EXHIBIT 10.34
ANNEX X
To
SALE AND CONTRIBUTION AGREEMENT
and
RECEIVABLES PURCHASE AND SERVICING AGREEMENT
each dated as of
August 30, 2002
Definitions and Interpretation
SECTION 1. Definitions and Conventions. Capitalized
terms used in the Sale Agreement and the Purchase Agreement shall have (unless
otherwise provided elsewhere therein) the following respective meanings:
"Accession Agreement" shall mean an Accession Agreement
substantially in the form of Exhibit A to the Collateral Agent Agreement.
"Accounting Changes" shall mean, with respect to any Person,
(a) changes in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion of the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants (or any
successor thereto or any agency with similar functions); (b) changes in
accounting principles concurred in by such Person's certified public
accountants; (c) purchase accounting adjustments under A.P.B. 16 or 17 and EITF
88-16, and the application of the accounting principles set forth in FASB 109,
including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (d) the reversal of any
reserves established as a result of purchase accounting adjustments.
"Accounts" shall mean the Collection Account, the
Concentration Account, the Lockbox Accounts and the Retention Account,
collectively.
"Accrued Monthly Yield" shall mean, as of any date of
determination within a Settlement Period, the sum of the Daily Yields for each
day from and including the first day of the Settlement Period through and
including such date.
"Accrued Servicing Fee" shall mean, as of any date of
determination within a Settlement Period, the sum of the Servicing Fees
calculated for each day from and including the first day of the Settlement
Period through and including such date.
"Accrued Unused Commitment Fee" shall mean, as of any date of
determination within a Settlement Period, the sum of the Unused Commitment Fees
calculated for each day from and including the first day of the Settlement
Period through and including such date.
"Accumulated Funding Deficiency" shall mean an "accumulated
funding deficiency" as defined in Section 412 of the IRC and Section 302 of
ERISA, whether or not waived.
"Additional Amounts" shall mean any amounts payable to any
Affected Party under Sections 2.09 or 2.10 of the Purchase Agreement.
"Additional Costs" shall have the meaning assigned to it in
Section 2.09(b) of the Purchase Agreement.
"Administrative Agent" shall have the meaning set forth in
the Preamble of the Purchase Agreement.
"Administrative Services Agreement" shall mean that certain
Administrative Services Agreement dated as of March 7, 2000, between Redwood
and the Operating Agent.
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"Adverse Claim" shall mean any claim of ownership or any
Lien, other than any ownership interest or Lien created under the Sale
Agreement or the Purchase Agreement or any Lien created under the Collateral
Agent Agreement.
"Affected Party" shall mean each of the following Persons:
the Conduit Purchaser, the Committed Purchaser, the Liquidity Agent, each
Liquidity Lender, the Administrative Agent, the Operating Agent, the Letter of
Credit Agent, each Letter of Credit Provider, the Collateral Agent, the
Depositary and each Affiliate of the foregoing Persons.
"Affiliate" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether beneficially, or
as a trustee, guardian or other fiduciary, twenty percent (20%) or more of the
Stock having ordinary voting power in the election of directors of such Person,
(b) each Person that controls, is controlled by or is under common control with
such Person, or (c) each of such Person's officers, directors, joint venturers
and partners. For the purposes of this definition, "control" of a Person shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise.
"Affiliated Servicer" shall have the meaning given such term
in Section 6.01 of the Sale Agreement.
"Aggregate Offset Reserve" means, at any time, the aggregate
Offset Reserve for all Obligors as reported on each Investment Base Certificate
and Monthly Report, in each case, in a manner satisfactory to the
Administrative Agent in its sole discretion.
"Appendices" shall mean, with respect to any Related
Document, all exhibits, schedules, annexes and other attachments thereto, or
expressly identified thereto.
"Applicable Purchaser" shall mean (i) prior to the occurrence
of a Committed Purchaser Funding Event, the Conduit Purchaser, and (ii) on and
after the occurrence of a Committed Purchaser Funding Event, the Committed
Purchaser.
"Authorized Officer" shall mean, with respect to any Person,
(i) the Chairman or Vice-Chairman of the Board, the President, any Vice
President, the Secretary, the Treasurer, any Assistant Secretary, any Assistant
Treasurer and each other officer of such Person specifically authorized in
resolutions of the board of directors of such Person to sign agreements,
instruments or other documents on behalf of such Person in connection with the
transactions contemplated by the Sale Agreement, the Purchase Agreement and the
other Related Documents and (ii) solely with respect to Investment Base
Certificates, Commitment Reduction Notices and Capital Purchase Requests, any
Director of Credit, Accounts Receivable Supervisor or Cash Management
Supervisor.
"Availability" shall mean, as of any date of determination,
the amount equal to the lesser of: (a) (i) the Investment Base multiplied by
the Purchase Discount Rate, minus (ii) the Xxxx and Hold Discount Rate Reserve
minus (iii) the Discount Reserve minus (iv) the Liquidity Availability Reserve,
and (b) the Maximum Purchase Limit.
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"Available LOC Percentage" shall mean twelve and one-half
percent (12.5%); provided, that the Available LOC Percentage may be changed at
any time by the Administrative Agent in its sole discretion, exercised in good
faith, and, in the case of an increase only, upon satisfaction of the Rating
Agency Condition with respect thereto.
"Bankruptcy Code" shall mean the provisions of title 11 of
the United States Code, 11 U.S.C. ss. ss. 101 et seq.
"Xxxx and Hold Arrangement" means an arrangement, confirmed
in writing, in which the Originator invoices one of its customers for goods but
retains possession of such goods for a period of time, as long as each of the
following requirements are satisfied:
(a) title to, and the risk of loss of, the goods is
transferred to the customer, and the Originator's records are marked
to indicate that title has passed,
(b) the Originator's records are adequate to enable the
Originator or a third-party to identify the goods subject to such
arrangement as separate from the Originator's own inventory at any
time,
(c) the related invoice is payable on the normal due
date for similar receivables of the Originator that do not arise from
a Xxxx and Hold Arrangement, and
(d) except for delivery of such goods, no additional
performance by the Originator, or acceptance by or other act of the
Obligor thereunder, remains to be performed as a condition to any
payments on such Receivable.
"Xxxx and Hold Concentration Reserve" means, at any time, the
amount by which (i) the aggregate Outstanding Balance of all Eligible
Receivables that are Xxxx and Hold Receivables exceeds (ii) the product of (a)
fifteen percent (15%) and (b) the aggregate Outstanding Balance of all Eligible
Receivables on such date.
"Xxxx and Hold Discount Rate Factor" shall mean, as of any
date of determination, the percentage set forth in the following table opposite
the Fixed Charge Coverage Ratio at such time:
Fixed Charge Coverage Ratio Xxxx and Hold Discount Rate Factor
1.50 : 1.00 20%
1.40 : 1.00 25%
1.25 : 1.00 30%
1.10 : 1.00 35%
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"Xxxx and Hold Discount Rate Reserve" shall mean, with
respect to any date of determination, an amount equal to the product of (i) the
Xxxx and Hold Discount Rate Factor and (ii) an amount equal to (a) the
aggregate Outstanding Balance of all Eligible Receivables that are Xxxx and
Hold Receivables minus (b) the Xxxx and Hold Concentration Reserve, if any, on
such date.
"Xxxx and Hold Receivable" shall mean a Transferred
Receivable that is subject to a Xxxx and Hold Arrangement.
"Billed Amount" shall mean, with respect to any Receivable,
the amount billed on the Billing Date to the Obligor thereunder.
"Billing Date" shall mean, with respect to any Receivable,
the date on which the invoice with respect thereto was generated.
"Breakage Costs" shall have the meaning assigned to it in
Section 2.10 of the Purchase Agreement.
"Bringdown Certificate" shall mean an Officer's Certificate
substantially in the form of Exhibit 3.01(a)(ii)(B) and 3.01(a)(iii)(B), as
applicable, to the Purchase Agreement.
"Budget" shall mean the Parent's and its Subsidiaries' annual
operating plan, as approved by its Board of Directors, which shall include an
income statement and cash flow statement; all prepared on the same basis and in
similar detail as the financial statements referred to in Annex 5.02(a) and
7.07 to the Purchase Agreement.
"Business Day" shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed in the
State of New York.
"Buyer" shall mean Avondale Funding, LLC, a Delaware limited
liability company, in its capacity as purchaser under the Sale Agreement.
"Canadian Receivables Reserve" means, as of any date of
determination, after giving effect to all Receivables to be Transferred on such
date and the application of Collections thereon on such date, the amount by
which (i) the aggregate Outstanding Balance of Eligible Receivables due from
Obligors domiciled in Canada and payable in Dollars exceeds (ii) the product of
(a) 5% and (b) the aggregate Outstanding Balance of Eligible Receivables on
such date.
"Capital Investment" shall mean, as of any date of
determination with respect to any Purchaser, the amount equal to (a) the
aggregate deposits made by the Purchasers to the Collection Account pursuant to
Section 2.04(b)(i) of the Purchase Agreement on or before such date and to such
other accounts as directed by the Seller in accordance with the terms of the
Purchase Agreement, plus (b) in the case of the Committed Purchaser only, any
amounts advanced by the Committed Purchaser to the Conduit Purchaser under the
LAPA in respect of Capital Investment when purchasing the Conduit Purchaser's
Purchaser Interests, minus (c) in the case of the Conduit Purchaser only, any
amounts advanced by the Committed Purchasers to the Conduit Purchaser under the
LAPA in respect to the Capital Investment when purchasing the Conduit
Purchaser's Purchaser Interests, minus (d) the aggregate amounts disbursed to
such Purchaser in reduction of Capital Investment pursuant to Sections 6.03,
6.04 or 6.05 of the Purchase Agreement on or before such date.
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"Capital Investment Available" shall mean, as of any date of
determination, the amount, if any, by which Availability exceeds Capital
Investment, in each case as of the end of the immediately preceding day.
"Capital Lease" shall mean, with respect to any Person, any
lease of any property (whether real, personal or mixed) by such Person as
lessee that, in accordance with GAAP, would be required to be classified and
accounted for as a capital lease on a balance sheet of such Person.
"Capital Lease Obligation" shall mean, with respect to any
Capital Lease of any Person, the amount of the obligation of the lessee
thereunder that, in accordance with GAAP, would appear on a balance sheet of
such lessee in respect of such Capital Lease.
"Capital Purchase" shall have the meaning assigned to it in
Section 2.01 of the Purchase Agreement.
"Capital Purchase Request" shall have the meaning assigned to
it in Section 2.03(b) of the Purchase Agreement.
"Change of Control" shall mean, with respect to any Person,
any event, transaction or occurrence as a result of which (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities Exchange Commission under the Securities
Exchange Act of 1934, as amended) of 20% or more of the issued and outstanding
shares of capital Stock of the Parent having the right to vote for the election
of directors of the respective entity under ordinary circumstances; (b) during
any twelve (12) consecutive calendar months ending after the Closing Date,
individuals who at the beginning of such twelve-month period constituted the
board of directors of the Parent or such Person (together with any new
directors whose election by such board or whose nomination for election by the
shareholders of the Parent or such Person was approved by a vote of a majority
of the directors still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) shall cease for any reason to constitute a majority of the board of
directors of the Parent then in office; (c) the Parent shall cease to own and
control all of the economic and voting rights associated with all of the
outstanding capital Stock of the Originator; (d) the Originator shall cease to
own and control 100% of the membership interests of the Seller, or (e) the
Parent has sold, transferred, conveyed, assigned or otherwise disposed of all
or substantially all of the assets of the Parent.
"Closing Date" shall mean August 30, 2002.
"Collateral Agent" shall mean GE Capital, in its capacity as
collateral agent for the Conduit Purchaser and the Conduit Purchaser Secured
Parties pursuant to the Collateral Agent Agreement.
"Collateral Agent Agreement" shall mean that certain Third
Amended and Restated Collateral Agent and Security Agreement dated as of March
7, 2000, among Redwood, the Depositary and GE Capital, in its capacities as (a)
the Collateral Agent, (b) the Operating Agent, (c) the Liquidity Agent and (d)
the Letter of Credit Agent.
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"Collection Account" shall mean (a) prior to a Committed
Purchaser Funding Event, that certain segregated deposit account established by
the Conduit Purchaser and maintained with the Depositary designated as the
"Redwood Main Collection Account," account number 00000000, ABA No. 000000000,
Reference: Avondale Collection Account # 33991, or such other account
established in accordance with the requirements set forth in Section 6.01(b) of
the Purchase Agreement, and (b) following the occurrence of a Committed
Purchaser Funding Event, an account established by the Administrative Agent
designated as the Purchasers' Collection Account and otherwise in accordance
with the requirements set forth in Section 6.01(b) of the Purchase Agreement.
"Collections" shall mean, with respect to any Receivable (or
Excluded Receivable, as applicable), all cash collections and other proceeds of
such Receivable (or Excluded Receivable, as applicable) (including late
charges, fees and interest arising thereon, and all recoveries with respect
thereto that have been written off as uncollectible) and any payments by the
Originator, the Seller or the Servicer in respect thereof under Section 4.02(o)
or Section 4.04 of the Sale Agreement or Section 7.04 of the Purchase
Agreement.
"Commercial Paper" shall mean those certain short-term
promissory notes issued by the Conduit Purchaser (or, with respect to the
Committed Purchaser, by GE Capital), from time to time in the United States of
America commercial paper market.
"Committed Purchaser" shall mean GE Capital, its successors
and assigns.
"Committed Purchaser Daily Yield" means, for any day, the
product of (i) the sum of the Committed Purchaser Daily Yield Rate for such
day, plus the Daily Margin on such day, plus, if a Termination Event has
occurred and is continuing, the Daily Default Margin, multiplied by (ii) the
Committed Purchaser's Capital Investment outstanding on such day.
"Committed Purchaser Daily Yield Rate" means, for any day
during a Settlement Period, (a) the weighted average Committed Purchaser Yield
Rates applicable to the Committed Purchaser's Capital Investment on such day,
weighted by outstanding Capital Investment, divided by (b) 360.
"Committed Purchaser Expiry Date" shall mean August 29, 2003
(as such date may be extended for additional periods not to exceed 364 days
from time to time upon the written agreement of the Conduit Purchaser, the
Administrative Agent and the Committed Purchaser).
"Committed Purchaser Funding Event" shall mean the occurrence
of either (A) a Redwood Termination Date, but only if both (i) no Termination
Event has occurred and is continuing, and (ii) the Committed Purchaser Expiry
Date has not occurred or (B) the Redwood Transfer Date.
"Committed Purchaser Yield Rate" means, with respect to any
portion of the Committed Purchaser's Capital Investment on any day during a
Settlement Period, the LIBOR Rate for such Settlement Period.
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"Commitment Reduction Notice" shall have the meaning assigned
to it in Section 2.02(a) of the Purchase Agreement.
"Commitment Termination Notice" shall have the meaning
assigned to it in Section 2.02(b) of the Purchase Agreement.
"Concentration Account" shall mean that certain concentration
account listed on Exhibit 4.01(r) to the Purchase Agreement established in the
name of the Seller and held at the Concentration Account Bank.
"Concentration Account Bank" shall mean any bank or other
financial institution at which the Concentration Account is maintained.
"Concentration Discount Amount" shall mean, with respect to
any Obligor, and as of any date of determination after giving effect to all
Eligible Receivables to be transferred on such date, the amount by which the
Outstanding Balance of Eligible Receivables owing by such Obligor exceeds the
product of (a) the larger of (i) the smallest "Concentration Limit" set forth
in the table below for such Obligor based upon (1) the long-term unsecured
senior debt rating assigned to it at such time by S&P, (2) the long-term
unsecured senior debt rating assigned to it at such time by Xxxxx'x, (3) the
short-term unsecured senior debt rating assigned to it at such time by S&P and
(4) the short-term unsecured senior debt rating assigned to it at such time by
Xxxxx'x and (ii) the Special Limit, if any, applicable to such Obligor, and (b)
the Outstanding Balance of all Eligible Receivables on such date.
S&P XXXXX'X S&P XXXXX'X ALLOWABLE
LONG LONG SHORT SHORT % OF
TERM TERM TERM TERM ELIGIBLE
RATING RATING RATING RATING RECEIVABLES
AA- or higher Aa3 or higher A-1+ P-1 10.0%
A or A+ A2 or A1 A-1 P-1 8.0%
BBB+ or A- Baa1 or A3 A-2 P-2 6.0%
BBB- or BBB Baa3 or Xxx0 X-0 P-3 3.5%
Below BBB- or Not Below Baa3 or Below A-3 or Not Below P-3 or Not 3.5%
Rated by either Not Rated by Rated by either Rated by either
S&P or Xxxxx'x either S&P or S&P or Xxxxx'x S&P or Xxxxx'x
Xxxxx'x
It is understood that all debt ratings as referred to above
refer to the public ratings of an Obligor's senior, unsecured and unguaranteed
obligations.
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"Conduit Purchaser" shall mean Redwood and its assigns.
"Conduit Purchaser Secured Parties" shall mean the
Administrative Agent, Collateral Agent, the CP Holders, the Depositary, the
Liquidity Agent, the Liquidity Lenders, the Letter of Credit Agent, the Letter
of Credit Providers and the Operating Agent.
"Contract" shall mean any agreement (including any invoice)
pursuant to, or under which, an Obligor shall be obligated to make payments
with respect to any Receivable.
"Contributed Receivables" shall have the meaning assigned to
it in Section 2.01(d) of the Sale Agreement.
"XX Xxxxxx" shall mean any Person that holds record or
beneficial ownership of Commercial Paper.
"Credit and Collection Policies" shall mean the credit,
collection, customer relations and service policies of the Originator in effect
on the Closing Date, as the same may from time to time be amended, restated,
supplemented or otherwise modified with the written consent of the
Administrative Agent.
"Credit Agreement" shall mean that certain Second Amended and
Restated Credit Agreement dated as of September 28, 2000, among the Originator,
as borrower, the lenders party thereto and Wachovia Bank, N.A., as agent for
itself and the other lenders party thereto.
"Credit Facility" shall mean the Credit Agreement and the
other loan documents executed in connection therewith, together with such
amendments, restatements, supplements or modifications thereto or any
refinancings, replacements or refundings thereof as may be agreed to by the
Purchasers and the Administrative Agent.
"Daily Default Margin" shall mean, for any day on which a
Termination Event has occurred and is continuing, two percent (2.0%) divided by
360.
"Daily Margin" shall mean, for any day, the Per Annum Daily
Margin on such day divided by 360.
"Daily Yield" means, for any day, the sum of (a) the Redwood
Daily Yield for such day, and (b) the Committed Purchaser Daily Yield for such
day.
"Daily Yield Rate" shall mean the Redwood Daily Yield Rate or
the Committed Purchaser Daily Yield Rate, as the case may be.
"Dealer" shall mean any dealer party to a Dealer Agreement.
"Dealer Agreement" shall mean any dealer agreement entered
into by Redwood for the distribution of Commercial Paper.
"Debt" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services payment
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for which is deferred 90 days or more, but excluding obligations to trade
creditors incurred in the ordinary course of business that are not overdue by
more than 90 days unless being contested in good faith, (b) all reimbursement
and other obligations with respect to letters of credit, bankers' acceptances
and surety bonds, whether or not matured, (c) all obligations evidenced by
notes, bonds, debentures or similar instruments, (d) all indebtedness created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital Lease
Obligations, (f) all obligations of such Person under commodity purchase or
option agreements or other commodity price hedging arrangements, in each case
whether contingent or matured, (g) all obligations of such Person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter
the risks of that Person arising from fluctuations in currency values or
interest rates, in each case whether contingent or matured, (h) all liabilities
of such Person under Title IV of ERISA, (i) all Guaranteed Indebtedness of such
Person, (j) all indebtedness referred to in clauses (a) through (i) above
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property or
other assets (including accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such indebtedness, (k) the "Obligations" as such term is defined in the Credit
Facility, (l) the Indenture Securities and (m) the Seller Secured Obligations.
"Default Event" shall mean the occurrence of any of the
following: a Termination Event, Incipient Termination Event, Servicer
Termination Event or Incipient Servicer Termination Event.
"Defaulted Receivable" shall mean any Receivable (a) with
respect to which any payment, or part thereof, remains unpaid for more than (i)
60 days from its Maturity Date or (ii) 120 days from its Billing Date, (b) with
respect to which the Obligor thereunder has taken any action, or suffered any
event to occur, of the type described in Sections 9.01(c) or 9.01(d) of the
Purchase Agreement or (c) that otherwise is determined to be uncollectible and
has been or should be written off as uncollectible in accordance with the
Credit and Collection Policies.
"Default Ratio" shall mean, as of any date of determination,
the ratio (expressed as a percentage) of:
(a) (i) the sum of the aggregate Outstanding Balances of
all Transferred Receivables which remain unpaid for more than 60 days from
their respective Maturity Dates as of the last day of each of the three
Settlement Periods immediately preceding such date, plus (ii) the aggregate
Outstanding Balance of Transferred Receivables that were written off as
uncollectible during such three Settlement Periods.
to
(b) the sum of the respective aggregate Outstanding
Balances of all Transferred Receivables as of the last day of each of the three
Settlement Periods immediately preceding such date.
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"Delinquency Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) of:
(a) the sum of the aggregate Outstanding Balances of all
Transferred Receivables which remain unpaid for more than 30 days but less than
61 days from their respective Maturity Date as of the last day of each of the
three Settlement Periods immediately preceding such date
to
(b) the aggregate Outstanding Balances of all
Transferred Receivables as of the last day of the three Settlement Periods
immediately preceding such date.
"Depositary" shall mean Deutsche Bank Trust Company Americas
(formerly known as Bankers Trust Company), or any other Person designated as
the successor Depositary pursuant to and in accordance with the terms of the
Depositary Agreement, in its capacity as issuing and paying agent or trustee in
connection with the issuance of Commercial Paper.
"Depositary Agreement" shall mean that certain Depositary
Agreement dated March 15, 1994, by and between Redwood and the Depositary and
consented to by the Liquidity Agent.
"Designated Obligor" means any Obligor designated by the
Administrative Agent to the Originator and the Seller as a "Designated Obligor"
based on audits and other information available to the Administrative Agent
that suggests that the collectibility of Receivables owed by such Obligor is in
doubt and following a discussion among the Administrative Agent, the Originator
and the Seller with respect to such designation.
"Dilution Factors" shall mean, with respect to any Receivable
(including, without limitation, any Xxxx and Hold Receivable), any credits
issued for rebates, freight charges, cash discounts, volume discounts,
cooperative advertising expenses, royalty payments, warranties, cost of parts
required to be maintained by agreement (whether express or implied), warehouse
and other allowances, disputes, setoffs, chargebacks, defective returns, other
returned or repossessed goods, inventory transfers, allowances for early
payments, waivers, service charges and other similar allowances and credits
that are reflected on the books of the Originator and made or coordinated with
the usual practices of the Originator and any refusal by an Obligor to pay a
Xxxx and Hold Receivable as a result of failure by the Obligor to have received
the related goods or merchandise; provided, that any allowances or adjustments
in accordance with the Credit and Collection Policies made on account of the
insolvency of the Obligor thereunder or such Obligor's inability to pay shall
not constitute a Dilution Factor; provided, further, that "Dilution Factors"
shall not include any such allowances or credits to the extent that such
allowances and credits have been fully included in the Offset Reserve for an
Obligor in a manner acceptable to the Administrative Agent in its sole
discretion.
"Dilution Ratio" shall mean, as of any date of determination,
the ratio (expressed as a percentage) of:
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(a) the aggregate Dilution Factors during the first
Settlement Period immediately preceding such date
to
(b) the aggregate Billed Amount of all Transferred
Receivables originated during the fourth Settlement Period immediately
preceding such date.
"Dilution Reserve Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) equal to the greater of
(a) 8.0% percent and (b) the ratio calculated in accordance with the following
formula:
[(ADR x 2.00) + [(HDR - ADR) x HDR]] x DILHOR
--- ------
ADR NRPB
where:
ADR = the average of the respective Dilution Ratios as of
the last day of the 12 Settlement Periods
immediately preceding such date.
HDR = the highest Two Month Rolling Dilution Ratio during
the 12 Settlement Periods immediately preceding such
date.
DILHOR = the aggregate Billed Amount of Transferred
Receivables originated during the two Settlement
Periods immediately preceding such date.
NRPB = the Outstanding Balance of Transferred Receivables
as of the last day of the first Settlement Period
immediately preceding such date.
Notwithstanding the foregoing, the Dilution Reserve Ratio may be changed at any
time at the sole discretion of the Administrative Agent, exercised in good
faith, and, in the case of a decrease only, upon satisfaction of the Rating
Agency Condition with respect thereto.
"Dilution Trigger Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) of:
(a) the aggregate Dilution Factors during the first,
second and third Settlement Periods immediately preceding such date
to
(b) the aggregate Billed Amount of all Transferred
Receivables originated during the first, second and third Settlement Periods
immediately preceding such date.
"Discount Reserve" means, at any time, the product of (a)
1.5, (b) the Prime Rate plus 2.00%, (c) Capital Investment and (d) a fraction,
the numerator of which is the higher of (i) 30 and (ii) the most recently
reported Receivables Collection Turnover multiplied by two and the denominator
of which is 360.
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"Dollars" or "$" shall mean lawful currency of the United
States of America.
"Domestic Person" shall mean a Person that (i) has a place of
business located in the United States of America or Puerto Rico and (ii) such
place of business is the billing address for all Receivables the Obligor of
which is such Person.
"Dynamic Purchase Discount Rate" shall mean, as of any date
of determination, the rate equal to (a) 100% minus (b) the sum of (i) the Loss
Reserve Ratio plus (ii) the Dilution Reserve Ratio, plus (c) the Available LOC
Percentage.
"Election Notice" shall have the meaning assigned to it in
Section 2.01(d) of the Sale Agreement.
"Eligible Receivable" shall mean, as of any date of
determination, a Transferred Receivable:
(a) that is not a liability of an Excluded Obligor or a
Designated Obligor;
(b) that is not a liability of an Obligor (i) organized
under the laws of any jurisdiction outside of the United States of America
(including the District of Columbia but otherwise excluding its territories and
possessions) or (ii) having its principal place of business outside of the
United States of America (including the District of Columbia but otherwise
excluding its territories and possessions) or Canada;
(c) that is denominated and payable only in Dollars in
the United States of America;
(d) that is not and will not be subject to any right of
rescission, set-off, recoupment, counterclaim or defense, whether arising out
of transactions concerning the Contract therefor or otherwise, except to the
extent that any such amount has been reserved for in the Offset Reserve for the
applicable Obligor in a manner satisfactory to the Agent in its reasonable
discretion;
(e) that is not a Defaulted Receivable or an Unapproved
Receivable;
(f) with respect to which all obligations on the part of
the Originator have been performed in full (including completed delivery and
performance of all goods and services covered thereby) and for which, except in
the case of a Xxxx and Hold Receivable, no portion represents "billed but not
yet shipped," "xxxx and hold" or "progress-billed" goods or merchandise,
unperformed services, consigned goods or "sale or return" goods and which does
not arise from a transaction for which any additional performance by the
Originator, or acceptance by or other act of the Obligor thereunder, remains to
be performed as a condition to any payments on such Receivable;
(g) as to which the representations and warranties of
Sections 4.01(v)(ii)-(iv) of each Sale Agreement are true and correct in all
respects as of the Transfer Date therefor;
13
(h) that is not the liability of an Obligor that has any
claim of a material nature against or affecting the Originator or the property
of the Originator;
(i) that is a true and correct statement of a bona fide
indebtedness incurred in the amount of the Billed Amount of such Receivable for
goods or merchandise sold to or services rendered and accepted by the Obligor
thereunder;
(j) that was originated by the Originator in the
ordinary course of business and in accordance with and satisfies all applicable
requirements of the Credit and Collection Policies;
(k) that represents the genuine, legal, valid, binding
and enforceable obligation of the Obligor thereunder enforceable by the holder
thereof in accordance with its terms;
(l) that is entitled to be paid pursuant to the terms of
the Contract therefor, has not been paid in full or been compromised, adjusted,
extended, satisfied, subordinated, rescinded or modified, and is not subject to
compromise, adjustment, extension, satisfaction, subordination, rescission, or
modification by the Originator (except for adjustments to the Outstanding
Balance thereof to reflect Dilution Factors made in accordance with the Credit
and Collection Policy);
(m) with respect to which the Originator has submitted
all necessary documentation for payment to the Obligor thereunder and the
Originator has fulfilled all of its other obligations in respect thereof;
(n) the stated term of which, if any, is not greater
than 60 days after its Billing Date;
(o) that was created in compliance with and otherwise
does not contravene any laws, rules or regulations applicable thereto
(including laws, rules and regulations relating to usury, consumer protection,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which no party to the Contract therefor is in violation of any such law, rule
or regulation, in each case except to the extent that such noncompliance or
contravention could not reasonably be expected to have a material adverse
effect on the collectibility, enforceability, value or payment terms of such
Receivable;
(p) with respect to which no proceedings or
investigations are pending or threatened before any Governmental Authority (i)
asserting the invalidity of such Receivable or the Contract therefor, (ii)
asserting the bankruptcy or insolvency of the Obligor thereunder, (iii) seeking
payment of such Receivable or payment and performance of such Contract or (iv)
seeking any determination or ruling that might materially and adversely affect
the validity or enforceability of such Receivable or such Contract;
(q) with respect to which the Obligor thereunder is not:
(i) bankrupt or insolvent, (ii) unable to make payment of its obligations when
due, (iii) a debtor in a voluntary or
14
involuntary bankruptcy proceeding, or (iv) the subject of a comparable
receivership or insolvency proceeding;
(r) that is an "account" (and is not evidenced by a
promissory note or other instrument and does not constitute chattel paper)
within the meaning of the UCC of the jurisdictions in which each of the Parent,
the Originator and the Seller are organized;
(s) that is payable solely and directly to the
Originator and not to any other Person (including any shipper of the
merchandise or goods that gave rise to such Receivable), except to the extent
that payment thereof may be made to the Collection Account or otherwise as
directed pursuant to Article VI of the Purchase Agreement;
(t) with respect to which all material consents,
licenses, approvals or authorizations of, or registrations with, any
Governmental Authority required to be obtained, effected or given in connection
with the creation of such Receivable or the Contract therefor have been duly
obtained, effected or given and are in full force and effect;
(u) that complies with such other criteria and
requirements as (i) the Administrative Agent may from time to time specify to
the Seller or the Originator based on audits and other information available to
the Administrative Agent and following a discussion among the Administrative
Agent, the Originator and the Seller regarding such criteria and requirements
or, (ii) required by any Rating Agency, upon such notice as may be specified by
such Rating Agency;
(v) that is not the liability of an Obligor that is
receiving or, under the terms of the Credit and Collection Policies, should
receive merchandise, goods or services on a "cash on delivery" basis;
(w) that does not constitute a rebilled amount arising
from a deduction taken by an Obligor with respect to a previously arising
Receivable;
(x) with respect to which no check, draft or other item
of payment has previously been received which was returned unpaid or otherwise
dishonored;
(y) no portion of which constitutes (i) sales tax or
(ii) late fees, service charges or any other similar charges;
(z) that is not subject to any Lien, right, claim,
security interest or other interest of any other Person, other than Liens in
favor of the Administrative Agent (for the benefit of the Purchasers);
(aa) if such Transferred Receivable is a "Xxxx and Hold
Receivable", with respect to which the Originator has not retained possession
of the goods giving rise to such Transferred Receivable past the Maturity Date
for such Transferred Receivable; and
(bb) with respect to which neither the Parent nor the
Originator has any knowledge of any fact (including any defaults by the Obligor
thereunder on any other Receivable) that would cause it or should have caused
it to expect that any payments on such
15
Receivable will not be paid in full when due or to expect any other Material
Adverse Effect to occur.
"Employee Control Group" shall mean all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Parent, are treated
as a single employer under Section 414 of the IRC.
"Employee Pension Plan" shall mean an employee pension
benefit plan which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the IRC and is either (i) maintained by
a member of the Employee Control Group for members of the Employee Control
Group or (ii) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which a member of the Employee Control Group is then making or accruing an
obligation to make contributions or has within the preceding five (5) plan
years made contributions.
"Environmental Laws" shall mean all applicable federal,
state, local and foreign laws, statutes, ordinances, codes, rules, standards
and regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 X.X.X.xx.xx. 9601 et seq.); the Hazardous Materials
Transportation Authorization Act of 1994 (49 X.X.X.xx.xx. 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 X.X.X.xx.xx. 136 et
seq.); the Solid Waste Disposal Act (42 X.X.X.xx.xx. 6901 et seq.); the Toxic
Substance Control Act (15 X.X.X.xx.xx. 2601 et seq.); the Clean Air Act (42
X.X.X.xx.xx. 7401 et seq.); the Federal Water Pollution Control Act (33
X.X.X.xx.xx. 1251 et seq.); the Occupational Safety and Health Act (29
X.X.X.xx.xx. 651 et seq.); and the Safe Drinking Water Act (42
X.X.X.xx.xx. 300(f) et seq.), each as from time to time amended, and any and all
regulations promulgated thereunder, and all analogous state, local and foreign
counterparts or equivalents and any transfer of ownership notification or
approval statutes.
"Environmental Permits" shall mean all permits, licenses,
authorizations, certificates, approvals, registrations or other written
documents required by any Governmental Authority under any Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974 as amended from time to time and any regulations promulgated
thereunder and any successor thereto.
"ERISA Affiliate" shall mean, with respect to the Parent or
the Originator, any trade or business (whether or not incorporated) that,
together with such Person, are treated as a single employer within the meaning
of Sections 414(b), (c), (m) or (o) of the IRC.
16
"ERISA Event" shall mean, with respect to the Parent, the
Originator or any ERISA Affiliate, (a) any event described in Section 4043(c)
of ERISA with respect to a Title IV Plan; (b) the withdrawal of the Parent, the
Originator or any ERISA Affiliate from a Title IV 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; (c) the complete or partial withdrawal
of the Parent, the Originator or any ERISA Affiliate from any Multiemployer
Plan; (d) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a plan amendment as a termination under Section 4041 of ERISA; (e)
the institution of proceedings to terminate a Title IV Plan or Multiemployer
Plan by the PBGC; (f) the failure by the Parent, the Originator or any ERISA
Affiliate to make when due required contributions to a Multiemployer Plan or
Title IV Plan unless such failure is cured within 30 days; (g) any other event
or condition that 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 Title IV Plan or Multiemployer Plan or for the imposition of
liability under Section 4069 or 4212(c) of ERISA; (h) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or
insolvency of a Multiemployer Plan under Section 4241 of ERISA; (i) the loss of
a Qualified Plan's qualification or tax exempt status; or (j) the termination
of a Plan described in Section 4064 of ERISA.
"ESOP" shall mean a Plan that is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"Event of Servicer Termination" shall have the meaning
assigned to it in Section 9.02 of the Purchase Agreement.
"Excluded Obligor" shall mean any Obligor (a) that is an
Affiliate of the Parent, the Originator or the Seller, (b) that is a
Governmental Authority, (c) (i) if such Obligor is VF Corporation, with respect
to which 35% of the aggregate Outstanding Balance of all Receivables owing by
such Obligor remain unpaid for more than 60 days from their respective Maturity
Dates or (ii) otherwise, with respect to which 50% or more of the aggregate
Outstanding Balance of all Receivables owing by such Obligor remain unpaid for
more than 60 days from their respective Maturity Dates or (d) any Designated
Obligor.
"Excluded Receivable" shall mean any (1) indebtedness of an
Obligor (whether constituting an account, chattel paper, document, instrument
or general intangible) arising from the provision of merchandise, goods or
services to such Obligor, including the right to payment of any interest or
finance charges and other obligations of such Obligor with respect thereto (a)
that was generated by Avondale Xxxxx Graniteville Fabrics, Inc., a Delaware
corporation, (b) the Obligor with respect to which is: (i) an Obligor organized
under the laws of any jurisdiction outside of the United States of America
(including the District of Columbia but otherwise excluding its territories and
possessions) or Canada or (ii) any Obligor that is a Non-Domestic Person if
such Non-Domestic Person both (x) has been instructed to make payments on the
Receivables owing by it to a bank account other than a Lockbox Account or the
Concentration Account and (y) such Non-Domestic Person can be reasonably
expected to follow such instructions or (c) which arises out of the provision
of goods or merchandise which is being held by the Originator as bailee for Key
Industries, Inc., (2) all rights to returned merchandise or goods (including
goods which are subject to a Xxxx and Hold Arrangement, the delivery of which
is cancelled for any reason whatsoever), the sale of which gave rise solely to
the indebtedness
17
described in the foregoing clause (1), and all Liens and property subject
thereto from time to time securing or purporting to secure any such
indebtedness of such Obligor, (3) all guaranties, indemnities and warranties,
insurance policies, financing statements and other agreements or arrangements
of whatever character from time to time supporting or securing solely payment
of any of the foregoing indebtedness, (4) all Collections solely with respect
to any of the foregoing, (5) all Records solely with respect to any of the
foregoing, and (6) all proceeds (including, without limitation, returned goods)
(whether constituting accounts, chattel paper, inventory, goods, documents,
instruments or general intangibles) solely with respect to the foregoing.
"Existing Receivables Facility" shall mean the transactions
contemplated by (i) that certain Amended and Restated Certificate Purchase
Agreement dated as of December 21, 1997 (as the same may have been amended,
restated, supplemented or otherwise modified from time to time, the
"Certificate Purchase Agreement") among Avondale Receivables Company, a
Delaware corporation, the Originator, the purchasers party thereto from time to
time and The First National Bank of Chicago (now known as Bank One, N.A.) and
(ii) all other agreements, instruments, documents, pledges, consents,
assignments, contracts, notices, and other items entered into in connection
with the Certificate Purchase Agreement.
"Facility Termination Date" shall mean the earliest of (a)
the date so designated pursuant to Section 9.01 of the Purchase Agreement, (b)
90 days prior to the Final Purchase Date, (c) 30 days prior to the date of
termination of the Maximum Purchase Limit specified in a notice from the Seller
to the Purchaser delivered pursuant to and in accordance with Section 2.02(b)
of the Purchase Agreement, (d) two (2) Business Days prior to the occurrence of
the Committed Purchaser Expiry Date, (e) the date that is sixty (60) days prior
to the "Termination Date" of the Credit Facility and (f) the date that is sixty
days prior to the final due date of the Indenture Securities.
"Fair Labor Standards Act" shall mean the provisions of the
Fair Labor Standards Act, 29 U.S.C. xx.xx. 201 et seq.
"Federal Funds Rate" means, for any day, a floating rate
equal to the weighted average of the rates on overnight federal funds
transactions among members of the Federal Reserve System, as determined by the
Administrative Agent.
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System.
"Fee Letter" shall mean that certain letter agreement dated
August 30 2002, between the Seller, the Administrative Agent, the Committed
Purchaser and the Conduit Purchaser.
"Final Purchase Date" shall mean August 29, 2007.
"Financial Statements" shall mean, consolidated and
consolidating income statements, statements of cash flows and balance sheets of
the Parent and its Subsidiaries delivered in accordance with Section 5.02(a) of
the Purchase Agreement.
18
"Fixed Charge Coverage Ratio" shall have the meaning given
such term in Annex G to the Purchase Agreement.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect on the Closing Date, consistently
applied as such term is further defined in Section 2(a) of this Annex X.
"GE Capital" shall mean General Electric Capital Corporation,
a Delaware corporation, and its successors and assigns.
"General Trial Balance" shall mean, with respect to the
Originator and as of any date of determination, the Originator's accounts
receivable trial balance (whether in the form of a computer printout, magnetic
tape or diskette) as of such date, listing Obligors and the Receivables owing
by such Obligors as of such date together with the aged Outstanding Balances of
such Receivables, in form and substance satisfactory to the Seller and the
Purchasers.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranteed Indebtedness" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("primary obligation") of any other Person (the "primary
obligor") in any manner, including any obligation or arrangement of such Person
to (a) purchase or repurchase any such primary obligation, (b) advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet condition
of the primary obligor, (c) purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, or
(d) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be the amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness; or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect
thereof.
"Guaranteed Obligations" shall mean, collectively: (a) all
covenants, agreements, terms, conditions and indemnities to be performed and
observed by the Originator under and pursuant to the Sale Agreement and each
other document executed and delivered by it pursuant to the Sale Agreement,
including, without limitation, the due and punctual payment of all sums which
are or may become due and owing by the Originator under the Sale Agreement,
whether for fees, expenses (including counsel fees), indemnified amounts or
otherwise, whether upon any termination or for any other reason and (b) all
obligations of the Originator and each other Affiliate of the Parent acting as
Servicer under the Purchase Agreement, or which arise pursuant to the Purchase
Agreement as a result of its termination as Servicer.
19
"Incipient Servicer Termination Event" shall mean any event
that, with the passage of time or notice or both, would, unless cured or
waived, become an Event of Servicer Termination.
"Incipient Termination Event" shall mean any event that, with
the passage of time or notice or both, would, unless cured or waived, become a
Termination Event.
"Indemnified Amounts" shall mean, with respect to any Person,
any and all suits, actions, proceedings, claims, damages, losses, liabilities
and expenses (including attorneys' fees and disbursements and other costs of
investigation or defense, including those incurred upon any appeal).
"Indemnified Person" shall have the meaning assigned to it in
Section 12.01(a) of the Purchase Agreement.
"Indemnified Taxes" shall have the meaning assigned to it in
Section 2.08(b) of the Purchase Agreement.
"Indenture" means that certain Indenture dated as of April
23, 1996 among the Originator, the Parent and The Bank of New York, as
indenture trustee.
"Indenture Securities" means those certain 10-1/4% Senior
Subordinated Notes issued by the Originator pursuant to the Indenture.
"Index Rate" shall mean, for any day, a floating rate equal
to the higher of (i) the rate publicly quoted from time to time by The Wall
Street Journal as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus fifty (50) basis points per
annum. Each change in any interest rate provided for in the Purchase Agreement
based upon the Index Rate shall take effect at the time of such change in the
Index Rate.
"Intercreditor Agreement" shall mean that certain
Intercreditor Agreement dated as of the Closing Date, among GE Capital (as
Administrative Agent), Wachovia Bank, N.A., (as agent with respect to the
Credit Facility), the Originator and Seller.
"Investment Base" shall mean, as of any date of
determination, the amount equal to the Outstanding Balance of Eligible
Receivables minus the Reserves with respect thereto, in each case as disclosed
in the most recently submitted Investment Base Certificate or as otherwise
determined by the Purchaser or the Administrative Agent based on Seller
Collateral information available to any of them, including any information
obtained from any audit or from any other reports with respect to the Seller
Collateral, which determination shall be final, binding and conclusive on all
parties to the Purchase Agreement (absent manifest error).
"Investment Base Certificate" shall have the meaning assigned
to it in Section 2.03(a) of the Purchase Agreement.
20
"Investment Company Act" shall mean the provisions of the
Investment Company Act of 1940, 15 X.X.X.xx.xx. 80a et seq., and any
regulations promulgated thereunder.
"Investment Reports" shall mean the reports with respect to
the Transferred Receivables and the Seller Collateral referred to in Annex
5.02(b) to the Purchase Agreement.
"Investments" shall mean, with respect to any Seller Deposit
Account Collateral, the certificates, instruments, investment property or other
investments in which amounts constituting such collateral are invested from
time to time.
"IRC" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated thereunder and any
successor thereto.
"IRS" shall mean the Internal Revenue Service.
"LAPA" shall mean that certain Liquidity Loan and Asset
Purchase Agreement dated as of August 30, 2002, among Redwood and GE Capital,
in its capacities as (a) the Administrative Agent, (b) the Collateral Agent and
Operating Agent for Redwood, (c) the initial Liquidity Lender, (d) the
Liquidity Agent, and (e) the Committed Purchaser, as amended, restated,
supplemented or otherwise modified from time to time.
"Letter of Credit" shall mean that certain Irrevocable Letter
of Credit No. RRC-3 dated March 7, 2000, issued by the Letter of Credit
Providers at the request of Redwood in favor of the Collateral Agent pursuant
to the Letter of Credit Agreement.
"Letter of Credit Agent" shall mean GE Capital, in its
capacity as agent for the Letter of Credit Providers under the Letter of Credit
Agreement.
"Letter of Credit Agreement" shall mean that certain Third
Amended and Restated Letter of Credit Reimbursement Agreement dated as of March
7, 2000, among Redwood, the Letter of Credit Agent, the Letter of Credit
Providers and the Collateral Agent
"Letter of Credit Providers" shall mean, initially, GE
Capital, in its capacity as issuer of the Letter of Credit under the Letter of
Credit Agreement, and thereafter its successors and permitted assigns in such
capacity.
"LIBOR Business Day" shall mean a Business Day on which banks
in the city of London are generally open for interbank or foreign exchange
transactions.
"LIBOR Rate" shall mean for each Settlement Period, a rate of
interest determined by the Administrative Agent equal to:
(a) the offered rate for deposits in Dollars
for the applicable Settlement Period that appears on Reuters Libor
Screen 01 and Libor Screen 02 as of 11:00 a.m., London time, on the
second full LIBOR Business Day next preceding the first day of each
Settlement Period (unless such date is not a Business Day, in which
event the next succeeding Business Day will be used); divided by
21
(b) a number equal to 1.0 minus the aggregate
(but without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on the day that is two (2)
LIBOR Business Days prior to the beginning of such Settlement Period
(including basic, supplemental, marginal and emergency reserves under
any regulations of the Federal Reserve Board or other Governmental
Authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred
to as "Eurocurrency liabilities" in Regulation D of the Federal
Reserve Board that are required to be maintained by a member bank of
the Federal Reserve System;
provided, that if the introduction of or any change in any law or regulation
(or any change in the interpretation thereof) shall make it unlawful, or any
central bank or other Governmental Authority shall assert that it is unlawful,
for the Committed Purchaser to agree to make or to make or to continue to fund
or maintain any Purchases or Capital Investment at the LIBOR Rate, then, unless
the Committed Purchaser is able to make or to continue to fund or to maintain
such Purchases or Capital Investment at another branch or office of the
Committed Purchaser without, in the Committed Purchaser's opinion, adversely
affecting it or its Capital Investment or the income obtained therefrom, the
LIBOR Rate shall in all such cases be equal to the Index Rate.
If such interest rates shall cease to be available from
Reuters, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to the
Administrative Agent and the Seller.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security
interest under the UCC or comparable law of any jurisdiction).
"Liquidity Agent" shall mean GE Capital, in its capacity as
agent for the Liquidity Lenders pursuant to the LAPA.
"Liquidity Availability" means, at any time, the sum of (i)
Capital Investment Available (modified, for purposes of this definition only,
by treating the Liquidity Availability Reserve for purposes of such definition
as being equal to zero) plus (ii) the maximum amount available to be
immediately drawn (and not subject to any conditions precedent that have not
already been fulfilled or could not be fulfilled through the delivery of solely
administrative documents such as a borrowing request or borrowing base
certificate) under the Credit Facility.
"Liquidity Availability Reserve" means, with respect to any
date, (i) as long as the Liquidity Availability has been greater than
$20,000,000 at all times since the later of (a) the Closing Date or (b) the
date that is 90 days prior to such date, zero or (ii) otherwise, $6,000,000.
"Liquidity Lenders" shall mean, collectively, GE Capital and
any other provider of Liquidity Loans under the LAPA.
22
"Liquidity Loans" shall mean any and all borrowings by
Redwood under the LAPA.
"Litigation" shall mean, with respect to any Person, any
action, claim, lawsuit, demand, investigation or proceeding pending or
threatened against such Person before any court, board, commission, agency or
instrumentality of any federal, state, local or foreign government or of any
agency or subdivision thereof or before any arbitrator or panel of arbitrators.
"LOC Draw" shall mean any draw under the Letter of Credit.
"Lockbox" shall have the meaning assigned to it in Section
6.01(a)(ii) of the Purchase Agreement.
"Lockbox Account" shall mean each lockbox account listed on
Exhibit 4.01(r) to the Purchase Agreement established in the name of the Seller
and held at a Lockbox Account Bank, together with any other segregated deposit
account established by the Seller for the deposit of Collections pursuant to
and in accordance with Section 6.01(a) of the Purchase Agreement.
"Lockbox Account Agreement" shall mean any agreement among
the Originator, the Seller, GE Capital, as Administrative Agent, and a Lockbox
Account Bank and/or Concentration Account Bank with respect to a Lockbox and
Lockbox Account and/or Concentration Account that provides, among other things,
that (a) all items of payment deposited in such Lockbox and Lockbox Account
and/or Concentration Account are held by such Lockbox Account Bank and/or
Concentration Account Bank, as the case may be, as custodian for GE Capital, as
Administrative Agent, (b) neither the Lockbox Account Bank nor the
Concentration Account Bank has any rights of setoff or recoupment or any other
claim against such Lockbox Account or Concentration Account, as the case may
be, other than for payment of its service fees and other charges directly
related to the administration of such Account and for returned checks or other
items of payment, (c) after the receipt of a "Notice of Direction" given by the
Administrative Agent, such Lockbox Account Bank agrees to forward all
Collections received in such Lockbox Account to the Concentration Account
within one Business Day of receipt of available funds or as otherwise directed
by the Administrative Agent, and (d) after the receipt of a "Notice of
Direction" given by the Administrative Agent, such Concentration Account Bank
agrees to forward all Collections received in the Concentration Account to the
Collection Account within one Business Day of receipt of available funds or as
otherwise directed by the Administrative Agent, and is otherwise in form and
substance acceptable to the Administrative Agent.
"Lockbox Account Bank" shall mean any bank or other financial
institution at which one or more Lockbox Accounts are maintained.
"Loss Reserve Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) calculated in accordance
with the following formula:
2 x ARR x DEFHOR
------
NRPB
where:
23
ARR = the highest Three Month Aged Receivables Ratio
during the 12 Settlement Periods immediately
preceding such date.
DEFHOR = the aggregate Billed Amount of Transferred
Receivables originated during the four Settlement
Periods immediately preceding such date.
NRPB = the Outstanding Balance of Transferred Receivables
as of the last day of the first Settlement Period
immediately preceding such date.
Notwithstanding the foregoing, the Loss Reserve Ratio may be changed at any
time at the sole discretion of the Administrative Agent, exercised in good
faith, and, in the case of a decrease only, upon satisfaction of the Rating
Agency Condition with respect thereto.
"Margin Stock" shall have the meaning assigned to it in
Section 4.01(o) of the Purchase Agreement.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the business, assets, liabilities, operations, prospects or
financial or other condition of (i) the Parent and its Subsidiaries, taken
either individually or as a whole, (ii) the Originator and its Subsidiaries,
taken either individually or as a whole, (iii) the Seller or (iv) the Servicer,
(b) the ability of the Parent, the Originator, the Seller or the Servicer to
perform any of its obligations under the Related Documents in accordance with
the terms thereof, (c) the validity or enforceability of any Related Document
or the rights and remedies of the Seller, the Purchasers, the Administrative
Agent or the Collateral Agent under any Related Document, (d) the federal
income tax attributes of the sale, contribution or pledge of the Transferred
Receivables pursuant to any Related Document or (e) the Transferred
Receivables, the Contracts therefor, the Seller Collateral or the ownership
interests or Liens of the Seller or the Purchasers or the Administrative Agent
thereon or the priority of such interests or Liens.
"Maturity Date" shall mean, with respect to any Receivable,
the due date for payment therefor specified in the Contract therefor, or, if no
date is so specified, 60 days from the Billing Date.
"Maximum Purchase Limit" shall mean $90,000,000, as such
amount may be reduced in accordance with Section 2.02(a) of the Purchase
Agreement.
"Monthly Report" shall have the meaning assigned to it in
paragraph (a) of Annex 5.02(a) to the Purchase Agreement.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. or any
successor thereto.
"MPPAA" shall mean the Multiemployer Pension Plan Amendments
Act of 1980, amending Title IV of ERISA.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA with respect to which the Parent, the
Originator or any ERISA Affiliate is
24
making, is obligated to make, or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of
them.
"Net Worth Percentage" shall mean a fraction (expressed as a
percentage) (a) the numerator of which equals the excess of assets over
liabilities, in each case determined in accordance with GAAP consistently
applied and (b) the denominator of which equals the Outstanding Balance of
Transferred Receivables.
"Non-Domestic Person" shall mean a Person who is not a
Domestic Person.
"Notice of Direction" shall mean a "Notice of Direction" as
described in any Lockbox Account Agreement.
"Obligor" shall mean, with respect to any Receivable (or
Excluded Receivable, as applicable), the Person obligated to make payments in
respect thereof.
"Officer's Certificate" shall mean, with respect to any
Person, a certificate signed by an Authorized Officer of such Person.
"Offset Reserve" means, at any time, with respect to any
Obligor, the amount established by the Servicer as a reserve for offsets to the
aggregate Outstanding Balance of such Obligor's Transferred Receivables as a
result of liabilities owed by the Originator to such Obligor, which shall not
exceed the lesser of (i) such aggregate Outstanding Balance and (ii) the
aggregate amount of such liabilities.
"Operating Agent" shall mean GE Capital, in its capacity as
operating agent for the Conduit Purchaser under the Administrative Services
Agreement.
"Originator" shall mean Avondale Xxxxx, Inc., an Alabama
corporation, as the seller of Receivables under the Sale Agreement.
"Originator Indemnified Person" shall have the meaning
assigned to it in Section 5.01 of the Sale Agreement.
"Other Funding Agreements" shall mean any agreements entered
into from time to time by the Purchaser for the purchase or financing of
receivables.
"Outstanding Balance" shall mean, with respect to any
Receivable and as of any date of determination, the amount (which amount shall
not be less than zero) equal to (a) the Billed Amount thereof, minus (b) all
Collections received from the Obligor thereunder, minus (c) all discounts to or
any other modifications that reduce such Billed Amount; provided, that if the
Administrative Agent or the Servicer makes a determination that all payments by
such Obligor with respect to such Billed Amount have been made, the Outstanding
Balance shall be zero.
"Parent" shall mean Avondale Incorporated, a Georgia
corporation.
"Parent Group" shall mean the Parent and each of its
Affiliates other than the Seller.
25
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" shall mean a Plan described in Section 3(2) of
ERISA.
"Per Annum Daily Margin" shall have the meaning given such
term in the Fee Letter.
"Permitted Investments" shall mean any of the following:
(a) obligations of, or guaranteed as to the full and
timely payment of principal and interest by, the federal government of the
United States or obligations of any agency or instrumentality thereof if such
obligations are backed by the full faith and credit of the federal government
of the United States, in each case with maturities of not more than 90 days
from the date acquired;
(b) repurchase agreements on obligations of the type
specified in clause (a) of this definition; provided, that the short-term debt
obligations of the party agreeing to repurchase are rated at least A-1+ or the
equivalent by S&P and P-1 or the equivalent by Moody's;
(c) federal funds, certificates of deposit, time
deposits and bankers' acceptances of any depository institution or trust
company incorporated under the federal laws of the United States or any state,
in each case with original maturities of not more than 90 days or, in the case
of bankers' acceptances, original maturities of not more than 365 days;
provided, that the short-term obligations of such depository institution or
trust company are rated at least A-1+ or the equivalent by S&P and P-1 or the
equivalent by Moody's;
(d) commercial paper of any corporation incorporated
under the laws of the United States of America or any state thereof with
original maturities of not more than 30 days that on the date of acquisition
are rated at least A-1+ or the equivalent by S&P and P-1 or the equivalent by
Moody's;
(e) securities of money market funds rated at least Aam
or the equivalent by S&P and P-1 or the equivalent by Moody's; and
(f) such other investments approved in writing by the
Administrative Agent with respect to which each Rating Agency shall have
confirmed in writing to the Purchaser and Collateral Agent that such
investments shall not result in a withdrawal or reduction of the then current
rating by such Rating Agency of the Commercial Paper.
"Permitted Originator Encumbrances" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental charges
not yet due and payable (other than with respect to environmental matters); (b)
pledges or deposits securing obligations under worker's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits securing
bids, tenders, contracts (other than contracts for the payment of money) or
leases to which the Originator, the Seller or the Servicer is a party as lessee
made in the ordinary course of business; (d) deposits securing statutory
obligations of the Originator, the Seller or the Servicer; (e) inchoate and
unperfected workers', mechanics', suppliers' or similar Liens arising in the
ordinary course of
26
business; (f) carriers', warehousemen's or other similar possessory Liens
arising in the ordinary course of business and securing liabilities in an
outstanding aggregate amount not in excess of $500,000 at any one time; (g)
deposits securing, or in lieu of, surety, appeal or customs bonds in
proceedings to which the Originator, the Seller or the Servicer is a party; (h)
any attachment or judgment Lien not constituting a Termination Event under
Section 9.01(f) of the Purchase Agreement; (i) Liens existing on the Closing
Date and listed on Schedule 4.03(b) of the Sale Agreement or Schedule 5.03(b)
of the Purchase Agreement; (j) Liens expressly permitted under Section 4.03(b)
of the Sale Agreement (except that such Liens shall not be deemed "Permitted
Originator Encumbrances" until such Liens have satisfied the criteria set forth
in such section), and (l) presently existing or hereinafter created Liens in
favor of the Buyer, the Seller, the Purchasers, the Administrative Agent or the
Collateral Agent.
"Permitted Seller Encumbrances" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental charges
not yet due and payable (other than with respect to environmental matters); (b)
deposits securing statutory obligations of the Seller; and (c) presently
existing or hereinafter created Liens in favor of the Purchasers, the
Administrative Agent or the Collateral Agent.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, unincorporated organization, trust, association,
corporation (including a business trust), limited liability company,
institution, public benefit corporation, joint stock company, Governmental
Authority or any other entity of whatever nature.
"Puerto Rican Receivables Reserve" means, as of any date of
determination, after giving effect to all Receivables to be Transferred on such
date and the application of Collections thereon on such date, the amount by
which (i) the aggregate Outstanding Balance of all Eligible Receivables due
from Obligors domiciled in Puerto Rico and payable in Dollars exceeds (ii)
$2,500,000.
"Plan" shall mean, at any time, an "employee benefit plan,"
as defined in Section 3(3) of ERISA, that the Parent, the Originator or any
ERISA Affiliate maintains, contributes to or has an obligation to contribute to
on behalf of participants who are or were employed by the Originator or any
ERISA Affiliate.
"Program Documents" shall mean the Letter of Credit
Agreement, the LAPA, the Collateral Agent Agreement, the Depositary Agreement,
the Commercial Paper, the Administrative Services Agreement, each Accession
Agreement and the Dealer Agreements.
"Purchase" shall have the meaning assigned to it in Section
2.01 of the Purchase Agreement.
"Purchase Agreement" shall mean that certain Receivables
Purchase and Servicing Agreement dated as of August 30, 2002, among the Seller,
the Conduit Purchaser, the Committed Purchaser, the Servicer and the
Administrative Agent.
"Purchase Assignment" shall mean that certain Purchase
Assignment dated as of the Closing Date by and between the Seller and the
Applicable Purchaser in the form attached as Exhibit 2.04(a) to the Purchase
Agreement.
27
"Purchase Date" shall mean each day on which a Purchase is
made.
"Purchase Discount Rate" shall mean, as of any date of
determination, a rate equal to the lesser of (a) the Dynamic Purchase Discount
Rate and (b) the Purchase Discount Rate Cap.
"Purchase Discount Rate Cap" shall mean a rate equal to
eighty-five percent (85%).
"Purchase Excess" shall mean, as of any date of
determination, the extent to which the Capital Investment exceeds the
Availability, in each case as disclosed in the most recently submitted
Investment Base Certificate or as otherwise determined by the Applicable
Purchaser or the Administrative Agent based on Seller Collateral information
available to any of them, including any information obtained from any audit or
from any other reports with respect to the Seller Collateral, which
determination shall be final, binding and conclusive on all parties to the
Purchase Agreement (absent manifest error).
"Purchaser Interest" shall mean the undivided percentage
ownership interest of the Purchasers in the Transferred Receivables which are
purchased under the Purchase Agreement. The Purchaser Interest of the
Purchasers shall be expressed as a fraction of the total Transferred
Receivables computed as follows:
PI = C + DR
--------
IB x PDR
where:
PI = the Purchaser Interest at the time of determination;
C = the aggregate Capital Investment at such time;
DR = the Discount Reserve plus the Xxxx and Hold Discount
Rate Reserve plus the Liquidity Availability
Reserve;
IB = the Investment Base at such time; and
PDR = the Purchase Discount Rate at such time.
(a) The Purchaser Interest shall be calculated (or deemed to be calculated) on
each Business Day from the Closing Date through the Facility Termination Date;
(b) from and after the Facility Termination Date until the Termination Date,
the Purchaser Interest of the Purchasers shall be fixed at 100% and (c) after
the Termination Date, at which time the Purchaser Interest shall equal zero.
"Purchasers" shall mean the Conduit Purchaser and the
Committed Purchaser
"Qualified Plan" shall mean a Pension Plan that is intended
to be tax-qualified under Section 401(a) of the IRC.
28
"Rating Agency" shall mean Moody's and/or S&P, as applicable.
"Rating Agency Condition" shall mean, with respect to any
action or event, that each Rating Agency has notified the Conduit Purchaser and
the Administrative Agent in writing that such action or event will not result
in a reduction or withdrawal of the rating of any outstanding Commercial Paper.
"Ratios" shall mean, collectively, the Default Ratio, the
Delinquency Ratio, the Dilution Ratio, the Dilution Reserve Ratio, the Dilution
Trigger Ratio, the Loss Reserve Ratio, the Receivables Collection Turnover, the
Three Month Aged Receivables Ratio and the Two Month Rolling Dilution Ratio.
"Receivable" shall mean, with respect to any Obligor:
(a) indebtedness of such Obligor (whether constituting
an account, chattel paper, document, instrument or general intangible) arising
from the provision of merchandise, goods or services to such Obligor (and
expressly including indebtedness arising out of a Xxxx and Hold Arrangement),
including the right to payment of any interest or finance charges and other
obligations of such Obligor with respect thereto;
(b) all rights to returned merchandise or goods
(including goods which are subject to a Xxxx and Hold Arrangement, the delivery
of which is cancelled for any reason whatsoever), the sale of which gave rise
to such indebtedness, and all Liens and property subject thereto from time to
time securing or purporting to secure any such indebtedness of such Obligor;
(c) all of Seller's credits and balances due from the
Originator existing at any time;
(d) all guaranties, indemnities and warranties,
insurance policies, financing statements and other agreements or arrangements
of whatever character from time to time supporting or securing payment of any
such indebtedness;
(e) all Collections with respect to any of the
foregoing;
(f) all Lockboxes, Lockbox Accounts, the Concentration
Account into which any Collections are deposited and all funds on deposit
therein and all certificates and instruments, if any, from time to time
representing or evidencing any Lockbox, Lockbox Account or the Concentration
Account;
(g) all notes, certificates of deposit and other
instruments from time to time delivered to or otherwise possessed by the Buyer
or any assignee or agent on behalf of the Buyer in substitution for or in
addition to any of the foregoing;
(h) all interest, dividends, cash, instruments,
investment property and other property from time to time received, receivable
or otherwise distributed with respect to or in exchange for any and all of the
foregoing;
29
(i) all Records with respect to any of the foregoing;
and
(j) all proceeds (including, without limitation,
returned goods) (whether constituting accounts, deposit accounts, chattel
paper, inventory, goods, documents, instruments, supporting obligations, letter
of credit rights, investment property or general intangibles) with respect to
the foregoing and all accessions to, and substitutions and replacements for,
all of the foregoing;
provided, however, that the foregoing definition of "Receivable" shall exclude
Excluded Receivables.
"Receivables Assignment" shall have the meaning assigned to
such term in Section 2.01(a) of the Sale Agreement.
"Receivables Collection Turnover" shall mean, as of any date
of determination, the amount (expressed in days) equal to:
(a) a fraction, (i) the numerator of which is equal to
the aggregate Outstanding Balances of Transferred Receivables on the first day
of each of the three Settlement Periods immediately preceding such date and
(ii) the denominator of which is equal to aggregate Collections received during
such three Settlement Periods with respect to all Transferred Receivables,
multiplied by
(b) the average number of days contained in each such
three Settlement Periods.
"Records" shall mean all Contracts and other documents,
books, records and other information (including computer programs, tapes,
disks, data processing software and related property and rights) prepared and
maintained by the Originator, the Servicer, any Sub-Servicer or the Seller with
respect to the Receivables (or solely with respect to the Excluded Receivables,
as applicable) and the Obligors thereunder and the Seller Collateral.
"Redwood" shall mean Redwood Receivables Corporation, a
Delaware corporation.
"Redwood Daily Yield" shall mean, for any day, the product of
(a) the Redwood Daily Yield Rate for such day, multiplied by (b) Redwood's
Capital Investment outstanding on such day.
"Redwood Daily Yield Rate" means, on any day, a floating per
annum rate equal to the sum of (a) the Daily Margin on such day, plus (b) if a
Termination Event has occurred and is continuing, the Daily Default Margin,
plus (c)(i) to the extent the Conduit
30
Purchaser's Purchases hereunder are being funded by the sale of Commercial
Paper, (A) the per annum rate equivalent to the weighted average of the rates
paid or payable by the Conduit Purchaser from time to time as interest on or
otherwise (by means of interest rate xxxxxx or otherwise) in respect of
Commercial Paper that is allocated, in whole or in part, to fund or maintain
the Conduit Purchaser's Capital Investment during the relevant Settlement
Period, which rates shall reflect and give effect to Dealer fees, commissions
of placement agents and other issuance costs in respect of such Commercial
Paper, divided by (B) 360 days; provided, however, that if any component of
such rate is a discount rate the rate used shall be the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum
and (ii) to the extent the Conduit Purchaser's Purchases hereunder are not
being financed by the sale of Commercial Paper, the daily rate to the Conduit
Purchaser of borrowing such funds under the LAPA.
"Redwood Termination Date" means the date elected by Redwood
or the Collateral Agent (which election shall be mandatory and immediate upon
the occurrence of an event listed in clause (c) below), by notice to the Seller
and the Administrative Agent as the Redwood Termination Date; provided, that on
such date, one or more of the following events shall have occurred and be
continuing: (a) a Seller LOC Draw; (b) the obligations of the Liquidity Lenders
to make Liquidity Loans shall have terminated and such Liquidity Lenders shall
not have otherwise been replaced; (c) an event of default under the Collateral
Agent Agreement or any other Program Document shall have occurred; (d) the
short term debt rating of a Liquidity Lender shall have been downgraded by a
Rating Agency and such Liquidity Lender shall not have been replaced in
accordance with the terms of the LAPA within 30 days thereafter; (e) Redwood or
the Collateral Agent shall have determined that the funding of Transferred
Receivables by Redwood under the Purchase Agreement is impracticable for any
reason whatsoever, including as a result of (i) a drop in or withdrawal of any
of the ratings assigned to the Commercial Paper by any Rating Agency, (ii) the
imposition of Additional Amounts, (iii) restrictions imposed by any Person on
the amount of Transferred Receivables Redwood may finance or (iv) the inability
of Redwood to issue Commercial Paper; (f) any change in accounting standards
shall occur or any pronouncement or release of any accounting or regulatory
body (including FASB, AICPA or the Securities and Exchange Commission) shall be
issued, or any other change in the interpretation of accounting standards shall
occur, such that all or any portion of the Conduit Purchaser's assets and
liabilities are deemed to be consolidated with the assets and liabilities of GE
Capital or any of its Affiliates; (g) a Termination Event shall have occurred
and be continuing; or (h) the outstanding loans to the Conduit Purchaser under
the LAPA equal or exceed the Conduit Purchaser's Capital Investment at such
time and no interest or other amounts are owed to the Conduit Purchaser under
the Purchase Agreement or the other Related Documents.
"Redwood Transfer Date" means the date on which the Conduit
Purchaser transfers to the Liquidity Lenders all of the Conduit Purchaser's
right, title and interest in and to its Purchaser Interest in the Transferred
Receivables, which transfer may be made at any time that any of the following
has occurred: (i) a Termination Event, (ii) the Redwood Termination Date or
(iii) both (a) the outstanding loans made to the Conduit Purchaser pursuant to
the LAPA equal or exceed the Conduit Purchaser's Capital Investment at such
time and (b) no other amounts are owed to the Conduit Purchaser under the
Purchase Agreement.
"Regulatory Change" shall mean any change after the Closing
Date in any federal, state or foreign law or regulation (including Regulation D
of the Federal Reserve Board) or the adoption or making after such date of any
interpretation, directive or request under any federal, state or foreign law or
regulation (whether or not having the force of law) by any
31
Governmental Authority charged with the interpretation or administration
thereof that, in each case, is applicable to any Affected Party.
"Reinvestment Purchase" shall have the meaning assigned to it
in Section 2.01 of the Purchase Agreement.
"Rejected Amount" shall have the meaning assigned to it in
Section 4.04 of the Sale Agreement.
"Related Documents" shall mean each Lockbox Account
Agreement, the Fee Letter, the Intercreditor Agreement, the Sale Agreement, the
Purchase Agreement, the Receivables Assignment, the Purchase Assignment and all
other agreements, instruments, documents and certificates identified in the
Schedule of Documents and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Person, or any
employee of any Person, and delivered in connection with the Sale Agreement,
the Purchase Agreement or the transactions contemplated thereby. Any reference
in the Sale Agreement, the Purchase Agreement or any other Related Document to
a Related Document shall include all Appendices thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
such Related Document as the same may be in effect at any and all times such
reference becomes operative.
"Repayment Notice" shall have the meaning assigned to it in
Section 2.03(c) of the Purchase Agreement.
"Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA.
"Reserves" shall mean the aggregate Concentration Discount
Amount for all Obligors of Transferred Receivables, the Aggregate Offset
Reserve, the Canadian Receivables Reserve, the Puerto Rican Receivables
Reserve, the Xxxx and Hold Concentration Reserve and such other reserves as the
Administrative Agent may establish from time to time in its sole discretion.
"Retained Monthly Yield" shall mean, as of any date of
determination within a Settlement Period, the sum of all amounts transferred to
or retained in the Retention Account with respect to Daily Yield from and
including the first day of such Settlement Period through and including such
date pursuant to Section 6.03(a)(ii)(A) and (B) of the Purchase Agreement.
"Retained Servicing Fee" shall mean, as of any date of
determination within a Settlement Period, the sum of all amounts transferred to
or retained in the Retention Account with respect to the Servicing Fee from and
including the first day of such Settlement Period through and including such
date pursuant to Section 6.03(a)(ii)(C) and (D) of the Purchase Agreement.
"Retained Unused Commitment Fee" shall mean, as of any date
of determination within a Settlement Period, the sum of all amounts transferred
to or retained in the Retention Account with respect to the Unused Commitment
Fee from and including the first day of such
32
Settlement Period through and including such date in accordance with Section
6.03(a)(ii)(E) and (F) of the Purchase Agreement.
"Retention Account" shall mean, (i) with respect to the
Conduit Purchaser, that certain segregated deposit account established by the
Administrative Agent and maintained with the Depositary designated as the
"Redwood Main Collection Account," account number 00000000, ABA No. 000000000,
Reference: Avondale Retention Account # 33992 and (ii) with respect to the
Committed Purchaser, such other segregated deposit account as may be
established by the Administrative Agent for the Committed Purchaser.
"Retention Account Deficiency" shall mean, as of any
Settlement Date, (A) prior to the occurrence of a Committed Purchaser Funding
Event, the amount, if any, by which (1) the amounts necessary to make the
payments required under Sections 6.04(a)(i), (ii) and (iii) of the Purchase
Agreement exceed (2) the amounts on deposit in the Retention Account or (B)
after the occurrence of a Committed Purchaser Funding Event, the amount, if
any, by which (1) the amounts necessary to make the payments required under
Sections 6.04(a)(i), (ii) and (iii) of the Purchase Agreement exceed (2) the
amounts actually distributed to the Administrative Agent pursuant to Sections
6.04(a)(i), (ii) and (iii) of the Purchase Agreement.
"Retiree Welfare Plan" shall mean, at any time, a Welfare
Plan that provides for continuing coverage or benefits for any participant or
any beneficiary of a participant after such participant's termination of
employment, other than continuation coverage provided pursuant to Section 4980B
of the IRC and at the sole expense of the participant or the beneficiary of the
participant.
"Revolving Period" shall mean the period from and including
the Closing Date through and including the day immediately preceding the
Facility Termination Date.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"Sale" shall mean a sale of Receivables by the Originator to
the Seller in accordance with the terms of the Sale Agreement.
"Sale Agreement" shall mean that certain Sale and
Contribution Agreement dated as of August 30, 2002, among the Originator (as
transferor of Receivables), the Parent (as guarantor) and the Seller (as the
buyer of receivables).
"Sale Price" shall mean, with respect to any Sale of Sold
Receivables, the price calculated by the Seller and approved from time to time
by the Administrative Agent equal to:
(a) the aggregate Outstanding Balance of such Sold
Receivables, minus
(b) the expected costs to be incurred by the Seller in
financing the purchase of such Sold Receivables until the Outstanding Balance
of such Sold Receivables, as applicable, is paid in full, minus
33
(c) the portion of such Sold Receivables that are
reasonably expected by the Originator be written off as uncollectible, minus
(d) the portion of such Sold Receivables that are
reasonably expected by the Originator to be reduced by means other than the
receipt of Collections thereon or pursuant to clause (c) above, minus
(e) amounts expected to be paid to the Servicer with
respect to the servicing, administration and collection of such Sold
Receivables;
provided, that such calculations shall be determined based on the historical
experience of (y) the Originator, with respect to the calculations required in
each of clauses (c) and (d) above, and (z) the Seller, with respect to the
calculations required in clauses (b) and (e) above.
"Schedule of Documents" shall mean the schedule, including
all appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Sale Agreement, the Purchase
Agreement and the other Related Documents and the transactions contemplated
thereunder, substantially in the form attached as Annex Y to the Purchase
Agreement and the Sale Agreement.
"Securities Act" shall mean the provisions of the Securities
Act of 1933, 15 U.S.C. Sections 77a et seq., and any regulations promulgated
thereunder.
"Securities Exchange Act" shall mean the provisions of the
Securities Exchange Act of 1934, 15 U.S.C. Sections 78a et seq., and any
regulations promulgated thereunder.
"Seller" shall mean Avondale Funding, LLC, a Delaware limited
liability company, in its capacity as seller under the Purchase Agreement.
"Seller Account" shall mean a deposit account maintained in
the name of the Seller at a commercial bank in the United States of America, as
designated by the Seller from time to time.
"Seller Assigned Agreements" shall have the meaning assigned
to it in Section 8.01(b) of the Purchase Agreement.
"Seller Collateral" shall have the meaning assigned to it in
Section 8.01 of the Purchase Agreement.
"Seller Account Collateral" shall have the meaning assigned
to it in Section 8.01(c) of the Purchase Agreement.
"Seller LOC Draws" shall mean any payments made to the
Purchaser in connection with the Letter of Credit and allocated to the Seller.
"Seller Secured Obligations" shall mean all loans, advances,
debts, liabilities, indemnities and obligations for the performance of
covenants, tasks or duties or for payment of monetary amounts (whether or not
such performance is then required or contingent, or such
34
amounts are liquidated or determinable) owing by the Seller to any Affected
Party under the Purchase Agreement and any document or instrument delivered
pursuant thereto, and all amendments, extensions or renewals thereof, and all
covenants and duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note, agreement or other instrument,
arising thereunder, including Capital Investment, Daily Yield, Yield Shortfall,
Unused Commitment Fees, Unused Commitment Fee Shortfall, amounts in reduction
of Purchase Excess, Successor Servicing Fees and Expenses, Additional Amounts
and Indemnified Amounts. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by
or against the Seller in bankruptcy, whether or not allowed in such case or
proceeding), fees, charges, expenses, attorneys' fees and any other sum
chargeable to the Seller thereunder, whether now existing or hereafter arising,
voluntary or involuntary, whether or not jointly owed with others, direct or
indirect, absolute or contingent, liquidated or unliquidated, and whether or
not from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations that are paid to the
extent all or any portion of such payment is avoided or recovered directly or
indirectly from any Purchaser or the Administrative Agent or any transferee of
the Purchaser or the Administrative Agent as a preference, fraudulent transfer
or otherwise.
"Seller's Share" shall mean the ratio of (a) the Maximum
Purchase Limit under the Purchase Agreement to (b) the aggregate maximum
purchase limits or commitments under the Purchase Agreement and all Other
Funding Agreements.
"Servicer" shall mean the Originator, in its capacity as the
Servicer under the Purchase Agreement, or any other Person designated as a
Successor Servicer.
"Servicer's Certificate" shall mean an Officer's Certificate
substantially in the form of Exhibit 3.01(a)(iii)(A) and (B) to the Purchase
Agreement.
"Servicer Termination Notice" shall mean any notice by the
Administrative Agent to the Servicer that (a) an Event of Servicer Termination
has occurred and (b) the Servicer's appointment under the Purchase Agreement
has been terminated.
"Servicing Fee" shall mean, for any day within a Settlement
Period, the amount equal to (a) (i) the Servicing Fee Rate divided by (ii) 360,
multiplied by (b) the aggregate Outstanding Balance of the Transferred
Receivables on such day.
"Servicing Fee Rate" shall mean 1.00%.
"Servicing Fee Shortfall" shall mean, as of any date of
determination within a Settlement Period, the amount, if any, by which the
Accrued Servicing Fee exceeds the Retained Servicing Fee, in each case as of
such date.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Transferred Receivables and whose name appears on any Officer's Certificate
listing servicing officers furnished to the Administrative Agent by the
Servicer, as such certificate may be amended from time to time.
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"Servicing Records" shall mean all documents, books, Records
and other information (including Servicing Software, computer programs, tapes,
disks, data processing software and related property and rights) prepared and
maintained by the Servicer with respect to the Transferred Receivables and the
Obligors thereunder.
"Servicing Software" shall mean the data processing software
used by the Originator, Servicer and/or Seller for the purpose of servicing,
monitoring, and retaining data regarding the Transferred Receivables, the
Seller Collateral and the Obligors thereunder.
"Settlement Date" shall mean the tenth Business Day following
the end of each Settlement Period.
"Settlement Period" shall mean (a) solely for purposes of
determining the Ratios, (i) with respect to all Settlement Periods other than
the final Settlement Period, each fiscal month of the Originator, whether
occurring before or after the Closing Date, and (ii) with respect to the final
Settlement Period, the period ending on the Termination Date and beginning with
the first day of the Originator's fiscal month in which the Termination Date
occurs, and (b) for all other purposes, (i) with respect to the initial
Settlement Period, the period from and including the Closing Date through and
including the last day of the Originator's fiscal month in which the Closing
Date occurs, (ii) with respect to the final Settlement Period, the period
ending on the Termination Date and beginning with the first day of the
Originator's fiscal month in which the Termination Date occurs, and (iii) with
respect to all other Settlement Periods, each fiscal month of the Originator;
provided, however, that upon the occurrence of the Committed Purchaser Funding
Event, such Settlement Period shall terminate on the day prior to the Committed
Purchaser Funding Event, and the next Settlement Period shall be the period
from and including the day of the Committed Purchaser Funding Event through and
including the last day of the Originator's fiscal month in which the Committed
Purchaser Funding Event occurs.
"Sold Receivable" shall have the meaning assigned to it in
Section 2.01(b) of the Sale and Contribution Agreement.
"Solvency Certificate" shall mean an Officer's Certificate
substantially in the form of Exhibit 3.01(a)(i) to the Purchase Agreement.
"Solvent" shall mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person; (b) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its Debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur Debts or liabilities beyond such Person's ability to pay as such Debts
and liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities (such as Litigation, guaranties and pension
plan liabilities) at any time shall be computed as the amount that, in light of
all the facts and circumstances existing at the time, represents the amount
that can reasonably be expected to become an actual or matured liability.
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"Special Limit" shall mean, (i) with respect to VF
Corporation as long as such Person's (a) long term unsecured debt rating is at
least "BBB" from S&P and (b) long-term unsecured debt rating is at least "Baa2"
from Xxxxx'x, 26%, (ii) with respect to Xxxxx Enterprises, Inc., as long as
either (a) such Person is unrated by both S&P and Xxxxx'x or (b) the Rating
Agency Condition has been satisfied after such Person is rated by S&P and/or
Xxxxx'x, 8%, (iii) with respect to Xxxxxxxxxx-Xxxxxx Manufacturing Company, as
long as either (a) such Person is unrated by both S&P and Xxxxx'x or (b) the
Rating Agency Condition has been satisfied after such Person is rated by S&P
and/or Xxxxx'x, 7% and (iv) with respect to any other Person, subject to
satisfaction of the Rating Agency Condition, such percentage as may be
specified by the Administrative Agent; provided, however, that each of the
percentages contained in the foregoing definition may be changed at any time by
the Administrative Agent, and, in the case of an increase only, upon
satisfaction of the Rating Agency Condition with respect thereto; provided,
further, that, as long as no Termination Event has occurred, the Administrative
Agent shall give advance written notice to the Seller with respect to each such
modification.
"Stock" shall mean all shares, options, warrants, member
interests, general or limited partnership interests or other equivalents
(regardless of how designated) of or in a corporation, limited liability
company, partnership or equivalent entity whether voting or nonvoting,
including common stock, preferred stock or any other "equity security" (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the Securities and Exchange Commission under the Securities Exchange Act).
"Stockholder" shall mean, with respect to any Person, each
holder of Stock of such Person.
"Sub-Servicer" shall mean any Person with whom the Servicer
enters into a Sub-Servicing Agreement.
"Sub-Servicing Agreement" shall mean any written contract
entered into between the Servicer and any Sub-Servicer pursuant to and in
accordance with Section 7.01 of the Purchase Agreement relating to the
servicing, administration or collection of the Transferred Receivables.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity (a) of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other Persons performing similar functions are at the time
directly or indirectly owned by such Person or (b) that is directly or
indirectly controlled by such Person within the meaning of control under
Section 15 of the Securities Act.
"Successor Servicer" shall have the meaning assigned to it in
Section 11.02 of the Purchase Agreement.
"Successor Servicing Fees and Expenses" shall mean the fees
and expenses payable to the Successor Servicer as agreed to by the Seller, the
Purchasers and the Administrative Agent.
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"Termination Date" shall mean the date on which (a) Capital
Investment has been permanently reduced to zero, (b) all other Seller Secured
Obligations under the Purchase Agreement and the other Related Documents have
been indefeasibly repaid in full and completely discharged and (c) the Maximum
Purchase Limit has been irrevocably terminated in accordance with the
provisions of Section 2.02(b) of the Purchase Agreement.
"Termination Event" shall have the meaning assigned to it in
Section 9.01 of the Purchase Agreement.
"Three Month Aged Receivables Ratio" shall mean, as of any
date of determination, the average of the ratios (each expressed as a
percentage) for each of the three Settlement Periods immediately preceding such
date of:
(a) (i) the sum of the respective Outstanding Balances
of Transferred Receivables with respect to which any payment,
or part thereof, remained unpaid for more than 60 but less
than 91 days from their respective Billing Dates as of the
last day of such Settlement Period plus (ii) the aggregate
Outstanding Balance of Transferred Receivables that were
written off as uncollectible less than 60 days from their
respective Billing Dates during such Settlement Period
to
(b) the aggregate Billed Amount of Transferred
Receivables originated during the fifth Settlement Period
immediately preceding such Settlement Date.
"Title IV Plan" shall mean a Pension Plan (other than a
Multiemployer Plan) that is covered by Title IV of ERISA and that the Parent,
the Originator or any ERISA Affiliate maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by any of them.
"Transfer" shall mean any Sale or capital contribution of
Transferred Receivables by the Originator to the Seller pursuant to the terms
of the Sale Agreement.
"Transfer Date" shall have the meaning assigned to it in
Section 2.01(a) of each Sale Agreement.
"Transferred Receivable" shall mean any Sold Receivable or
Contributed Receivable; provided, that any Receivable repurchased by the
Originator pursuant to Section 4.04 of the Sale Agreement shall not be deemed
to be a Transferred Receivable from and after the date of such repurchase
unless such Receivable has subsequently been repurchased by or contributed to
the Seller.
"Two Month Rolling Dilution Ratio" shall mean, as of any date
of determination, the ratio (expressed as a percentage) of:
(a) the aggregate Dilution Factors during the first and
second Settlement Periods immediately preceding such date
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to
(b) the aggregate Billed Amount of all Transferred
Receivables originated during the fourth and fifth Settlement
Periods immediately preceding such date.
"UCC" shall mean, with respect to any jurisdiction, the
Uniform Commercial Code as the same may, from time to time, be enacted and in
effect in such jurisdiction.
"Unapproved Receivable" shall mean any receivable (a) with
respect to which the obligor thereunder is not an Obligor on any Transferred
Receivable and whose customer relationship with the Originator arises as a
result of the acquisition by the Originator of another Person, any such
Person's assets or such receivable or (b) that was originated in accordance
with standards established by another Person acquired by the Originator, in
each case, solely with respect to any such acquisitions that have not been
approved in writing by the Administrative Agent and then only for the period
prior to any such approval.
"Underfunded Plan" shall mean any Plan that has an
Underfunding.
"Underfunding" shall mean, with respect to any Plan, the
excess, if any, of (a) the present value of all benefits under the Plan (based
on the assumptions used to fund the Plan pursuant to Section 412 of the IRC) as
of the most recent valuation date over (b) the fair market value of the assets
of such Plan as of such valuation date.
"Undertaking" shall have the meaning given such term in
Section 6.01 of the Sale Agreement.
"United States" shall mean the United States of America
(including the District of Columbia but otherwise excluding its territories and
possessions).
"Unfunded Pension Liability" shall mean, at any time, the
aggregate amount, if any, of the sum of (a) the amount by which the present
value of all accrued benefits under each Title IV Plan exceeds the fair market
value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent
valuation date for each such Title IV Plan using the actuarial assumptions for
funding purposes in effect under such Title IV Plan, and (b) for a period of
five years following a transaction that might reasonably be expected to be
covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that
could be avoided by the Parent, the Originator or any ERISA Affiliate as a
result of such transaction.
"Unused Commitment Fee" shall mean, for any day within a
Settlement Period, the amount equal to (a) (i) the Unused Commitment Fee Rate
divided by (ii) 360, multiplied by (b) the positive difference, if any, between
(i) the Maximum Purchase Limit and (ii) the Capital Investment on such day.
"Unused Commitment Fee Rate" shall have the meaning given
such term in the Fee Letter.
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"Unused Commitment Fee Shortfall" shall mean, as of any date
of determination within a Settlement Period, the amount, if any, by which the
Accrued Unused Commitment Fee exceeds the Retained Unused Commitment Fee, in
each case as of such date.
"Weekly Settlement Day" shall mean (a) prior to the
occurrence of a Default Event, the last Business Day of each calendar week and
(b) from and after the occurrence of a Default Event, each Business Day.
"Welfare Plan" shall mean a Plan described in Section 3(1) of
ERISA.
"Yield Shortfall" shall mean, as of any date of determination
within a Settlement Period, the amount, if any, by which the Accrued Monthly
Yield exceeds the Retained Monthly Yield, in each case as of such date.
SECTION 2. Other Terms and Rules of Construction.
(a) Accounting Terms. Unless otherwise specifically
provided in the Purchase Agreement or the Sale Agreement, any accounting term
used in any Related Document shall have the meaning customarily given such term
in accordance with GAAP, and all financial computations thereunder shall be
computed in accordance with GAAP consistently applied. That certain items or
computations are explicitly modified by the phrase "in accordance with GAAP"
shall in no way be construed to limit the foregoing. If any Accounting Changes
occur and such changes result in a change in the calculation of the financial
covenants, standards or terms used in any Related Document, then the parties
thereto agree to enter into negotiations in order to amend such provisions so
as to equitably reflect such Accounting Changes with the desired result that
the criteria for evaluating the financial condition of such Persons and their
Subsidiaries shall be the same after such Accounting Changes as if such
Accounting Changes had not been made. If the parties thereto agree upon the
required amendments thereto, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained therein shall, only to the extent
of such Accounting Change, refer to GAAP consistently applied after giving
effect to the implementation of such Accounting Change. If such parties cannot
agree upon the required amendments within 30 days following the date of
implementation of any Accounting Change, then all financial statements
delivered and all calculations of financial covenants and other standards and
terms in accordance with the Related Documents shall be prepared, delivered and
made without regard to the underlying Accounting Change.
(b) Other Terms. All other undefined terms contained in
any of the Related Documents shall, unless the context indicates otherwise,
have the meanings provided for by the UCC as in effect in the State of New York
from time to time to the extent the same are used or defined therein.
(c) Rules of Construction. Unless otherwise specified,
references in any Related Document or any of the Appendices thereto to a
Section, subsection or clause refer to such Section, subsection or clause as
contained in such Related Document. The words "herein," "hereof" and
"hereunder" and other words of similar import used in any Related Document
refer to such Related Document as a whole, including all annexes, exhibits and
schedules, as the same
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may from time to time be amended, restated, modified or supplemented, and not
to any particular section, subsection or clause contained in such Related
Document or any such annex, exhibit or schedule. Any reference to or definition
of any document, instrument or agreement shall, unless expressly noted
otherwise, include the same as amended, restated, supplemented or otherwise
modified from time to time. Wherever from the context it appears appropriate,
each term stated in either the singular or plural shall include the singular
and the plural, and pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter genders. The words
"including," "includes" and "include" shall be deemed to be followed by the
words "without limitation"; the word "or" is not exclusive; references to
Persons include their respective successors and assigns (to the extent and only
to the extent permitted by the Related Documents) or, in the case of
Governmental Authorities, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include
any amendments of the same and any successor statutes and regulations.
(d) Rules of Construction for Determination of Ratios.
The Ratios as of the last day of the Settlement Period immediately preceding
the Closing Date shall be established by the Administrative Agent on or prior
to the Closing Date and the underlying calculations for periods immediately
preceding the Closing Date to be used in future calculations of the Ratios
shall be established by the Administrative Agent on or prior to the Closing
Date in accordance with Schedule 1 attached to this Annex X. For purposes of
calculating the Ratios, (i) averages shall be computed by rounding to the third
decimal place and (ii) the Settlement Period in which the date of determination
thereof occurs shall not be included in the computation thereof and the first
Settlement Period immediately preceding such date of determination shall be
deemed to be the Settlement Period immediately preceding the Settlement Period
in which such date of determination occurs.
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