Exhibit 10.1
EXECUTION COPY
AMENDMENT NO. 5
DATED AS OF JANUARY 25, 2006
TO
RECEIVABLES PURCHASE AND SERVICING AGREEMENT
DATED AS OF AUGUST 30, 2002
THIS AMENDMENT NO. 5 (this "AMENDMENT") is entered into as of January
25, 2006 by and among AVONDALE FUNDING, LLC ("FUNDING"), AVONDALE XXXXX, INC.
(the "SERVICER") and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, in its separate capacities as a committed purchaser (the "COMMITTED
PURCHASER"), and as administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") under the Receivables Purchase and Servicing Agreement referred to
below. Capitalized terms used in this Amendment which are not otherwise defined
herein shall have the meanings given such terms in Annex X to the Receivables
Purchase and Servicing Agreement, as amended hereby.
RECITALS:
WHEREAS, Funding, the Servicer, the Committed Purchaser and the
Administrative Agent are parties to a Receivables Purchase and Servicing
Agreement dated as of August 30, 2002 (as amended, restated, supplemented or
otherwise modified from time to time, the "RECEIVABLES PURCHASE AND SERVICING
AGREEMENT"); and
WHEREAS, Funding, the Servicer, the Committed Purchaser and the
Administrative Agent have agreed to amend the Receivables Purchase and Servicing
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Funding, the Servicer, the Committed Purchaser and the Administrative Agent
hereby agree as follows.
1. AMENDMENTS TO RECEIVABLES PURCHASE AND SERVICING AGREEMENT.
Effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2 below, the Receivables Purchase and
Servicing Agreement is hereby amended as follows:
(a) Section 4.01 of the Receivables Purchase and Servicing Agreement is
hereby amended to add the following clause (v) to the end of such section:
(v) Approved Insurance Policies. Each Approved Insurance Policy
insuring Transferred Receivables is in full force and effect and the
Administrative Agent and the Committed Purchasers have been identified as
loss payees
thereunder with respect to all of the applicable Transferred Receivables.
No event or circumstance has occurred and is continuing which would impair
any of the coverage of Transferred Receivables under any Approved Insurance
Policy or would entitle any insurer to terminate any Approved Insurance
Policy or any coverage of Transferred Receivables thereunder. All premiums
due under all Approved Insurance Policies have been fully paid.
(b) Section 5.01 of the Receivables Purchase and Servicing Agreement is
hereby amended to add the following clause (j) to the end of such section:
(j) Approved Insurance Policies. The Seller shall, and shall cause the
Originator to (i) maintain in full force and effect each Approved Insurance
Policy and (ii) take all actions and execute all documents as the
Administrative Agent or any Committed Purchaser may reasonably request in
order to ensure that the Administrative Agent and the Committed Purchasers
shall be loss payees under each Approved Insurance Policy. If on any date,
the Seller, the Servicer or the Originator is or becomes entitled to assert
a claim under any Approved Insurance Policy in respect of any Transferred
Receivable, the Seller (i) shall take or cause to be taken on such date or
as soon as practical thereafter (and in any event prior to the last day on
which such claim can be asserted under such Approved Insurance Policy) all
actions necessary or appropriate to assert such claim under and in
accordance with the terms of such Approved Insurance Policy and (ii) on
each day thereafter until such claim is paid in full, (x) use its
reasonable efforts (and cause the Originator and the Servicer to use their
reasonable efforts) to ensure that such claim is processed as soon as
practical thereunder, including, without limitation, by taking all action
that the applicable insurer or the Administrative Agent may reasonably
request in connection with the submission or processing of such claim and
(y) diligently enforce (and cause the Servicer and the Originator to
diligently enforce) the right to receive payment of such claim in
accordance with the terms thereof including, without limitation, by
instituting such enforcement actions against the applicable insurer as the
Administrative Agent may reasonably request in respect of such claim. The
Seller shall promptly forward to the Administrative Agent all material
notices that it or any of its Affiliates receives from the insurer of any
Approved Insurance Policy relating to any Approved Insurance Policy. The
Seller shall not cancel (and will cause the Originator not to cancel) any
Approved Insurance Policy without providing at least 15 days' prior written
notice thereof to the Administrative Agent. The Seller shall not amend any
Approved Insurance Policy without the prior written consent of the
Administrative Agent.
(c) Section 7.07 of the Receivables Purchase and Servicing Agreement is
hereby amended to add the following clause (e) to the end of such section:
(e) Approved Insurance Policies. The Servicer shall (i) maintain in
full force and effect each Approved Insurance Policy and (ii) take all
actions and execute all documents as the Administrative Agent or any
Committed Purchaser may reasonably request in order to ensure that the
Administrative Agent and the
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Committed Purchasers shall be loss payees under each Approved Insurance
Policy. If on any date the Seller, the Servicer or the Originator is or
becomes entitled to assert a claim under any Approved Insurance Policy in
respect of any Transferred Receivable, the Servicer (i) shall take or cause
to be taken on such date or as soon as practical thereafter (and in any
event prior to the last day on which such claim can be asserted under such
Approved Insurance Policy) all actions necessary or appropriate to assert
such claim under and in accordance with the terms of such Approved
Insurance Policy and (ii) on each day thereafter until such claim is paid
in full, (x) use its reasonable efforts to ensure that such claim is
processed as soon as practical thereunder, including, without limitation,
by taking all action that the applicable insurer or the Administrative
Agent may reasonably request in connection with the submission or
processing of such claim and (y) diligently enforce the right to receive
payment of such claim in accordance with the terms thereof including,
without limitation, by instituting such enforcement actions against the
insurer as the Administrative Agent may reasonably request in respect of
such claim. The Servicer shall promptly forward to the Administrative Agent
all material notices that it receives from the insurer of any Approved
Insurance Policy relating to any Approved Insurance Policy.
(d) The definition of "Activation Event" appearing in Annex X of the
Receivables Purchase and Servicing Agreement is hereby amended and restated in
its entirety to read as follows:
"Activation Event" means, at any date, that Liquidity Availability is
less than the Specified Amount at such date and the average Liquidity
Availability during the four week period immediately preceding such date is
the Specified Amount or less, with such Activation Event being deemed to
exist thereafter until such time, if any, as a Deactivation Event shall
occur.
(e) The definition of "Availability Block" appearing in Annex X of the
Receivables Purchase and Servicing Agreement is hereby amended and restated in
its entirety to read as follows:
"Availability Block" means (i) for the period from January 25, 2006
until May 31, 2007, $0; provided, that, if an Insurance Event occurs during
such period, the "Availability Block" shall mean $10,000,000, and (ii) at
all times after May 31, 2007, $10,000,000.
(f) The definition of "Deactivation Event" appearing in Annex X of the
Receivables Purchase and Servicing Agreement is hereby amended and restated in
its entirety to read as follows:
"Deactivation Event" means, subsequent to any Activation Event, any
period of 90 consecutive days during which Liquidity Availability at all
times exceeds the Specified Amount and at the end of such 90-day period no
Termination Event, Incipient Termination Event, Servicer Termination Event
or Incipient Servicer Termination Event has occurred and is then
continuing.
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(g) The definition of "Eligible Receivable" appearing in Annex X of the
Receivables Purchase and Servicing Agreement is hereby amended to amend and
restate clause (b) of such definition in its entirety as follows:
(b) that is not a liability of an Obligor (i) organized under the laws
of any jurisdiction outside of the United States of America (including the
District of Columbia but otherwise excluding its territories and
possessions) or (ii) having its principal place of business outside of the
United States of America (including the District of Columbia but otherwise
excluding its territories and possessions) or Canada; provided, that a
Transferred Receivable otherwise satisfying the requirements of "Eligible
Receivable" but for this clause (b) may constitute an Eligible Receivable
(x) if and solely to the extent that the payment thereof is (i) insured by
an Approved Insurance Policy (without giving effect to any deductible
applicable thereto) that is in full force and effect or (ii) supported by a
letter of credit issued by a financial institution reasonably acceptable to
the Administrative Agent and (y) if and solely to the extent that the
Outstanding Balance of such Transferred Receivable, when added to the
Outstanding Balance of all other Transferred Receivables then constituting
"Eligible Receivables" by reason of this proviso, does not exceed an amount
equal to $8,500,000; provided, further, that, a Transferred Receivable that
constitutes an "Eligible Receivable" by reason of the preceding proviso
shall not constitute an "Eligible Receivable" to the extent that the
applicable insurer has denied that it is liable for the payment on such
Transferred Receivable under the applicable Approved Insurance Policy;
(h) The definition of "Maximum Purchase Limit" appearing in Annex X of the
Receivables Purchase and Servicing Agreement is hereby amended and restated in
its entirety to read as follows:
"Maximum Purchase Limit" shall mean $50,000,000, as such amount may be
reduced in accordance with Section 2.02(a) of the Purchase Agreement.
(i) Clause (iii) of the definition of "Special Limit" appearing in Annex X
of the Receivables Purchase and Servicing Agreement is amended to delete the
reference to the percentage "10%" appearing in such clause and to replace such
percentage with the percentage "15%."
(j) Annex X of the Receivables Purchase and Servicing Agreement is hereby
amended to add the following defined terms in the appropriate alphabetical
locations:
"Approved Insurance Policy" means any credit insurance policy (i) of
which the Administrative Agent and each Committed Purchaser has become a
loss payee in respect of the Transferred Receivables covered under such
credit insurance policy, (ii) underwritten by (A) Euler Hermes ACI (unless
the Administrative Agent reasonably determines that the credit quality of
Euler Hermes ACI has materially and adversely deteriorated since January 1,
2006) or (B) another insurer approved in writing by the Administrative
Agent in its sole
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discretion and (iii) satisfying such other criteria as the Administrative
Agent deems to be relevant in the exercise of its reasonable credit
judgment.
"Insurance Event" means the receipt by Avondale Incorporated and its
Subsidiaries from the insurance providers of Avondale Incorporated and its
Subsidiaries, in connection with the train collision, train derailment,
release of chlorine and other gases, and other events occurring because of
the foregoing described train collision, train derailment and release of
chlorine and other gases near the facilities of Avondale Incorporated and
its Subsidiaries in Graniteville, South Carolina on January 6, 2005 (the
"Derailment"), of an amount that is at least $60,000,000 more that the
amounts actually paid by Avondale Incorporated and its Subsidiaries in
connection with the chlorine abatement and rehabilitation of the chlorine
damage in connection with the Derailment.
"Specified Amount" means (i) for the period from January 20, 2006
until May 31, 2007, (A) if no Insurance Event has occurred, $10,000,000 or
(B) if an Insurance Event has occurred, $20,000,000 and (ii) at all times
after May 31, 2007, $20,000,000.
(k) Annex G to the Receivables Purchase and Servicing Agreement is hereby
amended to amend and restate paragraphs (a) and (b) of thereof in their entirety
as follows:
(a) Minimum Fixed Charge Coverage Ratio. With respect to any
Fiscal Quarter in which Liquidity Availability falls below the Specified
Amount and average Liquidity Availability during the four calendar week
period immediately preceding such date is the Specified Amount or less,
Parent and its Subsidiaries shall have on a consolidated basis, as of the
end of the most recent calendar month, a Fixed Charge Coverage Ratio for
the 12-month period then ended of not less than 1.0 to 1.0.
(b) Minimum EBITDA. With respect to any Fiscal Quarter in which
Liquidity Availability falls below the Specified Amount and average
Liquidity Availability during the four calendar week period immediately
preceding such date is the Specified Amount or less, Parent and its
Subsidiaries on a consolidated basis shall have, as of the end of the most
recent calendar month, as set forth below, EBITDA for the 12-month period
then ended of not less than $35,000,000.
2. CONDITIONS OF EFFECTIVENESS OF THIS AMENDMENT. This Amendment shall
become effective as of the date hereof (the "EFFECTIVE DATE") when, and only
when, the Administrative Agent shall have received each of the following:
(a) counterparts of this Amendment duly executed by each of Funding, the
Servicer, the Committed Purchaser, the Administrative Agent and the Collateral
Agent; and
(b) evidence that each of the conditions precedent to the effectiveness of
that certain Amendment No. 4 to Credit Agreement among Avondale Xxxxx, Inc.,
Avondale Xxxxx
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Graniteville Fabrics, Inc. and General Electric Capital Corporation in its
respective capacities as Lender and as Agent have been satisfied.
3. REPRESENTATIONS AND WARRANTIES.
3.1 Upon the effectiveness of this Amendment, each of Funding and the
Servicer (a) hereby reaffirms all covenants, representations and warranties made
by it in the Receivables Purchase and Servicing Agreement and each other Related
Document to the extent the same are not amended hereby and except to the extent
the same expressly relates solely to an earlier date, (b) agrees that all such
covenants, representations and warranties shall be deemed to have been re-made
as of the Effective Date, (c) represents and warrants that, as of the Effective
Date and after giving effect hereto, no Termination Event, Incipient Termination
Event, Event of Servicer Termination or Incipient Servicer Termination Event has
occurred and is continuing and (d) represents and warrants that no event or
circumstance has occurred since the Closing Date that has resulted, or could
reasonably be expected to result in, a Material Adverse Effect.
3.2 Each of Funding and the Servicer hereby represents and warrants
that this Amendment and each of the Receivables Purchase and Servicing
Agreement, as amended hereby, (i) are within the corporate or limited liability
company powers of such Person, (ii) have been duly authorized by all necessary
corporate or limited liability company action, (iii) have received all necessary
governmental approvals, (iv) do not and will not contravene or conflict with any
provision of law or the applicable charter, by-laws, operating agreement or
other organizational documents of such Person or any such Person and (v)
constitute legal, valid and binding obligations of such Person and are
enforceable against such Person in accordance with their respective terms.
4. REFERENCE TO AND EFFECT ON RELATED DOCUMENTS.
4.1 Upon the effectiveness of this Amendment pursuant to Section 2
hereof, on and after the Effective Date, each reference to Annex X and the
Receivables Purchase and Servicing Agreement in any of the Related Documents
shall mean and be a reference to Annex X or the Receivables Purchase and
Servicing Agreement, as the case may be, as amended hereby.
4.2 Except as specifically set forth above, Annex X and the
Receivables Purchase and Servicing Agreement, and all other documents,
instruments and agreements executed and/or delivered in connection therewith,
shall remain in full force and effect, and are hereby ratified and confirmed.
4.3 The execution, delivery and effectiveness of this Amendment shall
neither, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Funding, the Committed Purchaser, the Administrative Agent or
the Collateral Agent, nor constitute a waiver of any provision of any of the
Related Documents, or any other documents, instruments and agreements executed
and/or delivered in connection therewith.
4.4 Each party hereto agrees and acknowledges that this Amendment
constitutes a Related Document under and as defined in the Receivables Purchase
and Servicing Agreement.
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5. HEADINGS. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
6. COUNTERPARTS. This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
7. ENTIRE AGREEMENT. This Amendment, taken together with the
Receivables Purchase and Servicing Agreement and all of the other Related
Documents, embodies the entire agreement and understanding of the parties hereto
and supersedes all prior agreements and understandings, written and oral,
relating to the subject matter hereof.
8. GOVERNING LAW. THIS AMENDMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES).
9. NO COURSE OF DEALING. The Committed Purchaser and the
Administrative Agent have entered into this Amendment on the express
understanding with Funding and the Servicer that in entering into this Amendment
the Committed Purchaser and the Administrative Agent are not establishing any
course of dealing with Funding or the Servicer. The rights of the Committed
Purchaser and the Administrative Agent to require strict performance with all
the terms and conditions of the Receivables Purchase and Servicing Agreement as
amended by this Amendment and the other Related Documents shall not in any way
be impaired by the execution of this Amendment. Neither the Committed Purchaser
nor the Administrative Agent shall be obligated in any manner to execute any
further amendments or waivers, and if such waivers or amendments are requested
in the future, assuming the terms and conditions thereof are acceptable to them,
the Committed Purchaser and the Administrative Agent may require the payment of
fees in connection therewith.
10. WAIVER OF CLAIMS. In consideration for the execution by the
Committed Purchaser and the Administrative Agent of this Amendment, each of
Funding and the Servicer hereby waives each and every claim, defense, demand,
action and suit of any kind or nature whatsoever against each of the Committed
Purchaser, the Administrative Agent, the Operating Agent, the Collateral Agent
and each other Affected Party arising on or prior to the date hereof in
connection with the Purchase Agreement, any of the Related Documents and the
transactions contemplated thereby.
11. EXPENSES. In consideration for the execution by the Committed
Purchaser, the Administrative Agent and the Collateral Agent of this Amendment,
each of Funding and the Servicer severally agrees to promptly reimburse each of
the Committed Purchaser, the Administrative Agent and the Collateral Agent for
all of the reasonable out-of-pocket expenses, including, without limitation,
attorneys' and paralegals' fees and expenses, it
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has heretofore or hereafter incurred or incurs in connection with the
preparation, negotiation and execution of this Amendment.
12. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon each
of Funding and the Servicer, the Committed Purchaser, the Administrative Agent
and the Collateral Agent and their respective successors and assigns and shall
inure to the benefit of each such Person.
13. INTEGRATION. This Amendment contains the entire understanding of
the parties hereto with regard to the subject matter contained herein. This
Amendment supercedes all prior or contemporaneous negotiations, promises,
covenants, agreements and representations of every nature whatsoever with
respect to the matters contained in this Amendment, all of which have become
merged and finally integrated into this Amendment. Each of the parties hereto
understands that in the event of any subsequent litigation, controversy or
dispute concerning any of the terms, conditions or provisions of this Amendment,
no party shall be entitled to offer or introduce into evidence any oral promises
or oral agreements among the parties relating to the subject matter of this
Amendment not included or referred to herein and not reflected by a writing
included or referred to herein.
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IN WITNESS WHEREOF, this Amendment No. 5 has been duly executed as of
the day and year first above written.
AVONDALE FUNDING, LLC
By:
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Name:
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Title:
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AVONDALE XXXXX, INC., as the Servicer
By:
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Name:
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Title:
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GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Purchaser
By:
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Name:
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Title: Duly Authorized Signatory
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By:
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Name:
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Title: Duly Authorized Signatory
Acknowledged and Agreed to as of the
date first written above:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent
By:
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Name:
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Title: Duly Authorized Signatory
