its obligations thereunder have been duly authorized by all necessary
organizational action and proceedings on the part of such entity and will not:
(i) require any action by or in respect of, or filing with, any
governmental body, agency or official (other than the filing of UCC financing
statements);
(ii) contravene, or constitute a default under, any provision of applicable
law or regulation or of its articles or certificate of incorporation or bylaws
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon such entity; or
(iii) result in the creation or imposition of any Adverse Claim on assets
of such entity or any of its Subsidiaries (except as contemplated by the
Transaction Documents).
(d) Each of the Transaction Documents to which each of the Loan Parties and
Performance Guarantor is a party has been duly executed and delivered by such
entity and constitutes the legally valid, and binding obligation of such entity
enforceable in accordance with its terms, except to the extent the enforcement
thereof may be limited by bankruptcy, insolvency or similar laws affecting the
Page 230
Exhibit 10(i)A(4)
enforcement of creditors' rights generally and subject also to the availability
of equitable remedies if equitable remedies are sought.
(e) The provisions of the Credit and Security Agreement are effective to
create valid security interests in favor of the Agent, for the benefit of the
Secured Parties, in all of Borrower's right, title and interest in and to the
Receivables and Related Security described therein which constitute "accounts,"
"chattel paper" or "general intangibles" (each as defined in the UCC)
(collectively, the "Opinion Collateral"), as security for the payment of the
Obligations.
(f) Each of the UCC-1 Financing Statements naming Borrower as debtor, and
Agent, as secured party, to be filed in the [describe filing offices], is in
appropriate form for filing therein. Upon filing of such UCC-1 Financing
Statements in such filing offices and payment of the required filing fees, the
security interest in favor of the Agent, for the benefit of the Secured Parties,
in the Opinion Collateral will be perfected.
(g) Based solely on our review of the [describe UCC Search Reports], and
assuming (i) the filing of the Financing Statements and payment of the required
filing fees in accordance with paragraph (f) and (ii) the absence of any
intervening filings between the date and time of the Search Reports and the date
and time of the filing of the Financing Statements, the security interest of the
Agent in the Opinion Collateral is prior to any security interest granted in the
Opinion Collateral by Borrower, the priority of which is determined solely by
the filing of a financing statement in the [describe filing offices].
(h) Neither of the Loan Parties is 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 an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
13. A Compliance Certificate.
14. The Fee Letter.
15. A Monthly Report as at _____________, 2001.
16. Executed copies of (i) all consents from and authorizations by any
Persons and (ii) all waivers and amendments to existing credit facilities, that
are necessary in connection with this Agreement.
17. If applicable, a direction letter executed by each of the Loan Parties
authorizing the Agent and Blue Ridge, and directing warehousemen to allow the
Agent and Blue Ridge to inspect and make copies from such Loan Party's books and
records maintained at off-site data processing or storage facilities.
18. The Liquidity Agreement, duly executed by each of the parties thereto.
Page 231
Exhibit 10(i)A(4)
19. Performance Undertaking, duly executed by the Performance Guarantor.
20. If applicable, for each Lender that is not incorporated under the laws
of the United States of America, or a state thereof, two duly completed copies
of United States Internal Revenue Service Form W-8BEN or W-8ECI, as applicable,
certifying in either case that such Lender is entitled to receive payments under
the Agreement without deduction or withholding of any United States federal
income taxes.
