Exhibit 10.1
================================================================================
RECEIVABLES SALE AGREEMENT
DATED AS OF APRIL 28, 2005
AMONG
WOLVERINE TUBE, INC., TUBE FORMING, LP AND SMALL TUBE
MANUFACTURING LLC,
AS ORIGINATORS,
AND
DEJ 98 FINANCE, LLC,
AS BUYER
================================================================================
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE................................ 5
Section 1.1 Initial Contribution of Receivables......................... 5
Section 1.2 Purchase of Receivables..................................... 5
Section 1.3 Payment for the Purchases................................... 6
Section 1.4 Sale Price Credit Adjustments............................... 7
Section 1.5 Payments and Computations, Etc.............................. 8
Section 1.6 License of Software......................................... 8
ARTICLE II REPRESENTATIONS AND WARRANTIES.................................. 9
Section 2.1 Representations and Warranties of Originators............... 9
(a) Existence and Power............................................... 9
(b) Power and Authority; Due Authorization, Execution and Delivery.... 9
(c) No Conflict....................................................... 10
(d) Governmental Authorization........................................ 10
(e) Actions, Suits.................................................... 10
(f) Binding Effect.................................................... 10
(g) Accuracy of Information........................................... 10
(h) Use of Proceeds................................................... 10
(i) Good Title........................................................ 11
(j) Perfection........................................................ 11
(k) Places of Business and Locations of Records....................... 11
(l) Collections....................................................... 11
(m) Material Adverse Effect........................................... 11
(n) Names............................................................. 11
(o) Ownership of Buyer................................................ 12
(p) Not a Holding Company or an Investment Company.................... 12
(q) Compliance with Law............................................... 12
(r) Compliance with Credit and Collection Policy...................... 12
(s) Payments to such Originator....................................... 12
(t) Enforceability of Contracts....................................... 12
(u) Eligible Receivables.............................................. 13
(v) Accounting........................................................ 13
(w) OFAC.............................................................. 13
ARTICLE III CONDITIONS OF PURCHASE......................................... 13
Section 3.1 Conditions Precedent to Purchase............................ 13
Section 3.2 Conditions Precedent to Subsequent Payments................. 13
S-i
ARTICLE IV COVENANTS....................................................... 14
Section 4.1 Affirmative Covenants of Originators........................ 14
(a) Financial Reporting............................................... 14
(i) Annual Reporting......................................... 14
(ii) Quarterly Reporting...................................... 14
(iii) Compliance Certificate................................... 14
(iv) Shareholders Statements and Reports...................... 14
(v) S.E.C. Filings........................................... 14
(vi) Copies of Notices........................................ 14
(vii) Change in Credit and Collection Policy................... 14
(viii) Other Information........................................ 15
(b) Notices........................................................... 15
(i) Termination Events or Unmatured Termination Events....... 15
(ii) Judgment and Proceedings................................. 15
(iii) Material Adverse Effect.................................. 15
(iv) Defaults Under Other Agreements.......................... 15
(v) ERISA Events............................................. 15
(c) Compliance with Laws and Preservation of Existence................ 15
(d) Audits............................................................ 16
(e) Keeping and Marking of Records and Books.......................... 16
(f) Compliance with Contracts and Credit and Collection Policy........ 17
(g) Ownership......................................................... 17
(h) Purchasers' Reliance.............................................. 17
(i) Collections....................................................... 18
(j) Taxes............................................................. 18
Section 4.2 Negative Covenants of Originators........................... 18
(a) Name Change, Offices and Records.................................. 18
(b) Change in Payment Instructions to Obligors........................ 18
(c) Modifications to Contracts and Credit and Collection Policy....... 19
(d) Sales, Liens...................................................... 19
(e) Accounting for Purchase........................................... 19
ARTICLE V TERMINATION EVENTS............................................... 19
Section 5.1 Termination Events.......................................... 19
Section 5.2 Remedies.................................................... 21
ARTICLE VI INDEMNIFICATION................................................. 21
Section 6.1 Indemnities by Originators.................................. 21
Section 6.2 Other Costs and Expenses.................................... 24
ARTICLE VII MISCELLANEOUS.................................................. 24
Section 7.1 Waivers and Amendments...................................... 24
ii
Section 7.2 Notices..................................................... 24
Section 7.3 Protection of Ownership Interests of Buyer.................. 24
Section 7.4 Confidentiality............................................. 26
Section 7.6 Limitation of Liability..................................... 27
Section 7.7 CHOICE OF LAW............................................... 27
Section 7.8 CONSENT TO JURISDICTION..................................... 27
Section 7.9 WAIVER OF JURY TRIAL........................................ 28
Section 7.10 Integration; Binding Effect; Survival of Terms.............. 28
Section 7.11 Counterparts; Severability; Section References.............. 29
EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records; Federal
Employer Identification Number; Other Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - Form of Compliance Certificate
Exhibit V - Copy of Credit and Collection Policy
Exhibit VI - Form of Subordinated Note
Exhibit VII - Form of Purchase Report
Schedule A - List of Documents to Be Delivered to Buyer Prior to the Purchases
iii
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of April 28, 2005, is by and
among WOLVERINE TUBE, INC., a Delaware corporation ("PARENT"), TUBE FORMING, LP,
a Delaware limited partnership and SMALL TUBE MANUFACTURING LLC, a Delaware
limited liability company (each of the foregoing including Parent, an
"ORIGINATOR" and collectively, the "ORIGINATORS"), and DEJ 98 FINANCE, LLC, a
Delaware limited liability company ("BUYER"). UNLESS DEFINED ELSEWHERE HEREIN,
CAPITALIZED TERMS USED IN THIS AGREEMENT SHALL HAVE THE MEANINGS ASSIGNED TO
SUCH TERMS IN EXHIBIT I HERETO (OR, IF NOT DEFINED IN EXHIBIT I HERETO, THE
MEANINGS ASSIGNED TO SUCH TERMS IN EXHIBIT I TO THE PURCHASE AGREEMENT).
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time hereafter will
own, Receivables. Each of the Originators wishes to sell and assign to
Buyer, and Buyer wishes to purchase from each Originator, all of such
Originator's right, title and interest in and to its Receivables, together
with the Related Security and Collections with respect thereto.
Each of the Originators and Buyer intends the transactions
contemplated hereby to be true sales to Buyer by such Originator of the
Receivables originated by it, providing Buyer with the full benefits of
ownership of such Receivables, and none of the Originators nor Buyer
intends these transactions to be, or for any purpose to be characterized
as, loans from Buyer to such Originator.
Following the purchase of Receivables from each Originator, Buyer will
sell undivided interests therein and in the associated Related Security and
Collections pursuant to that certain Receivables Purchase Agreement dated
as of April 28, 2005 (as the same may from time to time hereafter be
amended, supplemented, restated or otherwise modified, the "PURCHASE
AGREEMENT") among Buyer, Wolverine Finance, LLC, a Tennessee limited
liability company ("WOLVERINE FINANCE"), as initial Servicer, Blue Ridge
Asset Funding Corporation ("BLUE RIDGE"), and Wachovia Bank, National
Association, individually ("WACHOVIA") and as agent (in such capacity,
together with any successor agent appointed pursuant to the terms of the
Purchase Agreement, the "AGENT").
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
4
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Initial Contribution of Receivables. On the date hereof, Parent
does hereby contribute, assign, transfer, set-over and otherwise convey to
Buyer, and Buyer does hereby accept from Parent, Receivables originated by
Parent and existing as of the close of business on the Business Day immediately
prior to the date hereof (the "INITIAL CUTOFF DATE") having an aggregate
Outstanding Balance of $39,651,962 (the "INITIAL CONTRIBUTED RECEIVABLES"),
together with all Related Security relating thereto and all Collections thereof.
Section 1.2 Purchase of Receivables.
(a) Effective on the date hereof, in consideration for the Sale Price
paid to each Originator and upon the terms and subject to the conditions set
forth herein, each Originator does hereby sell, assign, transfer, set-over and
otherwise convey to Buyer, without recourse (except to the extent expressly
provided herein), and Buyer does hereby purchase from such Originator, all of
such Originator's right, title and interest in and to all Receivables originated
by such Originator and existing as of the close of business on the Initial
Cutoff Date (other than the Initial Contributed Receivables) and all Receivables
thereafter originated by such Originator through and including the Termination
Date, together, in each case, with all Related Security relating thereto and all
Collections thereof. In accordance with the preceding sentence, on the date
hereof Buyer shall acquire all of each Originator's right, title and interest in
and to all Receivables existing as of the Initial Cutoff Date (other than the
Initial Contributed Receivables) and thereafter arising through and including
the Termination Date, together with all Related Security relating thereto and
all Collections thereof. Buyer shall be obligated to pay the Sale Price for the
Receivables purchased hereunder from each Originator in accordance with Section
1.3.
(b) On the 20th day of each month hereafter (or if any such day is not
a Business Day, on the next succeeding Business Day thereafter, each Originator
shall (or shall require the Servicer to) deliver to Buyer a report in
substantially the form of Exhibit VII hereto (each such report being herein
called a "PURCHASE REPORT") with respect to the Receivables sold by such
Originator to Buyer during the Settlement Period then most recently ended. In
addition to, and not in limitation of, the foregoing, in connection with the
payment of the Sale Price for any Receivables purchased hereunder, Buyer may
request that the applicable Originator deliver, and such Originator shall
deliver, such approvals, opinions, information or documents as Buyer may
reasonably request.
(c) It is the intention of the parties hereto that each Purchase of
Receivables from an Originator made hereunder shall constitute a sale, which
sale is absolute and irrevocable and provides Buyer with the full benefits of
ownership of the Receivables originated by such Originator. Except for the Sale
Price Credits owed to such Originator pursuant to Section 1.4, the sale of
Receivables hereunder by each Originator is made without recourse to such
Originator;
5
PROVIDED, HOWEVER, that (i) such Originator shall be liable to Buyer for all
representations, warranties, covenants and indemnities made by such Originator
pursuant to the terms of the Transaction Documents to which such Originator is a
party, and (ii) such sale does not constitute and is not intended to result in
an assumption by Buyer or any assignee thereof of any obligation of such
Originator or any other Person arising in connection with the Receivables, the
related Contracts and/or other Related Security or any other obligations of such
Originator. In view of the intention of the parties hereto that each Purchase of
Receivables made hereunder shall constitute a sale of such Receivables rather
than loans secured thereby, each Originator agrees that it will, on or prior to
the date hereof and in accordance with Section 4.1(e)(ii), xxxx its master data
processing records relating to the Receivables originated by it with a legend
acceptable to Buyer and to the Agent (as Buyer's assignee), evidencing that
Buyer has purchased such Receivables as provided in this Agreement and to note
in its financial statements that its Receivables have been sold to Buyer. Upon
the request of Buyer or the Agent (as Buyer's assignee), each Originator will
execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate to perfect and maintain the perfection of Buyer's
ownership interest in the Receivables originated by such Originator and the
Related Security and Collections with respect thereto, or as Buyer or the Agent
(as Buyer's assignee) may reasonably request.
Section 1.3 Payment for the Purchases.
(a) Buyer is obligated to pay the Sale Price for the Purchase from
each Originator of its Receivables in existence as of the close of business on
the Initial Cutoff Date (other than the Initial Contributed Receivables) in full
to such Originator on the date hereof, and such Sale Price shall be paid to such
Originator in the following manner:
(i) by delivery of immediately available funds to the applicable
Originator or to such bank account (the "DESIGNATED ACCOUNT") for the account of
such Originator as such Originator may designate in writing to Buyer, to the
extent Buyer has funds available from Collections and/or the sale of interests
pursuant to the Purchase Agreement, and
(ii) the balance, by delivery of the proceeds of a subordinated
revolving loan from such Originator to Buyer (a "SUBORDINATED LOAN") in an
amount not to exceed the least of (A) the remaining unpaid portion of such Sale
Price, (B) the maximum Subordinated Loan that could be borrowed without
rendering Buyer's Net Worth less than the Required Capital Amount, and (C)
fifteen percent (15%) of such Sale Price. Each Originator is hereby authorized
by Buyer to endorse on the schedule attached to its Subordinated Note an
appropriate notation evidencing the date and amount of each advance thereunder,
as well as the date of each
6
payment with respect thereto, PROVIDED THAT the failure to make such notation
shall not affect any obligation of Buyer thereunder.
The Sale Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and owing in full by Buyer, and Buyer is obligated to
pay such Sale Price, to the applicable Originator or its designee on the date
each such Receivable came into existence (except that Buyer may, with respect to
any such Sale Price, offset against such Sale Price any amounts owed by such
Originator to Buyer hereunder and which have become due but remain unpaid) and
shall be paid to such Originator in the manner provided in the following
paragraphs (b) and (c).
(b) With respect to any Receivables coming into existence after the
Initial Cutoff Date, on each Business Day, Buyer shall pay the applicable
Originator the Sale Price therefor in the following manner and order:
FIRST, by delivery of immediately available funds to the
applicable Originator or to the Designated Account, as the case may be, to
the extent Buyer has funds available from Collections and/or the sale of
interests pursuant to the Purchase Agreement;
SECOND, by delivery to the applicable Originator or its designee
of the proceeds of a Subordinated Loan, PROVIDED THAT the making of any
such Subordinated Loan shall be subject to the provisions set forth in
Section 1.3(a)(ii); and
THIRD, solely in the case of Receivables originated by Parent,
unless the Termination Date has occurred in accordance with this Agreement,
by accepting a contribution to its capital in an amount equal to the
remaining unpaid balance of such Sale Price.
Subject to the limitations set forth in Section 1.3(a)(ii), each Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to the Termination Date. The Subordinated Loans owing to each Originator
shall be evidenced by, and shall be payable in accordance with the terms and
provisions of its Subordinated Note and shall be payable solely from funds which
Buyer is not required under the Purchase Agreement to set aside for the benefit
of, or otherwise pay over to, the Purchasers.
(c) From and after the Termination Date, (i) no Originator shall be
obligated to (but may, at its option) sell Receivables to Buyer, and (ii) Parent
shall not be obligated to (but may, at its option) contribute Receivables to
Buyer's capital pursuant to clause THIRD of Section 1.3(b).
Section 1.4 Sale Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable purchased from any
Originator is:
(i) reduced as a result of any defective or rejected or returned
goods or services, any discount or any adjustment or otherwise by such
7
Originator (other than as a result of such Receivable becoming a Defaulted
Receivable or to reflect cash Collections on account of such Receivable),
(ii) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in Sections
2.1(h), (i), (j), (l), (r), (s), (t), (u), the second sentence of Section 2.1(q)
hereof and the last clause (relating to bulk sales laws) of Section 2.1(c) are
not true when made or deemed made with respect to any Receivable,
then, in such event, Buyer shall be entitled to a credit (each, a "SALE PRICE
CREDIT") against the Sale Price otherwise payable to the applicable Originator
hereunder equal to the Outstanding Balance of such Receivable (calculated before
giving effect to the applicable reduction or cancellation). If such Sale Price
Credit exceeds the Original Balance of the Receivables originated by the
applicable Originator on any day, such Originator shall pay the remaining amount
of such Sale Price Credit in cash on such day, PROVIDED THAT if the Termination
Date has not occurred, such Originator shall be allowed to deduct the remaining
amount of such Sale Price Credit from any indebtedness owed to it under its
Subordinated Note.
Section 1.5 Payments and Computations, Etc. All amounts to be paid or
deposited by Buyer hereunder shall be paid or deposited in accordance with the
terms hereof on the day when due in immediately available funds to the account
of the applicable Originator designated from time to time by such Originator or
as otherwise directed by such Originator. In the event that any payment owed by
any Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand, the
Default Fee in respect thereof until paid in full; PROVIDED, HOWEVER, that such
Default Fee shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
Section 1.6 License of Software.
(a) To the extent that any software used by any Originator to account
for the Receivables originated by it is non-transferable, such Originator hereby
grants to each of Buyer, the Agent and the Servicer an irrevocable,
non-exclusive license to use, without royalty or payment of any kind, all such
software used by such Originator to account for such Receivables, to the extent
necessary to administer such Receivables, whether such software is owned by such
Originator or is owned by others and used by such Originator under license
agreements with respect thereto, PROVIDED THAT should the consent of any
licensor of such software be required for the grant of the license described
herein, to be effective, such Originator hereby agrees that upon the request of
Buyer (or Buyer's assignee), such Originator will use its reasonable efforts to
obtain the consent of such third-party licensor. The license granted hereby
shall be irrevocable until the later to
8
occur of (i) indefeasible payment in full of the Aggregate Unpaids (as defined
in the Purchase Agreement), and (ii) the date each of this Agreement and the
Purchase Agreement terminates in accordance with its terms.
(b) Each Originator (i) shall take such reasonable action requested by
Buyer and/or the Agent (as Buyer's assignee), from time to time hereafter, that
may be necessary or appropriate to ensure that Buyer and its assigns under the
Purchase Agreement have an enforceable ownership interest in the Records
relating to the Receivables purchased from such Originator hereunder, and (ii)
shall use its reasonable efforts to ensure that Buyer, the Agent and the
Servicer each has an enforceable right (whether by license or sublicense or
otherwise) to use all of the computer software used to account for such
Receivables and/or to recreate such Records.
Section 1.7 UCC. All transactions contemplated or evidenced by this
Agreement, including the sale or contribution by an Originator to Buyer of
Receivables hereunder shall be subject to Article 9 of the UCC and other
applicable law. Buyer and its assigns shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies
provided to a secured creditor under the UCC and other applicable law, which
rights and remedies shall be cumulative.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originators. Each Originator
hereby represents and warrants to Buyer on the date hereof, on the date of the
Purchase or contribution from such Originator hereunder and on each date that
any Receivable is originated by such Originator on or after the date of such
Purchase or contribution, that:
(a) Existence and Power. Such Originator is a corporation, limited
liability company or limited partnership, duly organized under the laws of the
state set forth after its name in the preamble to this Agreement (the
"APPLICABLE STATE"), and no other state or jurisdiction. Such Originator is
validly existing and in good standing under the laws of its Applicable State and
is duly qualified to do business and is in good standing as a foreign entity,
and has and holds all power and all governmental licenses, authorizations,
consents and approvals required to carry on its business in each jurisdiction in
which its business is conducted except where the failure to so qualify or so
hold could not reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery.
The execution and delivery by such Originator of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder, and such Originator's use of the proceeds
of the Purchase made from it hereunder, are within its organizational powers and
authority and have been duly authorized by all necessary organizational action
on its part. This Agreement and each other Transaction Document to which such
Originator is a party has been duly executed and delivered by such Originator.
9
(c) No Conflict. The execution and delivery by such Originator of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its Organizational Documents, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Originator or its Subsidiaries (except as
created hereunder) except, in any case, where such contravention or violation
could not reasonably be expected to have a Material Adverse Effect; and no
transaction contemplated hereby requires compliance with any bulk sales act or
similar law.
(d) Governmental Authorization. Other than the filing of the 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 Originator of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Originator's knowledge, threatened, against or
affecting such Originator, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Originator is not in default with respect to any order of
any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction Document
to which such Originator is a party constitute the legal, valid and binding
obligations of such Originator enforceable against such Originator in accordance
with their respective terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) Accuracy of Information. All information heretofore furnished by
such Originator or any of its Affiliates to Buyer (or its assigns) for purposes
of or in connection with this Agreement, any of the other Transaction Documents
or any transaction contemplated hereby or thereby is, and all such information
hereafter furnished by such Originator or any of its Affiliates to Buyer (or its
assigns) will be, true and accurate in every material respect on the date such
information is stated or certified and not incomplete by omitting to state any
material fact necessary to make such information not misleading at such time.
There is no fact now known to any Authorized Officer of any Originator which
has, or would reasonably be expected to have, a Material Adverse Effect which
fact has not been set forth herein, in the financial statements, or any
certificate, opinion or other written statement made or furnished by such
Originator or any of its Affiliates to Buyer.
(h) Use of Proceeds. No portion of any Sale Price payment hereunder
will be used (i) for a purpose that violates, or would be inconsistent with, any
law, rule or regulation applicable to such Originator or (ii) to acquire any
security in any transaction which is subject to Section 12, 13 or 14 of the
Securities Exchange Act of 1934, as amended.
10
(i) Good Title. Immediately prior to the Purchase or contribution from
such Originator hereunder and upon the creation of each Receivable originated by
such Originator after the Initial Cut-Off Date, such Originator (i) is the legal
and beneficial owner of such 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 as created by the Transaction Documents. There have been duly
filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect such Originator's ownership interest in each such Receivable, its
Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to transfer to Buyer (and
Buyer shall acquire from such Originator) (i) legal and equitable title to, with
the right to sell and encumber each Receivable originated by such Originator,
whether now existing and hereafter arising, together with the Collections with
respect thereto, and (ii) all of such Originator's right, title and interest in
the Related Security associated with each such Receivable, in each case, free
and clear of any Adverse Claim, except as created by the Transactions Documents.
There have been duly filed all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Buyer's ownership interest in such Receivables, the
Related Security and the Collections.
(k) Places of Business and Locations of Records. The principal places
of business and chief executive office of such Originator and the offices where
it keeps all of its Records are located at the address(es) listed on Exhibit II
or such other locations of which Buyer has been notified in accordance with
Section 4.2(a) in jurisdictions where all action required by Section 4.2(a) has
been taken and completed. such Originator's Federal Employer Identification
Number is correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements set forth in Section
4.1(i) have at all times been satisfied and duly performed. The names and
addresses of all Collection Banks, together with the account numbers of the
Collection Accounts of such Originator at each Collection Bank and the post
office box number of each Lock-Box, are listed on Exhibit III. Such Originator
has not granted any Person, other than Buyer (and its assigns) 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 except that such Originator has instructed the
Agent to assign its interest in the Collection Accounts and Lock-Boxes to
Wachovia in its capacity as lender under the [ABL Credit Agreement] upon
termination of all commitments under the Purchase Agreement and payment in full
of the Aggregate Unpaids (under and as defined in the Purchase Agreement).
(m) Material Adverse Effect. Since December 31, 2004, no event has
occurred that would have a Material Adverse Effect.
(n) Names. The name in which such Originator has executed this
Agreement is identical to the name of such Originator as indicated on the public
record of its state of organization which shows such Originator to have been
organized. In the past five (5)
11
years, such Originator 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 II.
(o) Ownership of Buyer. Parent owns, directly or indirectly, 100% of
the issued and outstanding non-voting Equity Interests, and 49% of the voting
Equity Interests, of Buyer. Such Equity Interests are validly issued, fully paid
and nonassessable, and there are no options, warrants or other rights to acquire
securities of Buyer.
(p) Not a Holding Company or an Investment Company. Such Originator 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. Such Originator is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Such Originator has complied in all respects
with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (INCLUDING, WITHOUT
LIMITATION, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation, except where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Originator has
complied in all material respects with the Credit and Collection Policy with
regard to each Receivable originated by it and the related Contract, and has not
made any change to such Credit and Collection Policy, except such material
change as to which Buyer (or its assigns) has been notified in accordance with
Section 4.1(a)(vii).
(s) Payments to such Originator. With respect to each Receivable
originated by such Originator and sold to Buyer hereunder, the Sale Price
received by such Originator constitutes reasonably equivalent value in
consideration therefor. No transfer hereunder by such Originator of any
Receivable originated by such Originator is or may be voidable under any section
of the Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101 et seq.), as
amended.
(t) Enforceability of Contracts. Each Contract with respect to each
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
12
(u) Eligible Receivables. Each Receivable reflected in any Purchase
Report as an Eligible Receivable was an Eligible Receivable on the date of its
acquisition by Buyer hereunder.
(v) Accounting. The manner in which such Originator accounts for the
transactions contemplated by this Agreement in its financial statements does not
jeopardize the characterization of the transactions contemplated herein as being
true sales.
(w) OFAC. None of the Originators nor any of its Subsidiaries (a) is a
Sanctioned Person, (b) does business in a Sanctioned Country in violation of the
economic sanctions of the United States administered by OFAC or (c) does
business in such country or with any such agency, organization or person, in
violation of the economic sanctions of the United States administered by OFAC.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchases under this
Agreement are subject to the conditions precedent that (a) Buyer shall have been
capitalized with the Initial Contributed Receivables, (b) Buyer shall have
received on or before the date of such Purchase those documents listed on
Schedule A and (c) all of the conditions to the initial Purchase under the
Purchase Agreement shall have been satisfied or waived in accordance with the
terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments. Buyer's obligation
to pay for Receivables coming into existence after the Initial Cutoff Date shall
be subject to the further conditions precedent that: (a) the Facility
Termination Date shall not have occurred under the Purchase Agreement; (b) Buyer
(or its assigns) shall have received such other approvals, opinions or documents
as it may reasonably request and (c) on the date such Receivable came into
existence, the following statements shall be true (and acceptance of the
proceeds of any payment for such Receivable shall be deemed a representation and
warranty by such Originator that such statements are then true):
(i) the representations and warranties set forth in Article II
are true and correct on and as of the date such Receivable came into existence
as though made on and as of such date; and
(ii) no event has occurred and is continuing that will constitute
a Termination Event or an Unmatured Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Sale
Price for any Receivable (whether by payment of cash, through an increase in the
amounts outstanding under the Subordinated Note, by offset of amounts owed to
Buyer and/or by offset of capital contributions), title to such Receivable and
the Related Security and Collections with respect thereto shall vest in Buyer,
whether or not the conditions precedent to Buyer's obligation to pay for such
Receivable were in fact satisfied. The failure of such Originator to satisfy any
of the foregoing conditions precedent, however, shall give rise to a right of
Buyer to rescind the related
13
purchase and direct such Originator to pay to Buyer an amount equal to the Sale
Price payment that shall have been made with respect to any Receivables related
thereto.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originators. Until the date on which
this Agreement terminates in accordance with its terms, each Originator hereby
covenants as set forth below:
(a) Financial Reporting. Such Originator will maintain, for itself and
each of its Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and furnish to Buyer (or its assigns):
(i) Annual Reporting. Within 90 days after the close of each of
its respective fiscal years, audited, unqualified consolidated financial
statements (which shall include balance sheets, statements of income and
retained earnings and a statement of cash flows) of Parent and its Subsidiaries
for such fiscal year certified in a manner acceptable to Buyer (or its assigns)
by independent public accountants acceptable to Buyer (or its assigns).
(ii) Quarterly Reporting. Within 45 days after the close of the
first three (3) quarterly periods of each of its respective fiscal years,
consolidated balance sheets of Parent and its Subsidiaries as at the close of
each such period and consolidated statements of income and retained earnings and
a statement of cash flows of Parent and its Subsidiaries for the period from the
beginning of such fiscal year to the end of such quarter, all certified by its
chief financial officer.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in substantially the
form of Exhibit IV signed by such Originator's Authorized Officer and dated the
date of such annual financial statement or such quarterly financial statement,
as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of such Originator, copies of all
financial statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of
all registration statements and annual, quarterly, monthly or other regular
reports which such Originator or any of its Subsidiaries files with the
Securities and Exchange Commission.
(vi) Copies of Notices. Promptly upon its receipt of any notice
of breach from any Collection Bank, or notice of default from any lender, 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 proposed
change or amendment, and (B) if such proposed change or amendment
14
would be reasonably likely to adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created Receivables,
requesting Buyer's (and the Agent's, as Buyer's assignee) consent thereto.
(viii) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables
originated by such Originator or the condition or operations, financial or
otherwise, of such Originator as Buyer (or its assigns) may from time to time
reasonably request in order to protect the interests of Buyer (and its assigns)
under or as contemplated by this Agreement.
(b) Notices. Such Originator will notify Buyer (or its assigns) in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) Termination Events or Unmatured Termination Events. The
occurrence of each Termination Event and each Unmatured Termination Event, by a
statement of an Authorized Officer of such Originator.
(ii) Judgment and Proceedings. (1) The entry of any judgment or
decree against any Originator or any of its Subsidiaries if the aggregate amount
of all judgments and decrees then outstanding against the Originators and their
Subsidiaries exceeds $2,500,000 after deducting (a) the amount with respect to
which the applicable Originator or Subsidiary is insured and with respect to
which the insurer has not denied coverage, and (b) the amount for which the
applicable Originator or Subsidiary is otherwise indemnified if the terms of
such indemnification are satisfactory to Buyer (or its assigns), and (2) the
institution of any litigation, arbitration proceeding or governmental proceeding
against any Originator which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(iii) Material Adverse Effect. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(iv) Defaults Under Other Agreements. The occurrence of a default
or an event of default under any other financing arrangement pursuant to which
any Originator is a debtor or an obligor and such financing arrangement is in
excess of $2,500,000.
(v) ERISA Events. The occurrence of any ERISA Event.
(vi) Downgrade of Parent. Any downgrade in the rating of any
Indebtedness of Parent by S&P or by Xxxxx'x, setting forth the Indebtedness
affected and the nature of such change.
(c) Compliance with Laws and Preservation of Existence. Such
Originator will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it is subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Such Originator will preserve and
maintain its legal existence, rights, franchises and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good
standing as a foreign entity in each jurisdiction where its business is
conducted, except where the failure to so qualify or remain in
15
good standing could not reasonably be expected to have a Material Adverse
Effect. Nothing herein shall be deemed to preclude any Originator from merging
with and into any other Originator.
(d) Audits. Such Originator will furnish to Buyer (or its assigns)
from time to time such information with respect to it and the Receivables sold
by it as Buyer (or its assigns) may reasonably request. Such Originator will,
from time to time during regular business hours as requested by Buyer (or its
assigns), upon reasonable notice and at the sole cost of such Originator, permit
Buyer (or its assigns) or their respective agents or representatives, (i) to
examine and make copies of and abstracts from all Records in the possession or
under the control of such Originator relating to the Receivables and the Related
Security, including, without limitation, the related Contracts (other than those
Contracts that contain a confidentiality provision that purports to restrict
Buyer's (or its assigns) right to review the Contract for which such Originator
has been unable, after diligent effort, to obtain consent to disclosure), and
(ii) to visit the offices and properties of such Originator for the purpose of
examining such materials described in clause (i) above, and to discuss matters
relating to such Originator's financial condition or the Receivables and the
Related Security or such Originator's performance under any of the Transaction
Documents or such Originator's performance under the Contracts and, in each
case, with any of the officers or employees of such Originator having knowledge
of such matters (each of the foregoing examinations and visits, a "REVIEW");
PROVIDED, HOWEVER, that, so long as no Amortization Event (under and as defined
in the Purchase Agreement) has occurred and is continuing, the number of Reviews
in any one calendar year shall be limited to a maximum of four (4) and;
PROVIDED, FURTHER, that, the Originators, collectively, shall not be responsible
for the reasonable costs and expenses of more than two (2) Reviews in any one
calendar year unless (X) the immediately preceding audit was unsatisfactory to
the Agent with respect to missing information, erroneous reporting, other
non-compliance with the provisions of the Transaction Documents or questions
that have not been answered to the Agent's satisfaction, or (Y) the Aggregate
Invested Amount (under and as defined in the Purchase Agreement) exceeds an
amount equal to 0.75 times the difference between the most recently computed Net
Pool Balance (under and as defined in the Purchase Agreement) and the most
recently computed Required Reserve (under and as defined in the Purchase
Agreement).
(e) Keeping and Marking of Records and Books.
(i) Such Originator will maintain and implement administrative
and operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit the
immediate identification of each new Receivable and all Collections of and
adjustments to each existing Receivable). Such Originator will give Buyer (or
its assigns) notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
16
(ii) Such Originator will (A) on or prior to the date hereof,
xxxx its master data processing records and other books and records relating to
the Receivables originated by such Originator with a legend, acceptable to Buyer
(or its assigns), describing Buyer's ownership interests in the Receivables and
further describing the Receivable Interests of the Agent (on behalf of the
Purchasers) under the Purchase Agreement and (B) upon the request of Buyer (or
its assigns) following the occurrence of a Termination Event: (x) xxxx each
Contract with a legend describing Buyer's ownership interests in the Receivables
originated by such Originator and further describing the Receivable Interests of
the Agent (on behalf of the Purchasers) and (y) deliver to Buyer (or its
assigns) all Contracts (including, without limitation, all multiple originals of
any such Contract) relating to such Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such
Originator will timely and fully (i) perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables originated by it, and (ii) comply in all material
respects with the Credit and Collection Policy in regard to each such Receivable
and the related Contract.
(g) Ownership. Such Originator will take all necessary action to
establish and maintain, irrevocably in Buyer, (A) legal and equitable title to
the Receivables originated by such Originator and the Collections and (B) all of
such Originator's right, title and interest in the Related Security associated
with the Receivables originated by such Originator, in each case, free and clear
of any Adverse Claims other than Adverse Claims in favor of Buyer (and its
assigns) (INCLUDING, WITHOUT LIMITATION, the filing of all financing statements
or other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Buyer's interest in
such Receivables, Related Security and Collections and such other necessary or
desirable action to perfect, protect or more fully evidence the interest of
Buyer as Buyer (or its assigns) may reasonably request).
(h) Purchasers' Reliance. Such Originator acknowledges that the Agent
and the Purchasers are entering into the transactions contemplated by the
Purchase Agreement in reliance upon Buyer's identity as a legal entity that is
separate from such Originator and any Affiliates thereof. Therefore, from and
after the date of execution and delivery of this Agreement, such Originator will
take all reasonable steps including, without limitation, all steps that Buyer or
any assignee of Buyer may from time to time reasonably request to maintain
Buyer's identity as a separate legal entity and to make it manifest to third
parties that Buyer is an entity with assets and liabilities distinct from those
of such Originator and any Affiliates thereof and not just a division of such
Originator or any such Affiliate. Without limiting the generality of the
foregoing and in addition to the other covenants set forth herein, such
Originator (i) will not hold itself out to third parties as liable for the debts
of Buyer nor purport to own any of the Receivables and other assets acquired by
Buyer, (ii) will take all other actions necessary on its part to ensure that
Buyer is at all times in compliance with the "separateness covenants" set forth
in Section 7.1(i) of the Purchase Agreement and (iii) will cause all tax
liabilities arising in connection with the transactions contemplated herein or
otherwise to be allocated between such
17
Originator and Buyer on an arm's-length basis and in a manner consistent with
the procedures set forth in U.S. Treasury Regulations Sections 1.1502-33(d) and
1.1552-1.
(i) Collections. Such Originator 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 Receivables are remitted directly to such Originator or
any Affiliate of such Originator, such Originator 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, such Originator will itself hold or, if
applicable, will cause such payments to be held in trust for the exclusive
benefit of Buyer and its assigns. Such Originator will transfer exclusive
ownership, dominion and control of each Lock-Box and Collection Account to Buyer
and, will not grant the right to take dominion and control of any Lock-Box or
Collection Account at a future time or upon the occurrence of a future event to
any Person, except to Buyer (or its assigns) as contemplated by this Agreement
and the Purchase Agreement.
(j) Taxes. Such Originator will file all tax returns and reports
required by law to be filed by it and promptly pay all taxes and governmental
charges at any time owing, except any such taxes which are not yet delinquent or
are being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books. Such Originator will pay when due any taxes payable in connection with
the Receivables originated by it, exclusive of taxes on or measured by income or
gross receipts of Buyer and its assigns.
Section 4.2 Negative Covenants of Originators. Until the date on which this
Agreement terminates in accordance with its terms, each Originator hereby
covenants that:
(a) Name Change, Offices and Records. Such Originator will not change
its (i) state of organization, (ii) name, (iii) identity or structure (within
the meaning of Article 9 of any applicable enactment of the UCC) or relocate its
chief executive office at any time while the location of its chief executive
office is relevant to perfection of Buyer's interest in the Receivables or the
associated Related Security and Collections or any office where Records are kept
unless it shall have: (i) given Buyer (and the Agent, as its assignee) at least
thirty (30) days' prior written notice thereof and (ii) delivered to the Agent
(as Buyer's assignee) 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. Such Originator will
not add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless Buyer (or its assigns) shall have received, at least
ten (10) days before the proposed effective date therefor, (i) written notice of
such addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
PROVIDED, HOWEVER, that such Originator may make changes in instructions to
Obligors without any prior notice regarding payments if such new instructions
require such Obligor to make payments to
18
another existing Collection Account. Such Originator will not deposit or
authorize the deposit of any funds into any Collection Account other than
Collections.
(c) Modifications to Contracts and Credit and Collection Policy.
Except as otherwise expressly permitted by the Transaction Documents, such
Originator will not make any change to the Credit and Collection Policy that
could reasonably be expected to adversely affect the collectibility of the
Receivables originated by it or decrease the credit quality of any of its newly
created Receivables. Except as otherwise permitted in its capacity as Servicer
pursuant to the Purchase Agreement, such Originator will not extend, amend or
otherwise modify the terms of any Receivable or any Contract related thereto
other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Such Originator will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer provided
for herein), and such Originator will defend the right, title and interest of
Buyer in, to and under any of the foregoing property, against all claims of
third parties claiming through or under such Originator.
(e) Accounting for Purchase. Such Originator will not, and will not
permit any Affiliate to, financially account (whether in financial statements or
otherwise) for the transactions contemplated hereby in any manner other than the
sale or other outright conveyance by such Originator to Buyer of the Receivables
originated by such Originator and the associated Related Security or in any
other respect account for or treat the transactions contemplated hereby in any
manner other than as a sale of such Receivables and Related Security by such
Originator to Buyer except to the extent that such transactions are not
recognized on account of consolidated financial reporting in accordance with
generally accepted accounting principles.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or more of the
following events shall constitute a Termination Event:
(a) Such Originator shall fail to make any payment or deposit required
hereunder when due and such failure shall continue for three (3) consecutive
Business Days.
(b) Such Originator shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (i) of this
paragraph (a)) or any other Transaction Document to which it is a party and such
failure shall continue for seven (7) consecutive Business Days.
(c) Any representation, warranty, certification or statement made by
such Originator in this Agreement, any other Transaction Document or in any
other
19
document delivered pursuant hereto or thereto shall prove to have been incorrect
when made or deemed made; PROVIDED THAT any misrepresentation or certification
for which Buyer has actually received a Sale Price Credit shall not constitute a
Termination Event hereunder.
(d) Failure of any Originator to pay any Indebtedness when due in
excess of $2,500,000; or the default by any Originator in the performance of any
term, provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of any
Originator 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.
(e) (i) Any Originator or any of its Subsidiaries shall generally not
pay its debts as such debts become due or shall admit in writing its inability
to pay its debts generally or shall make a general assignment for the benefit of
creditors; or (ii) any proceeding shall be instituted by or against such
Originator or any of its Subsidiaries seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
or (iii) any Originator or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth in the foregoing clauses (i) or
(ii) of this subsection (d).
(f) A Change of Control shall occur.
(g) One or more final judgments for the payment of money in an amount
in excess of $2,500,000, individually or in the aggregate, shall be entered
against any Originator on claims not covered by insurance or as to which the
insurance carrier has denied its responsibility, and such judgment shall
continue unsatisfied and in effect for thirty (30) consecutive days without a
stay of execution.
(h) An ERISA Event shall occur with respect to a Pension Plan or
Multiemployer Plan which his resulted or could reasonably be expected to result
in liability of any Originator under Title IV of ERISA to such Pension Plan,
such Multiemployer Plan or the PBGC in an aggregate amount in excess of
$1,000,000; (ii) the aggregate amount of Unfunded-Pension Liability among all
Pension Plans at any time exceeds $1,000,000; or (iii) any Originator or any
ERISA Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of $1,000,000.
(i)
20
(j) Bank Agent shall deliver a Receivables Termination Notice under
and as defined in the Intercreditor Agreement.
Section 5.2 Remedies. Upon the occurrence and during the continuation of a
Termination Event, Buyer may take any of the following actions: (i) declare the
Termination Date to have occurred, whereupon the Termination Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by each Originator; PROVIDED, HOWEVER, that
upon the occurrence of a Termination Event described in Section 5.1(e), or of an
actual or deemed entry of an order for relief with respect to such Originator
under the Federal Bankruptcy Code, the Termination Date shall automatically
occur, without demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Originator and (ii) to the fullest extent
permitted by applicable law, declare that the Default Fee shall accrue with
respect to any amounts then due and owing by such Originator to Buyer. The
aforementioned rights and remedies shall be without limitation and shall be in
addition to all other rights and remedies of Buyer and its assigns otherwise
available under any other provision of this Agreement, by operation of law, at
equity or otherwise, all of which are hereby expressly preserved, including,
without limitation, all rights and remedies provided under the UCC, all of which
rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Originators. Without limiting any other rights
that Buyer may have hereunder or under applicable law, each Originator hereby
agrees to indemnify (and pay upon demand to) Buyer and its assigns, officers,
directors, agents and employees (each an "INDEMNIFIED PARTY") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys' fees (which attorneys
may be employees of Buyer or any such assign) and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Buyer of an
interest in the Receivables originated by such Originator, EXCLUDING, HOWEVER:
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from gross
negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables originated by such Originator that are uncollectible on
account of the insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
(c) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located, 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
21
by the Purchasers of Receivable Interests under the Purchase Agreement as a loan
or loans by the Purchasers to Buyer secured by, among other things, the
Receivables originated by such Originator, the Related Security and the
Collections;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of such Originator or limit the recourse of Buyer to such Originator
for amounts otherwise specifically provided to be paid by such Originator under
the terms of this Agreement. Without limiting the generality of the foregoing
indemnification, but subject in each case to clauses (a), (b) and (c) above,
each Originator shall indemnify Buyer for Indemnified Amounts relating to or
resulting from:
(i) any representation or warranty made by such Originator (or
any officers of such Originator) under or in connection with any Purchase
Report, this Agreement, any other Transaction Document or any other information
or report delivered by such Originator pursuant hereto or thereto for which
Buyer has not received a Sale Price Credit that shall have been false or
incorrect when made or deemed made;
(ii) the failure by such 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 such
Originator to keep or perform any of its obligations, express or implied, with
respect to any Contract;
(iii) any failure of such Originator to perform its duties,
covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage, suit or
other similar claim arising out of or in connection with merchandise, insurance
or services that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or service related to such Receivable
or the furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time
with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document with respect to
such Originator, the transactions contemplated hereby, such Originator's use of
the proceeds of the Purchase from it hereunder, the ownership of the Receivables
originated by such Originator or any other investigation, litigation or
proceeding relating to such Originator in which any
22
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 Termination Event described in Section 5.1(e);
(xi) any failure to vest and maintain vested in Buyer, or to
transfer to Buyer, legal and equitable title to, and ownership of, the
Receivables originated by such Originator and the associated Collections, and
all of such Originator's right, title and interest in the Related Security
associated with such Receivables, in each case, free and clear of any Adverse
Claim;
(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
Receivable originated by such Originator, the Related Security and Collections
with respect thereto, and the proceeds of any thereof, whether at the time of
the Purchase from such Originator hereunder or at any subsequent time;
(xiii) any action or omission by such Originator which reduces or
impairs the rights of Buyer with respect to any Receivable or the value of any
such Receivable;
(xiv) any civil penalty or fine assessed by OFAC against, and all
reasonable costs and expenses (including counsel fees and disbursements)
incurred in connection with defense thereof by Buyer (or its assigns) as a
result of the purchase of any Receivables;
(xv) any attempt by any Person to void the Purchase from such
Originator hereunder under statutory provisions or common law or equitable
action; and
(xvi) the failure of any Receivable reflected as an Eligible
Receivable on any Purchase Report prepared by such Originator to be an Eligible
Receivable at the time acquired by Buyer.
Notwithstanding the foregoing, (1) the foregoing indemnification contained in
this Section 6.1 is not intended to, and shall not, constitute a guarantee of
the collectibility or payment of the Receivables conveyed hereunder; and (2)
nothing in this Section 6.1 shall require any Originator to indemnify any
Indemnified Party for Receivables which are not collected, not paid or otherwise
uncollectible on account of the insolvency, bankruptcy, creditworthiness or
financial inability to pay of the applicable Obligor. The agreements in this
subsection shall survive the collection of all Receivables, the termination of
this Agreement and the payment of all amounts payable hereunder.
23
Section 6.2 Other Costs and Expenses. Each Originator shall pay to Buyer on
demand all reasonable costs and out-of-pocket expenses (including outside
counsel fees) in connection with the preparation, execution, delivery and
administration of this Agreement, the transactions contemplated hereby and the
other documents to be delivered hereunder. Each Originator shall pay to Buyer on
demand any and all costs and expenses of Buyer, if any, including reasonable
outside counsel fees and expenses in connection with the enforcement of this
Agreement and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following a Termination Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its assigns) in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing signed by each Originator and Buyer and, to
the extent required under the Purchase Agreement, the Agent and the Liquidity
Banks or the Required Liquidity Banks. Any material amendment, supplement,
modification of waiver will require satisfaction of the Rating Agency Condition.
Section 7.2 Notices. All communications and notices provided for hereunder
shall be in writing (including bank wire, telecopy, e-mail or electronic
facsimile transmission or similar writing) and shall be given to the other
parties hereto at their respective addresses, e-mail 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 (a) if given by telecopy, upon the receipt thereof, (b) if
given by mail, three (3) Business Days after the time such communication is
deposited in the mail with first class postage prepaid, (c) if given by e-mail,
upon sender's receipt of an acknowledgement from the intended recipient of a
return e-mail, which may be delivered through a "request a read receipt for this
message" function, as available, or other written acknowledgement, in each case
acknowledging that sender's e-mail has been read or (d) if given by any other
means, when received at the address specified in this Section 7.2.
Section 7.3 Protection of Ownership Interests of Buyer.
24
(a) Each Originator agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that Buyer (or its assigns) may
request, to perfect, protect or more fully evidence the interest of Buyer
hereunder and the Receivable Interests, or to enable Buyer (or its assigns) to
exercise and enforce their rights and remedies hereunder. At any time, Buyer (or
its assigns) may, at such Originator's sole cost and expense, direct such
Originator to notify the Obligors of Receivables of the ownership interests of
Buyer under this Agreement and may also direct that payments of all amounts due
or that become due under any or all Receivables be made directly to Buyer or its
designee.
(b) If any Originator fails to perform any of its obligations
hereunder, Buyer (or its assigns) may (but shall not be required to), after
delivery of notice to such Originator (which notice shall not be required after
the occurrence of a Termination Event), perform, or cause performance of, such
obligations, and Buyer's (or such assigns') costs and expenses incurred in
connection therewith shall be payable by such Originator as provided in Section
6.2. Each Originator irrevocably authorizes Buyer (and its assigns) at any time
and from time to time in the sole discretion of Buyer (or its assigns), and
appoints Buyer (and its assigns) as its attorney(ies)-in-fact, to act on behalf
of such Originator (i) to execute on behalf of such Originator as debtor and to
file financing statements necessary or desirable in Buyer's (or its assigns')
sole discretion to perfect and to maintain the perfection and priority of the
interest of Buyer in the Receivables originated by such Originator and the
associated Related Security and Collections and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables as a financing statement in such offices as
Buyer (or its assigns) in their sole discretion deem necessary or desirable to
perfect and to maintain the perfection and priority of Buyer's interests in such
Receivables. This appointment is coupled with an interest and is irrevocable.
Each Originator hereby authorizes Buyer (or its assigns) to file financing
statements and other filing or recording documents with respect to the
Receivables and Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the signature or other
authorization of such Originator, in such form and in such offices as Buyer (or
any of its assigns) reasonably determines appropriate to perfect or maintain the
perfection of the ownership or security interests of Buyer (or its assigns)
hereunder, and each Originator approves, authorizes and ratifies any filings or
recordings made by or on behalf of the Agent (as Buyer's assignee) in connection
with the perfection of the ownership or security interests in favor of Buyer or
the Agent (as Buyer's assignee).
25
Section 7.4 Confidentiality.
(a) Each Originator and Buyer shall maintain and shall cause each of
its employees and officers 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 Originator and its officers and employees may disclose
such information to such Originator's external accountants, attorneys and other
advisors and as required by any applicable law or order of any judicial or
administrative proceeding.
(b) Each Originator hereby consents to the disclosure of any nonpublic
information with respect to it (i) to Buyer, the Agent, the Liquidity Banks or
Blue Ridge by each other, (ii) to any prospective or actual assignee or
participant of any of the Persons described in clause (i), and (iii) to any
rating agency, Commercial Paper dealer or provider of a surety, guaranty or
credit or liquidity enhancement to Blue Ridge or any entity organized for the
purpose of purchasing, or making loans secured by, financial assets for which
Wachovia or any of its Affiliates acts as the administrative agent and to any
officers, directors, employees, outside accountants and attorneys of any of the
foregoing, PROVIDED each such Person described in the foregoing clauses (ii) and
(iii) is informed of the confidential nature of such information. In addition,
the Purchasers and the Agent may disclose any such nonpublic information
pursuant to any law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings (whether or not
having the force or effect of law).
(c) Notwithstanding any other express or implied agreement to the
contrary, the parties hereto agree that each of them and each of their
employees, representatives, and other agents may disclose to any and all
Persons, without limitation of any kind, the tax treatment and tax structure of
the transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to any of them relating to such tax treatment and
tax structure, except where confidentiality is reasonably necessary to comply
with U.S. federal or state securities laws. For purposes of this paragraph, the
terms "tax treatment" and "tax structure" have the meanings specified in
Treasury Regulation section 1.6011-4(c).
Section 7.5 Bankruptcy Petition.
(a) Each Originator and Buyer each hereby covenants and agrees that,
prior to the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of 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.
(b) Each Originator covenants and agrees that, prior to the date that
is one year and one day after the payment in full of all outstanding obligations
of Buyer under the
26
Purchase Agreement, it will not institute against, or join any other Person in
instituting against, Buyer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.
Section 7.6 Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of any Originator,
Buyer, Blue Ridge, the Agent or any Liquidity Bank, no claim may be made by any
such Person (or its Affiliates, directors, officers, employees, attorneys or
agents) against any such other Person (or its 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 of the parties hereto, on behalf of itself and its
Affiliates, directors, officers, employees, attorneys, agents, successors and
assigns, hereby waives, releases, and agrees not to xxx upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH SHALL APPLY HERETO) EXCEPT
TO THE EXTENT THAT THE PERFECTION OF THE BUYER'S OWNERSHIP OF OR SECURITY
INTEREST IN THE RECEIVABLES AND RELATED SECURITY OR REMEDIES HEREUNDER IN
RESPECT THEREOF ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
Section 7.8 CONSENT TO JURISDICTION. EACH ORIGINATOR HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW
YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH
ORIGINATOR PURSUANT TO THIS AGREEMENT AND SUCH ORIGINATOR HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST SUCH
ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
SUCH ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH ORIGINATOR
PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW
YORK.
27
Section 7.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY
ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.
Section 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contains 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 Originators, Buyer and their respective successors and permitted assigns
(including any trustee in bankruptcy). No Originator may assign any of its
rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of any Originator. Without limiting the foregoing, each Originator
acknowledges that Buyer, pursuant to the Purchase Agreement, may assign to the
Agent, for the benefit of the Purchasers, its rights, remedies, powers and
privileges hereunder and that the Agent may further assign such rights,
remedies, powers and privileges to the extent permitted in the Purchase
Agreement. Each Originator agrees that the Agent, as the assignee of Buyer,
shall, subject to the terms of the Purchase Agreement, have the right to enforce
this Agreement and to exercise directly all of Buyer's rights and remedies under
this Agreement (including, without limitation, the right to give or withhold any
consents or approvals of Buyer to be given or withheld hereunder) and each
Originator agrees to cooperate fully with the Agent in the exercise of such
rights and remedies. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall remain
in full force and effect until terminated in accordance with its terms;
PROVIDED, HOWEVER, that the rights and remedies with respect to (i) any breach
of any representation and warranty made by any Originator pursuant to Article
II; (ii) the indemnification and payment provisions of Article VI; and (iii)
Section 7.5 shall be continuing and shall survive any termination of this
Agreement.
28
Section 7.11 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
[Remainder of Page Intentionally Left Blank]
[Signature Pages Follow]
29
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.
WOLVERINE TUBE, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Operating
Officer
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxx@xxx.xxx
TUBE FORMING, LP
By: Tube Forming Holdings, Inc.
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: VP & Treasurer
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxx@xxx.xxx
S-1
[Signature Page to Receivables Sale Agreement]
SMALL TUBE MANUFACTURING LLC
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Treasurer
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxx@xxx.xxx
DEJ 98 Finance, LLC
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Manager and Secretary
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxx@xxx.xxx
S-2
[Signature Page to Receivables Sale Agreement]
EXHIBIT I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined). As used
in the Agreement and the Exhibits and Schedules thereto, capitalized terms have
the meanings set forth in this Exhibit I (such meanings to be equally applicable
to the singular and plural forms thereof). IF A CAPITALIZED TERM IS USED IN THE
AGREEMENT, OR ANY EXHIBIT OR SCHEDULE THERETO, AND IS NOT OTHERWISE DEFINED
THEREIN OR IN THIS EXHIBIT I, SUCH TERM SHALL HAVE THE MEANING ASSIGNED THERETO
IN EXHIBIT I TO THE PURCHASE AGREEMENT (HEREINAFTER DEFINED).
"AGENT" has the meaning set forth in the Preliminary Statements to the
Agreement.
"AGREEMENT" means the Receivables Sale Agreement, dated as of April
28, 2005, among Originators and Buyer, as the same may be amended, restated or
otherwise modified.
"BLUE RIDGE" has the meaning set forth in the Preliminary Statements
to the Agreement.
"BUYER" has the meaning set forth in the preamble to the Agreement.
"CALCULATION PERIOD" means each fiscal month of Parent or portion
thereof which elapses during the term of the Agreement. The first Calculation
Period shall commence on the date of the initial Purchase hereunder and the
final Calculation Period shall terminate on the Termination Date.
"CHANGE OF CONTROL" means (a) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding voting Equity Interests
of Parent, or (b) Parent ceases to own, directly or indirectly, 100% of the
outstanding voting Equity Interests of any Originator.
"CREDIT AND COLLECTION POLICY" means [each Originator's/the
Originators'] credit and collection policies and practices relating to Contracts
and Receivables existing on the date hereof and summarized in EXHIBIT V, as
modified from time to time in accordance with the Agreement.
"DEFAULT FEE" means a per annum rate of interest equal to the sum of
(i) the Prime Rate, PLUS (ii) 2% per annum.
"DESIGNATED ACCOUNT" has the meaning set forth in Section 1.3(a)(i).
Exhibit I-1
"DISCOUNT FACTOR" means a percentage calculated to provide Buyer with
a reasonable return on its investment in the Receivables originated by each
Originator after taking account of (i) the time value of money based upon the
anticipated dates of collection of such Receivables and the cost to Buyer of
financing its investment in such Receivables during such period and (ii) the
risk of nonpayment by the Obligors. Each Originator and Buyer may agree from
time to time to change the Discount Factor based on changes in one or more of
the items affecting the calculation thereof, PROVIDED THAT any change to the
Discount Factor shall take effect as of the commencement of a Calculation
Period, shall apply only prospectively and shall not affect the Sale Price
payment made prior to the Calculation Period during which such Originator and
Buyer agree to make such change. As of the date hereof, the Discount Factor in
respect of Eligible Receivables is 1.25% and the Discount Factor in respect of
all other Receivables is 1.25%
"EQUITY INTERESTS" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of such
Person, including, if such Person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with any Originator within the meaning of
Section 414(b) or (c) of the Tax Code (and Sections 414(m) and (o) of the Tax
Code for purposes of provisions relating to Section 412 of the Tax Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by any Originator or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001 (a) (2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by any Originator or any
ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Tide IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon any Originator or any ERISA Affiliate.
Exhibit I-2
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.1.
"INITIAL CONTRIBUTED RECEIVABLES" has the meaning set forth in Section
1.1.
"INITIAL CUTOFF DATE" has the meaning set forth in Section 1.1.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition or operations of the Originators and their Subsidiaries,
considered as a whole, (ii) the ability of any Originator to perform its
obligations under the Agreement or any other Transaction Document to which it is
a party, (iii) the legality, validity or enforceability of the Agreement or any
other Transaction Document, (iv) any Originator's, Buyer's, the Agent's or any
Purchaser's interest in the Receivables generally or in any significant portion
of the Receivables, the Related Security or Collections with respect thereto, or
(v) the collectibility of the Receivables generally or of any material portion
of the Receivables.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within the meaning
of Section 4001 (a) (3) of ERISA, to which any Originator or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make, contributions.
"NET WORTH" means as of the last Business Day of each Calculation
Period preceding any date of determination, the excess, if any, of (a) the
aggregate Outstanding Balance of the Receivables at such time, OVER (b) the sum
of (i) the Aggregate Invested Amount outstanding at such time, PLUS (ii) the
aggregate outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date of determination).
"OFAC" means the U.S. Department of the Treasury's Office of Foreign
Assets Control.
"ORGANIZATIONAL DOCUMENTS" means, for any Person, the documents for
its formation and organization, which, for example, (a) for a corporation are
its corporate charter and bylaws, (b) for a partnership are its certificate of
partnership (if applicable) and partnership agreement, (c) for a limited
liability company are its certificate of formation or organization and its
operating agreement, regulations or the like and (d) for a trust is the trust
agreement, declaration of trust, indenture or bylaws under which it is created.
"ORIGINAL BALANCE" means, with respect to any Receivable coming into
existence after the Initial Cutoff Date, the Outstanding Balance of such
Receivable on the date it was created.
"ORIGINATOR" has the meaning set forth in the preamble to the
Agreement.
"PARENT" has the meaning set forth in the preamble to the Agreement.
Exhibit I-3
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which any Originator sponsors or maintains,
or to which it makes, is making, or is obligated to make contributions, or in
the case of a multiple employer plan (as described in Section 4064(a) of ERISA)
has made contributions at any time during the immediately preceding five plan
years.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which any Originator or any of its ERISA Affiliates sponsors or maintains
or to which any Originator or any of its ERISA Affiliates makes, is making, or
is obligated to make contributions and includes any Pension Plan, other than a
Plan maintained outside the United States primarily for the benefit of Persons
who are not U.S. residents.
"PURCHASE" means the purchase by Buyer from an Originator pursuant to
Section 1.2(a) of the Agreement of the Receivables originated by such Originator
and the Related Security and Collections related thereto, together with all
related rights in connection therewith.
"PURCHASE AGREEMENT" has the meaning set forth in the Preliminary
Statements to the Agreement.
"PURCHASE REPORT" has the meaning set forth in Section 1.2(b) of the
Agreement.
"RECEIVABLE" means all rights to payment owed to an Originator (at the
time it arises, and before giving effect to any transfer or conveyance under the
Agreement) or to Buyer (after giving effect to the transfers under the
Agreement), whether constituting an account, a promissory note or a payment
intangible (in each case, as defined in the UCC) arising in connection with the
sale of goods or the rendering of services by such Originator and further
includes, without limitation, the obligation to pay any Finance Charges with
respect thereto. Indebtedness 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 or whether the account
debtor or such Originator treats such indebtedness, rights or obligations as a
separate payment obligation.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the applicable Originator's interest in the inventory
and goods (including returned or repossessed inventory or goods), if any, the
sale, financing or lease of which by such Originator gave rise to such
Receivable, and all insurance contracts with respect thereto,
Exhibit I-4
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the Contract related to
such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of the applicable Originator's right, title and interest
in each Lock-Box and each Collection Account, and
(vii) all proceeds of any of the foregoing.
"REPORTABLE EVENT" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"REQUIRED CAPITAL AMOUNT" means, as of any date of determination, an
amount equal to the greater of (a) 3% of the Purchase Limit under the Purchase
Agreement, and (b) the product of (i) 1.5 times the product of the highest
average of Default Ratios for any consecutive three-month period occurring
during the twelve Calculation Periods ending on the immediately preceding
Cut-Off Date times the Default Horizon Ratio, each as determined from the most
recent Monthly Report received from the Servicer under the Purchase Agreement,
and (ii) the Outstanding Balance of all Receivables as of such date, as
determined from the most recent Monthly Report received from the Servicer under
the Purchase Agreement.
"SALE PRICE" means, with respect to the Purchase from each Originator,
the aggregate price to be paid by Buyer to such Originator for such Purchase in
accordance with Section 1.3 of the Agreement for the Receivables originated by
such Originator and the associated Collections and Related Security being sold
to Buyer, which price shall equal on any date (i) the product of (x) the
Outstanding Balance of such Receivables on such date, MULTIPLIED BY (y) one
MINUS the Discount Factor in effect on such date, minus (ii) any Sale Price
Credits to be credited against the Sale Price otherwise payable in accordance
with Section 1.4 of the Agreement.
"SALE PRICE CREDIT" has the meaning set forth in Section 1.4 of the
Agreement.
Exhibit I-5
"SANCTIONED COUNTRY" means a country subject to a sanctions program
identified on the list maintained by OFAC and available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxx/xxxx/xxxxxxxxx/ index.html, or as otherwise
published from time to time.
"SANCTIONED PERSON" means (a) a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/ eotffc/ofac/sdn/index.html, or as otherwise
published from time to time, or (b) (i) an agency of the government of a
Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or
(iii) a person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.
"SUBORDINATED LOAN" has the meaning set forth in Section 1.3(a) of the
Agreement.
"SUBORDINATED NOTE" means a promissory note in favor of each
Originator in substantially the form of Exhibit VI hereto as more fully
described in Section 1.3 of the Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"TAX CODE" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"TERMINATION DATE" means the earliest to occur of (i) the Facility
Termination Date (as defined in the Purchase Agreement), (ii) the Business Day
immediately prior to the occurrence of a Termination Event set forth in Section
5.1(e), (iii) the Business Day specified in a written notice from Buyer to the
Originators following the occurrence of any other Termination Event, and (iv)
the date which is 10 Business Days after Buyer's receipt of written notice from
any Originator that it wishes to terminate the facility evidenced by this
Agreement.
"TERMINATION EVENT" has the meaning set forth in Section 5.1 of the
Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each
Collection Account Agreement, the Subordinated Notes, and all other instruments,
documents and agreements executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code from time to time in effect in
any applicable jurisdiction.
"UNMATURED TERMINATION EVENT" means an event which, with the passage
of time or the giving of notice, or both, would constitute a Termination Event.
Exhibit I-6
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP. ALL TERMS USED IN ARTICLE 9 OF THE UCC IN THE
STATE OF NEW YORK, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS
DEFINED IN SUCH ARTICLE 9.
Exhibit I-7
EXHIBIT II
Places of Business; Locations of Records;
Federal Employer Identification Number(s); Other Names
PLACES OF BUSINESS; LOCATIONS OF RECORDS; FEDERAL
EMPLOYER IDENTIFICATION NUMBER(S); OTHER NAMES
LEGAL NAME (STATE OF PLACES OF CHIEF EXECUTIVE LOCATION OF FED ID TRADE AND ASSUMED
ORGANIZATION) BUSINESS OFFICE RECORDS NUMBER(S) NAMES
--------------------- --------------- ----------------- ---------------- ---------- -----------------
Wolverine Tube, Inc. Alabama, 000 Xxxxxxx Xxx., 200 Clinton WTI; Wolverine
(Delaware Corp.) Tennessee, Xxxxx 0000 Xxx., Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxxx, XX Xxxxxxxxxx, XX
Xxxxxxxx, 00000 00000
Xxxxx
Xxxxxxxx,
Xxxxxxxx, Xxxxx
Tube Forming, L.P. Texas, Delaware 0000 Xxxx 000 Xxxxxxx TFI; Tube Forming
(Delaware Limited Beltline Road Ave., Suite 1000
Partnership) Carrollton, TX Xxxxxxxxxx, XX
00000 75006
Small Tube Pennsylvania, Spring Xxxxxxx 000 Xxxxxxx XXX
Manufacturing LLC Delaware, X.X. Xxx 0000 Xxx., Xxxxx 0000
(Xxxxxxxx LLC) Xxxxxxxxxxx Xxxxxxx, XX 00000 Xxxxxxxxxx, XX
00000
Wolverine Finance LLC Tennessee 30500 Railroad 200 Clinton Wolverine Finance
(Tennessee LLC) Street, Xxxx Xxx., Xxxxx 0000
X.X. Xxx 0000 Xxxxxxxxxx, XX
Xxxxxxx, XX 00000 35801
Exhibit II-1
EXHIBIT III
Lock-boxes; Collection Accounts; Collection Banks
EXHIBIT IV
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that certain
Receivables Sale Agreement dated as of April 28, 2005, among Wolverine Tube,
Inc., a Delaware corporation ("PARENT"), Tube Forming, LP, a Delaware limited
partnership, Small Tube Manufacturing LLC, a Delaware limited liability company,
and DEJ 98 Finance, LLC, a Delaware limited liability company (the "AGREEMENT").
Capitalized terms used and not otherwise defined herein are used with the
meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of ___________ ("ORIGINATOR").
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 Originator 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
a Termination Event or an Unmatured Termination 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 below].
[4. 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 Originator has taken, is taking, or
proposes to take with respect to each such condition or event:
______________________________].
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 this ____ day of
______________, 200_.
----------------------------------------
[Name]
Exhibit IV-1
EXHIBIT V
Credit and Collection Policy
EXHIBIT VI
Form of Subordinated Note
SUBORDINATED NOTE
______________, 200_
1. Note. FOR VALUE RECEIVED, the undersigned, DEJ 98 Finance, LLC, a
Delaware limited liability company ("SPV"), hereby unconditionally promises to
pay to [ORIGINATOR NAME], a(n) __________ ***[corporation] [limited liability
company] [partnership]*** ("ORIGINATOR"), in lawful money of the United States
of America and in immediately available funds, on or before the date following
the Termination Date which is one year and one day after the date on which (i)
the Outstanding Balance of all Receivables sold by Originator under the "Sale
Agreement" referred to below has been reduced to zero and (ii) Originator has
paid to Buyer all indemnities, adjustments and other amounts which may be owed
thereunder in connection with the Purchase thereunder (the "COLLECTION DATE"),
the aggregate unpaid principal sum outstanding of all "Subordinated Loans" made
from time to time by Originator to SPV pursuant to and in accordance with the
terms of that certain Receivables Sale Agreement dated as of April 28, 2005
among Originator and certain of its affiliates, as sellers, and SPV, as buyer
(as amended, restated, supplemented or otherwise modified from time to time, the
"SALE AGREEMENT"). Reference to Section 1.3 of the Sale Agreement is hereby made
for a statement of the terms and conditions under which the loans evidenced
hereby have been and will be made. All terms which are capitalized and used
herein and which are not otherwise specifically defined herein shall have the
meanings ascribed to such terms in the Sale Agreement. All payments under this
Subordinated Note shall be made to the applicable Originator or the Designated
Account, as the case may be.
2. Interest. SPV further promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full hereof
at a rate equal to the 1-month LIBOR rate published in THE WALL STREET JOURNAL
on the first Business Day of each month (or portion thereof) during the term of
this Subordinated Note, computed for actual days elapsed on the basis of a year
consisting of 360 days and changing on the first business day of each month
hereafter ("LIBOR"); PROVIDED, HOWEVER, that if SPV shall default in the payment
of any principal hereof, SPV promises to pay, on demand, interest at the rate
equal to LIBOR plus 2.00% per annum on any such unpaid amounts, from the date
such payment is due to the date of actual payment. Interest shall be payable on
the first Business Day of each month in arrears; PROVIDED, HOWEVER, that SPV may
elect on the date any interest payment is due hereunder to defer such payment
and upon such election the amount of interest due but unpaid on such date shall
constitute principal under this Subordinated Note. The outstanding principal of
any loan made under this Subordinated Note shall be due and payable on the
Collection Date and may be repaid or prepaid at any time without premium or
penalty.
Exhibit VI-1
3. Principal Payments. Originator is authorized and directed by SPV to
enter on the grid attached hereto, or, at its option, in its books and records,
the date and amount of each loan made by it which is evidenced by this
Subordinated Note and the amount of each payment of principal made by SPV, and
absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the information so entered; PROVIDED THAT neither the failure of
Originator to make any such entry or any error therein shall expand, limit or
affect the obligations of SPV hereunder.
4. Subordination. Originator shall have the right to receive, and SPV
shall make, any and all payments and prepayments relating to the loans made
under this Subordinated Note PROVIDED THAT, after giving effect to any such
payment or prepayment, the aggregate Outstanding Balance of Receivables (as each
such term is defined in the Purchase Agreement hereinafter referred to) owned by
SPV at such time exceeds the sum of (a) the Aggregate Unpaids (as defined in the
Purchase Agreement) outstanding at such time under the Purchase Agreement, plus
(b) the aggregate outstanding principal balance of all loans made under this
Subordinated Note. Originator hereby agrees that at any time during which the
conditions set forth in the proviso of the immediately preceding sentence shall
not be satisfied, Originator shall be subordinate in right of payment to the
prior payment of any indebtedness or obligation of SPV owing to the Agent or any
Purchaser under that certain Receivables Purchase Agreement dated as of April
28, 2005 by and among SPV, Wolverine Finance, LLC, as initial Servicer, various
"Purchasers" from time to time party thereto, and Wachovia Bank, National
Association, as the "Agent" (as amended, restated, supplemented or otherwise
modified from time to time, the "PURCHASE AGREEMENT"). The subordination
provisions contained herein are for the direct benefit of, and may be enforced
by, the Agent and the Purchasers and/or any of their respective assignees
(collectively, the "SENIOR CLAIMANTS") under the Purchase Agreement. Until the
date on which the "Aggregate Invested Amount" outstanding under the Purchase
Agreement has been repaid in full and all other obligations of SPV and/or the
Servicer thereunder and under the "Fee Letter" referenced therein (all such
obligations, collectively, the "SENIOR CLAIM") have been indefeasibly paid and
satisfied in full, Originator shall not institute against SPV any proceeding of
the type described in Section 5.1(e) of the Sale Agreement unless and until the
Collection Date has occurred. Should any payment, distribution or security or
proceeds thereof be received by Originator in violation of this Section 4,
Originator agrees that such payment shall be segregated, received and held in
trust for the benefit of, and deemed to be the property of, and shall be
immediately paid over and delivered to the Agent for the benefit of the Senior
Claimants.
5. Bankruptcy; Insolvency. Upon the occurrence of any proceeding of
the type described in Section 5.1(e) of the Sale Agreement involving SPV as
debtor, then and in any such event the Senior Claimants shall receive payment in
full of all amounts due or to become due on or in respect of the Aggregate
Invested Amount and the Senior Claim (including "Yield" as defined and as
accruing under the Purchase Agreement after the commencement of any such
proceeding, whether or not any or all of such Yield is an allowable claim in any
such proceeding) before Originator is entitled to receive payment on account of
this Subordinated Note, and to that
Exhibit VI-2
end, any payment or distribution of assets of SPV of any kind or character,
whether in cash, securities or other property, in any applicable insolvency
proceeding, which would otherwise be payable to or deliverable upon or with
respect to any or all indebtedness under this Subordinated Note, is hereby
assigned to and shall be paid or delivered by the Person making such payment or
delivery (whether a trustee in bankruptcy, a receiver, custodian or liquidating
trustee or otherwise) directly to the Agent for application to, or as collateral
for the payment of, the Senior Claim until such Senior Claim shall have been
paid in full and satisfied.
6. Amendments. This Subordinated Note shall not be amended or modified
except in accordance with Section 7.1 of the Sale Agreement. The terms of this
Subordinated Note may not be amended or otherwise modified without the prior
written consent of the Agent for the benefit of the Purchasers.
7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED
AT NEW YORK, NEW YORK, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF
THE STATE OF NEW YORK. WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED
NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE
PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
SUBORDINATED NOTE.
8. Waivers. All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor. Originator additionally expressly waives all notice of the
acceptance by any Senior Claimant of the subordination and other provisions of
this Subordinated Note and expressly waives reliance by any Senior Claimant upon
the subordination and other provisions herein provided.
9. Assignment. This Subordinated Note may not be assigned, pledged or
otherwise transferred to any party other than Originator without the prior
written consent of the Agent, and any such attempted transfer shall be void.
DEJ 98 FINANCE, LLC
By:
------------------------------------
Title:
---------------------------------
Exhibit VI-3
SCHEDULE
TO
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
AMOUNT OF UNPAID
UBORDINATED AMOUNT OF PRINCIPAL PRINCIPAL NOTATION MADE BY
DATE LOAN PAID BALANCE (INITIALS)
---- ----------- ------------------- --------- ----------------
Exhibit VI-4
EXHIBIT VII
[Form of] Purchase Report
For the Calculation Period beginning [date] and ending [date]
----------
TO: BUYER AND THE AGENT (AS BUYER'S ASSIGNEE)
Aggregate Outstanding Balance of all Receivables sold
during the period: $_____________ A
LESS: Aggregate Outstanding Balance of all Receivables
sold during such period which were not Eligible
Receivables on the date when sold: ($____________) (B)
EQUALS: Aggregate Outstanding Balance of all Eligible
Receivables sold during the period (A - B): $___________ =C
LESS: Sale Price discount during the Period: ($____________) (D)
EQUALS: Gross Sale Price Payable during the period (C - D) $___________ =E
LESS: Total Sale Price Credits arising during the (F)
Period: ($____________)
EQUALS: Net Sale Price payable during the Period (E - F): $___________ =G
Cash Sale Price Paid to Originator during the Period: $_____________ H
Subordinated Loans made during the Period: $_____________ I
LESS: Repayments of Subordinated Loans received during (J)
the Period: ($____________)
EQUALS: Sale Price paid in Cash or Subordinated Loans
during the period (H + I - J): $___________ =K
Aggregate Outstanding Balance of Receivables
contributed during the Period: $_____________ L
Exhibit VII-1
SCHEDULE A
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE PURCHASE
1. Executed copies of the Receivables Sale Agreement, duly executed by the
parties thereto.
2. Copy of the Credit and Collection Policy to attach to the Receivables Sale
Agreement as an Exhibit.
3. A certificate of each Originator's [Assistant] Secretary certifying:
(a) A copy of the Resolutions of the Board of Directors of such
Originator, authorizing Originator's execution, delivery and
performance of the Receivables Sale Agreement and the other documents
to be delivered by it thereunder;
(b) A copy of the Organizational Documents of such Originator
(also certified, to the extent that such documents are filed with any
governmental authority, by the Secretary of State of the jurisdiction
of organization of such Originator on or within thirty (30) days prior
to closing);
(c) Good Standing Certificates for such Originator issued by the
Secretaries of State of its state of incorporation and each
jurisdiction where it has material operations; and
(d) The names and signatures of the officers authorized on its
behalf to execute the Receivables Sale Agreement and any other
documents to be delivered by it thereunder.
4. Pre-filing state and federal tax lien, judgment lien and UCC lien searches
against each Originator from the following jurisdictions:
a.
b.
5. Time stamped receipt copies of proper financing statements, duly filed
under the UCC on or before the date of the initial Purchase (as defined in
the Receivables Sale Agreement) in all jurisdictions as may be necessary
or, in the opinion of Buyer (or its assigns), desirable, under the UCC of
all appropriate jurisdictions or any comparable law in order to perfect the
ownership interests contemplated by the Receivables Sale Agreement.
Schedule A-1
6. Time stamped receipt 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
each Originator.
7. Executed Collection Account Agreements for each Lock-Box and Collection
Account.
8. A favorable opinion of legal counsel for each Originator licensed to give
opinions under New York law reasonably acceptable to Buyer (and the Agent,
as Buyer's assignee) as to the following:
(a) Such Originator is a ______________ duly organized, validly
existing, and in good standing under the laws of the state of ______________.
(b) Such Originator 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 Originator's business.
(c) The execution and delivery by such Originator of the
Receivables Sale Agreement and each other 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 Originator 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 Originator; or
(iii) result in the creation or imposition of any Adverse Claim
on assets of such Originator or any of its Subsidiaries (except as
contemplated by the Receivables Sale Agreement).
(d) The Receivables Sale Agreement and each other Transaction
Document to which it is a party has been duly executed and delivered by such
Originator and constitutes the legally valid, and binding obligation of such
Originator enforceable in accordance with its terms, except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.
(e) In the event that the receivables Sale Agreement is held to
create a transfer for security purposes rather than a true sale or other
outright assignment, the provisions of the
Schedule A-2
Receivables Sale Agreement are effective to create valid security interests in
favor of Buyer in all of such Originator'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 a
loan deemed to have been made by Buyer to such Originator in an amount equal to
the Sale Price (as defined therein) of the Receivables (as defined therein)
acquired from such Originator, together with all other obligations of such
Originator thereunder.
(f) Each of the UCC-1 Financing Statements naming such Originator
as debtor, Buyer, as secured party, and Agent, as assignee of 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 Buyer
in the Opinion Collateral will be perfected and assigned of record to the Agent.
(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 Buyer in the Opinion Collateral is prior to any security interest
granted in the Opinion Collateral by such Originator, the priority of which is
determined solely by the filing of a financing statement in the [describe filing
offices].
(h) To the best of the opinion giver's knowledge, there is no
action, suit or other proceeding against such Originator or any Affiliate of
such Originator, which would materially adversely affect the business or
financial condition of such Originator and its Affiliates taken as a whole or
which would materially adversely affect the ability of such Originator to
perform its obligations under the Receivables Sale Agreement.
(i) Such Originator is not an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
9. A "TRUE SALE" opinion and "SUBSTANTIVE CONSOLIDATION" opinion of counsel
for Originator with respect to the transactions contemplated by the
Receivables Sale Agreement.
10. A Certificate of each Originator's [chief financial officer] certifying
that, as of the closing date, no Termination Event or Unmatured Termination
Event exists and is continuing.
11. 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 the Receivables Sale Agreement.
12. Executed Subordinated Note by Buyer in favor of each Originator.
Schedule A-3
13. If applicable, a direction letter executed by each Originator authorizing
Buyer (and the Agent, as its assignee) and directing warehousemen to allow
Buyer (and the Agent, as its assignee) to inspect and make copies from such
Originator's books and records maintained at off-site data processing or
storage facilities.
Schedule A-4
